A controversial auction of oil blocks in the Amazon by COP30 host Brazil drew bids on only 20% of the areas offered, a result that green campaigners have hailed as a partial victory as they prepare to challenge the bidding process in the courts.
Nine oil companies, led by a consortium between Petrobras and ExxonMobil, secured the rights to 34 exploration blocks – 19 of them in the Amazon basin – in last week’s auction in Rio de Janeiro, which put 172 onshore and offshore oil and gas blocks up for grabs and was hailed as a success by the energy minister.
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Environmental and Indigenous rights campaigners led condemnation of the auction, saying it dealt a sharp blow to Brazil’s COP Presidency months before it hosts the next U.N. climate conference in the Amazon city of Belém. They say exploration in the sensitive area threatens fragile ecosystems and traditional communities, and undermines efforts to move away from fossil fuels.
Asked about such criticism, COP30’s Executive Director Ana Toni said reducing oil and gas production globally needed to happen in an orderly manner.“When we agreed that we should be transitioning away from fossil fuels, which is a global goal, we also said in an orderly, just and actable way,” she told the We Don’t Have Time platform in an interview during mid-year climate talks in Bonn.
‘Partial victory’ for climate fight
But some campaigners said the fact that most of the licences went unsold had brought them some solace. Juliano Bueno, technical director of the Arayara Institute, a Brazilian climate nonprofit, said in a statement the “weak market uptake” was a “partial victory” for climate campaigners and their actions against the auction.
“After intense mobilisation by civil society and five lawsuits, the auction was partially unsold,” Bueno said.
The Federal Prosecution Office (MPF) and the Oil Workers’ Unions had also called for the suspension of the auction, saying it represented a “serious contradiction” in Brazil’s climate commitments and inadequate environmental studies.
That came in spite of higher global oil prices due to conflict in the Middle East, which according to Nicole Oliveira, executive director at the Arayara Institute, would have generally “increased companies’ appetite to acquire blocks in the bid”.
She added that there had been no bids on blocks overlapping areas defined as directly affecting Indigenous lands or in the Potiguar Basin, where the marine-rich volcanic islands of Fernando de Noronha lie about 350 km (215 miles) off the coast.
Both the Potiguar Basin and the Foz do Amazonas basin are part of the Equatorial Margin, which stretches as far as Guyana and is seen as Brazil’s most promising frontier for oil exploration. Brazil wants to produce 20% more oil and gas by 2030.
Chevron, ExxonMobil and China’s state-owned CNPC, which snapped up offshore blocks in the auction, may have been encouraged by recent signs that Brazil’s state-run energy firm Petrobras might be getting closer to receiving environmental permission to drill in Foz do Amazonas.
‘No legal basis’
Brazilian climate campaigners say the government rushed to carry out the auction using environmental permits granted under former President Jair Bolsonaro that were due to expire on June 18 – just a day after the bidding – and which they say are incomplete.
The Arayara Institute said the bidding process can only be completed when the winning companies have presented several rounds of documents and signed concession contracts, which is expected to happen in November – when COP30 takes place. That timeframe would mean the deadline had been broken.
“Those contracts will have no legal basis whatsoever,” Oliveira said. “We’ll continue to challenge this process in court to ensure that the sale of these blocks is cancelled.”
Cláudio Ângelo, international policy coordinator at Observatório do Clima, a Brazilian environmental network, told Climate Home News an oil spill from offshore blocks near Belém and the Amazon River would devastate coral reefs, mangroves and the coastlines of both Brazil and neighbouring French Guiana.
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Patricia Baran, head of Brazil’s ANP oil regulator, said after the auction that the blocks acquired for exploration would have additional environmental and social protections.
But campaigners dispute that, and much of their criticism over the auction has accused the government of double standards in efforts to shift away from fossil fuels.
Ângelo called the auction a “double act of sabotage” – endangering the environment and undermining Brazil’s COP30’s leadership and the efforts of its diplomats to foster a just transition.
According to research by Oil Change International (OIC), Brazil ranks higher than Saudi Arabia in projected CO2 emissions from oil and gas expansion to 2035, though four Global North countries – mainly the United States – are driving the expansion.
Toni said it was not fair to put all the blame for increasing oil demand on producers like Brazil.
“Obviously countries producing oil have a lot of responsibilities… but consumer countries also have a lot of responsibilities,” Toni said.
