LIMA -(Dow Jones)- Petroleo Brasileiro SA (PBR, PETR4.BR), or Petrobras, said that Peru has a solid potential for natural gas production. However, this is being held back by bottlenecks that are slowing investments in exploration.

Pedro Grijalba, Petrobras' country manager in Peru, said the Andean country has potential natural gas reserves of 50 trillion cubic feet, state news agency Andina reported Thursday. Peru's certified reserves are currently at 11 trillion cubic feet, Grijalba said.

"The potential reserves in Peru from a geological point of view are tremendous," Grijalba was reported saying. "There is a big potential for gas in Peru, but investors need to be given incentives to speed up exploration."

Petrobras has four blocks in Peru, Grijalba said. The company has already invested $367 million in exploration in Peru and plans to invest another $130 million to $150 million this year, he said.

Grijalba said that natural gas sales are expected to begin when the Southern Andean Gas Pipeline is completed.

A representative from the company was not immediately available to confirm the comments.

President Ollanta Humala launched the start of the pipeline project in March, calling it the country's "most important project" during the last 100 years.

The pipeline, which will be more than 1,000 kilometers long, will transport natural gas from fields in south-eastern Peru to cities in the country's south, to supply residents and industry with cheaper gas, while also creating a petrochemical complex.

Prime Minister Oscar Valdes said that the pipeline and petrochemical complex will require total investments of $16 billion, and create 40,000 new jobs.

-By Ryan Dube, Dow Jones Newswires; 51-945 043 802; peru@dowjones.com