Lula Says Brazil Oil Find May Lead to OPEC Membership

[Joanne98]

http://www.mercopress.com/vernoticia.do?id=11855&formato=HTML

Brazilian President Luiz Inacio Lula de Silva said the discovery of reserves that may total as much as 8 billion barrels of oil and natural gas may lead the country to join the Organization of Petroleum Exporting Countries

Brazil won't join for at least five years, the amount of time its state-controlled oil company, Petroleo Brasileiro SA, needs to start output from the Tupi field, Lula said today in Santiago before leaving an Ibero-American summit. Brazil would join Venezuela, a founder, and Ecuador, which is rejoining this month, as the cartel's third South American member.

The field, where the U.K.'s BG Group Plc and Portugal's Galp Energia SGPS SA are partners, may boost Brazil's reserves by almost two-thirds, transforming it from a small net exporter into a major supplier to world markets. Still, it's premature for Lula to announce his intentions to enter OPEC since ``there are huge technical challenges,'' said David Fleischer, a political science professor at the University of Brasilia.

Lula ``may be getting ahead of himself because even though the markets loved the Tupi announcement, there's no guarantee they'll be able to make the field work,'' Fleischer said. ``It sounds like Lula got a bit over-stimulated by his time with'' Venezuelan President Hugo Chavez, he said.

`Road to Social Cohesion'

Chavez, who has sought to use his country's oil wealth to counter U.S. influence in the region, urged Lula during the summit to sell oil at below-market prices to poor countries. For Chavez, Brazil's entry into OPEC could help unite the region.

``The road to social cohesion'' could ``be made with gravel or with this oil that Lula has just found,'' Chavez told the summit in Chile.

Lula said his goal in entering OPEC would be to ``reduce oil prices a little, because that is one of the contributions that the countries rich in oil can give.'' OPEC member states produce about 40 percent of the world's crude oil and attempt to direct prices by adjusting supply.

The discovery may allow Brazil to rival Venezuela in setting energy policy in the region and give it more leverage over Bolivia, the source of half of its natural gas, Fleischer said.

``The timing of the Tupi announcement on Nov. 8 was designed to boost Lula's bargaining power with Bolivia, Venezuela and Argentina,'' Fleischer said. ``It's no surprise that Lula flew directly from Petrobras headquarters the day of the announcement to Santiago.''
http://www.mercopress.com/vernoticia.do?id=11855&formato=HTML

[DCKit]

1. Isn't that like "Keys to the World"?

As if Brasil wasn't already corrupt enough. Yikes.