Photo: Cezar Fernandes/Divulgação

The auction of extraction blocks for oil fields promoted by the government of President Lula da in Brazil’s Equatorial Margin, particularly in the Amazon River Mouth, has reignited debate about socio-environmental risks and the predatory exploitation logic imposed by large international conglomerates. In yet another chapter of neoliberal advancement over the country’s natural assets, the National Agency for Petroleum, Natural Gas and Biofuels (ANP) held an auction on Tuesday 17^th June for concessions of 172 areas for oil exploration, of which 34 blocks were purchased in strategic [major sedimentary] basins such as Parecis, Amazon River Mouth, Santos and Pelotas.

In total, nine companies disbursed more than R$ 989 million [approximately EUR170 million] in bonuses to guarantee the right to explore these areas. Among them, giants such as ExxonMobil, Chevron, Shell and the Chinese state-owned CNPC, all with a track record of environmental impacts in different parts of the planet. In the Amazon River Mouth basin alone – dubbed the “new pre-salt” [referring to Brazil’s massive offshore oil discoveries in pre-salt rock formations] for its estimated potential of up to 10 billion barrels, according to Brazil’s Energy Research Company (EPE) – 19 of the 47 blocks were acquired by these multinationals, at a value exceeding R$ 844 million [approximately EUR 140 million].

Brazil’s state-owned oil company Petrobras also actively participated in the auction. According to Sylvia Anjos, executive director of Exploration and Production at the state company, “the company secured all the areas it intended”, concentrating bids on the Amazon River Mouth. The state company itself is still attempting, together with Brazil’s environmental protection agency Ibama to obtain licensing to drill block FZA-M-59, located off the coast of the northern Brazlian state Amapá, an area that forms part of a region of extremely high environmental sensitivity and indigenous presence.

Despite the official narrative about job creation and regional development, defended by ANP and the federal government, what is underway is the consolidation of a predatory extractivist model that ignores the climate emergency and warnings from the scientific community. The Equatorial Margin – which comprises five sedimentary basins in northern and northeastern Brazil – harbours biodiversity that is still little studied and approximately 13,000 indigenous people, who could suffer direct impacts in case of accidents, such as oil spills.

“Licensing without adequate socio-environmental studies represents a serious violation of fundamental rights,” warned the Federal Public Prosecutor’s Office, which attempted to legally block the auction. The action argued that exploration without proper safeguards violates international treaties for environmental protection and traditional populations.

Another critical point is the proximity of offshore blocks on offer to environmental protection areas. The Potiguar Basin in northeastern Brazil, for example, has blocks situated just 398 km from the Fernando de Noronha archipelago (classified as World Heritage by UNESCO). According to researchers from Brazil’s biodiversity conservation institute ICMBio, a potential spill in that region could reach the archipelago in a short time, due to ocean currents – a real threat to one of the country’s greatest natural heritage sites.

Experts also point out the contradiction of insisting on expanding the fossil frontier at a time when the world is discussing the end of oil and energy transition. “The Equatorial Margin should be treated as an ecological and cultural heritage of humanity, and not as the new energy colony of oil companies,” states Ilan Zugman, director of 350.org Latin America, the international climate action organisation that monitors the sector’s threats to the global climate.

Although 31 companies were qualified for the auction – including representatives from 11 countries – only 172 of the 332 blocks initially offered received bids. The lack of interest in areas such as the Potiguar Basin may reflect social pressures and risks already identified by environmental entities and the Public Prosecutor’s Office.

The concession of blocks in regions as sensitive as the Amazon River Mouth exposes, once again, the contradiction between the environmental discourse of the Lula government and its practice, which encourages fossil fuels and agribusiness through the lies of so-called “green capitalism”. The defence of carbon markets and the financialisation of nature, in addition to billions in tax exemptions for agribusiness, demonstrate the government’s real environmental priorities as much as this privatising stimulus to the fossil fuel industry.

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Movimento is a socialist magazine affiliated with the Socialism and Liberty Party (PSOL), Brazil’s main left-wing political party]