Offshore staff
(Brazil)-Shell Brasil Exploration & Production has exercised its pre-emption option for an additional 30% participating interest in the Shell-operated BC-10 block located offshore Brazil.
Further, Shell and partner Petrobras have agreed to the sale of half of Shell's additional stake acquired through this pre-emption (15%), to the Indian National Oil Company, ONGC Videsh Ltd. (OVL).
The transaction will increase Shell's equity interest while also bringing ONGC into the joint venture partnership. Shell will remain operator.
Once the transaction has been completed and approved by Brazil's National Petroleum Agency, the BC-10 shareholdings will stand at Shell 50%, Petrobras 35% and OVL 15%
During the coming months, Shell, Petrobras and ONGC will continue to analyze options for the development of BC-10. The project has entered the front-end engineering design phase and a high-level development concept has been selected, which includes an FPSO and sub-sea systems to produce the discoveries in the block.
BC-10 will mark Shell's second operated development in Brazil, with the potential for production of around 100,000 b/d of oil. Shell is already a leading international player in offshore Brazil, with production from the Shell-operated Bijipurá and Salema fields and interests in 14 exploration blocks.
According to John Haney, VP for Shell Brasil EP, "Deepwater offshore Brazil is an important element of our global growth strategy. We believe that an increased interest in BC -10 is an attractive opportunity and re-confirms our commitment to growth in Brazil. The nature of this deal emphasizes the strength of our relationship with Petrobras and our growing relationship with ONGC."
OVL Chairman Subir Raha said:
"We are extremely pleased to be joining the BC-10 joint venture. It broadens our portfolio through entry into a very valuable prospect and marks our presence in Latin America. We look forward to partnering with Petrobras and Shell, two of the most renowned companies in the area of deepwater operations."
BC-10 was declared commercial in December 2005, after a substantial exploration and appraisal program involving 13 wells and significant engineering and technological studies. In total, six discoveries were made in the block, which resulted in four development areas: Ostra, Argonauta, Abalone and Nautilus.
The block is located approximately 120 km southeast of the city of Vitoria, Espírito Santo state, in water depths ranging from 1,500 to 2,000 m.
4/27/2006
