By Brazil Stock Guide – Shell Plc (LON: SHEL) agreed to acquire 50% of the Tupinambá block from BP Plc (LON: BP), expanding its exposure to Brazil’s pre-salt. ANP studies estimate mean unrisked oil initially in place of 4.2 billion barrels.
BP currently owns the entire block and will remain operator after closing. Tupinambá lies about 400 kilometers (249 miles) offshore, in water depths of roughly 2,300 meters (7,550 feet). Financial terms were not disclosed.
“This is an excellent growth opportunity for Shell in the country,” Shell Brazil President João Santos Rosa said. He added that the deal strengthens Shell’s position in the Santos Basin and creates a new partnership with BP.
The transaction gives Shell access to a large exploration prospect before commerciality has been established. For BP, it reduces standalone exposure to future spending while preserving operatorship.
A Large Prospect in Brazil’s Core Oil Basin
ANP estimates mean unrisked oil initially in place, or VOIP, of 4.2 billion barrels at Tupinambá. VOIP measures oil originally contained in a structure and should not be confused with proven or recoverable reserves.
The Santos Basin produced about 3.57 million barrels of oil per day in July, or roughly 79% of Brazil’s output. Brazil’s total oil production reached 4.498 million barrels per day in the month.
Shell Adds Another Brazil Growth Option
Shell already has one of the largest foreign upstream positions in Brazil. Its equity interests across local projects accounted for about 394,900 barrels of oil per day in July, or roughly 540,500 barrels of oil equivalent per day, according to ANP data.
Tupinambá now adds another exploration option to that portfolio. If future drilling confirms a commercially viable accumulation, the block could become another sizeable pre-salt development for Shell and BP.
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