Global Processing

BPZ Resources, Shell seek Peruvian joint venture

June 27, 2008
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.