Shell’s deepwater project offshore Brazil is a go with first Gato do Mato gas due in 2029

Shell do Brasil, a Brazilian subsidiary of the UK-headquartered energy giant Shell, has taken a final investment decision (FID) for its deepwater development project in the pre-salt area of the Santos Basin off the coast of Brazil.

Shell put off the FID for the Gato do Mato field in November 2022, emphasizing that it did not expect to make it within 12 to 24 months. Come December 2023, Cristiano da Costa, President of Shell Brasil, revealed the company’s plans to take the final investment decision for the project in 1Q 2025.

Last year, the company put MODEC in charge of the hull design and all related topside facilities for a floating production, storage, and offloading (FPSO) unit destined to work at Gato do Mato, projected to be moored by a SOFEC spread mooring system.

Shell has now confirmed the much-anticipated FID for this deepwater project in the Santos Basin, which will entail the installation of the FPSO, designed to produce up to 120,000 barrels of oil per day. The estimated volume of recoverable resources is approximately 370 million barrels.

The Gato do Mato consortium, which includes Shell (operator with a 50% stake), Ecopetrol (30%), TotalEnergies (20%), and Pré-Sal Petróleo SA (PPSA) acting as manager of the production sharing contract (PSC), expects the project to come into operation in 2029.

Zoë Yujnovich, Shell’s Head of Integrated Gas and Upstream, commented: “Gato do Mato is an example of our continued investment in increasingly efficient projects. The project contributes to maintaining stable liquids production in our Upstream business and extends our leadership as the largest foreign producer in Brazil as we continue to work towards meeting the world’s energy needs in the future.”

Located in the Santos Basin, off the coast of Rio de Janeiro, in water depths ranging from 1,750 to 2,050 meters, the Gato do Mato field is a pre-salt gas-condensate discovery that spans two contiguous blocks: BM-S-54, a concession contract signed in 2005, and Sul de Gato do Mato, a production sharing contract (PSC) obtained in 2017.

The operator elaborates that initial operations will involve the reinjection of natural gas to support reservoir pressure, with the possibility of exporting gas to onshore facilities. While the produced stabilized crude will be stored in the FPSO tanks, the oil will be offloaded to shuttle tankers to go to market.

Shell believes the investment in Gato do Mato will generate an internal rate of return (IRR) higher than the minimum stipulated for the firm’s upstream projects. The UK-headquartered giant is working on boosting its oil and gas production arsenal from its global portfolio.

This is illustrated by its intention to have a field development plan (FDP) and an FID in 2027 for its recent natural gas discovery in the North Sea.