Mexico's Onshore E&P Opportunities

Mexico’s upstream strategy is increasingly focused on onshore oil and gas development, with PEMEX preparing to launch a slate of mixed contracts aimed at bringing private capital into both mature and new fields across the country. This shift reflects the government’s broader goal of stabilizing national production while testing investor appetite for domestic exploration, even as debate over unconventional resources and hydraulic fracturing remains unresolved.

PEMEX’s Strategic Plan 2025–2035 underscores the importance of the prolific Southeast Basins, along with opportunities in Veracruz and the Burgos Basins. Near-term efforts will concentrate on a portfolio of 21 projects slated for mixed contracts with private partners. Nine of these are onshore, including Tupilco Terciario, Miquetla, Sini-Caparroso, Macavil, Cuervito, Madrefil-Bellota, Pánuco, Agua Fría, and Tamaulipas-Constituciones. Cuervito, in the Burgos Basin, is notable for its sizable gas potential, while Tamaulipas-Constituciones combines oil and natural gas volumes, making it a high-priority block for both PEMEX and prospective investors. Several contracts are expected to be signed by late September, with operations slated to begin in 2025 under 20-year terms.

Industry experts caution that unlocking these resources will require not only capital but careful attention to technology, regulatory frameworks, and market readiness. Argenis Nieves, Vertical Business Development Manager, Hikvision, emphasized the opportunities created by modern technology and the current administration’s openness. “The world has changed a lot since the first oil rounds … The openness of the current administration allows us to explore new opportunities.” He stressed the need for realistic planning, including responsible consideration of hydraulic fracturing. “We have to evaluate fracking considerably, but responsibly, ensuring no impact on groundwater, the environment, or local communities.”

For operators, infrastructure and supplier readiness are critical concerns. Oscar Roldan, Director at R9 Holdings, highlighted the fragility of current supply chains. “The supply situation is extremely affected … If the reactivation is planned as quickly as proposed, there will not be enough supply because the providers are in a critical situation.” He also underscored regulatory uncertainty and landowner relations as persistent obstacles. “After years without reform, the relationship with landowners is a particularly sensitive issue, especially in fields previously produced by PEMEX.” Security also remains a key factor, encompassing both the protection of workers and safeguarding hydrocarbons from theft.

Understanding and leveraging technology is also central to maximizing onshore potential. Ibis Colli, CEO, Black Eagle, pointed to the importance of integrating geology and operational decision-making to create more streamlined projects. “Geologists should be participating jointly with oil engineers at the moment of development. If we do not review history, we are condemned to repeat the same mistakes.” Colli highlighted the use of advanced technologies, such as 3D seismic and scalar fractal tensors, to guide operational strategies. On unconventional resources, he noted, companies “have to ensure that the entire team understands the play and uses the latest technologies to optimize development. What technologies can make unconventional plays conventional? Regardless of the name, it is still fracking.”

William Waggoner, CEO, Mexico Petroleum Company, highlighted the evolving perception of fracking under the current administration. “Claudia Sheinbaum came to the realization that responsible fracking … is ready to go. One of the biggest things is planning around the supplies, the water, and the sand in these communities. You really have to get permission and plan responsibly.” He added that investment is essential to make these opportunities viable. “These opportunities do not happen without money. Mexico is welcoming foreign investment and is ready for unconventional development.”

Beyond technology and investment, regulatory clarity will be decisive for onshore E&P expansion. Mixed contracts, while providing a framework for private participation, operate alongside a broader regulatory landscape that still leaves questions around approvals, environmental compliance, and long-term infrastructure development. As Roldan noted, the combination of regulatory uncertainty, supply bottlenecks, and security issues creates short-term risks that must be addressed to unlock full production potential.

Experts discussed the strategic role of unconventional resources, particularly shale formations. Estimates indicate that over half of Mexico’s 113Bb of prospective resources are trapped in shale. Unlocking these reserves could be key to sustaining long-term production, but achieving this requires careful planning, clear policy guidance, and responsible hydraulic fracturing practices. As the panelists emphasized, the focus must be on balancing energy sovereignty, environmental protection, and social license.