Bloomberg News

Shell Interested in Buying Petrobras Blocks in Gulf of Mexico

April 18, 2013

Royal Dutch Shell Plc (RDSA), Europe’s biggest oil company, is interested in acquiring assets in the Gulf of Mexico, including Petroleo Brasileiro SA (PETR4) blocks.

“It is one of the most strategic deep-water areas for Shell and the company will continue to negotiate with partners in the region, including Petrobras, if there are opportunities,” Andre Araujo, head of Shell’s Brazilian unit, said at a press conference in Rio de Janeiro yesterday aside Chief Executive Officer Peter Voser.

Petrobras, as the state-controlled Brazilian oil company is known, has a $237 billion,five-year business plan starting in 2013, which includes $9.9 billion in sales and restructuring as it focuses on the development of domestic off-shore oil reserves. In March, it said it sold a stake in a block in Benin to Shell, as well as a Gulf of Mexico prospect to Plains Exploration and Production.

Petrobras lowered its divestment and cost-cutting targets this year by almost $1 billion from a year earlier. The adjustment was needed because the company didn’t have experience as a seller when it set the original target, Chief Executive Officer Maria das Gracas Foster said March 19. Foster said in October that the company was close to selling some Gulf assets for as much as $8 billion.

Petrobras and Shell are partners in Brazil’s offshore Parque das Conchas field, and Shell is also a supplier of liquefied natural gas to Petrobras. The Gulf of Mexico accounts for about 55 percent of Shell’s oil and gas production in the U.S. through licenses for 423 blocks, according to its website.

To contact the reporter on this story: Rodrigo Orihuela in Rio de Janeiro at rorihuela@bloomberg.net

To contact the editor responsible for this story: James Attwood at jattwood3@bloomberg.net


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