Huge Oil Discovery Rocks Brazil

I missed this last week, but this story is welcomed in that it has the potential to reduce world dependence on Middle East oil and, therefore, pressure the Arab world to conform with international law and standards. I am all for higher oil prices which will force the suburban soccer moms in their tank-like SUV's and other irresponsible consumers to conserve resources. Therefore, as Brazil brings these reserves online, I hope that it will be done in a manner that will not flood the market and reduce the price of oil. Here are story highlights from CNN (http://www.cnn.com/2007/WORLD/americas/11/08/brazil.oil.ap/):

RIO DE JANEIRO, Brazil (AP) -- A huge offshore oil discovery could raise Brazil's petroleum reserves by a whopping 40 percent and boost this country into the ranks of the world's major exporters, officials said. The government-run oil company Petroleo Brasileiro SA, or Petrobras, said the new "ultra-deep" Tupi field could hold as much as 8 billion barrels of recoverable light crude, sending Petrobras shares soaring and prompting predictions that Brazil could join the world's "top 10" oil producers.

Petrobras President Sergio Gabrielli said Thursday the oil from ultradeep areas, including the Tupi field, would give Brazil the world's eighth-largest oil and gas reserves. "Brazil's reserves will lie somewhere between those of Nigeria and those of Venezuela," Gabrielli said at a news conference. Petrobras says the Tupi field, off Brazil's southeastern Atlantic coast, has between 5 billion and 8 billion barrels -- equivalent to 40 percent of all the oil ever discovered in Brazil. Brazil's total oil reserves currently rank 17th in the world, with 14.4 billion barrels of oil equivalent, Gabrielli said.

"If the best-case scenario happens, this discovery would make Petrobras' reserves overcome those of Shell and Chevron and put Petrobras behind only Exxon and British Petroleum," Cunha said. Petrobras has a 65 percent operating stake in the field, Britain's BG Group PLC holds 25 percent, and Petroleos de Portugal holds the remaining 10 percent.