Key facts
- Mexico's President Claudia Sheinbaum is considering pilot fracking projects in Coahuila and Tamaulipas.
- The move aims to increase domestic natural gas production and decrease reliance on U.S. imports.
- Sheinbaum has recently changed her position on fracking, citing advancements in techniques.
- If approved, Pemex could start pilot projects as early as September.
- The Tampico-Misantla basin has significant unconventional hydrocarbon potential, but the government is studying an area near the U.S. border in Coahuila.
Mexico's President Claudia Sheinbaum is considering the implementation of pilot fracking projects in the northern states of Coahuila and Tamaulipas, according to four sources familiar with the discussions. This initiative aims to increase domestic natural gas production and reduce the country's significant reliance on imports from the United States.
While Mexico currently extracts a small amount of oil and gas through fracking, the government and state-owned oil company Pemex are exploring a more extensive rollout. Hydraulic fracturing, a technique involving the injection of water, sand, and chemicals to break apart rock formations, has historically raised environmental concerns including groundwater contamination, methane emissions, and seismic activity, as well as potentially delaying the transition to renewable energy sources.
President Sheinbaum, who was previously opposed to fracking, has recently indicated a shift in her position, stating that newer techniques exist that offer lower environmental impact and more efficient water usage. A panel of specialists in geology, water, engineering, and environmental issues recently presented their findings to the government to aid in decision-making, with three sources confirming this. If the pilot projects receive approval, Pemex could commence work as early as September, according to one of the sources.
Pemex currently produces an average of 4.869 billion cubic feet of gas per day and 1.658 million barrels of oil and condensate. With conventional reserves dwindling, one source indicated that fracking is seen as the only viable alternative for Mexico to boost production, while another described the country's dependence on U.S. gas imports as "alarming."
Pemex has conducted exploratory drilling in basins spanning Coahuila, Tamaulipas, and Veracruz, and has utilized hydraulic fracturing in the Chicontepec project. The company's 2035 strategy includes bringing unconventional fields into production, projecting modest contributions between 2026 and 2028, and significant volumes starting in 2029. The plan forecasts cumulative production through 2030 of 197 million barrels of crude oil and 303 billion cubic feet of gas from a resource potential of 64 billion barrels of oil equivalent.
Development areas present distinct challenges: Coahuila is governed by the opposition, Tamaulipas faces security risks from organized crime, and water scarcity is a concern in parts of the Tampico-Misantla basin. Despite the Tampico-Misantla basin holding the country's largest unconventional hydrocarbon potential, the government is reportedly studying an area near the U.S. border in Coahuila, adjacent to the Eagle Ford formation, a major U.S. shale oil and gas producing region responsible for most of Mexico's gas imports. The Eagle Ford formation alone produced 4.3 billion cubic feet of gas per day in June, nearly matching Pemex's total national gas output. Sustaining intensive unconventional development requires continuous operations and hundreds of wells, as these wells typically decline rapidly and necessitate ongoing investment.