MercoPress, en Español

Montevideo, September 20th 2018 - 20:45 UTC

Shell confident Petrobras will recover and willing to purchase more assets from the Brazil oil giant

Monday, April 27th 2015 - 10:14 UTC
Full article 2 comments
CEO Ben van Beurden said production from Brazil's offshore subsalt region will remain profitable, and predicted oil prices will rise from the current low levels CEO Ben van Beurden said production from Brazil's offshore subsalt region will remain profitable, and predicted oil prices will rise from the current low levels

Royal Dutch Shell Plc has taken into account the risks presented by the Petrobras graft scandal to its expanding operations in Brazil and is confident the Brazilian state-run oil company will emerge stronger, Shell's CEO said in an interview.

 Chief Executive Ben van Beurden said oil production from Brazil's offshore subsalt region will remain profitable, and predicted that oil prices will rise from the low levels of the past six months.

Van Beurden briefed Brazilian President Dilma Rousseff for an hour and a half on Friday on the company's operations in Brazil, where Shell is set to become the second-largest oil producer following its April 8 agreement to purchase rival BG Group .

The acquisition increases Shell's role in Brazil, where it had been the No. 3 producer, giving it a financial stake in giant new offshore fields operated by Brazil's troubled Petrobras. In January, BG's 140,562 barrels a day of oil and gas output (boepd) in Brazil was nearly four times greater than Shell's 49,014 boepd.

While Shell will have to take a backseat to Petrobras on operational decisions, it is believed to have the money and technology needed to push Petrobras-led projects forward.

Petrobras took a 17 billion charge last Wednesday to account for the costs of a political kickback scandal that forced it to cut investment, and paralyzed its contracts with engineering firms under investigation for bribery.

“I have 100% confidence that Petrobras will come through this probably as a stronger company than it was before,” van Beurden said at a news conference after meeting Rousseff.

He said Brazil's subsalt resources are among the best in the world and that Shell is interested in deepening its involvement. “The resources in production today are very, very strong. I do not see any issue of profitability of the operation,” he said.

Van Beurden said Shell has studied the risks of working with Petrobras.

“We have taken into account the impact that any of today's news will have on the development of existing fields as well as the Libra field going forward, and these risks have been fully factored into the commercial arrangements we have done with BG,” he said.

Van Beurden expects Brazil to account for 20% of Shell's global oil output in a decade due to the BG deal. He said Shell would consider buying any Petrobras assets put up for sale “if the opportunities come up”.

Top Comments

Disclaimer & comment rules
  • Jack Bauer

    Hey brassholes,
    where are you all ??
    There you are, Royal Dutch Shell - a FOREIGN company - buying up portions of Petrobras oil fields....just a couple of weeks ago, I had to tell you that you were wrong when you stated that there were no foreign oil companies operating in Brazil ......You didn't even try to defend your statement, because you couldn't, which proves you are an ignorANUS !!

    Apr 27th, 2015 - 05:05 pm 0
  • Conqueror

    It's normal practice for BIG oil companies to buy various parts of smaller companies. Especially when the smaller company can't survive without local government support. Comparison of date. Petrobras manages annual revenue of US$130.0 billion. Shell does US$421.105 billion. Petrosbras manages a net income of US$10.0 billion. Shell does US$20.159 billion.

    Apr 27th, 2015 - 05:56 pm 0
  • Jack Bauer

    Latest news from Bloomberg - Brazil is studying the possibility of easing-up on the demand that 100% of the new sub-salt oilfields be explored by Petrobras alone...
    Although any change in the legislation which governs the sub-salt will need to be approved by Congress, day-by-day, this option is becoming more likely.
    The government has decided to allow PB to set its own fuel price policy given that the company lost billions through the subsidies granted to the imports of gasoline and diesel oil during fat Dilma's first term.
    PB is now the most indebted oil compnay in the world, owing 3,5 times its worth on the stock market.
    Finally, the government has realized PB cannot survive unless drastic changes are made......which should make the 'brasshole' and his smelly friends go crazy.

    May 04th, 2015 - 10:16 pm 0
Read all comments

Commenting for this story is now closed.
If you have a Facebook account, become a fan and comment on our Facebook Page!