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Mexico's 10-year plan aims to revitalize Pemex with help

of

fracking

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Sheinbaum approves fracking despite previous opposition

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Mexico's oil output has declined from about 3.4 million

bpd in

early 2000s to 1.6 million bpd

By Adriana Barrera

MEXICO CITY, Aug 7 (Reuters) - Mexico is planning to

increase the use of hydraulic fracturing to tap unconventional

hydrocarbon deposits and boost oil and gas production after

years of declining output, marking a shift in its stance on what

some say is a highly polluting practice.

The evaluation and development of unconventional resources

hidden deep underground within complex geological formations is

part of a 10-year plan unveiled on Tuesday to revitalize

Petroleos Mexicanos, or Pemex, Mexico's deeply indebted state

energy company.

Mexico had attempted to exploit unconventional oil and gas

plays that required hydraulic fracturing, or fracking, following

sweeping energy reform in 2014, but the bidding processes to

secure contracts were unsuccessful.

Former President Andres Manuel Lopez Obrador, in office from

2018 to 2024, ruled out developing oil and gas reserves via

fracking, a practice he publicly condemned and which

environmentalists object to because it uses large volumes of

water and contaminates groundwater.

President Claudia Sheinbaum, Lopez Obrador's successor, has

signed off on the production method, however, even though she

had said during her 2024 election campaign she would not allow

it.

"We're going to address all the geological potential we

have," said Pemex CEO Victor Rodriguez on Tuesday, when the

company's revitalization plan was presented during Sheinbaum's

daily morning press conference.

The plan said there is very significant potential for

production in fields with "complex geology", referring to shale

basins in which oil and gas are extracted using fracking

technology. This includes about 64 billion barrels of crude

oil-equivalent production, mainly in the basins of

Tampico-Misantla, Sabinas-Burro Picachos, and Burgos.

"These types of deposits have the potential to change Mexico's

declining production outlook ... if implementation plans are

established that favor private investment in the exploration and

exploitation of these resources," the plan said.

Pemex is seeking to stem a decline in its crude oil

production, which is around 1.6 million barrels per day, down

from about 3.4 million bpd in the early 2000s, and increase

natural gas output.

TARGETS

Despite being a major oil and gas producer, Mexico remains

highly dependent on imports from the United States, both for

natural gas and refined products like gasoline and diesel.

The plan unveiled on Tuesday outlined a modest production

increase of unconventional resources between 2026 and 2028, and

a significant ramp-up in volumes starting in 2029. The

cumulative addition to production by 2030 would be 197 million

barrels of crude oil and 303 billion cubic feet of gas,

according to the plan, although Pemex did not share details on

how those increases would be achieved.

Pemex's plan highlighted technological advances made over

the last decade in well design, drilling and completion that it

said would minimize environmental impacts and preserve

freshwater resources.

"Hydraulic fracturing today has nothing to do with that of

20 years ago," Fluvio Ruiz, a former independent advisor for

Pemex, said in an interview, adding that both techniques and

technologies have advanced since.

"One of the advantages of being late or waiting (to exploit

unconventional resources) is that there are already technically

very well-designed regulations; there's no need to reinvent the

wheel," Ruiz said.