Brazil's announcement that it has found new oil reserves maybe vast enough to give it OPEC-style clout is certainly good long-term news for its economy and the state-controlled oil giant Petrobras.
But Brasilia shouldn't be looking to elbow its way alongside neighbor Venezuela or the petro-rich Arab countries anytime soon, analysts warned.
That's because the precious oil and gas deposits lie deep undersea way off Brazil's southeast coast -- making recovery a costly and time-consuming prospect.
PHOTO: AFP
"Petrobras has discovered big amounts of oil. But that doesn't mean that Brazil will instantly become a member of the Organization of the Petroleum Exporting Countries [OPEC]," said Roberto Schaeffer, an energy specialist and professor at the Federal University of Rio de Janeiro.
Brazil's government and Petrobras announced on Thursday that tests had shown a promising area 250km offshore from Rio dubbed the Tupi field to be far richer than initially thought.
It holds an estimated 5 to 8 billion barrels of light crude oil -- enough to boost Brazil's national reserves by up to 50 percent.
Petrobras said other tests were still underway on a nearby zone that could prove even bigger.
The 800km-long area off the shore of Sao Paulo State might yield enough oil to put Brazil on the same level "as Arab countries, Venezuela and others," the chief-of-staff of the Cabinet, Dilma Rousseff, said.
The news sent the shares in Petrobras -- and in British energy group BG and Portugal's Petrogal-Galp Energia, which are its minor partners in exploiting part of the Tupi field -- soaring.
But by Friday, the celebrations quieted as thoughts turned to how to get at the oil.
In the case of the Tupi field, it lies 2km underwater -- and another 4km under the seabed, through rock, salt and sand.
"It's the first time we've gone this deep, and the technology is expensive," said Guillerme Estrella, director of exploitation and production at Petrobras.
"And we still have to study how to use the gas, because you can't just make a 250-kilometer long pipeline [to the shore],"he said.
The alternatives are generating fluctuating energy [using the gas to help pumping the oil] or liquifying it," he said.
"The costs are high, but the quantity of oil gives this investment robustness and viability," Estrella said.
Another expert, Adriano Pires of the Brazilian Center for Infrastructure, said "It's very expensive production, in deep water, which could only start in the best-case scenario in 2012 or 2013, and will only be viable if oil prices stay high."
Schaeffer said the Tupi find would likely mean Brazil would become independent in terms of oil production, no longer needing to import, he said.
But for it to become an exporter, the possible reserves in the second area will have to be confirmed.
The Brazilian government is putting its faith in the potential of the new area being explored. It has decided to withdraw from bidding 41 blocks that were to have been put up in its next round of offers.
Press comment have also suggested that the timing of the discoveries' announcement was opportune, coming as the Brazilan government is locked in negotiations with Bolivia over the supply of gas for its expanding economy.
AIR SUPPORT: The Ministry of National Defense thanked the US for the delivery, adding that it was an indicator of the White House’s commitment to the Taiwan Relations Act Deputy Minister of National Defense Po Horng-huei (柏鴻輝) and Representative to the US Alexander Yui on Friday attended a delivery ceremony for the first of Taiwan’s long-awaited 66 F-16C/D Block 70 jets at a Lockheed Martin Corp factory in Greenville, South Carolina. “We are so proud to be the global home of the F-16 and to support Taiwan’s air defense capabilities,” US Representative William Timmons wrote on X, alongside a photograph of Taiwanese and US officials at the event. The F-16C/D Block 70 jets Taiwan ordered have the same capabilities as aircraft that had been upgraded to F-16Vs. The batch of Lockheed Martin
GRIDLOCK: The National Fire Agency’s Special Search and Rescue team is on standby to travel to the countries to help out with the rescue effort A powerful earthquake rocked Myanmar and neighboring Thailand yesterday, killing at least three people in Bangkok and burying dozens when a high-rise building under construction collapsed. Footage shared on social media from Myanmar’s second-largest city showed widespread destruction, raising fears that many were trapped under the rubble or killed. The magnitude 7.7 earthquake, with an epicenter near Mandalay in Myanmar, struck at midday and was followed by a strong magnitude 6.4 aftershock. The extent of death, injury and destruction — especially in Myanmar, which is embroiled in a civil war and where information is tightly controlled at the best of times —
Taiwan was ranked the fourth-safest country in the world with a score of 82.9, trailing only Andorra, the United Arab Emirates and Qatar in Numbeo’s Safety Index by Country report. Taiwan’s score improved by 0.1 points compared with last year’s mid-year report, which had Taiwan fourth with a score of 82.8. However, both scores were lower than in last year’s first review, when Taiwan scored 83.3, and are a long way from when Taiwan was named the second-safest country in the world in 2021, scoring 84.8. Taiwan ranked higher than Singapore in ninth with a score of 77.4 and Japan in 10th with
SECURITY RISK: If there is a conflict between China and Taiwan, ‘there would likely be significant consequences to global economic and security interests,’ it said China remains the top military and cyber threat to the US and continues to make progress on capabilities to seize Taiwan, a report by US intelligence agencies said on Tuesday. The report provides an overview of the “collective insights” of top US intelligence agencies about the security threats to the US posed by foreign nations and criminal organizations. In its Annual Threat Assessment, the agencies divided threats facing the US into two broad categories, “nonstate transnational criminals and terrorists” and “major state actors,” with China, Russia, Iran and North Korea named. Of those countries, “China presents the most comprehensive and robust military threat