U.S.-controlled energy company PetroTech has made a promising gas discovery in northern Peru, a company executive said yesterday.

"We have found an interesting gas deposit but we're still evaluating it and studying drilling a confirmation well," Pedro Lecon, PetroTech's head of geoscience, told Reuters. He said it was still too early to say how big the deposit was. It is located near Piura, 1,050 kilometres north of Lima, where PetroTech has three search teams working.

The company - its U.S. parent has the same name - achieved average output of 13,316 barrels of oil and 14,060 cubic feet of gas per day last year. It is one of 13 energy companies exploiting hydrocarbons in Peru.

News of the potential new oil field comes amid a fall in Peru's oil and gas output as fields are exhausted, searches fail and reserves drop, analysts say. Peru's big hope to date has been the Camisea natural gas field - the country's biggest - which is being developed by a consortium led by Argentina's Pluspetrol and Techint.

At the end of 2000, Peru had accumulated output of 36.3 million barrels of oil, a fall of 6.2 per cent from the previous year, and gas production of 12,183 million cubic feet.

Lecon said the confirmation well, whose execution will depend on market and price prospects, would require investment of $1.2 million on top of the $2 million already spent on the initial search. The company is already planning to sink another $2.5 million into another field in the area. "Our advantage compared with other deposits in the area is that we have rich gas fields associated with condensates while others have solely gas wells," Lecon said.

According to Peru's energy and mines ministry, PetroTech has low and mid-production wells with 70 million barrels in proven oil reserves, some 40 million barrels of probable reserves and 160 barrels of possible reserves. The ministry said PetroTech had 180,000 million cubic feet of proven gas reserves.

Energy and Mines Minister Carlos Herrera said at the weekend that three other groups had found interesting gas deposits in the area where PetroTech is operating. "We have good possibilities of finding more gas in our working area which is why we're thinking of carrying out an experimental work in the north costing $2.5 million more (in another field)," Lecon said.