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Huge shale boost for Mexico

Mexican shale-gas fields discovered near the US border

Huge shale-gas fields have been discovered in Mexico, near the border with the US. Energy minister Jordy Herrera did not specify the size of the reserves, but said: "These huge deposits may completely change the energy situation in Mexico in the next few decades."

He added: "Mexico may end gas imports, create new jobs and clusters to operate 15 or 20 gas wells per hectare of land, and build two or three petrochemical plants in the north of the country."

Shale-gas deposits had been discovered in the states of Chihuahua and Tamaulipas near Mexico’s border with Texas – home of the prolific Barnett and Eagle Ford shales – and in the northern state of San Luis Potosi, as well as Veracruz in the southeast. Herrera claimed the discoveries could quadruple the country’s natural gas reserves, pegged at 12.3 trillion cubic feet (cf) by Cedigaz.

 

The US Energy Information Administration (EIA) estimates Mexico’s recoverable shale gas resources at 681 trillion cf – the fourth-largest in the world – spread across eight formations in five basins. However, the agency said the geology of Mexican shales could be much more complex than those in Texas and Louisiana, with many too deep for gas development.

State-owned producer Pemex drilled the country’s first shale-gas well last year in Coahuila state, into which part of Texas’s Eagle Ford play runs. The well’s initial flow rates reached almost 3 million cf/d.

With domestic gas consumption on the rise and conventional reserves declining – increasing the country’s reliance on imports – Mexico is focusing  on developing its unconventional potential.

Over 52% of the country's primary energy consumption comes from oil, but with Mexico's production in terminal decline, the International Energy Agency (IEA) predicts Mexico could end up importing 1.3 million barrels a day (b/d) by 2035. According to BP data, Mexico exported over 1.5 million b/d last year, with the IEA saying oil sales provide around 32% of government revenue.

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