Petrobras wins in Amazon drilling but licensing is in doubt

The Brazilian environmental agency Ibama announced a decision on Monday that will allow state-run Petrobras to move closer to drilling oil in a highly sought after offshore region. However, it also came with a warning for future permits.

The documents seen by us show that Ibama's Rodrigo Agostinho warned against the "disorderly multiplicity of future requests for environment licenses" near the mouth the Amazon River.

Petrobras considers this area to be the most promising oil frontier in Brazil. It shares geology with Exxon Mobil's huge fields being developed in nearby Guyana.

Agostinho, however, said that it would be difficult to issue "fragmented exploration licenses", also known as AAASs in the Foz do Amazonas Basin without a comprehensive environmental study. This could take many years to complete.

Ibama requested that an AAAS evaluate Petrobras bid. However, Brazil's Solicitor-General issued a legal opinion stating that such a study shouldn't delay licensing.

Agostinho’s renewed request adds uncertainty to future licensing in the area, where Brazil prepares to offer new blocks during a June auction.

The agency chief has approved a Petrobras plan to help local fauna if there is an oil spillage in this environmentally sensitive area, which includes coral reefs, coastal Indigenous communities, and vast coral reefs.

Petrobras welcomed the decision Monday and took it as green light for a test run of its environmental emergency plans, which they called the final step before a licensing decision.

Petrobras' progress is a blow to Ibama technical staff. They had signed in February a document stating that the plan for rescuing fauna in case of a spill of oil had only "a remote possibility" of success.

Ibama refused a Petrobras drilling request in 2023. The company appealed immediately, creating a rift in Brazil's Government between environmentalists and those who pushed for oil and natural gas development. (Reporting and editing by Brad Haynes, Jamie Freed and Fabio Teixeira)

(source: Reuters)