Brazil's IBAMA grants Petrobras permit to drill equatorial margin exploration oil well

The Brazilian Institute for the Environment and Renewable Natural Resources,or IBAMA, opened the country's environmentally sensitive equatorial margin to oil and natural gas exploration activity, granting state-led oil company Petrobras a permit to drill an exploration well in the FZA-M-59 block of the Foz do Amazonas Basin, Petrobras said Oct.2.

"The drilling rig is located on site and the drilling is expected to start immediately, with a duration of five months," Petrobras said. "The company hopes to obtain geologic information and evaluate whether the area contains oil and gas deposits on an economic scale during this exploration survey. There will be no oil production.

The well will be drilled by the Ocyan-owned ODN-ll drillship, also known as NS-42, according to Petrobras.The drilling rig arrived at the FZA-M-59 block offshore Amapa.

The much-anticipated environmental license wil allow Petrobras to drill the first exploration well in the promising western portion of Brazil's equatorial margin since 2015.The so-called equatorial margin stretches along Brazil's northern coast from Amapa state in the west to Rio Grande do Norte state in the east, where Petrobras discovered oil in the Anhanga and Pitu Oeste wells in 2024.

Petrobras plans to spend $3.0 billion to drill 15 wells in the equatorial margin under the company's $111 billion investment plan 2025-2029.Petrobras holds 100% operating stakes in 16 blocks spread across the Barreirinhas,Ceara, Foz do Amazonas, Para-Maranhao and Potiguar Basins.

Brazil's equatorial margin is widely considered one of the country's last remaining offshore exploration frontiers, with geologists expecting to find similar oil and natural gas deposits as those found offshore neighboring Guyana and Suriname, government and industry officials said.The Foz do Amazonas Basin is located off the coast of Amapa state on Brazil's maritime border with French Guiana and along the same trend as major oil discoveries offshore neighboring Guyana and Suriname.

Brazil's equatorial margin is widely considered one of the country's last remaining offshore exploration frontiers, with geologists expecting to find similar oil and natural gas deposits as those found offshore neighboring Guyana and Suriname, government and industry officials said.The Foz do Amazonas Basin is located off the coast of Amapa state on Brazil's maritime border with French Guiana and along the same trend as major oil discoveries offshore neighboring Guyana and Suriname.

Latin America's biggest oil and natural gas producer needs to expand drilling because production from the subsalt frontier in the Campos and Santos Basins off the country's southeast coast is expected to peak in 2o30 and then start to decline. Subsalt production sharing blocks sold at acreage sales held in 2017-2019 also have failed to yield any big discoveries, which means Brazil needs to make new discoveries to offset the declines or face returning to the ranks of net oil importers, according to government and industry officials.

"The company remains committed to the development of the Brazilian equatorial margin, recognizing the importance of new frontiers to ensure the country's energy security and the resources necessary for a fair energy transition," Petrobras said.