Brazil, on Thursday, declined a formal invitation from Iran to join the oil producers’ cartel OPEC. But, according to the country's mines and energy minister, Edson Lobao, this does not rule out the possibility of Brazil joining the group in the future.
The offer came after the South American nation announced, in 2007, that they had found major supplies of oil some 155 miles off of its coastline, that are estimated to contain as much as eight billion barrels of oil.
Also, earlier this year it said that other nearby fields could contain an additional 40 billion barrels of light crude.
Minister Lobao, said: “I received the ambassador of Iran, and he invited Brazil to become part of OPEC. It wasn't a suggestion but a formal invitation.”
Mr. Lobao reportedly told the Iranian ambassador, Moshen Shaterzadeh, at the meeting two weeks ago that Brazil did not envisage the possibility of joining OPEC - which is made up of 13 oil producing nations including Saudi Arabia and Iran - at the present time.
As a member of the oil cartel, Iran can recommend Brazil's entry.
In Brazil it is the National Energy Policy Council which has the final say on whether the nation will join. Despite rejecting the invitation, Brazil did spend time considering the invite.
This is not the first time that OPEC has approached Brazil, although never an explicitly as Iran’s invitation two weeks ago. In May Saudi Arabia invited Mr. Lobao to an emergency meeting of the cartel, at which he was given stage to out the perspectives for Brazil’s oil industry.
In 2006, Brazil was ranked as the world’s 13th-largest oil producing nation, according to data from the U.S. Department of Energy. The country’s state oil company, Petrobas, has recently begun to start drilling the offshore fields off of the Rio de Janeiro coastline in the hope of increasing Brazil’s ranking and turning the nation into a world oil-exporting power.
If the drilling proves to be successful and the estimated quantities of oil underneath the sea bed are correct then Brazil could potential multiply its already proven natural oil reserve, which currently stands at approximately 14 billion barrels, and find itself in the same league as Nigeria, or even Venezuela, in terms of exports.
Slower economic growth in the global economy has stunted demand for oil, consequently pushing prices well down from their July 11 high of $147 a barrel to below $110 in trading yesterday.
Despite the unprecedented drops, many analysts predict that prices will once again consistently rise over a prolonged period.