Nuevo Energy Seeks Partners for Block Z-1 in Peru

US-based energy company Nuevo Energy Company is seeking one or more partners to share exploration costs on Peru's block Z-1, which it formally acquired from fellow US company Syntroleum on Thursday, Nuevo Energy's investor relations director Barbara Forbes told BNamericas.

"We're in the process of promoting the permit, so we hope to have another party or parties to absorb some of the cost," she said.

Syntroleum transferred its 95% participation in block Z-1 to Nuevo Energy on Thursday, a source at Peru's state investment agency Perupetro told BNamericas. US-based BPZ holds the remaining 5% stake.

Nuevo Energy will pay Syntroleum a nominal amount upfront and could pay a "more meaningful" amount later, depending on whether there is a commercial discovery on the block, Forbes said.

Nuevo Energy takes over Syntroleum's 7-year exploration contract with Perupetro that was signed in 2001. The contract is divided into three phases.

The first phase, to reprocess existing 2-D seismic, ends in July, Forbes said. The second phase involves acquiring new 3D seismic and the third phase will require Nuevo Energy to drill at least one exploration well.

Syntroleum decided in 2003 that the gas reserves in block Z-1 do not justify a gas-to-liquids (GTL) plant. However, Syntroleum identified two structures in deep water in the south of the block which could be oil discoveries, but oil exploration is out of the company's range of expertise.

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