Mexico Has 64.5 Billion Boe in Unconventional ReservesBy Conal Quinn | Wed, 08/17/2022 - 18:57
The National Hydrocarbons Commission (CNH) published data revealing Mexico’s prospective resources in unconventional plays to total 64.2 billion boe for 1Q22. Oil reserves from conventional reserves amounted to an estimated 35.9MMboe, of which 97 percent is located in the Tampico-Misantla basin, 1.5 percent in Sabinas-Burro-Picachos and the remainder in the Veracruz basin. Meanwhile, natural gas prospective resources from unconventional plays were put at 141.5tcf. Of this figure, 47 percent is to be found in the Sabinas-Burros-Picachos basin with 38 percent in Burgos and 15 percent in the Tampico-Misantla basin.
However, despite this vast geological potential, there is still no clear political mandate to enable unconventional development and production due to concerns over fracking. Hydraulic fracturing, as the method is also known, is the process by which rock reservoirs are made more accessible by injecting a high-pressure fracking fluid into a wellbore to create cracks, which allow natural gas and petroleum to flow more freely. With dwindling oil and gas reserves worldwide, fracking has long been presented as a panacea for the industry. Despite major technological advancements in recent years, critics still point to the environmental cost and public health risk of fracking, which can result in earth tremors that lead to earthquakes, leakage of methane gas, which is one of the major contributors to the greenhouse effect, air and noise pollution, as well as water contamination. Reiterating his opposition to fracking at a morning press conference two weeks ago, President López Obrador also cited the excessive use of water required to produce the fracking fluid as a reason why a country prone to water scarcity such as Mexico is unsuitable for the divisive practice.
Proponents of fracking point to the immense economic potential afforded by unconventional hydrocarbons, which burn more clearly and therefore emit less CO2. In addition to this, both tight oil and shale gas boast an optimal high API gravity and flow freely at room temperature, facilitating easier transportation. In Mexico’s case, unconventionals make up almost two-thirds of the nation’s total resources of 112.9 billion boe. For this reason, former PEMEX CEO Rogelio Montemayor Seguy believed unconventionals to be the surest way of securing energy sovereignty.
Mexico has long enjoyed cheap natural gas imports from the US, disincentivizing investment in costly deepwater and controversial unconventional plays. Nevertheless, if winter weather north of the Rio Bravo continues to disrupt supply chains and sustained Russian embargoes see the US directing more LNG exports to Europe, Mexico could find itself frozen out. Indeed, the country’s overreliance on natural gas imports certainly seems to be a major strategic oversight in the current administration’s pursuit of energy sovereignty, say many industry experts. Fracking has already sparked a major boom in both the US and Canada, greatly reducing household energy costs. Given the major successes at Texas’ Eagle Ford in particular, which is geometrically symmetrical to Mexico’s Burgos Basin across the border and saw production peak at over 1MMboe in 2013, industry experts such as Amexhi Director General, Merlin Cochran, view unconventionals as an “untapped goldmine.”
The potential of Mexico’s unconventional reserves is just one of the many topics to be debated at this year’s Mexico Oil and Gas Summit, which will feature contributions from industry leaders such as Cochran, as well as panels discussing Crucial Upstream Technologies & Operating Frameworks and CNH’s Upstream Oil & Gas Outlook. Book your place at MOGS 2022 here!