MEXICO CITY, May 20 (Reuters) - Mexico’s marginal oil fields hold more potential than any other country in Latin America, a mostly onshore resource that could be tapped quickly with techniques perfected in the U.S. shale boom, the lead author of a new study said on Wednesday.
The 14.1 billion barrels in incremental oil potential from Mexico’s lower-quality, overwhelmingly onshore fields is bigger than any nation bar Russia and Iran, said Leta Smith, director of upstream energy research at consultancy IHS Energy.
“The thing that makes it exciting is that access to Russia and Iran is pretty limited for most international oil companies, but Mexico is opening up right now,” she said.
Last year, Mexico finalized a historic energy overhaul that ended state-owned oil company Pemex’s longstanding oil and gas monopoly and that aims to lure billions of dollars in private investment via new contracts to boost output.
Spread across 158 fields, the IHS estimate for Mexico comes from an analysis of areas with a recovery factor of less than 20 percent, as well as rock formations that are less porous and less permeable.
About 80 percent of Mexico’s current oil production comes from shallow water deposits clustered around the southern rim of the Gulf of Mexico.
Since the energy reform, many investors have focused on the country’s ample deep water resources, but Smith emphasizes the potential of land-based fields.
“People need to look onshore first, and they will,” she said.
The potential could be unlocked with technologies developed by operators in surging shale plays in the United States, Smith added, such as horizontal drilling, fracking, geosteering and new sensors placed directly on drilling columns.
Last week, Mexico’s Energy Ministry invited bids for a package of onshore contracts covering 26 areas, part of the so-called Round One tender launched late last year along with an initial allotment of areas to Pemex.
The 26 areas to be tendered are believed to contain 2.5 billion barrels of oil equivalent in remaining resources with average production costs of between $10 and $20 per barrel.
Mexico, the world’s 10th biggest crude producer, is expected to award its first Round One oil contracts in July.
The IHS analysis concluded that worldwide as much as 141 billion barrels of oil could be tapped using newer technologies. (Reporting by David Alire Garcia; Editing by Leslie Adler)