Tesco teams up with Schlumberger for Burgos drilling

Thursday, July 15, 2004

Canadian company Tesco (Nasdaq: TESOF) signed a joint operations agreement with oil services company Schlumberger to drill five development wells in Mexico's Burgos field, Tesco president Bob Tessari told BNamericas.

Schlumberger has teamed up with Tesco to gain access to the latter's patented technology for casing drilling, which can cut the drilling costs by up to 30%.

"There is a lot of lost time needed in drilling, so we came up the idea of casing and drilling the well at the same time. We eliminate drillpipe and the dollars needed to buy it, move it, maintain it and handle it. It [casing drilling] is safer, quicker and involves less machinery," he said.

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Tesco will apply the technology to one of Schlumberger's rigs in the Burgos field in August. Work is expected to wrap up around November, he said, adding that each development well will take 20 days to drill and they will be drilled one at a time.

"We've got the technology to drill wells and Schlumberger has a contract to drill a lot of wells, so we've given them exclusive rights to the technology in Mexico and Russia," he said.

"When the wells have been drilled, we will analyze the value that we have added on these five wells and starting January 1, we will possibly apply it [casing drilling] on a Mexican-wide level [with Schlumberger]," he added.

Schlumberger is expected to drill wells at depths ranging between 500 and 8,000 feet, Tessari said.

Tesco has recently been re-awarded a US$35mn contract by Mexico's state oil company Pemex to rent portable top drives for conventional drilling rigs in the Campeche field for another two and a half years, Tessari said.

This technology, which rotates the pipe from the top instead of the bottom, improves drilling efficiency on conventional rigs by about 20%, he added. Tesco has had the contract since 1993.

Elsewhere in Latin America, Tesco has portable top drive contracts in Argentina and Brazil.