Interests shift in Shell block off Brazil

Shell Brazil SA exercised an option to assume a 30% additional participating interest in a block off Brazil, then sold 15% of that share to ONGC Videsh Ltd. (OVL).

May 2, 2006

Peter Howard Wertheim
OGJ Correspondent

RIO DE JANEIRO, May 2 -- Shell Brazil SA exercised an option to assume a 30% additional participating interest in Block BC-10 in the Campos basin off Espirito Santo, Brazil, then sold 15% of that share to ONGC Videsh Ltd. (OVL), the overseas unit of India's Oil & Natural Gas Corp.

Shell remains operator with 50% interest. Petroleo Brasileiro SA retains 35%. Brazil's National Petroleum Agency must approve the transaction.

The block, in with water depths of 1,500-2,000 m, lies 120 km southeast of Vitoria.

BC-10 was declared commercial in December 2005 following engineering and technological studies and an exploration and appraisal program involving 13 wells (OGJ, Jan. 23, 2006, Newsletter). Six discoveries resulted in four development areas on the block: Ostra, Argonauta, Abalone, and Nautilus. Shell said estimates probable reserves at 400 million bbl.