Royal Dutch Shell, Europe's largest oil company, expects to make robust investments in Brazil's offshore sector, hoping to quadruple oil and gas output there by the end of the decade, its chief executive officer said on Monday.
CEO Ben van Beurden spoke in Brazil shortly after Shell's $52 billion takeover of rival BG Group Plc, approved in late January, took effect, Reuters reported. He said Brazil will be a key area for the Anglo-Dutch company as it focuses its expanded operations in liquefied natural gas and deepwater oil production.
"We believe in the strong fundamentals of Brazil and the fundamentals of its geology," Van Beurden told reporters in Rio de Janeiro. "We will be looking at a substantial part of our production from Brazil."
By adding BG's large Brazilian offshore assets, Shell's local output rose sixfold to about 240,000 barrels of oil and natural gas equivalent a day (boepd), or 13% of its total of 1.8 million boepd.
A quadrupling of its Brazilian output would boost production to nearly 1 million bpd by 2020. Shell is already Brazil's No. 2 producer after state-led Petroleo Brasileiro SA, or Petrobras.
The BG takeover also makes Shell the world's largest trader of LNG. While it sells LNG to Petrobras for the Brazilian market, van Beurden and his Brazilian deputy, Andre Araujo, declined to say if they want to buy Petrobras' natural gas assets, some of which are for sale. Brazil's importance to Shell is expected to increase as it moves ahead with giant subsalt projects such as Libra, which it is developing with Petrobras, France's Total SA, China's CNOOC and CNPC.
