CThe city of Oiapoque, in the state of Amapá, is located in a densely forested area larger than Wales and is an isolated but famous region in Brazil thanks to its national proverb. “From Oiapoke to Chui” focuses on the northernmost and southernmost parts of the country, respectively, to illustrate its vastness.
Although it is well known, it is a remote area with a population of approximately 30,000 people and less than 2% of homes have adequate sewage treatment. One-third of the population is indigenous from four ethnic groups, living in 68 settlements across three indigenous lands, of which 66 have less than 12 hours of electricity per day.
But while there are now hopes for significant developments, they are also accompanied by great fears.
Oiapoque, on the northern tip of Brazil’s coastline, has been transformed into an operational base for ultra-deep-sea Atlantic drilling by state-run company Petrobras in what could become Brazil’s new energy frontier.
Spanning four other countries, Brazil’s equatorial rim stretches 2,200 km (1,370 miles) along the coasts of six states and includes 19 “blocks” in the Amazon River estuary, exploration rights for which have been acquired by multiple companies. Petrobras holds a 100% stake in six blocks and has begun research on the first block.
In the midst of climate change and the energy crisis, many see it as a contradiction for Brazil to aim to become the world’s fifth largest oil producer by 2030 while positioning itself as a global leader in the energy transition.
Oil has already been Brazil’s main export for the second year in a row, surpassing soybeans.
“The world economy is organized around fossil fuels, so this contradiction exists for any country that is serious about transitioning away from fossil fuels,” says Miriam García, senior climate policy manager at the World Resources Institute (WRI) in Brazil. “We still need to increase energy efficiency and eliminate energy poverty by providing universal access to affordable renewable energy.”
The first block that Petrobras began prospecting on October 20, 2025 was FZA-M-59, which was previously under the control of BP. Building safety structures at Oiapoke, 175 km (110 miles) away, was one of the requirements set by the federal environmental regulator, Ibama, for granting research permits.
“It’s like a fire extinguisher. It has to be nearby,” says Rodrigo Agostinho, president of Ibama. “The risk of an accident does not only concern Petrobras, as there is already very active oil activity nearby.”
The fears of conservationists and environmental officials were borne out when the first accident occurred on January 4, 76 days after drilling began. Petrobras reported a leak of 113 barrels (18 cubic meters) of drilling fluid.
According to the company, “The liquid meets acceptable toxicity limits, is biodegradable and poses no harm to the environment or human health.” However, Mr Ihama expressed “serious concerns” and fined the company 2.5 million Brazilian reals (£360,000).
The chemical contains enough toxic substances to affect the basic functions of marine animals until the chemical is completely broken down, according to a now-sealed technical report. Other important microorganisms may have been eliminated in the affected areas, changing the dynamics of the food chain.
Petrobras was given permission by the National Petroleum Agency (ANP) to suspend operations for more than 30 days and resume operations after reporting the cause, replacing all sealing elements and training the workers involved.
Oiapoke has a divided population. If the potential for equatorial margins is confirmed, production would begin between 2032 and 2035. The prospect is expected to attract new residents interested in developing safety infrastructure and improving air transport, with a projected 60% increase in Amapá’s GDP and 54,000 direct and indirect jobs.
Petrobras says it prioritizes local labor, similar to its Uruk sector, and that the majority of its workforce is made up of people from the Amazon region.
So far, this prospect seems realistic. A rescue exercise conducted in August generated BRL 50 million. The share of economic activity in goods and services represents 10% of Oiapoke’s GDP. Food and rent prices rose. 800 students are waiting for vacancies in city schools. Formal temporary buildings are being constructed in seven new districts in deforested areas.
But the city’s history of political instability and repeated corruption scandals threaten its development. The mayor and vice mayor had their mandates revoked due to vote-buying, and a special election was scheduled for April 12.
Environmental impacts are also beginning to occur. “Initially, there were daily low-altitude flights by planes and helicopters. The birds would fly far away and no one would know where they were,” said Edmilson dos Santos Oliveira, general coordinator of the Oiapoke Indigenous Council of Chiefs. “We have survived for thousands of years by ingesting. [our livelihood] From nature. What will happen to us if they pollute our rivers? ”
The equatorial margin is known for its strong and complex ocean currents. It is home to some of the most biodiverse marine ecosystems on Earth, including rare types of mangroves and coral reef systems that regulate the planet’s temperature.
The study, published in the journal Nature Sustainability, says that containing an oil spill in the region would be more difficult and time-consuming than the BP oil spill in the Gulf of Mexico. Models suggest that species such as jaguars, as well as economic activities such as acai harvesting, tourism and fishing, could be threatened.
“There is no public policy for the research phase, and the damage is already irreversible,” said Luen Kalipuna, executive coordinator for collaboration with indigenous peoples and organizations in Amapá and northern Pará. “We’re not against development, but it’s not included in the impact assessment. It’s as if there are no indigenous people or land in this area. We want to be heard.”
Petrobras said it strictly complies with the requirements of the competent authorities and that this activity does not require consultation with local communities.
Activists say Brazil lacks a framework of mandatory safeguards for each stage of a project, and existing environmental laws are weakened.
“In these large-scale projects, a tremendous amount of time, money and political capital has already been invested by the time a public consultation takes place,” says Caroline Rocha, executive director of the Latin American Climate Lawyers Initiative (Lacrima).
Federal District Attorney Felicio Pontes Jr. said other large-scale developments, such as road paving, waterway openings, hydroelectric dams and oil fields, have followed a similar path in the Amazon over the decades.
“What all these projects have in common is the invisibility of affected communities, a tactic used during military dictatorships and replicated in the 21st century,” he says.
Recent history speaks for itself. Communities around the Belo Monte Dam continue to lack access to electricity and food, and fishermen are receiving insurance payments that are significantly lower than their previous incomes. The Federal Prosecutor’s Office for the State of Pará has filed a lawsuit seeking compensation for the unintended consequences in Belo Monte and Oiapoque.
Another example of a new oil exploration frontier is in the dense rainforest of the Amazon. The Uruk field, the country’s largest onshore oil and gas project, has an average production of 105,000 barrels of oil equivalent per day. Nearly 100 wells were drilled 40 years ago, and Petrobras plans to invest $500 million by 2030 to drill 22 new wells, starting with two in 2026.
The company said available fossil gas supplies 65% of electricity consumption in Manaus and five other municipalities in Amazonas state, while all states in parts of the north and northeast of the country rely on liquefied petroleum gas. However, the affected cities of Carauari and Manaus continue to face basic shortages, despite receiving royalties and taxes.
“We face a high level of insecurity, drug traffickers and violence. Indigenous action plans are not being followed and community returns are inadequate,” said Mariaginha Valle, general coordinator of Amazonas Indigenous Organizations and Peoples Collaboration. “It’s the state and the big corporations that benefit.”
In Brazil, oil and gas revenues are distributed through royalties and special participation based on proximity to producing fields. This 1980s model has been described as “outdated and fragmented” in a recent ruling by the Federal Court of Accounts, resulting in “an overconcentration of resources.”
“It is a true geographic lottery, with some beneficiaries achieving a wealth index (GDP per capita) that would put them among the 10 richest countries in the world,” the judgment said.
Promises to improve living standards with resources from “pre-salt” – a deep water resource discovered in the Atlantic Ocean 20 years ago – remain far from being realized, with a lack of governance and transparency cited.
The Brazilian Government Fund was established in 2008 and abolished in 2018 to pay public debt. The Federal Social Fund, created in 2010 and also funded by pre-salt revenues, is scheduled to publish its first annual report in June, in response to new legislation to be passed in 2025.
Two weeks after the conclusion of the COP30 United Nations Climate Change Summit, President Luiz Inácio Lula da Silva ordered his staff to present guidelines by February 6 for the creation of an Energy Transition Fund, financed by revenues from oil and gas production, for a “just and planned transition aimed at gradually reducing the country’s dependence on fossil fuels.” This document has not yet been published.
In 2024, the funds will also begin to be used to address the climate crisis, with BRL 20 billion earmarked to repair loss and damage caused by flooding in southern Brazil.
At least BRL 45 billion is caught up in judicial disputes over income distribution or is stuck for other reasons, according to a study by the Institute of Social and Economic Research (Inesc). Additionally, barriers prevent the use of royalty income to reduce inequality. Increases in basic spending are limited by fiscal rules, and about 30% of the government’s flexible spending is allocated to parliamentary amendments.
“This creates legal constraints that prevent oil revenues from being channeled into social and climate policy,” says Alessandra Cardoso, a policy advisor at Inescu. “Social relief from oil revenues is a mirage.”
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