The Role of Onshore Developments in Mexico’s Oil and Gas Future

Mexico’s new upstream strategy is placing fresh emphasis on onshore oil and gas development, with PEMEX preparing to launch a slate of mixed contracts that will bring private investment into mature and new fields across the country. At the same time, the government’s own long-term plan acknowledges that unconventional resources could be critical to sustaining national production, though the debate over fracking remains unresolved.

PEMEX’s Strategic Plan 2025–2035 outlines a focus on the prolific Southeast Basins, both onshore and offshore, as well as the Veracruz Basin. For complex geology and deepwater acreage, the company intends to continue exploratory evaluations. But the real push in the near term lies in a portfolio of 21 projects identified for development under mixed contracts with private companies.

Of these, nine are onshore projects, including Tupilco Terciario, Miquetla, Sini-Caparroso, Macavil, Cuervito, Madrefil-Bellota, Pánuco, Agua Fría and Tamaulipas-Constituciones. PEMEX expects to have at least seven contracts signed by late September including five onshore projects, allowing operations to begin in 2025 under 20-year terms.

Among the most significant is the Cuervito block in the Burgos Basin, covering 536km2 with a recoverable volume of 245Bcf of natural gas. In the Tampico-Misantla Basin, the Tamaulipas-Constituciones block holds an estimated 79Mb of oil and 96Bcf of natural gas. Additional acreage in the Southeast includes Macavil, Sini-Caparroso, and Tupilco Terciario, collectively adding more than 60Mb of recoverable crude and just under 470Bcf of natural gas .

These developments align with the government’s broader effort to stabilize production around 1.8Mb/d. Yet PEMEX’s own plan highlights the scale of Mexico’s untapped unconventional potential: of an estimated 113Bb of prospective resources, 57% are in non-conventional reservoirs such as shale oil and gas.

The problem is that unlocking those resources requires hydraulic fracturing, or fracking. Environmental groups have long opposed the technique, citing risks to water tables, seismic activity, and contamination. President Claudia Sheinbaum’s administration has publicly rejected fracking, and PEMEX Director Víctor Rodríguez recently reiterated that the company is not pursuing such developments, while also conceding that Mexico cannot ignore the resource base.

“The problem that I have is replacing productive reservoirs with less productive ones,” Rodríguez said during the National Energy Forum. “We are not exploiting unconventional resources right now, but we are evaluating what could be recovered, what production might look like, and what revenues they could generate.”

Industry observers say Mexico’s options are limited without turning to unconventional fields. Fernando Cruz, Energy Director. Kannbal Consulting, argued that the success of the US shale revolution and Argentina’s Vaca Muerta play offers a clear roadmap.

“Our next development path in Mexico is to explore unconventional fields,” Cruz said. “Over the past 20 years, companies in Texas and Louisiana have transformed the production landscape through fracking. Argentina is also increasing output thanks to Vaca Muerta. Those reservoirs extend into Mexico. If we want to reach the 1.8Mb/d target, we need to take those lessons and start exploring unconventional fields in Burgos, Misantla, and across the northern states.”

For others, the opportunity spans both mature and unconventional resources. Thibaud Cadieu, General Manager, XWELLS, noted that Mexico’s portfolio is unusually diverse, with room for progress on multiple fronts.

“Opportunities are substantial, rooted in Mexico's highly diverse resource portfolio,” Cadieu said. “The country possesses mature onshore fields, with some remaining exploration potential. There is a significant public discourse underway regarding non-conventional resources like shale gas and oil. Should this debate conclude with a decision to open these areas to exploration, this would require the development of an entirely new industry segment. There is much to learn from developments in Texas and Argentina.”

Cadieu also pointed out that many of Mexico’s challenges stem from policy disputes rather than geology. “The perception of a stalled industry was largely a consequence of disagreements between previous administrations, which undeniably slowed progress. However, the inherent potential is undeniable: the necessary technologies exist, and the fields will remain. Under the current administration, I see a more conciliatory conversation around oil and gas, with an openness to adopting better technologies and enhancing training for Mexican professionals.”

For now, PEMEX’s near-term focus will remain offshore and onshore conventional opportunities. The mixed contract framework, developed in coordination with SENER, is designed to attract private capital and technical capacity into fields where the state-owned company alone cannot keep pace. The first round of contracts, scheduled to be awarded in mid-September, will test both market appetite and the government’s willingness to sustain public-private collaboration.

Yet the larger question looms. With more than half of Mexico’s prospective resources trapped in unconventional reservoirs, industry experts warn that sidelining fracking indefinitely may prove incompatible with long-term production goals. As PEMEX itself acknowledges in its 2025–2035 plan, unconventional development may be the only way to meaningfully replenish reserves.

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