ANALYSIS-Crisis dents Brazil's dreams of oil bonanza

By Stuart Grudgings

RIO DE JANEIRO, Oct 30 (Reuters) - Plummeting crude prices and the evaporation of global credit seem certain to delay development of huge oil reserves off Brazil's coast, which the government had hoped would solve many of the country's ills.

Just two months ago, with the price of oil at around $120 a barrel, Brazil was brimming with confidence over the potential 50-80 billion barrels of oil, with newspapers running cover stories and editorials on the issue daily.

President Luiz Inacio Lula da Silva, who called the oil a "gift from God," advocated taking greater a cut for the government to drive Brazil to developed-country status. Analysts said this would also boost support for his chosen successor in 2010.

But the financial crisis has delayed plans by the government and state-controlled oil company Petrobras, which needs to spend hundreds of billions of dollars to extract the 7-km (4.5-mile) deep oil from beneath a thick layer of salt below the ocean floor.

Petrobras (PETR4.SA)(PBR.N) postponed the eagerly awaited announcement of its new investment plan from this month until the end of the year. Chief executive Jose Sergio Gabrielli said the delay was due to market "uncertainty."

Petrobras has said its exploration plans were based on an oil price of around $35, but officials have said that level may be as high as $50 for the more challenging "subsalt" fields. On Thursday, oil was hovering around $68 a barrel, down from a record high of $147.27 on July 11.

Aside from the oil price slide, analysts say Petrobras faces problems getting the large number of deep-water rigs it needs as suppliers struggle with the credit crunch.

Petrobras plans to tender for 28 rigs this year and for 63 by the end of 2018, a large share of those available in the world, but some contractors have hit financing problems.