(Bloomberg) — Brazil’s government may have removed one of the main hurdles for Petrobras to drill in a promising offshore oil region, a move that could escalate a standoff between the oil company and environmental authorities.
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A major impact study demanded by the Ibama environmental agency is not necessary for the project, the Attorney General’s Office (AGU) said in an advisory released Tuesday. It sent the matter to a mediation chamber to begin a reconciliation process between the federal agencies involved.
Petroleo Brasileiro SA, as the Rio de Janeiro-based producer is known, is “fully prepared” to participate in the mediation to resolve any disagreements, a message said on Wednesday. The oil giant believes it has met all the necessary requirements to get started, adding that it is open to new requests.
In May, Ibama blocked Petrobras from exploring the Foz do Amazonas basin on environmental and social grounds. Petrobras’s drilling permit was auctioned in 2013 and has since ceased.
Read more: Brazil to allow oil drilling in Amazon, marring Lula’s top
Mines and Energy Minister Alexandre Silveira supports the exploration project and has asked the Attorney General’s office to decide whether an impact study was necessary. Meanwhile, Environment Minister Marina Silva, who oversees Ibama, has expressed concern about the development of a region offshore from where the Amazon flows into the Atlantic Ocean.
Silva has so far resisted pressure from other parts of the government. The lack of a major impact study wasn’t the only reason Ibama blocked Petrobras’ drilling request, the Department of the Environment said in an emailed response. It also cited “inconsistencies” in the information provided by the company.
Ibama said it has received the attorney general’s opinion and will comment in due course.
The government of President Luiz Inacio Lula da Silva faces competing priorities: growing the economy and protecting the environment. The debate over offshore drilling in Brazil comes as Colombia and Ecuador are taking steps to curb the oil industry.
Ecuadorian voters this month passed a referendum to close a major oil field in the Amazon region. Colombian Gustavo Petro opposes oil exploration in new areas and denounced climate change ‘denial’ at an environmental summit in Brazil earlier this month.
Read more: Brazil Petrobras blocked from drilling in key offshore zone
(Updates to add commentary from Petrobras, the Department of the Environment and Ibama)
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