The Abrolhos Islands O&G Reality

Abrolhos is short for open your eyes in Portuguese, an expression meaning beware, often used by Portuguese navigators when naming islands flanked by dangerous reefs. There is even a group of islands going by the same name along the west coast of OZ.

Not only do these two places (In Brazil and Australia) have a name in common but both are also pristine islands officially protected as ecological preserves by the countries they belong to. Both are also flanked by major Oil & Gas E&P areas. The Brazilian Abrolhos is a whale haven and contains a wonderful yet fragile flora and fauna ecosystem, both on land and underwater. The place is thought to be one of the world´s coral matrixes, where the rest of the coral in the world originated from after the last ice age, something like 16 thousand years ago.

There are also 16 O&G blocks flanking the Abrolhos islands, comprising areas pertaining to the South Jequitinhonha Basin and North Espirito Santo Basin, all of which are located within a 50 km radius of Abrolhos, where there is a national marine park (which happens to be the first NMP in Brazil). There is no oil production in this area yet but that is bound to change, unless strong environmental opposition occurs, which makes me wonder if anyone even cares. If anyone does they are sure being circumspect about it.

As it is, a Brazilian regional federal court has overruled a ban on oil exploration in the Abrolhos offshore area off the State of Bahia, located in the northeast, freeing the area to activities by Brazilian and foreign oil companies. The regional federal court in Brazil's first region upheld an appeal by ANP against the ban on the grounds of the general public's economic interest. The ban was enforced early this year after a local Federal Court obtained an injunction prohibiting oil exploration in the area on environmental grounds.

National O&G player Petrobras holds the concession to 11 of the blocks, Perenco Corp. holds to two, Queiroz Galvao holds one, Royal Dutch Shell holds one and Oil & Natural Gas Corp. (ONGC) holds  one,  according to ANP (Agência Nacional do Petroleo), the national O&G regulator. "Abrolhos is an environmentally sensitive area, frequented by whales," an ANP spokeswoman said. "All activities there have to gain environmental licensing from federal environmental institute, Ibama," she said. What she omitted was that any damn O&G area must gain environmental licensing from federal environmental institute, the famous Ibama. So significantly she meant that there will not be any special concerns or even  more stringent rules applying to this very special and unique ecosystem, and that´s that!

Well I sure hope there is at least one big momma of a reservoir among these 16 blocks (which according to my sources there actually may very well be), because it is a serious environmental risk. If you still didn´t catch my drift, think of Abrolhos as a miniature Galapagos, where each island has its unique ecology. Where there is subsea ecosystem truly unique in the South Atlantic, there is nowhere in the South Atlantic remotely like this. It sure as hell better rate as “General public's economic interest”, because there will be hell to pay if this place goes sour do to some player messing up and causing a major spill there.

What shocks me is that there is simply no environmental outcry or even environmental agencies seriously and publically questioning this decision and its potentially sad consequences. Or do the world´s major environmental agencies and world media not care! Interesting, it sure shows the strength of the O&G industry, luckily I know that at least they do care and will be careful. Well I hope anyway. I guess that´s all we can do, hope.

Claudio Paschoa