Bloody Mexican Shale Fields Sit Idle While Texas Booms

Limonaria's geology is not an extension of Eagle Ford, but part of Mexico's Tampico-Misantla basin, the country's biggest shale basin at nearly 35 billion boe, according to Pemex data.

Through its Newpek unit, Mexican industrial conglomerate Alfa operates more than 200 wells in Eagle Ford. But it has yet to announce any plans to venture into shale in its homeland.

"What we're trying to figure out is exactly what kind of formation and what kind of area will be available in Mexico to be the best one in which we can participate," Raul Mijares, Alfa's energy director, said recently.

Pemex is awaiting the September outcome of a so-called Round Zero allocation in which it has asked for rights to 9 billion boe in shale resources, but specific blocks are unknown.

While energy ministry officials say the first exploration and production contracts to go up for grabs next year will include shale gas blocks, they may prove to be a victim of the reform's success at attracting investments to lower-cost deposits first.

Energy consultancy Wood Mackenzie estimates 109 mature oil fields, accounting for less than 2 percent of current output of about 2.5 million bpd, are likely to lure investment before costlier shale fields.

While most other sector analysts are also downbeat on Mexico's near-term shale prospects, a notable exception is Edward Morse, global head of commodities research for U.S. bank Citigroup.


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