In Focus: Brazil

With 103 years of continuous activity in Brazil, Shell was the first international oil company (IOC) to produce oil on a commercial scale in the country, in 2003. Our current presence in Brazil encompasses both the Upstream and Downstream sectors of the value chain. Shell’s upstream footprint is mainly comprised of deep-water assets, and we are operators and consortium partners in several offshore fields in the Campos, Santos and Barreirinhas basins. The combination with BG gave Shell an additional production of approximately 175 thousand boe/d in Q1 2016 from the Petrobras operated pre-salt, which is among the world’s most important discoveries in the past decade.

In the Campos Basin, we are the operators of the Bijupirá and Salema fields (Shell interest 80%) and the BC-10 field (Shell interest 50%). In March 2016, Shell started production from the third development phase of BC-10.

In the Santos Basin, we now hold non-operated interests in BM-S-9 (30%), BM-S-11 (25%), and BM-S-50 (20%) blocks, all operated by Petrobras. In BM-S-9 we have a 30% working interest in the Sapinhoa and Lapa fields. Sapinhoa currently has two FPSOs in operation and Lapa has one FPSO scheduled to start up later this year. In BM-S-11, we have a 25% interests in the Lula, Iracema, Berbigão, Sururu and Atapú West fields. The Iracema and Lula fields have five FPSOs in operation, with one FPSO scheduled to start this year and seven FPSOs planned.

As part of the solution to transport gas from the Santos Basin, Shell has a 25% stake in the Lula Mexilhão Pipeline, which carries natural gas produced by the FPSOs Cidade de Angra dos Reis, Cidade de São Paulo and Cidade de Paraty. The natural gas then travels to a treatment unit in Caraguatatuba (São Paulo state). Finally, we also have a 25% stake in the Cabiúnas Pipeline (also known as Route 2) along with our partners on BM-S-9 and BM-S-11. With an extension of 401 kilometres, Route 2 is the longest subsea pipeline for gas transport in Brazil, with an operational capacity to move 13 million cubic metres of natural gas daily. It connects the Santos Basin to a gas plant in Macaé, in the state of Rio de Janeiro.

With the successful conclusion of the BG combination, and instant access to their reserves and production share in the country, our oil and gas output in Brazil is now above 200 thousand boe/d – and on an upward curve – with steady growth planned through 2020 and beyond.

Shell also holds a 20% interest in a 35-year PSC to develop the Libra pre-salt oil field located in the Santos Basin. The ultra-deep water Libra accumulation is located approximately 170 kilometres (105 miles) off the coast of Rio de Janeiro. The block covers approximately 1,550 square kilometres in water depths of around 2,000 metres (6,500 feet). The reservoir depth is around 3,500 metres (11,500 feet) below the sea floor. Exploration and appraisal drilling is underway, and an extended well test is scheduled to start producing in 2017. Libra will potentially make Shell and its international partners in the consortium the first IOCs to produce oil and gas in Brazil under a PSC model.

In exploration, Shell operates one offshore block in the Santos Basin, BM-S-54 (Shell interest 80%), and 10 blocks in Brazil’s Equatorial Margin offshore Barreirinhas Basin, an area of considerable geological potential.