Spanish oil group Repsol has made a large natural gas discovery in Peru, specifically at the Subandean Block 57.

The test drilling project named Sagari has been successful at two different locations, Nia Superior and Nia Inferior.

Preliminary estimates indicate that the discovery may contain up to 1-2 trillion cubic feet of natural gas.

Repsol is the operator of the block with a 53.84% stake while Petroleo Brasileiro SA holds the remaining 46.16%.

The Sagari discovery strengthens the Spanish company's potential in Peru, where Repsol also discovered the Kinteroni camp, one of the five largest discoveries in the world in 2008, and which is currently in an accelerated development phase for production by the end of 2012.

Shares of Repsol jumped on the news. By 12:27, they were up 3.26% at €15.22.

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