Instituto Arayara vs. ANP and others on auction of oil exploration blocks in the Amazon Basin

On December 6, 2023, the NGO Instituto Arayara de Educação e Cultura para a Sustentabilidade filed a public civil action (environmental class-action) against the National Agency for Petroleum, Natural Gas and Biofuels (ANP), Brazil’s Federal Environmental Agency (IBAMA), and the Federal Government. This lawsuit is part of a set of 6 environmental class actions filed against the 4th Bid Cycle for oil exploration blocks. The aim is to challenge the auction of oil exploration blocks located in the Amazon Basin. The plaintiff argued that the inclusion of this set of blocks is illegal as it overlaps with Conservation Units (Brazilian Protected areas), buffer zones, environmental protection areas and areas where endangered species occur. The plaintiff argued that the climate emergency scenario requires an energy transition towards clean energies and a reduction in GHG emissions, which is incompatible with the expansion of oil exploration. As a preliminary injunction, it requested that the offer in the 4th Permanent Offer Cycle of the blocks in the Amazon Basin in Sector AM-T-82 be suspended until the technical analysis that demonstrates the socio-environmental viability is carried out, in particular with reasoned opinions from bodies such IBAMA. On a definitive basis, they request that the contested blocks be excluded from the Bid Cycle. In March 2024, IBAMA and ANP presented their defenses, stating that the alleged overlapping of an exploration block with Conservation Units does not mean that it should be excluded from the bidding phase, in accordance with current regulations, but that sensitive areas are observed in the procedure. They emphasized the economic benefits of oil exploration for Brazilian society and that in the International Energy Agency's NetZero 2050 scenario, the energy matrix will still rely on oil and natural gas as primary energy and that the impacts of greenhouse gas emissions from the projects can be assessed in the environmental licensing phase under the financial burden of the entrepreneur. The ANP clarified that it promotes social participation before bidding for oil and natural gas exploration rights. They emphasized that simply holding an auction process does not impose a risk on the environment. On March 1, 2024, the Federal Government filed its defense. In addition to addressing the licensing issues already dealt with by other federal bodies, it claimed that the offer of the contested blocks is technically supported by the rules issued by the competent bodies. In March 2024, Atem Participações S.A. filed a defense in which it stressed that the bidding process does not pose a risk to the environment and that all the impacts of the projects to be explored will be assessed during the environmental licensing phase.