October 8, 2010 / 3:26 PM / in 8 years

UPDATE 1-Petrobras discovers 1.7 tcf natural gas in Peru

* Petrobras 100 percent owner of concession block

* Discovery near Camisea gas find in Peruvian Amazon (Recasts, adds details, background)

RIO DE JANEIRO, Oct 8 (Reuters) - Brazilian state oil company Petrobras (PETR4.SA) said on Friday it has discovered 1.7 trillion cubic feet of gas in Peru in an exploratory block in the country’s Amazon region.

Petrobras said the find was its second discovery in lot 58, which is near near Peru’s Camisea gas field.

“The discovery is the result of drilling the Picha 2X exploratory well, with a depth of close to 4,400 meters,” the company said in a press statement.

Petrobras, via its Peruvian subsidiary, is 100 percent owner of the concession area.

Peruvian President Alan Garcia last year said Petrobras had discovered about 1 trillion cubic feet (tcf) in the first of five wells being drilled in the lot.

Peru, which is trying to become a net energy exporter, is encouraging companies to invest in the resource-rich Amazon jungle — thought to have vast and largely untapped reserves of oil and natural gas.

But that effort has sparked criticisms that gas exports could leave Peru without enough energy for its own economy.

Competing estimates have shown Peru’s gas reserves between 8.8 tcf and 14.1 tcf, creating dispute as to whether it has enough gas to supply both a LNG terminal that began operations this year and meet local demand.

Reporting by Elzio Barreto, Writing by Brian Ellsworth; Editing by Lisa Shumaker

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