BJ Services and Precision Drilling were awarded a major fielddevelopment contract by Petroleos Mexicanos (Pemex). The projectentails the drilling and completing of 240 gas wells in the BurgosBasin, which covers more than 21,000 square miles and is located inthe northeastern part of Mexico near Camargo.

A study recently completed by the Gas Technology Institute foundthat previous estimates on gas reserves in the basin could be waybelow the mark (see Daily GPI, Jan. 9). Rather than prior estimatesof 9.7 Tcf of gas, the Burgos might actually hold between 21 Tcfand 75 Tcf, GTI said.

The basin is a geological extension of the Texas Gulf Coast,with similar rock formations and expected yield. In the past fewyears, the basin’s gas production has increased more thanfour-fold. Currently, the Burgos is producing about 970 MMcf/d.Non-associated gas production in the basin should increase, saidthe GTI study, reaching a level of 2.3 Bcf/d by 2015.

BJ and Precision said they expect to begin work on their projectin mid May. It is expected to take 24 months to complete. The totalvalue of the project is estimated at $270 million with BJ andPrecision revenues estimated at $70 million to $80 million each.

BJ Services will provide cementing, fracturing and coiled tubingservices while Precision Drilling’s services will include drilling,wireline, logging and directional drilling. The civil constructionof roads and drilling locations, pipeline installation and tie-inwork will be subcontracted through this partnered project.

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