RIO DE JANEIRO (Reuters) - Royal Dutch Shell Plc’s (RDSa.L) Brazil chief said on Monday that the oil major plans to begin drilling in 2019 in an offshore block in the coveted pre-salt layer that it won in an auction last month with France’s Total (TOTF.PA).
“We already drilled in the area. We know how to do it. We have the experience. So it is just about putting in place everything that we already have in order to not waste time,” Andre Araujo, Shell’s Brazil unit head, told reporters on the sidelines of an event in Rio de Janeiro.
The block, South Gato do Mato, is adjacent to a prospect that Shell and Total are already exploring jointly. Shell is operator in both areas with an 80 percent stake.
Araujo said it was too soon to forecast when the first oil might be produced there, but reiterated that the company is committed to investing an average of $2 billion (£1.5 billion) a year in Latin America’s top economy through 2020.
Shell won half the blocks awarded in Brazil’s deepwater auction in October in a historic opening of the pre-salt play to foreign operators. Billions of barrels of oil are trapped below thousands of feet of salt in the country’s Atlantic waters.
Wael Sawan, executive vice president for Shell’s deepwater division, told Reuters the company was confident it could pump oil from the fields on offer for less than $40 a barrel.
During the event, Araujo also said the company is looking for opportunities in renewable energy in Brazil, which could be through acquisitions or working with partners.
“There are a lot of companies that believe that renewable energy in Brazil will grow, that there are business opportunities. Why not go in?” he said, adding that Raízen, partly owned by Shell, already invests in the sector.
Raízen is a 50-50 joint venture between Shell and Cosan SA Indústria e Comércio (CSAN3.SA), a Brazilian energy and infrastructure group. Besides being the world’s largest sugar producer, Raízen is a large ethanol maker and generates electricity from biomass by burning dried-crushed cane at power plants adjacent to the mills.
Reporting by Alexandra Alper; Editing by Chizu Nomiyama and Jeffrey Benkoe