Venezuela finds vast gas reserve

The find will allay fears of a decline in Venezuela's energy industry

President Hugo Chavez has announced the discovery of a vast gas field off the coast of Venezuela.

The find - estimated at 7 to 8 trillion cubic feet, about five times what Spain uses in a year - was made with the Spanish energy company Repsol.

Mr Chavez announced the find while in Spain during a tour of Europe and Asia.

"What are we going to do with so much gas?" he jokingly asked Repsol's head Antonio Brufau in a joint interview with Spanish newspaper El Pais.

"I'm sure we'll find some use for it," came the reply.

Mr Chavez said the development of the field would put Venezuela - which already boasts the largest proven oil reserves outside the Middle East - among the world's top five gas producers.

Repsol confirmed the "enormous" discovery, which it made in an offshore site called Cardon 4 in the Gulf of Venezuela in an exploration consortium with the Italian energy company Eni.

It said further tests were under way to confirm provisional estimates of its volume.

If so, it will be the biggest gas find in Repsol's history.

Boost for Venezuela

Repsol said that once development of the field was under way, profits from the venture would be split three ways, with Repsol and Eni taking 32.5% each and Venezuela's state company PDVSA taking 35%.

For both Mr Chavez and Repsol the timing of the announcement could not have been better, reports the BBC's Will Grant in Caracas.

There have been suggestions that the oil industry in Venezuela is in decline, with falling prices, reduced production and high debts to contractors.

However, this gas find will go a long way to calm investor fears in Venezuela and Spain about the extent of the country's energy reserves, our correspondent says.