BP Amazon reef plans dealt further blow by Brazilian regulator

The oil giants move to drill in the mouth of the Amazon river faces another delay

BPs plans to drill for oil near a huge coral reef in the mouth of Amazon river have been dealt a further blow after a regulator questioned the company’s environmental risk assessment.

Ibama, Brazil’s federal environmental agency, rejected an environmental study from the British oil giant, further delaying the company’s plans to drill in the region.

In a technical note [in Portuguese], the agency criticised the study for a lack of detail on oil spill modelling and the impact drilling could have on local wildlife, and said it required more information before allowing the company to proceed with plans to drill in the region.

The news comes just a few weeks after Unearthed revealed that the British oil giant discussed concerns over environmental licensing in Brazil with a UK government minister.

Department of International Trade (DIT) minister Greg Hands then personally lobbied Brazil’s deputy mines and energy minister Paulo Pedrosa on the issue.

When asked to comment on that story, a spokesperson for DIT said: “it is absolutely not true that our Ministers lobbied to loosen environmental restrictions in Brazil – the meeting was about improving the environmental licensing process, ensuring a level playing field for both domestic and foreign companies, and in particular helping to speed up the licensing process and make it more transparent, which in turn will protect environmental standards”.

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Amazon reef

Geologists believe there could be as much as 14 billion barrels of oil in the region, known as the Foz do Amazonas basin.

But a massive coral reef has thrown plans to drill in the area into doubt.

Scientists had long suspected there might be a reef in the region, but its size and depth was not confirmed until five years ago, just as the Brazilian government was putting out drilling licenses to tender.

BP, along with French company Total and Brazil’s Petrobras, snapped up five exploration blocks in the mouth of the Amazon in 2013.

In order to drill for oil in the region, companies have to submit an environmental impact assessments (EIA) to Ibama.

Ibama said the methodology in BPs EIA for the FZA-M-59 block,was “very limited” and the regulator needed more information about what the impact of a oil spill might be in the region. BP holds a 70% stake in the block, with the remaining 30% owned by Petrobras.

Contacted by Unearthed, BP said “requests for clarifications” from the regulator may occur several times before a permit is issued.

“As part of the licensing process for drilling a well on the FZA-M-59 block, BP has received the first technical opinion requesting clarifications to the environmental impact study that was presented.

“Under Brazilian legislation and the licensing process managed by IBAMA, requests for clarifications related to the environmental study typically can and do occur several times before the issuance of an environmental permit.”

Trade minister Greg Hands lobbied a Brazilian official on concerns from Shell and BP, according to documents obtained by Unearthed. Photo: Ben Pruchnie/Getty Images

‘30% chance of a spill hitting the reef’

Previous assessments filed by the oil majors have caused controversy.

Earlier this year, Unearthed reported that documents filed by Total and BP to Ibama showed that there was a 30% chance that a prospective spill from the company’s shared blocks could reach the reef.

At the time a BP spokesperson told us: “Operations on the blocks will only proceed when fully permitted by the Brazilian regulators.”

Just a few weeks later, Unearthed found a document showing that BP intended to use a chemical known as Corexit in the event of an oil spill in the region.

The chemical dispersant was used extensively during the Deepwater Horizon disaster in 2010 and three years later, scientists found that the chemical had a negative impact on coral larvae in the Gulf of Mexico.

BP still intends to drill in the region in 2018.

British government lobbying

The news comes as BP finds itself embroiled in a political controversy in Brazil.

We previously reported that a diplomatic telegram from the British government, obtained by Unearthed, showed that, at a “private breakfast” in Rio de Janeiro, BP – together with Shell and Premier Oil – relayed their concerns “around taxation and environmental licensing” to Greg hands, who then raised them “directly” with Brazilian official Pedrosa.

Now a group of politicians in Brazil are asking prosecutors to investigate whether there may have been any breach of Brazilian law in the award of offshore oil blocks to international companies, including BP.