Shell adds new, deepwater production in Brazil

Shell Brasil Petróleo Ltda, a subsidiary of Royal Dutch Shell plc and its bid consortium member Chevron Brasil Óleo & Gás Ltda won a 35-year production sharing contract for the Saturno pre-salt block located off the coast of Brazil in the Santos Basin. Shell will pay its share of the total signing bonus for the block, equating to approximately USD $390 million [R$ 1,562 billion]. Operated by Petrobras, P-69 is a standardized vessel that can process up to 150,000 bbl of oil and 6 MMcm of natural gas daily. It will ramp up production through eight producing and seven injection wells. With the addition of the Saturno block (Shell 50% operating, Chevron 50%), Shell increases its total net acreage off the coast of Brazil to approximately 2.7 million acres. Shell will engage with Chevron to define specific plans for exploration drilling in the area won today.

Shell is a major oil and gas producer in Brazil with a clear strategy to continue developing an industry-leading portfolio of pre-salt acreage through exploration. The company plans to drill the Alto de Cabo Frio West and South Gato do Mato pre-salt fields in the Santos Basin next year and is proceeding with seismic studies to mature two exploration blocks awarded earlier this year. “The Brazilian pre-salt fields are some of the best deepwater provinces in the world,” said Andy Brown, upstream director for Shell. “With significant flowrates, deepwater Brazil projects are breaking even under $40/bbl. We commend Petrobras on this production milestone, and we look forward to progressing additional development plans with our consortium partners as well as for our recently-acquired, deepwater Brazil blocks. “We are pleased to add another material, operated exploration position to our leading portfolio in one of the world’s most prolific deep-water areas,” said Andy Brown, Upstream Director, Royal Dutch Shell. “We continue to grow an exciting and resilient Upstream business of long-term competitive positions in our heartlands while maintaining strong, capital discipline.”

The Libra product sharing agreement continues to progress with an extended well test as well as the Mero 1 FPSO, and additional FPSOs are planned. Shell also has development drilling planned for its operated, Gato do Mato South field in 2019. Since 2014, Shell has more than doubled its global, deep-water production and expects to exceed 900,000 barrels of oil equivalent by 2020, coming from previously discovered areas in Brazil, the U.S. Gulf of Mexico, Nigeria, and Malaysia. The company is also developing deep-water, exploration plans for its acreage off the coast of Mexico, Mauritania, and in the Western Black Sea. Shell has a 25% stake in the Lula consortium, operated by Petrobras (65%). Galp, through its subsidiary Petrogal Brasil, holds the remaining 10% interest.

Facebook Comments