As Mexico moves closer to again welcoming foreign energy companies to its oil fields, American firms are weighing whether the nearby development is worth the risk.
Mexico’s congress late last year took steps to end the country’s 75-year monopoly by state-owned Petroleos Mexicanos, or Pemex.
The reforms promise to allow foreign oil companies to enter into production and service contracts in a move the government hopes will spur development throughout the country.
American and international oil companies have developed fields in the Gulf of Mexico that are believed to extend into Mexican territory. The booming Eagle Ford shale in south Texas is one of the fastest-growing and most prolific fields in the country. The field also is believed to extend across the Rio Grande.
Development in Mexico would open up a new territory that has nearby access to pipelines, other infrastructure and service companies already on the American side of the border.
“There are certain geological trends we have explored right up the border,” Devon Energy Corp. Chief Operating Officer Dave Hager said at the Oklahoma State University energy conference last month. “There are a lot of prospects from that side.”
There also are many challenges.
“My personal feeling is it will be slow,” Hager said. “Sometimes we don’t get too excited about exploring in a country that still celebrates a national holiday for when they kicked out the foreign oil companies.”
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