• Gang violence deters exploitation of Mexican shale oil and gas reserves

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      Patrick Lavery

      Combustion Industry News Editor

Mexico’s push to develop of shale oil and gas industry is facing an all too familiar problem – drug gang violence. The Burgos Basin in the country’s north, part of the same basin which is present in southern Texas (in an area called Eagle Ford) is also the region in which a war between the Gulf and Zeta gangs has raged since 2010, making potential bidders for extraction rights shy. Although Mexico has large shale oil and gas reserves, and its conventional reserves are being depleted, only the state-owned Pemex has made a foray into fracking in the country, and even that was only experimentally. In the state of Tamaulipas, a Pemex worked was killed in April this year, after previous killings and kidnappings of other domestic and foreign oil and gas workers in previous years. Spanish oil and gas company Repsol is indicative of the hesitancy of international firms in entering the Mexican market – it operated in the Burgos Basin between 2044 and 2014, when it pulled out because of the violence, and an executive told Reuters that “very big changes” would have to happen before the company would consider returning, as the situation is worse now than it was in 2014. It seems that until the Mexican government can assure companies of security, the opportunity that the country’s reserves offer will not be exploited.