Shale gas regulation in Mexico and Colombia: an uncertain future

The Latin American region possesses some of the largest reserves of shale gas in the world, with more than 20 per cent of the total reserves, and accounting for about 1.907 billion cubic feet, more than double the region’s conventional gas reserves. Over the last decade, some states and companies have been keen to open up these markets to exploration and production (E&P), creating or modifying the legal rules governing these types of activity with mixed results. In this chapter, we have chosen two countries, Mexico and Colombia, to illustrate this development – or lack thereof – and the avenues other Latin American countries could follow with regard to the development of extraction of shale gas. Both of these countries are typical of the Latin American approach to hydrocarbon extraction, where state control of the exploitation of hydrocarbons remains strong, and the market has little influence.