RIO DE JANEIRO, June 12 (Reuters) - President Luiz

Inacio Lula da Silva on Wednesday threw his weight behind a push

by state-run oil company Petrobras to explore the

environmentally sensitive offshore Equatorial Margin, saying

Brazil cannot give up such an opportunity.

The offshore region along the northern coast is seen as

Brazil's most promising frontier for oil exploration as it

shares geology with nearby Guyana, where Exxon Mobil ( XOM ) is

developing huge fields.

"When we start exploring the so-called Equatorial

Margin, I think we will make an extraordinary leap in quality,"

Lula told a business forum hosted by the FII Institute in Rio de

Janeiro.

"We want to do everything legally, respecting the

environment, but we are not going to throw away any opportunity

to make this country grow."

Petrobras has been pushing for a license to drill in the

northernmost part of the Equatorial Margin, near the mouth of

the Amazon River, where scientists have warned of threats to

local coral and coastal biomes.

Brazil's environmental agency Ibama denied a drilling

license in the area, citing potential impact on the environment

and

Indigenous peoples

. Petrobras has been waiting over a year for it to rule on

an appeal.

Lula at the event also said Brazil would reduce its

fiscal deficit reduction through increased revenues and lower

borrowing costs, without undermining the capacity for public

investments.

"We are getting our house in order and putting public

finances in check to ensure fiscal balance," the leftist leader

said.