How much is Mexico really opening to drilling?

SAN ANTONIO — This satellite night image of South Texas clearly shows electrical lights and gas flares in the Eagle Ford Shale region south of San Antonio. The activity stops at the Rio Grande.

The Eagle Ford Shale extends into Mexico, a country that has one of the world’s great reserves of hydrocarbons.

But Mexico’s oil and gas production has been dropping. It hasn’t tapped its shale fields the way the U.S. has. Now the Mexican government and national oil company Petróleos Mexicanos, known as Pemex, are opening the doors to foreign, privately owned companies for the first time since the 1930s.

Just how wide will those doors open?

Guillermo Dominguez-Vargas, a commissioner on Mexico’s National Hydrocarbon Commission, said this week in San Antonio that it depends on the type of oil and gas field.

Pemex had told the government it wants to keep about 63 percent of its prospects in shallow offshore waters where it has had a lot of success, as well as around 82 percent of conventional onshore fields.

But Pemex is willing to let private companies have a crack at 85 percent of the country’s shale prospects, Dominguez-Vargas said. It’s also willing to release large areas of its deep water offshore. Both are areas that require a lot of technology to do well.

“They want to keep small areas, and they are giving us back most of the shale areas,” Dominguez-Vargas said of the shale fields.

Several foreign companies are working in the in the Eagle Ford in Texas, which along with other U.S. shale fields is seen as a sort of training ground for learning how the produce oil and gas from tight formations such as shale. They include the Norwegian national oil company, Statoil, and Britian’s BP. Pemex isn’t among them.

But Dominguez-Vargas said the company wants to learn more about drilling for shale gas. It has some test wells that produced both oil and gas. On the 15 percent of the shale areas it plans to keep, Pemex is shooting 3-D seismic data, which bounces sound waves to create a detailed view of the Earth’s layers, Dominguez-Vargas said. The first round of contracts could happen in mid-2015, Dominguez-Vargas said.

Eagle Ford operators are seen as the most likely to move across the border into northern Mexico. San Antonio’s Lewis Energy is one company that already has experience working in Mexico.

SHOW MORE