March 27 (UPI) -- The state energy company in Mexico said it signed on with a partner to help extract natural gas from the Eagle Ford shale reservoir in the country.
Petróleos Mexicanos, known also as Pemex, said it signed an exploration and extraction contract with the Mexican subsidiary of Lewis Energy to invest $617 million in developing the Olmos field in the Mexican state of Coahuila.
"The purpose is to assess and develop the Eagle Ford field in Mexico," Pemex stated.
Lewis has drilled more the 500 wells in the Texas section of the Eagle Ford shale, setting itself up as the third-largest producer in the state. The Eagle Ford shale is the fourth-largest shale natural gas reservoir in the United States by volume. The U.S. Energy Information Administration expects an incremental increase in production by April.
Pemex esimates it could produce as much as 117 million cubic feet of natural gas per day from its section of the Eagle Ford by 2021.
Mexico in early February brought in about $93 billion in investments over the lifetime of the contracts, extending over the next 35 years, in one of its most successful auctions to date. In a new era where oil prices are close to $70 per barrel, 19 of the 29 contracts on the auction block were awarded, with supermajor Royal Dutch Shell taking the lead in the tenders.
Through a series of reforms meant to draw investors into the energy sector, Mexican President Enrique Peña Nieto's vision could bring in up to $415 billion in investments over the next 20 years.
"Pemex is actively using the tools and flexibility the energy reform has granted the company, to share financial and operating risks with third parties and increase the strategic investments that will maximize the value of its hydrocarbon production," the company stated.