Brazilian federal environmental regulator Ibama has rejected an application submitted by oil giant Petrobras to drill a high-impact exploration well in the ultra-deepwater section of the country’s Foz do Amazonas basin.

The decision, anticipated by Upstream in a news story earlier this month, is a major setback for Petrobras, which has been trying for months to secure a drilling permit to spud the Morpho wildcat in Block FZA-M-59 in the environmentally sensitive region in the Brazilian equatorial margin.

Petrobras took over operatorship of several blocks in Foz do Amazonas in late 2020 after European supermajors BP and TotalEnergies gave up on their attempts to obtain drilling licences to conduct their exploration campaigns in the area.