Tesoro acquires Zapata's interests in Bolivia

Jul 29, 1997 02:00 AM

July 14, 1997 Tesoro Bolivia Petroleum Company, has purchased the interests of Zapata Exploration Corporation, of Zapata Corporation, in two jointly held contract blocks in southern Bolivia for approximately $ 20 million. The purchase price includes working capital and assumption of certain liabilities. The assignment of interest is subject to approval by the Bolivian government.
Zapata held a 25 % interest in Block 18 and a 27.4 % interest in the adjoining Block 20. The purchase gives Tesoro a 100 % interest in the blocks. Block 18 covers approximately 93,000 acres and Block 20 covers approximately 787,000 acres. In June, Tesoro announced a farmout agreement under which an affiliate of Total S.A. may earn a 75 % interest in the western 315,000 acres of Block 20 by meeting certain drilling objectives.
Gross production, which all comes from Block 18, is approximately 40 mm cfpd of natural gas. Production has been constrained by limited markets for gas. Tesoro has discovered three fields on Block 20 that currently are shut in. Construction is scheduled to start this month on a new, 32-inch pipeline that will link Bolivian gas production to Brazil. The pipeline is scheduled to be completed in late 1998.
"The new pipeline to Brazil will be the primary means to meet the growing demand for natural gas in that country. Our contract areas have great exploration potential for meeting this demand, and to date our exploratory commercial success rate has approached 60 %," said Bruce Smith, Chairman, President and CEO of Tesoro Petroleum.

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