Shell may invest up to $300 million in Peru

Adolfo Heeren, chief of Shell's Peru operations, said in a news conference that the company will finalize a partnership with Houston-based BPZ Energy Inc. in the next few months to explore for gas and oil in northwestern Peru near its border with oil-rich Ecuador.

BPZ may invest a similar amount in exploration and up to $150 million in an electric plant in the region, said company President Manuel Pablo Zuniga. BPZ will fully control the electricity plant, but Shell would have the option of buying a 50 percent stake.

Both companies signed a memorandum of understanding in June for joint exploration, and company officials hope to wrap up negotiations by the end of the year.

If natural gas reserves prove sufficient to meet local demand, the companies may also develop plans to export liquid natural gas, Zuniga said

Shell and what was then Mobile Oil Corp. pulled out of a $3 billion project to develop the massive Camisea gas fields in Peru's southern Andes in mid-1998. Both companies wanted more control over the sale and marketing of gas than the government had offered.