Is Brazil going to be the next oil giant???

Some major new discoveries in Brazil...

The potential of Brazil to become one of the biggest oil producers in the world was highlighted today when BG – the former exploration arm of British Gas – reported a "supergiant" field with up to two billion barrels of recoverable reserves.

The Guara discovery builds on a series of other major successes in very deep waters off Brazil and dwarfs rival strikes such as Tiber in the US Gulf which was announced with great fanfare by BP last week.

The Brazilian oil rush not only undermines claims that the world may run out of oil soon but threatens to upset the political balance in Latin America where Hugo Chávez's Venezuela has held sway as the continent's dominant energy provider.

The BG find comes as the Brazilian government proposes laws that will tighten its grip on its newfound oil wealth through a state-owned management company.

Frank Chapman, the BG chief executive, could not hide his excitement about the latest results emanating from appraisal drilling of the Guara area. He said: "The well-test results on Guara were excellent and underscore again the potential in BG Group's extensive position in the world-class Santos Basin."

Chapman has never before given a figure for the size of Guara's reserves which are on par with fields like Forties, the biggest find in the North Sea. Neither has he commented on Tupi, in which BG also has a stake, where operator Petrobras has talked about recoverable reserves of between five and eight billion barrels.