Shell Updates On South American Assets In Annual Report

Instant Max AI

(Shell, 1.Apr.2021) — Shell provided details in its 2020 annual report related to its operations in South America from Argentina, Brazil and Bolivia. What follows is a summary from the report.

South America

Argentina

We have more than 178 thousand net mineral acres in the Vaca Muerta Basin, a liquids- and gas-rich play located in the Neuquén Province. The operated acreage includes blocks in Cruz de Lorena and Sierras Blancas (Shell interest 90%), Coiron Amargo Sur Oeste (Shell interest 80%), and Bajada de Añelo (Shell interest 50%). We have a 45% non-Shell-operated interest in the Rincon La Ceniza and La Escalonada blocks.

In 2020, we drilled and brought 23 wells on stream. We have interests in 88 producing wells. We have a 90% interest in our operated Sierras Blancas / Cruz de Lorena central processing facility.

In 2020, in a 50:50 partnership with Equinor, we acquired a 60% working interest (Shell 30% interest) in the Bandurria Sur block, operated by YPF S.A., in the Vaca Muerta Basin.

Offshore

We have two frontier exploration blocks offshore Argentina. For both blocks, Shell is the operator with a 60% interest.

Brazil

Our total share of production in Brazil was an average of 394 thousand boe/d in 2020.

Our operated portfolio consists of offshore assets in:

• the Bijupirá and Salema fields (Shell interest 80%) and the BC-10 field (Shell interest 50%) in the Campos Basin;

• the Gato do Mato field in the Santos Basin and the adjacent Sul de Gato do Mato area (Shell interest 50%, after the completed sale of a 30% stake to Ecopetrol in 2020), subject to unitisation, with development options under evaluation; and

• a total of 17 exploration blocks in the following areas: – Barreirinhas Basin (10 blocks with Shell interests ranging from 50% to 100%); – Santos Basin (Alto Cabo Frio Oeste PSC, Shell interest 55%; Saturno PSC, Shell interest 45%); – Potiguar Basin (POT-M-948, Shell interest 100%); and – Campos Basin (C-M-659, Shell interest 40%; CM-713, Shell interest 40%; C-M-791, Shell interest 40% and C-M-757, Shell interest 100%). (Block CM-757 was awarded to Shell in the National Petroleum Agency (ANP) permanent offer round in December 2020 and is awaiting ratification.)

Our non-operated portfolio consists of the following fields in the offshore Santos Basin:

• Sapinhoá field (Shell interest 30%, operated by Petrobras), straddling the BM-S-9 and Entorno de Sapinhoá blocks, already unitised;

• Lapa field (Shell interest 30%, operated by Total) in Block BMS-9A;

• Berbigão and Sururu fields (Shell interest 25%, subject to ongoing discussions about unitisation agreements, operated by Petrobras) in Block BM-S-11A;

• Atapu field (Shell interest 4%, unitised in September 2019) in Block BM-S-11A;

• Lula field in Block BM-S-11, recently renamed the Tupi field because of a court decision (subject to unitisation in effect since April 2019, Shell interest 23%, operated by Petrobras);

• Iracema field in Block BM-S-11 (Shell interest 25%, not subject to unitisation, operated by Petrobras); and

• Mero field in the Libra PSC area (Shell interest 20%, unitisation with an adjoining area still subject to government approval, operated by Petrobras).

In addition to the producing assets, we hold interests in two non-operated exploration blocks in the Santos Basin:

• BM-S-50, containing the Sagitário discovery (Shell interest 20%, operated by Petrobras); and

• Tres Marias (Shell interest 40%, operated by Petrobras).

We also hold interests in two non-operated exploration blocks in the Potiguar Basin:

• POT-M-859 (Shell interest 40%, operated by Petrobras); and

• POT-M-952 (Shell interest 40%, operated by Petrobras).

The activities of operated and non-operated fields are currently supported by 17 producing deep-water FPSOs, of which the 17th (P-70) delivered first oil in June 2020. Two additional FPSOs are expected to be brought online over the period 2022-2023 (Mero 1 and Mero 2). In August 2020, we announced the final investment decision to contract the Mero 3 FPSO vessel to be deployed at the Mero field. We agreed to sell our 23% interest in the P-71 FPSO, the deal is expected to be completed in the first quarter of 2021.

Bolivia

We hold a 37.5% participating interest in the Caipipendi block where we produce and explore. We also have a 25% interest in Tarija XX West block where we produce from the Itaú field. We have the rights to explore and further develop the onshore Huacareta block (Shell interest 100% during exploration), and we are exploring there. We hold a 15% participating interest in the Repsol-operated Iniguazu exploration.

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