Petrobras steps up pressure on regulator for Equatorial Margin drilling authorization

Brazil’s national oil company Petrobras is stepping up political pressure on federal environmental regulator Ibama regarding authorization to drill in the geologically promising but ecologically sensitive Equatorial Margin. 

Last Friday, the company’s CEO Magda Chambriard met with the governor of Amapá state, Clécio Luis, and local senators Davi Alcolumbre and Randolfe Rodrigues. 

The Amapá authorities presented opportunities and asked for Petrobras investments in the northern state, whose maritime portion is located in the Equatorial Margin.

“We’ve heard your concerns and reiterate our continued interest in exploration and the search for riches in the state of Amapá. We want to transform the state's potential into real benefits for the local population,” Chambriard, who received the authorities at the company's headquarters in Rio de Janeiro, said in a release.

The meeting took place days after local media reports said Ibama’s technical team recommended rejecting the environmental license that Petrobras has been trying for years to obtain to drill a well (dubbed Morpho) in block FZA-M-59 in the Equatorial Margin’s Foz do Amazonas basin. 

The project is Brazil’s main target in terms of new oil and gas exploration frontiers but environmental concerns have hindered drilling plans in the area. Even though it lies 200km off the coast, the block is located in a pristine region into which the Amazon flows. 

Petrobras claims that exploring the Equatorial Margin is essential for Brazil to have new discoveries given the prospect of peak oil production at the beginning of the next decade. 

The state-run firm is supported by President Luiz Inácio Lula da Silva despite criticism of what many see as a contradiction as he is trying to make Brazil a global environmental leader.

At the end of October, the head of Ibama, Rodrigo Agostinho, informed Petrobras that, despite the progress made in terms of the time it takes to provide assistance to wildlife in the event of an oil spill, there is still a lack of detail on how to adapt to good practices for handling affected fauna. 

Agostinho listed several problems mentioned by Ibama’s technical team, such as differences in information on the number of support helicopters available, the number and availability of veterinarians and the lack of definition regarding the Oiapoque oil spill clean-up and stabilization unit in Amapá. 

“Ibama's technical team points out the need for these clarifications in order to continue analyzing the license,” he said in the document which was obtained by BNamericas and can be downloaded from the Documents box in the top-right corner of the screen.   

Marcus D'Elia, a partner at Leggio Consultoria, said any decision on exploration in the Equatorial Margin should take into account the interests expressed by society and not just the objective of adding a new exploration area, which would increase production and allow exports to rise.

The consultant said exploring and producing in Foz do Amazonas will be significantly more expensive than in other areas of the country, requiring investment in infrastructure that does not exist in the region. 

“It's up to the company to assess whether, even at this cost, it's worth pursuing projects in the mouth of the Amazon. By turning the issue into a political debate, the consequence for the country is deadlock and the postponement of project development in the region for almost 10 years,” D'Elia said in a press release. 

In an interview with CNN Brasil on Wednesday, Chambriard said no one has supreme power in deciding on oil exploration in the Equatorial Margin and complained about the slowness of the environmental process. 

“I think everyone has to play their part. Our role is to show the benefit to society, to seek wealth, to seek development, to show a thriving industry. The environment people, Ibama and the state bodies, have to show us within what limits we can do this,” she said.