Brazil Axes Controversial Amazon Oil Project

The Brazilian environmental protection agency has refused to grant approval for a controversial offshore oil project led by state oil major Petrobras.

The agency based its decision, which was celebrated by environmentalists, on “a function of a group of technical inconsistencies.”

The FZA-M-59 block was originally under license to BP Energy but Petrobras took over in 2020. The block, located in the Foz do Amazonas basin, off Brazil’s northern coast, is close to the mouth of the Amazon River, which prompted the environmentalist protest that eventually led to the regulator’s decision.

As many as 80 organizations, including Greenpeace and WWW Brasil, called for the regulator to not grant an exploration license to Petrobras for the block, claiming sensitive ecosystems, including a coral reef.

Petrobras already operates several blocks in the area, which, according to Brazil’s oil and gas regulator, has a similar geology to the Guyana-Suriname Basin where several massive discoveries have been made.

“There is no doubt that Petrobras was offered every opportunity to remedy critical points of its project, but that it still presents worrisome inconsistencies for the safe operation in a new exploratory frontier with high socioenvironmental vulnerability,” the environmental watchdog’s head Rodrigo Agostinho, wrote in the agency’s decision, as quoted by the AP.

“Agostinho is protecting a virtually unknown ecosystem and maintains the coherence of the Lula government, which has promised in its discourse to be guided by the fight against the climate crisis,” a network of environmentalist organizations dubbed the Climate Observatory said in comments on the regulator’s decision.

Yet the same government is working on a program aiming to boost Brazil’s oil production to turn it into the world’s fourth-largest producer of the commodity. The program will seek to guarantee investment in new oil exploration in both mature fields and frontier areas, Offshore Energy reported earlier this year.

By Charles Kennedy for Oilprice.com

More Top Reads From Oilprice.com:

• IEA: Oil Bears Are Disregarding An Imminent Supply Shortage
• Oil Prices Rise Amid Expectations Of A Tightening Market
• EU Delays Key Renewable Energy Vote Over Nuclear Disagreement