Shale gas potential in Mexico has been identified by government, Mexican National Oil Company - PEMEX, and international petroleum industry, as a great opportunity for resources development in order to solve increasing natural gas demand.
Large gas pipeline extension and power generation projects have been launched and others are on the way according to National Infrastructure Program. In the mid-term U.S. gas exports are expected to continuously rise, which for some political parties is a threat to Mexican energy independence.
The upcoming Round One bids for onshore fields will comprise Unconventional resources including Shale Gas, Shale Oil and Chicontepec. The aim of this study is to evaluate Shale Gas development profitability for different gas prices, costs and royalties and more important to develop fiscal and contract incentives alternatives based on geological trends, current well construction technologies, technical risks and market risk.
Uncertainty is Clouding the Energy Trading OutlookCTRM Center
As the United States continues to rapidly grow its production of oil and gas from shale, and Canada increases production from its oil-rich tar sands, these new volumes are helping to support world oil markets as crude production outside the US declines due to increasing conflict in the Middle East and North Africa. Should these conflicts widen, the global markets will be increasingly volatile as supply disruptions outpace the growth in North American production.
Though US natural gas production has not yet impacted the global market space via LNG exports, there is no doubt that those exports will happen. While the impact on US prices is unclear at this time, these exports will be yet another variable with which to content in a US market already unsettled by increasing regulations that will, by design, reshape the US energy mix.
Dealing with this uncertainty will require increasing market vigilance, with a constant view on both the near and longterm energy outlook, and supported by a commodity trading and risk management solution that facilitates analytics, market visibility and regulatory compliance, such as Eka Energy.
The operational and financial updated issued by CONSOL Energy for first quarter 2014. The update shows CONSOL's rapid change from coal company to shale gas company. In May CONSOL's current CEO will retire and the current President will assume that role.
A quarterly update of global energy activity and trends in the oil and gas markets. This publication includes a forecast of 2010 energy commodity prices and a review of recent M&A activity.
Navigant: North American Natural Gas Market Outlook - Year-End 2014: A View t...Marcellus Drilling News
A report issued by global consulting firm Navigant. The report says U.S. natural gas supply will increase from 72 billion cubic feet per day (Bcf/d) in 2015 to nearly 110 Bcf/d by 2035. Other key insights.
Justin Dargin, a Research Fellow with The Dubai Initiative at Harvard University and a Fulbright Scholar of the Middle East, was invited by CIRS to deliver a lecture on “Gulf Gas Development: A Rational Development Strategy” to Georgetown University in Qatar faculty and staff. The lecture focused on the basics of the Gulf Gas/Power Sector and how the countries of the GCC are facing the current energy challenges.
Uncertainty is Clouding the Energy Trading OutlookCTRM Center
As the United States continues to rapidly grow its production of oil and gas from shale, and Canada increases production from its oil-rich tar sands, these new volumes are helping to support world oil markets as crude production outside the US declines due to increasing conflict in the Middle East and North Africa. Should these conflicts widen, the global markets will be increasingly volatile as supply disruptions outpace the growth in North American production.
Though US natural gas production has not yet impacted the global market space via LNG exports, there is no doubt that those exports will happen. While the impact on US prices is unclear at this time, these exports will be yet another variable with which to content in a US market already unsettled by increasing regulations that will, by design, reshape the US energy mix.
Dealing with this uncertainty will require increasing market vigilance, with a constant view on both the near and longterm energy outlook, and supported by a commodity trading and risk management solution that facilitates analytics, market visibility and regulatory compliance, such as Eka Energy.
The operational and financial updated issued by CONSOL Energy for first quarter 2014. The update shows CONSOL's rapid change from coal company to shale gas company. In May CONSOL's current CEO will retire and the current President will assume that role.
A quarterly update of global energy activity and trends in the oil and gas markets. This publication includes a forecast of 2010 energy commodity prices and a review of recent M&A activity.
Navigant: North American Natural Gas Market Outlook - Year-End 2014: A View t...Marcellus Drilling News
A report issued by global consulting firm Navigant. The report says U.S. natural gas supply will increase from 72 billion cubic feet per day (Bcf/d) in 2015 to nearly 110 Bcf/d by 2035. Other key insights.
Justin Dargin, a Research Fellow with The Dubai Initiative at Harvard University and a Fulbright Scholar of the Middle East, was invited by CIRS to deliver a lecture on “Gulf Gas Development: A Rational Development Strategy” to Georgetown University in Qatar faculty and staff. The lecture focused on the basics of the Gulf Gas/Power Sector and how the countries of the GCC are facing the current energy challenges.
For much of the last decade through 2014, the U.S. energy sector expe¬rienced a bull market sustained by debt-financed drilling programs in emerging unconventional plays and supported by elevated commodity prices. U.S. E&P players, particularly the emerging universe of indepen¬dent unconventional operators, required an array of capital-intensive services that led to a boom in the services industry as well: rigs to handle development drilling; engineering services to handle geological surveys; logistics/infrastructure services to gather, transport, and store various hydrocarbons; and refitting of refineries to process increasing volumes of light oil. This wave of capital spending led to innovation in drilling and fracking technology, taking US production from about 6 million b/d to over 9 million b/d and marking the reversal of a decades-long decline in U.S. domestic oil production.
What’s Inside:
- U.S. Crude Production Oil Outlook
- Sector Updates: Last 12 Months in Review
- Capital Spending Trends
- Current State of the Storage Market
Energy equipment & services monthly report – september finalCapstone Headwaters
Crude prices have moderated somewhat after reaching the upper $40
range
–– Prices weakened by rising exports from Iran, elevated inventories, and
weak refinery demand
• US Rig counts continue to improve moderately
–– Since August 12, the US onshore market has added 25 rigs, bringing the
total rig count to 506
–– International rig counts rose slightly by 66 in August
• Refining utilization decreased mildly since last month, and more
substantial declines are expected going forward
–– 300k bbl/d capacity expected to be down for routine maintenance at
times during fourth quarter, excluding economic run cuts or unplanned
downtime
• In Q2 2016, overall solar system pricing fell by up to 7.5%. Utility fixedtilt
and tracking projects in Q2 2016 saw an average pricing of $1.17/Wdc
and $1.30/Wdc, respectively.
• Continued elevated temperatures led to record power demand across
the country, including an
2019 Election| LNG| Natural Resources| Canada| August 2019paul young cpa, cga
Canada is one of the top exporters of Natural Gas
Canada lacks the LNG capacity to expand LNG exports
United States continues to expand its export market for its LNG - https://www.forbes.com/sites/judeclemente/2018/08/05/despite-trade-war-u-s-natural-gas-exports-booming-to-record-highs/#173faff614ea
Canada regulatory process will get messier if bill C-69 becomes law - https://www.bnnbloomberg.ca/video/what-bill-c-69-means-for-industry~1483271
“US Shale Gas Industry Analysis” Report Highlight:
US Shale Gas Industry Overview
Shale Gas Exploration, Technical and Technology Aspects
US Shale Gas Reserve Analysis: Technical & Recoverable Reserves
Investments in Shale Gas Exploration & Production
US Shale Gas Sector Dynamics
Shale Boom to Drive LNG Export Projects
Energy Equipment & Services: Industry Insights & HappeningsCapstone Headwaters
The latest issue of our monthly Energy Equipment & Services Report, highlighting trends in M&A, financing and capital markets for private and public companies in the energy market, is now available.
Oil field bids in Mexico: Round 1.3. “Onshore Fields”. Commerciality evaluati...Juan Diego Suarez Fromm
An Economical model for oil field development was built for onshore License Contracts in Mexico. Sensibility analysis for price, royalties and costs was performed. A conceptual profitability map was obtained, leading to some important conclusions for awarded Fields in Round One Bid #3. Some would be uncommercial and others would have critical performance due to very high offers in royalty. Sensibility analysis also shows that Government Revenue model promotes investments in a License Contract in oil price range between 30 and 100 usd/bbl; aiding the high royalties cases to achieve profitability under favourable costs conditions.
For much of the last decade through 2014, the U.S. energy sector expe¬rienced a bull market sustained by debt-financed drilling programs in emerging unconventional plays and supported by elevated commodity prices. U.S. E&P players, particularly the emerging universe of indepen¬dent unconventional operators, required an array of capital-intensive services that led to a boom in the services industry as well: rigs to handle development drilling; engineering services to handle geological surveys; logistics/infrastructure services to gather, transport, and store various hydrocarbons; and refitting of refineries to process increasing volumes of light oil. This wave of capital spending led to innovation in drilling and fracking technology, taking US production from about 6 million b/d to over 9 million b/d and marking the reversal of a decades-long decline in U.S. domestic oil production.
What’s Inside:
- U.S. Crude Production Oil Outlook
- Sector Updates: Last 12 Months in Review
- Capital Spending Trends
- Current State of the Storage Market
Energy equipment & services monthly report – september finalCapstone Headwaters
Crude prices have moderated somewhat after reaching the upper $40
range
–– Prices weakened by rising exports from Iran, elevated inventories, and
weak refinery demand
• US Rig counts continue to improve moderately
–– Since August 12, the US onshore market has added 25 rigs, bringing the
total rig count to 506
–– International rig counts rose slightly by 66 in August
• Refining utilization decreased mildly since last month, and more
substantial declines are expected going forward
–– 300k bbl/d capacity expected to be down for routine maintenance at
times during fourth quarter, excluding economic run cuts or unplanned
downtime
• In Q2 2016, overall solar system pricing fell by up to 7.5%. Utility fixedtilt
and tracking projects in Q2 2016 saw an average pricing of $1.17/Wdc
and $1.30/Wdc, respectively.
• Continued elevated temperatures led to record power demand across
the country, including an
2019 Election| LNG| Natural Resources| Canada| August 2019paul young cpa, cga
Canada is one of the top exporters of Natural Gas
Canada lacks the LNG capacity to expand LNG exports
United States continues to expand its export market for its LNG - https://www.forbes.com/sites/judeclemente/2018/08/05/despite-trade-war-u-s-natural-gas-exports-booming-to-record-highs/#173faff614ea
Canada regulatory process will get messier if bill C-69 becomes law - https://www.bnnbloomberg.ca/video/what-bill-c-69-means-for-industry~1483271
“US Shale Gas Industry Analysis” Report Highlight:
US Shale Gas Industry Overview
Shale Gas Exploration, Technical and Technology Aspects
US Shale Gas Reserve Analysis: Technical & Recoverable Reserves
Investments in Shale Gas Exploration & Production
US Shale Gas Sector Dynamics
Shale Boom to Drive LNG Export Projects
Energy Equipment & Services: Industry Insights & HappeningsCapstone Headwaters
The latest issue of our monthly Energy Equipment & Services Report, highlighting trends in M&A, financing and capital markets for private and public companies in the energy market, is now available.
Oil field bids in Mexico: Round 1.3. “Onshore Fields”. Commerciality evaluati...Juan Diego Suarez Fromm
An Economical model for oil field development was built for onshore License Contracts in Mexico. Sensibility analysis for price, royalties and costs was performed. A conceptual profitability map was obtained, leading to some important conclusions for awarded Fields in Round One Bid #3. Some would be uncommercial and others would have critical performance due to very high offers in royalty. Sensibility analysis also shows that Government Revenue model promotes investments in a License Contract in oil price range between 30 and 100 usd/bbl; aiding the high royalties cases to achieve profitability under favourable costs conditions.
Breaking Paradigms in old Fields. Finding “the reservoir key” for Mature Fiel...Juan Diego Suarez Fromm
Two field examples will be presented, where after 50 years of development; fresh oil and gas were produced by changing some reservoir paradigms.
Upsides could be overlooked due to paradigms on field development. The successful one in terms of reserves and cost effective capital expenditure could be visualized as “finding the key for the field”. But as development takes place over many years (decades), the “key” should be a dynamic concept over time, correlated with technology availability, enabling us a better understanding of petroleum resources size, quality and distribution.
Anthony Santa Maria is an Experienced Elementary School Teacher in Cornellrocco010
Anthony Santa Maria is a Cornell based elementary school teacher with more than 15 years of experience. He is a qualified teacher with a Bachelor of Science and a Master of Science from a reputed Florida based university. He has strong interpersonal skills, and always motivates young students try to learn as much as they can. He tells that teachers who build strong relationships with students can easily establish rules for a better learning environment. He believes that teachers need to develop a fun attitude towards the students.
Seattle boasts beautiful natural scenery, numerous parks, many cultural attractions, a temperate climate, and a booming economy. The city is cradled by both the Cascade and Olympic mountain ranges and rests beside Puget Sound, and there is a reason it's known as the Emerald City. Here’s a few our favorites things to do in Seattle.
On August 11, 2014, the secondary laws implementing the historic Mexican constitutional changes drastically reforming the energy sector, including oil and gas, and electricity, were officially published.
These reforms bring deep changes to the Mexican energy market and huge opportunities for investment.
Given the complexity of the changes, we have prepared a presentation as background for such a discussion, summarizing the context of the reforms and the fundamentals of the new scenario for investors.
Sanchez Devanny Eseverri
Mexico’s controversial Energy Reform may divide the population, but it is revitalizing the sector and positioning the energy industry for new levels of inward investment and job creation. But is it a reform to last?
Mercer Capital's Value Focus: Exploration and Production | Q2 2016Mercer Capital
Mercer Capital's Energy Industry newsletter provides perspective on valuation issues. Each newsletter also typically includes macroeconomic trends, industry trends, and guideline public company metrics.
Evaluation of Artificial Lift Methods to Increase Oil Production from Depleti...Dr. Amarjeet Singh
This paper summarizes the research work with reference to artificial lift methods to increase oil production form mature oil wells in Gulf of Mexico.
Increase oil production or oil recovery from oil reservoirs is very important. If the average worldwide recovery factor from hydrocarbon reservoirs can be increased beyond current limits, it will alleviate a number of issues related to global energy supply. Currently the daily oil production comes from mature or maturing oil fields and reserves replacement is not keeping pace with the growing energy demand.
This paper presents big picture overview of artificial lift methods for mature oil wells in Gulf of Mexico.
The 25-page executive summary for a study published in January 2014 by IHS titled "Fueling the Future with Natural Gas: Brining it Home." The new study finds that because of the ongoing rush of new natural gas supplies from shale drilling, the Henry Hub benchmark price will likely stay between $4-$5 per Mcf until 2035. It also finds homeowners will save a signifcant amount of money by heating with natural gas.
“US Shale Gas Industry Analysis” Report Highlight:
* US Shale Gas Industry Overview
* Shale Gas Exploration, Technical and Technology Aspects
* US Shale Gas Reserve Analysis: Technical & Recoverable Reserves
* Investments in Shale Gas Exploration & Production
* US Shale Gas Sector Dynamics
* Shale Boom to Drive LNG Export Projects
“US Shale Gas Industry Analysis” Report Highlight:
US Shale Gas Industry Overview
Shale Gas Exploration, Technical and Technology Aspects
US Shale Gas Reserve Analysis: Technical & Recoverable Reserves
Investments in Shale Gas Exploration & Production
US Shale Gas Sector Dynamics
Shale Boom to Drive LNG Export Projects
White Paper: Shell Petrochemical Complex (“Cracker”) Project OverviewMarcellus Drilling News
A white paper issue by the Ben Franklin Shale Gas Innovation and Commercialization Center. Provides an excellent overview of the coming ethane cracker in Beaver County, PA--with details for how and who can benefit from it.
Research done while in PwC Mexico. A short version was published within the publication "The Future of Pacific Alliance", launched in the presidential summit of Chile in 2016.
Mercer Capital's Value Focus: Exploration & Production | Q3 2017 | Region Foc...Mercer Capital
Mercer Capital's E&P newsletter provides perspective on valuation issues. Each newsletter also typically includes macroeconomic trends, industry trends, and guideline public company metrics.
The world of search engine optimization (SEO) is buzzing with discussions after Google confirmed that around 2,500 leaked internal documents related to its Search feature are indeed authentic. The revelation has sparked significant concerns within the SEO community. The leaked documents were initially reported by SEO experts Rand Fishkin and Mike King, igniting widespread analysis and discourse. For More Info:- https://news.arihantwebtech.com/search-disrupted-googles-leaked-documents-rock-the-seo-world/
LA HUG - Video Testimonials with Chynna Morgan - June 2024Lital Barkan
Have you ever heard that user-generated content or video testimonials can take your brand to the next level? We will explore how you can effectively use video testimonials to leverage and boost your sales, content strategy, and increase your CRM data.🤯
We will dig deeper into:
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Unveiling the Secrets How Does Generative AI Work.pdfSam H
At its core, generative artificial intelligence relies on the concept of generative models, which serve as engines that churn out entirely new data resembling their training data. It is like a sculptor who has studied so many forms found in nature and then uses this knowledge to create sculptures from his imagination that have never been seen before anywhere else. If taken to cyberspace, gans work almost the same way.
Improving profitability for small businessBen Wann
In this comprehensive presentation, we will explore strategies and practical tips for enhancing profitability in small businesses. Tailored to meet the unique challenges faced by small enterprises, this session covers various aspects that directly impact the bottom line. Attendees will learn how to optimize operational efficiency, manage expenses, and increase revenue through innovative marketing and customer engagement techniques.
Tata Group Dials Taiwan for Its Chipmaking Ambition in Gujarat’s DholeraAvirahi City Dholera
The Tata Group, a titan of Indian industry, is making waves with its advanced talks with Taiwanese chipmakers Powerchip Semiconductor Manufacturing Corporation (PSMC) and UMC Group. The goal? Establishing a cutting-edge semiconductor fabrication unit (fab) in Dholera, Gujarat. This isn’t just any project; it’s a potential game changer for India’s chipmaking aspirations and a boon for investors seeking promising residential projects in dholera sir.
Visit : https://www.avirahi.com/blog/tata-group-dials-taiwan-for-its-chipmaking-ambition-in-gujarats-dholera/
3.0 Project 2_ Developing My Brand Identity Kit.pptxtanyjahb
A personal brand exploration presentation summarizes an individual's unique qualities and goals, covering strengths, values, passions, and target audience. It helps individuals understand what makes them stand out, their desired image, and how they aim to achieve it.
Implicitly or explicitly all competing businesses employ a strategy to select a mix
of marketing resources. Formulating such competitive strategies fundamentally
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Digital Transformation and IT Strategy Toolkit and TemplatesAurelien Domont, MBA
This Digital Transformation and IT Strategy Toolkit was created by ex-McKinsey, Deloitte and BCG Management Consultants, after more than 5,000 hours of work. It is considered the world's best & most comprehensive Digital Transformation and IT Strategy Toolkit. It includes all the Frameworks, Best Practices & Templates required to successfully undertake the Digital Transformation of your organization and define a robust IT Strategy.
Editable Toolkit to help you reuse our content: 700 Powerpoint slides | 35 Excel sheets | 84 minutes of Video training
This PowerPoint presentation is only a small preview of our Toolkits. For more details, visit www.domontconsulting.com
Kseniya Leshchenko: Shared development support service model as the way to ma...Lviv Startup Club
Kseniya Leshchenko: Shared development support service model as the way to make small projects with small budgets profitable for the company (UA)
Kyiv PMDay 2024 Summer
Website – www.pmday.org
Youtube – https://www.youtube.com/startuplviv
FB – https://www.facebook.com/pmdayconference
Skye Residences | Extended Stay Residences Near Toronto Airportmarketingjdass
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"𝑩𝑬𝑮𝑼𝑵 𝑾𝑰𝑻𝑯 𝑻𝑱 𝑰𝑺 𝑯𝑨𝑳𝑭 𝑫𝑶𝑵𝑬"
𝐓𝐉 𝐂𝐨𝐦𝐬 (𝐓𝐉 𝐂𝐨𝐦𝐦𝐮𝐧𝐢𝐜𝐚𝐭𝐢𝐨𝐧𝐬) is a professional event agency that includes experts in the event-organizing market in Vietnam, Korea, and ASEAN countries. We provide unlimited types of events from Music concerts, Fan meetings, and Culture festivals to Corporate events, Internal company events, Golf tournaments, MICE events, and Exhibitions.
𝐓𝐉 𝐂𝐨𝐦𝐬 provides unlimited package services including such as Event organizing, Event planning, Event production, Manpower, PR marketing, Design 2D/3D, VIP protocols, Interpreter agency, etc.
Sports events - Golf competitions/billiards competitions/company sports events: dynamic and challenging
⭐ 𝐅𝐞𝐚𝐭𝐮𝐫𝐞𝐝 𝐩𝐫𝐨𝐣𝐞𝐜𝐭𝐬:
➢ 2024 BAEKHYUN [Lonsdaleite] IN HO CHI MINH
➢ SUPER JUNIOR-L.S.S. THE SHOW : Th3ee Guys in HO CHI MINH
➢FreenBecky 1st Fan Meeting in Vietnam
➢CHILDREN ART EXHIBITION 2024: BEYOND BARRIERS
➢ WOW K-Music Festival 2023
➢ Winner [CROSS] Tour in HCM
➢ Super Show 9 in HCM with Super Junior
➢ HCMC - Gyeongsangbuk-do Culture and Tourism Festival
➢ Korean Vietnam Partnership - Fair with LG
➢ Korean President visits Samsung Electronics R&D Center
➢ Vietnam Food Expo with Lotte Wellfood
"𝐄𝐯𝐞𝐫𝐲 𝐞𝐯𝐞𝐧𝐭 𝐢𝐬 𝐚 𝐬𝐭𝐨𝐫𝐲, 𝐚 𝐬𝐩𝐞𝐜𝐢𝐚𝐥 𝐣𝐨𝐮𝐫𝐧𝐞𝐲. 𝐖𝐞 𝐚𝐥𝐰𝐚𝐲𝐬 𝐛𝐞𝐥𝐢𝐞𝐯𝐞 𝐭𝐡𝐚𝐭 𝐬𝐡𝐨𝐫𝐭𝐥𝐲 𝐲𝐨𝐮 𝐰𝐢𝐥𝐥 𝐛𝐞 𝐚 𝐩𝐚𝐫𝐭 𝐨𝐟 𝐨𝐮𝐫 𝐬𝐭𝐨𝐫𝐢𝐞𝐬."
Upcoming Round 1.5. “Unconventionals”. Part I: Exploring contract terms and fiscal incentives for Shale gas development in Mexico.
1. Quinquennial Plan of bids, drilled shale wells and basins boundaries where tentative Shale blocks
correspond to “Exploration”
[6]
. Modified from National Commission of Hydrocarbons - CNH.
Nuevo Laredo
Reynosa
Piedras Negras
Eagle Ford
Sabinas
Burgos
Corpus Christi
2011-2013 Shale Wells
Pimienta
Eagle Ford
2. 1
Upcoming Round 1.5. “Unconventionals”.
Part I: Exploring contract terms and fiscal
incentives for Shale gas development in Mexico.
Keywords: Round One, License Contract, profitability, royalty, government take,
Mexico Shale, Eagle Ford, Type well, shale technologies, National Infrastructure
Program, gas market.
For further details or full report please contact:
Juan Diego Suarez Fromm
Senior Reservoir Engineering Advisor
jdsfromm@hotmail.com
Mexico
3. 2
“We require new strategies in the way we finance and manage shale gas/oil
projects. Shale gas eventually will become the main source of natural gas for
Mexico”. Dr. Edgar Rangel German.
4. 3
0. Summary
Shale gas potential in Mexico has been identified by government, Mexican National Oil
Company - PEMEX, and international petroleum industry, as a great opportunity for
resources development in order to solve increasing natural gas demand.
Large gas pipeline extension and power generation projects have been launched and
others are on the way according to National Infrastructure Program. In the mid-term
U.S. gas exports are expected to continuously rise, which for some political parties is a
threat to Mexican energy independence.
The upcoming Round One bids for onshore fields will comprise Unconventional
resources including Shale Gas, Shale Oil and Chicontepec. The aim of this study is to
evaluate Shale Gas development profitability for different gas prices, costs and
royalties and more important to develop fiscal and contract incentives alternatives
based on geological trends, current well construction technologies, technical risks and
market risk.
In spite of Shale Gas Potential in Mexico and closeness to U.S. shale technologies and
human capital talent, current market conditions are not favourable for Shale Gas
development.
Basically are needed two conditions for building up the shale industry in Mexico: time
and fiscal incentives in order to mitigate market and technical risks.
Among several barriers, the following emerge as very relevant for shale development.
Low present and future prices.
The exploration and appraisal phases are time consuming; as well also it is the
cost optimization process and productivity enhancement.
Transport infrastructure requirements for the logistic of rigs and materials.
Shale industry is very capital intensive, where +90% of capital expenditures are
new wells.
Huge water resources availability for fracking.
Security issues in some places.
In this study, fiscal incentives are set by applying deductions in income taxes
permitted by “Hydrocarbon Revenue Law” [10]
.
5. 4
Several economical models were run based on U.S. Eagle Ford development history;
showing that only marginal profitability is obtained under current market conditions;
even with fiscal incentives.
On the other hand, an optimistic case was run assuming well costs optimization and
more favourable sale prices; showing that fiscal incentives could be taken away.
Therefore, three general recommendations can be set for Shale gas development in
Mexico under license contracts.
1. Redefinition of contract periods: The “Exploration period” will replace
the “Evaluation Period”, which will be run before Development Period. During
the Exploration period, the Minimal Work Commitment must be fulfilled and the
operator will have the option for the continuing of operations or the end of the
contract.
2. Extension of Exploration Period: Instead of one year period, the exploration
phase will last about 5 years. During this period, operators are expected to
successfully apply well construction optimizations.
3. Fiscal incentives: During Exploration Period, all development capital
expenditures will be treated as Exploration expenditures, thus allowing 100%
deduction for income tax determination.
These fiscal incentives and contract terms or similar are strongly
recommended for Shale Gas Development in Mexico under License Contracts.
During the Exploration period, they will mitigate market and technical risks
for operators, allowing them to develop a learning curve regarding well
construction and project management in order to sustain future intensive
capital expenditures in the development period. During the second period,
where main field development takes place, incentives will no longer be
needed, favouring government income.
6. 5
1. Introduction
1.1. The Grand Energy Transition
Robert Hefner published in 2009 “The Grand Energy Transition: THE RISE OF ENERGY
GASES, SUSTAINABLE LIFE AND GROWTH, AND THE NEXT GREAT ECONOMIC
EXPANSION”, where he states that gases will completely replace liquid and solid
carbon based fuels, leading to a low-carbon energy matrix (Chart 1).
In this transition natural gas is one link of this macro process, which presents many
advantages from technical and environmental point of view. Methane, and latterly
Propane and Butane are being used for transportation, which is a major Dioxide
Carbon generator when based on gasoline burn.
Chart 1. Energy matrix transition. From “The Grand Energy Transition”, Robert Hefner [1]
.
7. 6
1.2. National market of natural gas
Mexican natural gas demand has been increasing, averaging 1,4% since 2008
(Chart 2). Today, gas pipeline network covers 8,990 Km with 5,750 MMcf/d capacity,
over 19 states; and it is projected to expand 5,200 Km according National
Infrastructure Program 2014-2018 [2]
.
Chart 2. Mexican Gas demand by sector. From “Mexico’s new chapter in natural gas”, National
Commission of Hydrocarbons (CNH) [3]
.
Gas production peaked in 2009, boosted by Marine and North regions. Since then it
has declined due to onshore fields depletion (Chart 3).
8. 7
Chart 3. Mexican Gas supply. Natural gas production and gas imports from U.S.
Since 2011 National Oil Company (Pemex) has increased gas utilization from onshore
and offshore fields, reaching 96%; by improving gas compression, sour gas
sweetening processes, and gas injection to reservoirs.
On the other hand, gas imports from U.S. after a stable period from 2003 and 2010,
have continuously increased; reaching 50% of fuel gas production.
0
2.000
4.000
6.000
8.000
0
2.000
4.000
6.000
8.000
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
GasImport(MMcf/d)
GasPrd(MMcf/d)
Mexican Gas Supply. Natural gas production*
by Region and gas import from U.S.
Marine South North U.S. Imports
*Without Nitrogen
9. 8
1.3. Natural gas from North Mexico. Multiple Service Contracts in
Burgos
Natural gas plays a central role in North Mexico for power generation industry. The
Northwest region has high electric power consumption due to fans, air-conditioning,
refrigerators, and agricultural irrigation systems. And the Northeast has a vast
manufacture industry as steel, cement, chemical, and glass among others, very energy
demanding [2]
.
Mexican gas industry started in 1945 with the discovery of “Mision” field in Burgos
Basin. This basin is the main non associated natural gas resource in Mexico, extending
in the U.S. as “Rio Grande” basin. Located at Northwest, it develops over States of
Tamaulipas and Nuevo Leon, and covers 30,000 Km2 (Chart 4).
Chart 4. Petroleum provinces in Mexico. From “National Hydrocarbon Commission” (CNH).
10. 9
Gas production stabilized in 600 MMcf/d between late 60’s and 70’s. In early 80’s it
declined steadily, reaching 200 MMcf/d in mid-90’s (Chart 5). In response to this
situation, PEMEX retook exploration and development, achieving production
enhancement to 1.000 MMcf/d by 2000. Even so, U.S. gas import continuously
increased, reaching 300 MMcf/d at 2000. Consequently, PEMEX called International Oil
Companies looking for private investment and knowhow. By 2003, PEMEX awarded 7
fields in Burgos basin, opening for first time the petroleum industry to private
operators, with “Multiple Service Contracts” (MSC). In the second (2004-2005) and
third call (2007), three additional blocks were awarded.
Chart 5. Gas supply in North Mexico. Burgos’s production and U.S. imports.
The MSC contracts allow Burgos production enhancement from 2005 to 2009, boosted
by high gas prices (Chart 6). By 2004 prices were around 6 usd/MMbtu (Henry Hub)
and 50 usd/bbl (West Texas Intermediate), being very attractive market conditions for
PEMEX, allowing profitable development for these service contracts.
0
500
1000
1500
2000
2500
3000
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
Gas[MMcf/d]
Gas supply in North Mexico.
Burgos's production & U.S. imports
U.S. Imports Burgos's Nat Gas prd.
Sabinas
development
Burgos new
developments
(Pemex)
Burgos's COPF
Contracts
11. 10
On the other hand, by late 2009, oil and gas prices were decoupled. Gas price dropped
from 13 usd/MMbtu in 2008 to 3 usd/MMbtu in 2009, staying between 2 and 4,5
usd/MMbtu since then. Therefore PEMEX decreased capital expenditures in Burgos, in
traditional fields and MSC contracts, and thus redirecting investment on condensate
fields.
Lately, oil price crisis directed PEMEX to cut off almost all capital expenditures in
Burgos, keeping only operation and maintenance budgets. This situation explains total
production decline since 2010.
Chart 6. Henry Hub and West Texas Intermediate prices.
0
2
4
6
8
10
12
14
16
18
20
0
20
40
60
80
100
120
140
160
180
200
1995
2000
2005
2010
2015
HenryHub[USD/MMBTU]
WTI[USD/BBL]
WTI & Henry Hub
WTI (USD/bbl) Henry Hub (usd/Mmbtu)
Burgos COPF
Contracts
12. 11
1.4. The U.S. Shale boom
Shale resources have a long history; since War World Two, shale has been identified by
U.S. government as a future oil source. But it development had to wait until market
conditions incentivized by Federal government promoted the investigation of new
technologies that jointly triggered shale industry development (Chart 7). By 2000
shale production accounted for only 1.6 percent of total U.S. natural gas production,
while currently it accounts for 40 percent (Chart 8).
Chart 7. U.S. shale plays. From EIA.
13. 12
Chart 8. U.S. shale plays production and rig count.
Shale oil and gas production has allowed declining energy imports in U.S. Energy
imports decreased from 30% of total energy consumption in 2005 to 13% in 2013.
It is interesting to analyse the critical conditions that lead to the shale boom in U.S.
The following summary is taken from the publication “US Shale Gas Development,
What Led to the Boom?”, by Zhongmin Wang and Alan Krupnick.
A number of factors converged in the early 2000s government policy by
deregulating gas prices (which led to high natural gas prices), tax incentives,
favorable geology, private land and mineral rights ownership, market
structure, water availability, and natural gas pipeline infrastructure, but that
the most important factor was innovations in technology. Some of the key
technological innovations resulted from government research and
development (R&D) programs and private entrepreneurship that aimed to
develop unconventional natural gas, but other important technologies were
largely developed by the oil industry for use in oil exploration and production.
-
10.000
20.000
30.000
40.000
50.000
60.000
-
1.000
2.000
3.000
4.000
5.000
6.000
GasPrd(MMcf/d)
OilPrd(Mbpd),rigcount
U.S. Shale Production
Rig count Oil (Mbbl/d) Total prd Natural gas (MMcf/d) Total prd
14. 13
The most important energy-related technological innovations were assessed
in 1980s and the 1990s, which included three technologies that are critical to
shale gas development: horizontal drilling, three-dimensional (3-D) seismic
imaging, and fracturing technology.
Horizontal Drilling. Few practical applications of horizontal drilling took place
until the early 1980s and it did not achieve commercial viability until the late
1980s.
Massive Hydraulic Fracturing. Agarwal et al. (1979, 172) note that MHF was
already “a proven technique for developing commercial wells in low-
permeability or ‘tight’ gas formations.” With financial assistance from DOE,
Mitchell Energy conducted in 1978 what was, at the time, the largest MHF in a
tight gas formation. Mitchell Energy quickly applied MHF to the Barnett shale.
3-D Seismic Imaging. Limited commercial application of 3-D seismic
technology began in the early 1980s (Haar 1992). 3-D seismic imaging
provides a better picture of the structure and properties of subsurface rocks
than the earlier two-dimensional (2-D) method.
Microseismic Fracturing Mapping. Since the early 2000s, microseismic frac
monitoring has played a key role in optimizing how shale gas wells are
hydraulically stimulated. Unlike 3-D seismic imaging, microseismic fracture
monitoring is a passive method that uses sensors to listen for underground
seismic energy and record the minor seismic events generated during the
fracturing of a nearby well. This technology can reveal the height, length,
orientation, and other attributes of induced fractures.
From “US Shale Gas Development, What Led to the Boom?”, by Zhongmin Wang and
Alan Krupnick.
15. 14
1.5. Shale Resources in Mexico
Mexico’s shale resources hold fourth Global place according to World Shale Gas
Resources from U.S. Energy Information Administration publication (EIA) [4]
(Chart 9).
Chart 9. Worldwide shale resources, Proved Reserves and cumulative production. From
“Mexico’s new chapter in natural gas”, National Commission of Hydrocarbons (CNH) [3]
.
16. 15
Mexico’s Shale potential is located in four onshore petroleum provinces, according to
EIA’s and PEMEX studies (Chart 10).
1. Burgos.
2. Sabinas.
3. Tampico-Misantla.
4. Veracruz.
The following information is taken from the book from EIA “Technically Recoverable
Shale, Oil and Shale Gas Resources in Mexico” [5]
.
17. 16
Chart 10. Prospective shale basins in Mexico
[5]
. From EIA.
According to EIA assessment, Burgos and Sabinas basins account with large Shale Gas
resources, while Shale Oil potential is located in Burgos and Tampico-Misantla basins.
In Mexico two shale formations: Cretaceous “San Felipe” and Jurassic “Pimienta-La
Casita” are developed over these regions (Chart 11). They are organic rich marine
deposits with suitable thermal maturity, areal extension and good gross thickness.
They are main source rocks for conventional oil and gas fields in Mexican petroleum
provinces, and correlate with two U.S. Shale Plays: Cretaceous Eagle Ford and Jurassic
Haynesville.
18. 17
Chart 11. Stratigraphy of Jurassic and Cretaceous rocks in the Gulf of Mexico basin, Mexico and
U.S. Shale gas targets are highlighted
[5]
. From EIA.
Stratigraphy of Jurassic and Cretaceous rocks in the Gulf of Mexico
Basin, Mexico and USA. Shale gas targets are highlighted.
Eagle Ford
Haynesville
19. 18
About 14 shales wells have been drilled and tested in Burgos and Sabinas basins by
the National Oil Company - Pemex between 2011 and mid-2013, targeting Eagle Ford
and Pimienta formations. The rest of petroleum provinces have some indirect
antecedents from conventional wells, increasing the geological risk.
If U.S. Shale boom could be replicated in Mexico has not a straight forward answer.
Many barriers will be needed to overcome:
Low present and future oil and gas prices.
The exploration and appraisal phases are time consuming; as well also it is the
cost optimization process and productivity enhancement.
Transport infrastructure requirements for the logistic of rigs and materials.
Shale industry is very capital intensive, where +90% of capital expenditures are
new wells.
Huge water resources availability for fracking.
Security issues in some places.
From government point of view, some incentives should be set in order to promote
private interest in the upcoming bids of Unconventional resources.
20. 19
2. Technical and economical assessment for Shale Gas development in
North Mexico. Evaluation of fiscal incentives for License Contracts.
2.1. Geological overview
Upcoming onshore bids will be the so called “Unconventionals”, which comprises Shale
Oil & Gas Exploration, and Chicontepec field development. The last is a tight oil Play,
and despite of it is not a shale formation same development technologies are applied.
This paper will be devoted to Shale Gas, which is located in Northern Burgos and
Sabinas basins.
The following chart shows Quinquennial Plan of bids [6]
, drilled shale wells and basins
boundaries where tentative Shale blocks correspond to “Exploration” (Opening
Chart).
Whereas Mexico’s marine-deposited shales appear to have good rock quality,
the geologic structure of its sedimentary basins often is considerably more
complex than in the U.S. Compared with the broad and gently dipping shale
belts of Texas and Louisiana, Mexico’s coastal shale zone is narrower, less
continuous and structurally more disrupted [5]
.
Regional compression and thrust faulting related to the formation of the
Sierra Madre Ranges have squeezed Mexico’s coastal plain, creating a series
of discontinuous sub-basins. Many of Mexico’s largest conventional oil and
gas fields also occur in this area, producing from conventional sandstone
reservoirs of Miocene and Pliocene age that were sourced by deep, organic-
rich and thermally mature Jurassic and Cretaceous-age shales. These deep
source rocks are the principal targets for shale gas/oil exploration in Mexico
[5]
.
From U.S. Energy Information Administration - EIA, “Technically Recoverable Shale, Oil
and Shale Gas Resources in Mexico”, September 2015.
21. 20
Chart 12. Burgos and Sabinas basins. Structural and geological features. Drilled shale wells
2011-2013. Modified from PEMEX.
Burgos
2011-2013 Shale Wells
Eagle Ford
Piedras NegrasB
B’
Sabinas
Salt Dome
Thrust fault
Anticline
Pimienta
Eagle Ford
22. 21
Chart 13. General Cross section Burgos and Sabinas basins
[7]
.
2.2. Main evaluation assumptions
Some assumptions were made for shale gas development evaluation in Mexico.
Economical evaluation will be based on “Eagle Ford” formation:
The “Eagle Ford” has been developed in U.S. over last 10 years. Public
information is available for evaluation of production performance and costs.
“Eagle Ford” is the main shale target regarding EIA evaluation.
Expected shale blocks distribution will favour Eagle Ford development, mainly
for gas development.
In spite of shale gas potential for “Pimienta – La Casita”, for simplicity this evaluation
will only cover “Eagle Ford” development.
To sum up, only “Eagle Ford” development will be evaluated assuming natural
gas window for shale blocks to be auctioned.
B B’
Burgos
Basin
Sabinas
Basin
La Casita
Pimienta
Terciary
23. 22
2.3. Main evaluation results
Main evaluation results are presented in the following charts.
Income tax deductions play a very relevant role for shale development profitability
under License Contracts. The Base Case needs them in order to achieve a profitable
case. In this scenario all development capital expenditures are considered as
Exploration capital expenditures, thus generating an income tax deduction of 100%.
Chart 14. Gas production profile for Base Case. The economic limit is 0,2 MMcf/d per well.
Chart 15. Capital and Operation Expenditure’s for Base Case. The economic limit is 0,2
MMcf/d per well.
0
20
40
60
80
0 1 2 3 4 5 6 7 8 9 10 11 12
[MMpc/d]
year
Gas production profile for Base Case
G Inc MMpc/d G Base MMpc/d
-100,00
-80,00
-60,00
-40,00
-20,00
0,00
0 1 2 3 4 5 6 7 8 9 10 11 12 13
[MMusd/year]
Year
Capital & Operation Expenditure's for Base Case
CAPEX [Mmusd/year] OPEX [Mmusd/year]
24. 23
Chart 16. Sensibility analysis results for Shale gas development with License Contract.
Reference case is Base case (3 usd/MMbtu, 60 usd/bbl and additional royalty 5%). Income
Tax deductions treatment for development capital expenditures: Exploration -100%
deductible.
25. 24
Chart 17. Sensibility analysis results for Shale gas development with License Contract.
Percentages represent variations respect to Base Case. Reference case is Base case (3
usd/MMbtu, 60 usd/bbl and additional royalty 5%). Income Tax deductions treatment for
development capital expenditures: Exploration -100% deductible.
26. 25
4. References
1. Hefner III, Robert. “The Grand Energy Transition: THE RISE OF ENERGY GASES,
SUSTAINABLE LIFE AND GROWTH, AND THE NEXT GREAT ECONOMIC EXPANSION”,
WILEY, 2009.
2. Presidencia de los Estados Unidos Mexicanos. “National Infrastructure Program
2014-2018”, “Programa Nacional de Infraestructura 2014 – 2018”, December 2015
3. Rangel Germán, Edgar. “Mexico’s new chapter in natural gas”, National Commission
of Hydrocarbons (CNH), 16th Mexican Energy Conference, November 13-14, 2012,
Houston, Texas.
4. U.S. Energy Information Administration. “World Shale Gas Resources: An Initial
Assessment of 14 Regions Outside the United States”, April 2011.
5. U.S. Energy Information Administration. “Technically Recoverable Shale, Oil and
Shale Gas Resources in Mexico”, September 2015.
6. National Hydrocarbon Comission - CNH. “Quinquenial Program of Bids for
Exploration and Production– 2015-2019”, “Plan Quinquenal de Licitaciones para la
Exploracion y Extraccion de Hidrocarburos. 2015-2019”, 2014.
7. Dyer, M.J. and Bartolini, C. “Sabinas Basin Lower Cretaceous to Jurassic
Production—Comparison to South Texas Equivalents”. IHS Energy
8. Hughes, David. “DRILLING DEEPER: A REALITY CHECK ON U.S. GOVERNMENT
FORECASTS FOR A LASTING TIGHT OIL & SHALE GAS BOOM, PART 2: TIGHT OIL”,
post carbon institute.
9. U.S. Energy Information Administration. “Annual Energy Outlook 2015, with
projections to 2040”, April 2015.
10. Cámara de Diputados del Honorable Congreso de la Unión. “Mexican Hydrocarbon
Revenue Law”, “Ley de Ingresos sobre Hidrocarburos”.