Brazil's Lula Backs Petrobras Bid to Explore Offshore Equatorial Margin

President Luiz Inacio Lula da Silva on Wednesday threw his weight behind a push by state-run oil company Petrobras to explore the environmentally sensitive offshore Equatorial Margin, saying Brazil cannot give up such an opportunity.

The offshore region along the northern coast is seen as Brazil's most promising frontier for oil exploration as it shares geology with nearby Guyana, where Exxon Mobil is developing huge fields.

"When we start exploring the so-called Equatorial Margin, I think we will make an extraordinary leap in quality," Lula told a business forum hosted by the FII Institute in Rio de Janeiro.

"We want to do everything legally, respecting the environment, but we are not going to throw away any opportunity to make this country grow."

Petrobras has been pushing for a license to drill in the northernmost part of the Equatorial Margin, near the mouth of the Amazon River, where scientists have warned of threats to local coral and coastal biomes.

Brazil's environmental agency Ibama denied a drilling license in the area, citing potential impact on the environment and Indigenous peoples. Petrobras has been waiting over a year for it to rule on an appeal.

Lula at the event also said Brazil would reduce its fiscal deficit reduction through increased revenues and lower borrowing costs, without undermining the capacity for public investments.

"We are getting our house in order and putting public finances in check to ensure fiscal balance," the leftist leader said.

(Reuters - Reporting by Rodrigo Viga Gaier, Lisandra Paraguassu and Marcela Ayres; Writing by Gabriel Araujo and David Gregorio)