Royal Dutch Shell Plc  .com Rotating Header Image

Brazil regulator tells Shell, partners to develop two oilfields as one

Screen Shot 2015-08-17 at 20.40.13

Screen Shot 2015-08-18 at 12.32.40

Screen Shot 2015-07-31 at 19.22.09RIO DE JANEIRO | BY MARTA NOGUEIRA: 18 Aug 2015

Brazil’s National Petroleum Agency (ANP) ruled that Royal Dutch Shell (RDSa.L) and its Qatari and Indian partners need to treat oil and gas fields in the Parque das Conchas area as a single deposit, Shell said, a move that could increase taxes on output.

Shell owns 50 percent of Parque das Conchas, its main Brazilian asset. Qatar’s state oil company Qatar Petroleum [QATPE.UL] owns 23 percent and India’s ONGC (ONGC.NS) owns 27 percent.

The ANP’s decision to treat the fields as a single deposit applies to two of Shell’s four fields in the block, also known as BC-10, for which it holds exploration and production rights.

The decision comes as Shell prepares to expand production in the block that now produces 50,000 barrels per day of oil equivalent and take over the Brazilian properties of Britain’s BG Group Plc (BG.L), which it is buying.

Shell said the ANP has approved its development plan for the Nautilus field but also stipulated that it must be joined with the Argonauta field.

The ANP previously made a similar decision with the Lula and Cernambi fields and seven other fields in the Parque das Baleias area, all operated by state oil company Petroleo Brasileiro (PETR4.SA).

Petrobras ended up challenging the ANP’s previous decisions, which are still tied up in court and in international arbitration.

When oil companies discover fields with production potential above a certain level, they are subject to paying a windfall tax know locally as a “special participation” tax on top of the basic royalty they must pay the government. This can increase the government tax on each barrel of oil produced to about 40 percent from 10 percent.

Shell told Reuters in an email that it was not currently paying special participation for any of the fields in the Parque das Conchas.

Shell’s production expansion plans at Parque das Conchas is expected to boost output by 30,000 barrels a day (bpd).

The company said it would not comment on the ANP’s decision until its management had discussed it.

The Brazilian Oil Institute, which represents the sector, said the companies operating in Brazil’s oil exploration industry are very concerned about the ANP’s decision.

(Writing by Reese Ewing; Editing by Jeb Blount and Christian Plumb)

SOURCE

This website and sisters royaldutchshellgroup.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, and shellnews.net, are owned by John Donovan. There is also a Wikipedia segment.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Comment Rules

  • Please show respect to the opinions of others no matter how seemingly far-fetched.
  • Abusive, foul language, and/or divisive comments may be deleted without notice.
  • Each blog member is allowed limited comments, as displayed above the comment box.
  • Comments must be limited to the number of words displayed above the comment box.
  • Please limit one comment after any comment posted per post.