Brazil, the New Oil Superpower

Brazil recently announced the discovery of between 5 billion and 8 billion barrels of oil in a deep offshore oilfiled. Brazil, the New Oil Superpower: "Contrary to the price-hawk position of Venezuelan President Chávez, who recently said oil-producing countries should try to 'stabilize' oil prices near $100 a barrel, Lula said he hopes Brazil's new oil will someday help to bring global oil prices down from their current levels, allowing poor countries to buy more of it. 'Brazilians are right to be euphoric,' says Peter Hakim, president of Washington-based think tank Inter-American Dialogue. Because Brazil has discovered its new oil after the country's economy has been largely diversified and industrialized, 'Brazil can avoid the oil curse, the dependency on one resource that dominates countries like Nigeria and Venezuela.' "

According to the CIA World Factbook, as of 2004 the United States was using 20.73 million barrels a day, of which 13.15 million barrels/day are imported. If the United States 1) held usage/imports steady at 13.15 million barrels/day; 2) bought all of the oil produced from the Tupi field (and let's assume it's 8 billion barrels); and 3) only bought from that field until the field ran dry; Brazil's huge new find would supply enough oil to keep America running for 608 days, or 1.66 years. Now, granted, the U.S. will continue buying oil from the Middle East and all other viable suppliers, and Brazil has other oilfields and will continue looking for more. On the other hand, China and India are growing consumers of oil.

If we crunch the numbers a little differently - if the find is only 5 billion barrels, it would supply the United States total daily consumption (as of 2004) for just 241 days or a bit shy of 8 months. A new oilfield discovery of more than 1 billion barrels is so large that the industry calls it an "elephant".

"Geologist Roberto Fainstein, whose seismic imaging work at oil-field services company Schlumberger helped Brazil to discover its massive new reserves, says the subsalt find will "lead to a rush in this kind of drilling worldwide." Brazil's discovery may quicken subsalt drilling in the Gulf of Mexico by oil majors and Mexico's state-run oil giant Pemex. A salt layer offshore West African countries including Angola, Gabon, and Equatorial Guinea is "virtually identical to Brazil's," Fainstein says, "so companies will race to begin drilling it."

Subsea salt layers are present in all three of the world's biggest offshore oil areas: the Gulf of Mexico, West Africa, and Brazil. So far, subsalt oil production has been executed only in the Gulf of Mexico, near the Texas and Louisiana coast where companies including BP, Shell, ExxonMobil, Chevron, and Anadarko Petroleum (APC) have all made significant discoveries."

More oil will be discovered. New technologies will be developed to provide power. No matter how much we find, though, it is a finite resource. Let's hope we figure it all out while there's still plenty of petrol left for producing silicon chips, creating pacemakers, and doing all the other things that can only be done with petroleum today.