Shell Signs Latest in Handful of Petrobras Partnerships
Shell last week signed a memo of understanding (MoU) with Brazilian state-controlled Petrobras to establish a long-term collaboration in developing deepwater oil and gas fields offshore Brazil, both said September 11. Shell is the latest of a handful of big international oil firms to do so.
Shell said it will benefit from technical solutions, contract management expertise and cost efficient initiatives applied by Petrobras to Brazil’s pre and post-salt projects and, in return, will share with Petrobras its global deep water experience, especially on cost efficiency efforts and use of technology.
The MoU, which was signed by Shell CEO Ben Van Beurden and Petrobras CEO Pedro Parente, during a visit by Petrobras executives to Shell's The Hague headquarters, also involves sharing best practices and learnings on safety and governance management, technical and operational solutions, contract management, logistics, wells construction and air transportation safety.
Most of Shell's Brazil assets were BG-developed
The agreement is valid initially for five years and can be renewed. Shell is a strategic partner of Petrobras in the pre-salt, with minority interests in the Libra and Lula fields and other important areas such as Sapinhoa, Lapa, and Iara, all of which are in Santos Basin. Of those five, all but Libra were originally developed by BG Group, the UK producer acquired en bloc for $54bn in early 2016. Most of their production is oil, but some produce associated gas.
“We’ve seen cost, safety, innovative thinking, and production growth evolve in a very positive way; preferred partnerships and shared expertise are core to that success,” said Shell's executive vice-president for deepwater, Wael Sawan.
In the past 13 months, Petrobras has signed agreements on strategic partnership with Total, Portugal's Galp and Norway's Statoil and, in July 2017, with Chinese National Petroleum Corp (CNPC) the latter including on potential structuring of funding. Shell and CNPC are partners in the Libra field.