(Updates to add Pemex comment in the sixth paragraph.)
Nov. 17 (Bloomberg) -- Petroleos Mexicanos plans to drill 175 shale-gas wells in the next two to four years, said Carlos Morales, the head of exploration and production of the company, at an event in Mexico City.
Pemex, as the Mexico City-based state oil company is known, has begun test wells in the Salinas-Burgos-Picachos basin, which is an extension of the Eagle Ford formation in the U.S. and has the most promise for producing shale gas, Morales said. The test wells Pemex has drilled so far are showing good results, he said.
Shale gas production could help Mexico avoid importing gas to meet demand and may attract investment of $10 billion a year to develop the industry, said Energy Minister Jordy Herrera today in the conference.
Mexico should avoid rushing into shale gas production because the technology to extract the fuel continues to change and improve, Morales said.
“We’re working with a high degree of uncertainty and this is why we have to be patient and let the technology mature,” Morales said.
The country needs to reduce the taxes it charges for gas production to make shale projects profitable,’’ Morales said.
“With the fiscal regimen that we have today for gas, it’s impossible to move forward,” he said.
Herrera said the U.S. Department of Energy estimates Mexico has potential shale gas resources of 680 trillion cubic feet, which is 11 times more than the country’s current proven natural gas reserves. Morales said Pemex estimates that Mexico has 150 trillion cubic feet of shale gas with a 90 percent probability of production. With a 10 percent probability, the shale gas resources are 450 trillion cubic feet, Morales said.
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