Context:

Last year (2023), Petrobras was denied a license to explore block 59 in the Foz do Amazonas basin by the Brazilian Institute of Environment and Renewable Natural Resources (Ibama). The denial cited the absence of an AAAS (Avaliação Ambiental de Área Sedimentar), an environmental study that assesses the impact of fossil fuel projects in sensitive areas. Although the AAAS is not legally required for drilling permits, it is considered an important tool for evaluating the overall environmental feasibility of such projects.

In March 2024, President Lula is expected to issue a decree mandating the AAAS for environmentally sensitive areas, including the Foz do Amazonas. This decree aims to resolve the ongoing disputes between the Ministry of Environment (MMA) and the Ministry of Mines and Energy (MME) regarding oil exploration. The decree may help clarify the requirements for environmental assessments and facilitate future licensing decisions.

Read more: https://www1.folha.uol.com.br/ambiente/2024/03/lula-publicara-decreto-sobre-estudo-ambiental-para-perfuracao-na-foz-do-amazonas-diz-ibama.shtml

Resolution Criteria:

This market will resolve to "Yes" if Petrobras is granted a license to search for oil in the mouth of the Amazon River (specifically in the Foz do Amazonas basin) by the end of 2024. If no such license is granted by this date, the market will resolve to "No."