Petrobras, Shell, and CNOOC ink deals for three blocks offshore Brazil

Three oil and gas players – Brazil’s Petrobras, the UK’s Shell, and China’s CNOOC – have signed three concession contracts for three blocks in the Pelotas Basin offshore Brazil acquired at the public session held by the National Agency of Petroleum, Natural Gas and Biofuels (ANP) in December 2023.

During the 4th cycle of the permanent concession offer held by the National Agency of Petroleum, Natural Gas and Biofuels (ANP) in Rio de Janeiro on December 13 last year, Petrobras (operator) won 29 blocks in the Pelotas Basin, out of which 26 were in partnership with Shell Brasil Petróleo, a subsidiary of the UK oil major, and three in consortiums formed with Shell and CNOOC Petroleum.

The firm signed 26 concession contracts on the same date for blocks in which it holds a 70% stake with its partner, Shell, having the remaining 30% stake. The contracts refer to blocks P-M-1277, P-M-1279, P-M-1281, P-M-1361, P-M-1363, P-M-1441, P-M-1443, P-M-1357, P-M-1359, P-M-1439, P-M-1516, P-M-1518, P-M-1595, P-M-1597, P-M-1793, P-M-1795, P-M-1838, P-M-1840, P-M-1520, P-M-1522, P-M-1599, P-M-1674, P-M-1676, P-M-1678, P-M-1743, and P-M-1799.

According to the  Brazilian state-owned energy giant, contracts for the three remaining blocks P-M-1737, P-M-1739, and P-M-1797, in the Pelotas basin have now also been penned, thus, the consortium will have Petrobras as the operator, with a 50% stake, and Shell and CNOOC as partners with 30% and 20% stakes, respectively.

“The signing of these contracts is in accordance with the company’s long-term strategy with the aim of diversifying its portfolio; and it also strengthens Petrobras’ position as the main operator of oil fields located in deep and ultra-deep waters, potentializing the recomposition of reserves for the future,” explained the firm.

The expansion of the Brazilian energy giant’s portfolio is aligned with its 2024-2028 strategic plan, which puts oil and natural gas at the forefront of further investments, positioning them to receive the biggest slice of the planned $102 billion investment pie.

Petrobras sees oil and gas as drivers of growth, which will propel and fund the energy transition to greener sources of supply. The Brazilian player plans to deploy 14 new FPSO vessels over five years.

While the pre-salt has been in production for 15 years, with more than 30 production platforms in operation and approximately 170 exploratory wells already drilled, with a success rate of 50%, the Energy Research Company (EPE) expects oil production in the country to peak at 5.3 million boe/day in 2030, before declining in the following years.

Petrobras is also working on multiple projects outside Brazil, including two discoveries offshore Colombia that have raised the gas potential in the Guajira Offshore Basin to approximately 6 trillion cubic feet (tcf). Recently, Petrobras also got the green light to acquire a stake in the Deep Western Orange Basin (DWOB) block, through a competitive process conducted by TotalEnergies.

The block is located in deep waters in the Orange Basin, where there have recently been significant discoveries by TotalEnergies, Shell, and Galp. Following the acquisition, the consortium will consist of TotalEnergies (operator, 40%), QatarEnergy (30%), Sezigyn (20%), and Petrobras (10%).

The Brazilian firm underlined: “The purpose of the operation will be to diversify the exploration portfolio with value generation and is in line with the company’s long-term strategy, which aims to oil and gas reserves replacement by exploring new frontiers, both in Brazil and abroad, and acting in partnership.

“The acquisition of the DWOB block in South Africa complies with all the company’s internal processes and governance procedures, in line with its Strategic Plan 2024-2028+ and is subject to approval by local regulatory bodies.”