Insight
Mexico's unconventional round tests the shale landscape, but can it change it?
*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
Mexico's latest tender includes nine unconventional blocks averaging in size of about 300 kilometres squared with mostly dry and wet gas exposure. The timing of the announcement signals the government's commitment to roll out the round before this summer's election. Shale development will be challenging in Mexico for a number of factors. Pioneering the development of a local unconventional supply chain will be a significant undertaking. We expect that US service providers will pass along cost inflation to operators in Mexico. This will likely be complicated by the security situation near the border, perhaps the biggest area of concern for most onshore operators. Yet, despite these challenges, we believe this is an important first step toward developing a viable unconventionals landscape. We expect the round to allow Mexico to test its fiscal terms on the market, similar to the early phases of Round One.
Table of contents
- Nine Burgos basin blocks on offer
- Early Pimienta wells confirm shale potential
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Cost and commerciality: great unknowns
- US shale gas imports to Mexico are cheap and growing
- Can Mexico build a fit-for-purpose supply chain?
- Mexico's onshore faces heightened security risks near the border
- Round will have local appeal
- Fiscal terms introduce a new secondary rate
- Mexico's pilot unconventional phase - a positive step
Tables and charts
This report includes the following images and tables:
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Round Three unconventional onshoreUnconventional shale characteristicsType curve comparison
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Fiscal timeline of taxes and fees for an unconventional development under new license termsL48 Cumulative undrilled gas resource remaining (1Q2018)L48 Cumulative undrilled liquids resource remaining (1Q2018)Mexico onshore net acreage by company for active licenses (excludes Pemex)
What's included
This report contains:
