Shell joins Exxon with $1b Brazil exploration setback

Bloomberg

Expensive offshore exploration setbacks for international oil majors including Shell Plc and Exxon Mobil Corp are throwing cold water on their plans to turn Brazil into a profit center.
In the past three years, Shell has drilled three exploration wells without finding any commercial volumes, said Marcelo de Assis, the head of Latin American upstream research at consultant Wood Mackenzie Ltd. Shell and its partners paid just over $1 billion for the rights to explore the three blocks. The three wells Exxon Mobil has drilled in Brazil’s waters since late 2020 are also non-commercial, which cost $1.6 billion to access.
Brazil has sold more than $10 billion worth of exploration acreage to Petroleo Brasileiro and international majors since 2017. So far, the world’s most experienced drillers have little to show for it. The last knock-out oil discovery in Brazil was made by Petrobras more than a decade ago, and the underwhelming results since then could indicate the biggest fields in the country’s pre-salt region have already been found.
“Shell has had a string of failures similar to Exxon,” said de Assis. “All the blocks acquired by Shell were unsuccessful” so far. The drillship contract Exxon had for the first three wells has expired and the company doesn’t plan to put out a tender for a new rig until next year, according to two people familiar with its exploration program.