Brazilian President Luiz Inácio Lula da Silva has hailed a new offshore oil discovery by Petrobras near the mouth of the Amazon River as a passport to the country's future, continuing his support for controversial oil and gas drilling in ecologically sensitive regions. Last week, the state-run oil and gas giant announced it has found oil at the Morpho-1 well in Block FZA-M-59, roughly 180 kilometres off the coast of Amapa state, with CEO Magda Chambriard saying all studies indicate substantial potential though recoverable volumes are yet to be determined. The ultra-deepwater exploratory well faced considerable regulatory hurdles, with environmental agency Ibama initially rejecting the drilling application in May 2023 before a federal regulator issued the operating license in October 2025, and drilling was halted in January after an estimated 18,000 liters of synthetic drilling fluid leaked into the ocean. The Equatorial Margin could hold between 20 to 30 billion barrels of oil across adjacent basins like Pará-Maranhão, and its geological profile mirrors the ultra-deepwater formations in nearby Guyana and Suriname, where the Stabroek Block owned by Exxon Mobil and partners holds at least 11 billion barrels of recoverable oil. Brazil's oil production hit an all-time high of 4.5 million barrels per day in July, up 19.2% year-over-year, driven by new Floating Production Storage and Offloading vessels at pre-salt fields such as Tupi, Búzios and Mero, but output is projected to peak and decline around 2034-2035, making the Equatorial Margin strategically important. Petrobras has allocated roughly $2.5 to $2.7 billion to exploratory drilling in the Equatorial Margin through 2030, and Lula has made the discovery part of his economic and energy-security pitch as he campaigns for a fourth presidential term.
Petroleo Brasileiro Petrobras SA ADR
Exxon Mobil Corp