Investors welcome?
Venezuelan President
Hugo Chávez (top) and
Ecuadorean President
Rafael Correa have
tightened conditions
for international oil
companies.
output of around 2 million b/d.
Petrobras claims that Tupi represents only a small part of a giant
oil reservoir containing many large
fields and extending 500 miles along
the coast. These discoveries contain
“pre-salt” reserves, formed before the
salt layer on the ocean’s floor existed.
JUAN BARRETO/AFP/GE TTy ImAGEs
Yet, little data have been gathered
on the area, and estimates of its size
ranging from 50 billion to 100 bil-
lion barrels of oil equivalent are un-
substantiated. Pre-salt production in
the Tupi field alone could push out-
put levels to 4 million b/d. These
reserves lie 180 miles offshore in ul-
tra-deep waters under almost 10,000
feet of sand and rocks and a layer of
salt some 6,500 feet thick. Given the
immense technological and finan-
cial challenges involved in drilling
in this layer, Petrobras would be bet-
poor management and inefficiency. global oil exporter within a decade ter off partnering with other major
Moreover, the government recently thanks to the discovery of the hemi- oil companies.
announced a 40 percent cut to Petro- sphere’s largest oil reserve since 1976. Instead, Brazil, the first Latin
ecuador’s budget, citing declining In November 2007, Petrobras an- American country to partially priva-
oil revenue as a result of lower oil nounced that it had identified the tize its state oil company, may be on
prices. equivalent of 5 billion to 8 billion the verge of a return to resource na-
barrels of reserves in Tupi, an off- tionalism. The pre-salt oildiscovery
Brazil Reaches shore field along Brazil’s southeast- has encouraged the government to
for Offshore Gold ern coast. According to the state oil seek a larger share of oil revenues.
Brazil, a net oil importer just three producer, Tupi output could add over A government energy commission
years ago, could become a major 1 million b/d by 2017 to its current established in July is currently
spring 2009
americas quarterly 35
