Pemex has announced a strategic shift to increase hydraulic fracturing, or fracking, to exploit unconventional hydrocarbon deposits and reverse years of declining oil and gas production.
The company aims to tap into shale basins with complex geology, potentially unlocking around 64 billion barrels (bbbl) of crude oil-equivalent production under a new ten-year plan unveiled on March 31.
This policy change aligns with the current administration’s effort to revitalise Pemex, whose output has fallen from about 3.4 million barrels per day (mbbl/d) in the early 2000s to 1.6 mbbl/d.
Pemex CEO Victor Rodriguez stated: “We are going to address all the geological potential we have,” signalling a concerted move to increase natural gas and crude oil production.
The plan forecasts a modest rise in unconventional production between 2026 and 2028, with a significant ramp-up from 2029 onward.
By 2030, Pemex expects an additional 197 million barrels of crude oil and 303 billion cubic feet of gas production.
This shift comes despite past unsuccessful attempts to secure contracts for fracking following the 2014 energy reforms and the former President Andres Manuel Lopez Obrador’s strong opposition to the practice.
Current President Claudia Sheinbaum has authorised fracking despite having pledged against it during her 2024 election campaign, illustrating a pragmatic policy reversal driven by the need to enhance energy security and reduce import dependence, particularly on US natural gas.
Pemex emphasised advancements in well design, drilling, and completion technologies that would minimise environmental impacts and conserve freshwater resources, recognising the contentious nature of fracking.
Additionally, to support Pemex’s financial obligations and upcoming debt maturities in 2025 and 2026, Mexico recently placed a US$12 billion (223.38 billion pesos) debt offering involving pre-capitalised securities, or P-Caps, as announced by the Finance Ministry.
This new strategic approach thus marks a pivotal turning point in Mexico’s energy policy, aiming to unlock significant unconventional resources within shale basins, revitalise declining production, and secure the future of the national energy company.
