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Shell’s Brazil Unit Finds Oil In Santos Basin Well

THE WALL STREET JOURNAL

SEPTEMBER 28, 2010

RIO DE JANEIRO (Dow Jones)–The Brazilian unit of Royal Dutch Shell PLC (RDSA, RDSB, RDSA.LN, RDSB.LN) discovered oil in the Santos Basin during the company’s first exploration attempt in the region famous for its deepwater discoveries, the company said Tuesday.

Shell Brasil’s first well in the BM-S-54 block showed indications of hydrocarbons, the company said in a statement emailed to Dow Jones Newswires. Earlier Tuesday, the discovery was also published on the Brazilian National Petroleum Agency’s website.

Shell operates the block, with an 80% stake. France’s Total SA (TOT, FR.FR) earlier this year purchased a 20% stake in the block from Shell, although the transaction has not yet been approved by local regulators, Shell said.

The Santos Basin where the BM-S-54 block is located is home to the presalt cluster that produced several oil discoveries, including the two of the largest finds made in the past 30 years. Shell Brasil is actively targeting the presalt region as part of a 10-well exploration program over the next 18 months.

The Santos Basin presalt finds were made under a thick layer of salt off the coast of Sao Paulo and Rio de Janeiro states. The oil lies under more than 2,000 meters of water and a farther 5,000 meters under sand, rock and a shifting layer of salt.

Shell’s well in the BM-S-54 block is targeting a final depth of about 6,000 meters, the company said.

Earlier this year, Shell also discovered oil in a presalt well in the Campos Basin.

-By Jeff Fick, Dow Jones Newswires; 55-21-2586-6085; [email protected]

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