en.Wedoany.com Reported - Shell Brazil President Cristiano Pinto da Costa assessed at the Argus Rio Crude Conference that Brazil's pre-salt fields are approaching their production peak, but opportunities still exist within the polygon area to enhance recovery rates at existing fields and develop adjacent blocks.
The executive stated at the conference held on May 19 in Rio de Janeiro that the major discovery phase is over, but enhanced oil recovery and near-field exploration still hold significant opportunities. Shell has communicated with Brazil's Ministry of Mines and Energy and the National Agency of Petroleum, Natural Gas and Biofuels (ANP), hoping to include these new areas in future bid rounds. In his view, the advantage of these areas lies in the existing nearby infrastructure, which can accelerate the extraction of existing reserves and enhance the competitiveness of new projects.
While new pre-salt areas have yet to enter the bidding phase, Shell is developing the Sul de Santos area. Located beneath the Santos Basin, this area is operated by Shell. Costa revealed that Shell will drill an exploratory well there next year, and the area shows promising prospects. He emphasized that pre-salt project development costs are high, but once in production, the unit production costs are competitive.
In addition to enhanced oil recovery and adjacent asset development, Costa pointed out that opening new frontier areas, such as the Amazon Mouth Basin, the Sergipe-Alagoas Basin, and southern Brazil, are also ways to sustain oil production. In 2023, Shell won 26 blocks within a consortium operated by Petrobras. Cristiano stated that there are no drilling plans for the region yet, and seismic studies are currently underway.
Brazil has become Shell Group's largest oil-producing market. Shell recently reached a milestone of 500,000 barrels of oil equivalent per day in Brazil, with production increasing by approximately 25% over the past four to five years.
When discussing risks in the Brazilian market, Costa affirmed the country's institutional and regulatory stability, but also noted that the recent imposition of an export tax on oil and the inclusion of oil in the selective tax under the tax reform have become points of market concern. He stated that Brazil's tax burden is already heavy, while other countries are offering more competitive tax terms, leading capital flows to Namibia, Argentina, Suriname, and Guyana. Furthermore, he mentioned that the country's licensing process is slower and less competitive compared to other regions, which incurs financial costs related to project capital costs.
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