Teikoku Oil Acquires Stake in Venezuelan Blocks

Teikoku Oil has entered a farm out agreement with Pecom of Argentina to acquire a 50% participating interest in the San Carlos and Tinaco blocks in Venezuela, subject to the approval of Venezuelan authorities. The partners to each Block will be eventually composed of Pecom 50% (Its Venezuelan affiliates are licensees and Operators) and Teikoku 50%.

The San Carlos Block and its adjacent Tinaco Block are located in the western part of Venezuela. The presence of natural gas is already confirmed by the exploration well drilled in the San Carlos Block, in which Pecom is in advanced negotiation for the Gas Exploration License of four years. In the Tinaco Block for which the four-year Gas License started in August, 2001, 2D seismic is scheduled to start at the end of this year.