Drilling Into Trouble
New report by Stand.earth, ClimaInfo, Observatório do Clima and WWF-Brasil reveals the scale of the financial, legal, and environmental risks facing banks and investors backing Petrobras and other oil companies as they expand fossil fuel frontiers in the Mouth of the Amazon Basin
While the Amazon is approaching a critical ecological tipping point, with severe consequences for the global climate, the region has emerged as a major frontier for fossil fuel expansion. Nearly one-fifth of oil and gas reserves discovered globally between 2022 and 2024 are located in the Amazon.
“Drilling Into Trouble” examines the case of Brazilian fossil fuel giant Petrobras, which is pressing ahead with high-risk oil drilling in the Mouth of the Amazon Basin off of the northern coastline known for its unique biodiversity — a region that has also drawn interest from Chevron.
As Petrobras pushes ahead with oil expansion plans in the Amazon, the report reveals that banks and investors backing the company face growing exposure to risks, including:
- Financial risks: Between 31% and 86% of Petrobras’ US$42 billion in planned investments in new oil and gas fields could become stranded assets. As global demand for oil shifts, these projects risk becoming unprofitable. At the same time, the company’s reliance on general corporate-purpose financing, with no project-level allocation or transparency, makes it difficult for banks and investors to track how their capital may be enabling fossil fuel expansion.
- Legal risks: Petrobras and its financiers face growing legal challenges over oil drilling in the Mouth of the Amazon, including challenges related to securing Free, Prior and Informed Consent from Indigenous Peoples and traditional communities affected by the projects.
- Environmental risks: In January 2026, a leak at deepwater drillsite Block 59 in the Mouth of the Amazon released 18,440 liters of drilling fluid, leading to a fine by Brazil’s environmental agency Ibama, a temporary suspension of operations and further delays. The region’s powerful ocean currents and the proximity of sensitive ecosystems, including the Great Amazon Reef System and Brazil’s mangrove coastline, increase the risk that future accidents could cause widespread environmental damage, disrupt operations and result in significant financial losses.
Who finances Petrobras
Financial institutions help maintain Petrobras’ access to capital and reduce the cost of financing its activities, including expansion into new Amazon oil frontiers, like the Mouth of the Amazon.
Key findings:
A small group of banks accounts for most of Petrobras’s financing
Between 2016 and 2026, Petrobras received an estimated US$61.5 billion in financing from at least 39 financial institutions. Of this, 64% came from only 10 banks — indicating an oversized role for a small group of financiers, including Santander, Citi, JPMorgan Chase, Bank of America, HSBC, Itaú, and Bradesco.
More than $10 billion was issued between 2024 and 2026, despite growing climate disasters in the Amazon and globally.
Lack of transparency makes it difficult to track how financing supports oil expansion
Petrobras is unique in receiving exclusively general corporate purpose financing since 2016. This makes it difficult for financiers and investors to track how funds may enable oil expansion in critical ecosystems like the Amazon.
Financing as a pathway to engagement may be an increasingly ineffective strategy.
Petrobras relies almost entirely on bond financing (61%) and syndicated loans (38%), reducing individual banks’ leverage to advance positive change.
Long-term debt increases exposure to the energy transition
Over $33 billion — 71% of Petrobras’ outstanding bond debt — matures after 2030, beyond the IEA’s projection for peak oil demand. This suggests Petrobras is betting on a delayed energy transition. As global demand shifts away from oil, long-term debt obligations could increase the company’s financial risks.
Investors face growing financial and fiduciary risks
Financial backers of Petrobras face significant fiduciary risk. While the Brazilian government remains the controlling shareholder, major investors in Petrobras include some of the world’s largest asset managers and pension funds.
The company’s aggressive Amazon expansion is at odds with many investors’ environmental risk policies and mandates on the rights of Indigenous Peoples and traditional communities.
The table below shows the 20 largest holders of Petrobras preferred shares (PETR4 / PBR.A), as reported by LSEG. Petrobras has two classes of stock, and these figures cover the preferred class only, which carries economic rights but no vote. The Brazilian federal government does not appear here because it holds only common shares rather than preferred shares.
Full report
Download the report in English, Portuguese and Spanish
Read the press release in English, Portuguese and Spanish
Recommendations
Advancing a just energy transition and protecting communities and vital ecosystems will require a fundamental shift in financial flows.
For banks
- Stop enabling fossil fuel expansion. Immediately stop the provision of lending, underwriting and advisory services to Petrobras and other oil and gas companies unless they commit to withdrawing from Amazon and Mouth of the Amazon expansion plans.
- Redirect financing. Set targets to improve energy supply financing ratios and direct financing into proven and reliable climate solutions that respect Indigenous and traditional community rights, and that repair and remediate damages.
- Enhance Indigenous and human rights policies. Explicitly recognize Indigenous Peoples’ right to self-determination and to refuse consent to impacting projects by addressing deficiencies in existing Indigenous and human rights policies.
For investors
- Commit to investment restrictions. Immediately stop new investments in companies active in oil and gas expansion in the Amazon, including the Mouth of the Amazon, prioritizing an end to new bond investments.
- Phase down existing investments. Progressively end investments in companies remaining active in Amazon oil and gas expansion.
- Vote systematically. Immediately commit to vote systematically against management-proposed resolutions at the Annual General Meetings of companies engaged in Amazon oil and gas expansion.
- Establish energy transition targets. Support the real-world energy transition by publicly setting investment targets that increase financing to renewables and companies aligned with internationally agreed climate goals, and decrease investments in fossil fuel companies overall.
For policy frameworks
- Amazon as a Fossil-Free Zone
Fossil-Free Zones are geographically defined areas permanently closed to fossil fuel exploration, extraction, infrastructure, and activities. Indigenous Peoples, social movements, and civil society organizations across the Amazon have called for the region to be designated a Fossil-Free Zone.
- Harvest mode oil and gas strategy
The “harvest mode” strategy maximizes cash flow from producing and under-developed but existing oil and gas fields, avoids new upstream capex, and redirects capital to the energy transition.
By 2035, Petrobras is forecast to spend US$8.7 billion a year on oil and gas expansion projects incompatible with any credible 1.5°C scenario, against an annual clean energy investment gap in Brazil of US$16 billion. Redirecting frontier and expansion capex would close more than half that gap while leaving the company’s near-term cash flow intact: Brazilian production would still generate around US$38 billion a year in taxes and royalties.
Banks leading the way
To date, eleven major banks have adopted policies at different levels restricting financing for fossil fuel development in the Amazon. While much more needs to be done, these commitments represent a step toward a just energy transition.
- Between 2021 and 2022, six banks (ING, BNP, Intesa, Natixis, Societe Generale, and Credit-Suisse) committed to ending financing for oil trade in Ecuador.
- After that, BNP, Standard Chartered, HSBC, and Barclays applied forms of Amazon exclusions, including some comprehensive policies at the corporate level.
- In 2024 and 2025, two biggest Amazon oil and gas financiers, Citi and JPMorgan, adopted Amazon-related project-level financing restrictions.