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Brazil hits the economic jackpot

Brazil is celebrating a discovery that will send shockwaves through the economy…

Not only is Brazil blessed with some of the best beaches and purest air in the world, last month the whole country was celebrating the world’s biggest ever deep-water oil discovery. This incredible treasure was found 250km offshore from Rio de Janeiro and has been dubbed ‘Tupi field’. Predicted to quickly turn Brazil into a major oil exporter and big player in world affairs, the knock-on effect for the economy and property investment industry is set to be massive… No wonder people say “God is Brazilian”.

The discovery by state-run company, Petrobras, of up to 8-billion barrels of light crude oil in the Tupi fields is likely to raise Brazil’s oil reserves by 50%. And now, just one month later, further reserves have been revealed in the northerly Campos and Espirito Santo basins off the South eastern coast.

On the brink of greatness

The country is now poised to become one of the world’s most powerful emerging economic powers, alongside Russia, India and China. The Senior Minister in charge of the cabinet, Dilma Rousseff, was quoted by The Associate Press as saying, “This has changed our reality. It will transform the nation to another level, with exporting capabilities like Venezuela, Arab nations and others.”

Petrobras’ Chief Executive , Sergio Gabrielli said that the Tupi field was “only part of a new frontier” for Brazilian oil exploration. He predicted that the current fields and future finds could give Brazil the world’s eighth-largest oil reserves. Bear Stearns analyst, Marc McCarthy estimates the value of Tupi alone at $25 to $60 billion, depending on international prices.

Peter Hakim, President of the inter-American Dialogue – a policy group in Washington which focuses on Latin America, commented “All of a sudden Brazil is emerging as an energy power,” he said, “Everything they have developed, from soya beans to sugar to oil is suddenly working. They have had amazing luck!”

Brazil's population 'euphoric'

The New York Times recently reported that countries around the region had been quick to sense the potential benefits of a strong alliance with Brazil. With news of the discovery coming just ahead of a meeting of Latin American leaders in Santiago, Chile; President Luiz Inacio Lula da Silva acknowledged that during the meeting he was being “treated with a certain deference” by other leaders.

The magnitude of this discovery is already having an effect on the Brazilian population who is understandably euphoric. The discovery of such a large quantity of oil is expected by many industry experts to have a positive effect on small businesses and on economic growth in general, with the most significant increase in prosperity being in the North East of the country as reported by the Brazilian national Statistics Institute (IBGE). Furthermore, it is expected that property investors will be greatly encouraged to invest in here, as Brazil is without doubt a huge boom waiting to happen.

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