A large oil discovery has been made in the Chaco region and Paraguay could join the petroleum producers club in 2013, President Federico Franco said.

"Paraguay is a country full of opportunities. Next week, Tuesday, if God allows, we are going to the Chaco. Petroleum has been found in the Pirity basin and of the best quality, and in abundant quantities," Franco told a group of Brazilian businessmen on Monday.

Initial studies have been conducted and "certainly by April, May, June of next year" Paraguay will join "the countries that produce petroleum," the president said.

Crescent Global Oil and Pirity Hidrocarburo, which are exploring for oil in the Chaco region, expect to begin drilling in December, the official IP news agency reported.

The Chaco, Paraguay's westernmost region, is arid, sparsely populated and home to vast cattle ranches.

Paraguay and Bolivia fought for control of the region in the bloody 1932-1935 Chaco War, which left 100,000 dead, most of them from malaria and lack of water.

Paraguay has been searching for crude in the region for decades in an effort to cut its dependence on foreign oil.

The South American country has large energy resources, thanks to the two hydroelectric projects it shares with Brazil and Argentina on the Parana River, but most of the electricity produced goes to its neighbors in exchange for economic compensation. EFE