OPEC Invitation declined by Brazil

Brazil has declined Saudi Arabia’s invitation to join OPEC. It has instead announced plans to refine, not export, crude oil from its recently discovered deep water reserves.

Edison Lobao, Brazil’s Mines and Energy Minister, said Brazil determined it doesn't need the cartel as it plans to boost oil income by refining crude into products like gasoline for export abroad.

Paulo Roberto Costa, a high-ranking executive with Brazil's state-run Petroleo Brasileiro SA oil company, confirmed the government had decided not to join OPEC "Brazil won't be a big exporter of oil, that's already defined,'' Costa told Agencia Brasil at the Rio Oil & Gas Expo 2008 industry conference in Rio de Janeiro. "Brazil was invited to participate in OPEC and did not accept because our priority is refining here and exporting derivatives.''

Analysts say the reserves found in the last year thousands of meters under the ocean floor and several hundred kilometers off the Rio de Janeiro coast may contain 55 billion barrels of oil, enough to propel Brazil to superpower oil status.

By refining its own oil, instead of shipping it abroad to be refined, Lobao said Brazil will generate more money and jobs at home in an attempt to heal the gap between rich and poor within the country
Under orders from President Luiz Inacio Lula da Silva, a commission of government ministers is examining possible changes in the nation's oil law. Silva insists profits from the new oil discoveries be used to fight poverty and improve education. Agencia Brasil said the Saudi OPEC invite came at a "recent'' meeting of oil producing nations, but gave no other details. OPEC met last week in Vienna.

Brazil last month declined an invitation extended by Iran to join the Organization of Petroleum Exporting Countries. Lobao did not specify why at the time, saying only that Brazil had "other priorities".

Author: Jo Amey