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Posted: Tuesday Apr 28 8:42:14PM 2009
Well I think it would be a little naive to think that anyone could be immune from this virus. Tonight I hear that both Westjet and Air Canada are discontinuing flights to Mexico.
Now with this being said you have to think logically when you think about Mexico. The Mexican government gets something like 40% of their government revenue from the Oil and Gas business. With Oil dropping it only means that they need to pump out that much more oil and gas to sustain their current spending. Mexico has been working on some very large oil fields that are currently being exploited (see Schlumberger press release) So ILI is trying to get their share of the pie. That is still to be seen and of course we are all sitting patiently.
Now back to the virus situation. If the tourists stop coming it is going to only be more imperative to further pump out as much oil as possible.
I dont know if many know this but oil is written in the Mexican constitution that all oil is owned by the country and not by any company. For this reason the Mexican government controls all the oil in its country. My feeling though is that due to the current Mexican downturn in their economy, the swine flu epidemic and the constant attacks for a change in government that you will see Mexico open up its doors to the oil industry. Calderon has already tried to put this past congress but he lost. My belief is that if the economy gets worst this will be passed somehow and if it does this will open the doors to many big firms in Mexico. The bonus to Mexico is they wont have to put out the cash to build the infrastructure and they will get upfront payments. Time will tell.
I spoke with Guy at ILI today and they are just waiting for the lawyers to sign off of the paperwork and the financing will be officially closed. That is the latest so far. I cannot add anything that is substantial as in a contract or anything other than to say they are working on things.
Posted: Wednesday Mar 18 1:13:58PM 2009
Today shares closed at 0.155, 287% higher than the 0.04 low of early December.