For Petrobras, it will gauge the frontier basin’s potential and validate years of geoscientific studies. For Brazil, it will test whether the nation can responsibly balance exploration-driven energy security with its global environmental commitments. The outcome will likely shape not only Petrobras’s frontier exploration strategy but also test its environmental governance. The impending drilling campaign also brings optimism that Brazil can increase its discovered resources, which continue to dwindle following a series of subpar wells in its prolific pre-salt basins. This year stands out as the most successful year since 2013, owing to BP’s Bumerangue find.

Long-time focus
Approval from the Brazilian Institute of Environment and Renewable Natural Resources (IBAMA), granted in recent days, follows persistent efforts from Petrobras and continuous investments in environmental studies. Following IBAMA’s formal rejection in 2023, Petrobras invested heavily in environmental studies and advanced spill-response systems, as well as carrying out a large-scale emergency simulation in August this year, involving hundreds of personnel, vessels and aircraft.

Promising but challenging region
IBAMA’s decision comes, however, against the backdrop of continued division of opinions between stakeholders in the region. Environmentally, it reopens a decade-long debate about drilling near one of the world’s most sensitive ecosystems—the Amazon River estuary—just a month before Brazil hosts the COP30 climate change conference in the Brazilian Amazonian city of Belem, reigniting the debate between Brazil’s energy ambitions and its environmental responsibilities. While a commercial discovery could attract investment and infrastructure to Brazil’s underdeveloped basins, a dry or non-commercial result could fuel environmental opposition and raise doubts over the basin’s geological prospectivity.

The equatorial margin is considered one of Brazil’s most promising yet underexplored frontier regions. Stretching from the states of Amapa to Rio Grande do Norte, it shares a geological continuity with the Guyana-Suriname Basin—a global exploration and production hub with proven multi-billion-barrel reserves. Seismic data and basin modeling suggest similar Cretaceous-age source rocks, high-quality reservoirs and effective trapping systems across Brazil’s northern offshore region. This geological analogy fuels optimism that the equatorial margin could hold tens of billions of barrels of recoverable resources, potentially proving to be Brazil’s next major oil-producing region after the pre-salt polygon. However, limited well-level data and environmental sensitivities mean that much of this prospectivity remains unproven and highly prospective, with exploration drilling yet to validate its potential.

Blocks attract interest

The decision also comes as a welcome development for other companies that acquired exploration blocks in the Foz do Amazonas Basin during Brazil’s 5th Permanent Offer bid round, earlier this year. Nineteen of the 34 tracts were awarded in the basin, with signature bonuses averaging at over $8 million per block and accounted for 85% of the total bonus tally of the latest bid round. The exercise saw participation of major oil and gas companies such as US majors Chevron and ExxonMobil, and Chinese state giant China National Petroleum Corporation, variously as operator and non-operating partners. The recent approval is expected to unlock investor confidence and encourage progress across the blocks awarded during the bid round, potentially reigniting interest in the broader equatorial margin.

A meaningful discovery at Morpho could accelerate exploration activity across the region, attract new international partners and capital, and act as a catalyst for more license awards within the equatorial margin. Additionally, as Petrobras plans to fast-track any development in the event of a commercial discovery and to start producing within seven years, success could shift government and regulatory focus toward enabling infrastructure, streamlined licensing and establishing clearer environmental frameworks. This could transform Foz do Amazonas Basin from a technically prospective frontier into Brazil’s next growth corridor for offshore development.

Authors: 

Aatisha Mahajan

Vice President, Upstream Research
aatisha.mahajan@rystadenergy.com

(The data and/or forecasts in this column are Rystad Energy's, and the opinions are of the authors.)