Newcomers arrive and Amazon forests are cleared as Brazil explores for oil

On a recent morning in Oiapoque, Brazil, Reginaldo Nunes Fonseca watched heavy rain fall on an area called Nova Conquista — “New Conquest” — where pristine Amazon rainforest stood just a year ago. The downpour temporarily halted construction of his home, but something else has kept Fonseca and thousands of other migrants in limbo: waiting for an economic boom that remains uncertain.

The small city in Brazil’s northern Amapa state has experienced a surge of newcomers since Petrobras, Brazil’s state-run oil company, secured environmental licensing last year for offshore drilling in the Equatorial Margin, approximately 180 kilometers off the coast.

“I thought, well, that’s good — the city is going to grow, there will be a lot of job opportunities,” said Fonseca, who relocated from the northeastern state of Maranhao after seeing a television report about the licensing in January. “So I started calling friends and said: ‘I’m going there because here I’m unemployed and not doing anything.'”

Amapa ranks among Brazil’s poorest and least developed states. Oiapoque’s economy currently depends on fishing, illegal gold mining, and visitors from neighboring French Guiana who cross daily and spend euros, a currency more stable than the Brazilian real. While the prospect of oil-driven prosperity has brought hope, the rapid, unplanned urban growth is already straining the city’s inadequate infrastructure.

This situation exemplifies a broader dilemma facing developing nations: how to reduce carbon emissions while simultaneously relying on fossil fuel revenues to transform local economies. It also raises questions about President Luiz Inácio Lula da Silva’s environmental commitments. Despite making deforestation prevention a government priority and hosting the UN climate summit last year, Lula has defended the project, stating: “We don’t want to pollute a single millimeter of water, but no one can stop us from lifting Amapa out of poverty if there is oil here.”

Petrobras representatives met with local stakeholders on March 10 to present operational plans. The company revealed that exploratory drilling began in October and would continue for about five months. If significant oil deposits are discovered and the company decides to begin extraction, additional government permits would be required—a process that could take months or years.

Environmental and Indigenous groups have filed lawsuits against the Brazilian government and Petrobras, seeking to halt exploration. They argue that the licensing process failed to properly consult traditional communities, underestimated spill risks, and inadequately assessed climate impacts. Federal prosecutors have also requested that IBAMA, Brazil’s environmental regulator, annul or suspend the environmental license, claiming that Petrobras’ studies are insufficient. No ruling has yet been issued.

During the meeting, officials clarified that Oiapoque primarily serves as a helicopter base for offshore crews, being the nearest land point. Administrative operations are based in Belém, a major city in neighboring Pará state. Despite these limitations and uncertainty about future extraction, speculation has already transformed Oiapoque.

The city’s population was recorded at 27,482 in 2022, but no updated count has been conducted since the migration influx began. “In the past 18 months, Oiapoque has seen significant population growth,” said city councilman Tiago Vieira Araújo. “There are already seven new neighborhoods, and social problems have come with them.”

Urban infrastructure in Oiapoque was already inadequate before the influx. Less than 2% of households have proper sewage systems, and only 0.2% are located on properly structured streets, according to Brazil’s Institute of Geography and Statistics. In the new settlements—locally called “invasions”—conditions are worse. Residents have cleared public rainforest to create informal plots with makeshift homes consisting of little more than a kitchen, bed, and basic bathroom.

“We know it’s not right to clear the forest. Everyone knows it’s wrong,” Fonseca acknowledged. “But space is limited.”

Yuri Alesi, a 34-year-old lawyer who advocates for land rights in these new settlements, envisions Oiapoque becoming an “Amazonian Dubai,” fueled by oil revenues. “Dubai is in the middle of a desert, an unlikely place to grow,” he said. “The industry that drove its development was oil.”

Preliminary estimates suggest Brazil’s offshore Equatorial Margin could hold up to 10 billion barrels of oil worth approximately 3.8 trillion reais ($720 billion). Alesi claims royalties could generate roughly 100 million reais ($19 million) monthly for Oiapoque—equivalent to the city’s entire annual economic output.

However, nearby cities that once benefited from resource booms offer cautionary tales. Petrobras has explored oil and gas in Coari, another Amazonian state, since the 1980s, yet the city remains among Brazil’s poorest, with about 72% of residents living in extreme poverty. Similarly, Pedra Branca in Amapa experienced boom and bust cycles tied to iron ore mining.

Selma Soares, who witnessed Pedra Branca’s decline, recently moved her family to Oiapoque after hearing rumors of its potential boom. “People are waiting for drilling to begin,” she said. “They believe everything will improve.”

At the river separating Oiapoque from French Guiana, boats display green-and-yellow stickers reading: “Oil yes! Development yes!”—a message promoted by local politicians. Just 20 minutes away by boat, however, members of the Indigenous Galibi Kali’na community express concerns about environmental risks.

“Petrobras arrived with strong political backing, promising progress as if we would go to sleep one way and wake up like Dubai,” said Renata Lod, a representative on Oiapoque’s Indigenous council. “But what we have actually seen is completely disorganized population growth, invasions of Indigenous lands.”

Indigenous leaders fear potential oil spills that could devastate the region’s wetlands. “Most Indigenous lands are flooded wetlands. How do you clean a wetland? Once oil enters the rivers, there’s no way to remove it,” Lod explained.

In January, Petrobras reported a drilling-fluid leak that temporarily halted operations, resulting in a 2.5 million reais ($470,500) fine from IBAMA. While company officials have defended their safety measures, many locals remain skeptical.

“People here see Petrobras as an economic remedy,” said Araújo, the city councilman. “But even a remedy has side effects. And we’re already experiencing the side effects before seeing any of the benefits.”