Lula de Silva changing his tune regarding joining OPEC

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    Eric Watkins, OGJ Oil Diplomacy Editor

    LOS ANGELES — Brazil’s President Luiz Lula da Silva, apparently reversing earlier decisions, said his government is again considering an invitation to join the Organization of Petroleum Exporting Countries.

    “Very, very soon Brazil is going to participate in OPEC,” said the Brazilian president, according to Argentina’s Empresas News. If correct, the statement would reverse earlier remarks by Lula, who last year said he preferred Brazil to export refined products, not crude.

    The Brazilian president’s remarks follow a Mar. 23 statement by Mines and Energy Minister Edison Lobao, who said the country was officially invited to join OPEC last week, but that it should enter the organization only when it effectively becomes an oil exporter.

    At the moment, he said, OPEC membership would not be possible as Brazil, which consumes all of its own production and still imports oil, would not be able to implement OPEC output cuts. But Brazil could join once it has taken care of domestic needs and begun to export oil, he said.

    The statements by Lula and Lobao indicate a possible shift in policy, as last September Brazil declined an invitation from Saudi Arabia to join OPEC, citing plans to export refined oil, not crude from its deep water reserves.

    At the time, Lobao said Brazil determined it didn’t need OPEC, because the Latin American country planned to boost oil income by refining crude into products like gasoline for export abroad.

    Petroleo Brasilerio SA’s Refining and Petrochemicals Chief Executive Paulo Roberto da Costa confirmed Lobao’s remarks, saying, “Brazil was invited to participate in OPEC and did not accept because our priority is refining here and exporting derivatives.”

    Earlier that year, Lula also opposed OPEC membership in favor of becoming an exporter of refined products.

    “Brazil is going to be transformed into a major producer. I do not want it to become an exporter of petroleum,” he said. “I want Brazil to export petroleum products” (OGJ, July 7, 2008, p. 37).

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