Petrobras (NYSE:PBR) needs to be granted an environmental license to drill in the sensitive Foz do Amazonas region by the end of April or it will run out of time before the contract with a drilling vessel ends in October, Reuters reported Thursday.

A newly released government document puts a firm deadline for Petrobras (PBR), which has been waiting since mid-2023 for Brazil's Ibama environmental agency to issue a decision on its appeal to drill in the region off Brazil's northern coast.

Petrobras (PBR) already has spent ~1B reais ($174M) in the drilling operation, and chartering the vessel costs the company ~$400K per day, the document said.

Earlier this month, the agency approved Petrobras' (PBR) plan for cleaning the ship of corals, a necessary step for it to be moved to the so-called Equatorial Margin, which is considered the company's most promising frontier for oil exploration.

But replacing the current vessel with another could further delay the project, an unnamed source at Ibama told Reuters, noting that a substitute vessel likely would need to be cleaned of corals, which can take "a long time."