Sheinbaum, a Mexican company, is weighing pilot fracking to boost gas production.
According to four sources familiar with the discussion, Mexican President Claudia Sheinbaum has been evaluating possible pilot fracking in the northern states of Coahuila & Tamaulipas that could boost domestic gas production.
Mexico produces crude oil and natural gas via fracking. However, the government and the state-owned company Pemex is evaluating the possibility of a larger rollout in order to reduce the country's reliance on U.S. imported gas.
Hydraulic fracture is a method in which water, chemicals and sand are injected under high pressure into rock to extract resources. This technique has been causing concern for years about groundwater contamination, earthquakes and methane emissions. It also delays the transition to renewable energies. Sheinbaum, who was once an opponent of fracking has changed her mind and now believes that there are newer techniques with a lower environmental impact and efficient water usage.
Three sources claim that Sheinbaum was given the results of a panel consisting of experts in geology, water, engineering, and environmental issues, who were tasked to help the government make the "best possible decision" a few weeks back. Pemex, if approved, could start work on its first pilot projects in September, according to one of three sources.
The Pemex nor the Presidency did not respond to further requests for comment.
Pemex produces a daily average of 4.869 billion cubic feet of natural gas, in addition to the 1.658 millions barrels of crude oil and condensate. One source said that Mexico had no choice but to increase production due to the declining conventional reserves. Another described Mexico's dependency on U.S. imported gas as "alarming."
CHALLENGES OF DEVELOPMENT AREA
Pemex has completed 25 exploratory drillings in the Sabinas - Burro Picachos - Burgos - Tampico - Misantla basins that span Coahuila - Tamaulipas - Veracruz. The company has also used hydraulic fracturing for the Chicontepec Project. In its strategy for 2035, Pemex proposed that unconventional fields be brought into production with "modest" contributions between 2026-2028 and "significant" volumes beginning in 2029.
The plan estimates that cumulative production will reach 197 million barrels of crude and 303 billion cubes of gas by 2030, with a potential resource of 64 billion barrels?of oil-equivalent.
Each development area presents unique challenges. Coahuila, for example, is governed by an opposition party, while Tamaulipas has security concerns linked to organized criminality. Water scarcity in the richly resourced Tampico-Misantla Basin remains a problem.
Sources said that although the Burro-Picachos Platform, which is located near the U.S. Border in Coahuila, contains the largest unconventional hydrocarbon potential in the country, the government was studying the area near the U.S.-border in Veracruz.
The Eagle Ford Formation, which is one of the most important shale gas and oil?producing areas in the U.S., is the source for the majority of Mexican gas imports.
In just June, Eagle Ford produced 4.3 billion cubic foot of gas each day. This is roughly equal to the entire gas production of Pemex nationwide.
The development of unconventional oil and gas would require the drilling of hundreds or thousands wells, and the continuous operation. These wells are prone to rapid decline and require constant investments in order to maintain production. (Reporting and editing by Adriana Barera and Ana Isabel Martinez, and Muralikumar Aantharaman.
(source: Reuters)
