Brazilian authority to review Petrobras’ offshore oil drilling request

(Bloomberg) – Brazil’s environmental authority said it will review Petrobras’s request to drill its first well at an offshore oil frontier known as the Equatorial Margin.

Ibama, as the agency is known, blocked on May 18 Petroleo Brasileiro SA’s exploration plan in Foz do Amazonas, an area of northeastern Brazil known for coral reefs and marine wildlife, delivering a major setback to the state-controlled oil company. Ibama cited the social and environmental sensitivity of the biologically diverse region.

Petrobras appealed and Ibama will review changes proposed in the new request, the agency said in a statement Saturday. While there’s “no maximum analysis period,” the process can take as much as a year, according to the agency.

Petrobras didn’t respond to a request for comment.

The Brazilian company has had an oil rig in place since early December, awaiting approval to drill in block FZA-M-59, costing around $1 million a day. The six-month stalemate cost as much as $200 million by some estimates.

The Equatorial Margin has similar geology to neighboring Guyana, where Exxon Mobil Corp. found billions of barrels.