Petrobras Makes Huge Natural Gas Find in Peru

RIO DE JANEIRO (Dow Jones), Nov. 6, 2009

Brazilian state-run energy giant Petrobras confirmed Friday the company discovered natural gas at a field in Peru's Cusco province.

Petrobras said it completed drilling the first well in Peru's Block 58, dubbed Urubamba 1X. The well was drilled to a depth of 4,000 meters and showed the presence of natural gas, Petrobras said.

The samples are under analysis, which will be used to determine the commercial viability of the find as well as the volume of natural gas. Petrobras holds 100% of the Block 58 concession.

On Wednesday, Peruvian President Alan Garcia said that Petrobras had made a natural gas discovery in Block 58, possibly containing up to 5 trillion cubic feet of natural gas.

Petrobras also said it would drill a second well at Block 58, dubbed Picha 1X, in 2010. That well will probe deeper than Urubamba in search of natural gas, the company said.

The discovery could add significantly to Peru's natural gas reserves. According to Garcia, Peru currently has up to 15 trillion cubic feet of gas reserves from southern Blocks--up to 3 trillion cubic feet in Block 56, more than 9 trillion cubic feet in Block 88 and 2 trillion cubic feet in Block 57.

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