While the potential is widely recognized, a shale boom in Mexico akin to the rest of North America is unlikely any time soon, an analyst with the Houston office of Wood Mackenzie told NGI.

The Eagle Ford Shale play in Texas extends south into Northern Mexico and that has prompted a little drilling, according to Robert Clarke, Wood Mackenzie manager of global unconventional gas. There is not much positive that has come from this limited activity, he said.

“The costs are very high there on the early wells, so it is going to be tough to make a call on whether or not that play will be commercial longer term,” Clarke said. “But it is certainly an asset that Pemex [Petroleos Mexicanos] is looking at and trying to get some assistance from experienced shale operators to build out a development plan for the play.”

Clarke said that if there is finally a breakthrough in Mexico, it will “take a lot of capital and a lot of wells.”

He indicated that there are not any U.S. or Canadian oil/gas exploration and production companies (E&P) working in Mexico’s Eagle Ford. It is mostly Pemex trying to work with various service companies that do hydraulic fracturing (fracking), Clarke said. “But I am sure that Pemex would like to bring in some North American expertise into that play,” Clarke said.

From a geology perspective, Mexico’s shales are correlated in geologic time periods to the U.S. shale plays (Eagle Ford, Haynesville, Bossier and Pearsall shales), according to Mexican energy officials (see Shale Daily, Sept. 13, 2011). “Structural complexity [faulting and folding], excess depths [below 5,000 meters underground] and locally thin or absent shale on paleo highs constrain [Mexico’s] resource assessments,” a member of Mexico’s National Commission for Hydrocarbons told NGI’s Shale Daily last year.

While petroleum economists in Texas have said the economics are favorable and the risks manageable in Mexico, Clarke and other analysts closer to the E&P process are not sure.

And beyond economics, the geology can be tricky, according to Clark.

“A lot of North American shales certainly aren’t ‘heterogeneous’ and change a tremendous amount when you move 10 to 20 miles in any direction,” said Clarke, who is bullish on shales generally, mainly because of the continuing technological improvements by operators. “It can make it a little easier asset to develop [shales] if you don’t see as much subsurface variability.”