Fidelity bank banner Bayelsa State 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: 1,167


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)

*PLS USE SHELL LOGO OR OFFICE

Source News Express

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

 

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


 

CLASSIFIED ADS

 

You may also like...
Reps urge Buhari to strengthen security in Adamawa...

2015: Why INEC’s new polling units cannot stand...

Boko Haram: Lamido faults Nigerian state

Osun to set up Commodity Board, produce tribunals...

Closure of institutions in southern Kaduna punitive, vindictive...

2015: Stakeholders adopt Governor Akpabio as Senator

Showbiz stars mourn Justus Esiri of “Village Headmaster”...

Okowa, others lay wreaths, as Nigerians mark Armed...

Amosun distances self from calls for minimum wage...

Northern Governors inaugurate committee to identify Boko Haram...

Transfer of Boko Haram terrorists to South-East will...

Detained Shiite Leader Zakzaky suffers stroke in custody...

 

Latest News Next President: The right man for the job, By Chima Nwafo Hate Speech Bill: Issues and worries, By Jerome-Mario Utomi 18-year-old boy rapes 7 Ekiti Varsity students Communications Minister, Adebayo Shittu, in certificate scandal Lawyer ambushes Python Dance 3 in court •Sues Buhari, Buratai, Malami, others Buhari, governors may clash with Tinubu over Ambode Oshiomhole, APC bow to governors, make U-turn on indirect primaries Delta establishes 6 IDP camps •To forward 2019 budget proposals to DTHA soon Southern, Northern leaders express fears over 2019 polls Plateau women protest half naked over military action Businessman sentenced 140 years for forging foreign cheques Stella Oduah dumps APGA, announces return to PDP

 

Most Read NUDE PHOTO OF OMOTOLA JALADE-EKEINDE surfaces online (395,145 views) Nigerian female sex addict opens up, says ‘I like it with both men and women’ (376,087 views) Shameless Genevieve Nnaji exposes breasts in public (307,687 views) Finally named: The full list of friends of Nigerian female sex addict who prowled Facebook (250,148 views) OLUMBA OLUMBA OBU (the one who called himself God) IS DEAD (231,667 views) Igbo scholar disgraces Femi Fani-Kayode •Demolishes claims on Igbo/Yoruba history with facts and figures (221,342 views) Breaking News: POPULAR REVEREND CONVERTS TO ISLAM in Kaduna (Nigeria) (199,565 views) OBJ’s son reported dead in Lagos plane crash •Names of more victims emerge (181,199 views) My wasted years in Olumba Olumba Obu’s Evil Brotherhood (165,279 views) THE FINAL DISGRACE: Igbo scholar unleashes more facts about Igbo/Yoruba history, finishes off Femi Fani-Kayode with second article (163,146 views) Lagos plane crash: Journalist releases victims’ names (157,837 views) Gunmen kill ASP, 2 other police officers in vain bid to kidnap Rivers PDP chieftain (146,653 views)

 

Categories Advertorials (3) African Press Organisation (81) Art & Literature (62) Business & Economy (3,613) Business Verdict (52) Columnists (932) Complaints & Requests (94) Enterprise & Opportunities (207) Entertainment (547) Features (652) Global Business Monitor (301) International (2,415) Interview (164) Live Commentary (28) Love Matters (143) News (39,022) Opinion (1,109) Pidgin (11) Politics (6,664) Religion (869) Sports (1,697) Stock Watch (33) AMA & Al Jazeera Global Update

 

CBN banner

Firstmobile banner

 

 

NEWS EXPRESS TV

I am Imo State's New Governor -- Okorocha's son-in-law Uche Nwosu...

 

APO Group Partner

 

 

CLASSIFIED ADS

GOCOP Accredited Member

GOCOP Accredited member

 

 

Africa Media Agency and Al Jazeera

Advertisement