Shell expands Brazil project with ONGC after blocking China bid

10/3/2013

Shell expands Brazil project with ONGC after blocking China bid

BY EDUARD GISMATULLIN

HAGUE (Bloomberg) -- Royal Dutch Shell and Oil & Natural Gas Corporation expanded oil production at a project off Brazil after blocking a Chinese bid for a stake in the venture. The partners, together with Petroleo Brasileiro, started output at the Argonauta O-North field, Shell said in a statement. It expects peak production of as much as 35,000 boed.

Shell and ONGC are expanding off Brazil after last month pre-empting a $1.54 billion bid by Sinochem Group for a stake held by Petrobras in their Parque das Conchas venture, which includes Argonauta. The Latin American country has attracted investment to its oil industry since Petrobras discovered the Tupi field in 2007, the Americas’ biggest find in 30 years.

The Parque das Conchas, in the Campos Basin, is a phased project where production from the Abalone, Ostra and Argonauta B-West deposits began in 2009. Extraction from those fields peaked at 90,000 bpd in 2010 before falling to 35,000 bpd, Shell said.

The first phase output “declined naturally as expected,” Julia Dudley, a Shell spokeswoman, said by phone. Output from the second and third phases; the latter still under construction, will boost production, she said.

Shell, holds 50 % of Parque das Conchas, also known as BC-10. ONGC has 15 % and Petrobras 35 %. Shell operates the heavy-oil block, about 110 km off southeast Brazil. The third phase will add volumes from the Massa and Argonauta O-South reservoirs, which will pump as much as 28,000 bpd.

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