On June 17, five months before Brazil hosts the COP30 climate summit in November, ANP, Brazil’s federal agency for oil and biofuels, will offer 332 areas to companies interested in prospecting for oil and gas. Media and civil society have been focusing on 47 of these areas on the Amazon’s northern shore, where the exploration block FZA-M-59 is located.

Standing 175 kilometers (109 miles) from Amapá’s coast in Brazil’s far north and operated by the state oil company Petrobras, FZA-M-59 is at the center of an arm wrestle. On one side, politicians are pushing for the exploration — with support from President Luiz Inácio Lula da Silva and the Senate’s president, Davi Alcolumbre. On the other hand, environmentalists and the federal environmental agency, IBAMA, warn of the tremendous risks of the project, which could endanger wildlife around the environmentally critical mouth of the Amazon River, the Atlantic coastline and neighboring countries.

Environmental agents had been denying Petrobras’ licensing on technical grounds, arguing there’s a high risk of oil spills in an area known for its strong sea currents. According to studies from the state company itself, the oil slicks could reach eight countries in South America and the Caribbean if an accident occurs. In Brazil, it would mean an environmental disaster for the Amazon’s rich coral reef and the world’s largest mangrove belt, besides impacts on Indigenous territories and artisanal fishing communities in Amapá.

After months of intense pressure, IBAMA is only one step away from approving Petrobrás’ licensing. According to environmentalists, the license would be extended to exploration in another 34 blocks already granted to oil companies in the same coastal zone, besides boosting the market’s interest in the 47 blocks ANP will offer in June.

In recent years, the rainforest has become the most promising frontier for the fossil fuel industry, according to a new report from the Brazilian news outlet InfoAmazônia, citing data from the Global Energy Monitor. Nearly one-fifth of the newly identified oil and gas reserves in the world from 2022-24 were located in the Amazon region, primarily off the northern coast of South America in Guyana and Suriname (around 5.3 billion of the 25 billion barrels identified).

Experts say that allowing oil exploration in FZA-M-59 block would be the first step to open all Amazon shores to oil production. Image by André Mota/Petrobrás.

However, further south into the Brazilian Amazon, these threats are going unnoticed. “We haven’t had any information about this,” Tereza Cristina Kezonazokero, from Pareci Indigenous Land, told Mongabay in a WhatsApp message. Her territory in western Mato Grosso state is only 10 kilometers (6.2 miles) from one of the 21 blocks ANP will offer in June’s bid, in the so-called Parecis Basin. “We’re looking for information so that we can organize ourselves, so that we won’t be surprised as we have been so many times before,” she said.

The basin as a whole has 352,724 km² (136,187 square miles) and overlaps with 41 Indigenous territories. According to research from Arayara International Institute, an NGO that fights fossil fuels worldwide, four of the blocks offered by ANP are within 10 km (6.21 mi) of Indigenous lands, the so-called direct influence area. Two of these territories, Ponte de Pedra and Estação Parecis, are totally surrounded by the oil and gas prospecting areas. “These territories look like islands in the middle of the blocks,” Arayara’s technical director, Juliano Bueno de Araújo, told Mongabay. By the end of May, the NGO filed two lawsuits asking the blocks to be removed from the bid.

In an email to Mongabay, ANP stated all Parecis’s blocks “are at least 10 km [6.21 mi] from indigenous lands and conservation units” and that its inclusion in the bid was approved by both the Ministry of Mines and Energy and the Environmental Ministry. The agency added that it is not responsible for consulting the communities and that all activities carried out by the companies require “licensing by the competent environmental agencies.” Read ANP’s full response here.

Fossil fuels pose an extra threat in an area already under intense pressure from agribusiness. Bacia do Parecis’ municipalities, such as Sinop, Sorriso and Lucas do Rio Verde, are known as Brazil’s agribusiness champions for their soy, corn and cotton plantations as far as the eye can see. To ease the grains’ exports, the agribusiness lobby has been pushing to construct infrastructure projects as the Ferrogrão, a railway up to the Tapajós River, which would affect at least six Indigenous territories.

Invasions from illegal miners and loggers have also increased in recent years, according to Sebastião Carlos Moreira, from the Indigenist Missionary Council (CIMI in Portuguese), a Catholic Church organization that fights for Indigenous rights. “The Indigenous situation in Mato Grosso is extremely challenging,” he told Mongabay. “And it is getting worse because there are criminal factions operating these invasions.”

Marta Tipuici Manoki lives in Irantxe Indigenous Land, located around 10 km (6.2 miles) from one of the exploration blocks. She is mostly concerned about the Juruena River Basin, which covers 29 municipalities and 23 Indigenous territories and is already affected by pesticide contamination and the proliferation of hydroelectric dams. By January 2024, 180 energy generation projects were planned in the area according to the Indigenous organization Operação Amazônia Nativa (OPAN).

“We already have a lot of problems with the river and the water, because so many power plants have been built,” said Marta Tipuici Manoki, who is part of the Juruena Vivo Network (Rede Juruena Vivo), which advocates for the protection of the basin. “And now there’s this issue of gas and oil exploration, which is something very new for us. We can’t even think of actions to take on this issue because we have so many demands. We can’t cope.”

In 2024, a similar situation led the Brazilian Federal Justice to temporarily suspend contracts in six exploration areas in Amazonas state. The blocks, won in an ANP bid by the Brazilian companies Atem Distribuidora and Eneva SA, would affect six Indigenous territories and 11 protected areas, according to Amazonas Public Ministry (MPF-AM).

The federal judge, Mara Elisa Andrade, concluded the federal administration should have listened to the Indigenous communities before offering the areas to the oil and gas companies. “The approval of the concession and the formalization of the concessions would in itself authorize the attraction of investments, including in the financial market, reducing the chances that these communities, when and if consulted, could be effectively considered in the decision-making process,” she stated in the court decision.

The decision was overturned in November 2024, however, and the case is still ongoing. According to ANP, companies have already signed contracts for all blocks with the exception of AM-T-133, which remains vetoed by the court.

An exploratory frontier

Studies trying to confirm the presence of oil and gas in the Parecis Basin started in the late 1980s, when a Petrobras report described the area as “attractive for hydrocarbon exploration.” In the 1990s, the state company drilled two wells and concluded they were “dry without evidence,” but found the presence of natural gas attached to the reservoir’s rocks.

Petrobras deepened its studies after 2008, when it won six blocks in the Parecis Basin in an ANP bid. However, in the following years the company returned all of them to ANP.

In 2016, the video of a company’s workers analyzing a dark oil and saying it was petroleum generated a buzz about the findings in the area, but Petrobras later denied the information. In 2022, the federal institution Energy Research Company (EPE in Portuguese) concluded that there is a chance of finding fossil fuels in the basin. However, “there is no published data in the literature that fully proves the existence of an active petroleum system.”

Rogério Roque Rubert, a geoscience professor at Mato Grosso Federal University (UFMT in Portuguese), said the Parecis Basin is what experts call an “oil frontier.” “There is evidence of oil, there is evidence of gas, but to turn this into a commercial venture a lot of research is still needed,” he told Mongabay. “It is a bet on a long-term project.”

Caiubi Kuhn, a geologist from UFMT, explained that Brazil has historically concentrated its oil and gas exploration on the coastline, in the so-called continental shelves. “These remain the most attractive areas,” he told Mongabay. However, the Parecis Basin may become more attractive in the future thanks to the region’s economic growth and its current dependence on Bolivian gas. “These are municipalities that have seen a lot of growth in agribusiness, and perhaps in the future this could be an attractive factor for gas extraction,” he said.

ANP offered Parecis’ areas to companies for the second time in 2013, when there was no interest in them. In 2021, they were included in the agency’s permanent offer, meaning oil and gas companies could demonstrate their interest in these areas at any time, and then wait for their inclusion in the next public offer. The presence of the Parecis Basin blocks in the June bid means one or more companies have already shown interest in them, explained Arayara’s Araújo.

“I have behind-the-scenes information that at least 12 oil companies have signaled their interest in this area,” he said. “So, in my opinion, there will be competition over these blocks.”

The area may have become more attractive after ANP cropped the blocks so they don’t directly overlap with the Indigenous territories in order to increase the companies’ legal security. “So, in the minds of some of these companies, the risk has been reduced,” Araújo said. He said he believes Lula’s clear signs in favor of the oil and gas sector, including in sensitive environmental areas such as the mouth of the Amazon River, may also be read as a positive sign by the oil and gas sector. “There has been a clear signal that Brazil wants to expand its hydrocarbon exploration frontiers. The capital markets, investors, and oil companies have seen this opportunity.”

Short-term and long-term impacts

According to ANP, 30 companies are able to participate in June’s bid. Corporations eventually auctioning Parecis’ Basin areas would spend some years researching to assess the commercial viability of the blocks. According to Rubert, it includes the presence of employees, vehicles and machinery in the area, running tests that include small explosions and perforations up to 25 centimeters (10 inches) in diameter. “Research activity on land doesn’t have much impact,” he said.

Companies may drill different parts of the block until they identify a viable exploration well. In Amazonas state’s case, the MPF-AM argued these operations would already affect Indigenous communities. “Since the first studies and drilling, the impacts on indigenous and traditional communities have been notorious, as they are pressured and harassed by real estate speculation and invasions, in addition to the environmental impacts that have consequences for their way of life,” stated the Amazonas federal prosecutor.

“In the research phase, you bring dozens or hundreds of employees to the site, as well as equipment such as jacks, trucks, tractors, and helicopters,” said Araújo, who also has a PhD in environmental risks and emergencies and is a postdoc in energy research. “If there are roads, all this will arrive by road. If not, roads will have to be opened. Then the impacts on Indigenous territories and biodiversity will begin.”

If the wells advance to the production phase, impacts tend to be higher, possibly including the burning of gases discarded by the industry. “You would have the burning of gases that generate acid rain and release particulate matter that causes cardiorespiratory diseases,” Araújo said.

In the case of oil extraction, there is also the risk of contamination of rivers and groundwater. “If you’re not careful, it could happen, but this operation [oil extraction] is much safer on land than in the marine environment,” Rubert said.

However, examples from other parts of the Amazon show that the impacts of onshore operations tend to be minimized by the industry. In March, an MPF-AM forensic report concluded that the company Eneva underestimated the impacts of its natural gas facility in the municipalities of Silves and Itapiranga in Amazonas. According to the document, the area subject to water resource contamination is significantly larger than the one considered by Eneva in its environmental impact studies.

A recent case in Ecuador shows how hard it is to control damages once an accident happens: the spill of 25,000 oil barrels from a pipeline flowed downstream for more than 80 km (50 mi) through the Esmeraldas River and its tributaries towards its mouth at the Pacific Ocean. Around 750 families depending on agriculture, livestock, and fishing were affected in the Cube village. It was the fourth major oil spill registered in the country in the last five years.

In Colombia, where President Gustavo Petro promised to halt oil extraction, Indigenous communities from Siona and Inga territories also claim their water sources have been contaminated by the Colombian company Geopark. According InfoAmazônia, they are also perturbed by the noise of oil operations and had their access to sacred areas restricted.

Large infrastructure projects may also bring profound social impacts to small Amazon communities. The municipality of Coari, in Amazonas, has been living with oil extraction since the 1980s. According to the Brazilian news website UOL, the arrival of the industry doubled Coari’s population and attracted “big city problems,” like mafias associated with drug trafficking. However, the long-awaited economic development didn’t arrive, resulting in the population suffering from high unemployment rates, lack of sanitary sewage, precarious health and education services, and the sudden rise in living costs.

“A plate of food that used to cost 12 reais [$2] now starts to be sold for 80 reais [$14],” Araújo said. “All services become more expensive, and there is competition for the already poor public services, such as hospitals and schools.”

Banner image: Oil spill in an Ecuadorian cocoa cultivation area. Photo by Amazon Watch.

Lula pushes oil drilling at mouth of Amazon despite climate risks

FEEDBACK: Use this form to send a message to the author of this post. If you want to post a public comment, you can do that at the bottom of the page.