Why do the thousands of Eagle Ford wells on the map all end at the Rio Grande? Oil reservoirs know no river nor international boundary.
Last November Morales Gil, then-president of PEMEX E&P, announced at Platt’s Mexican Energy Conference in Mexico City that Mexico may soon be producing five million bbls (barrels)/day. His ultra-deep water exploration activities offshore Matamoros/Brownsville were doing very well, and he hoped to send more ultra-deep water rigs there. Presently Seadrill’s ultra-deep water Sea Dragon and Grupo R’s rigs are working offshore Matamoros.
Mexico’s northern offshore Gulf is perhaps the least explored area in the world. The Mexican side of the Perdido field covers about 39,000 square kilometers. Last December a Mexican television interviewer showed a map of the Gulf’s oil wells and said, in Spanish, ‘This photo is worth a thousand words. There are thousands of wells on the U.S.A.’s side of our Gulf, and I count only six on the Mexican side.”
President Pena Nieto’s Energy Reform is designed to end that anomaly. Could the Mexican Eagle Ford become the world’s most profitable shale play? Will their offshore production boom as well? This might prove to be true, due to logistical and financial assets already in place. The Mexican side of the Eagle Ford is already contributing to the infrastructure buildup at the Port of Brownsville. These assets will, in turn, help support both sides of the offshore Perdido.
Unlike in the United States, Mexico has no restrictions on the export of crude and raw natural gas liquid condensates to high-paying, thirsty European and Asian markets. This is perhaps the single most important reason for all the interest in Mexico’s wet shale gas fields.
And Mexico’s Eagle Ford has important logistical advantages: a closely located deep-water seaport, the Port of Brownsville, sits just 60 miles north of the field. Mexico’s Eagle Ford will need no expensive rail investments nor even remote oil field storage tanks. Fast moving Mexican tanker trucks will haul new wells’ production to the Port’s crude tanks, providing quick cash flow for oil companies. Mexico’s massive tanker trucks carry 35 metric tons, or 300 bbls of liquid condensate NGLs. In the United States, they are restricted to only 20 metric tons or 175 bbls. Brownsville has the only bridge that allows these highway goliaths to enter the U.S. legally. Rail cannot compete with these giant trucks for such a short haul.
Brownsville is the entrance to the Gulf Intracoastal Canal and the nation’s immense inland waterway system, the least expensive form of inland transport. This man-made canal passes through Corpus, Houston and Louisiana, the largest petrochemical centers in the world, and a thirsty market for American natural gas liquid condensates. Kirby Marine just placed orders for 29 new 30,000 bbl inland river tank barges. That’s good, as Mexico is going to need them.
To read more of this story by Joseph P. Linck, read the October 2014 edition of VBR under the “Current & Past Issues” tab on this website, or pick up a copy on news stands.