Brazil’s environmental agency has blocked an oil project near the mouth of the Amazon River

RIO DE JANEIRO — Brazil’s environmental regulator on Wednesday denied a license for a controversial offshore oil drilling project near the mouth of the Amazon River, sparking a celebration by environmentalists who warned of its potential impact.

The decision to reject state oil company Petrobras’ request to drill block FZA-M-59 was made “because of a bunch of technical inconsistencies,” said agency president Rodrigo Agostinho, who highlighted environmental concerns.

With Brazil’s existing production set to peak in the coming years, Petrobras has sought to secure more reserves off Brazil’s northern coast. The company has earmarked almost half of its five-year budget of $6 billion for exploration of the area.

CEO Jean-Paul Price said the first well would be temporary and that the company had never experienced a leak while drilling offshore. The company failed to convince the environmental agency.

“There is no doubt that Petrobras has been offered every opportunity to correct the critical points of its project, but it still presents worrisome inconsistencies in the new exploration boundary for safe operation with high socio-ecological vulnerability,” Agostinho wrote in his decision.

The unique and biodiverse area is home to little-studied mangroves and coral reefs, and activists and experts have said the project risks a spill that could endanger the sensitive environment.

Eighty civil society and environmental organizations, including WWF Brasil and Greenpeace, had called for the license to be denied pending an in-depth investigation.

“Agostino protects an almost unknown ecosystem and maintains the coherence of Lula’s government, which in its speech has promised to lead the fight against the climate crisis,” said the Climate Observatory, a network of environmental non-profit organizations. statement.

During Luís Inacio Lula da Silva’s first presidential term, from 2003 to 2010, huge offshore discoveries became a means of financing health, education and welfare programs. Some members of his Labor Party continue to see oil as a means of ensuring social progress.

Energy Minister Alexandre Silveira said in March that the area is a “future passport” for the development of Brazil’s northern region. In his previous remarks, Lula used the same phrase to describe offshore oil discoveries in an area known as the pre-salt.

But Lula has sought to show the environmental awakening he has undergone since, as Amazon’s champion in his campaign last year to oust Jair Bolsonaro and return to the presidency.

Activists and experts had warned that approval of the offshore oil project could threaten the natural world, but also undermine Lula’s new image as an environmental defender.

The environmental license process for block FZA-M-59 began in 2014 at the request of BP Energy do Brasil. Exploration rights were transferred to Petrobras in 2020.

Sueli Araujo, a former head of the Environment Agency and now a public policy specialist at the Climate Observatory, says Agostinho made the right call, not just for the project, but for the nation.

“In this case, the decision gives rise to a wider debate about the role of oil in the country’s future. It’s time to create a calendar to phase out fossil fuels and accelerate a just transition for oil-exporting countries like Brazil. a new exploratory frontier,” Araujo said in a statement. “Those who go to sleep today dreaming of oil wealth are likely to wake up tomorrow with a stranded asset or an environmental disaster, or both.”

Other controversial megaprojects in the Amazon that remain on the table include repairing a highway that would cut through protected rainforest, building a major rail line to transport grain, and renewing the license for a giant hydroelectric dam.


Associated Press writer Eleanor Hughes in Rio de Janeiro contributed to this report.

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