Nov. 5 (Bloomberg) -- Petroleo Brasileiro SA, Brazil’s state-controlled oil company, may have discovered at least 1 trillion cubic feet of natural gas in Peru’s southern Amazon jungle, Peruvian President Alan Garcia said. The shares surged.

The block may hold as much as 5 trillion cubic feet, Garcia told reporters today in Lima. The Rio de Janeiro-based company is drilling next to the Camisea gas fields, Peru’s biggest.

“This morning, we received information directly from the jungle that a large quantity of gas has been found,” Garcia said today in televised remarks. “If this is confirmed, we can say we’ve made a leap forward in energy security.”

Peru is counting on companies such as Rio de Janeiro-based Petrobras and Spain’s Repsol YPF SA to develop natural-gas reserves and help supply Hunt Oil Co.’s Peru LNG project, which aims to export 600 million cubic feet a day of gas to Mexico by 2011. Camisea, operated by a Pluspetrol SA-led group, is struggling to meet gas-supply commitments after domestic demand jumped 20 percent last year, partly because of gas-fired power plants built by GDF Suez SA, Endesa SA and Duke Energy Corp.

A Petrobras spokesman, who declined to be identified citing company policy, declined to comment on Garcia’s remarks.

Petrobras rose 2 percent to 36.40 reais at 6:09 p.m. in Sao Paulo trading. The stock has risen 59 percent this year, less than the 73 percent gain for Brazil’s benchmark Bovespa index.

Peruvian Exploration

Petrobras’ Block 58, one of four areas it is exploring in the Peruvian jungle, is part of $10 billion in energy investments expected by Peru’s Energy Ministry in the next six years. Peru aims to double oil and gas output by 2015 to fuel petrochemical plants to be built by CF Industries Holdings Inc., Braskem SA and Sigdo Koppers SA.

Peru, which currently produces 375 million cubic feet a day has also pledged to supply 800 million cubic feet a day to a $1.35 billion natural-gas pipeline to be built in the southern Andes by New York-based Conduit Capital Partners LLC.

“Current reserves can barely cover demand for the next 20 years,” Cesar Gutierrez, an oil analyst and former chief executive officer of state oil company Petroperu SA, said today in a telephone interview. “The government needs companies to keep finding more gas.”

To contact the reporter on this story: Alex Emery in Lima at aemery1@bloomberg.net

Last Updated: November 5, 2009 17:23 EST