Representatives from the Texas Railroad Commission met with the Mexican Energy and Finance Ministries to discuss stable shale exploration and regulations as Mexico looks to enter into their share of the Eagleford. Texas Railroad Commissioner Christi Craddick spearheaded the meeting and stated “we have been a resource for Mexico since their energy reform process began, and as Mexico initiates shale exploration and production, we welcome greater cross-border cooperation, collaboration and regional success.” This partnership continues the longstanding technological and economic comradery between the two countries.
The Mexico Shale Summit is set to take place in San Antonio later this month, with companies such as Pemex, Cena Gas, Halliburton, and Weatherford collaborating to give presentations. The country holds over 400 trillion cubic feet recoverable shale gas in the Burgos basin and another 13 billion barrels of recoverable crude abroad, ranking Mexico 6th and 8th largest in world respectively. Mexico hopes to gain a better technological understanding and learn best practices from the summit to better asses their exploration plans.
Unfortunately the same issues plaguing the US energy industry have hit Mexico hard. “Demand for oilfield services remained depressed as drilling declined in the Permian Basin and Eagle Ford shale,” the Dallas Federal Reserve reported. Adding, “cost cutting continued through reductions in employment and capital spending.” Mexico has been plagued by declining production, both natural and artificial, as well as rising imports from the US. Moves to establish a strong domestic oil and gas industry would help lead to energy security for both the US and Mexico.
With the recent change in the Mexican constitution last summer, companies are eager to start production. Reminiscent of Texas during the 1920’s oil boom, many companies have their eyes on the other problems with drilling in the area. The arid climate of the region lends little access to water reserves for fracturing projects and other well head activities. Lack of infrastructure also means delays in possible production in the area. The Burgos basin also sits in a part of illegal Mexican drug trafficking territory. With kidnappings, gun battles, and fuel pirating common place, security is a big issue.
Still many are hopeful for a rebound in the market and a beginning to Mexican energy independence. “Mexico’s success relies on their ability to cultivate a strong regulatory structure, and the Railroad Commission is a ready source of expertise,” Craddick said, offering aid whenever the country begins to develop their assets. The energy reform holds promise for both the US and Mexico leading into the future for sustained cooperation and energy abundance.