Oil found in Brazil. How long before Bush screws this up too?

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VegasGuy

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Brazil Oil Finds May End Reliance on Middle East, Zeihan Says

By Joe Carroll

April 24 (Bloomberg) -- Brazil's discoveries of what 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, Strategic Forecasting Inc. said.

Saudi Arabia's influence as the biggest oil exporter would wane if the fields are as big as advertised, and China and India would become dominant buyers of Persian Gulf oil, said Peter Zeihan, vice president of analysis at Strategic Forecasting in Austin, Texas. Zeihan's firm, which consults for companies and governments around the world, was described in a 2001 Barron's article as ``the shadow CIA.''

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, Zeihan said in a telephone interview. The U.S. Navy's presence in the Persian Gulf and adjacent waters would be reduced, leaving the region exposed to more conflict, he said.

``We could see that world becoming a very violent one,'' said Zeihan, former chief of Middle East and East Asia analysis for Strategic Forecasting. ``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.''

Tupi and Carioca

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.

Analysts Mark Flannery of Credit Suisse Group and Gustavo Gattass of UBS AG challenge the estimate for Carioca. Lima, the Brazilian oil agency director, later attributed the figure to a magazine.

Flannery told clients during an April 16 conference call that 600 million barrels is a ``reasonable'' estimate and suggested Lima may have been referring to the entire geologic formation to which Carioca belongs.

Supply Boost

Carioca is one of seven fields identified so far in the BM- S-9 exploration area, part of a formation called Sugar Loaf.

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.

Zeihan said that beyond supply gains from Brazil, it will take a tripling of Canadian oil-sands output and greater fuel efficiency to end Western reliance on Middle East oil.

The U.S. imports about 10 million barrels of oil a day, or 66 percent 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.

``Hemispheric energy independence sounds a little pie-in- the-sky given that this hemisphere already is generating one- third of overall global demand,'' said Jason Gammel, an oil analyst at Macquarie Bank Ltd. in New York. ``It's pretty tough to talk about self-sufficiency unless we were to see food-based biofuels taking an even bigger role in the next five to 10 years than is already mandated.''

Offshore Fields

Zeihan predicts a 2012 start to production at Tupi. Technology needed to tap fields like Tupi, which sit hundreds of miles offshore beneath thousands of feet of rock, sand and salt, hasn't been developed, he said.

Petrobras, Chevron Corp., Royal Dutch Shell Plc and Norsk Hydro ASA plan to start pumping oil from eight Brazilian fields in the next 2 1/2 years that will produce a combined 1.02 million barrels a day, enough to supply two-thirds of the crude used by U.S. East Coast refineries.

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,'' Zeihan said. ``Brazil is going to change the balance of the global oil markets, and Petrobras will become a geopolitical supermajor.''

http://www.bloomberg.com/apps/news?pid=20601086&sid=aBUoYKhu7PWk

-VG
 
Interesting article VG. I thought I had posted something on this the other day, but looks like I didn't. I had an interesting piece from Stratfor on the subject. I'll look for it.

QueEx
 
<font size="5"><center>
Cheaper Oil Prices on the Horizon?
The Geopolitical Diary: Blue-Skying Brazil</font size></center>

Stratfor
April 21, 2008


Brazil is a rising power politically, economically and militarily. Not only is it South America’s largest country in terms of population, economic heft, military strength and land area, its geopolitical power is expanding while most of its traditional competitors — namely Argentina and Venezuela — are contracting.

But while Brazil is almost certain in the next few years to evolve into a regional hegemon — a step up from the region’s most powerful state — it is still difficult to see Brazil playing a leading role on the world stage. South America’s geography is too fractured for any power to control the whole space, and the continent is too remote from the world’s power centers — 7,000 miles from Buenos Aires to Brussels, more than 10,000 miles from Santiago to Singapore — for any of its powers ever to be a major global player.

Unless, that is, something changes. And for a few hours on Monday, it appeared that that something had indeed changed.

Initial reports from the Brazilian government asserted that a new oil find in the Carioca offshore block contains 33 billion barrels of crude. Within a few hours, however, an announcement that seemed to have global implications fizzled. By nightfall Petroleo Brasileiro, the state-influenced (and quite competent) national oil firm, had formally denied that test drilling had even reached the depth necessary to confirm or deny the presence of oil — much less a mammoth find.

<font size="3">Offshore region rich in oil</font size>
Brazil only began exploring the region in question in 2007, and it already has generated probable finds of at least 13 billion barrels of oil equivalent. Many, many more discoveries not only are possible, they are likely. What has been found to date already has doubled Brazil’s reserves.

This crude will not come online cheaply or quickly, however, and much uncertainty remains in these heady early days of exploration in Brazil’s ultradeep. But with potential discoveries of this size it is worth exploring a possible future.

Brazil has recently become self-sufficient in oil production — not counting the recent (and likely future) finds. And that got our analytical team thinking.

<font size="3">‘What if’ exercise</font size>
What would a world look like with a Latin American Saudi Arabia? How would things change on the global scene? At Stratfor we undertake what we term “blue sky” exercises from time to time, albeit typically in a much more compact geography and on a much shorter time line. These exercises help us think outside the tactical minutiae of day-to-day events, and prevent us from becoming too wed to our own predictions. It is not every day that something happens that can change global economic and political interactions on such a grand scale.

So rather than tightly edit our analysts’ responses to this question, here are some of their responses in the raw:

  • Should Brazil become a significant oil producer, global interest in Latin America will increase in proportion — not only from the United States, but also China, Russia, Europe and others. Competition for access to — and potentially control of — the resources, for security of the shipping routes, and for influence over the Brazilian government and energy companies also would rise. A resource-powerful Brazil, coupled with China’s labor, India’s tech and labor pool, and Russia’s energy and arms could also revive the BRIC (Brazil, Russia, India, and China) concept, perhaps making it a more viable bloc of formerly second-tier players, and bringing some counterbalance to U.S. global hegemony.

  • Brazil is too far away from energy consumers like India and China to tap without great cost. The United States is a much closer consumer. In time this would lessen U.S. energy dependence on the Middle East, especially Saudi Arabia — leaving that region for other energy consumers, like the aforementioned India and China. Such a shift largely would regionalize energy routes, leaving the United States looking at its own hemisphere for energy supplies, Europe to the former Soviet Union, and Asia to the Middle East (leaving Africa as a swing player). Though this may look like a more peaceable reality, it would be far from it, and could actually lead to more instability as no power would have much of an interest in stabilizing energy supplies going to other regions.

  • Canada’s tar sands hold anywhere from 800 billion to 1.2 trillion barrels of oil. Oil shale deposits in the U.S. Rocky Mountains are estimated at around 800 billion barrels. The success of tapping these deposits is uncertain, and technological and economic factors must play out, but in 15 to 20 years, substantial oil flows from Brazil, coupled with these potential new sources of North American oil (though more difficult to extract and expensive), and only moderate efficiency gains could guarantee almost complete energy independence for the entire Western Hemisphere.

  • A legitimate and proximate alternative oil source means the primary geopolitical motivation for immense U.S. investment in military operations in the Middle East begins to slowly evaporate. Though mastery of the world’s oceans remains a core geopolitical imperative for Washington, the disproportionate focus of the U.S. Navy on the Persian Gulf and the maintenance of the Strait of Hormuz becomes far less critical. Suddenly freeing the energy and capability the Pentagon would lead to a very robust and flexible — but far more evenly distributed — global U.S. naval presence. This could also be just the opening for the Navy, which in many ways has failed to re-evaluate its post-Cold War stance, to fundamentally remake itself for the 21st century.

  • The region with most to worry about from this development is the Middle East. From Washington’s view, getting oil from a relatively friendly and stable country to its south is far, far preferable than dealing with the chaos of the distant Middle East. Saudi Arabia and the other major Gulf powers will become distant not only from their biggest energy customer, but also from their biggest security guarantor. With a diminished U.S. interest in the Middle East, regional fault lines are more likely to erupt, spelling more instability for this already largely volatile region. Israel in particular has much to lose as it sees its regional security framework — which is built around having the United States deeply involved in the Middle East — weaken, and its alliance with the United States strained as a result.

Aaric S. Eisenstein
SVP Publishing

stratfor.com
 
if this is ture we can begin to focus on our own hemisphere and hopefully Black peopel in both nations can benfit. Brazil has the largest black population outside of Africa.
 
QueEx said:
Interesting article VG. I thought I had posted something on this the other day, but looks like I didn't. I had an interesting piece from Stratfor on the subject. I'll look for it.

QueEx
Click to expand...

You may have QueEx, I can't ever get ahead of yall thinking I'm breaking some new news up on this piece. But I'm trying. :)

-VG
 
Great find if true. I read an article on the subject this morning, it said that the quoted official may have mis-stated just how much oil may be present. If they really have billions rather than hundreds of millions of barrels then I would hope that oil prices could begin dropping.

The other thing that raised my brows, was the thought that the Middle East may be left to its own devises, even after the worlds meddlesome behavior has created a clusterf@ck of a situation. Pitting region against region, Warlord against Warlord, and ethnicity against ethnicity, all in an effort to be hegemonic king of the sand dune. That they might find it reasonable to just bounce is beyond deplorable.
 
Brazil rides out the oil storm

Brazil becoming a world producer and a superpower
<object width="450" height="370"><param name="movie" value="http://www.liveleak.com/e/437_1214053292"></param><param name="wmode" value="transparent"></param><embed src="http://www.liveleak.com/e/437_1214053292" type="application/x-shockwave-flash" wmode="transparent" width="450" height="370"></embed></object>
Click to expand...
 
Re: Brazil rides out the oil storm

I live in Brasil so I can see the obvious positive effects of their energy policy...things are looking up for Brasil...nice vid
 
Re: Brazil rides out the oil storm

You have to give the Brasilians a hellava lot of credit for seeing the problem following the Embargo of 1973-74 and knew and understood like many in Washington and elsewhere in the U.S. that the vulnerability, once exploited, will be open to exploitation, again. The Brasilians opted with a plan and put their future in cane. We chose to put on blinders, and consumed insane.

QueEx
 
Re: Brazil rides out the oil storm

QueEx said:
You have to give the Brasilians a hellava lot of credit for seeing the problem following the Embargo of 1973-74 and knew and understood like many in Washington and elsewhere in the U.S. that the vulnerability, once exploited, will be open to exploitation, again. The Brasilians opted with a plan and put their future in cane. We chose to put on blinders, and consumed insane.

QueEx
Click to expand...

Quite true, Que. But remember, that cane came at a price that the US no longer wishes to pay. Brazil devastated the rain forest to clear the land for cane.
 
Re: Brazil rides out the oil storm

The United States produces as much ethanol as Brazil. We have more cars on the road, which limits our impact on foreign oil.

Brazil had no choice to come up with this energy policy, there currency couldn't buy that much imported oil back than. The United States will have to face a tough choice like that to get off oil.
 
Re: Brazil rides out the oil storm

My point was that Brazil made a choice, but it came with consequences for the entire planet, just like the US did. Brazil does not have anywhere near the economic impact the US does, so it'changes does not produce the seismic impacts like the US does. As I said long before others on this board or the mainstream media said, the US cannot grow enough crops to supplant the amount of oil we need for energy. And with the little energy we are getting from ethanol, it's come at the high price of increasing the price of staple foods throughout the world, particuarly in Mexico.
 
Re: Brazil rides out the oil storm

F.A.Y.,

I agree with you: our actions have seismic consequences; we <u>may</u> <u>not</u> be able to grow enough for bio-fuels to have a significant impact, especially without consdequences, etc. But I think its been criminal the way we allowed muscle to return in the auto industry post 1973-74.

As you probably know, cars shrunk, we started the semblance of mandatory fuel economy in vehicles and we dropped the national speed limit from 70 to 55. All of that, I believe, had a significant impact on our consumption. Nevertheless, in the 34 years since the Arab Oil Embargo, we've allowed the guzzlers not only to roam the highways like buffalo once roamed the plains, but they've become a sign of wannabe affluence or a chicken in every pot. In otherwords, by abandoning consumption consciousness and working towards the development of alternative fuels or realities, the government has helped perpetuate the illusion that the oil producers couldn't or wouldn't bust our nuts again.

QueEx
 
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