In Brazil, Oil Rigs in Sight, but World Cup on Minds

BY Margaret Warner  June 24, 2010 at 5:31 PM EDT

As we flew into Rio de Janeiro Wednesday, the city’s jagged emerald mountains, sapphire blue waters and ribbon of white beaches seemed as pristine and beautiful as advertised, a natural paradise for residents and vacationers alike. Yet Thursday morning, just outside our sea-side breakfast room on famed Copacabana beach, a gigantic oil tanker was steaming for the deep Atlantic waters beyond.

Oil cranes, drilling rigs and tankers are everywhere in Rio’s waters. In the world of energy, Brazil may be renowned for its pioneer development of sugar-cane based ethanol, a renewable source that now generates 15 percent of the country’s energy needs. But Brazil also has been on a break-neck race to develop its oil resources — and 90 percent of its reserves are off-shore.

The project seems to be succeeding. Two years ago, Brazil went from being a net importer of oil to being self-sufficient. What complicates the picture is this: Brazil’s best reserves are not just off-shore – but in extremely deep waters, deeper than the Gulf of Mexico site of BP’s Deepwater Horizon well.

Brazil’s national oil company, Petrobras, has pioneered deepwater drilling technology. It’s already the No. 1 deep-water drilling company in the world — producing one-quarter of the world’s total deepwater oil. And now it’s poised to begin developing a stunning new find, the so-called “Pre-Salt” fields discovered in 2007, which lie below a substratum of salt some 250 kilometers offshore. The hitch: to reach those reserves, Petrobras will have to drill and extract some 25,000 feet deep, through 7,000 feet of water and another 18,000 feet through a salt layer and mud – nearly twice as deep as the Deepwater Horizon well.

Brazil beachSo we’ve come to Brazil to assess how the BP spill has affected Brazil’s oil drilling present — and future. Has the BP disaster given Brazil any second thoughts? Unlike Norway, which temporarily suspended all new drilling licenses, or the Obama administration, which slapped a controversial six-month moratorium on all deepwater drilling, Brazil has taken no overt action since the BP spill to slow down its present or future drilling.

But some people here are clearly concerned. “Yes, I’m very afraid,” said 38-year-old maintenance worker Agildo Bisbo, as he lounged in a beach bar Thursday afternoon watching the Denmark-Japan World Cup match. “An environmental disaster like that would destroy our way of life here.” His co-worker Fabio Rodrigues nodded in agreement. “The population in general would suffer a lot. The impact would be huge because we’re famous for our landscape.”

But there is enormous confidence here, too — confidence in Brazil’s ability to master the technology required, and in the nation’s ability to manage it properly. Paulo M., a Petrobras drilling engineer, was sitting on the sandy beach a few feet away, enjoying an Itaiapava beer with his girlfriend Carolina. “This is the kind of beauty you don’t want destroyed,” he said, “but I work for Petrobras. We have a lot of security measures in place to make sure this doesn’t happen here. BP didn’t do that.”

Store in BrazilFor now, most cariocas — as Rio residents are known — are thinking about something far more immediate: Brazil’s prospects in the World Cup soccer championship. Brazil has won the World Cup a stunning five times, more than any other country on the planet, and has already won its first two matches in this tournament, assuring it of a place in the knockout round. For Brazilians, this soccer prowess seems to be further proof that their country is on a roll. The excitement is palpable. Brazil’s green-and-yellow banners hang everywhere. High end clothing stores sport green-and-yellow designer bags in their windows.

On Friday, Brazil plays an emotionally charged match against its former colonial master, Portugal. We’ve already been warned, Rio will come to a standstill. Cariocas aren’t waiting for tomorrow, though. At the official FIFA viewing arena on the beach Wednesday night, hundreds of couples and families rocked out to a live Brazilian band, which was belting out old ’60′s and ’70′s classics, from the best of the Beatles to the Isley Brothers classic, “Twist and Shout.” If Brazil beats Portugal tomorrow, that’s exactly what this city will be doing.