NewsExpress advert FCMB banner
Shell bets big on Brazil as oil majors snap up offshore blocks

By News Express on 29/10/2017

Share on facebook Yahoo mail icon Gmail icon Share on Google+

Views: 717

Oil major Royal Dutch Shell Plc (RDSA.L) won half the blocks awarded in Brazil's deepwater oil auction on Friday, while rival BP (BP.L) took two blocks and Exxon Mobil Corp (XOM.N) one in a historic opening of the pre-salt play to foreign operators.

Brazil awarded six of the eight blocks on offer in the auction for the rights to pump oil from the country’s coveted pre-salt region, where billions of barrels of oil are trapped below thousands of feet of salt in the country’s Atlantic waters.

President Michel Temer said development of the blocks would lead to 100 billion reais (23.52 billion pounds)in investment from the winning companies and 130 billion reais in royalties and other revenues for the cash-strapped state.

The wins bolster Shell's position as the largest foreign operator in Brazil’s offshore oil sector, second only to state-run oil giant Petroleo Brasileiro (Petrobras) (PETR4.SA), adding more than 1,700 square kilometers (656 square miles) to its deep-water Brazil portfolio.

The Anglo-Dutch oil major won one area in a consortium with France's Total SA (TOTF.PA), another with Petrobras and Repsol-Sinopec, and a third with Qatar Petroleum International (QPI) and China’s CNOOC.

Shell has said it is confident it can pump oil from the pre-salt fields at below $40 a barrel.

“These winning bids were submitted after our thorough evaluation and add strategic acreage to our ... global deep-water growth options,” Shell Upstream Director Andy Brown said.

Rival BP Plc (BP.L), which is active in Brazil but not yet producing oil, took two blocks on Friday.

“We see the government of Brazil being more supportive of foreign companies entering Brazil,” BP Latin America President Felipe Arbelaez said after the rounds.

“There are high quality assets. We believe that the assets here will be resilient in any price environment.”

Brazil earned 6.15 billion reais ($1.88 billion) in signing bonuses for the six fields that it awarded in the auction.

Temer’s government has enacted reforms to make the energy sector more attractive to foreign investment, and for the first time international oil firms will be allowed to operate fields in the pre-salt.

Countries worldwide sitting on oil and gas reserves are keen to pump it before it becomes less valuable as global policies to address climate change kick in.

The opposition in Brazil has pushed back against the reforms and the auction was delayed by three hours on Friday after a federal judge issued an injunction to suspend the process at the behest of the leftist Workers Party, which opposes the privatisation of oil production.

That left top executives from the world’s largest oil companies milling around in the hotel that hosted the auction, in an upscale seaside neighbourhood in Rio de Janeiro.

United States major, Exxon Mobil, whose 10-block win in last month’s Brazilian auction was seen by many as a prelude to a big play on Friday, took just one block as part of a consortium with Norway’s Statoil ASA (STL.OL) and Petroleos de Portugal SA [PETP.UL], a unit of Galp Energia SGPS SA (GALP.LS). Two blocks got no bids.

But Exxon bought a stake in a nearby block from Statoil for $1.3 billion, Statoil said, soon after the round.

“Our full intent is to get right after the Brazil acreage,” Jeff Woodbury, Exxon’s head of investor relations, said on a conference call following the auction.

The quality of reserves and the reforms have made Brazil an important target for oil majors, even though they have had less appetite for capital-intensive mega projects since crude prices crashed in 2014.

Peroba, which was clinched by Petrobras, BP and China National Oil and Gas Exploration and Development Corp, boasts an estimated 5.3 billion barrels of oil while Carcara, won by Statoil, Exxon and Petrogal, is thought to have some 2.2 billion barrels of oil.

“Brazil’s offshore is one of the last major plays out there that’s in its infancy,” said Brian Youngberg, an oil industry analyst at Edward Jones. “Companies that are still interested in the big elephants out there, like Exxon and Shell, are aggressively pursuing them.”

Brazil has high hopes for the volume of oil the companies can pump from the blocks. Brazilian oil output could double to more than 5 million barrels per day (bpd) by 2027, compared with the 2.6 million bpd produced in August, regulator ANP has said.

Two blocks on offer at the auction were not placed. But ANP chief Decio Oddone still considered the rounds a success.

“A result in which 75 percent of offered areas are sold is a resounding success anywhere on the planet according to any point of view,” he said. “Brazil returned to the oil and gas sector with this auction.” (Reuters)


Source News Express

Posted 29/10/2017 05:02:56 AM


Share on facebook Yahoo mail icon Gmail icon Share on Google+



REVEALED: 3 natural ways to get stronger erections, last 25minutes on bed, and increase manhood size without using drugs. Also, Natural Prostrate Enlargement Remedy.. Get In HERE...


You may also like...
NIPC staff battle CEO, demand immediate sack

Kano - Port Harcourt train services back on...

Obiano presents artificial limbs to the physically-challenged

Corruption allegation: Umahi descends on Ebonyi APC factional...

7th annual Ibadan Sustainable Development Summit begins

Presidency rebukes The Sun for linking Buhari to...

Boko Haram: Madagali residents request more troops, threaten...

Rampaging herdsmen kill 11 in Plateau

Igbos, Xhosa kingdom in South Africa plan cultural...

Patients flee Kaduna hospital

Corruption: Alison-Madueke, 4 others arrested in London

Wonder banker bags 8 years jail term for...


Latest News Buhari leads heavyweights to Kano for Dangote’s daughter’s wedding Herdsmen occupy 3 Delta communities NJC appoints 60 judges for 25 states + Names of the judges Air hostess dies after falling from plane EXCLUSIVE: Buhari, National Assembly leaders strike deal on 2018 Budget 100 arrested over Ojota Lagos violence FG sets up National Food Security Council, appoints members Petroleum Industry Bill ready for presidential assent by end-March — Committee Chairman Oil prices jump, Brent hits approximately $70 Lagos Land Use Charge review a plus to the people, says NIM Russia, U.S. to hold joint test flight to moon in 2019 Violence erupts in Madrid over African migrant’s death


Most Read Nigerian female sex addict opens up, says ‘I like it with both men and women’ (331,810 views) NUDE PHOTO OF OMOTOLA JALADE-EKEINDE surfaces online (324,370 views) Shameless Genevieve Nnaji exposes breasts in public (260,041 views) Finally named: The full list of friends of Nigerian female sex addict who prowled Facebook (213,847 views) Igbo scholar disgraces Femi Fani-Kayode •Demolishes claims on Igbo/Yoruba history with facts and figures (197,650 views) OLUMBA OLUMBA OBU (the one who called himself God) IS DEAD (191,969 views) Breaking News: POPULAR REVEREND CONVERTS TO ISLAM in Kaduna (Nigeria) (167,273 views) OBJ’s son reported dead in Lagos plane crash •Names of more victims emerge (150,059 views) THE FINAL DISGRACE: Igbo scholar unleashes more facts about Igbo/Yoruba history, finishes off Femi Fani-Kayode with second article (142,846 views) My wasted years in Olumba Olumba Obu’s Evil Brotherhood (132,731 views) Lagos plane crash: Journalist releases victims’ names (132,261 views) Gunmen kill ASP, 2 other police officers in vain bid to kidnap Rivers PDP chieftain (125,562 views)


Categories Advertorials (3) African Press Organisation (81) Art & Literature (34) Business & Economy (2,968) Business Verdict (36) Columnists (813) Complaints & Requests (94) Enterprise & Opportunities (206) Entertainment (455) Features (552) Global Business Monitor (237) International (1,851) Interview (145) Live Commentary (28) Love Matters (114) News (33,658) Opinion (894) Pidgin (10) Politics (4,615) Religion (700) Sports (1,456) Stock Watch (28) AMA & Al Jazeera Global Update





Football Highlight -- BARCELONA - CHELSEA 3:0


APO Group Partner




REVEALED: 3 natural ways to get stronger erections, last 25minutes on bed, and increase manhood size without using drugs. Also, Natural Prostrate Enlargement Remedy.. Get In HERE...

GOCOP Accredited Member

GOCOP Accredited member



Africa Media Agency and Al Jazeera