Shell Advances Exploration Program in Brazil

Shell in partnership with Petrobras, bid approximately $3.7 million for the BM-C-25 block in Campos basin. The Campos basin are produces over 80 percent of Brazil's oil. The block lies in deep waters with depths of between 600 meters and 1,700 meters off the coast of southeastern Espirito Santo state.

Shell has so far made no commercially viable discoveries in the country, but is full of hopes to strike crude. "We are building and upgarding our exploration program in Brazil," said Michel Kool, vice president of Shell Brasil. "We have made non-commercial discoveries and, despite a technical challenge, we hope to produce oil here. The block is close to our B-10 block where we have conducted aggressive drilling and made non-commercial discoveries. That's why we bid on it," Kool said, adding that Shell planned to drill at least one more well at B-10 shortly.

Shell controls the consortium with Petrobras with a 60 percent stake, but Petrobras will operate the new block. "It is convenient for us to have Petrobras as the operator," he said without elaborating further. After Wednesday's purchase and the incorporation of Enterprise Oil assets, Shell now owns or co-owns exploration and production rights for 13 Brazilian blocks. Kool did not rule out divesting some of the Brazilian assets following the incorporation, to concentrate on the projects with most prospects. Kool would not comment on long-term investment plans, only mentioning the BM-C-10 well and another well to be drilled at the BM-C-4 block. Each well costs between $15 million and $20 million, he said.