A Brazil-based civil society organisation has filed multiple lawsuits against the government for holding an auction of oil exploration blocks – which will allow drilling at the mouth of the Amazon basin – on 17 June, months before the Latin American nation hosts the COP30 United Nations climate summit.
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Nicole Figueiredo de Oliveira, executive director of nonprofit Instituto Internacional Arayara, said the auction held by state regulatory body Brazilian National Agency of Petroleum, Natural Gas and Biofuels (ANP) contradicts the government’s climate rhetoric and threatens the country’s credibility at COP30.
“Brazil is playing [the role of] world leader in climate action, was one of the first countries to submit its nationally determined contributions (NDCs), and Brazil president [Luiz Inácio Lula da Silva] just came to Nice, France and talked about oil and gas and ocean conservation,” de Oliveira said a press briefing before the auction.
Yet by allowing the auction to go ahead, it is opening up a massive frontier for offshore oil and gas, she said. “At the same time, the environmental agency is also being pressured to license the blocks in very sensitive areas where we do not have enough data and information about the risks that this poses,” she added.
Arayara has filed five lawsuits that include complaints about how the oil exploration blocks up for bids either have outdated environmental assessment studies or expirations a day after the auction, which it says “poses a legal risk to investors”.
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Brazil is playing [the role of] world leader in climate action … At the same time, [its] environmental agency is also being pressured to license the blocks in very sensitive areas where we do not have enough data and information about the risks that this pose.
Nicole Figueiredo de Oliveira, executive director, Instituto Internacional Arayara
Environmental activists have highlighted that some of the land overlap with Indigenous territories or conservation areas, including marine reserves around the island paradise of Fernando de Noronha. Arayara also argued that ANP failed to transparently assess the true scope of greenhouse gas emissions from the exploration and potential production of oil and gas at these sites.
Rio de Janeiro-based nonprofits Observatório do Clima and Instituto Futuro are joining the legal case but as “amicus curiae” or impartial advisors that offers expertise to assist the court in making a decision. Some Indigenous associations are also evaluating the complaints, said de Oliveira.
Brazil’s National Agency of Petroleum, Natural Gas and Biofuels (ANP) opened 172 exploratory oil blocks for bidding on 17 June. In the end, only 34 blocks, or 20 per cent of the total offering, received bids from nine companies. Image: Arayara
At the auction, the country’s first in about 18 months, Chevron, Karoon, ExxonMobil, Petrobras, Shell, Dillianz, Equinor, CNPC, and Petrogas were the nine companies that won bids for 34 blocks, 23 of which are categorised as contentious land as part of Arayara’s legal case. Total signing bonuses collected reached US$179.8 million, which the government has lauded as a success; the Brazilian authorities have been under pressure to boost the country’s revenue.
President Luiz Inacio Lula da Silva has spoken in favour of oil production several times – even clashing with environment oversight body, the Brazilian Institute of the Environment and Renewable Natural Resources (IBAMA), over a delay to award permits to drill the equatorial margin. At the same time, ahead of COP30, he has positioned himself and the country as a leaders in the fight against climate change.
Brazil is one of the few G20 members that have submitted updated NDCs under the Paris Agreement.
Low market interest in the auction?
At the auction, exploration rights were offered for 172 oil blocks, covering an area of 145,600 km2 – a territory equivalent to the size of Bangladesh. But with only 34 blocks receving bids, Urgewald has described it as a sign that the “massive pressure and resistance from Brazilian civil society” paid off.
The results reflect a “low market interest in the auction”, said Klara Butz, finance campaigner at Urgewald.
“The nine oil and gas companies involved [will have to] bear responsibility for massive environmental destruction in this highly sensitive region. The auction is further proof of how willingly big oil and gas companies throw responsibility to the wind for the sake of short-term profits,” she added.
Indigenous groups hold a rally against the auction on 17 June in Rio de Janeiro. Image: Arayara
Claudio Angelo, international policy coordinator at Observatorio do Clima, said that it is not the first time a Brazilan auction sees many blocks unsold.
Angelo cited the Latin American nations’ last offshore oil auction in 2023 on the last day of COP28, when ANP held a tender that had 600 exploration and production areas on offer, although only 192 were assigned in the end.
Often, before companies can start exploration, they must obtain a drilling licence from IBAMA. But the former journalist said that for auctions of oil blocks that do not yet have these licences, court complaints are regarded as a natural route for NGOs to take, to protest these actions.
Chinese oil and gas firms Sinopec, China National Offshore Oil Corporation (CNOOC), and China National Petroleum Corporation (CNPC) were among the companies that took part in the auction, according to Urgewald.
In 2017, Sinopec and CNOOC won rights to develop six pre-salt oil reserves, which refers to the deep ocean waters where the densest of oil blocks are found, off the coast of Brazil, along with China National Oil and Gas Exploration and Development Corp (CNODC).
The offshore blocks previously explored by the Chinese companies have no direct overlap with traditional communities, though Arayara noted that one of the blocks that CNOOC has been surveying has been found to overlap with a coral reef area.
Eco-Business reached out to CNOOC to request for comment on the alleged breach but the company has yet to reply.
A monitoring platform by Arayara shows that CNOOC has been exploring 22 areas for oil and gas in Latin America, mostly in Argentina. Image: Arayara
“China and Brazil have a very good relationship in energy cooperation, and Chinese oil producers aim to further develop their deep-sea drilling technologies,” Zeng Xingqiu, an oil industry veteran and former adviser to the China National Petroleum Corporation, was previously quoted in local Chinese media.
Latin America has been a hotspot for oil and gas exploration. Since 2020, oil and gas exploration has expanded to an area of about 359,480 square kilometres, almost the size of Japan, according to Urgewald, even as the International Energy Agency (IEA) stated that no new oil and gas fields were needed to achieve net zero emissions by 2050.
