Oil and Gas in Mexico: Geology, Production Rates and Reserves

Abstract

Historically, Mexico has been one of the largest producers of oil in the world. At one time its production rate was second only to Saudi Arabia. But existing reserves are low, and at the present rate of production, will last only about nine more years. The source rocks, for the most part, were deposited in the early Mesozoic. Differing geological episodes in different parts of the country, as well as differences in the type of kerogen, have resulted in the production of differing varieties of hydrocarbons. In the north, the Laramide orogeny resulted in a mountain chain, the Sierra Madre Oriental, that in geological terms is known as a fold and thrust belt. Paralleling this chain is a deep valley, known geologically as the foredeep, in which thick layers of sediment were deposited. The deep burial of source rocks led to their overmaturation and consequent generation of gas, which is produced in the Sabinas basin and in the western parts of the Burgos and Veracruz basins. The reservoirs that contain the gas are often Tertiary sands. Almost all the production of oil at the present time comes from the Sureste (southeast) basin. This area was not subject to an orogeny that produced a fold and thrust belt and a parallel foredeep. In the offshore parts of this basin, salt tectonics are most important in giving rise to structural and stratigraphic traps. The source beds containing oil-prone kerogens did not overmature and much oil was generated. However, production in the Sureste basin is declining, which is a source of much concern. As far as the future is concerned, the Chicontopec basin with its large deposits of “in-place heavy oil” is an important target. The geological nature of the reservoir makes it difficult to apply conventional enhanced oil recovery (EOR) techniques. Barring sudden technological breakthroughs in the development of new EOR techniques, a process that is generally incremental, the recovery rates will only increase slowly, taking many years. Exploration in the deep sea with the possibility of large subsalt reservoirs also holds much promise. Known technology is applicable, but even discoveries based on ongoing geophysical surveys will lead to production of oil in no less than three to five years in the most optimistic case. In any event, large investments will be necessary, and risks associated with these efforts will be large.