Natgas deposit found at Chaco Boreal

Thursday, August 4, 2005

Exploration work in Paraguay has discovered a natural gas deposit with enough gas to supply capital Asunción and its metropolitan area for 20 years, local press reported.

The deposit, known as Independencia I, is in Chaco Boreal, an area of high gas and oil exploration 800km northwest of Asunción near the Bolivian border.

Paraguayan partner companies Primo Cano Martínez and CDS Energy, 90%-owned by Britain's CDS Oil and Gas, found the deposit at a depth of 606m after six years of exploratory drilling. It will be able to produce 900,000 cubic feet of natural gas per day, the reports said.

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Paraguay does not produce natural gas and lacks the technology and infrastructure needed to process and transport it.

Newspapers said the public works ministry is evaluating awarding concessions to private foreign companies for the production and delivery of gas as well as for continuing exploration for gas and oil. The ministry estimates gas and oil production could bring in annual revenues of US$50mn.

CDS Energy and Primo Cano Martínez are also drilling at sites Independencia II and III, the latter of which showed signs of gas at 50m, according to the reports. Both are near Independencia I and the companies hope to find oil as well.