With estimates of shale gas reserves ranging from 150- to 680 trillion cubic feet (Tcf) and rapidly increasing domestic gas demand, Mexico is turning its attention to evaluating the massive shale gas formations in the eastern half of the country.

Pemex Exploration and Production estimates shale gas reserves between 150- and 460 Tcf while the U.S. Energy Information Administration puts the potential at 680 Tcf.  A Pemex official declared earlier this year that the company would invest $8 billion to drill 4,000 wells and produce 1.0 billion cubic feet (Bcf) of shale gas per day.

Details of Mexico’s shale gas reserves and coalbed methane were discussed at a meeting on “New Opportunities for Unconventional Resources in Mexico: The Extension of the Eagle Ford Shale Play and Coalbed Methane Gas” hosted by the Institute for Energy Law’s Oil and Gas Practice, and International committees in Houston on Aug. 23.  Luis Ramos, planning manager, Pemex E&P, Javier Estrada, commissioner, National Commission for Hydrocarbons, Nicolas Borda, partner, Borda y Quintana, and Stan Harbison, vice president, research and analysis, Energy Policy Research Foundation, made presentations.

“Mexico has huge shale gas reserves,” Borda emphasized.  “The reserves are fourth behind China, the U.S. and Argentina.”

Pemex recently completed its first shale gas well -- the Emergente 1 -- that confirmed the Eagle Ford shale does extend into Mexico into Coahuila state.  The well cost an estimated $20 million to drill, and its initial production was nearly 3.0 million cubic feet per day (MMcf/d).  The well was completed with 17 frac stages in a 4,500-ft lateral at a depth of 2,500 m (8,250 ft).  Production began from the well in May.

“The continuity of the Eagle Ford was proved by Emergente 1.  We are now optimizing drilling and completion costs,” he emphasized.  “We have to accelerate the learning curve for the production of these resources.   We have to generate predictive models of brittleness and ductility to define areas that are susceptible for hydraulic fracturing.   We will evaluate the regional potential of shale gas and provide the best estimate of resources in place.”

Ramos explained that there were five areas where Pemex is focusing its efforts -- Sabinas-Burro Picachos, Chihuahua, Burgos, Tampico-Misantla and Veracruz.   Between 2011 and 2014, Pemex will drill at least 20 wells to evaluate these areas, depending on the capex and what funds the government will allocate to Pemex.

Mexico’s current gas resources are around