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Mexico could mass develop its shale resources by 2023-24


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Acapulco, Mexico — Mexico's Pemex expects to explore and assess its shale oil and gas portfolio with the hope of starting mass development in 2023-2024, the company's exploration director said Friday.

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The company is currently drilling its first two shale exploration wells since the energy reform was approved, Juan Antonio Escalera told S&P Global Platts at the sideline of the Mexican Petroleum Congress in Acapulco.

"I don't want to speculate on output numbers, but without a doubt, we have the potential to increase production in the midterm and long-term," Escalera said.

Shale is key for Mexico future oil and gas production as half of the country's prospective resources, over 60 billion boe, are locked in shale formations.

The executive declined to comment on a recent comment from Mexico's National Hydrocarbon Commission that shale oil could boost output at the Tampico-Misantla Basin (TMB) to 775,000 b/d by 2032 from less than 90,000 b/d in 2018.

"We are talking about 12 years, but we need for the stars and planets to align to reach that scenario," he added.

Mexico needs to overcome challenges regarding land ownership and supply chain successfully, Escalera said.

Pemex is currently drilling its Maxochitl-1EXP well at its Puchut block in TMB and Semillal-1EXP at its Anhelido block in the southern portion of the Burgos basin. In the coming months, the company expects to begin drilling additional exploration wells, reaching close to 20 wells by the end of the next year, CNH data show.

At both blocks, Pemex drilled its most prolific shale wells before the energy reform was approved in 2013, halting its shale exploration efforts.

At Anhelido, the company drilled Anhelido-1, which had initial production of about 500 b/d of light oil and 1.5 MMcf/d of wet gas, Pemex's reports shows. Anhelido-1 had 17-stage hydraulic stimulation and produced 40,000 barrels of oil in its first year.

At Puchut, Pemex drilled Corralillo-157, with initial production of 750 b/d, accumulating 300,000 barrels of oil in its first year, Pemex's reports show.

Escalera said achieving a similar initial production rate of 500-750 b/d would be a good goal for the exploration shale wells it is currently drilling.

Escalera expects Pemex to fine tune and enhance the production potential of new wells during a pilot project phase.


In 2010, Pemex initially expected to mass develop its shale resources by the end of the decade. However, the approval of the energy reform delayed Pemex's plans. The company had to wait for the drafting and approval of new fracking regulation, which was approved in 2017.

Escalera said he expects local communities will support the shale projects the state company is developing. "I consider these communities as having an oil vocation, and they are economically depressed due to the lack of investment and jobs," Escalera.

There is an opportunity to work with communities and local authorities to reactivate the economy of this region, gaining support for shale development, he added.

President-elect Andres Manuel Lopez Obrador pledged to ban hydraulic fracturing at the beginning of September. Escalera said he expects the transition team of the incoming president will ease their concerns regarding shale development once they speak with authorities.

"Conventional and non-conventional production have risks, and the important thing is to learn how to mitigate them," he added.

-- Daniel Rodriguez,

-- Edited by Brandon Evans,