President Energy made Paraguay’s first major oil discovery in the Chaco Basin.

The discovery of light oil in the Lapacho well is expected to have commercial potential, with first output slated for next year, the London-based company said in a statement. The well may hold about 200 MMboe, it said.

“President has demonstrated beyond doubt that movable conventional oil does exist in the Paraguayan Chaco,” Chairman Peter Levine said in the statement. “This discovery represents a significant milestone.”

The company has been targeting as many as 1 Bbbl of oil and gas in Paraguay, a landlocked nation between Brazil, Argentina and Bolivia. The flat landscape, stable politics and favorable tax regime make it attractive, Levine said in January.

Production from the Lapacho find will supply the domestic market, reducing reliance on imports of oil and gas, Levine said by phone. Corporation tax is 10% with royalties set at 10% to 14%, depending on volumes, he said.

The explorer also plans to deepen its suspended Jacaranda well following testing of Lapacho, it said in the statement.