From Shale Gas Resources to Shale Gas Reserves

Wed, 01/25/2012 - 12:38

Shale gas is both a great opportunity and a great challenge for Mexico, according to the CNH. One of the first important technological challenges that the country must face is to evaluate the potential that shale gas represents. “I think it is a very important area for exploratory opportunities in Mexico that hasn’t been totally tackled yet,” said Alma América Porres Luna, Commissioner at the CNH, “but first, we have to know how much resources we have.” According to an EIA assessment of Mexico’s shale gas potential, there are 680.87 Tcf of technically recoverable shale gas resources in Mexico, which amounts to 11 times the country’s proven, probable and possible (3P) reserves of natural gas. However, Pemex E&P Director General, Carlos Morales Gil, recently communicated that early studies are indicating a more conservative estimate of between 150.09 Tcf and 459.09 Tcf of shale gas in Mexico’s five dierent geological provinces.

The EIA figure is lower than the recoverable reserves of the US, which stand at 862 Tcf, but ranks Mexico’s potential shale gas resources as fourth in the world, above Canada, which has 388.1 Tcf of recoverable reserves. However, it is now important to confirm that amount in Mexico, says Porres Luna. In order to estimate the resources, she says the US agency looked at the basins in the US and considered that there was continuity in the Mexican basins in terms of characteristics. The estimation of the volume was then made with the area surface, as well as the porosity and the further characteristics that have already been proven in the US, presuming that the whole area is impregnated with gas. But now, it has to be seen if the characteristics are really as continuous as assumed, says Porres Luna. Also, some properties need to be evaluated based on the observations made in wells, cores and formations.

Some CNH area estimations of the dierent basins are considerably lower than previously calculated. For example, if it is generally assessed that the Chihuahua basin surface is 70,000km2, the CNH estimates the prospective area to be 35,000km2. “It’s a very global estimation,” she says. She does acknowledge that there is a need for more precise data - which Pemex possibly has - so as to be more certain of the shale gas amount. Among the features to be evaluated are for example the extension and thickness of shale gas formations within the prospective basins, as well as the organic content and geochemical data on the areas. “So it could be more or it could be less – it could have more surface, or more thickness. But the important thing is that I would be able to say: our volume is this, and we are going to exploit it,” the CNH Commissioner says.

Evaluating the potential of shale gas is also a technological challenge, as, until now, exploratory projects were focused rather towards carbonate or fractured fields. Now the focus has to be on something that was previously discarded by Pemex. “Today, shale gas is useful and we need to change the way that we approach the knowledge of the reservoirs. It changes the ways of interpreting the seismic studies, the geological modelling and the well log data.”

Porres Luna thinks Pemex is very well placed to do exploratory work on shale gas, but that the exploitation should be left to smaller private companies, as it would not be aordable for Pemex, partly because of the administrative size of the NOC. “I feel Pemex is not well positioned to do the exploitation,” she says, “and that is why it hasn´t shown much interest.” However, she does think Pemex should evaluate the shale gas potential of Mexico, as it represents a priority for the country.