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Brazilian President Lula’s Coalition Divided over Amazon Petrobras Project: Environment vs Economy

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Brazilian President Lula's Coalition Divided over Amazon Petrobras Project: Environment vs Economy

Brazil’s environmental regulator, Ibama, has blocked state-owned oil company Petrobras’ Amazon oil project, creating a conflict within President Luiz Inacio Lula da Silva’s coalition between green advocates and those prioritizing economic development. Petrobras plans to appeal the decision, stating that it strictly complied with all licensing requirements. Lula has focused on environmental policies, but he is also under pressure to boost poor, underdeveloped regions in the north and northeast. Senator Randolfe Rodrigues wrote on Twitter that the governing coalition will fight against the decision, as it has major economic impacts. Petrobras can file a new request to drill in the region, but studies presented so far were not enough for the move to be cleared.

Petrobras remains committed to developing the Brazilian Equatorial Margin and ensuring the country’s energy security, but the ruling effectively ends all future development of the unexplored oil prospects at the mouth of the Amazon river. Exploration rights in the area were auctioned in 2013, but oil majors BP and TotalEnergies pulled out due to the cost of off-shore studies and difficulties in obtaining licenses for drilling, while Petrobras kept going. Environmental groups celebrated Ibama’s decision, which emphasized the need for a fair energy transition amidst the climate crisis.

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