Brazil was celebrating one of the world's biggest oil discoveries of recent years yesterday, a huge deposit off the coastline of Rio de Janeiro, which officials claim will take it into the major league of the world's biggest energy powers.
The find at the Tupi field, about 155 miles off Rio, could yield a total of 8bn barrels of light crude and represent 40% of the oil ever found in Brazil.
Dilma Rousseff, chief of staff in the president's office and tipped as a possible successor, said the discovery could propel Brazil "to the level of Saudi Arabia and Venezuela".
"This has changed our reality," she said. "It is something that could contribute to Brazil moving from an intermediate nation in the petrol sector to another level."
The Correio Braziliense newspaper heralded the discovery with the headline God is Brazilian. The find could propel Brazil into the "first division of petrol producers and exporters", it added.
Oil experts said it was the biggest find anywhere in the world for at least seven years and would push Brazil's reserves into the global top 10 but comparisons to Saudi Arabia may be over-optimistic. Brazil's total reserves will rise to about 20bn barrels as a result of the discovery, compared with Saudi Arabia's 260bn, whose daily production is four times that of the Brazil.
The share price of Brazil's state oil company Petrobras, which owns 65% of the field, rose by about 14% after the announcement.
The price of the British BG Group, which owns a 25% stake, also rose.
"If confirmed, the recoverable volumes of oil and gas will lift significantly the quantity of existing oil in Brazilian basins, putting Brazil among the countries with big reserves of oil and gas," the company said.
It described the Tupi field as the first part of a new oil "frontier" which potentially stretched for some 500 miles along the Brazilian coastline.
According to Petrobras, Brazil has the 24th biggest oil reserves in the world. The company said the find could push South America's biggest country up to ninth place.
But analysts said the find would not immediately solve Brazil's energy crisis. The country's natural gas sector has been in trouble since May last year when the Bolivian president, Evo Morales, moved to nationalise his country's gas and oil fields, on which Brazil is heavily dependant.
Adriano Pires, an energy expert from the Brazilian centre of infrastructure, said while the discovery was important the government had "put on this [media] show to divert the focus of attention from the gas crisis and the critical situation of the Brazilian electricity sector".
"In the short term this does not solve in any way the energy problems the country is suffering from," he said.
Relief for global oil markets, which have soared in recent months to all time highs close to $100 a barrel, will not come in the near future. Full-scale production will not start for at least five years and getting the oil out will be expensive and difficult because it is so deep under the surface.
The discovery is also unlikely to divert Brazil from its development of biofuels. Brazil is the world's biggest producer of ethanol.
Emilio La Rovere, a biofuel expert from Rio's federal university, said that in the long term the discovery was unlikely to change Brazil's focus on alternative fuels such as ethanol.
"The fact that this big reserve has been discovered and that Brazil is starting to think about being a producer does not mean that Brazil will abandon this," he said. But, he said, in the short term the discovery might mean that there would not be "such a great urgency in the economic sense" in pursuing alternative fuels.
From Guardian.co.uk
NVDL: This illustrates just how collectively stupid we are. Right now, today, oil prices are snapping at the heels of $100. The Brazil field is a baby compared to the superbig saviours like Saudi's Ghawar and Mexico's Cantarell. It's NOT going to save us; it's not even going to be a blip.
And it's tiny compared to North Sea. It's our biggest find in 7 years. That says it all. What have we found in the last 27 years? And having just been discovered, by the time this field comes online, by the time it produces, several countries will have imploded, as their oil arteries contracted and turned to dust. Meanwhile OPEC recently stated, very magnanimously, they will consider increasing supply if there is a need. Er...did we miss something?
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