| NEW YORK/MEXICO CITY, June 18
NEW YORK/MEXICO CITY, June 18 Mexico's top
steelmaker is hoping to tap the country's ample shale gas
reserves if an energy sector overhaul expected this year
provides an opening, a senior executive with the company, Altos
Hornos de Mexico (AHMSA), said on Tuesday.
"I hope...we are going to start drilling in the next year,"
Alonso Ancira, AHMSA's executive chairman, said at the Steel
Success Strategies conference in New York.
"I hope I'm the next Marathon Oil," he added, referring to
the former oil and gas producing unit of U.S. Steel.
While Mexico's constitution mandates that only the state can
own and extract oil and gas resources, President Enrique Pena
Nieto has promised a reform to attract new investments from
private oil companies aimed at boosting lagging production.
While details of the reform have yet to be revealed, a
formal proposal is expected by September.
Industry officials and lawmakers hope the reform will at
least contain measures to permit profit-sharing production
agreements between state oil monopoly Pemex and
Mexican government officials have repeatedly suggested that
the plan could also set out a framework for allowing private
capital to help exploit Mexico's shale resources.
Based in the northern, shale-rich state of Coahuila, AHMSA
operates iron ore and coal mines and is Mexico's top
manufacturer of steel products, according to company estimates.
AHMSA holds some 6 million acres (2.4 million
hectares) of mining concessions near the U.S.-Mexico border in
areas where shale deposits are believed to be concentrated.
"It makes sense that AHMSA has an interest in having access
to reliable, cheap sources of gas in the long term, and that's
something they could gain from an opening in the shale
industry," said Pablo Ferrante, a Houston-based partner of law
firm Mayer Brown in its corporate and global energy practice.
Ferrante added that other industrial users of natural gas as
a raw material for production or power generation would also
benefit from a potential shale boom in Mexico.
Mexico, a leading oil exporter to the United States, boasts
the world's fourth-largest reserves of shale gas in deposits
that may contain rich pockets of both natural gas and oil,
according to the U.S. Energy Information Administration.
However, it has been slow to exploit them.
At the end of April, Pemex announced its first ever
production of shale gas from a test well in the country's
northern Burgos basin, just across the border from Texas.
The company said it showed that the Eagle Ford geological
formation in south Texas extends into northeastern Mexico,
including Coahuila. In the United States, Eagle Ford shale gas
and oil production has been booming in recent years.
Pemex plans to drill a total of 10 shale test wells this
year as the company continues to study its reserves.
"Non-conventional (reserves) are going to play a bigger and
bigger role," Carlos Morales, Pemex's exploration and production
chief, told Reuters in late April. "If not by Pemex, then as
part of the country's overall oil policy."