Question-and-Answer Session
Operator
Yes, sir. Your first question comes from the line of Bill Herbert of Simmons and Company.
Gary Flaharty
Good morning, Bill.
Bill Herbert - Simmons & Company
Hey, thanks. Good morning, guys. Chad, on the Pemex contract, that is being split with B.J., right?
Chad Deaton
That is correct. They have the fluids and cementing.
Bill Herbert - Simmons & Company
Right, so is it 50-50?
Chad Deaton
No, it is about 65%, 70% for Baker Hughes and the balance for B.J.
Bill Herbert - Simmons & Company
Okay, great and then with regard to the timing of the rig ramp, by when do you get to the 15th rig?
Chad Deaton
Well, there are 15 wells --
Bill Herbert - Simmons & Company
I mean 15 wells.
Chad Deaton
Seven --
Bill Herbert - Simmons & Company
Yes, sorry.
Chad Deaton
Seven rigs and they will just ramp up. We should be in the early -- the end of the third quarter, early fourth quarter, we will begin to start on the first rig and it will just ramp up from there.
Bill Herbert - Simmons & Company
Okay and do you have handy what the magnitude of expected start-up costs are for all of these Latin American projects?
Chad Deaton
We are probably looking at about $10 to $12 million a quarter.
Bill Herbert - Simmons & Company
For the next two quarters?
Chad Deaton
Correct.
Bill Herbert - Simmons & Company
Okay and then that should tail off, right?
Chad Deaton
Yes.
Bill Herbert - Simmons & Company
Okay.
Chad Deaton
You, know you can look at it just like the Brazil startup when all that started up and for the directional drilling side and it took several quarters to work through that. That was a much bigger start-up, though.
Bill Herbert - Simmons & Company
Okay and then the last one for me is just a question for Peter. I think I heard you say, Peter that margins for Q3 flat with Q2, and I am just curious with a recovering Canada, the offsetting negatives are these -- is the ramp in Latin America in terms of cost or what?
Peter Ragauss
That and we are also investing , you will have noticed in the press release we are ramping up our hiring of people.
Bill Herbert - Simmons & Company
Yes, yes.
Peter Ragauss
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