RIO DE JANEIRO, Brazil, Aug 15, 2026 (BSS/AFP) - Brazilian oil giant Petrobras announced Friday it had detected signs of oil off the coast of the country's Amazon region, in an exploration project fiercely opposed by environmentalists.

It was a significant milestone for the project backed by leftist President Luiz Inacio Lula da Silva, who believes his country needs fossil fuel revenue to fund its energy transition.

"Petrobras has identified the presence of hydrocarbons in an exploratory well currently being drilled" about 175 kilometers (110 miles) off the coast of northern Brazil's Amapa state, the company said.

Specifically, it has detected an organic compound indicating the presence of oil, gas, or both.

Petrobras began the deepwater drilling operation in October 2025, following a five-year process to obtain an environmental permit.

The site is located in a maritime region known as the Equatorial Margin, where neighboring Guyana has discovered massive oil reserves.

Environmental groups have warned of possible threats to the biodiverse area just off the coast of the world's largest rainforest.

"Our optimism regarding the Brazilian Equatorial Margin is being confirmed today," Petrobras CEO Magda Chambriard said in a statement, adding that the company is committed to "ensuring the country's energy security."

Lula supports the gradual phasing out of fossil fuels to curb climate change. However, he believes Brazil needs revenue to fund the transition to clean energy.

Lula, 80, will seek reelection in October, running against 45-year-old Flavio Bolsonaro, the eldest son of far-right former president Jair Bolsonaro.

Petrobras, known for its expertise in deepwater drilling, more than doubled its net profit year-on-year in the second quarter, reaching $10.4 billion.

The growth was driven by record production and high oil prices due to the Middle East conflict.

Brazil is the world's ninth biggest oil producer, almost 95 percent of which comes from offshore reserves.

The Brazilian Petroleum, Gas and Biofuels Institute (IBP) industry group described Friday's news as "extremely important."

It points to "the possibility of exploration and production in a new frontier," IBP noted, "strengthening national energy security in the medium and long term."

Last November, Lula hosted the COP30 UN climate conference where he urged world leaders to present "roadmaps" for the transition away from fossil fuels.

However, his own government has yet to deliver its plan.