Brazil to Become Major Oil Producer
Brazil is expected to become a major oil producer whose production will become increasingly important to the United States over the next decade.
Petrobras, Brazil’s top oil exploration and oil and gas production company, announced in November, 2007 that it had made a major discovery some 300Km off the Brazilian coast off the Rio de Janeiro State coast. The Tupi field discovery is equivalent to the world’s most important ones and probably the most significant new field discovery in the past thirty years.
Only about two weeks after the Tupi field discovery Petrobras announced another large discovery of the natural gas and condensate field in the area called Jupiter. There are distinct similarities between the Tupi and Jupiter dimensions. “This new field’s geological structure indicates an area of 1,200 square kilometers, similar to Tupi’s.” The pioneer well, 1-BRSA-559-RJS (1-RJS-652), called Jupiter, is nestled at a final depth of 5,252 meters, 290 km off the Rio de Janeiro State coast, and 37 km from the Tupi area, at a water depth of 2,187 m.
While both of these discoveries are at a tremendous depth they are expected to produce superior light sweet crude oil that will demand a premium price on the world market which will help offset the cost of production. Petrobras leads the world in deep oil field production technologies.
The discovery and planned production from these two enormous fields by 2010 to 2011 will likely change the relationship between the US and Brazil to a considerable degree. Brazil will likely emerge as one of the world’s premier oil and gas producers and have surplus oil to export in large amounts.
This will enrich Brazil as a nation and bodes well for investments in Brazil and in the Real, the Brazilian currency. As for the US it will have to look at Brazil in an entirely new way should it become heavily dependent upon importing Brazilian oil and gas. The new relationship that will be forged between Brazil and the US may well make the US far less dependant upon oil from the Middle East.
Should that occur you might imagine that the US relationship with Saudi Arabia will under go significant changes as well. Hopefully the US would no longer have to look the other way and ignore the repressive nature of the Saudi government.
One thing is for certain as the 21st century moves forward. Those nations that have surplus oil are going to prosper and those who depend upon importing large amounts of oil are going to suffer.
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