The problem that share-selling scams, and con-games face, every once in a while, is that there are people who actually work in the industry, and are in the region where the scam is being perpetrated.
Unfortunately for MMEX, that's the case here. Being boots-on-the-ground, I have personally seen the South Orient / Texas-Pacifco rail line, and walked portions of it, from the junction at San Angelo, south to the border.
I've also lived in the region my entire life, done business here, and worked for more than four decades in the industry, from the field to the boardroom, so I understand the oil & gas business, upstream through downstream, along with engineering, marketing, and finance. In contrast to MMEX, who's only been involved in creating shareholder losses through oil & gas, and other con games...
I can tell you with absolute clarity that MMEX does not understand this business, at all.
Mexico, particularly northern Mexico, lacks refining capacity, and other infrastructure. The topping unit MMEX proposes in its Phase I plan is the simplest, most basic separation unit - it appears to have been lifted from a textbook, the Internet, or adapted from a model/framework in one of several design tools, by the unknown/unproven VFuels "team" engaged by MMEX. As their own evidence clearly shows, this topping unit cannot produce any product sufficient for the Mexican market. It produces low-value, intermediate streams of ATB, LGO, AGO, and unstabilized naphtha. All of those streams would have to be transported out by truck - there are no pipeline ties, no midstream relationships, no infrastructure of that nature in place.
The South Orient/Texas-Pacifico is unusable south-south west, and has no possibility of being usable for at least three years. There are no refinery customers to the north-northeast who have need for any intermediates that might be produced by MMEX.
That forces all feedstock delivery to occur by truck, and all product haul out to occur by truck, which is capacity limited, low volume, and has a tremendous negative margin impact, particularly for intermediate products.
There are hundreds of reasons why MMEX will never build anything, other than shareholder losses. They document all this in their hilarious SEC filings, available for anyone to read, analyze, and understand.
MMEX will never get to Phase I, let alone Phase II, a complete refinery. There are already three regionals, one of whom supplies the northern Mexico market, and has pipeline capacity in place, in the correct delivery locations. As an aside, export pipelines require federal permits and approval, and take two to three years to put in place. They require complex coordination because there is a connected facility on the Mexican side of the border.
Analysts understand this business, and market, and know that RCN and expansion of an existing facility like WNR-Andeavor El Paso is viable, where as a new refinery is not. Again, hundreds of reasons why, but you actually have to understand the business, the market, and lots of other moving parts, which MMEX absolutely does not.
MMEX is purely an attempt at a clever scam, a charade to sucker in unsophisticated investors, and those who enjoy spinning the roulette wheel in P&D schemes.
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