Brazil’s Oil Rush

SÃO PAULO – Brazil is poised to take its place among the world’s petro-powers. Estimates of its newfound oil reserves place it in eighth place among oil-producing nations, ahead of Nigeria as well as Brazil’s rival for influence in Latin America,Venezuela. Such newfound wealth is normally a source of celebration. But Brazil’s President Luiz Inácio Lula da Silva, perhaps fearing the infamous “resource curse” that has blighted the development of so many countries blessed with mineral wealth, is determined that the new oil wealth not be turned into “nonsense.”

In 2007, huge oil deposits were discovered off Brazil’s coast. Modest estimates put these reserves at around 30 billion barrels. Crédit Suisse and other investment banks say that 50 billion barrels are available.

The discovery is the result of a strategic policy maintained through successive Brazilian administrations, something unusual in Latin America. In 1989, when the Iraq-Iran war sent shivers among oil-consuming nations, Brazil began to explore for energy both within and beyond its 200-nautical-mile protected zone. The size of the oceanic areas involved was enormous, thus earning the term “Blue Amazonia.”

The discoveries are the largest oil reserves discovered in the ocean in recent years. For a while, the US tried to question Brazil’s ownership by trying to force a discussion of the “internationalization” of the oceans and their mineral resources. But the UN would have none of it, and Brazil’s ownership was recognized.