Brazil announces new oil reserves

Brazil has confirmed discovery of another giant offshore oilfield, known as Libra, making it possibly the second-largest crude discovery of the last 20 years.

The oilfield that may be even bigger than the Tupi field in the Santos basin contains approximately 8 billion barrels of oil, vastly boosting a previous estimate of 5.5 billion barrels, a Press TV correspondent said on Monday.

Petrobras (Petroleo Brasileiro S.A.) is expected to raise as much as $130 billion, with almost $50 billion in new shares going to the Brazilian government in return for five billion barrels of its deepwater reserves.

The remaining cash — approximately $80 billion — will come from private investors; it is believed that this will meet the company’s cash flow needs for extracting deepwater crude over the next few years.

Petrobras oil production could reach 6 million barrels per day by 2020.

The numbers involved are very high. Since Brazil’s oil output to date has not been of global importance, it is therefore likely that politics will come into play.

How the country will manage the huge oil resources and income is yet to be seen. The Brazilian government maintains stock control over Petrobras, publicly held shares of which are likely to rise in value now.