Brazilian oil as a contradiction in Lula’s climate goals

While Ecuador halts oil production in the Amazon, Brazil under the Lula government invests massively in oil exploration near the mouth of the Amazon. The "FZA-M-59" exploration project is being criticized for its lack of environmental consistency, despite its climate commitments.

Share:

At almost the same time as Ecuador announced this week that it would halt oil production at an iconic field in the Amazon, Brazil was boasting of massive hydrocarbon investments, with plans to explore for oil near the mouth of the Amazon.

Brazil’s oil paradox: Lula and the environmental challenges of energy pressure

A paradox for the government of left-wing President Luiz Inacio Lula da Silva, which likes to present itself as a champion of the fight against climate change, but has been criticized for its reluctance to abandon fossil fuels.

“We hope that the Brazilian government will follow Ecuador’s example,” said Marcio Astrini, of the NGO group Observatoire du climat, in a statement.

This strategic issue was also discussed at a summit of Amazonian countries two weeks ago, in the Brazilian city of Belem, but Lula turned a deaf ear when his Colombian counterpart Gustavo Petro called for a halt to all oil exploration in the region. On the contrary, a few hours after the announcement on Monday of the result of the “historic” referendum in Ecuador to preserve the Yasuni reserve, the presidency of Brazil, home to 60% of the Amazon rainforest, announced a 335 billion reais (around 64 billion euros) investment plan in the hydrocarbons sector. The plan calls for state-owned oil company Petrobras to explore an offshore deposit, block “FZA-M-59”, located not far from the estuary where the Amazon River flows into the Atlantic.

This project has exposed differences within the Lula government. The Ibama environmental protection agency refused to grant Petrobras an exploration license on the grounds that the company had not submitted the necessary studies. But on Tuesday, the Union’s General Counsel’s office, which defends the government’s interests, issued a favorable opinion on the project, considering that the studies were “not indispensable”. Environment Minister Marina Silva, for her part, strongly called for compliance with the “technical” criteria imposed by Ibama.

Black gold “dream” in the Amazon: the Brazilian administration’s oil exploration on the Guyana line despite Amazon fragility

Returning to power in January after ruling from 2003 to 2010, 77-year-old Lula pledged to make preserving the Amazon a priority, following a surge in deforestation under the presidency of his far-right predecessor Jair Bolsonaro. But the former lathe-mill operator recently declared that the people of northern Brazil could “continue to dream” of black gold, despite Ibama’s objections.

Guyana, a small Amazonian country on Brazil’s northern border, has extracted an enormous amount from neighboring waters since 2019, to the point of being dubbed “the Dubai of South America”. The “FZA-M-59” exploration project has drawn fierce criticism from environmental organizations, indigenous leaders and the inhabitants of Marajo, an island in the heart of the Amazon river mouth. Critics cite the risk of catastrophic impact on this mangrove region with its fragile biodiversity.

“The majority of the planet is suffering the consequences of some people turning nature into a source of profit,” says Naraguassu, a 60-year-old activist from the Caruana indigenous people, who hold sacred the site where the Amazon meets the Atlantic. “Temperatures keep rising, the Earth is telling us something is wrong,” she tells AFP.

For Luis Barbosa, of the Marajo Observatory, a local NGO, it is the “very existence” of his island that is threatened by rising water levels, linked among other things, according to him, “to the continued use of fossil fuels”.

At the crossroads of energy: Oil exploration in the Amazon to launch a “sustainable energy transition

Petrobras, for its part, believes that this project “will open up a new energy frontier”, with a view to a “sustainable energy transition”. The company points out that the “FZA-M-59” block is more than 500 kilometers from the mouth of the Amazon, and promises a “robust” protocol to contain any leaks. But Brazil, the world’s eighth-largest oil producer, is already self-sufficient in this hydrocarbon, explains Climate Observatory specialist Suely Araujo, who headed Ibama from 2016 to 2019.

“We’re living through a climate crisis, so there’s no reason to persist in wanting to explore for oil in sensitive areas,” she argues.

It was under his leadership that Ibama refused a license to the French group Total to drill five offshore blocks in the same region in 2018. Ms Araujo welcomes the Brazilian president’s ambitions in the fight against climate change, but deplores the fact that he is not ready to abandon fossil fuels. For her, “the great contradiction of the Lula government is oil”.

The expansion of the global oil and gas fishing market is accelerating on the back of offshore projects, with annual growth estimated at 5.7% according to The Insight Partners.
The Competition Bureau has required Schlumberger to divest major assets to finalise the acquisition of ChampionX, thereby reducing the risks of market concentration in Canada’s oilfield services sector. —
Saturn Oil & Gas Inc. confirms the acquisition of 1,608,182 common shares for a total amount of USD3.46mn, as part of its public buyback offer in Canada, resulting in a reduction of its free float.
OPEC slightly adjusts its production forecasts for 2025-2026 while projecting stable global demand growth, leaving OPEC+ significant room to increase supply without destabilizing global oil markets.
Talks between European Union member states stall on the adoption of the eighteenth sanctions package targeting Russian oil, due to ongoing disagreements over the proposed price ceiling.
Three new oil fields in Iraqi Kurdistan have been targeted by explosive drones, bringing the number of affected sites in this strategic region to five in one week, according to local authorities.
An explosion at 07:00 at an HKN Energy facility forced ShaMaran Petroleum to shut the Sarsang field while an inquiry determines damage and the impact on regional exports.
The Canadian producer issues USD 237 mn in senior notes at 6.875 % to repay bank debt, repurchase USD 73 mn of 2027 notes and push most of its maturity schedule to 2030.
BP revised upwards its production forecast for the second quarter of 2025, citing stronger-than-expected results from its US shale unit. However, lower oil prices and refinery maintenance shutdowns weighed on overall results.
Belgrade is engaged in complex negotiations with Washington to obtain a fifth extension of sanctions relief for the Serbian oil company NIS, which is majority-owned by Russian groups.
European Union ambassadors are close to reaching an agreement on a new sanctions package aimed at reducing the Russian oil price cap, with measures impacting several energy and financial sectors.
Backbone Infrastructure Nigeria Limited is investing $15bn to develop a 500,000-barrel-per-day oil refinery in Ondo State, a major project aimed at boosting Nigeria’s refining capacity.
The Central Energy Fund’s takeover of the Sapref refinery introduces major financial risks for South Africa, with the facility still offline and no clear restart strategy released so far.
PetroTal Corp. records production growth in the second quarter of 2025, improves its cash position and continues replacing key equipment at its main oil sites in Peru.
An explosion caused by a homemade explosive device in northeastern Colombia has forced Cenit, a subsidiary of Ecopetrol, to temporarily suspend operations on the strategic Caño Limón-Coveñas pipeline, crucial to the country's oil supply.
U.S. legislation eases access to federal lands for oil production, but fluctuations in crude prices may limit concrete impacts on investment and medium-term production, according to industry experts.
Permex Petroleum Corporation has completed a US$2mn fundraising by issuing convertible debentures, aimed at strengthening its cash position, without using intermediaries, and targeting a single institutional investor.
Petróleos de Venezuela S.A. (PDVSA) recorded $17.52bn in export sales in 2024, benefiting from increased volumes due to U.S. licences granted to foreign partners, according to an internal document seen by Reuters.
The detection of zinc in Mars crude extracted off the coast of Louisiana forced the US government to draw on its strategic reserves to support Gulf Coast refineries.
Commissioning of a 1.2-million-ton hydrocracking unit at the TANECO site confirms the industrial expansion of the complex and its ability to diversify refined fuel production.