Drillers responsible for the Texas shale-oil boom want to cross the U.S. border to Mexico.
“But first the Mexican government, foreign oil companies or some combination of the two will have to neutralize some of the most savage gangsters in the world” according Steve LeVine.
LeVine, one of America’s most respected energy journalists, was writing Thursday in Quartz (from the Atlantic Monthly).
“Oil and gas were a key subtext of yesterday’s North American summit between Canadian prime minister Stephen Harper, Mexican President Enrique Peña Nieto and U.S. President Barack Obama. Hoping to join the US and Canadian energy boom and invigorate the laggard Mexican economy, Peña has pushed through a dramatic reversal of the country’s seven-decade-old ban on private oil and gas drilling. His goal is to lure companies that are drilling in the deepwater Gulf of Mexico and the Texas shale patch to lead the development of Mexico’s potential 42 billion barrels of oil.”
But American drillers — accustomed to operating in some of the world’s most dangerous places — are wary of crossing into the shale-rich states of Tamaulipas, Coahuila and Nuevo Leon, LeVine said.
“Tamaulipas is not in government control. There is not a single business there that in some way does not pay off the organized crime groups,” according to Louie Palu, an American war photographer who reported in the gang-run states from 2011 to 2013.
State-run Mexican oil company Pemex has only drilled only a handful of shale wells.
“Meanwhile, just across the border in Texas, 11,000 well permits have been issued for the Eagle Ford shale in the southern part of the state. They have been drilled by wildcatters like Apache, Devon and Petrohawk, companies that have helped to resurrect Texas as a global oil powerhouse,” LeVine said.
Eagle Ford alone produces some 1.2 million barrels of oil a day, and half of the 38,000 square mile field lies within Mexico.
“But businesses operating in the Mexican states bordering shale-rich Texas and the Gulf of Mexico have been especially vulnerable to gang extortion. Pemex, operating conventional fields in the region, has also suffered from theft, often assisted by oil workers in cahoots with the gangs. Last year, Pemex found 539 siphons along its pipelines in Tamaulipas,” according to LeVine.