[1/2] A logo of Brazil’s state oil company Petrobras is seen at its headquarters in Rio de Janeiro, Brazil October 16, 2019. REUTERS/Sergio Moraes
SAO PAULO, May 18 (Reuters) – A decision by Brazil’s environmental regulator to block state oil company Petrobras’ Amazon oil project has highlighted tensions in President Luiz Inácio Lula da Silva’s coalition between supporters of green and those who prioritize economic development.
Ibama on Wednesday afternoon said it would block a request by state oil giant Petrobras ( PETR4.SA ) to drill at the mouth of the Amazon near Amapá, in a long-awaited decision that followed a technical recommendation of Ibama experts to reject the project.
In a filing, Petrobras said it planned to file an appeal for Ibama to reconsider its decision, saying it “strictly complies with all the requirements of the licensing process.”
Ibama’s decision, which is overseen by Lula’s environment minister, world-renowned environmentalist Marina Silva, has angered some within the ruling coalition.
Lula, who hails from the impoverished northeast, has staked his international reputation on reversing the environmental backsliding under his far-right predecessor, former president Jair Bolsonaro. But he is also under pressure to deliver much-needed growth to the poor and underdeveloped regions of the north and northeast, and wants state-owned Petrobras to be a driver of that growth.
Senator Randolfe Rodrigues, who represents Amapa State, said Ibama had taken a decision with a huge economic impact on the state without considering the views of the people of Amapa or their state government. Rodrigues is a strong ally of Lula who ran his presidential campaign last year.
“We will fight this decision,” Rodrigues wrote on Twitter, adding that “the people of Amapa want to have the right to be heard.” He later announced he was leaving his party, the centre-left Sustainability Network, in light of the decision.
The Sustainability Network was founded in the early 2010s by Silva, the Minister of the Environment, who appointed the head of Ibama Rodrigo Agostinho.
Agostinho told GloboNews TV on Thursday that Petrobras could submit a new application for drilling in the region, but noted that the studies submitted by the company so far were not sufficient to approve the move.
Petrobras said in its filing that it was not giving up hope in its plans to develop an oil-rich region with potential reserves of up to 14 billion barrels of oil.
“The company remains committed to the development of the Brazilian Equatorial Margin,” he said, adding that it would “guarantee the country’s energy security.”
“THE DECISION IS FINAL”
Despite Petrobras’ stated intentions, the ruling effectively ends all future development of unexplored oil prospects at the mouth of the Amazon River, former Ibama director Suely Araujo told Reuters.
Araujo said that even if Petrobras undertakes the deeper studies requested by Ibama, the final word still rests with the regulator. “The decision is final,” he said, adding that he hoped Lula would support Ibama’s decision.
Petrobras shares fell about 0.5% on Thursday.
Exploration rights to the area were auctioned in 2013, but oil majors BP ( BP.L ) and TotalEnergies ( TTEF.PA ) pulled out because of the cost of offshore studies and difficulties in obtaining drilling licenses, while Petrobras it continued. .
Neither Lula’s office nor the environment ministry responded to requests for comment.
Environmental groups celebrated Ibama’s decision.
In a statement, Greenpeace said Ibama has emphasized the need for “a just energy transition, rather than insisting on another oil exploration frontier in the context of the climate crisis.”
Ibama has “postponed the end of the world”, proclaimed the environmental group Observatorio do Clima.
Report by Eduardo Simoes; Editing by Steven Grattan
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