Brazil-Oil Carnival.

BRAZIL-A Brazilian oil carnival?

How much access western energy firms win to Brazil’s vast offshore oil fields hinges on complex political currents in the country – and how well the companies navigate these, argues Juliet Hepker.

The recent discovery of potentially vast oilfields buried beneath a thick layer of salt off the coast of Brazil has become a focus of excitement among many of the world’s big energy firms. Though the total size of reserves is not yet known, government officials estimate 80bn to 100bn barrels – enough to vault Brazil well into the top ten of oil-producing countries. Described as "a gift from God" by Brazil’s President Lula da Silva, the ’pre-salt’ fields could significantly boost Brazil’s economy and influence on the world stage – while shifting the dynamics of global resource geopolitics.

For major oil and gas firms the pre-salt fields present a tantalising opportunity for replacing their reserves (and this is notwithstanding the economic downturn – the planning horizon of most such firms is decades, beyond the current slump). Several western energy firms including Shell, Exxon-Mobil, BG Group, and Statoil-Hydro were fortunate to be awarded concessions before the government realised the vastness of the reserves – these and many other companies may soon be vying to expand their involvement.