Lula: Brazil's environmental agency must be satisfied with Petrobras tests in offshore areas.

Brazil's president Luiz Inacio Lula Da Silva said that the environmental agency Ibama must be satisfied with results of a emergency drill conducted by the state-run oil company Petrobras within the Foz do Amazonas Basin.

Petrobras already conducted the test. Ibama must be happy with the results, and Ibama is now going to grant us the permission to conduct the first experiment," Lula stated in an interview given by local news channel Rede Amazonica. Petroleo Brasileiro SA (as the company is officially known) considers the drill as a pre-operational evaluation, the final step in an environmental licensing process that it hopes will allow it to obtain a permit for drilling an exploratory well of oil and gas in the area. Lula has been pressing Ibama for years to give Petrobras the license to drill offshore in an environmentally sensitive area, as this is the best way to increase its oil and natural gas reserves. Oil industry experts believe there is a significant chance of finding large oil and natural gas reserves in Foz do Amazonas basin based on the major discoveries made in geologically comparable regions in Suriname, Guyana and Brazil.

There is still resistance to exploration from some segments of the society, and even within the government, because of the risks associated with it.

Rodrigo Agostinho, the president of Ibama, is solely responsible for granting the license. Ibama didn't immediately respond to an inquiry for comment. Reporting by Fabio Téixeira and Lisandra Parguassu, Writing by Isabel Teles, Editing by Mark Porter & Paul Simao

(source: Reuters)