Brazilian Offshore Fields - Caveat Emptor

A decade ago Jim O'Neill, then Goldman Sachs head of global economic research and commodities and strategy research, coined an acronym that has increasingly come to dominate the last decade in a study reported entitled, "Building Better Global Economic BRICs." Despite the coy cuteness of the title, the paper's content was both serious and prescient, predicting the rise of the four BRIC economies - Brazil, Russia, India and China - over the next few years.

O'Neill's forecast has come to pass, but what is interesting about the rise of the BRIC economies is that only Russia is a major energy exporter, vying with Saudi Arabia for the world's number one position. Both India and China have to purchase expensive energy imports to fuel their economies, which leaves Brazil as the median state - since the beginning of the year, it has been a modest net energy exporter, greatly pleasing Brazil's government and treasury.

While Brazil is seemingly poised for not only soaring economic growth, its energy sector is about to boom as well, and herein lies a cautionary tale, nor for individual investors, but for those seemingly invulnerable economic colossi, the multinational oil companies.

As oil is the world's most fungible commodity oil companies have unprecedented economic clout and political support that it buys in most countries and they usually use that massive influence to improve their bottom lines regardless of the lopsided deals that they forge with resource-rich…