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Turkey And Brazil To Search For Oil and Gas In The Black Sea

May 27, 2009

Turkey And Brazil To Search For Oil and Gas In The Black SeaMartin McCauley writes: Brazilian President Luiz Inacio Lula da Silva has recently visited Turkey. Before that he had visited China and Saudi Arabia as part of his world tour. His main aim was to expand bilateral trade.

President Lula da Silva told Turkish businessmen that the two countries had so far failed to realise their full potential for cooperation. Brazil, he said, would welcome increased Turkish investment. Trade turnover this year will be about $1.5 billion. Areas in which there was great scope for cooperation included energy, construction, the automobile industry, production of household appliances and tourism.

The Brazilian President also stressed that the multibillion stimulus package which is underway in Brazil at present would ensure continued rapid growth and ensure its recovery from the effects of the world financial meltdown. On coming to power, Lula da Silva underlined that his first priority had been to strengthen relations with South American countries. After that, Brazil reached out to Africa and Asia. His visit to Turkey was part of this programme.

The most significant aspect of the visit was the agreement between Turkey’s TPAO and Brazil’s Petrobras to jointly search for oil and gas in the Black Sea. Petrobras, which has already invested $130 million since 2006, will contribute another $300 million by 2010. TPAO will invest $500 million.

Ankara expects that there are abundant hydrocarbon reserves in the Black Sea. The dream is to become energy self-sufficient and not be dependent on Russia for oil and gas. Petrobras has experience in off-shore drilling and recently discovered huge reserves of hydrocarbons off the south east coast of Brazil. TPAO estimates that there are 10 billion barrels of oil and 1.5 trillion cubic metres of gas in the Black Sea. TPAO, Petrobras and ExxonMobil are to work together over the next three years in an effort to locate the assumed riches which lie below the water.

To achieve energy independence Turkey needs to develop alternative energy sources as well. Brazil is a leader in the production of biodiesels so joint production of ethanol based fuels would be attractive. President da Silva floated the idea that the two countries work together in agriculture and, for instance, produce ethanol in Africa.

Brazilian companies are keen to sell aircraft but Turkish Airlines stated that it had no joint projects at present. That could change in the future.

Turkey would like greater access to Latin American markets. It would like to sign a free trade agreement with Mercosur (a free trade grouping of Argentina, Brazil, Paraguay and Uruguay) to eliminate the duties on Turkish goods. President Gül of Turkey asked his Brazilian counterpart to accelerate negotiations. If an agreement can be signed next year when Prime Minister Recep Tayyip Erdogan visits Brazil it would be a considerable achievement for the Turkish government.

Turkey is eager to play a more expansive role in the Middle East as is Brazil in Latin America. When in Beijing, President da Silva and President Hu Jintao discussed the possibility of conducting trade in their respective currencies. This would be a step in the proclaimed aim of both countries to end the dominance of the US dollar as the main international reserve currency. Brazil and Turkey are setting the pace in the developing world. Will they escape from the shadow of the US dollar? Only time will tell.

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One Response to “Turkey And Brazil To Search For Oil and Gas In The Black Sea”

  1. PhastPhoodPhool on May 28th, 2009 12:04 am

    Boycotting Chinese goods would leave us all naked without toilet paper, tupperware, or all the crap we need in our daily lives. Who the hell can afford that? You need to compete with them. Its your salary that forces the situation because people in china work for a fraction of what you do to get your goods for cheap while maximizing profits for your masters. A great equalization is about to occur. Soon, for the 1st time the average American will have to compete with all foreign workers around the world. Times are not gonna get any better once the middle class is gone.

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