Shell Exploration Company (West) B.V. (Shell) and BPZ Energy Inc. have signed a preliminary agreement to jointly explore for oil and gas in northern Peru.
The agreement calls for Shell to fund a three-phase exploration program in exchange for a 50% interest in parts of three BPZ blocks in northern Peru. Under the agreement, Shell will evaluate progress at the end of each exploration phase and decide whether to proceed to the next one.
The agreement covers BPZ blocks XIX and XXIII and parts of block Z-1. BPZ retains 100% rights for the parts of block Z-1 where there are existing discoveries. Under the agreement Shell has the possibility to buy into these areas at a later stage.
The agreement complements Shell’s ongoing strategy of expanding its upstream oil and gas activities.
“This agreement makes the most of the strengths of our companies. We bring complementary technical skills, gas marketing expertise and capital to combine with BPZ’s knowledge of these northern Peru blocks. I am delighted that Shell is once again involved in Peru’s upstream industry,” said Executive VP Exploration David Lawrence.
Shell and BPZ Energy Inc. have begun negotiating a definitive agreement which is subject to board and government approval.
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