Brazil’s President Luiz Inácio Lula da Silva has intensified efforts to move forward with a major oil exploration project at the mouth of the Amazon River, despite growing opposition from environmentalists, ahead of the country’s hosting of the UN climate talks in November.
Lula, 79, who seeks to position Brazil as a leader in combating global warming, has defended the oil industry as vital to the country’s economic growth. He emphasised the need for oil revenue to fund the energy transition, calling it an essential yet costly endeavour.
He made these comments while Brazil’s environmental protection agency, IBAMA, deliberates whether to approve an exploration license for Petrobras, the state-owned oil giant, to explore offshore in the Equatorial Margin, an area covering 350,000 square kilometres off northern Brazil, about 500 kilometres from the Amazon River mouth. Petrobras estimates the area could hold reserves of 10 billion barrels of oil.
While Brazil’s proven oil reserves stood at 15.9 billion barrels in 2023, the project has drawn criticism due to the role of fossil fuels in climate change.
Lula’s administration saw early environmental progress, including a sharp decline in deforestation and heightened climate targets. However, the new oil project raises concerns, particularly as Brazil prepares to host COP30 in Belem in the Amazon region, where the conference will focus on global climate action.
Critics argue that increasing fossil fuel production is incompatible with the country’s climate ambitions. Suely Araujo from the Climate Observatory noted that financing the energy transition with oil revenue contradicts environmental preservation goals, particularly in the Amazon, which plays a crucial role in regulating the global climate.
Despite Brazil’s robust renewable energy sector, which accounts for nearly half of its consumption, the country remains Latin America’s largest oil producer and one of the top eight globally.
Environmental and Indigenous rights groups have raised alarms, warning that the project threatens vulnerable ecosystems and Indigenous communities. Toya Manchineri, from the Coordination of Indigenous Organizations of the Brazilian Amazon, cautioned that the project could cause irreversible environmental damage and pollution.
After IBAMA blocked Petrobras’s initial exploration request in 2023, the company submitted a revised plan in 2024, which is still under review. IBAMA has called for further details on how Petrobras would handle potential oil spills in the biodiverse region.
The oil project has also caused divisions within Lula’s government. Environment Minister Marina Silva, who oversees IBAMA, stated that the decision would be purely technical and not politically influenced. Meanwhile, Energy Minister Alexandre Silveira has urged IBAMA to approve the project promptly, citing its importance for Brazil’s economic development.
