Royal-Dutch Shell has unloaded its 20 percent stake in a major deep-water subsalt exploration block off Brazil’s coast to two local start-up oil and gas companies, Barra Energia and QGEP. Shell said the sale was part of a previously announced reshuffle of its asset portfolio. It plans to continue investing in Brazil and expects to participate in future exploration and production auctions.
On Tuesday, Barra Energia said it closed a deal to buy the remaining half of Shell’s stake in the BM-S-8 block off the coast. No price was disclosed.
On Monday, QGEP, controlled by Brazilian construction giant Queiroz Galvao, purchased half of Shell’s stake in the area, 290 kilometres (181 miles) south of Rio de Janeiro in Brazil’s Santos Basin. The two deals mark Shell’s exit from the block known as “Bem-Ti-Vi”, in which the state oil company Petrobras is the operator with controlling stake. Portugal’s Galp holds the remaining interest in the block.
“This is the first acquisition of Barra Energia and is an important step to building a portfolio of high quality assets in exploration and production in Brazil,” Executive Director Renato Bertani said. QGEP, which sold stock in an initial public offering in
February, is using the cash to expand exploration and production activities in Brazil by buying stakes in fields where oil has already been discovered, a process known as “farming in.”
BM-S-8 is in the most promising exploration frontier in one of the world’s fastest growing oil producing nations. By 2020, Brazil is expected to produce more than 7 million barrels of oil and natural gas a day, an amount that could make it one of the world’s three largest producers, based on current output and estimates from Brazil’s state-led Petrobras and other operators in Brazil.
While Petrobras has not given an estimate of the amount of oil in the block, it said in 2008 that it may contain volumes similar to Lula, a field with an estimated 8 billion barrels of oil and natural gas equivalent reserves.
