McALLEN, March 11 – The Rio Grande Valley stands ready to benefit economically from Mexico’s version of Eagle Ford Shale, which lies just south of Rio Bravo.
This is the view of Mike Willis, executive director of the South Texas Manufacturers Association.
“Eagle Ford Shale does not end in Laredo. There is a mirror image of it just south of here, south of Rio Bravo,” Willis explained. “Mexico is investing the bulk of PEMEX’s budget over the next two years in northern Mexico. So, we have a good opportunity to be a jumping-off point for drilling companies and sand and fracking materials and all of that in the Valley – the companies that will be serving northern Mexico will be staging their operations here.”
Willis said he is seeing a lot of interest in Mexico’s version of Eagle Ford Shale through the ports of Brownsville and Corpus Christi. “Mexico has changed its Constitution, which was a radical breakthrough and much-needed. Mexico’s revenue has been so dependent on PEMEX over the years and their productivity has gone down because they have not kept up with technology. So, they have recognized the need to form partnerships. They are still working out what that will look like without the companies actually owning the oil in the ground.”
Asked how far away the Valley is from seeing direct benefits from oil and gas exploration in northern Mexico, Willis said: “From what I hear, it is moving forward. Companies are already positioning themselves to be ready to start working with drillers and PEMEX in northern Mexico. I think we are going to see a lot of opportunity in the Valley, working through the Port of Corpus Christi and the Port of Brownsville.”
Willis said drilling companies that work in both Eagle Ford Shale north of Laredo and northern Mexico may choose to make the Valley a staging post.
“For some of these drilling companies, now, perhaps, we are a good location for serving Eagle Ford Shale and northern Mexico. I think we will see some of the EDCs trying to capitalize on that going forward. I have talked to Eddie (Campirano), over at the Port of Brownsville. I have spoken with the folks at the Port of Corpus Christi. They are telling me they have got clients that are bringing materials into the Port of Corpus Christi that need to service northern Mexico.”
Asked what type of operations may be located in the Valley, Willis said: “I think we will see opportunities for storage facilities, staging facilities. If I were a CEO of a company, I think I would want to keep my expensive materials here until it is time to take them to the drill site, instead of storing them somewhere in the frontera of northern Mexico.”
Willis is also director of business partnerships for Workforce Solutions, which handles jobs training in Hidalgo and Starr Counties. In his January report on the Valley labor market for Workforce Solutions, Willis wrote:
“We are seeing opportunities develop to take advantage of our location when PEMEX begins opening up the southern half of the Eagle Ford Shale to exploration in 2014. Our ports anticipate an increase in energy-related business as materials begin to flow into our region before being routed into northern Mexico. While the RGV is not taking part significantly in the drilling activity, energy-related companies are actively recruiting our workforce, and we could soon play a significant role in the distribution/logistics sector by supporting the energy work taking place both north and south of the RGV. Laredo continues to benefit strongly from the drilling activity taking place all around them.”
Willis said that for the first time in 25 years, employment in manufacturing is up slightly in the Valley. He was interviewed at a check presentation at South Texas College’s technology campus in south McAllen. There, the North American Advanced Manufacturing Research and Education Initiative (NAAMREI) received a $500,000 grant from the Wagner-Peyser program administered through the Governor’s Office.
Carlos Margo, NAAMREI’s interim executive director, said the Wagner-Peyser program is a federally funded initiative that matches employers with qualified job seekers. Through this project, Margo said, a total of 675 individuals will receive specialized training in areas including robotics, mechatronics, programmable logic controllers and other advanced topics.
“These funds will help NAAMREI continue to build its prominence in promoting advanced manufacturing in the South Texas region,” Margo said. “It will ensure NAAMREI adds to its current inventory of cutting edge automation technology equipment, supports the development and expansion of curriculum and innovative programs and provides training, instruction and credentials that will have global appeal.”
Asked if South Texas College and NAAMREI are ready to assist with oil and gas exploration and production in northern Mexico, Margo told the Guardian: “We certainly have the capacity to do so and we certainly will have the funding to develop programs in those fields. We currently are not doing training directly, simply because the activity tends to be a little bit further north of where we are. But, as the activity moves further south, as Mike said, into Mexico, we can certainly develop programs. We are primed, if you will, to be able to react quickly to develop. If industry changes, we are right there with them.”
At a news conference held last week to announce a Memorandum of Understanding between the City of Pharr and the Port of Corpus Christi, there was discussion about Mexico’s version of Eagle Ford Shale. The MOU will see Pharr and Corpus Christi help promote each other’s trade facilities. Pharr Bridge Director Juan Guerra and Port of Corpus Christi board member Richard Valls told the Guardian that the MOU was important because of increased oil and gas exploration and production in northern Mexico.
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