Brazil has just tapped into the first of its newfound pre-salt oil discoveries, and already lawmakers are looking for ways to spend the expected multibillion-dollar windfall.
President Luiz Inacio Lula da Silva, a longtime champion of the left whose monetary policy has been somewhat conservative during his first six years in office, said the country's oil profits should be spent revamping Brazil's educational system, particularly for the country's vast poor populace.
A former union leader, Da Silva said earlier this month during an offshore test drilling that Brazil's recent oil fortunes would help Brazil wipe out endemic poverty once and for all, a bold claim considering the South American country has one of the world's largest economic divides been the haves and have-nots.
According to experts, Brazil's offshore reserves could contain up to 55 billion barrels. At current prices, the reserve could be worth well over $6 trillion, making Brazil an immediate player among the world's largest oil producers.
Da Silva warned, however, that the money must not be spent on "silly things," a direct reference to the recent frenzy of discussion among lawmakers in Brasilia on how to spend Brazil's future oil fortunes. Among the recently proposed expenditures is a fleet of nuclear submarines.
With full-scale production years away, talk of costly warships and the pricey revamping of an antiquated educational system are premature, analysts warn.
"All of the findings so far are probable. … They aren't proven yet," Jorge Pinon, energy fellow at the Center for Hemispheric Policy at the University of Miami, told United Press International.
Along with uncertainty about just how much oil lies beneath the Atlantic off Brazil is the difficulty in retrieving it from beneath thousands of feet of water and salt deposits under the ocean floor.
While the pre-salt findings at the much heralded Tupi field -- believed to hold somewhere between 5 billion and 8 billion barrels -- went online for the first time last week, the post-salt reserves are far deeper and could prove extremely difficult to access.
Though state-run Brazilian energy firm Petrobras is a world leader in offshore oil drilling, extracting oil from extreme depths is a difficult and costly endeavor, said Pinon.
"It's not that Brazil doesn't have the technological know-how -- the industry as a whole doesn't have the experience," he said. "It's a new geological frontier."
Others contend that Brazil's wealth of experience in deep-water drilling will allow it to make good on its projected timetable for production to begin in Tupi.
"As one of the industry's premier deep-water players, Petrobras absolutely has the ability to profitably develop recent huge discoveries," said Michael Lewis, an analyst with PFC Energy.
Difficult drilling depths and internal debates aside, Brazil's projected oil fortunes have not gone unnoticed in international circles.
Last week Brazil announced it was invited by the Iranian ambassador to Brazil, Mohsen Shaterzadeh, to join the international oil cartel OPEC.
In what some consider a show of apprehension in joining the Organization of Petroleum Exporting Countries at the behest of Iran, Brazilian energy officials declined the invitation, saying they had "other priorities" at the moment.
