ABU DHABI Ñ Saudi Arabia has reported the discovery of gas reserves in the eastern part of the kingdom.

Saudi Oil Minister Ali Al Naimi said Saudi Aramco discovered gas reserves in the Eastern Province. Al Naimi said the gas surfaced at the Madraka-1 well at a rate of 38 million cubic feet per day. Aramco also reported a find of 1,650 barrels of condensates a day.

"Studies show that the permanent production capacity of the well might exceed the current level of production," Al Naimi said.

The gas discovery was the first reported since Saudi Arabia signed contracts in March 2004 with companies from China, Italy, Russia and Spain for gas exploration and development. Saudi Arabia has reported gas production of seven billion cubic feet a day.