Brazil could launch oil exploration in an environmentally sensitive deepwater basin if state oil giant Petrobras has a “cautious” approach to drilling in the area, according to Brazilian Finance Minister Fernando Haddad.
The so-called Equatorial Margin offshore Brazil including the Foz do Amazonas, Pará-Maranhão, and Barreirinhas basins, and is estimated to hold large oil and gas reserves.
“We may need oil from the Equatorial Margin on the condition that Petrobras take environmental precautions and Petrobras is very willing to consider this,” Haddad said in a television interview on Sunday, carried by Reuters.
Earlier this year, Brazil’s environmental protection agency, Ibama, refused to grant approval for a controversial offshore oil project in the area led by Petrobras. The company was preparing to drill a well in the Foz do Amazonas area in the Equatorial Margin where the Amazon River meets the Atlantic.
The block 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.
Petrobras has appealed the decision of the environmental protection agency.
The administration of Brazilian President Luiz Inacio Lula da Silva is looking to accelerate the energy transition, but it is also betting on continued development of the oil and gas industry, to pay for more incentives for green initiatives.
Despite the efforts to accelerate emissions reductions, the Brazilian administration has signaled that there isn’t a discrepancy in Brazil’s efforts to advance the energy transition and its state oil company Petrobras pursuing drilling in domestic frontier areas.
“There is no contradiction. You indicate where you want to get and then you'll need resources for that,” Lula’s chief of staff Rui Costa said in a radio interview last month carried by Reuters.
“We are going to build a sustainable, renewable energy matrix, but it's obvious that we need to fund that transition process,” Costa added.
By Tsvetana Paraskova for Oilprice.com
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.