17:33 DJS Shell To Pursue Deepwater Projects, Undeterred By Low Oil Prices
17:33 DJS Shell To Pursue Deepwater Projects, Undeterred By Low Oil Prices
HOUSTON -(Dow Jones)- Despite current low oil prices, Shell Oil Co. is
continuing to aggressively pursue high-cost deepwater exploration projects
world-wide, company officials said Tuesday.
The company has recently acquired deepwater leases in 25 countries,
said Laura Raymond, business development manager for Shell E&P International
Ventures, a unit of Shell Oil.
Included in those leases are blocks in Angola, Trinidad, Congo, Cote
D'Ivoire and Indonesia. The company is also negotiating for deepwater leases
in Brazil.
Because deepwater development is a long-term project, current oil
prices aren't as important as what will happen in two years, five years or 10
years, said Rich Pattarozzi, president and chief executive of Shell Deepwater
Development Inc.
Yet the cost of deepwater projects is more important with world prices
at $14 a barrel than at $18 a barrel, he added. Pattarozzi wouldn't disclose
Shell's breakeven price for deepwater barrels.
Deepwater discoveries have been large so far, helping to justify the
high costs.
Shell wasn't as active in a recent Minerals Management Service western
Gulf of Mexico lease sale as it had been in previous deepwater sales, he said.
But the company won 14 of the 18 blocks on which it bid in that sale.
"We're selectively adding to our portfolio,' Pattarozzi said. Shell
already owns 20% of the deepwater leases in the Gulf of Mexico, he said.
The company's current gulf production from deepwater projects is about
220,000 barrels a day of oil and 800 million to 900 million cubic feet a day
of natural gas, he said.
Those figures probably won't increase through the end of 1998.
Until recently, production increases have been held back by lack of
capacity of deepwater oil and gas pipelines, Pattarozzi said.
But completion of the Destin pipeline a month ago means that pipeline
systems will be able to handle all the production increases Shell is
expecting.
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09/15 5:33p CDT
of interest is Shell's pursuit of deep water contracts in Brazil where Trico has contracts with Petrobras |
