Brazil is pumped up over offshore oil field

Exploratory oil wells drilled off Brazil's coastline indicate the presence of a vast pool of crude that could propel this nation into the top tier of world energy producers, reports Chris Kraul.

The oil field highlighted last week by state-controlled oil company Petrobras lies in "ultra-deep" waters beneath an unstable layer of hot salt, presenting technological challenges that are sure to bring ultra-high costs.

The find has sparked a fierce debate about whether Brazil should stake hundreds of billions of dollars on a risky field amid market uncertainty and pressing social needs.

Read the rest of the report on Brazil's new energy find here.

Click here for more on Brazil.

-- Deborah Bonello in Mexico City

Photo: Brazil's President Luiz Inacio Lula da Silva, right, and Petroleo Brasileiro SA president, Sergio Gabrielli, show their hands covered with oil during a visit to the P-34 offshore platform, 75 miles east of Vitoria in the Atlantic Ocean. Credit: Ricardo Stuckert / Associated Press.

Hurricane Ike pushes up U.S oil prices

Motorists far from the Gulf Coast on Sunday continued to feel the ripple effects from Hurricane Ike's trek through refinery-rich Texas, as the cost of gas throughout the Midwest and East leaped higher, going above $5 a gallon at a growing number of stations.

The $5-plus service stations weren't all that common, but they provided an exclamation point to Ike's effect on gas prices. Weekend jumps of 30 to 60 cents weren't out of the ordinary in some regions and they helped kick the nationwide average cost of self-serve regular to $3.79 a gallon Sunday, a 12-cent hike since Friday, reports Elizabeth Douglass.

Read more about how Hurricane Ike is affecting oil prices in the United States here.

Click here for more on energy and here for more about environmental issues.

-- Deborah Bonello in Mexico City

Oil prices dive as Gustav passes

The biggest repercussions from Hurricane Gustav's brush with the Gulf Coast oil complex played out in energy markets Tuesday instead of at refineries and oil rigs, as reports trickled in that damage to key facilities was mostly minor and oil prices plunged below $110 a barrel in response, report Elizabeth Douglass and Ronald D. White.

Teams of oil industry and government employees fanned out across the region, inspecting shut-down refineries responsible for more than 10% of the nation's gasoline production and boarding helicopters and planes to fly over oil platforms that account for 25% of U.S. oil output.

"The good note is that we have not gotten any reports of major damage at this point," said John Rodi, deputy director of the Gulf of Mexico region of the U.S. Minerals Management Service. He added that more thorough inspections would take several days, "after which we'll have a really definitive idea of what's damaged and what's not damaged."

Click here to read more about dropping oil prices.

Photo: Hurricane Gustav's impact "will be over in a matter of days," an oil industry analyst said. Here, utility workers wade through floodwaters in Slidell, La., left by Gustav. Credit: Luis Sinco / Los Angeles Times

Sempra opens natural gas import terminal in Baja

With the help of Mexico President Felipe Calderon, San Diego-based Sempra Energy on Thursday inaugurated its $1-billion Energia Costa Azul gas import terminal to serve fast-growing energy demands in the southwestern U.S. and Baja California, Mexico.

The first such facility on North America's West Coast, the Sempra plant receives natural gas that was cooled to a liquid for overseas shipment by tanker. The fuel is then processed back into a gas for pipeline transport to users, including power plants, industry and homes.

As we reported yesterday, Calderon traveled to northern Baja California to open bidding on a $4-billion seaport that his adminstration hopes will one day rival those of Los Angeles and Long Beach and catapult Mexico into being a major player in North American logistics.

To read on about the new Sempra Energy gas import terminal here.

For more business click here and more about Mexico click here.

-- Deborah Bonello in Mexico City

Mexico feels economic effects of U.S., global woes

Inflationary pressures are rising. Remittances are falling. Mexico's economy is slowing. So is job growth, writes Marla Dickerson from Mexico City.

Mexico's central bank released a string of bad news Wednesday confirming that the nation is feeling the effects of a U.S. slowdown and exploding global prices for food and fuel.

The Bank of Mexico revised its inflation expectations sharply upward to a high of 6% for the fourth quarter. That's well above the 5.26% annualized rate recorded in June and double the central bank's long-term target.

Mexicans have long fled to the United States when things got tough at home. But tight employment conditions north of the border may dissuade some from making the trip.

Money wired home by Mexicans living outside the country, most of them working in the U.S., totaled $11.6 billion through the first six months of the year, according to figures released Wednesday. That's down 2.2% from the same period last year -- the longest sustained drop since the Bank of Mexico began tracking the flows in the mid-1990s.

Read on about Mexico's financial woes here.

Mexican voters oppose Calderon's plan for oil industry

Turnout was light, but voters in a nonbinding referendum gave an overwhelming "no" to President Felipe Calderon's proposal to give private firms a bigger role in Mexico's government-controlled petroleum industry, reports the L.A. Times' Marla Dickerson.

More than 80% of those who cast ballots Sunday in Mexico City opposed the plan, according to the official tally of the federal district released Monday. The results were even more lopsided outside the capital, where nine of Mexico's 31 states also participated. With about two-thirds of the ballots counted, more than 90% of those voters gave the president's proposal a thumbs down.

Slightly more than 1.5 million people cast ballots Sunday. Organizers had been hoping for a turnout twice that size in the greater Mexico City area alone.

But according to El Universal here in Mexico this morning, Calderon said in a meeting last night that the Consulta Ciudadana failed to achieve its objective of discrediting his reforms, and that it had been designed to obstruct the discussion.

Read more about the results of the ballot on the future of Mexico's oil here, and watch a video of Mexicans voting Sunday here.

-- Deborah Bonello in Mexico City

Photo: A woman wears a T-Shirt which says "I decide" during a voting session Sunday in Mexico City's Zocalo. Those who took part voted "no" on the question of opening up parts of Mexico's nationalized oil company Pemex to outsiders. Credit: Deborah Bonello / Los Angeles Times.

Venezuelans cross border to sell gas to Colombians

Venezuelan motorists are crossing the frontier with Colombia to sell gas to their neighbors, making the most of the varying price of oil across Latin America.

These gas-sellers -- or "pimpineros" as they're known -- are taking advantage of the fact that in the border city of San Antonio de Táchira, Venezuela, gas is a whole lot cheaper than on the Colombian side of the border in Cúcuta, where it sells for around US $3.44 a gallon. A story in Reforma states that gas prices in Venezuela are around 7.6 cents a gallon, but other sources say it's more around 12 cents a gallon.

Cheap gas prices in Venezuela mean that those enterprising individuals who cross over to sell the contents of their car tanks can make a good profit. Some are even living off the earnings, according to this report in today's Reforma (in Spanish).

The same kind of thing is happening in Mexico, where gas is much cheaper than in the U.S. This has led to United States citizens crossing over the border into Mexico to fill their tanks. The Dallas Morning News reported in June that Texans were heading across the border to escape gas prices at home, which at the time were around US $4 a gallon.

Today, the cost of oil per gallon in Mexico is about US $2.72 a gallon. In the United States, it's US $3.95 a gallon.

The cost of oil in Latin America varies. But surging fuel prices across the region have ignited inflation throughout Latin America, driving up the cost of food, the price of which was already on the upswing thanks in part to ravenous global demand for its farm products, as we reported in June.

Read more on the Venezuelan cross-border gas sale here.

-- Deborah Bonello in Mexico City

In Mexico City, a debate (and a vote) about oil

Despite the many hardships suffered by its people, Mexico is a rich country, in terms of its natural resources. And none of those resources is more highly prized than the nation's oil reserves. The country's wealth of black gold is a great source of nationalistic pride, as well as political opportunism. Raising the question of how much to open Mexican oil fields to foreign investment or development is a sure way to spark a heated discussion.

That's the historical background to what Times business writer Marla Dickerson describes as the current "bitter debate" over "how to rescue Mexico's troubled state-owned oil company," known as Pemex. That debate, she writes, "went directly to the people Sunday as residents of the capital and nine states voted in a nonbinding referendum on President Felipe Calderon's plan to open some portions of the petroleum industry to outsiders."

"The vote, organized by the opposition Democratic Revolution Party, or PRD, has no official bearing on energy legislation making its way through Congress. But opponents of Calderon's reforms hope a decisive 'no' vote will force legislators to back off."

"The balloting was the first of three so-called Citizen Consultation referendums over the next month that will eventually cover Mexico's 31 states and federal district.... Mexico City's historic center was bustling with poll workers wearing T-shirts emblazoned with 'I decide,' the referendum's slogan. A six-piece band performed 'The oil isn't for sale,' a popular refrain among Mexicans wary of privatizing Pemex, the state oil company."

Here's a video by Times staffer Deborah Bonello looking at Sunday's scene.

-- Reed Johnson in Caracas, Venezuela

On Russian visit, Chavez is all business

Venezuelan President Hugo Chavez blew through Russia on Tuesday, being his usual, controversial self, according to our correspondent Megan K. Stack.

Chavez cut some business deals and pumped up the friendship between the two oil-rich nations, while criticizing the United States.

He pressed Prime Minister Vladimir Putin to pay him a visit in Venezuela. He subtly ribbed President Dmitry Medvedev, who has been widely portrayed as Putin's handpicked puppet. And he announced that his country would buy Russian weapons "to guarantee the sovereignty of Venezuela, which is being threatened by the United States."

Click here to read more on President Hugo Chavez's visit to Russia.

-- Deborah Bonello in Mexico City

Photo: Venezuela's President Hugo Chavez smiles during his meeting with Russian Prime Minister Vladimir Putin. Credit: Dmitry Kostyukov / AFP/Getty Images

With oil prices soaring, Colombia helps feed coal craze

With gas prices soaring and millions of people in Latin American and other parts of the world being plunged back into poverty, it's not surprising that there's a global scramble to find new energy sources.

Many energy-hungry countries are buying up coal to fuel their power plants, as the Times' Chris Kraul writes from Colombia. Never mind that this Industrial Age fossil fuel is one of the dirtiest pollutants known to man and a leading source of the carbon and methane emissions that help produce the greenhouse gases that most scientists agree contribute to global warming.

Or, as Henry Henderson, the Chicago-based Midwest director of the Natural Resources Defense Council, puts it in Kraul's story, "Growing coal use threatens nothing less than the end of civilization as we know it."