Brazil’s environmental authority has rejected Petrobras’ request to drill its first well in an offshore oil frontier known as the Equatorial Margin, dealing a major setback to the state-controlled oil company’s exploration plans .
Ibama, as the agency is known, highlighted the extreme social and environmental sensitivity of the biologically diverse region that is home to indigenous lands, mangroves, coral reefs and endangered species. It has been a controversial location for drilling and has raised concerns from Brazil’s Environment Minister Marina Silva.
“There is no doubt that Petrobras was given every opportunity to fix the critical points of its project, but it still presents worrying inconsistencies for safe operations in a new exploratory frontier of high social and environmental vulnerability,” said the president of the regulator Rodrigo Agostinho in the decision. . Petrobras did not immediately respond to a request for comment.
Petroleo Brasileiro SA, as it is formally known, has had an oil rig at the site since early December awaiting approval to drill block FZA-M-59, at a cost of $1 million a day. The Equatorial Margin has similar geology to nearby Guyana, where Exxon Mobil Corp. has found billions of barrels. Brazil’s energy minister, Alexandre Silveira, has called the area “the passport to the future of Brazil’s northern and northeastern regions.”
