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BPZ Resources, Shell end Peru development talks
LIMA
Petroleumworld.com, Jan 15, 2009
BPZ Resources, and Petro Peru has ended talks with Royal Dutch Shell PLC about jointly developing properties in northwest Peru, and signed a seven -year, $1.3 billion crude oil sales contract with PetroPeru. BPZ shares tumbled 83 cents, or 9.9 percent , to close at $7.55.Although both parties worked diligently during the past few months to reach an agreement that was mutually beneficial and acceptable, both sides determined that the complexities involved in completing the transaction within the guidelines defined by the memorandum of understanding were far greater than anticipated, BPZ Energy President and Chief Executive Officer Manolo Zuniga said in a statement late Thursday.Zuniga said a joint venture deal drawn up during current oil price volatility would financially burden BPZ.With crude prices tumbling sharply from summertime highs near $150 a barrel, many oil companies have pulled back on project spending.Houston-based BPZ said it will continue appraising its Corvina field, while preparing to drill in its Albacora location, and will continue developing its gas-to-power project.The PetroPeru deal covers the sale of 17 million barrels of oil at an average price of about $65 each.
BPZ noted that commodity price fluctuations and production levels will determine the actual number of barrels sold and the corresponding term of the PetroPeru contract.Under this agreement, oil will be delivered from the company's Corvina field in northwest Peru to the State-owned Talara refinery.This long-term contract gives us a secure market for the sale of oil from our Corvina field, Zuniga said Friday.
Story from LRB
LRB 01/14/2009
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