Environmental licensing emerged as an equally critical constraint. TotalEnergies and BP both held acreage in the Foz do Amazonas basin from the early 2010s but surrendered blocks to Petrobras between 2020 and 2021 after Ibama rejected drilling applications. Olivier Bahabanian, TotalEnergies’ Brazil exploration chief, stated that waiting two to four years without approval certainty proves incompatible with exploration economics. The basin remains a proving ground for regulatory consistency as Petrobras advances its own drilling campaign.
The regulatory friction occurs as Brazil faces intensifying competition for exploration capital across Latin America. Guyana, Suriname, Argentina and Venezuela are actively courting the same international majors present in Brazilian waters. ExxonMobil, which produces 900,000 barrels daily in Guyana, expressed interest in Brazil’s Equatorial Margin at the conference, while Shell evaluates Barreirinhas blocks and Equinor pursues post-Bacalhau licenses.
Despite the complaints, no operator indicated plans to exit Brazil. The critique centered on marginal project economics rather than wholesale portfolio reconsideration. One senior executive acknowledged that Brent crude near $100 per barrel masks regulatory inefficiencies that would become untenable at lower prices. The tax dispute continues through Brazilian courts, with multiple producer groups challenging the export levy’s constitutionality and extension beyond its stated temporary nature.
This article was curated and published as part of our South American energy market coverage.
