Petrobras seeks approval for disputed offshore exploration project

(Bloomberg) – Petroleo Brasileiro SA (Petrobras) has requested authorization from Brazil’s environment protection agency to prepare a drilling rig for work at a disputed offshore exploration project, a sign that the state-controlled producer is optimistic about overcoming licensing hurdles. 

Petrobras is requesting approval from the agency, known as Ibama, to remove an invasive species known as sun coral from the hull of the drillship so it can begin work at a block in the Foz do Amazonas basin, according to a Feb. 10 letter seen by Bloomberg. The NS-42 rig is owned by Foresea.

Exxon Mobil Corp.’s discovery of billions of barrels further north in Guyana has also boosted interest in Foz do Amazonas and the wider region known as the Equatorial Margin. More than 70% of Brazil’s production is currently from a deep-water area known as the pre-salt, but Petrobras and other explorers haven’t made any significant discoveries there in more than a decade. 

Chief Executive Officer Magda Chambriard is optimistic that Petrobras will get approval to begin exploration this year, and President Luiz Inacio Lula da Silva said Wednesday that his cabinet could meet with Ibama next week to discuss the project. 

“We have to see how much oil there is, because often you dig a hole two thousand meters deep and you don’t find what you imagined,” he said in a local radio interview.

The company has been waiting since 2020 to start exploring and initiated an appeal after Ibama blocked it from drilling two years ago.