RIO DE JANEIRO, June 17 (Reuters) - Exxon Mobil ( XOM )
and Chevron ( CVX ) on Tuesday took their first steps toward
eventually exploring oil in Brazil's Foz do Amazonas basin,
scooping up offshore blocks auctioned by the country in the
promising but environmentally-sensitive area.
The move marks the first recent endeavor from companies
other than Brazil's state-run oil giant Petrobras in
the ecologically biodiverse area, triggering backlash from
environmentalists who say it will increase the risk of
contamination of water sources and ecosystems that both wildlife
and Brazilians depend on.
Plans by Chevron ( CVX ) partnering with China's CNPC and Exxon with
oil giant Petrobras to drill for oil in Foz do Amazonas basin,
located off the coast of the Amazon rainforest, are
controversial due to the environmental importance of the region
and have faced delays in obtaining permits.
Two consortia involving Petrobras and Exxon Mobil ( XOM ) secured
ten blocks in total, with the Brazilian company acquiring five
blocks as operator, while the U.S. giant purchased the other
five as operator.
Chevron ( CVX ) in a consortium with China's state-owned CNPC
acquired a total of nine blocks, with Chevron ( CVX ) as
operator.
The area, home to vast coral reefs and coastal Indigenous
communities, is considered a frontier for oil exploration as it
shares geology with nearby Guyana, where Exxon Mobil ( XOM ) is
developing huge fields.
The auction result was celebrated by Brazil's Mines and
Energy Minister Alexandre Silveira, who said that exploration in
the Foz do Amazonas region was a "winning ticket" to reduce
poverty in northern Brazil.
"The interest from the U.S. companies, Chevron ( CVX ) and Exxon,
which already operate in Guyana, demonstrates that our potential
is gigantic," Silveira said in a statement.
LICENSING HURDLES
Petrobras has long been seeking clearance to drill in the
area. A decision by environmental agency Ibama last month let it
move a step closer to the goal, but came with an important
caveat for future permits in the area.
Chief Executive Magda Chambriard told Reuters earlier this
month she believes Petrobras will clear the last step to getting
a permit to drill in the second half of July.
"We scooped up what we wanted and seeing more companies
getting in, the majors, puts more pressure on the license for
exploration in the Equatorial Margin to be granted," a Petrobras
source said, referring to a broader offshore region of which Foz
do Amazonas is a key basin.
Silveira said he was certain Ibama would speed up the
process of granting licenses after the auction, which happened
as Indigenous organizations and non-governmental organizations
like the Arayara Institute protesting outside of the auction
venue against what they called "doomsday auction."
"Drilling new wells will increase the risk of environmental
disasters, worsen the climate crisis and deepen inequalities,"
Greenpeace Brasil's oceans coordinator, Mariana Andrade, said in
a statement.
Brazil's government is set to obtain 989 million reais
($180.79 million) in signing bonus for auctioning off 34 blocks.
($1 = 5.4704 reais)