Provides Operations Update for Z-1 Block Development

    HOUSTON, Aug. 3 /PRNewswire-FirstCall/ -- BPZ Energy, Inc. (OTC Bulletin
Board: BPZI) announced today that it has awarded the turnkey contract for the
engineering, procurement and construction (EPC) of its power plant project in
northwest Peru to BTEC Turbines LP of Houston.  The contract was awarded
following a comprehensive six-month bidding process that included field visits
by all of the bidders.  Under the EPC contract, the final terms of which are
being negotiated, BTEC will supply two General Electric Frame 7 simple-cycle
gas-fired turbines.  BTEC will also act as the main contractor for the
transportation of all equipment, construction, startup and commissioning of
the power plant, which is to be located at Caleta Cruz, approximately 10 miles
southwest of the city of Tumbes, Peru.  First power generation from the BPZ
Energy power plant is planned for July 2006.
    The turnkey EPC contact calls for both turbines to be fully tested in the
United States before being shipped to Peru in three major components for
alignment and reassembly on site.  BTEC's contract will also include a two-
year maintenance and operations program, a ten-year service agreement for
long-term maintenance and a one-year warranty on the equipment.
    "Selecting the right contractor to handle the EPC contract for our power
plant project is a critical step in keeping the project on schedule and on
budget to produce power by mid-next year," stated Manolo Zuniga, President and
Chief Executive Officer of BPZ Energy, Inc.  "We are impressed with BTEC's
reputation for providing superior turnkey services.  We also like the
operating flexibility and redundancy of using two smaller turbines versus one
large unit to generate electricity.  The General Electric Frame 7 units are
known to be workhorse machines that are simple to operate and maintain,"
continued Mr. Zuniga.

    Operations Update
    BPZ has also made significant progress this summer on the engineering and
construction projects necessary to develop, produce and transport gas from the
Z-1 Block, located 10 miles offshore from the power plant in northwest Peru.
    In May 2005, the Company received the required environmental permit from
the Ministry of Energy and Mines in Peru to refurbish the CX-11X platform at
the Corvina Field in the Z-1 Block.  The platform refurbishment program is
underway and is expected to be completed by year-end.  In addition, BPZ Energy
has identified several drilling rigs and contractors with experience working
in the area and is currently negotiating to secure a rig for its drilling
program.  The drilling plan will rehabilitate and test the currently shut-in
C-16X well and anticipates the drilling of six new wells in the Corvina Field.
    BPZ Energy has awarded the front end engineering and design contract for
the Corvina gas field development project to Upstream Engineering LLC, a
Houston-based engineering firm which specializes in the design of platforms,
production facilities and pipelines.  Under the terms of the contract,
Upstream Engineering is designing offshore and onshore gas processing
facilities capable of handling up to 200 MMCF/D of gas from BPZ Energy's
offshore gas fields in its initial phase.  They are also designing the 10 mile
offshore pipeline to deliver gas to the BPZ Energy power plant as well as the
40 mile onshore pipeline dedicated to delivering gas for third party sales at
the city of Arenillas, Ecuador.
    Upstream Engineering has already completed a preliminary engineering study
that confirmed the previously held cost estimates for the project as well as
the timeline for first gas production, currently scheduled for July 2006.
Procurement and construction are expected to commence in September 2005.
Upstream Engineering's reputation and experience is renowned worldwide through
participation in projects in the Gulf of Mexico, West Africa, Mexico, and
South America.

    About BPZ Energy
    Houston-based BPZ Energy, Inc. is an oil and gas exploration and
production company with properties in northwest Peru and Ecuador.  It is
executing a gas to power strategy which includes generation of electric power
in Peru for its own account and sales of gas into Ecuador for third-party
power generation.  BPZ has exclusive rights and license agreements for oil and
gas exploration and production covering approximately 2.7 million acres in
four properties in northwest Peru.  It also owns a working interest in a
producing property in southwest Ecuador.

    This Press Release contains forward-looking statements based on our
current expectations about our company, our properties, our estimates of
required capital expenditures and our industry.  You can identify these
forward-looking statements when you see us using words such as "expect,"
"anticipate," "estimate," "believes," "plans" and other similar expressions.
These forward-looking statements involve risks and uncertainties.  Our actual
results could differ materially from those anticipated in these forward-
looking statements.  Such uncertainties include the success of our project
financing efforts as well as the successful management of our capital
development project and other normal business risks.  We undertake no
obligation to publicly update any forward-looking statements for any reason,
even if new information becomes available or other events occur in the future.
We caution you not to place undue reliance on those statements.

    Contact:  Manolo Zuniga, CEO
              Randall D. Keys, CFO
              BPZ Energy, Inc.
              281-556-6200

              Lisa Elliott / lelliott@drg-e.com
              Jack Lascar / jlascar@drg-e.com
              DRG&E / 713-529-6600

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