February 27, 2014 / 12:10 AM / 4 years ago

Mexico's Pemex to drill just 10 shale test wells in 2014

MEXICO CITY, Feb 26 (Reuters) - Mexico’s state-owned oil company Pemex will drill just 10 shale test wells this year, the head of the company’s exploration and production arm said on Wednesday, as it awaits the implementation of a landmark energy overhaul law passed last year.

That will bring the total number of shale test wells in Mexico to 175, which compares with more than 13,000 permits issued for shale wells in the Eagle Ford formation just across the border in southern Texas, where shale oil production stood at 688,000 barrels per day last year.

Mexico has yet to produce any shale oil on a commercial scale.

“That kind of massive development has yet to reach us here in Mexico,” Gustavo Hernandez, interim head of Pemex’s exploration and production division, said at a conference in Mexico City.

He said Mexico’s technically recoverable shale resources stand at 60.2 billion barrels of oil equivalent.

Hernandez added that the country’s prospective shale oil and gas developments, mostly in northeastern Mexico near the U.S. border, will eventually require 60,000 wells.

As a result of President Enrique Pena Nieto’s energy reform, which ended Pemex’s 75-year monopoly on oil and gas production, the bulk of shale development could be handled by foreign and private oil companies.

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