Petrobras president Magda Chambriard announced 2.5 billion reais ($500 million) in investments to drill 22 new wells to boost production and explore for new oil at the Urucu field in the state of Amazonas.

The field, which has been operating for 40 years, is Brazil's largest onshore oil and natural gas field and produces about 105,000 barrels of oil a day.

"We are back to fulfill, among other things, our role of ensuring oil and gas production within the state," Chambriard said.

Lula, 80, has said that while he is against fossil fuels, the world cannot yet live without them, and argues that oil can finance the transition to clean energy.

"We are Brazilians; we love Brazil, we love Petrobras, we want to live well, we want to work well, and we want to study well -- and this will only be possible if the economy is growing," said Lula.

Chambriard said the investment at Urucu would lead to a 20-percent increase in oil and gas production, and the creation of 14,000 jobs.

Brazil is the world's ninth biggest oil producer, almost 95 percent of which comes from offshore reserves.

Natural gas from Urucu is used to generate 65 percent of the electricity consumed in Manaus and five other municipalities in the impoverished northern Amazon region.

Chambriard sought to allay fears about damage to the world's largest rainforest.

"For every trail we cut, we carry out reforestation."

Lula angered environmentalists by backing oil exploration near the mouth of the Amazon river, which began in October last year.

"Ideally, the entire Amazon region would be declared a zone free of fossil fuel exploration," said Suely Araujo, coordinator of the Climate Observatory NGO.

"However, at the very least, we must fight to ensure that no new frontiers are opened up for this purpose."

In November, Lula hosted the COP30 UN climate conference where he urged world leaders to present "roadmaps" for the transition away from fossil fuels.

However, his own government has yet to deliver its own, which it had promised to do by February.

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