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Headlines: New oil basin in Brazil; Chilean fisheries exports; FAM scare in Chile; Nothing to celebrate.

New oil basin in Brazil

Brazil's National Petroleum Agency, ANP, announced the discovery of high quality oil reserves offshore the north east of the country, in Sergipe, with preliminary estimates of 1,9 billion barrels. The announcement had a double impact: it's the first major reserve that does not belong to the Campos Basin, (from where Brazil extracts most of its oil) and the crude is light, 46 API degrees. According to ANP the reserve is situated in Area Seal-100, belonging to the Sergipe-Alagoas basin, 20 miles off the coast and at a depth of 1,150 meters. However Petrobras, Brazil's oil government company that drilled the two successful wells indicated that assessments as to the commercial viability of the discovery had not been completed suggesting ANP's announcement was premature. ANP and Petrobras have been at loggerheads for some time over the disclosure of information relating to the industry. Brazil has a daily production of 1,597,000 barrels, mostly offshore but insufficient for home consumption, and is planning to reach self sufficiency with 1,9 million barrels by 2005.

Chilean fisheries exports

Chilean fisheries exports reached 1,959 million US dollars in 2002, a 5,3% increase over 2001 according to the National Fisheries Association, Sonapesca. Fish meal prices, (21% increase over 2001), the recovery of the salmon market and greater sales of frozen fish helped to achieve the almost 2 billion US dollars benchmark. Roberto Izquierdo, Sonapesca's president said that prospects for 2003 are encouraging since prices are holding and greater investments in the sector anticipate a 5 to 10% increase in overall exports. However Mr. Izquierdo also pointed out that the Chilean fish industry was concerned with the presence of a Chinese fleet that is not actually poaching "but is catching all sizes of fish, threatening future harvests". Besides and is spite of the trade agreement with the European Union, because of the fear of mad-cow disease, some countries discriminate Chilean fish meal "which is nonsense since there's no scientific evidence regarding any possible contagion".

FAM scare in Chile

Chilean animal health authorities sacrificed over a thousand goats and cattle that had been illegally introduced into an animal free area in the region of San Fabián de Alico, central Chile next to the Argentine border. Mr. Eduardo Führer from the Agriculture and Livestock Service, SAG, indicated that the animals had to be terminated because of the possibility of foot and mouth disease, since they could endanger Chile's foreign trade of animal products. "We have made it quiet clear that any animals appearing in this animal-free area will be automatically sacrificed, to avoid any possible contact with Chilean livestock. That is the law and it will be strictly enforced", said Mr. Führer. The Chilean official admitted it was the largest killing of animals in the last few years, and also that it was the third time this season that livestock from neighbouring Argentina was detected in the animal-free border area.

Nothing to celebrate

The canceling of President Ricardo Lagos three years in office commemoration, programmed with months of anticipation, gives an idea of the adverse political situation the ruling Socialist led coalition is facing in Chile. Corruption scandals involving Congressional members of the ruling coalition, as well as former cabinet Ministers and Deputy ministers that have been jailed plus the latest 100 million US dollars fraud in the Development and Production Promotion Corporation managed by the president's son in law, sums up the distrust of the Chilean electorate towards the government although not necessarily against Mr. Lagos himself. "The coalition (that has ruled Chile since the return of democracy in 1990) is exhausted and is now even threatening president Lagos standing. And we still have three years ahead of us", said an analyst from the public opinion pollster Mori in Santiago. Since taking office Mr. Lagos popularity has always been above that of his government and public opinion seemed to be more tolerant towards the man who before becoming president was Public Works and Education Minister. According to the latest polls one out of two Chileans support him. However the accumulation of scandals and shortcomings is eroding Mr. Lagos command and even the president of his Socialist Party has been demanding the resignation of crucial members of his staff such as the much respected president of the Central Bank, Carlos Massad, who also faced shame when it was revealed his most trusted secretary was sharing privileged information with local brokers. And Mr. Lagos faces another crucial excruciating decision, this time in foreign policy. While an overwhelming percentage of Chilean public opinion reject war in Iraq, Chile has nurtured a close relationship with the past US Democrat and current Republican administration pushing hard for a free trade agreement that would open even wider opportunities for local exporters to the country's main single trade partner. But Chile also holds a crucial vote in the Security Council as a non permanent member and must carefully evaluate the consequences, if it does not support with its vote the Bush administration's determination to end by diplomacy or force the regime of Mr. Saddam. Nothing to celebrate.