Wood Group Capitalizes On Mexico Energy Reform

Wood Group Mustang and Grupo Diavaz, a Mexican oil and gas operator and services company, have created a joint venture engineering business to capitalize on Mexico’s energy reform. Mustang Diavaz is based in Mexico City and will provide engineering, procurement, and construction management services to onshore and offshore facilities, and pipelines for the upstream and midstream oil & gas markets in Mexico.

Mexico’s energy reform took its first steps in 2013 when Mexican officials decided to open the country’s oil and gas fields to foreign companies for the first time in 75 years. Pemex had controlled nearly every aspect of Mexico’s oil and gas production and distribution since its creation in 1938.

Plummeting oil prices slowed Mexico’s reform, but last year’s back-and-forth dialogue between the Mexican government and the oil and gas industry, and the willingness of the government to adjust and take feedback from energy companies hoping to capitalize on Mexico’s resources, has renewed hope that reform is indeed on its way.

Mexico has one of the world’s largest shale gas resource bases, which could support increased natural gas reserves and production. According to the U.S. Energy Information Admiration’s assessment of world shale gas resources, Mexico has an estimated 545 Tcf (14 x 1012 m3) of technically recoverable shale gas resources—the sixth largest of any country examined in its study. The figure of technically recoverable shale gas resources is far smaller than the total resource base because of the geologic complexity and discontinuity of Mexico’s onshore shale zone. Most of Mexico’s shale gas resources are in the northeast and east-central regions of the country. The Burgos Basin, which accounts for most of Mexico’s technically recoverable shale gas resources, is considered to be Mexico’s most promising prospect for natural gas production in the future.

“We are making a long-term commitment to Mexico that includes investing in its people, growing our local project expertise and sharing our global knowledge to form a Center of Engineering Excellence,” said Michele McNichol, CEO of Wood Group Mustang. “Grupo Diavaz’s knowledge of the Mexican oil & gas industry combined with Wood Group Mustang’s global engineering experience will enable Mustang Diavaz to provide unmatched expertise to companies operating in Mexico.”