(Bloomberg) -- A reef habitat near the mouth of the Amazon River is threatening to derail Brazil’s biggest bet on expanding oil output.

State-controlled producer Petroleo Brasileiro SA, or Petrobras, is shutting down a drillship at the Foz do Amazonas exploration block and will put it to work on other offshore sites in the country’s southeast, Petrobras said in an emailed statement. The company is appealing a decision earlier this month by Brazilian environmental agency Ibama to block drilling near the the 3,600-square-mile (9,500-square-kilometer) reef. 

Petrobras has been awaiting approval to use the rig since early December. The six-month stalemate has cost the company as much as $200 million, by some estimates. Ibama has said it could take up to a year to decide if exploration near the reef can go forward or not.  

Read more: Idle Rig Shows the Costs of Petrobras’ Offshore Drilling Fight

Petrobras’s opportunities to boost oil production are dwindling. The Equatorial Margin in northeastern Brazil, home to the reef, is the main target for exploration spending in the company’s five-year business plan, with $3 billion currently earmarked for the region. That’s a shift in focus after lackluster results at traditional basins in the country’s south, known as the pre-salt region. Petrobras has said that after 2030, output will decline unless its finds more oil.

Petrobras also sold most of its foreign exploration assets over the past decade when it thought it would continue making major discoveries in the Santos and Campos basins, where almost all of its oil is produced. The company is betting that the Equatorial Margin could hold reserves similar to the multi-billion-barrel discoveries that Exxon Mobil Corp. is developing to the north in Guyana. 

“The Equatorial Margin became very important after the disappointments in the Santos basin,” said Marcelo de Assis, the head of Latin American upstream research at consultancy Wood Mackenzie Ltd. “Petrobras has almost no international assets. They don’t have another place to go.”

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