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Financial Times: Shell to develop three Brazilian oilfields

By Ed Crooks, Energy Editor: Published: November 7 2006 02:00 | Last updated: November 7 2006 02:00

Royal Dutch Shell has announced the development of three oilfields in deep water off the coast of Brazil, an area seen as a potentially extremely important source of new oil supplies.

The company is putting in a floating production vessel with capacity to process 100,000 barrels of oil a day in a project which will push back the frontiers of technology.

The floating production, storage and offloading vessel, which will pump the oil into tankers without the need to take it onshore, will be moored in 1,780m of water – some of the deepest for this type of vessel anywhere in the world.

The project is also the first full field development to use underwater separation of the oil and gas and underwater pumping.

Shell would not say how much it was investing in the development, but Russ Ford, vice-president of technology for Shell’s exploration and production arm, described it as a “big, complex project”.

Nor would the company say how great it expected the total size of the reserves to be.

But Mr Ford said that the deep water off Brazil held “several of the most prolific basins anywhere on the planet, and it is somewhere that we’re very interested in getting more involved in”.

Brazil also has the advantage of a stable political environment, he added. “Stability is important to us,” he said, “but we are happy and we are going to participate in further development and exploration in Brazil.”

Shell owns 50 per cent of the project, with Petrobras of Brazil owning 35 per cent and ONGC of India the remaining 15 per cent.

It is expected to begin producing oil around the turn of the decade.

Shell has been investing in a number of ambitious developments, including the controversial Sakhalin-2 gas and oil development in the far east of Russia and the oilsands of Canada.

Shares in Shell closed up 24p at £18.38.* Mitsui Babcock, the Crawley-based power station equipment and services company, has been bought by Doosan, the South Korean heavy engineering group that hopes to become a global leader in “clean coal” technology. Doosan is paying Y20bn (£89m) to Mitsui Engineering and Shipbuilding, which bought Babcock in 1995. The company will be renamed Doosan Babcock.

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