Overview

Mexico’s gas industry is caught between a closed past and an open future. There have been tight controls on foreign investment and participation in the hydrocarbon sector for the past century, with the Mexican government claiming all mineral rights for the state as part of its constitution in 1917. Resource nationalism was further enshrined in 1938, when President Lázaro Cárdenas sided with oil workers striking against foreign-owned oil companies, creating state-controlled Pemex.

National pride may have served the oil industry well, but it has started to choke upstream gas activities over the past decade, meaning consumption growth has outstripped production. Gas demand in Mexico is expected to grow at an average rate of 2.4% per year to reach 305 million cubic metres per day (MMcm/d) in 2025, up from 209 MMcm/d in 2009, with imports still needed to meet projected demand over the period, according to the National Commission for Hydrocarbons.

The industry saw healthy growth between 2000 and 2006, but then hit a barrier. Proven reserves in 2011 were 353 bcm, although the country sits on top of shale resources nearly as big as those in the US. Gas production is concentrated in the Burgos Basin in the northeast of the country and offshore in the Gulf of Mexico.

Page updated: 18/10/2012