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Shell shocked

Times Online: Tempus: Shell shocked

April 15, 2008
Robin Pagnamenta

Executives at Shell must be biting their nails in frustration.

Reports overnight indicating that the Carioca oilfield offshore Brazil could contain as much as 33 billion barrels of oil — making it the biggest discovery in 30 years — may still be unconfirmed but they still sent shares in BG Group rocketing by over 5 per cent this morning.

BG, which has long been spoken of as a potential takeover candidate for Shell, holds a 30 per cent stake in the project.

Its fortunes — and its share price — have been transformed over the past year as fresh reports have emerged about the scale of the discoveries now being made in deepwater off Rio de Janeiro.

Some doubts remain but it is possible that the Carioca field could turn out to be five times the size of Tupi, itself a huge field found last November. Together, they have the potential to deliver a huge boost to Brazil’s economy and its position in the world.

But for Shell, which has been battling to replace its own reserves despite huge investments in exploration and production in recent years, this latest discovery must be excruciating. Indeed, it may put BG beyond its reach once and for all.

http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article3750586.ece

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