HOUSTON, October 21, 2013 /PRNewswire/ --
A consortium of companies, including Royal Dutch Shell plc ("Shell") (NYSE:RDS.A)(NYSE:RDS.B), Petrobras, Total, CNPC and CNOOC, won today a 35-year production sharing contract to develop the giant Libra pre-salt oil discovery located in the Santos Basin, offshore Brazil. The Brazilian regulator, Agência Nacional do Petróleo (ANP), estimates Libra's recoverable resources of between 8 to 12 billion barrels of oil.
"The Libra oil discovery in Brazil is one of the largest deep water oil accumulations in the world. We look forward to applying Shell's global deep water experience and technology, to support the profitable development of this exciting opportunity," said Peter Voser, Chief Executive Officer, Royal Dutch Shell.
Shell holds 20% in the consortium, with Petrobras 40% as operator, Total 20%, CNPC 10% and CNOOC 10%. The consortium will work together in an integrated fashion to support Petrobras, the most experienced operator in the Brazilian pre-salt, and will incorporate each company's deep water skills, people and technology for the success of the venture.
The production sharing contract is expected to be signed in November 2013. As part of the winning bid, Shell will pay its 20-percent share of the total signing bonus of USD $1.4 billion [3.0 billion reais], and fulfill the minimum work program no later than end 2017.
The ultra-deep water Libra accumulation is located in Santos Basin, approximately 170 kilometers (105 miles) off the coast of Rio de Janeiro. The block covers approximately 1,550 square kilometers in water depths of around 2,000 meters (6,500 feet). The reservoir depth is around 3,500 meters below the sea floor (11,500 feet). The ANP estimates that total gross peak oil production could reach 1.4 million barrels per day. Further appraisal is required to firm up this estimate, the development concept and a first oil date.
Shell is one of the industry's pioneers in deep water oil and gas with some 330,000 boe/d of production, world-wide, from deep water in 2012. Our commitment to technology and innovation continues to be at the core of our strategy. As energy projects become more complex and more technically demanding, we believe our engineering expertise will be a deciding factor in the growth of our businesses.
Shell was the first International Oil Company to produce on a commercial scale in Brazil and has more than 100 years of history within the country, with circa 65,000 boe/d of operated production in 2012. Shell is currently operating two Floating, Production, Storage and Offloading (FPSO) vessels in Brazil's offshore - the Espírito Santo at Parque das Conchas and the Fluminense at the Bijupirá/Salema fields - and has recently announced projects to expand production at both fields. Shell also operates and owns an 80% interest in the BM-S-54 block, where the Gato do Mato discovery is being appraised. Shell has also other interests in Brazil, particularly our Lubricants business and our joint venture Raízen, the leading sugar cane ethanol producer and fuels retailer.
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