Oil Rig That’s Treading Water Is Costing Brazil $1 Million a Day

By Mariana Durao and Peter Millard

(Bloomberg) –The conflict between Brazil’s ambitions to become a more responsible environmental steward while also ramping up lucrative oil exports has turned into an early test for President Luiz Inacio Lula da Silva. 

Off the coast of northern Brazil where the Amazon River enters into the South Atlantic, state-controlled oil giant Petroleo Brasileiro SA has had an oil rig on site since early December that hasn’t started drilling. The entire industry is waiting to see if the exploration well opens up a new oil frontier in an area known as the Equatorial Margin. World-class finds in Guyana, north of this site, have helped generate further excitement about the area.

The delay is costing Petrobras a fortune of about $1 million a day for the rig, three helicopters, support boats and workers, according to calculations by consultancy Wood Mackenzie Ltd. The holdup: State authorities are reviewing a permit for Petrobras to operate a wildlife rescue facility to be used in the event of an oil spill, and it could take them until mid-April to make a decision.

View entirety: gCaptain