Mexico shale oil proven reserves amount to 13 billion barrels.
Pemex has drilled in Mexico shale reserves, but produced little
Reuters reports that Mexico is hoping to hold its first shale oil and gas auction by the end of the year, according to the head of the country’s oil regulator.
The Mexico shale auction could open up the world’s ninth largest reserves of unconventional energy to foreign investors.
Many countries have shale reserves, but are struggling to replicate the success of the industry in the United States. So far, Pemex, Mexico’s state oil firm, has done some drilling in shale reserves, but has produced little.
The rapid rise of shale production in the US has revolutionized the energy industry in the United States and is credited with increasing US production, which is expected to top 10 million barrels per day (b/d) in the coming weeks.
Juan Carlos Zepeda, head of the CNH, Mexico’s National Hydrocarbons Commission, says he is waiting for authorization from the energy minister to hold the auction.
“We are waiting for the ministry of energy to establish the specific schedule,” he told Reuters. The tentative schedule “would be to award the blocks before the end of this year.”
According to Zepeda, the Burgos basin located in northeastern Mexico would be up for offer. The Burgos is part of the large geological formation laden with oil and gas reserves that include the Eagle Ford shale formation in the US.
Eagle Ford currently produces about 1.6 million b/d of the total 6.5 million b/d produced by the seven largest US shale regions, according to US government data. Zepeda says drilling equipment sitting idle in the Eagle Ford area could easily be moved south of the border to work on shale fields in Mexico, following the auction.
Another Mexico shale area up for auction is the Tampico-Misantla basin, located in the Gulf Coast states of Veracruz and Tamaulipas.
In 2014, Mexico’s energy industry was liberalized and since then, auctions have been held for both onshore and offshore oil and gas fields, but none have included shale fields.
At a Mexican deepwater auction held on Wednesday, Shell won nine out of 19 blocks.
A presidential election in July could put a spanner in the works as the candidate leading in the polls, Andres Manuel Lopez Obrador, has pledged to review the oil industry contracts awarded since the 2014 reform.