(MENAFN- The Peninsula) Qatar Petroleum International (QPI) and Shell yesterday signed a Memorandum of Cooperation in the presence of H E Dr Mohamed bin Saleh Al Sada, the Minister of Energy and Industry and Chairman of Qatar Petroleum, and Ben van Beurden, Chief Executive Officer of Royal Dutch Shell.
The agreement was signed by Nasser Al Jaidah, CEO of QPI and Wael Sawan, Managing Director and Chairman of Qatar Shell Companies. The agreement follows QPI's $1bn purchase in April 2014 of a 23 percent stake in a major oil production asset offshore Brazil operated by Shell known as BC-10 or Parque das Conchas.
Commenting on the BC-10 deal, Al Jaidah said, "QPI is extremely pleased to have strategically expanded and strengthened our international investment portfolio through this agreement. With our long-term partner, Shell, QPI offers valuable support for the progressed development of BC-10."
"We are especially pleased to be jointly involved with QPI in this pioneering offshore development," aid Wael Sawan, Managing Director and Chairman of Qatar Shell Companies. "The opportunity represents a major achievement in our long-term partnership with Qatar Petroleum (QP). Together, we have built two of the world's largest energy projects: Pearl GTL and Qatargas4. In the near future we hope to reach a final investment decision for the Al Karaana Petrochemicals project, another groundbreaking joint venture between QP and Shell."
BC-10 is currently producing approximately 50,000 barrels of oil equivalent per day (boe/d). Since coming on-stream in 2009, BC-10 has produced more than 80 million boe. Phase 2 of the project, to tie-in the Argonauta O-North field, came online on October 1, 2013, with an expected peak production of 35,000 boe per day. A final investment decision for a Phase 3 of the BC-10 project was taken in July 2013 and once online is expected to reach a peak production of 28,000 boe per day.
BC-10 represents a key milestone in the development and commercialisation of Brazil's deep-water oil. Three fields in the Campos basin have been developed with subsea wells and manifolds, with each field tied back to the heart of Parque das Conchas (BC-10) - a centrally located floating production storage and offloading (FPSO) vessel moored in approximately 1,780m of water.
On December 30, 2013, Shell acquired an additional 23 percent interest in BC-10 for approximately $1bn resulting from a buy-out of Petrobras' interest in the project. Petrobras is the national oil company of Brazil. This transaction raised Shell's total interest in BC-10 to 73 percent. India's Oil and Natural Gas Corporation Limited (ONGC), previously holding a 15 percent working interest, acquired an additional 12 percent interest. In December 2013, Shell also entered into an agreement with QPI to on-sell for approximately $1bn the additional 23 percent interest Shell acquired. The sale was completed on April 30, 2014. Following the latest transaction, Shell continues as operator and as a 50 percent equity owner, with ONGC holding a 27 percent interest and QPI holding 23 percent.
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