Petroleo Brasileiro SA, as the company is formally known, is constantly under government pressure to shield consumers from volatility in the oil markets, while private investors fear the company would sacrifice profits to subsidize politically sensitive motor fuels as it has done in the past.
Brazilian President Luiz Inacio Lula da Silva is pressuring the country’s environmental regulators to approve oil drilling near the mouth of the Amazon River, arguing that revenue from this new fossil fuel supply could help finance a transition to green energy. Located in the Equatorial Margin, the offshore site, Bloc 59, is about 160 kilometers (99 miles) off Brazil’s eastern coast. Brazil’s environmental regulator rejected a license in 2023, citing issues such as the risk of oil spills that could affect one of the world’s most biodiverse regions. State-run oil giant Petrobras (NYSE:PBR) estimates the potential reserves in the basin at 10 billion barrels.