This sub-sector market research report presents Mexico’s Shale Gas industry and equipment used in the production of shale gas. Mexico’s Energy Ministry (Secretaria de Energia-SENER) indicate that preliminary studies show the boundary of share deposits exist through the northern states of Chihuahua, Coahuila, Nuevo Leon, Tamaulipas, small areas of the eastern state of Veracruz, and central state of San Luis Potosi. Pemex’s (Mexico’s government owned petroleum company) Exploration and Production business unit is responsible for the implementation of the Shale Gas projects.
Mexico’s total market in 2011 for shale gas drilling equipment and services was US$225.0 million and is expected to increase to US$242.0 million by the end of 2012. Market growth is expected to continue into 2015. U.S. companies claimed 51% of the total import market in 2011 and will reach 52% of the total import market at the end of 2012.
Pemex (Petroleos Mexicanos), as the government owned petroleum company, is governed by Mexico’s Public Works Law. To sell equipment and services to Pemex, under a national, international, or by invitation only tender, companies are required to be registered as suppliers.
At the end of 2011, Pemex was considered the number 4th largest crude oil and the 11th largest natural gas producer in the world. Pemex’s Exploration and Production Business unitis the most important area within Pemex for tenders on oil and gas drilling, including shale gas projects, in which small, mid-sized, and large Pemex contractors participate and demand drilling equipment and services.
Mexico’s shale gas deposits (based on information provided by SENER) are located in through the northern states of Chihuahua, Coahuila, Nuevo Leon, Tamaulipas, and small areas of the eastern state of Veracruz and central state of San Luis Potosi. According to SENER, Pemex drilled a test well in the State of Coahuila in 2011 (Emergent 1 Project) and is planning to invest US$50 million in a study to drill over 300 wells during 2013.
The market for shale gas drilling equipment and services is expected to grow at an average of 7.5% from 2012 to 2015 (Table 1) due to priorities set by Mexico’s National Energy Strategy 2012-2026, therefore, Pemex will invite companies to participate in gas drilling projects to find new reserves of natural gas based on the shale gas deposits already identified.
The figures in Table 1 also show that the total market will increase from US$225.0 million in 2011 to US$242.0 million by the end of 2012. According to Pemex, 80% of the demand for shale gas drilling equipment will be imported by large contractors for turn key projects announced in national and international tenders and by invitation only tenders. 20% of the demand will be supplied by representatives and distributors of shale gas drilling equipment with offices in Mexico. Total imports are expected to increase by 7% from 2012 to 2015.
The following is a short list of shale gas drilling equipment and products that will have the greatest demand during the next five years.
Excavators, boring machines, cranes, crawler dozers, crawler loaders, mobile water pumping stations, water pipe, water desalination equipment, motor graders, light towers, scrappers, telehandlers/forklifts, wheel dozers, wheel loaders, trucks (off-highways), trucks (on-road), coring drilling rigs, single rotary head geothermal drill rigs, blasting drilling rig, reverse circulation drilling supplies, drill pipe, hammers and bits, crossover subs, rock bit adaptor, directional drilling bits, gas pressure regulators, mounting brackets, multi valves, relief valves, external relief valves, excess flow valves, bypass valves, compressors, back pressure valves, oil-free gas compressors, hand pumps, vapor meters , level indicators, flexible connectors, copper tubing, tube cutters, flaring tubes, mechanical couplings, coating strippers, bearings, brass precision needle valves, brass fittings, leak detectors, gas detectors, Pipe for Gas drilling; iron or steel; casting and tubing gas drilling; drilling, threading or tapping tools; tools for drilling other than rock drill; tools for boring or broaching; tools for turning of base metals; interchangeable tools for hand or machines; pumps fitted with measuring device; hand pumps fitted with measuring devices; concrete pumps; rotary positive displacement pumps; gas pumps; boring or sinking machinery; pressure-reducing valves; check valves; mobile drilling derricks; surveying instruments; test benches, etc.
With regards to services: geological surveys and environmental impact statements, among others.
Pemex’s Exploration and Production will be contracting over US$8.0 billion between 2013 to 2015 to drill over 4,000 shale gas wells from international and domestic companies, therefore, the market demand for manufacturers, representatives, and distributors of shale gas drilling equipment is projected to increase 7.5%. Total imports of equipment from the U.S. to Mexico are expected to increase 7.0% from 2013 to 2015.