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RIO DE JANEIRO - Brazil's state-run oil company has been given the green light to drill near the mouth of the Amazon River, a move criticised by environmentalists as the country is set to host the United Nations Climate Summit, or COP30, in November.  

On Oct.20, Brazil's environmental agency Ibama announced it had to conduct exploratory research by drilling in the environmentally sensitive deep waters off the shore of the Amapa state.

The drilling is expected to begin immediately and last an estimated five months, Petrobras said, adding that for the moment it will not be producing any oil.

The exploratory process is likely to be up and running when countries gather at COP30 in Brazil's Amazon city of Belém.

In response, Suely Araújo, former head of Ibama and now public policy coordinator at the non-profit Climate Observatory, said in a statement that Brazil's government is "disrupting COP30 itself, whose most important deliverable must be the implementation of the determination to phase out fossil fuels."

As a backer of expanding potential , Brazil's president Luiz Inácio Lula da Silva “has just buried his claim to be a climate leader," Araújo added.

Environmental groups have called for a ban on fossil fuel drilling in the Amazon, where scientists say climate change has contributed to a devastating record drought.

They fear Petrobras’ potential success in the region will open the way for dozens of similar initiatives, consolidating the Amazon as a key global frontier for fossil fuel drilling.

Most countries in the Amazon region are highly reliant on fossil fuels for exports.

Here is what you need to know:

Where are fossil fuels drilled in the Amazon?

Some of the oldest fossil fuel blocks in the Amazon are located near the western limits of the Amazon basin between southern Colombia, eastern Ecuador and northern Peru, which have been since the late 1960s and early 1970s.

Brazil's largest inland fossil fuel fields lie deep in the Amazon forest and have been , whereas its offshore Amazon reserves are still untapped.

For most Amazon countries, oil and gas are a crucial part of their exports – 7, for example, according to 2023 data from the Observatory of Economic Complexity, an online platform that gathers data on international trade.

In Brazil, the largest economy in South America, oil and natural gas made up 16% of exports in that year, second only to soybeans. 

What are the impacts of fossil drilling in the Amazon?

In Peru, Colombia and Ecuador, from old, deteriorated pipelines are a longstanding issue, contaminating water resources, harming ecosystems and leading to health issues from toxic chemicals.

According to a 2020 report from international NGO Oxfam, there were in the Peruvian Amazon between 2000 and 2019.

In Ecuador, a 2024 report from environmental advocacy group Stand.earth and the Coordinating Body of Indigenous Organizations of the Amazon Basin (COICA) identified more than 4,600 oil spills and contamination .

The building of infrastructure, such as roads and pipelines, which attracts outsiders and fragments the forest as well as stirs up corruption in state-controlled companies, add to the impact, Stand.earth said.

Where is extraction off limits?

In a landmark 2023 Ecuador referendum, voters halted production by state oil company Petroecuador in the Yasuni Amazon reserve that had started in 2016.

Rules across Amazon countries also restrict drilling for fossil fuels and other minerals in territories with high degrees of environmental protection.

In Brazil, home to about 60% of the Amazon rainforest, mining and fossil fuel drilling are prohibited in Indigenous lands.

The country's Congress and the Supreme Court have, however, been discussing an agreement that could open up that land for such activities, going of the Indigenous movement.

Which institutions are financing drilling in the Amazon?

According to Stand.earth's 2024 report, the five top financiers of Amazon oil and gas drilling are Citibank, JPMorgan Chase, Itaú Unibanco, Santander and Bank of America.

Among them, the banks have invested more than $20 billion in oil and gas projects in the Amazon in the last 20 years, 47% of the total amount detected by the report.

The document recommended that banks rule out financing any transactions in the oil and gas sector in the Amazon region.

(Reporting by Andre Cabette Fabio; Editing by Anastasia Moloney and Ellen Wulfhorst)