Royal Dutch Shell to sell 23% stake in Brazilian oil project to Qatar Petroleum for $1 bn
29 Jan 2014
Royal Dutch Shell is selling part stake in a Brazilian oil project to Qatar Petroleum International for $1 billion, as part of the largest European energy company's plan of selling non-core assets to focus on more profitable ventures and improve the company's financials.
The Anglo-Dutch oil and gas giant will sell its 23 per cent stake in the Parque das Conchas or BC-10 project off the coast of Brazil.
The sale comes a week after the London-based company agreed to sell stake in two gas projects in Western Australia to the Kuwait Foreign Petroleum Exploration Company for $1.14 billion. (See: Shell to sell stakes in two Australian projects to Kuwait for $1.14 bn)
Shell said that it will continue to operate BC-10 with a 50 per cent working interest and retains a significant upstream presence in Brazil.
In addition to the recent entry into the Libra oil discovery, Shell is currently operating two floating, production, storage and offloading (FPSO) vessels in Brazil's offshore - the Espírito Santo at Parque das Conchas and the Fluminense at the Bijupirá/Salema fields.
Currently, BC-10 is producing approximately 50,000 boe/d. Since coming on-stream in 2009, BC-10 has produced more than 80 million barrels of oil equivalent (boe).
Phase 2 of the project, to tie-in the Argonauta O-North field, came online on October 1st 2013, with an expected peak production of 35,000 boe per day.
The final investment decision for Phase 3 of the BC-10 project was taken in July 2013 and once online is expected to reach a peak production of 28,000 boe.
Shell has also other interests in Brazil, particularly its Lubricants business and its joint venture Raízen, the leading sugar cane ethanol producer.
Shell is under pressure from investors to sell non-core assets to focus on more profitable ventures and improve the company's financials.
The disposal of stakes in Australia and Brazil comes a few days after the London-listed energy group warned that full-year profits would be "significantly lower" than expected.
The warning came nearly 10 years to the day after Shell, the western world's third-biggest oil company, revealed the so-called reserves accounting scandal, when the group dramatically downgraded its reserves estimates.
Media has recently speculated that the company may dispose off assets worth $15 billion this year.
