Environmental Risks of Drilling the Brazilian Equatorial Margin

With the 11th round of tendering for O&G block in Brazil set to start next week, it is important to look at some of the serious risks involved in drilling for O&G in Brazil’s Equatorial Margin. Most of the offshore blocks being tendered in this 11th round of bidding are located along Brazil’s northeast and north coasts. This, according to the Brazilian government, is being done in order to de-centralize O&G production in Brazil, where most of the oil and gas E&P is done along the southeast coast, basically centered off the states of São Paulo, Rio de Janeiro and Espirito Santo.

This is all well and good, when considering the need to redistribute O&G wealth to other parts of the country, however, both the Brazilian government and the ANP (National Petroleum Agency) have been lax in researching the marine national parks that are located along this Equatorial Margin, which runs from the state of Rio Grande do Norte to Amapá, right on the border with French Guiana.

Of the 289 blocks on offer, 170 are located on the Brazil’s equatorial margin. Unfortunately the Brazilian government never got around to obtaining primary research data such as water temperature, tide variations, data on biodiversity and wind patterns for the equatorial margin and this is the main complaint being made by environmentalists. The coast from the state of Maranhão to the state of Amapá is the largest mangrove coast in the country and there is an important Marine National Park off the coast of Maranhão, the Parcel Manoel Luis National Park, which is a veritable ship cemetery with over 100 sinkings. It is made up of 18 square kilometers of coral heads that nearly reach the surface of the sea and are home to many marine species of fish and crustaceans, currents there are very strong and the tide variations are large.

To the north at the tip of Amapá is the beautiful Cape Orange national park also home to a wide variety of marine and land species. The government sustains that the primary data will be developed by the operator that acquire the blocks, even though this primary data should have been acquired before the decision to negotiate these block was ever made. This long coast on the equatorial margin is also very remote, with little if any infrastructure in place for emergency oil spill cleanup equipment. All this points to the fact that operators acquiring the block will need to make large investments in primary research and emergency response infrastructure in order to attain an environmental license for exploring the blocks. It is a notable fact that there are expectations of around 7,5 billion barrels boe of reserves in the equatorial margin that has seen very little exploration and development and this is attracting many operators, big and small to the area. We will see more on the risks of drilling in the Brazilian equatorial margin in future posts.