Spain's Repsol Says It Makes Venezuela's Biggest Gas Discovery

Repsol YPF SA, Spain’s biggest oil company, discovered a Venezuelan gas field containing as much as 8 trillion cubic feet of fuel, one of the world’s largest finds.

The field’s potential gas resources would be enough to supply Spain for more than five years, the company said yesterday in an e-mailed statement. Venezuelan President Hugo Chavez and Repsol Chief Executive Officer Antonio Brufau discussed the find in Madrid yesterday, the company said.
“Given that Repsol was initially expecting reserves seven to eight times less than this, until we see confirmation that this is the size of the discovery, I don’t think it’s time to toot Repsol’s horn,” said Patrick Esteruelas, a Latin America risk analyst with Eurasia Group in New York.

Repsol wants to boost oil and gas production through new finds off the coasts of Brazil and Venezuela after four years of declining output. A “challenging” operating and contractual environment in Venezuela make it difficult to develop new gas reserves, Esteruelas said yesterday in a telephone interview.

“The Venezuelan government remains insistent that any new gas developments should be directed to the heavily subsidized price in the domestic market,” he said. “Venezuela is still running a gas deficit and will use any new production to plug that deficit. That’s a massive stumbling block to successive gas development.”

Bloomberg