LONDON (AFX) - Chaco Resources PLC said it is proposing the reverse takeover
of two Paraguayan companies -- Amerisur SA and Bohemia SA -- from Candey SA and
Daniel Sztern in exchange for 27,322,404 new ordinary shares in the company.
It also plans to raise up to 750,000 stg before expenses in a placing of
36,585,365 new ordinary shares.
The company's shares were suspended on Sept 3 and it said it expects this to
be lifted today. It has called an EGM for Nov 15 to approve the acquisition and
placing plans.
Amerisur holds two oil and gas prospecting permits in Paraguay and is the
registered applicant for exploration and exploitation concession contracts over
the same permit areas. Bohemia holds registered applications for an oil and gas
prospecting permit in Paraguay and for an exploration and exploitation
concession contract over the same area.
The exploration areas covered by these three applications comprise a total of
approximately 48,000 square kilometres of the Curypayty and Parana Basins.
Chaco said these basins extend respectively into Bolivia and Brazil, where
commercial oil and gas production has been established for many years from
similar geological sections.

Chaco Resources PLC
21 October 2004

Chaco Resources plc

Proposed Acquisition of Amerisur S.A. and Bohemia S.A.
Notice of Extraordinary General Meeting
Placing of 36,585,365 New Ordinary Shares of 0.1p each

FOR IMMEDIATE RELEASE

1 Introduction to the Acquisition

The Board of Chaco Resources plc ('Chaco' or 'the Company') announced on 28
September 2004 that it had entered into a conditional agreement with Candey
S.A. and Mr Daniel Sztern ('the Vendors') relating to the sale and purchase
of the entire issued share capital of Amerisur S.A. and Bohemia S.A. for a
total consideration ('Consideration Shares') of 27,322,404 new ordinary
shares in the Company ('the Acquisition') and announces today that it has
published an admission document setting out full details of the Acquisition
and of a proposed placing to raise up to 750,000 (less expenses) ('the
Placing').

Amerisur S.A. and Bohemia S.A. are two Paraguayan companies. Amerisur holds
two oil and gas prospecting permits in Paraguay and is the registered
applicant for exploration and exploitation concession contracts over the
same permit areas. Bohemia holds registered applications for an oil and gas
prospecting permit in Paraguay and for an exploration and exploitation
concession contract over the same area. The exploration areas covered by
these three applications comprise a total of approximately 48,000 square
kilometres of the Curypayty and Parana Basins. These basins extend
respectively into Bolivia and Brazil, where commercial oil and gas
production has been established for many years from similar geological
sections.

The Consideration Shares will be allotted in tranches, subject to
satisfaction of certain conditions relating to actions by the government of
Paraguay which secure the concession rights in the areas to which the
applications relate.

As the Acquisition represents a fundamental change in the business of the
Company, it constitutes a reverse takeover under the AIM Rules. Completion
of the Acquisition is therefore conditional, inter alia, upon the approval
of the Share Sale Agreement by the Shareholders in general meeting and
re-admission of the existing ordinary shares in the Company to AIM and
admission of the new ordinary shares pursuant to the Placing ('Admission').
If these conditions have not been fulfilled within 12 months of the date of
the Share Sale Agreement (being 27 September 2004), then neither the
Vendors nor the Company will be obliged to complete the Acquisition and
neither party shall have any further rights or obligations under the
agreement (except in respect of a breach before the date of termination).
It is expected that the document setting out details of the proposals will
be posted to Shareholders today. It is expected the suspension of the
Company's Existing Ordinary Shares will be lifted today.

2 Background and Reasons for the Acquisition

In February 2004, the principal assets of the Company, held by its then
Australian subsidiary, were transferred into a newly-formed Canadian
subsidiary of the Company. That Canadian subsidiary was then amalgamated
with Full Riches Investments Ltd., a TSX Venture listed company, to form
Medoro. 50 per cent of the shares in Medoro (on a fully diluted basis)
received as consideration for the amalgamation were then distributed to
Shareholders by way of a dividend in specie. Medoro was quoted on the TSX
Venture and admitted to trading on AIM. The Company then became a shell.

On 29 June 2004, the Board announced that, having reviewed a number of
sectors, they had decided to refocus the Company's activity on oil and gas
exploration. On 28 July 2004, the Company changed its name to Chaco
Resources plc from Gold Mines of Sardinia plc following the disposal of its
Sardinian gold mining assets to Medoro.

The Company raised 790,000 of working capital through a private placing in
April 2004 at 1p per Ordinary Share, representing an 11.5 per cent discount
to the then ambient share price of 1.13p. Around this time, the Company
secured an exclusivity period to negotiate the acquisitions of Amerisur and
Bohemia.

Following press speculation concerning the Acquisition, on 3 September
2004, the Board announced that it was in negotiations for the acquisition
of oil and gas exploration rights in Paraguay and that the terms of the
potential transaction were likely to constitute a reverse takeover under
the AIM Rules. Consequently, the Company requested on the same day that the
London Stock Exchange suspend trading in its ordinary shares. Trading in
the Company's ordinary shares has been suspended since that date. On 28
September 2004, the Board announced that the Company had conditionally
acquired Amerisur and Bohemia, the two Paraguayan companies holding
registered applications for hydrocarbon prospecting permits and concession
contracts relating to oil and gas exploration areas in Paraguay. The
Directors believe that the exploration areas (the Curypayty and Parana
Basins), which border Bolivia and Brazil, are relatively lightly explored
in terms of oil and gas. In addition, the Directors have been advised that
these basins extend respectively into Bolivia and Brazil, where commercial
oil and gas production has been established for many years from similar
geological sections.

3 Appointment of Additional Director

The Board of Chaco is delighted to announce that Mr Douglas Jendry (the
'Proposed Director') has agreed to join the Board as an additional
non-executive director, with effect from Admission. Mr Jendry has had a
career spanning more than 30 years in the oil and gas industry and is a
welcome and experienced addition to the Board.

4 Placing

The Company intends to raise 750,000 (less expenses) pursuant to a Placing
('the Placing'). The Placing is being effected on a reasonable endeavours
basis by Daniel Stewart & Company plc, to provide the Company with the
additional funds it requires to finance the costs of the Acquisition and
assist its future growth and development.

5 Directors' Intentions

The Directors and Mr Jendry who hold ordinary shares in the Company have
confirmed that they will vote in favour of the resolutions to be proposed
at the Extraordinary General Meeting of the Company. Accordingly, 4,750,000
Ordinary Shares (in aggregate) which, at the date of this document,
represents approximately 1.34 per cent of the issued share capital of the
Company will be voted in favour of the resolutions.

6 Extraordinary General Meeting

A notice is set out at the end of the Admission Document convening an
Extraordinary General Meeting to be held at 10.00 a.m. on 15 November 2004
at the offices of Charles Russell, 8-10 New Fetter Lane, London EC4A 1RS.
At the Extraordinary General Meeting, the following resolutions will be
proposed:- Ordinary Resolution

1. To approve the Acquisition.

Special Resolution

2. To disapply the statutory pre-emption rights in respect of the issue
of equity securities for cash pursuant to the Placing and to replace
the current general disapplication of the pre-emption provisions in
respect of the issue of equity securities for cash with a new general
disapplication in respect of such shares up to an aggregate nominal
amount of 41,725.83.

Approval of the Acquisition - Explanatory Note

As the Acquisition constitutes a reverse takeover, Shareholder approval, is
required under the AIM Rules. In addition, implementation of the
Acquisition is conditional upon, inter alia, and requires, shareholder
approval.

Disapplication of Pre-Emption Rights - Explanatory Note

The provisions of Section 89(1) of the Act, to the extent that they are not
disapplied, confer on shareholders rights of pre-emption in respect of the
allotment of equity securities which are, or are to be, paid wholly in
cash. Pursuant to Resolution 2, the current disapplication authority will
be replaced and the provisions of Section 89(1) of the Act will be
disapplied in respect of the new Ordinary Shares to be issued pursuant to
the Placing and will be generally disapplied in connection with a rights or
other pre-emptive issue and any other issue of equity securities for cash
which, when taken together with any other equity securities allotted for
cash during the period of the disapplication, do not in aggregate exceed a
nominal value of 41,725.83. This general disapplication authority
represents approximately 10 per cent of the enlarged issued share capital
of the Company assuming the issue of all the Placing Shares and the
Consideration Shares.

7 Recommendation, Voting Intentions and Notification

The Directors consider that the Acquisition is in the best interests of the
Company and of Shareholders taken as a whole. The Directors have
unanimously recommended all Shareholders to vote in favour of the
Resolutions to be proposed at the EGM. Copies of the Notice of
Extraordinary General Meeting, Form of Proxy and Admission Document were
circulated by post to shareholders yesterday. Additional copies will be
available from Daniel Stewart & Company Plc, 48 Bishopsgate, London, EC2N
4AJ.


Enquiries:-

Martin Groak, Finance Director
Chaco Resources plc Tel No. 07949-209 301

Ruari McGirr
Daniel Stewart & Company plc Tel No. 0207-374 6789

The Directors and Proposed Director of the Company accept responsibility for the
information contained in this document. To the best of the knowledge and belief
of the Directors and Proposed Director (who have taken all reasonable care to
ensure that such is the case) the information contained in this document is in
accordance with the facts and does not omit anything likely to affect the import
of such information.

Daniel Stewart & Company plc is acting for Chaco as nominated adviser and broker
in relation to the admission to AIM and for no-one else and will not be
responsible to anyone other than Chaco for providing the protections offered to
clients of Daniel Stewart & Company plc nor for providing advice in relation to
the admission to AIM. Daniel Stewart & Company plc is authorised and regulated
by the Financial Services Authority in respect of regulated activities.

Chaco Resources issues new shares in purchase of 2 Paraguayan companies
AFX
LONDON (AFX) - Chaco Resources PLC said it is proposing to acquire two Paraguayan companies -- Amerisur SA and Bohemia SA -- from Candey SA and Daniel Sztern in exchange for 27,322,404 new ordinary shares in the company.

It also plans to raise up to 750,000 stg before expenses in a placing of 36,585,365 new ordinary shares.

The company's shares were suspended on Sept 3 and it said it expects this to be lifted today. It has called an EGM for Nov 15 to approve the acquisition and placing plans.

Chaco Resources PLC
21 October 2004


Chaco Resources plc

Confirmation of Placing of 36,585,365 New Ordinary Shares of 0.1p each

FOR IMMEDIATE RELEASE

Pursuant to the announcements on the proposed Acquisition, Notice of
Extraordinary General Meeting and the Placing released earlier today, the
Directors of Chaco Resources plc confirm that they have received irrevocable
commitments for the placing of 36,585,365 new ordinary shares. The Placing will
raise 750,000 (before expenses) at a placing price of 2.05p per new ordinary
share.

Enquiries:-

Martin Groak, Finance Director
Chaco Resources plc Tel No. 07949-209 301

Ruari McGirr
Daniel Stewart & Company plc Tel No. 0207-374 6789

Hi Grevis,

How long have you been in this one? I got in before the suspension at just under 2p.

From Rigzone.com on 24/9/04 -

"Paraguay's mines and energy ministry will sign contracts in the next few days for 12 hydrocarbons exploration and production concessions totaling 26 million hectares, deputy minister Htor Ruiz told BNamericas.

"Formalizing these contracts will allow exploration to begin in the area from the Chaco [in the northwest] to the eastern part of the country," Ruiz said.

At August 2003 the country only had 40,000ha under concession in a single contract.

"We have asked each company to inform us about which entity is giving them economic and financial aid," he said. Companies giving such assistance include Williams de Broe PLC, Thorpe-Beestom Investment, and Mindley Investment, he added. UK-based CDS Oil & Gas recently formed a joint venture with local company Cano Martez and is providing financial assistance for the Paraguayan company.

CDS has also expressed interest in partnering with Morrison Mining for an exploration concession on the Boquer block. Other companies to sign agreements include Paraguay Gas, Boreal Petreos, Aurora Petreos and Amerisur.

"Those are all local companies with foreign agents," Ruiz said. Foreign companies that will sign agreements include HA & ER Exploraciones, Pilcomayo Petreos, Hidroener Consultora, GuaranExploration, and Union Oil, with technical and financial assistance from Brazil's BOYG and Andrade Gutirez.

The ministry recently recovered all of the original information related to 18,000km of seismic shot by US companies that had explored Paraguay for 40 years, as well as data on 24 wells, Ruiz said. "That [information] is highly valuable - mostly for technical reasons, but also for economic ones because it is work that does not have to be done again," he said.

Recovering the data will allow companies to begin work, he added. "That new information will be freely provided to each of the companies, making the sector more attractive and possibly increasing the number of companies interested in investing in the country," he said.

About Business News Americas: Business News Americas is a multilingual news and business information service that covers the most important original stories in 11 different business sectors throughout Latin America everyday. Visit BNamericas to access our real-time news reports, 7-year archive, Fact File company database, and latest research reports.

Click here for a Free two week trial to our Latin America Oil & Gas information service. Paraguay's mines and energy ministry will sign contracts in the next few days for 12 hydrocarbons exploration and production concessions totaling 26 million hectares, deputy minister Htor Ruiz told BNamericas.

"Formalizing these contracts will allow exploration to begin in the area from the Chaco [in the northwest] to the eastern part of the country," Ruiz said.

At August 2003 the country only had 40,000ha under concession in a single contract.

"We have asked each company to inform us about which entity is giving them economic and financial aid," he said. Companies giving such assistance include Williams de Broe PLC, Thorpe-Beestom Investment, and Mindley Investment, he added. UK-based CDS Oil & Gas recently formed a joint venture with local company Cano Martez and is providing financial assistance for the Paraguayan company.

CDS has also expressed interest in partnering with Morrison Mining for an exploration concession on the Boquer block. Other companies to sign agreements include Paraguay Gas, Boreal Petreos, Aurora Petreos and Amerisur.

"Those are all local companies with foreign agents," Ruiz said. Foreign companies that will sign agreements include HA & ER Exploraciones, Pilcomayo Petreos, Hidroener Consultora, GuaranExploration, and Union Oil, with technical and financial assistance from Brazil's BOYG and Andrade Gutirez.

The ministry recently recovered all of the original information related to 18,000km of seismic shot by US companies that had explored Paraguay for 40 years, as well as data on 24 wells, Ruiz said. "That [information] is highly valuable - mostly for technical reasons, but also for economic ones because it is work that does not have to be done again," he said.

Recovering the data will allow companies to begin work, he added. "That new information will be freely provided to each of the companies, making the sector more attractive and possibly increasing the number of companies interested in investing in the country," he said.

About Business News Americas: Business News Americas is a multilingual news and business information service that covers the most important original stories in 11 different business sectors throughout Latin America everyday. Visit BNamericas to access our real-time news reports, 7-year archive, Fact File company database, and latest research reports.

Click here for a Free two week trial to our Latin America Oil & Gas information service. Paraguay's mines and energy ministry will sign contracts in the next few days for 12 hydrocarbons exploration and production concessions totaling 26 million hectares, deputy minister Htor Ruiz told BNamericas.

"Formalizing these contracts will allow exploration to begin in the area from the Chaco [in the northwest] to the eastern part of the country," Ruiz said.

At August 2003 the country only had 40,000ha under concession in a single contract.

"We have asked each company to inform us about which entity is giving them economic and financial aid," he said. Companies giving such assistance include Williams de Broe PLC, Thorpe-Beestom Investment, and Mindley Investment, he added. UK-based CDS Oil & Gas recently formed a joint venture with local company Cano Martez and is providing financial assistance for the Paraguayan company.

CDS has also expressed interest in partnering with Morrison Mining for an exploration concession on the Boquer block. Other companies to sign agreements include Paraguay Gas, Boreal Petreos, Aurora Petreos and Amerisur.

"Those are all local companies with foreign agents," Ruiz said. Foreign companies that will sign agreements include HA & ER Exploraciones, Pilcomayo Petreos, Hidroener Consultora, GuaranExploration, and Union Oil, with technical and financial assistance from Brazil's BOYG and Andrade Gutirez.

The ministry recently recovered all of the original information related to 18,000km of seismic shot by US companies that had explored Paraguay for 40 years, as well as data on 24 wells, Ruiz said. "That [information] is highly valuable - mostly for technical reasons, but also for economic ones because it is work that does not have to be done again," he said.

Recovering the data will allow companies to begin work, he added. "That new information will be freely provided to each of the companies, making the sector more attractive and possibly increasing the number of companies interested in investing in the country," he said.

Hi gavdfc: Nice to hear from you. In regard to CHP, I bought in this morning on their return to the market. Seems to be an interesting little speculation. Should go 'well' from here!

gavdfc: Also, many thanks for posting that article. Most interesting!

You're welcome Grevis. It's quite hard to find news on CHP on the web. There was quite a bit of speculation going around as to what the price would be when the share came back from suspension. Also, would expect this to get tipped from UK-Analyst very soon. They mentioned it quite a lot before it was suspended in the emails they send out. Seemed like the rumour mill was in full swing before the suspension! I only took out a small punt, but it's been profitable already and I'm just going to let this one run and see where it goes. Should be fun!

Thanks gadvfc: I'll look out for a mention on today's bulletin from UK-Analyst.

Heres a copy of an email a friend sent a while ago me re CHP from the T1ps.com site:

Chaco - Suspended
03 September 2004 (13:41:07)
Chaco - Suspended
Chaco Resources* (CHP) has today suspended its shares at 2.15p following press comment about the Paraguay deal. Well it is always good to have Fleet Street pick up on t1ps material after a few days! The deal will be classed as a reverse so the shares will be suspended until it is completed which I would expect to be within the next three weeks. Thereafter I'd be hopeful of a second deal, perhaps in Libya. All good stuff. Am happy to be holding the stock in my pension.

Interesting to note the Libyan aspect.

Thanks gavdfc: I'll post that on ADVFN to see what reaction we get to the suggestion of a further deal in Libya. Interesting thought though!

No problem Grevis. The Libya deal could just be rumours, but would be an additional bonus. Lots of talk and rumour with Libya in General, but lots of oil there so any compnay getting a licence there would do well.

From This Is London:

"Chaco Resources was also a winner. The company, formerly called Gold Mines of Sardinia, reversed earlier losses after it announced it is proposing the reverse takeover of two Paraguayan companies in exchange for 27m shares in the company.

It also plans to raise up to 750,000 in a placing of more than 36.5m shares.

Chaco rose 0.37p at 2.52p."

From UK-Analyst.com:

"Shares in Chaco Resources, the former Goldmines of Sardinia, jumped after returning from suspension today. The shares have been suspended since September 3rd. The company agreed to purchase the entire issued share capital of Amerisur and Bohemia for a total consideration of 27,322,404 new ordinary shares. Chaco has also published an admission document setting out full details of a proposed placing at 1.75p to raise up to 750,000. The assets of the 2 companies are 47,000 square kilometres of the Curupayty and Parana basins and, if the government approves, the transfer of the right to explore. The prospect is interesting because the structures crosses the Bolivian and Brazilian borders where commercial quantities of oil and gas have been produced in geologically similar sections. The shares added 0.375p to 2.525p. Who told you about this deal first (months before Chaco 'fessed up)? Modestly prevents us from reminding you but we hope you took our advice."

Well done gavdfc. Good find!

From another BB:

A deal in Libya was rumoured before they were delisted, apparently a well known family in Libya had taken a large stake in CHACO Resources....DONT KNOW WHAT FAMILY but Gadafi's son invests on the London stock market could be a possibility. I will do some more research.

From Google:
Paraguay geologically is located in the southwestern portion of the South American Platform and the Brazilian Central Shield. Folded Faja Paraguay-Araguaia and the Crat of the Guaporhave their continuity from Brazil towards the Paraguayan territory; to the North of the Eastern Region one constitutes the denominated North Precbrico (Crat of the Apa river) and the South Precbrico (Crat of the Tebicuary river) to the South of the Eastern Region.

Two great river basins are pronounced both between cratones, one of them with intracraticas characteristics happens to the East, and is denominated River basin of Parana, the other of the pericratico type, call River basin of the Chaco is located in the Western Region and it extends to the South in Argentina and the Northwest in Bolivia.

PLINTH OF The RIVER BASINS Of PARANA And CHACO

The plinth of the river basins of the paleocontinente Gondwana is even a discussion subject, although yes it is established that the substrate of the River basin of Parana and the Chaco is constructed by strained of a precbricos land mosaic, highly diversified in origin and composition (Of Wit ET al., in Milani, 1997). This straining is made between 800 to 450 Ma and it is related to the Orogenia Brasiliana/Panafricana (Almeida & Hasui, 1983).

The belts of the Brasiliano/Panafricano Cycle constitute a set of river basins and orenos that include the continents African and South American, with a complex history tectonic, sedimentaria and metamfica, and accompanied by constant deformations in the surroundings of the craticos nuclei, allowing including the development of river basins associated this cycle of initial consolidation of the paleocontinente (Milani, 1997). For Branches (1988) the land strained one to the paleocontinente continues during the Paleozoico, with the acresi of blocks smaller or patagicos lands.

The acresi and collision of the different blocks in the course from geologic history are attributed to one prolonged convergent interaction of plates (Milani, 1997).

RIVER BASIN OF THE PARANA

The River basin of Parana constitutes a set of fanerozoico sedimentario/magmico filling, that geographically includes great part of Brazil, Paraguay, Argentina and the north of Uruguay, constituted by a succession of sedimentitas of continental and marine atmospheres, deposited in different intervals from the geologic time. The initial ingresi of the sea in the intracratico atmosphere moves the continental conditions to the limits of the river basin and from transgressions and regressions they determine the implanted environmental conditions in the inner subriver basins there.

The implantation of a great variety of subatmospheres of depositaci, probably is attributed to tectonic crustales throughout the active margins of the continent. The preparation of the river basin through the geologic time establishes a tectono/estratigrico context, related to tectonic events that control the subsidencia, the resurgence and the erosion, as well as the transgressions and regressions registered in the history of the river basin, within the intracratico design and positioning of antepa.

The beginning of the sedimentation of the River basin of Parana is registered from the Superior Ordovico, in Brazil (Milani ET al., 1996) like in Paraguay (Wiens, 1995), considering the beginning of the subsidencia in the Inferior Ordovico and finalizing in the Superior Cretico. The creation of space for the sedimentation would be related to the flexural behavior of the plinth of the river basin, produced by compression of the active margin of the paleocontinente and reactivated through the geologic time with cyclical characteristics, that alternate periods of accelerated and decelerated subsidencia.

The tectono/sedimentaria evolutionary history of the River basin of Parana is characterized by great cycles of sedimentation, with amplitude of tens of millions of years, denominated supersequences. In the sedimentario registry of the river basin 6 supersequences, each one of them represented by a rock set can be recognized, limited by surfaces of discordancias of interregional character. Of the 6 supersequences the three first correspond to transgresivos cycles and regressive paleozoicos and the three last ones are mesozoicas continental units and igneous rocks associated.

RIVER BASIN OF THE CHACO

The river basin of the Chaco like pericratica river basin is conformed by sedimentarias subriver basins, that present/display almost all their sedimentarias columns in sub-surface, filled up by Cretico/terciaria sedimentation, with exceptions of the northern subriver basins of Curupayty and Carandayty, that have outcrops of some of their estratigricas units and the Stops of the Chaco Central and Lagerenza.

Subuencas of separated Curupayty and Carandayty by the Stops of Big hole and Lagerenza presents/displays paleozoicas sedimentarias columns on a Precbrico/cbrico plinth. The subriver basins of Pirity (or Pirizal) and To pound separated by the Stop of Hayes, present/display a sedimentaria column of more than 3,000 meters of rocks of cretica age.

Due to intensive the stuffed Terciario/cuaternario, caused by the great sedimentario fan of the Pilcomayo river, the geolico/estratigrico knowledge of the River basins of Pirity and Pilar are restricted to works of geophysical and perforations associated to the oil exploration.

Looking good so far. Buys 869,682 v sells 93,531.

OnWar.com
Armed Conflict (over oil?)
Events Data

The Chaco War 1932-1935



State Entry Exit Combat Forces Population Losses
Bolivia 1928 1935 100 000 4 000 000 80 000
Paraguay 1928 1935 80 000 800 000 200 000

*****

Chaco War (1932-35), costly conflict between Bolivia and Paraguay. Hostile incidents began as early as 1928 over the Chaco Boreal, a wilderness region of about 100,000 square miles (259,000 square km) north of the Pilcomayo River and west of the Paraguay River that forms part of the Gran Chaco. The conflict stemmed from the outcome of the War of the Pacific (1879-84), in which Chile defeated Bolivia and annexed that nation's entire coastal region. Thereafter, Bolivia attempted to break out of its landlocked situation through the R de La Plata system to the Atlantic coast; athwart that route lay the Gran Chaco, which the Bolivians thought had large oil reserves.

Bolivia seemed to enjoy overwhelming advantages over Paraguay: it had thrice the latter's population, an army well-trained by the German general Hans von Kundt, and an ample supply of arms purchased by loans from American banks. But the morale of Bolivia's army of Indian conscripts was low, and Paraguayans were better fitted to fight in the lowland swamps and jungles, in which many Bolivians died of disease and snakebite as well as gunfire. Both countries had maintained military posts in the disputed region.

On Dec. 5, 1928, Paraguay initiated a series of clashes, which led to full-scale war in spite of inter-American arbitration efforts. Both belligerents moved more troops into the Chaco, and by 1932 war was definitely under way. In June the Bolivians seized Paraguayan positions in the northern Chaco and launched a successful attack in the central Chaco against Fort Boquer. In August Paraguay ordered mobilization and sent forces under General JosEstigarribia in their first major offensive against Fort Boquer, which fell at the end of September. Kundt was recalled by Bolivia, and he concentrated his forces in the south to attack Fort Nanawa, where there was heavy fighting for several months.

Paraguay formally declared war on May 10, 1933. Estigarribia launched a series of attacks along an extended front late in October and made such impressive gains that the Bolivian president Daniel Salamanca replaced Kundt with General Enrique Peranda. At the end of a three-week truce, Estigarribia renewed his drive (Jan. 9, 1934) against the Bolivian post of Ballivi, where from March to July the heaviest fighting of the war occurred. Ballivi fell on November 17, and Salamanca was forced to resign. Paraguay's advance continued into indisputably Bolivian territory in January 1935.

After Bolivian counterattacks put Paraguayan forces on the defensive, a truce was arranged on June 12, 1935. About 100,000 men lost their lives in the war. A peace treaty was arranged by the Chaco Peace Conference, which included Argentina, Brazil, Chile, Peru, Uruguay, and the United States. It was signed in Buenos Aires on July 21, 1938. Paraguay gained clear title to most of the disputed region, but Bolivia was given a corridor to the Paraguay River and a port (Puerto Casado). The war had caused disruption of the Bolivian economy, provoking demands for reform among the deprived Bolivian masses. Argentina was given the main credit for the settlement, and Argentine investors profited greatly from Paraguay's territorial gain.

Paraguay Energy Ministry to Sign 12 E&P Contracts
BNAmericas Friday, September 24, 2004


Paraguay's mines and energy ministry will sign contracts in the next few days for 12 hydrocarbons exploration and production concessions totaling 26 million hectares, deputy minister Htor Ruiz told BNamericas.

"Formalizing these contracts will allow exploration to begin in the area from the Chaco [in the northwest] to the eastern part of the country," Ruiz said.

At August 2003 the country only had 40,000ha under concession in a single contract.

"We have asked each company to inform us about which entity is giving them economic and financial aid," he said. Companies giving such assistance include Williams de Broe PLC, Thorpe-Beestom Investment, and Mindley Investment, he added. UK-based CDS Oil & Gas recently formed a joint venture with local company Cano Martez and is providing financial assistance for the Paraguayan company.

CDS has also expressed interest in partnering with Morrison Mining for an exploration concession on the Boquer block. Other companies to sign agreements include Paraguay Gas, Boreal Petreos, Aurora Petreos and Amerisur.

"Those are all local companies with foreign agents," Ruiz said. Foreign companies that will sign agreements include HA & ER Exploraciones, Pilcomayo Petreos, Hidroener Consultora, GuaranExploration, and Union Oil, with technical and financial assistance from Brazil's BOYG and Andrade Gutirez.

The ministry recently recovered all of the original information related to 18,000km of seismic shot by US companies that had explored Paraguay for 40 years, as well as data on 24 wells, Ruiz said. "That [information] is highly valuable - mostly for technical reasons, but also for economic ones because it is work that does not have to be done again," he said.

Recovering the data will allow companies to begin work, he added. "That new information will be freely provided to each of the companies, making the sector more attractive and possibly increasing the number of companies interested in investing in the country," he said.