SAO PAULO, Brazil: A monster offshore oil discovery and promising fields near the find could help Brazil join the ranks of the world’s major exporters, but full-scale extraction is unlikely until 2013 and will be very expensive.The “ultra-deep” Tupi field off the coast of Rio de Janeiro could hold as much as 8 billion barrels of recoverable light crude, and initial production should exceed 100,000 barrels daily, though experts believe the amount will then go much higher.State oil company Petroleo Brasileiro SA will start pilot pumping in 2010 or 2011 but it will take several more years for full production to get under way, at a cost of billions of dollars (euros).Bear Stearns analyst Marc McCarthy estimated the value of the oil in the block at US$25 billion to US$60 billion (€17 billion to €41 billion) depending on international prices.

Offshore oil rigTupi “is immense and marks the beginning of a new horizon for Brazil,” he said in a note to clients.

Several thoughts come to mind.

The first is political; crazy uncle Hugo just got through promising the Chinese a million barrels a day to pay off about $4 billion worth of loan the Chinese provided him to keep his socialist monstrosity afloat. Given the circumstances, I can’t imagine that the Chinese aren’t going to want to sweeten the deal somewhat.

Secondly, here again, we see that oil is going to be with us for a while. Granted that the current projections are for this oil to be fairly expensive, because of how deep it is. That said, technology has a way of showing up on the scene when it’s needed. Free enterprise is like that. If there’s anything to slow the process down , it’s that Brazil’s oil production is state owned and operated.

Thirdly I find it amusing that Brazil should even be looking for oil, given their dependence on sugar cane for fuel. Ethanol, you know.

Finally, one has to wonder just what opportunities like this we are missing out on, because of bans on exploration off our own coasts ?

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