A new Venezuela gas find could raise oil and gas reserves held by Repsol YPF SA (REP) by more than 20%, providing the Spanish oil firm with a much needed boost following declines in its oil and gas resources.

Repsol's reserves have fallen in recent years as oil fields matured and production contracts in several South American countries, including Venezuela, were changed.

Repsol, in an exploration partnership with Italy's Eni SPA (E), estimates that reserves at the offshore Perla 1 find in the Gulf of Venezuela could hold between 7 and 8 trillion cubic feet in recoverable reserves, equivalent to between 1.26 billion and 1.44 billion barrels of oil equivalent, or BOE, a Repsol spokesman said Monday.

Repsol and Eni would each have a 32.5% stake in future output from the field, while Venezuelan state-oil company Petroleos de Venezuela, or PdVSA, would get a 35% stake. According to the most optimistic of the recoverable reserve estimates, around 468 million BOE of Perla's reserves would be attributable to Repsol.

Repsol held 2.2 billion barrels of oil equivalent in proven reserves at the end of 2008, including those from its Argentine unit YPF. By comparison, Eni had proven hydrocarbon reserves of 6.6 billion BOE at the end of last year.

The find - the Spanish company's largest discovery ever - is good news in that it addresses one of the company's weak points, its relative lack of reserves, Banco Espanol de Credito analyst Robert Jackson said in a note.

The bank has a neutral rating and an EUR18.3 target for Repsol.

If initial reserve estimates for Perla are confirmed, recoverable volumes would be similar to that of Brazil's giant Guara field, which Repsol and its exploring partners last week said has estimated recoverable reserves of 1.1 billion to 2 billion BOE. Repsol holds a 25% stake in Guara.

But unlike the ultra-deep Guara field, Perla lies close to shore in shallow waters of only 60 meters, which would likely make production costs much cheaper.

The company said it will still take a couple of weeks before current tests are completed and it can confirm the reserve estimate for Perla. Repsol didn't say how long it would take before production may start.

Resource nationalism in Latin America has contributed to the decline in Repsol's reserves in recent years, with governments in Bolivia, Ecuador and Venezuela forcing the company into less favorable production contracts for oil and gas projects.

Venezuela's President Hugo Chavez has stepped up state control over the country's vast hydrocarbons resources and forced foreign oil firms into joint ventures in many oil projects, in which he gave PdVSA a majority stake.

In gas developments, however, Venezuela allows foreign companies to hold bigger stakes, the Repsol spokesman said Monday. Spain's leading news daily El Pais Saturday quoted Chavez as saying that there is no risk that the new gas reserve will be nationalized by Venezuela.

Gas found at Perla could be enough to be used in a liquefied natural gas project, Repsol Chairman Antonio Brufau was also quoted as saying in El Pais Saturday.

The Perla find is relatively less important for Eni, meanwhile, due to the Italian firm's superior reserve levels.

"Gas is important for Eni, but the current (gas) prices are so low that the (Venezuela) find isn't helping the stock," said Gianpaolo Rivano, a fund manager at GestiRe in Milan.

At 1157 GMT, Repsol shares were up 0.2%, or EUR0.04, at EUR17.77, while Madrid's IBEX-35 index fell 0.8%. At 1212 GMT, Eni shares were down EUR0.13, or 0.8%, at EUR17.24, slightly less than the 1.1% drop in Italy's benchmark FTSE Mib index.

Company Web site: http://www.repsol.com

-By Bernd Radowitz and Liam Moloney, Dow Jones Newswires, +34-91-395-8125, djmadrid@dowjones.com