Shale gas can be acquired by methods such as fracking. Mexico is looking to market its rich reserves to the U.S. but it could face some stiff competition. (Shutterstock)
Mexico’s energy markets, which have been monopolized by the state-owned Pemex for decades, are now open to foreign investment for the first time in over 70 years.
Mexico’s abundant energy resources are on the table, and investors are lining up to learn more, which is why nearly 300 oil and natural gas producers gathered in San Antonio for a conference this week.
The Mexico Shale Summit is being held at the Hilton Palacio del Rio in San Antonio, and despite the current low cost of crude oil, investors remain optimistic about the potential of Mexico’s shale reserves.
Crude oil prices are at a six-year low, staying close to $50 a barrel, but Edgar Rangel-German, Commissioner with Mexico’s National Hyrdrocarbons Commission (CNH), believes that these low prices have just given Mexico more room to breathe while the country tackles energy reforms.
Rangel-German also said that shale oil will be open for bidding this year, and that the announcement is expected sometime in March or April.
Texas was an appropriate location to host this summit, as its shale operations have already proven to be efficient and successful. However, competing with Texas’s shale operations could be problematic for Mexican energy companies, despite their abundant natural resources.
Mexico’s resources include an estimated 13 billion barrels of oil and around 600 trillion cubic feet of gas from shale reserves, the 8th and 6th largest supplies in the world, respectively.
“The possibility of a North American energy confederation is still something I would like to see on the table, for Canada, Mexico and the United States,” said Chris Faulkner, CEO and Chairman of Breitling Energy Corporation (OTCBB: BECC), according to Business Wire.
“It doesn’t seem to be on anyone’s radar in Washington, but if we could strive for North American energy independence first, we would be the second largest oil producing coalition in the world next to OPEC, and would be incredibly formidable in determining world oil policy.”
An estimated $100 billion is needed to effectively develop Mexico’s natural shale reserves, and President Pena Nieto is taking the necessary legislative steps to achieve this goal.
“Mexico is in an excellent position, they know it, and President Pena Nieto is making the right moves to open his country to new partnership and development,” Falkner said.
Written by: Gabrielle Meyer