Exploration at the mouth of the Amazon River and the future of oil in Brazil
Authorization for Petrobras to conduct oil exploration near the mouth of the Amazon River in the Atlantic Ocean should be contingent upon completing an Environmental Assessment of Sedimentary Areas (Avaliação Ambiental de Área Sedimentar – AAAS), as mandated by Brazilian environmental laws since 2012,” stated Suely Araújo, a lawyer, environmentalist, and former head (2016 to 2018) of the Brazilian Institute of the Environment and Renewable Natural Resources (IBAMA), during a webinar hosted by the Fundação FHC.
Ms. Araújo criticized the federal government’s previous decision to auction several blocks along the Equatorial Margin in 2013 without an environmental assessment of the expansive Atlantic region, which extends from the state of Rio Grande do Norte to the state of Amapá: “Had the study been conducted prior to the auction of the exploratory blocks, we could have circumvented the ongoing controversy.”
“Environmental licensing stands as the foremost tool in averting environmental harm. Removing its technical component could lead to grave incidents. Hence, the prerogative to either grant or deny research permissions at the Amazon’s mouth rests entirely with IBAMA’s president, Rodrigo Agostinho, who should rely strictly on technical grounds. It is imperative that there will not be any intrusion from political figures,” said the senior public policy specialist at the Climate Observatory.
“The Brazilian state auctioned off the blocks, generating substantial revenue. Then, another governmental body intervened and halted the research. What is the stance on the companies that acquired these rights? How does this affect the government’s credibility?” Roberto Furian Ardenghy, CEO of the Brazilian Oil and Gas Institute (IBP), raised concerns. In May, IBAMA denied the licensing application for block 59 by Petrobras, which claims the exploration rights to the potential reserves located in the Atlantic Ocean, approximately 500 km off Amapá, near the Mouth of the Amazon River.
According to Mr. Ardenghy, the fact that an Environmental Assessment of the Sedimentary Area has not yet been carried out is the government’s responsibility: “It’s not up to Petrobras or the private sector to carry out this type of study.”
With regard to the Mouth of the Amazon River region, Mr. Ardenghy pointed out that what is being debated at the moment is authorization to carry out research into the real oil potential of the region, not the actual start of exploration. “It’s possible we might not discover any oil. However, to obstruct the research process, thus concealing potential knowledge of a significant oil reserve along the Equatorial Margin, is, in my view, unwise,” he remarked.
The expertise of Petrobras in offshore oil exploration, according to the company’s former chief of staff, equips it with all the necessary capabilities to conduct research at the Amazon’s mouth responsibly and safely: “Petrobras successfully extracts millions of barrels daily in the Campos (in the states of Rio de Janeiro and Espírito Santo) and Santos (Rio de Janeiro and São Paulo) basins, located in regions of high environmental sensitivity and dense population, without a record of major incidents. The Brazilian offshore oil sector is not only safe but also highly effective,” he stated.
“In 2018, during my tenure as IBAMA’s president, I declined five drilling proposals near block 59 without witnessing such a strong response. The Mouth of the Amazon River, a biodiversity haven scarcely explored and characterized by intense sea currents, poses unique challenges. The license request from Petrobras lacks comprehensive details on the swift management of potential accidents in this area,” Mr. Aguiar contended.
He suggested pausing all licensing activities across the Equatorial Margin until an AAAS is performed. “With adequate support from the federal government in terms of human, logistical, technological, and financial resources, conducting this study could take up to two years. Obtaining a thorough understanding of both the environmental and social ramifications is crucial prior to any decisions regarding the exploration of oil in this extensive maritime zone in Brazil’s north,” he explained.
Society must engage in dialogue on Brazil’s oil future
In her introductory remarks, Suely Araújo emphasized the need to separate the specific licensing discussions at the Amazon’s mouth from the broader discourse on the future of oil exploration in Brazil and crafting an energy strategy suitable for the 21st century. “Since 2007, IBAMA has issued over 2,100 offshore drilling licenses, each determined by rigorous technical assessments on a case-by-case basis. However, formulating energy policies is beyond IBAMA’s scope. We must engage in a national conversation about our energy framework, involving all societal sectors in a transparent and thoughtful manner,” she stated.
Reflecting on the global climate crisis, the former IBAMA president highlighted the urgent recommendations of the UN Intergovernmental Panel on Climate Change (IPCC), which calls for a 43% reduction in worldwide greenhouse gas emissions by 2030 to cap the ongoing temperature rise at 1.5ºC. “Brazil is uniquely positioned to lead the charge in the energy transition and in addressing the climate emergency. Thanks to its advantageous power grid, Brazil has the potential to emerge as the world’s first ‘carbon negative economy’ by 2045,” she said.
“What kind of country do we want? Is the oil from the Equatorial Margin truly necessary, whether for domestic needs or export purposes? In an era of escalating global warming, is it prudent to base our economic growth on the export of fossil fuels? Or should we instead emphasize investments in green technologies and energy initiatives that derive from renewable sources?” said Araújo.
“I am not suggesting a complete halt to oil production in Brazil. Instead, the focus should be on limiting the number of barrels extracted to what is absolutely necessary, whether for domestic needs or export purposes. It is vital that the country prioritizes other energy sources in its energy matrix. This approach aligns with President Lula’s electoral promises to prioritize climate issues and is reflected in the appointment of Minister Marina Silva to the Environment Ministry in 2023.”
Brazil has the most extensive carbon capture program in the oil and gas sector
“Rather than focusing solely on the concept of energy transition, we advocate for the idea of energy convergence. This approach integrates various energy sources in a manner that minimizes greenhouse gas emissions,” Roberto Ardenghy emphasized, noting the inevitable economic and environmental impacts of all energy production methods.
The head of the Brazilian Oil and Gas Institute highlighted Brazil’s leading role in environmental responsibility within the oil and gas sector. “Brazil is home to the most extensive carbon capture initiative globally, particularly within the pre-salt layer, where carbon dioxide emissions are only a third of the global average. Petrobras has committed to re-injecting all CO2 produced during the extraction process back into the underwater reservoirs since the commencement of its operations in the pre-salt fields,” he explained.
“Fossil fuels, accounting for approximately 80% of global energy consumption, encompass oil and its derivatives, coal, and natural gas. These resources are expected to remain significant contributors to the world economy for decades to come. Brazil is uniquely positioned to supply fossil-based energy while significantly minimizing carbon emissions, as demonstrated in the Santos Basin,” he elaborated.
Mr. Ardenghy recalled that the Biden administration, despite its environmental pledges, has approved oil exploration in Alaska. Similarly, Norway has greenlit a substantial oil and gas venture in the North Sea. “Faced with the challenge of securing energy resources amid declining production, these nations are adapting and affirming their status as key players in the global oil and gas market. Why should it be any different in Brazil? We cannot afford to overlook the immense value lying beneath us,” he said.
The executive highlighted Petrobras’ decades-long record of producing oil and gas in the Amazon Rainforest through the Urucu project in the municipality of Coari, located 650 km from Manaus: “Eighty percent of the energy supply in Manaus is sourced from natural gas extracted from the Solimões River Basin. Without this energy source, residents would have to rely on diesel oil, which emits significantly more pollutants than natural gas.”
He also noted that approximately 70% of Brazil’s current oil output is derived from the pre-salt layer, but warned that by 2029, production in the Santos Basin is expected to peak and subsequently decline. “We have to plan for the future by identifying new reserves to replace the ones currently in use, ensuring the nation’s energy security. Brazil can and should continue its oil and gas production, maintaining a commitment to reducing carbon emissions,” he stated.
“In our perspective, it’s imperative to embrace the strategy of ‘stacking energies,’ where fossil-based and renewable energies—encompassing wind, solar, biomass, and green hydrogen—integrate and contribute to a robust, coherent, and sustainable energy framework,” he summarized.
Suely Araújo acknowledged Petrobras’s achievement in producing oil and gas more cleanly than other nations. However, she underscored a crucial point: regardless of emission reductions during extraction, production, and transportation, the combustion of oil inevitably releases carbon dioxide, exacerbating global warming. “Minimizing the impact of emissions in the production chain doesn’t change the fact that burning oil, both in Brazil and globally, is a significant source of emissions. Given the urgency of the climate crisis, reducing our reliance on fossil fuels is critical, and Brazil stands in a prime position to initiate this transition without delay,” she stated.
According to the environmentalist, the idea of increasing oil production by incorporating the Equatorial Margin alongside existing oil-producing regions would be “environmental and climate suicide.”
Watch the lecture in full (In Portuguese).
Otávio Dias is the content editor at the Fundação FHC. He is a political and international affairs journalist, a former correspondent for Folha de São Paulo in London, and former editor of the estadao.com.br website.
Portuguese to English translation by Melissa Harkin, CT and Todd Harkin – Harkin Translations.