Religion, Politics and World Events They make great dinner conversation, don't you think? plus Political Film

Could new oil fields in Brazil end reliance on Middle East?

Old 04-24-08, 07:45 AM
  #1  
Enormous Genitals
Thread Starter
 
Bandoman's Avatar
 
Join Date: Oct 2000
Location: a small cottage on a cul de sac in the lower pits of hell.
Posts: 33,001
Could new oil fields in Brazil end reliance on Middle East?

http://www.bloomberg.com/apps/news?p...d=aBUoYKhu7PWk

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.''
I haven't seen a therad on this.

The article raises many questions:

(1) Is it true? Is there really that much oil there, and if so, is there a reasonable expectation that production will allow us to shift our focus from the Middle East to Brazil?

(2) Is this a good thing overall? Certainly less dependence on the ME would give us options we don't currently have, but if we lessen our presence in the ME how will it affect anti-American sentiment? I imagine that terrorist organizations will grow, at least initially, without a concerted US political/military effort to curb their growth. I'm sure we wouldn't just up and leave without any presence there, but if we don't need ME oil why spend the kind of money/effort it would take to "control" the area?

Lots of questions, few answers.

Last edited by Bandoman; 04-24-08 at 07:48 AM.
Bandoman is offline  
Old 04-24-08, 07:49 AM
  #2  
DVD Talk God
 
Join Date: Jun 1999
Posts: 68,522
No, it won't.
classicman2 is offline  
Old 04-24-08, 07:53 AM
  #3  
DVD Talk Godfather
 
The Bus's Avatar
 
Join Date: Aug 2001
Location: New York
Posts: 54,851
If it was true, it would be interesting. You forgot to bold the part where several people said it wasn't true.
The Bus is offline  
Old 04-24-08, 07:53 AM
  #4  
DVD Talk Hero
 
Join Date: Nov 1999
Posts: 36,981
Does it matter when we're in a global market? Unless we get some kind of exclusive deal with Brazil, China and India's demands on the ME oil would still affect prices for us.
Venusian is offline  
Old 04-24-08, 08:47 AM
  #5  
Enormous Genitals
Thread Starter
 
Bandoman's Avatar
 
Join Date: Oct 2000
Location: a small cottage on a cul de sac in the lower pits of hell.
Posts: 33,001
I was more intrested in the potential change in national security interests in the ME.
Bandoman is offline  
Old 04-24-08, 08:49 AM
  #6  
DVD Talk Hero
 
Join Date: Nov 1999
Posts: 36,981
but since the ME supply would affect the price of oil, i'm not sure we'd change National Security interests much.

...unless we got off oil completely
Venusian is offline  
Old 04-24-08, 09:18 AM
  #7  
Enormous Genitals
Thread Starter
 
Bandoman's Avatar
 
Join Date: Oct 2000
Location: a small cottage on a cul de sac in the lower pits of hell.
Posts: 33,001
Mr. Fusion FTW!

Bandoman is offline  
Old 04-24-08, 09:19 AM
  #8  
bhk
DVD Talk Legend
 
Join Date: May 1999
Location: Right of Atilla The Hun
Posts: 19,749
It would make a huge difference and might break the OPEC cartel. Brazil's finds are 2 of the 3 world's largest.
bhk is offline  
Old 04-24-08, 09:21 AM
  #9  
Enormous Genitals
Thread Starter
 
Bandoman's Avatar
 
Join Date: Oct 2000
Location: a small cottage on a cul de sac in the lower pits of hell.
Posts: 33,001
Originally Posted by bhk
It would make a huge difference and might break the OPEC cartel. Brazil's finds are 2 of the 3 world's largest.
The question then becomes, as Venusian pointed out, whether even this would be enough to satify global demand, or at least to bring down prices globally.
Bandoman is offline  
Old 04-24-08, 09:26 AM
  #10  
Moderator
 
wendersfan's Avatar
 
Join Date: Jun 2002
Location: Nuova Repubblica di SalÚ
Posts: 32,796
It would be entertaining if, because of this, the gulf states became India's and China's problem instead of ours.
wendersfan is offline  
Old 04-24-08, 09:26 AM
  #11  
DVD Talk Legend
 
Nick Danger's Avatar
 
Join Date: Mar 2001
Location: Albuquerque
Posts: 22,360
Originally Posted by bhk
It would make a huge difference and might break the OPEC cartel. Brazil's finds are 2 of the 3 world's largest.
Why wouldn't Brazil just join OPEC? Venezuela was one of the founding members.
Nick Danger is offline  
Old 04-25-08, 06:35 AM
  #12  
DVD Talk Limited Edition
 
Join Date: Mar 2000
Location: Where the sky is always Carolina Blue! (Currently VA - again...)
Posts: 5,167
What's fairly irritating is watching some of the interviews and clips coming out of the most recent OPEC conference.

Most of the guys are blaming the low dollar and high demand for keeping prices high - apparently increasing supply "wouldn't affect prices". I'm not sure how that works following the basic laws of supply and demand.

I'm better with poli sci than pure economics though - so maybe someone else can explain why even increasing supply wouldn't bring prices down. I can't see any downside for the producers to produce more.
Tuan Jim is offline  
Old 04-25-08, 07:55 AM
  #13  
DVD Talk Hero
 
Join Date: Aug 2001
Location: in da cloud
Posts: 26,196
the middle east countries were close to bankruptcy in the 1990's when oil prices were low. why would they even think of increasing supply?
al_bundy is offline  
Old 04-25-08, 08:06 AM
  #14  
Admin-Thanos
 
VinVega's Avatar
 
Join Date: Nov 2000
Location: Caught between the moon and NYC
Posts: 31,523
Originally Posted by Nick Danger
Why wouldn't Brazil just join OPEC? Venezuela was one of the founding members.
That was my thought as well. In a perfect world, it would be awesome if we imported our oil from a closer and less volatile region of the world. Well in an even more perfect world, we wouldn't be importing oil. Well in an even more perfect-er world, we wouldn't be using oil to power our economy.

I would love to get out of the ME business foreign policy-wise. It's an albatross around our necks. Pretty ironic that the country that has shifted its automobiles to ethanol only would find a big reserve of oil.
VinVega is offline  
Old 04-25-08, 09:09 AM
  #15  
DVD Talk Limited Edition
 
Join Date: Aug 1999
Posts: 5,191
More oil (from any source) is not going to be enough oil to affect our interest in policing the middle east.
Lord Rick is offline  
Old 04-25-08, 10:29 AM
  #16  
DVD Talk God
 
Join Date: Jun 1999
Posts: 68,522
What percentage of our oil imports come from OPEC producing countries?
classicman2 is offline  
Old 04-25-08, 11:08 AM
  #17  
DVD Talk Legend
 
wishbone's Avatar
 
Join Date: Mar 2005
Posts: 20,880
Originally Posted by classicman2
What percentage of our oil imports come from OPEC producing countries?

http://www.gravmag.com/oil.html
wishbone is offline  
Old 04-25-08, 11:15 AM
  #18  
DVD Talk God
 
kvrdave's Avatar
 
Join Date: Aug 1999
Location: Pacific NW
Posts: 86,201
Oil is just something for environmentalists to say we need to get rid of no matter how much is found. I don't believe finding huge reserves means anything without an energy policy that includes our own drilling and refineries. And environmentalists don't want that.
kvrdave is offline  
Old 04-25-08, 11:46 AM
  #19  
DVD Talk Godfather
 
The Bus's Avatar
 
Join Date: Aug 2001
Location: New York
Posts: 54,851
Take that, Kuwait! <img src="http://www.fantasticdamage.com/blog/emot-dance.gif">

I wish I got a 3% discount at the pump.
The Bus is offline  
Old 04-25-08, 11:47 AM
  #20  
DVD Talk Hero
 
Join Date: Aug 2001
Location: in da cloud
Posts: 26,196
read earlier this week that saudi arabia is about to get a new oil field online

they spent over $15 billion on it so far
al_bundy is offline  
Old 04-25-08, 11:48 AM
  #21  
DVD Talk God
 
Join Date: Jun 1999
Posts: 68,522
Originally Posted by al_bundy
the middle east countries were close to bankruptcy in the 1990's when oil prices were low. why would they even think of increasing supply?
Surely you jest!!

When was Saudi Arabia close to bankruptcy?

Now if you want to say that a number of independent oil producers in the U.S. were close to bankrupticy - I might agree with that.

When your at maximum capacity, it's a little difficult to increase the supply.
classicman2 is offline  
Old 04-25-08, 04:17 PM
  #22  
DVD Talk Limited Edition
 
Join Date: Aug 1999
Posts: 5,191
Originally Posted by kvrdave
Oil is just something for environmentalists to say we need to get rid of no matter how much is found. I don't believe finding huge reserves means anything without an energy policy that includes our own drilling and refineries. And environmentalists don't want that.
We can't drill our way out of this mess.

The people who build and operate refineries are the ones who don't want any more refineries.

Environmentalists have barely any effect on the price of oil. Surely you realize that by now.

Oil won't come down in price by providing more oil. Supply and demand don't work very well because the market isn't free. Refiners can always take a refinery off-line as they have in the past. "uncertainty" in the market can cause traders to bid up the price. Companies can manipulate the price in so many ways.

The only thing that will bring down the cost of oil is if there are alternatives. I have always said we need a Manhattan project level of effort to develop solar panel technology. Look at the price of LCD televisions - they've plummeted in recent years. That kind of manufacturing should be very similar to that for solar cells. There is no reason the price couldn't be driven down given research and economies of scale.
Lord Rick is offline  
Old 04-25-08, 04:23 PM
  #23  
DVD Talk Hero
 
Join Date: Aug 2001
Location: in da cloud
Posts: 26,196
LCD is an old and mature technology and the low prices are a recent phenomenom

anyone can cut their demand of oil, but most people aren't willing to make the lifestyle changes yet
al_bundy is offline  
Old 04-25-08, 04:40 PM
  #24  
DVD Talk God
 
Join Date: Jun 1999
Posts: 68,522
What I'm more concerned about than the new Saudi oil field is what they're going to put on that oil field - refineries.
classicman2 is offline  
Old 04-25-08, 07:49 PM
  #25  
DVD Talk Hero
 
Join Date: Aug 2001
Location: in da cloud
Posts: 26,196
supposedly valero is building new refineries in south america
al_bundy is offline  

Thread Tools
Search this Thread

Archive Advertising Cookie Policy Privacy Statement Terms of Service

Copyright © 2018 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.