Brazilian oil company Petrobras (PETR4.SA) will appeal a decision by environmental regulator Ibama to ban it from drilling an oil well near the Amazon, the company said Friday. The dispute is a first test for leftist President Luiz Inacio Lula da Silva, who is seeking to reconcile environmental concerns with the need to promote economic development at a time when government finances are tight.
In a statement filed with regulators, Petrobras says it is possible to maintain the equipment deployed at the drill site until May 29 at no additional cost. The filing confirms an earlier Reuters report citing sources also indicating that Petrobras expected a response from Ibama in about 10 days.
Danger to wildlife and Aboriginal communities
Earlier in the week, Ibama announced its intention to block Petrobras’ request to drill in an environmentally sensitive area in the basin at the mouth of the Amazon, South America’s largest river, near the state of Amapa. This long-awaited decision followed a technical recommendation by the regulator’s experts to reject the project. The technical report had identified discrepancies in environmental studies, inadequate communication with Aboriginal communities and protection of wildlife in the area.
In the filing, Petrobras claims to have “strictly complied” with all licensing requirements. Ibama’s decision, which reports to Lula’s environment minister, the world-renowned environmentalist Marina Silva, has angered the ruling coalition. Later Friday, the Brazilian prosecutor’s office issued a statement recommending that Ibama reject the drilling project and said it would continue to monitor the case.