Petrobras Completes Test in Offshore Oil Area Ahead of Environmental Assessment

© Petrobras

Brazil's President Luiz Inacio Lula da Silva said on Tuesday that environmental agency Ibama should be satisfied with the results of an emergency drill done by state-run oil firm Petrobras in the country's Foz do Amazonas basin, ahead of Ibama's official assessment.

"Petrobras has already carried out the test. Ibama should be satisfied with the results of the research, and Ibama will now grant us the license to carry out the first experiment," Lula said in an interview with local news channel Rede Amazonica.

Despite Lula's claims, Ibama's technical staff has yet to finish a report on the test and whether it was a success, a source with knowledge of the matter told Reuters.

The report needs to be completed before the head of Ibama Rodrigo Agostinho makes a final decision to grant or deny the license. Ibama's staff has in the past recommended the body to deny the license, but was overruled by Agostinho, who gave the go-ahead for the emergency drill.

Ibama and Petrobras did not immediately respond to a request for comment.

Petroleo Brasileiro SA, as the company is formally known, considers the drill, a pre-operational assessment, the final stage of an environmental licensing process it hopes will ensure it obtains a permit to drill an exploratory oil and gas well in the region.

Lula has long pressured Ibama to grant Petrobras a license to drill in the environmentally sensitive offshore region, which is considered the best prospect for it to expand its oil and gas reserves.

The oil industry believes there is significant potential for discovering large oil and gas reserves in the Foz do Amazonas basin, based on major discoveries in geologically similar regions in Suriname and Guyana.

However, there is resistance from segments of society and within the government itself, due to the socio-environmental risks tied to exploration.

(Reuters)