Brazil agency recommends barring Petrobras from drilling in Amazon’s mouth

Reuters) – Brazilian environmental agency Ibama has recommended the rejection of state-run oil firm Petrobras’ (PETR4.SA) request to drill a well in the mouth of the Amazon River Basin, documents seen by Reuters showed on Friday.

Signed last week by several environmental analysts from Ibama, the report also recommended the agency stop processing environmental licenses for the block.

Petrobras has for years been trying to open up a new exploration front on the coast of Amapa state in northern Brazil near Guyana, where Exxon Mobil (XOM.N) has made important discoveries.

The oil block, FZA-M-59, was auctioned off by oil regulator ANP to Petrobras in 2013. Though they paid for studies, Britain’s BP (BP.L) and France’s TotalEnergies (TTEF.PA) gave up on their assets there due to the difficulties in obtaining drilling licenses.

According to Ibama’s report, Petrobras’ environmental studies still have “inconsistencies” even after a series of reviews.

The report pointed to lack of specific measures regarding communication with indigenous communities and a failure to revise a point on identifying and evaluating environmental impacts.

It also warned of “significant deficiencies” in Petrobras’ plan to protect the region’s wildlife.

Petrobras and Ibama did not immediately respond to requests for comment.

Another document seen by Reuters showed Werneck Sanchez Basseres, Ibama’s environmental licensing coordinator for offshore oil and gas exploration, said he agreed with the report’s assessment.

In correspondence addressed to the president of Ibama, the deputy director of licensing at Ibama, Regis Fontana Pinto, suggested Thursday that the process not be shelved immediately, giving Petrobras the opportunity to present “other improvements.”

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