Without oil exploration on the Equatorial Margin, production in Brazil runs a serious risk of falling sharply, reaching just 700 barrels per day by 2052.
When it comes to oil exploration in Brazil, the pre-salt layer has always been the main star, accounting for a large part of current production. But a new protagonist is emerging on the horizon: the Equatorial Margin, also called by many the “new pre-salt”. This region, which could be crucial to guaranteeing the country’s energy security in the coming decades, is at the center of a dispute between Petrobras and Ibama.
What is the Equatorial Margin?
The Equatorial Margin is an area of great interest for oil exploration, located on the northern and northeastern coast of Brazil. Despite its enormous potential, no wells have been drilled in the region so far. And the main reason is environmental obstacles. The area was auctioned by the ANP (National Agency for Petroleum, Natural Gas and Biofuels) in 2013, but issues such as licensing and environmental protection delayed exploration.
Interestingly, this region is often compared to the pre-salt layer, due to its geological characteristics. Petrobras, which is leading the development of projects in this area, believes that the Equatorial Margin could be the next major hub for oil exploration in the country. However, without Ibama's approval, everything remains at a standstill, and the forecasts are worrying.
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Brazil fails to collect R$3 trillion in revenue and blocks the creation of 300 jobs
According to the Ministry of Mines and Energy, if Brazil does not open new oil exploration fronts, such as the Equatorial Margin, the country could fail to collect almost R$3 trillion in taxes and royalties between 2032 and 2055. This amount would be crucial for the national economy, especially at a time when we are looking for new sources of revenue and job creation.
What makes the scenario even more alarming is that, without new discoveries, oil production in Brazil could fall sharply. Projections indicate that national production, which is expected to peak at 5,3 million barrels per day in 2030, could fall to 2,5 million in 2040 and plummet to just 700 barrels per day by 2052. This puts even more pressure on the need to explore regions such as the Equatorial Margin.
Additionally, oil exploration in this region has the potential to create up to 300 empregos direct and indirect, mainly in the North and Northeast of Brazil. However, while environmental licensing does not advance, these jobs also remain at a standstill.
Environmental obstacles and the role of Ibama
Although oil exploration in the Equatorial Margin could be the salvation for Brazilian production in the coming decades, the project faces environmental obstacles. The National Institute of Environment and Renewable Natural Resources (IBAMA) is the agency responsible for authorizing or blocking exploration in the area. And so far, no decision has been made.
According to Clarice Coppetti, Petrobras' director of corporate affairs, the company has already fulfilled all the pending issues identified by the agency, including the implementation of a new wildlife protection base in Oiapoque, in the state of Amapá. Ibama is expected to provide a response in 2024.
On the other hand, Magda Chambriard, CEO of Petrobras, expressed frustration with the delay, stating that the company “lost ten years” of exploration in the Equatorial Margin. According to her, licensing issues that were not resolved during this period are unlikely to be resolved quickly.
Government support for oil exploration
Despite the challenges, the Brazilian government, with the support of President Lula, strongly supports oil exploration in the “new pre-salt layer”. The president has stated on several occasions that the country cannot give up this opportunity. He has even suggested that the government, Ibama and Petrobras sit down together to make a definitive decision about the future of this exploration.
Petrobras' exploration and production director, Sylvia dos Anjos, stressed the need to drill more wells to assess the region's real oil potential. According to her, the Equatorial Margin system is similar to that of the Campos Basin, where there are already several wells in shallow waters. She also highlighted that almost 600 wells have already been drilled in the Equatorial Margin, with important discoveries in Rio Grande do Norte and even in the mouth of the Amazon.
A new pre-salt?
The Equatorial Margin is often referred to as the “new pre-salt” by industry experts. This is because the region may have oil reserves comparable to those discovered in the pre-salt layer off the southeast coast. If forecasts are confirmed, exploration in the region could once again put Brazil in a prominent position in the international market, ensuring the country’s energy self-sufficiency.
However, uncertainty about environmental licensing and the lack of drilling make it difficult to predict when this production will actually begin. To ensure that the country does not miss this opportunity, Petrobras and the government need to speed up the procedures and find a solution to the challenges imposed by environmental agencies.