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October 31, 2017

Shell wins offshore blocks in Brazil

Royal Dutch Shell, along with its partners, secured three production sharing contracts (PSC) for pre-salt blocks located in the Santos Basin, offshore Brazil.

Shell and its partners have secured three production sharing contracts (PSC) for pre-salt blocks in the Santos Basin, offshore Brazil.

Towards the contracts, which run for a period of 35 years each, Shell is required to pay its share of the total signing bonuses, of around $100m.

Shell won a block adjacent to the Gato do Mato field in partnership with France’s Total. It is owned by the companies on an 80:20 basis.

The company also secured a now unitised area to the Sapinhoá field, where Petrobras currently has a 45% operating interest, while Shell and Repsol have 30% and 25% respectively.

The third successful bid is the new Alto de Cabo Frio-West block, where the company has 55% operating interest, with Qatar Petroleum and CNOOC holding 25% and 20% respectively.

Shell upstream director Andy Brown said: “These winning bids were submitted after our thorough evaluation and add strategic acreage to our already leading set of global deepwater growth options.

“These winning bids were submitted after our thorough evaluation and add strategic acreage to our already leading set of global deepwater growth options.”

“We will determine our next steps with a focus on continued value to Shell and our shareholders. Our deepwater expertise is well-suited for the opportunities that lie ahead.”

Together, the contracts enable Shell to add more than 1,700km² to its deepwater portfolio in the country.

The latest development comes after Shell previously declared plans to invest $10bn into the early 2020s to pursue its existing offshore developments in Brazil as part of its strategy of embracing deepwater as its upstream growth priority.

The company’s first PSC in the country started in 2013, when it entered the Libra consortium led by Petrobras.

Last quarter, Shell produced around 330,000boe/d from its deepwater business in the country.

The company currently operates two floating, production, storage and offloading (FPSO) vessels in Brazil and partners ten other FPSOs operated by Petrobras.

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