President Luiz Inácio Lula da Silva and Petrobras president Magda Chambriard attended a ceremony in Manaus on Wednesday to announce 2.5 billion reais — roughly $500 million — of new drilling investment at the Urucu oil and gas hub in the state of Amazonas. The state-controlled company will sink twenty-two new wells at the site, the first wholly new drilling at Urucu in more than a decade, with an expected output increase of around 4,400 barrels of oil equivalent per day.
Petrobras separately committed a broader 2.8-billion-real envelope to Amazonas through 2030, which will fund the expansion of natural gas production at Urucu and a modernisation of subsidiary Transpetro's river fleet of tankers, push boats and barges. Transpetro president Sérgio Bacci said the new vessels would be designed for shallow-draft, dry-season operation on the Solimões and Madeira systems, an explicit adaptation to climate-shifted river hydrology.
The Urucu Hub, located in the municipality of Coari deep in the western Amazon, marks its fortieth anniversary of operation in 2026. The site supplies the Manaus metropolitan grid through the Coari-Manaus pipeline and is the only producing hydrocarbon installation entirely within the Amazon biome. Petrobras said the wells were "infill drilling" within the existing concession boundary and would not require new licensing.
The announcement nevertheless drew sharp criticism from environmental groups, with the Climate Observatory calling it "a fatal contradiction" with Brazil's commitments under the 2025 Belém Declaration and a Greenpeace Brazil statement saying the country could not credibly host COP30 in November while expanding upstream oil in the Amazon. Lula in his remarks defended the project as "responsible, regulated drilling in a brownfield concession" and said Brazil would still meet its net-zero-by-2050 commitment.
The political backdrop is the October presidential election. Lula's polling has held around forty per cent in first-round surveys throughout the spring, against a slowly rising Flávio Bolsonaro on roughly twenty-seven per cent. The Urucu announcement is the second major energy-policy move Lula has made in two weeks; the Foz do Amazonas exploratory licence at the mouth of the Amazon, approved by environmental regulator Ibama in early May, has drawn larger and more sustained protest.
Petrobras' Urucu strategy fits with the broader pivot the company has made under Chambriard, who took over in May 2024. Net production has risen from 2.6 to 2.84 million barrels of oil equivalent a day since her arrival, dividend distribution has been maintained above eighty per cent of payout policy, and the company's ADRs have outperformed the broader Brazilian equity benchmark by twelve percentage points year-to-date.