Mexico’s Sheinbaum Administration Finally Ready to Pursue Shale Gas and Oil via Hydraulic Fracturing

      For well over a decade, Mexico has resisted tapping its shale gas and oil resources. The Eagle Ford trend in South Texas likely extends into Mexico as the Burgos Basin extension of the Western Gulf Coast Basin and can be developed. Recently, Mexican President Gloria Sheinbaum has expressed a desire to develop those resources. One reason to do it is to wean Mexico off of U.S. natural gas, which powers Mexican power plants and industry. Former President Andres Manuel Lopez Obrador (AMLO) was adamantly against allowing Mexico to engage in hydraulic fracturing for energy production. Mexico now imports far more than half of its natural gas, pipelining it in from the U.S. The supply is close and abundant, so the costs to purchase American natural gas are low.

     No concrete plans have been made public yet, and it will take time for them to be formulated and the process begun. Mexico’s state energy company PEMEX is notoriously inefficient and not likely to compete with the U.S. on well and infrastructure costs. Mexico would be wise to allow American companies in to accelerate development, but that is not seen as likely. 

     According to Morning Overview's Everett Sloan, the next steps may be as follows:

     The Burgos Basin was opened for development by private companies in 2017 but by 2019 AMLO decided against allowing hydraulic fracturing in the country. The EIA noted in 2017 that there are 3500 natural gas wells in the Burgos Basin producing from non-shale reservoirs. Those reservoirs typically have low permeability and high decline rates. Burgos Basin gas production was at a peak in 2012 at 1.2 BCF/day but by 2016 it had dropped to 0.87 BCF/day.

     Realistically, it will take years, probably several years, maybe a decade, before Mexican shale production makes an impact and reduces imports from the U.S. Demand may grow as well. This means that the U.S. gas export sales are quite safe for now and in the near-term.

     PEMEX estimates that Mexico holds more oil & gas reserves in unconventional resources like shale than in conventional resources. Proven conventional gas reserves stand at about 83 TCF, while non-conventional resources are estimated at more than 140 TCF. Mexico consumes roughly 9 BCF of natural gas per day, but produces just 2.3 BCF domestically. About 75% to 80% comes from the U.S., mainly from Texas.

     According to OilPrice.com’s Julianne Geiger:

“Sheinbaum said a scientific committee will be formed to evaluate available technologies, including the use of less harmful chemicals and recycled water. The group is expected to deliver recommendations within two months.”

“Pemex expects to increase domestic production to just over 4 billion cubic feet per day by 2030, with a longer-term target of 8.6 billion cubic feet over the next decade. That outlook includes potential contributions from non-conventional sources.”

     Mexico continues to build new combined-cycle natural gas plants, with seven currently under construction or ready to come online and five more planned.

     As the graph below shows, Mexico’s prices for pipelined U.S. gas have mostly remained under $3 per MCF and sometimes closer to $2. It has been a good deal for Mexico and the U.S. and will likely remain so for years to come.

     The Burgos Basin is thought to contain the largest unconventional reserves in the country. The Burgos Basin butts right up against EOG’s Dorado Play in Webb County, Texas, announced in 2020, which produces from the Eagle Ford Shale and the Austin Chalk.

 

References:

 

Sheinbaum backs Mexico energy shift to cut reliance on US natural gas. Everett Sloane. Morning Overview. April 10, 2026. Sheinbaum backs Mexico energy shift to cut reliance on US natural gas

Mexico’s shale-rich Burgos Basin opens to private investment for the first time. Energy Information Administration. August 22, 2017. Mexico’s shale-rich Burgos Basin opens to private investment for the first time - U.S. Energy Information Administration (EIA)

Mexico’s Sheinbaum Weighs Fracking Return to Cut U.S. Gas Dependence. Julianne Geiger. OilPrice.com. April 9, 2026. Mexico’s Sheinbaum Weighs Fracking Return to Cut U.S. Gas Dependence | OilPrice.com

End of Fracking Freeze? Mexico Eyes 141 Tcf in Unconventional Resources to Slash U.S. Imports. Christopher Lenton. Natural Gas Intelligence. April 9, 2026. End of Fracking Freeze? Mexico Eyes 141 Tcf in Unconventional Resources to Slash U.S. Imports

Mexico Basins Overview. 12 Mexico Gas Summit. 2026. Mexico Shale Summit Burgos Sabinas Picachos Burros Basin