Shell Keen on LatAm Gas Despite Ashmore Sale
Anglo-Dutch oil company Shell does not plan to downsize its gas activities in Latin America after agreeing to sell JV businesses in Brazil and Bolivia to Ashmore International, John Haney, Shell E&P VP for Brazil, told BNamericas.
"We are in the final stages of negotiations [with Ashmore]. We are leaving the gas pipeline business but are still interested in gas distribution through our stake in [Brazilian natural gas distributor] Comgas," said Haney. Shell is one of the world's largest gas distributors "and this business is very interesting for the company," Haney said.
Ashmore announced in May its deal to buy out Shell's interest in their JV activities in Brazil and Bolivia. As a result, Ashmore would own 100% of the following: Pantanal Energia, a 480MW gas-fired plant in Brazil's Mato Grosso state; natural gas marketer Transborder Gas Services, which services the plant; Brazilian natural gas pipeline company Gasocidente de Mato Grosso; and Bolivian natural gas pipeline company GasOriente Boliviano.
Further, Ashmore would boost from 25% to 50% its stake in Bolivian natural gas and liquids pipeline company Transredes Transporte de Hidrocarburos.
Meanwhile, prices are going up all over the world for rig construction. "FX [foreign exchange] and steel prices are affecting prices," said Haney. Shell is awaiting conclusion of the floating production, storage and offloading (FPSO) vessel that will operate in the Campos basin's BC-10 block in Brazil, said Haney.
The 100,000b/d FPSO will operate in the first stage of the block's development linked to the Ostra, Abalone and Argonauta fields some 120km offshore at water depths of 1,500-2,000m, Shell said previously in a statement. The vessel is due to be in place in the second quarter of 2009, according to the 2006 Shell statement.
"All the services are contracted. We plan to start the production on this block by the end of the decade," Haney said.
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