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May 17, 2016


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a ha! Just found the cue at the bottom...

I agree, buyers can always be found, it all depends on the incentives the government is willing to give to those looking into buying assets requiring major overhauls.

Importing is not really the solution as transportation throughout Mexico will eat up on the profits as you try to cover all of Mexico. In the States, distribution and marketing already accounts for an average close to 20% of the costs of unbranded gasoline (http://energyalmanac.ca.gov/gasoline/margins/), in Mexico this percentage will certainly increase as you add the losses due to illegal tapping and other "administrative" issues.

So there is a business case for investing in Refining within Mexico, it is just a matter of finding some middle ground with the sellers in order to soften the initial investment blow...

Let us remember that last year we suffered gasoline scarcities (desabastos), and this does not go well with society. Not all of the causes are attributable to old refineries in Mexico, but I'm sure this will be in the government's top list of assets to sell in order to capitalize themselves and spend the money elsewhere.

At the end of the day, refining is not Pemex's core.

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