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Shell to invest $10 billion as Brazil expands private role in oil industry

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screen-shot-2016-11-09-at-19-58-01Royal Dutch Shell Plc (RDSa.L) will invest $10 billion (8 billion pounds) in Brazil over five years now that the country has increased opportunities for foreign companies in its oil industry, its chief executive officer said on Thursday.

Already the largest foreign investor in Brazil, Shell is particularly encouraged by recent legislation that increases the role of private oil companies in the tapping of vast off-shore oil deposits in the subsalt layer, Chief Executive Officer Ben van Beurden said.

“This was a good move by the government and it will open up opportunities for more players to invest in Brazil,” Van Beurden told reporters after meeting with President Michel Temer.

Temer took office this year after the impeachment and removal of leftist Dilma Rousseff, whose Workers Party was opposed to reducing the central role of state-controlled oil company Petrobras (PETR4.SA) in the subsalt region.

Shell is already a major subsalt player as a Petrobras partner in the massive Libra oil field, and acquired more assets in Brazil through its merger with rival BG Group.

New investments could be made by Shell in oil industry auctions planned next year, Van Beurden said, and the company will look at opportunities in distribution at a time that Petrobras is considering selling a big stake in its subsidiary BR Distribuidora.

“If there are opportunities, we will also look at the possibility of deepening our portfolio in the downstream area, he said.

(Reporting by Lisandra Paraguassu; Editing by Lisa Shumaker)

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