Brazilian Oil Finds

There’s good news and there’s bad news. The good news is that the Brazilian oil finds may be two of the world’s three biggest oil finds in the past 30 years could help end the Western Hemisphere’s reliance on Middle East crude. Saudi Arabia’s influence as the biggest oil exporter would wane if the fields are as big as advertised,The bad news? They won’t be fully operational until 2020.

We might see a $150 a tank fiull up before the good news comes about.

Brazil may be pumping several million barrels of crude daily by 2020, vaulting the nation into the ranks of the world’s seven biggest producers. The U.S. Navy’s presence in the Persian Gulf and adjacent waters would be reduced, leaving the region exposed to more conflict. We could see that world becoming a very violent one. Like it’s not already? Every hiccup makes oil spike upwards.

If the United States isn’t getting any crude from the Gulf, what benefit does it have in policing the Gulf anymore? All of the geopolitical flux that wracks that region regularly suddenly isn’t our problem. And then we’d see why OIL played such a role in this so-called war against terrorism.

Brazil’s state-controlled Petroleo Brasileiro SA in November said the offshore Tupi field may hold 8 billion barrels of recoverable crude. Among discoveries in the past 30 years, only the 15-billion-barrel Kashagan field in Kazakhstan is larger.

Haroldo Lima, director of the country’s oil agency, last week said another subsea field, Carioca, may have 33 billion barrels of oil. That would be the third biggest field in history, behind only the Ghawar field in Saudi Arabia and Burgan in Kuwait. Carioca is one of seven fields identified so far in the BM- S-9 exploration area.

If additional drilling by Petrobras, as Petroleo Brasileiro is known, confirms the Tupi and Carioca estimates, the fields together would contain enough oil to supply every refinery on the U.S. Gulf Coast for 15 years. Petrobras said it needs at least three months to determine how much crude Carioca may hold.

The U.S. imports about 10 million barrels of oil a day, or 66% of its needs, according to the Energy Department in Washington. Saudi Arabia was the second-largest supplier in January, behind Canada.
Persian Gulf nations accounted for 23 percent of U.S. imports, compared with Brazil’s 1.7 percent share. Brazilian crude output rose 1.9 percent last year to 2.14 million barrels, according to the International Energy Agency.

More discoveries will follow in Brazil’s offshore basins, most of which have yet to be opened to exploration, Zeihan said. Repsol YPF SA, Exxon Mobil Corp. and Devon Energy Corp. are among the producers scouring Brazil’s waters for reserves. The finds they’ve got so far are just the tip of the iceberg; Brazil is going to change the balance of the global oil markets, and Petrobras will become a geopolitical supermajor.’

And Hugo Chavez is right on it!