A big FU to the Mid East

April 24 (Bloomberg) -- Brazil's discoveries of what may be two of the world's three biggest oil finds in the past 30 years could help end the Western Hemisphere's reliance on Middle East crude, Strategic Forecasting Inc. said.

Saudi Arabia's influence as the biggest oil exporter would wane if the fields are as big as advertised, and China and India would become dominant buyers of Persian Gulf oil, said Peter Zeihan, vice president of analysis at Strategic Forecasting in Austin, Texas. Zeihan's firm, which consults for companies and governments around the world, was described in a 2001 Barron's article as ``the shadow CIA.''

Brazil may be pumping ``several million'' barrels of crude daily by 2020, vaulting the nation into the ranks of the world's seven biggest producers, Zeihan said in a telephone interview. The U.S. Navy's presence in the Persian Gulf and adjacent waters would be reduced, leaving the region exposed to more conflict, he said.

``We could see that world becoming a very violent one,'' said Zeihan, former chief of Middle East and East Asia analysis for Strategic Forecasting. ``If the United States isn't getting any crude from the Gulf, what benefit does it have in policing the Gulf anymore? All of the geopolitical flux that wracks that region regularly suddenly isn't our problem.''

Tupi and Carioca

Brazil's state-controlled Petroleo Brasileiro SA in November said the offshore Tupi field may hold 8 billion barrels of recoverable crude. Among discoveries in the past 30 years, only the 15-billion-barrel Kashagan field in Kazakhstan is larger.

Haroldo Lima, director of the country's oil agency, last week said another subsea field, Carioca, may have 33 billion barrels of oil. That would be the third biggest field in history, behind only the Ghawar field in Saudi Arabia and Burgan in Kuwait.

Analysts Mark Flannery of Credit Suisse Group and Gustavo Gattass of UBS AG challenge the estimate for Carioca. Lima, the Brazilian oil agency director, later attributed the figure to a magazine.

Flannery told clients during an April 16 conference call that 600 million barrels is a ``reasonable'' estimate and suggested Lima may have been referring to the entire geologic formation to which Carioca belongs.

Supply Boost

Carioca is one of seven fields identified so far in the BM- S-9 exploration area, part of a formation called Sugar Loaf.

If additional drilling by Petrobras, as Petroleo Brasileiro is known, confirms the Tupi and Carioca estimates, the fields together would contain enough oil to supply every refinery on the U.S. Gulf Coast for 15 years. Petrobras said it needs at least three months to determine how much crude Carioca may hold.

Zeihan said that beyond supply gains from Brazil, it will take a tripling of Canadian oil-sands output and greater fuel efficiency to end Western reliance on Middle East oil.

The U.S. imports about 10 million barrels of oil a day, or 66 percent of its needs, according to the Energy Department in Washington. Saudi Arabia was the second-largest supplier in January, behind Canada.

Persian Gulf nations accounted for 23 percent of U.S. imports, compared with Brazil's 1.7 percent share. Brazilian crude output rose 1.9 percent last year to 2.14 million barrels, according to the International Energy Agency.

``Hemispheric energy independence sounds a little pie-in- the-sky given that this hemisphere already is generating one- third of overall global demand,'' said Jason Gammel, an oil analyst at Macquarie Bank Ltd. in New York. ``It's pretty tough to talk about self-sufficiency unless we were to see food-based biofuels taking an even bigger role in the next five to 10 years than is already mandated.''

Offshore Fields

Zeihan predicts a 2012 start to production at Tupi. Technology needed to tap fields like Tupi, which sit hundreds of miles offshore beneath thousands of feet of rock, sand and salt, hasn't been developed, he said.

Petrobras, Chevron Corp., Royal Dutch Shell Plc and Norsk Hydro ASA plan to start pumping oil from eight Brazilian fields in the next 2 1/2 years that will produce a combined 1.02 million barrels a day, enough to supply two-thirds of the crude used by U.S. East Coast refineries.

More discoveries will follow in Brazil's offshore basins, most of which have yet to be opened to exploration, Zeihan said. Repsol YPF SA, Exxon Mobil Corp. and Devon Energy Corp. are among the producers scouring Brazil's waters for reserves.

``The finds they've got so far are just the tip of the iceberg,'' Zeihan said. ``Brazil is going to change the balance of the global oil markets, and Petrobras will become a geopolitical supermajor.''

Brazil, superpowerdom is in reach

SAO PAULO, Brazil (AP) deep-water exploration area off Brazil's coast could contain as much as 33 billion barrels of oil, the head of Brazil's National Petroleum Agency said Monday. That would make it the world's third-largest known oil reserve.

Haroldo Lima cautioned that his information on the field off the coast of Rio de Janeiro is unofficial and needs to be confirmed.

The state-run Petrobras oil company declined comment on what would be the planet's largest oil find in decades, and its shares moved wildly in positive territory after Lima made the comments.

By early afternoon, the company's American depository shares were up 8.5 percent in New York, or US$9.54 (euro6.01) to US$122.39 (euro77.13).

Lima told reporters that Petrobras "may have discovered a huge petroleum field that could contain reserves large as 33 billion barrels," amounting to the world's third-largest reserve, according to his spokesman, Luiz Fernando Manso.

If true, the oil in the Carioca exploration area would be five times larger than the Tupi oil field, whose estimated reserves of 8 billion barrels were announced by Petroleo Brasileiro SA in November. Petrobras also announced a blockbuster find of natural gas in February in an Atlantic Ocean field nicknamed Jupiter.

Industry experts say the Tupi and Jupiter fields alone could turn Brazil into a major oil and gas exporter and lead to it joining OPEC.

Petrobras is renowned for its deep-water drilling ability, and is widely regarded as one of the best state-run oil companies in the world.

Brazil became self-sufficient in oil production in 2006 but must import light crude oil for the refined products it needs. The country produces  and exports  mostly heavy crude oil, which has to be mixed with the light oil in refineries.

Carnival = lots of anonymous sexual enounters

The Brazilian city of Recife is to distribute morning-after pills to women during carnival after public prosecutors on Tuesday rejected a Catholic Church lawsuit claiming the initiative promoted sex and provided "abortions."

"The pill has no abortive effect, as the archdiocese claims, and its distribution is in no way an incentive to have sex," the prosecutor who made the decision, Ivana Botelho, told AFP.

On top of its legal defeat, the church has come under fire from the Brazilian government for attempting to sway public health policy.

"The (Recife) mayor's office is right and the church is wrong, again," Health Minister Jose Gomes Temporao said Sunday, as the issue was coming to a head.

"The morning-after pill is used with medical guidance and is a matter of public health, not religion," he said, adding that he believed the church was alienating youths with its stance.

The archiocese for Recife, one of the Brazilian cities most famous for its wild carnival celebrations alongside Rio de Janeiro and Salvador, on Monday lodged its suit with the public prosecutor's office.

It was seeking to block the distribution of the contraceptive during this year's pre-Lenten carnival, which begins on Friday and runs to Tuesday of next week.

The verdict allows Recife officials to go ahead and hand out the pills from stationary and mobile health posts which will also provide medical consultations.

The municipality says its aim is to "guarantee the sexual and reproductive rights of women who have been victims of sexual violence or who have had a failure of contraceptive methods."

Morning-after pills must be used within 72 hours of unprotected sexual intercourse. They work by blocking fertilization.

According to the newspaper Pernambuco, the archbishop at the center of the storm, Jose Cardoso Sobrinho, is not prepared to back down on the issue, and had threatened excommunication to any church-goers who use the pill.