Report: Mexico ignoring shale natural gas

HOUSTON, Oct. 3 (UPI) -- Mexico may be ignoring some of the natural gas deposits thought to exist in shale by a lack of investments, a financial review said.

A report from Barclays Capital found natural gas production in Mexico is in decline in part because state-owned oil company Petroleos Mexicanos, or Pemex, is focusing more of its budget on oil exploration, the Platts energy news service reported Wednesday.

Mexico hosts more than 500 trillion cubic feet of technically recoverable natural gas reserves in shale, the U.S. Energy Information Administration says. It relies almost exclusively, however, on conventional natural gas for its energy needs.

Barclays said Pemex is assessing the shale natural gas potential but has set aside "only a small portion of its budget to these resources."

Mexican President Enrique Pena Nieto outlined a proposal in August to revive the oil and natural gas sector by bringing in more foreign investments. His proposal keeps Pemex in state hands and offers foreign companies a chance to share profits. They are not, however, afforded the right to keep any of the natural reserves produced in the country under his provision.

Platts reports Mexico is expected to double the amount of natural gas it imports from the United States by 2016.