Royal Dutch Shell has announced that it has inked a partnership with Petrobras where the two firms will partner in the development of pre-salt fields located in Brazil. The MoU signed between the two oil companies will see them share experience and expertise in cost efficiency initiatives, contract management, operational solutions as well as technical solutions. Initially the cooperation agreement will run for five years with a possibility of an extension.
“Competitive growth of deep-water resources remains key to our company’s strategy for decades to come, and we’re very pleased to advance the technical and operational benefits of our joint-ventures with Petrobras in Brazil,” Royal Dutch Shell’s Deep Water executive vice president, Wael Sawan, said.
The pre-salt layer in Brazil, which is considered a highly promising offshore energy asset has attracted interest from ten oil firms. All of these firms have registered with a view to bidding on eight blocks located in the Campos and Santos basins. Set for October 27, this will be the second and auction of oil exploration rights in Brazil.
Oil sector reforms
The developments are coming less than a year since the oil sector laws were amended in Brazil paving the way for viable investments in the South American country. Among the reforms that were carried out under President Michael Temer included the revamping of the pre-salt law which opened blocks operatorship to all foreign firms after scrapping the obligation of Petrobras to serve as the sole operator.
With the changes in law and the generous acreage offered, foreign investments in Brazil are growing. Late last year French oil giant Total bought stakes in various oil fields in South America’s biggest economy. There has also been interest from other oil producers based in Europe and this is partly because the fields offer low-risk opportunities in a weak crude environment.