Shell expands Brazil operated footprint with new deep-water blocks

Shell Brasil Petroleo won four additional deep-water exploration blocks in the Campos and Potiguar basins, bringing its total operated presence offshore Brazil to 18 blocks. In the 15th deep-water bid round organized by the Brazilian National Petroleum Agency (ANP), Shell secured one exploration block on its own, and three in joint-bids with Chevron Brazil, Petrobras, and Petrogal Brasil. Of the newly acquired blocks today, Shell will operate two.

Shell will pay its share of the total signing bonuses, equating for all bids to approximately USD $70-million (R$ 235-million).

“We continue to demonstrate our commitment to growing our production in Brazil and our strong belief in the value deep-water resources brings to our global portfolio,” said Andy Brown, Upstream Director, Shell. “This bid round offers significant potential for additional deep-water discoveries. These lease commitments fall within our agreed capital ceiling and are consistent with our value-based approach.”

Globally, Shell plans to invest $5-6 billion each year through 2020 into its deep water business to strategically grow production and returns for the company. The business is on track to deliver annual, free cash flow of $6-7-billion by 2020 (at $60/barrel Brent RT 2016).