Petrobras granted environmental license to explore Equatorial Margin
Petrobras has obtained a license from Brazil’s environmental preservation authority Ibama to explore oil in the Equatorial Margin. The region, located in the north of the country, is hailed as extremely promising due to its tremendous potential for oil exploration. The agency made the announcement early Monday afternoon (Oct. 20).
According to Petrobras, the exploratory rig is in the FZA-M-059 block region, and drilling should begin immediately. The well is located in deep waters off Amapá state, 175 km from the coast and 500 km from the mouth of the Amazon river.
Drilling in the initial phase is expected to take five months. During this time range, the state-owned company should seek to obtain more geological data and assess whether there is enough oil and gas in the area. “No oil production should take place at this stage,” Petrobras noted in the statement.
The authorization comes two months after the last phase of the licensing process – the pre-operational assessment, an emergency simulation and response plan with special attention given to wildlife.
The promise of safety
Petrobras reports it has met all the requirements established by Ibama and is in full compliance with the environmental licensing process. The company’s president, Magda Chambriard, described obtaining the license as “an achievement for Brazilian society.”
“It reveals the commitment of national institutions to dialogue and to enabling projects that can represent the country’s development,” she said in the statement.
She noted it took five years of dialogue with municipal, state, and federal governments as well as environmental agencies to get the license. Chambriard believes the state-owned company was able to prove “the robustness of its entire environmental protection structure.”
“We will operate in the Equatorial Margin with safety, responsibility, and technical quality. We hope to obtain excellent results in this research and prove the existence of oil in the Brazilian portion of this new global energy frontier,” she added.
New source of oil
The Equatorial Margin has risen to prominence in recent years as a promising new area for oil and gas exploration. Recent oil discoveries off the coasts of Guyana, French Guiana, and Suriname – countries neighboring Brazil to the north – have demonstrated the exploratory potential of this region near the Equator. In Brazil, the area extends from the states of Rio Grande do Norte to Amapá.
The search for an exploration license began in 2013, when UK multinational oil company BP won the bid for the area. As part of a strategic decision, the oil giant transferred the concession to Petrobras in 2021.
Petrobras has wells in the new exploration frontier, but before the authorization was granted, it was only allowed by Ibama to drill the two off the coast of Rio Grande do Norte.
In May 2023, Ibama denied the license for the area known as the Amazon river basin, prompting Petrobras to request reconsideration.
In addition to the company, government sectors – including the Ministry of Mines and Energy and President Luiz Inácio Lula da Silva himself – advocated for the license to be granted. In Congress, Senate President Davi Alcolumbre was one of the main proponents of expediting and approving the license.
Waiting for the exploration license cost the company BRL 4 million per day, Petrobras stated.
A study by Brazil’s Energy Research Company estimates that the total recoverable potential volume of the Foz do Amazonas basin could reach 10 billion barrels of oil equivalent. For the sake of comparison, Brazil is reported to have 66 billion barrels of proven, probable, and possible reserves.
Criticism
The exploration is criticized by environmentalists, concerned about possible impacts on the environment. They also see it as conflicting with the energy transition, which entails replacing fossil fuels with renewable energy sources that emit less greenhouse gases.
Petrobras insists that oil production from the Equatorial Margin is a strategic decision aimed at preventing Brazil from having to import oil in the next decade. The state-owned company stresses that, despite the name Foz do Amazonas, the site is 540 km from the mouth of the river itself.
