Bloody Mexican Shale Fields Sit Idle While Texas Booms

Article title
Surging crime, while dramatic, is just one of many obstacles thwarting a Mexican shale boom that is seen as years off at best.


NUEVO LAREDO, Mexico, June 12 (Reuters) - To grasp the difficulties Mexico faces in capitalizing on a North American shale boom, just wander into the dusty landscape due south of the U.S. border.

On one side of the fence, thousands of wells work around the clock in Texas to produce record volumes of shale oil and gas, transforming towns like Carrizo Springs in a modern-day gold rush.

On the other side, violent drug cartels roam above untapped shale riches, leaving behind a trail of blood. The relatively few conventional wells operated by state oil giant Pemex and its contractors close down overnight as a security precaution.

But surging crime, while dramatic, is just one of many obstacles thwarting a Mexican shale boom that is seen as years off at best.

"Organized crime is an additional operating cost companies will be keeping a close eye on," said Alberto Islas, head of Mexico City-based consultancy firm Risk Evaluation.

Bullet-riddled corpses are piling up in and around the city of Reynosa in the heart of one of Mexico's richest shale deposits, a major flashpoint of gang wars where hundreds of troops have deployed in recent weeks.

Since April, there have been dozens of murders in Reynosa, a city of 600,000, as the Gulf Cartel battles the infamous Zetas. The dead include a top Tamaulipas state intelligence officer. The head bodyguard to the state governor has been implicated in the crime.


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