<article><p><i>CNH commissioner Nestor Martinez says fracking is essential for production at four blocks in the Tampico-Misantla basin</i></p><p class="lead">Mexican oil regulator CNH has authorised state-owned Pemex to move ahead with hydraulic fracturing (fracking) at four unconventional exploration blocks.</p><p>The firm will drill and fracture up to two exploration wells at each of its Pitepec, Amatitlan, Soledad and Miahuapan blocks in the Tampico-Misantla basin, according to modified exploration plans approved by CNH.</p><p>Pemex says it could produce up to 60bn bl of oil equivalent (boe) in unconventional resources, mainly in northern Mexico's Burgos basin just south of the US Eagle Ford shale play, but the future of fracking in Mexico remains uncertain.</p><p>President Andres Manuel Lopez Obrador has repeatedly ruled out fracking and lawmakers in the senate have called for a ban. But energy minister Rocio Nahle confirmed last month that the ministry is analysing new fracking techniques.</p><p>"There is regulation that permits fracking and, while there has been talk of prohibiting it, for the time being we are acting in accordance with the law by approving this practice," CNH commissioner Gaspar Franco says.</p><p>Pemex will invest around $200mn in the exploration plans, with the potential to add 200mn boe to Mexico's reserves. The blocks are under consideration for migration to a production-sharing contractwithout a partner, which would allow Pemex to benefit from more attractive fiscal arrangements and enhanced cost recovery, but with more regulatory oversight. And it would allow the firm to drill two exploration wells per block, rather than one, as envisaged under the original exploration plans.</p><p>"Without fracking there will be no production at these blocks," CNH commissioner Nestor Martinez Romero says.</p></article>
