Posted by
voice_of_reason on Friday, November 09, 2007 7:14:50 AM
Oil Discovery Rocks BrazilRIO DE JANEIRO, Brazil (AP) -- A huge offshore oil discovery could raise Brazil's petroleum reserves by a whopping 40 percent and boost this country into the ranks of the world's major exporters, officials said.
The government-run oil company Petroleo Brasileiro SA, or Petrobras, said the new "ultra-deep" Tupi field could hold as much as 8 billion barrels of recoverable light crude, sending Petrobras shares soaring and prompting predictions that Brazil could join the world's "top 10" oil producers.
Petrobras President Sergio Gabrielli said Thursday the oil from ultradeep areas, including the Tupi field, would give Brazil the world's eighth-largest oil and gas reserves. Petrobras' American depository shares jumped $24.03 to $116.77 on the New York Stock Exchange to close at a 52-week high. In Brazil, Petrobras shares ended 14.1 percent higher Thursday at 80.17 reals ($45.94) in Sao Paulo.
"If this is confirmed, we will no longer be a 'medium' country, pursuing self-sufficiency and exporting a little. It will transform the nation to another level, with exporting properties like Venezuela, Arab nations and others," said Dilma Rousseff, presidential chief of staff.
For a country that went deeply into debt buying foreign oil in the 1970s and '80s, "this has changed our reality," she said.
Felipe Cunha, an oil analyst with the Sao Paulo-based brokerage Brascan, said the Tupi field guarantees Brazil's oil output will continue to grow.
"If the best-case scenario happens, this discovery would make Petrobras' reserves overcome those of Shell and Chevron and put Petrobras behind only Exxon and British Petroleum," Cunha said.
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VoR: this is great news! I will personally celebrate by purchasing Brazilian wine this weekend and toasting their success.
Note: most Americans are not aware that Italian immigrants launched a wine growing industry in Brazil in the 1880's. The best Brazilian wines come from Rio Grande do Sul, the Brazilian state that is furthest south. If any readers of this blog are wine
aficionados, I would suggest a Merlot from wineries such as Miolo or Casa Valduga.
Saúde (to your health) as they say in Brazil.
Some additional points to ponder:
* Remember that Brazil has been touted by environmentalists as a role model, due to its Govt-mandated efforts to switch a significant percentage of Brazilian automobiles from gasoline to ethanol or flex (dual-use)?
* As a result of this discovery, the price of gas will eventually drop in Brazil. How will Brazilians feel about the Govt-mandated switch from gasoline to ethanol or dual use? Will they continue to be enthusiastic supporters of ethanol because of their deeply held feelings about Go-Ba-Wa-Ma as a religious cult? (that's global warming, to you un-enlightened, capitalist, gas guzzlers).
* It would be interesting to see how environmentalists react to the fact that their enviro-champion is soon to become a major exporter of oil. No doubt they will find that this drilling disturbs the mating rituals of the dwindling numbers of endangered undersea Brazilian caribou.
* For Americans, it means the addition of an additional source of oil that is not affiliated with the Middle East. This news should also have a positive effect on the price of oil, which has hovered near the $100/barrel mark in recent days.
* This news from Brazil also begs the question - WHY AREN'T WE DRILLING IN THE ANWR COASTAL PLAIN? Heck, the mere opening of debate on this subject in our Congress wil cause oil prices to drop!
* One hopes that Brazil will use its resources wisely and not go the way of Venezuela. However, the fact that Petrobras is Govt-run doesn't bode well for long-term prospects. It would be a lot more beneficial to the Brazilian economy if Petrobras were privatized.
* Since Brazil had become a net importer of corn (to produce ethanol), perhaps this will help reduce the demand for corn -- bringing corn prices back to normal. Hey, maybe our Mexican comrades can afford to eat Tortillas again!
Read
"Of Tortillas .. and men"