A controversial auction of oil blocks in the Amazon by COP30 host Brazil drew bids on only 20% of the areas offered, a result that green campaigners have hailed as a partial victory as they prepare to challenge the bidding process in the courts.

Nine oil companies, led by a consortium between Petrobras and ExxonMobil, secured the rights to 34 exploration blocks – 19 of them in the Amazon basin –  in last week’s auction in Rio de Janeiro, which put 172 onshore and offshore oil and gas blocks up for grabs and was hailed as a success by the energy minister.

The Amazon rainforest emerges as the new global oil frontier

Environmental and Indigenous rights campaigners led condemnation of the auction, saying it dealt a sharp blow to Brazil’s COP Presidency months before it hosts the next U.N. climate conference in the Amazon city of Belém. They say exploration in the sensitive area threatens fragile ecosystems and traditional communities, and undermines efforts to move away from fossil fuels.

Asked about such criticism, COP30’s Executive Director Ana Toni told the We Don’t Have Time platform that demand for oil is still increasing – and there is a need to debate how to move away from this and other polluting fuels in a fair and organised way, as governments committed to do at COP28.

“When we agreed that we should be transitioning away from fossil fuels, which is a global goal, we also said in an orderly, just and equitable manner,” she said in an interview during mid-year climate talks in Bonn.

‘Partial victory’ for climate fight

But some campaigners said the fact that most of the licences went unsold had brought them some solace. Juliano Bueno, technical director of the Arayara Institute, a Brazilian climate nonprofit, said in a statement the “weak market uptake” was a “partial victory” for climate campaigners and their actions against the auction.

“After intense mobilisation by civil society and five lawsuits, the auction was partially unsold,” Bueno said.

The Federal Prosecution Office (MPF) and the Oil Workers’ Unions had also called for the suspension of the auction, saying it represented a “serious contradiction” in Brazil’s climate commitments and inadequate environmental studies.

The low level of interest came in spite of higher global oil prices due to conflict in the Middle East, which according to Nicole Oliveira, executive director at the Arayara Institute, would have generally “increased companies’ appetite to acquire blocks in the bid”.

She added that there had been no bids on blocks overlapping areas defined as directly affecting Indigenous lands or in the Potiguar Basin, where the marine-rich volcanic islands of Fernando de Noronha lie about 350 km (215 miles) off the coast.

Both the Potiguar Basin and the Foz do Amazonas basin are part of the Equatorial Margin, which stretches as far as Guyana and is seen as Brazil’s most promising frontier for oil exploration. Brazil wants to produce 20% more oil and gas by 2030.

Chevron, ExxonMobil and China’s state-owned CNPC, which snapped up offshore blocks in the auction, may have been encouraged by recent signs that Brazil’s state-run energy firm Petrobras might be getting closer to receiving environmental permission to drill in Foz do Amazonas.

‘No legal basis’

Brazilian climate campaigners say the government rushed to carry out the auction using environmental permits granted under former right-wing President Jair Bolsonaro that were due to expire on June 18 – just a day after the bidding – and which they say are incomplete.

The Arayara Institute said the bidding process can only be completed when the winning companies have presented several rounds of documents and signed concession contracts, which is expected to happen in November – when COP30 takes place. That time-frame would mean the deadline had been missed.

“Those contracts will have no legal basis whatsoever,” Oliveira said. “W