Diamond Shamrock Partners discovers major gas field in Bolivia.

SAN ANTONIO, Texas--(BUSINESS WIRE)--Aug. 4, 1995--Officials of Diamond Shamrock Boliviana, Ltd. (DSBL) have announced the successful completion of an exploratory well in southern Bolivia, resulting in a major gas discovery for the joint venture.

The well, Nupuco-X101, located in the Gran Chaco Province of the southern Bolivian department of Tarija, was drilled by the joint venture company, which is owned by Diamond Shamrock, Inc. of San Antonio, Texas, and Austrofueguina S.A. of Buenes Aires, Argentina. A sophisticated production system was installed in well Nupuco-X101 in order to allow it to selectively produce up to 20 million cubic feet per day of sweet gas (gravity of 0.67) and 400 barrels per day of light condensate (API 70 degree) from five commercial gas bearing zones.

Diamond Shamrock's Vice President for South America Pat McConahy says that the company is very pleased with the discovery of significant gas reserves in the Nupuco structure. "Diamond Shamrock first ventured into South America in 1991, obtaining both existing production and exploration opportunities for a modest investment. We have gained invaluable experience and, with our partners in DSBL, have become a major player in Bolivia."

McConahy commented that DSBL was awarded the exploration and production rights for the Nupuco structure as well as operatorship in an association contract with Yacimientos Petroliferos Fiscales Bolivianos (YPFB), the Bolivian national oil company. This was the first time YPFB and a private corporation have entered into such an agreement.

Once the engineering studies are concluded and the corresponding certification of reserves is issued, DSBL intends to develop the Nupuco Field as well as construct a 45 km. gas pipeline that will connect Nupuco to the Porvenir Field where DSBL owns a gas processing plant, which is under an operation contract with the Bolivian government and where produced gas will be processed and conditioned for sales into the Argentine market.

McConahy says he expects to begin construction of the gas pipeline immediately as well as drill another well in the Nupuco structure before the end of the year. Financing for the project will be through the DSBL partnership.

The gas plant at Porvenir processes its allocation of 45,000 mcfd of gas, which is delivered to YPFB. The plant, built in 1981, is a very modern, efficient plant located in the gas-rich southern region of Bolivia. DSBL also owns and operates six producing gas wells in the Chaco block, directly north of the Nupuco block.

Diamond Shamrock, Inc. (NYSE:DRM), with annual sales of $2.6 billion, is a leading refiner and marketer of petroleum products in the Southwestern United States with a growing mix of related businesses.

CONTACT: Diamond Shamrock Inc.

Katherine Hughes, 210/641-8846; Mary Hartman, 210/641-8840