INTERVIEW-Shell rethinks Brazil block, keen on sub-salt

By Andrei Khalip

RIO DE JANEIRO, June 19 (Reuters) - A production test at Royal Dutch Shell's (RDSa.L) BS-4 block off Brazil's coast has opened up possibilities to use equipment like a ship-based rig rather than the initially planned tension leg platform.

John Haney, Shell vice president for exploration and production in Brazil, told Reuters on Tuesday the company would submit the development plan for the block to Brazil's ANP regulator by the end of the month, while it was also preparing to embark on promising sub-salt exploration jointly with state-run oil company Petrobras.

"So, we did the production test on BS-4 and that kind of opened up the possibilities on what we may do there," Haney said in an interview on the sidelines of the Brazil Offshore Conference in Macae -- the main offshore exploration and production hub.

"That opens a possibility for an FPSO, for subsea wells, look at the full range up, rather than TLP, where we have a single location and drill wells at a distance," he said.

The BS-4 discovery was declared commercial in December. Haney did not provide an estimate on when production might start at the ultra-deep block, with a wellhead depth of 1,800 meters (5,900 feet) and heavy oil 14 on API grade, which will require low-pressure wells.

"These are clearly frontier developments ... some of that we'll develop from BC-10, we'll build off the back of that for flow insurance, for pumping, for separation subsea," Haney said, referring to another Shell block, in the Campos basin, which is in the early development phase.

FMC has been contracted to prepared the subsea design in Rio de Janeiro and SBM Offshore NV is readying a 100,000-barrel-per-day tanker-based Floating Production, Storage and Offloading rig in Singapore for the BC-10 project, which includes the fields called Ostra, Abalone and Argonauta.

Production is due to begin "by the end of the decade," according to Shell.