EXPLORATION SLATED ON BOLIVIAN BLOCK

BHP Petroleum (Bolivia) Inc. has taken a farmout on Pan Andean Resources plc's Chapare exploration block in Central Bolivia. BHP initially takes a 30% stake in the 3.5 million acre tract, with Pan Andean, London, retaining 20% and state owned Yacimentos Petroliferos Fiscales Bolivianos (YPFB) holding 50%. YPFB awarded a 30 year operations contract on the block to Pan Andean last May. The Chapare block offsets acreage operated by Maxus Bolivia Inc., declared commercial in May with 30,000

July 12, 1993

2 min read

BHP Petroleum (Bolivia) Inc. has taken a farmout on Pan Andean Resources plc's Chapare exploration block in Central Bolivia.

BHP initially takes a 30% stake in the 3.5 million acre tract, with Pan Andean, London, retaining 20% and state owned Yacimentos Petroliferos Fiscales Bolivianos (YPFB) holding 50%.

YPFB awarded a 30 year operations contract on the block to Pan Andean last May. The Chapare block offsets acreage operated by Maxus Bolivia Inc., declared commercial in May with 30,000 b/d of oil production planned by yearend 1994.

Pan Andean said there have been four discoveries in four wells drilled during the last 18 months on the Maxus block and YPFB acreage within 40 km of the Chapare block.

The farmout commits BHP to a $6 million seismic survey and data processing program in the first 2 years. BHP plans to begin acquiring seismic data in August, with the aim of completing a 400 fine km program by yearend.

"BHP assumes 100% of our obligatory work and spending commitments," said John Teeling, Pan Andean chairman. "The farmout guarantees that a program consisting of two exploratory weds, along with geophysical and geochemical activities, may be conducted during the first 4 years at a cost of more than $20 million."

Pan Andean can maintain its 20% interest by participating in the second well and those that follow. Completion of the second well would cut Pan Andean's interest to 10% if the company decides against further participation.

Chapare is accessible to the 27,250 b/d YPFB refinery at Cochabamba, said Pan Andean, and the main Cochabamba-Santa Cruz pipeline to which Maxus has built a spur line.