QPI and Shell sign cooperation deal for Brazil’s offshore oil project

offshore-jjordan64816-flickrQatar Petroleum International (QPI) has signed a memorandum of cooperation with Shell following the purchase of the latter’s 23 per cent of stake in oil project — BC-10 or Parque das Conchas — offshore Brazil for US$1bn

BC-10 reportedly represents a milestone in the development and commercialisation of Brazil’s deep-water oil. Three fields in the Campos Basin have been developed with sub-sea wells and manifolds, with each field tied back to the heart of Parque das Conchas — a centrally located floating production storage and offloading (FPSO) vessel moored in around 1,780 metres of water.

Nasser al-Jaidah, CEO of QPI, said, “QPI is pleased to have strategically expanded and strengthened our international investment portfolio through this agreement. With our long-term partner, Shell, QPI offers valuable support for the progressed development of BC-10.”

Wael Sawan, MD of Qatar Shell, added that the opportunity represented a major achievement in the two companies’ partnership.

“The opportunity represents a major achievement in our long-term partnership with Qatar Petroleum. Together, we have built two of the world’s largest energy projects — Pearl GTL and Qatargas4. In the near future, we hope to reach a final investment decision for the Al Karaana Petrochemicals project, another joint venture between QP and Shell,” he added.

BC-10 has been producing around 50,000 barrels of oil equivalent per day (boepd). Since coming on-stream in 2009, BC-10 has produced more than 80mn barrels of oil equivalent. Phase 2 of the project came online in October 2013, with an expected peak production of 35,000 boepd. A final investment decision for a Phase 3 of the BC-10 project was taken in July 2013 and once online is expected to reach a peak production of 28,000 boepd.

In December 2013, Shell acquired an additional 23 per cent interest in BC-10 for approximately US$1bn resulting from a buy-out of Petrobras’ interest in the project. This transaction raised Shell’s total interest in BC-10 to 73 per cent. India’s Oil and Natural Gas Corporation Limited (ONGC), previously holding a 15 per cent working interest, acquired an additional 12 per cent interest.

Following the latest transaction this year, Shell continues as operator and as a 50 per cent equity owner, with ONGC holding a 27 per cent interest and QPI holding 23 per cent.

QPI said that the latest deal regarding BC-10 represents its first upstream investment in Latin America, adding to the company’s expanding portfolio across the energy chain in five continents.

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