I guess Obama’s idea of US energy independence is saying, “Drill, Dilma, drill”?
(The UK Telegraph) — Prices for Brent crude hit more than $117 last week as the civil war in Libya continued and are likely to rise further after the start of UN-backed action against Col Gaddafi’s forces.
Traders are also concerned about protests and tensions in a number of other oil-producing nations in the region.
Mr Obama spoke of the US’s desire to secure more of its oil from Brazil in future after talks with his counterpart, President Dilma Rousseff, in Brasilia at the start of a two-day visit to Latin America’s biggest country. “I have told her that the United States wants to be a major customer, which can be a win-win for both our countries,” he said.
Brazil possesses some of the world’s biggest offshore oil reserves in the pre-salt area off its south-east coast. Ms Rousseff has stated her desire to export the vast majority of oil from the fields as the country concentrates on using renewable sources of energy such as hydroelectric power and ethanol for domestic needs.
Speaking in a newspaper interview just before Mr Obama’s arrival, she made what seemed a clear sales pitch, asking “which other country in the world has the oil reserves that Brazil has, that is not at war, that does not have an ethnic conflict, which respects contracts, has clear democratic principles and vision, is generous and in favour of peace?”
Mike Froman, a senior White House adviser on international economic affairs, also spoke of a “natural potential strategic partnership”with Brazil.
Much of the money raised from deals to sell oil to the US and other countries could go towards infrastructure improvements as the 2014 World Cup and 2016 Olympics in Rio de Janeiro approach. Mr Obama’s visit to Brasilia also saw the US sign an agreement to help Brazil in its preparations for the sporting events, which could see America training security teams and helping with planning and infrastructure challenges. Many key works, especially at Brazil’s creaking airports, are currently well behind schedule and US companies with experience of preparing for major events will hope the deal may also help them cash in.
Great. The only job creation to come out of this trip will result in improving Brazilian infrastructure (see Obama’s Interior Department Gives Final Approval to Brazilian Oil Company’s Gulf of Mexico Deep Water Floating Facility).