Royal Dutch Shell Pares Brazil Offshore Drilling Interest for $1 Billion
Just a month after securing an additional 23% interest in its existing Brazilian BC-10 offshore drilling operation to pre-empt a "third party bid," Royal Dutch Shellannounced today it would sell the 23% ownership stake for roughly $1 billion to Qatar Petroleum. Shell will retain a 50% interest in the BC-10 drilling operation.
The Parque das Conchas project, also known as BC-10, generates an estimated 50,000 barrels of oil equivalent per day, or BOE/d, according to Shell. Phase 2 of the drilling operation off Brazil's southeast coast began in early October 2013, and is expected to produce as much as 35,000 BOE/d once "peak production" capacity is reached. Once phase 3 of the project comes online, production capacity is expected to jump another 28,000 BOE/d, according to Shell.
In addition to its lubricants and ethanol businesses, Shell has two offshore floating production and storage operations in Brazil. Shell also expanded its South American operations after winning a 20% ownership stake in Brazil's Libra pre-salt oil discovery in October 2013. The Libra operations have oil reserves of an estimated 8 billion to 12 billion BOE, Brazilian oil regulators have said.
The BC-10 transaction is subject to regulatory and customary closing conditions.
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