Shell has a 40% interest in the block, Brazil's federal energy company Petrobras (NYSE: PBR) has 40% and US oil company Chevron (NYSE: CVX) the remaining 20%.
The partners have been exploring the block since 1998, when Brazil's oil sector was opened up to private investment. The block is located in water depths of 1,500 meters and estimated to contain total reserves of 1.6 million barrels (Mb) of 14-degree API heavy crude, Haney said.
"We consider this a frontier block," he said. "We want to improve recovery levels there."
Shell also has interests in the BC-10 block in the Campos basin and in 11 exploratory blocks in Brazil.
The company plans to continue development of the BC-10 block, which it operates with a 35% stake. Its partners there are Petrobras with 35% and US oil company Exxon Mobil (NYSE: XOM) with 30%.
"We should file the development plans for the block at the hydrocarbons regulator by the end of the first half," Haney said.
The company expects to recover as much as 400Mb of heavy crude there by 2010, he said.
At the same time Shell should drill new appraisal wells this year in the existing productive fields of Bijupira and Salema, where the company is producing some 35,000-40,000 barrels of oil a day.
Shell invested US$200mn in 2005 in its Brazilian operations, of which US$150mn went into E&P. Haney declined to say how much the company would invest in Brazil this year.
Shell also has downstream operations in the country, including interests in natural gas distribution and transport.
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