Brazil as a new kind of oil giant
As its peers in the region see their oil production slipping Brazil's state-controlled oil company Petrobras is entering a new era as the region's silent giant.
Rio de Janeiro
More than 180 miles off Brazil's coast, trapped under a few miles of water, rock, and salt, lie billions of barrels of light, sweet crude – the largest discovery of oil in the Western Hemisphere in a generation.Skip to next paragraph
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Accessing it will require some of the most advanced technology on the planet. But Brazil, once a heavy importer that celebrated its "oil independence" only two years ago, is uniquely positioned to extract reserves trapped millions of years ago when South America and Africa began to separate. The state-controlled oil company, Petroleo Brasileiro (Petrobras), says it will begin production by 2010.
The potential is enormous. Brazil's president Luiz Inácio Lula da Silva called the find "a gift from God" that would thrust Brazil to the list of top oil exporters and help end the nation's wealth disparities. It is also a significant discovery for the world: proven reserves have been declining, and drops in both Norway and Mexico last year were offset in part by Brazil.
New discoveries are creating fresh challenges as to how the oil wealth should be spent. And some of the enthusiasm has been tempered by the global market turmoil that will make financing harder to find. But the fact remains: as its peers in the region see their oil production slipping – most notably state-owned oil companies in Mexico and Venezuela – Petrobras is entering a new era as the region's silent giant. And with oil in ever-deeper waters and more inaccessible nooks, more countries are turning to Brazil for its expertise.
"Petrobras is really a standout: in finding reserves, developing reserves, and investing in technology and human capital," says Francisco Gros, former chief executive of Petrobras and vice president of the board of OGX, one of Petrobras's competitors. "It should be a model; national companies should first be treated as oil companies."
The hope Brazil has placed on oil's transformative potential is on view in the stunning bay of Angra dos Reis, where the massive P-51 oil platform juts out from the water like a giant LEGO piece. Weighing 48,986 tons – with capacity to sleep 200 and its own movie theater and soccer field – it is the first semisubmersible platform built entirely in Brazil and has created 4,000 direct jobs.