Petrobras is challenging regulatory demands to conduct impact studies on indigenous communities for its proposed offshore drilling project near the Amazon River, reported Reuters.  

The state-run oil company's chief exploration and production officer, Joelson Mendes, stated during a news conference on quarterly earnings that the studies were not legally required at this stage of the licensing process. 

"Petrobras will not do these studies at this stage of the licensing process, because they are not legal," Mendes was quoted by the publication as saying.  

Brazilian environmental agency Ibama has insisted on these studies before it will consider Petrobras' appeal for a drilling licence in the Foz do Amazonas basin.  

However, Mendes expects intervention from Brazil's solicitor general, believing the request for new studies to be "not adequate at this point in the licensing process".  

This stance could escalate tensions with the regulator, which previously denied a drilling licence due to potential impacts on indigenous groups and the coastal biome. 

The Foz do Amazonas basin is part of the Equatorial Margin and is viewed as a highly promising area for oil exploration, sharing geological similarities with fields in nearby Guyana where ExxonMobil is active.  

The licensing delays in this region are compounded by potential production impacts due to a labour strike at Ibama, which Mendes warned could hinder Petrobras' operational expansion. 

Amidst these challenges, Petrobras' CEO has offered to resign, with the government preparing to appoint Magda Chambriard, former head of Brazilian oil and gas regulator ANP, as the new CEO.  

The developments come after Petrobras reported a 38% drop in net recurring profit for the first quarter of 2024 compared with the previous year.