Petrobras Reports Ultra-Deepwater Oil Discovery Off Amapa, Targets Fifth-Largest Producer Rank

Petrobras announced an ultra-deepwater oil discovery off Amapa on Friday the 14th, in the Equatorial Margin at the mouth of the Amazon river. The company's chief executive said the objective is to make Brazil the fifth-largest oil producer in the world.

The find sits in block FZA-M-59 on the Equatorial Margin. That trend runs from the border with French Guiana to the coast of Rio Grande do Norte. President Lula is due in Amapa on Monday the 17th to see the Petrobras drillship, leaving Brasilia at 08:00 and travelling to Oiapoque to view the operation up close.

Magda Chambriard, president of Petrobras, made the announcement two days before the official start of the election campaign on Sunday the 16th. Lula called the discovery "a historic day for Amapa and for Brazil".

The announcement has already opened discussion inside the government and among PT members about a possible change to the rules governing exploration of Equatorial Margin reserves. Petrobras also disclosed that 16 state piped-gas distributors have opted into its new mechanism protecting against gas price volatility. Separately, a Petrobras carbon capture and storage pilot in Rio de Janeiro is scheduled to start operating in 2029, followed by three years of injection and three years of monitoring.

Speaking in Amapa, Lula linked the acreage to global supply risk. If Trump keeps waging war with Iran and closes the Strait of Hormuz, Lula said, Brazil will open the Equatorial Margin to the whole world.

The discovery lands in a domestic political sequence. Amapa is the home state of Congress president and senator Davi Alcolumbre (UB-AP), described as part of the Centrao. On Friday the 14th, Alcolumbre reopened negotiations with Lula and announced that three bills of importance to the government would move to a vote: the public security bill, an end to the 6 x 1 working week, and a critical minerals policy covering rare earths. The working-time debate concerns cutting the schedule from 6 x 1 to 5 x 2, giving workers two rest days a week.

Lula and Alcolumbre had been at odds for close to four months before the recent rapprochement. One agreed point was Lula's explicit backing for the reelection of Amapa governor Clecio Luis of Uniao Brasil, who is struggling in opinion polls. Chamber president Hugo Mota (Republicanos-PB), also of the Centrao, had announced support for Lula in the preceding days. PSD president Gilberto Kassab, running as vice on the ticket of party candidate Ronaldo Caiado of Goias, said the Centrao has picked a side and that side is Lula, adding that he sees no path to victory for opposition candidate senator Flavio Bolsonaro (PL-RJ), as electoral polling has indicated so far. Lula is seeking a fourth term.

On the regional supply picture, the text notes that neighbouring Venezuela holds the world's largest oil reserve, and that Washington currently sets the political terms there after Maduro was removed. On rare earths, China is described as the largest current supplier to American industry, a dependence Trump wants to reduce in Brazil's favour.

Brazil is also working the downstream and diplomatic channels. Lula held a videoconference with Mexican president Claudia Sheinbaum on Thursday 13 August, according to a note from the Brazilian social communication secretariat. The two presidents welcomed progress in talks between Petrobras and Pemex following a memorandum of understanding signed in June, and said they expect joint projects between the companies to begin soon. Lula told Sheinbaum that trade between Brazil and Mexico remains below its potential. Both countries have recently become targets of the unilateral policy adopted by US president Donald Trump, according to the report.

The two leaders also committed to continuing high-level contacts to advance matters of common interest, the secretariat said. They reaffirmed support for former Chilean president Michelle Bachelet's candidacy for United Nations secretary-general, and Lula presented first lady Rosangela da Silva's proposal for an international initiative against femicide, which Sheinbaum received positively.

Press access to the drillship is not expected because of space constraints and security, with Lula scheduled back in Brasilia around 19:50.