Mexico’s President, Claudia Sheinbaum, is evaluating two areas where the country’s first tests aimed at significantly increasing the use of fracking could begin this year in an effort to boost the country’s deficient gas production, after recently receiving recommendations from a group of experts she tasked with studying the feasibility of exploiting unconventional hydrocarbons, according to four sources familiar with the matter.
The areas with potential that the president is reviewing are located in the states of Coahuila and Tamaulipas, both in northern Mexico, according to the sources. One of them said the idea would even be to try to begin as early as September to develop fields that require hydraulic fracturing, a technique in which water, sand, and chemicals are injected at high pressure to break rock and extract crude oil and gas. Although Mexico already produces marginal amounts through fracking, the government and state-owned oil company Pemex are seeking to expand its use in order to reduce gas imports from the United States, which supplies 75% of the country’s needs.
Currently, Pemex produces an average of 4.869 billion cubic feet of gas per day (bcf/d) and 1.658 million barrels per day (bpd) of oil and condensates.
According to three of the sources, Sheinbaum received the conclusions several weeks ago from a group of specialists in areas such as geology, water, engineering, and the environment. They were tasked with helping her government “make the best possible decision” on whether Mexico should adopt fracking, according to what the president said when announcing the creation of the group in April.
An announcement had been expected in June, but the analyses were delayed because of disagreements among some of the experts who joined later at the president’s request. These experts believe that environmentally friendly development of these types of plays is not possible and maintain a position against the technique. Sheinbaum, who had previously been a strong opponent of fracking, a technique condemned by environmentalists, has recently changed her position and said that there are new hydraulic fracturing methods with lower environmental impacts and more efficient water use. She has therefore argued that “we need to look at unconventional gas again through the lens of sovereignty.”
“Yes, they are going to do it, because there is no other option; they have to do it” in order to increase production, said one source linked to the oil industry. Another source said that the figures presented by the government regarding Mexico’s dependence on U.S. gas were “alarming.”
Opponents argue that areas with unconventional hydrocarbon deposits already face significant water stress, and that the environmental impact of exploitation in the United States could be transferred to Mexico, including the possibility of groundwater contamination, methane emissions, and induced earthquakes. They also warn that it could delay the country’s transition toward renewable energy.
The presidency did not respond to a Reuters request for comment regarding the statements made by the sources. Pemex also did not respond to a request for comment.
Although Mexico has not developed fracking on an intensive scale, the practice is not new to the country. Pemex has drilled 25 test wells in areas with prospective resources in the Sabinas-Burro Picachos, Burgos, and Tampico-Misantla basins, which cover parts of the states of Coahuila, Tamaulipas, and Veracruz. According to Pemex data, the company has extracted hydrocarbons from the Chicontepec project using hydraulic fracturing.
In fact, the state-owned company proposed last year, as part of its 2035 strategy, incorporating production from unconventional deposits, which it identified as having “complex geology.”
The plan contemplated a “modest” contribution from unconventional resources between 2026 and 2028 to national hydrocarbon production, but “significant volumes” beginning in 2029. Under the plan, cumulative production by 2030 would reach 197 million barrels of crude oil and 303 billion cubic feet of gas, from a potential of 64 billion barrels of oil equivalent.
In Search of Gas
Although the Tampico-Misantla basin, located mostly in Veracruz, is believed to have the greatest potential for unconventional oil and gas, the government is studying an area in Coahuila, near the border with the United States and part of the Burro-Picachos platform, for a pilot unconventional resources project, according to the sources.
The area borders the Eagle Ford formation on the other side of the border, one of the largest producers of shale oil and gas in the United States and the source of most of Mexico’s gas imports. In June alone, the area produced 4.3 billion cubic feet per day (bcf/d) of gas, a production level similar to that of Pemex across all of its fields and basins in Mexico.
The proximity to the United States and the area’s energy potential are two of the reasons for starting a pilot project in Coahuila, according to the sources. Another factor in its favor is the very low population density in the area, which could reduce the risk of opposition or tensions. Such conflicts have occurred in Veracruz in the past with Pemex projects in highly populated areas.
The biggest problem facing the Coahuila area is the lack of water, but two sources said this could be addressed by drilling deep wells for brackish water in order to avoid using surface water deposits intended for human consumption.
Two of the sources said that, despite these factors, the government was still reluctant to begin in Coahuila because it is governed by the opposition, unlike Tamaulipas, the other state being considered by Sheinbaum. Specifically, the area under consideration is the Burgos region, which has known gas potential and where Pemex has operated for years. There is also less public opposition to oil projects in the area.
The problem there, according to the sources, is the presence of organized crime.
Although Pemex and other oil and energy companies have managed to operate conventional hydrocarbon projects in the region despite security problems, intensive unconventional development would require the drilling of hundreds of wells and operations around the clock. Any disruption or shutdown caused by an attack or incursion by organized crime could therefore become extremely costly.
“Once it starts, it cannot be stopped,” one source said regarding the drilling of fracking wells, which become depleted within a few years or even months and require substantial and continuous investment.
Source: eleconomista
