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Oil & Gas

BPZ Resources, Shell seek Peruvian joint venture

June 27, 2008
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The Associated Press is reporting that shares of BPZ Resources Inc. soared recently after the oil and gas exploration and production company said it is in talks with a unit of Royal Dutch Shell PLC about jointly developing properties in Peru.

Under terms of a memorandum of understanding signed by BPZ and Shell Exploration Co., the companies agreed to negotiate terms of a so-called farmout agreement whereby Shell may earn a stake in three northwestern Peru properties that are believed to hold significant crude oil and natural gas reserves.

The memorandum envisions a joint venture in which Shell pays BPZ, collects seismic data on the parts of the properties, or blocks, and drills wells. A spokesman for BPZ said some of the properties are off Peru''s coast.

According to the companies, the goal of the negotiations, expected to conclude this year, is large-scale oil and gas ventures, including regional power generation, gas supply for local and regional industry, and liquid natural gas.
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