Mexico: Shale Oil & Gas In Mexico: On The Market In 2017?

On December 5 of this year the National Hydrocarbons Commission (CNH) of Mexico will conduct a tender for deepwater acreage in what is being dubbed as Round 1.4, concluding the currently envisaged tenders for Mexico's deepwater production rights in the Gulf of Mexico. Mexico's licensing rounds to date have not garnered as much interest nor bids as lucrative as the CNH initially hoped for. Much of this can be chalked up to a severe decrease in the price of hydrocarbons that has practically mirrored the timeline of Mexico's bidding rounds and, in the case of Round 1.4, that deepwater production requires significant upfront capital investment during a period when many energy companies are slashing new project budgets. But the uncertainty around the structure of the contracts with Petróleros Mexicanos (Pemex), formerly Mexico's national oil company and a de facto prospective joint venture partner of bidders, has likely chilled bidding as well. The conclusion of Round 1.4 will, nonetheless, be a positive culmination of the initial stage of Mexico's energy reform being brought to bear by current President Enrique Peña Nieto, although both Mexico and the international energy industry view room for improvement.

Bien hecho...what now?

Many companies successful at extracting unconventional resources in the Eagle Ford Shale play in South Texas are wondering what is the next step in the Mexican energy reform. They are well aware that the shale oil and gas deposits that they have become so adept at efficiently extracting do not stop at the Texas-Mexico border. The U.S. Energy Information Administration estimates that Mexico has the world's sixth and eighth largest potential reserves of shale gas and shale oil, respectively, with much of those potential reserves being located in Northern Mexico. A gating item to auctioning off shale production in Mexico has been the lack of environmental regulations in place to accommodate hydraulic fracturing. It is encouraging that according to Mexico's Energy Secretary, Pedro Joaquin Coldwell, those regulations are scheduled to become effective by the end of the first quarter of 2017. Three questions follow: 

When will Mexico conduct bidding rounds for its areas containing shale oil and gas?

Originally scheduled for auction as early as 2015 but pushed back due to the decrease in oil and gas prices, expect to see Mexico's shale gas bidding rounds in the latter half of 2017 or perhaps early 2018. The tender for shallow water and on-shore areas is expected to take place in late March or early April 2017. The success and level of interest by international companies, along with the expected positive movement of oil and gas prices, is expected to heavily influence the incentive for Mexico to auction off shale oil and gas basins as the next round of bids.

Where are these areas located?

The bulk of Mexico's shale deposits are in Northeast Mexico in the Burgos basin, which runs along the Texas-Mexico border, and the Tampico-Misantla basin, which lies further south along the Gulf of Mexico. The location of these basins presents two important issues: lack of infrastructure and security. 

  • Infrastructure: While there is legacy infrastructure from Pemex in those areas, the concern is whether the volume and quality of such infrastructure can adequately handle the levels of potential production. Both public and private investment into infrastructure in these areas is important to increasing the attractiveness and long-term viability of Mexico's shale oil and gas industry. 
  • Security: The Mexican government will need to continue increasing its policing efforts against organized crime in the area to help attract lucrative bids from investors. With the prospect of a booming shale industry, it would seem that Mexico's strategy would be to tackle the security challenges head-on.

How does an interested company get more information and participate in the bidding process?

Information about how to participate in Mexico's bidding rounds may be found on CNH's website. Further developments with respect to the exact timing of the shale bidding rounds are expected to be fluid and will likely depend on the results of the next two bidding rounds and movement in oil and gas prices. But based on recent comments by Mr. Coldwell, there is optimism that the shale bidding rounds could be targeted for the latter half of 2017. In the meantime, interested parties should keep their eye out for news on the Mexican energy reform in the press and develop relationships with advisors and industry parties that are active participants in the current phases of Mexico's energy reform to see what insight might be gained from those relationships.

Andrews Kurth is closely monitoring the energy reform developments in Mexico, and we look forward to providing additional updates as more information becomes available, specifically on the shale front. As we are experienced legal practitioners in Mexico and the energy industry, please do not hesitate to reach out to us for additional information or to discuss a potential engagement.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.