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Petroleum History of Mexico: How it Got to Where it is Today

Guzman, Alfredo E.
[email protected]

Mexico has five major hydrocarbons producing provinces: two for oil, the Southeast and the Tampico – Misantla basins; and three for gas, the Sabinas, Burgos and Veracruz basins. It has seven other provinces with potential: California, Gulf of Cortes, Chihuahua, Sierra Madre Oriental, Sierra de Chiapas, Progreso Shelf, and the Deep Gulf of Mexico. Nevertheless, despite this natural rich endowment, Mexico is the only country in the world among those considered to be oil rich, that has consistently lost production and reserves in the last ten years.

Many reasons can be attributed for these results, and as this note proves, least of them is the country`s endowment of oil and gas resources. The explanation can be found in the petroleum history of Mexico. Since 1938 the country has had only one oil company responsible for all of its upstream activities and even though Pemex`s performance is comparable with that of most of the majors, it`s impossible that all the remnant potential of the whole country can be found and produced through only one company, no matter how large, wealthy, efficient, technologically advanced and successful it can be.

The understanding of the petroleum history of Mexico helps explain why the country is so unexplored and undeveloped. Aspects like: the legal frame, that up to now has precluded third party participation outside of Pemex`s in the exploration activities of Mexico; the discovery of the supergiant onshore Mesozoic Chiapas – Tabasco and offshore Gulf of Campeche provinces in the 1970`s, that took Pemex to concentrate all of its resources in the development of the Southeast basin; the historically allocated Capex for E&P, that has been totally insufficient to allow a systematic exploration and development of the country`s potential; and that the exploration activities have focused mostly in low risk, extension opportunities with little expenditures allocated to test rank wildcat ones.

The results of these policies are complete basins / provinces / plays with tremendous potential untested for all practical reasons. The history as is being written today allows for optimism as the country is being opened up for third party participation in the upstream, which will allow for spectacular results.

 

AAPG Search and Discovery Article #90166©2013 AAPG International Conference & Exhibition, Cartagena, Colombia, 8-11 September 2013