Shell has become one of the largest and most profitable energy companies in the world, and for good reason, too. Through the company’s long history, it has developed a diverse energy portfolio that beggars belief. Shell has operations in nearly every market on the planet, and now, the company has plans to increase its upstream presence in Brazil, one of the largest markets in the world. Through its Brazilian subsidiary, Shell has purchased a stake in two pre-salt assets in the South American nation.
Shell’s vast expertise positions the company at the forefront of upstream production
Shell has been operating in the energy market for well over a hundred years, and in that time, has developed one of the most diverse upstream energy portfolios anywhere in the world. Brazil has been through quite a lot in the past year or two, with the country’s former President being convicted of trying to overthrow a democratic election and being sentenced to jail.
Political tension in the region is on a knife-edge, with the United States moving its military into the waters off Venezuela following some back and forth with the nation’s President Maduro. Geopolitical tension aside, Brazil has been developing two new offshore assets that the nation’s largest energy company, Petrobras, along with the UK-based Shell, has purchased stakes in.
Brazil’s Pré-Sal Petróleo (PPSA) recently led an auction for two offshore assets
The auction attracted some of the largest energy companies in the region, and when the dust settled, Shell and Petrobras purchased a stake in the Mero and Atapu shared reservoirs, respectively. Brazil is the latest country in South America to double down on its upstream exploration and activity in the upstream market despite calls to integrate renewable energy projects.
A shared exploration vision benefits all involved in the new assets in Brazil
While Petrobras will hold the vast majority of the operating rights in the two new assets in Brazil, Shell is also hoping to increase its footprint in the Brazilian upstream market. Shell now holds 26.76% of Atapu Open Acreage, which amounts to 0.95% of the unit, as well as holding a 20% interest in Mero Open Acreage, which works out to about 3.5% of the unit.
“This investment strengthens Shell’s position in areas where we have existing assets and supports the company’s aim to sustain material liquids production of 1.4 million barrels per day through 2030,” – Shell on its Brazilian acquisition
Expectations are for the contract for the two projects to be signed early next year. Auctions of non-contracted areas and lease sales have become a necessity for nations aiming to increase their upstream oil and gas output capacity as the new year edges ever closer. And with a new year comes the wave of new upstream possibilities in the global upstream market.
“Today’s winning bid reinforces our disciplined approach to grow Shell’s high margin portfolio in Brazil. Our assets in Brazil are among the most competitive in our global portfolio, combining strong performance with a low carbon footprint.“ – Peter Costello, Shell’s Upstream President
Shell’s international energy portfolio has been growing, despite some issues
Shell has become the cornerstone of the traditional upstream oil and gas market through its substantial portfolio that, with every year, only grows stronger. The company recently unveiled that it has signed off on a new gas development in Nigeria, exemplifying the company’s expertise and knowledge in the upstream market. While Shell has had the odd problem, the company maintains a solid base of operations with its substantial energy assets that span the length and breadth of the international energy market. With the two new acquisitions in Brazil, Shell’s future in the region is looking promising.
