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Petrobras’ Amazon Drilling Plan Faces Growing Opposition From Locals

While Petrobras is touting a potential start to drilling in an environmentally sensitive area offshore the mouth of the Amazon River, indigenous communities are increasingly opposing the exploration plans of Brazil’s state-owned oil giant, which has yet to receive an all-clear license to drill, Reuters reports, citing interviews with locals and memos and documents it has reviewed.

After spending a decade selling off many assets outside Brazil, Petrobras is now shifting its strategy to portfolio diversification, keeping the focus on the most profitable assets, the company said earlier this year. Reserves replacement, new frontiers, and increased gas supply are all pillars of the new exploration and production strategy.

Petrobras is now re-evaluating its portfolio in search of synergies and diversification and is looking at new frontiers in exploration, especially in the Equatorial Margin offshore Brazil, CEO Jean Paul Prates said in an investor presentation in January.

In October, Prates said that Petrobras expects to begin offshore exploration drilling close to the mouth of the Amazon River this year in the so-called Equatorial Margin offshore Brazil.

The Equatorial Margin offshore Brazil, which includes Foz do Amazonas, Pará-Maranhão, and Barreirinhas basins, is estimated to hold large oil and gas reserves and is expected to share geology similar to that of Guyana’s offshore, where Exxon is finding billions of barrels of oil and has developed and is developing half a dozen projects.

Petrobras currently doesn’t have permission from regulators to drill for oil and gas in the environmentally sensitive area.

Last year, Brazil’s environmental protection agency, Ibama, refused to grant approval for the controversial offshore oil project in the Foz do Amazonas area in the Equatorial Margin where the Amazon River meets the Atlantic.

Petrobras has appealed the decision of the environmental protection agency.

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As Ibama reviews the appeal to decide whether to issue a license for Petrobras to drill, indigenous communities and indigenous affairs agency Funai say that drilling would violate their rights and ask the environmental agency to consider all potential impacts of a drilling license.

By Charles Kennedy for Oilprice.com

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