By Brazil Stock Guide – Shell Plc (SHEL), the world’s second-largest oil producer in Brazil after state-run Petrobras (PETR4.SA), reaffirmed its interest in expanding exploration in the country’s pre-salt reserves. Chief Executive Officer Wael Sawan told Valor Econômico that Brazil remains strategic for the company, though future projects will require greater selectivity.
During his trip to Brazil this week, Sawan met with President Luiz Inácio Lula da Silva in Brasília to discuss Shell’s projects and the need for stability in the regulatory and fiscal environment. “We continue to see room for exploration in Brazil’s pre-salt,” Sawan said.
Pre-salt projects and long-term plans
Over the past decade, Shell has invested between $1 billion and $1.5 billion annually in Brazil. Its most ambitious initiative is the Gato do Mato field in the Santos Basin, expected to start producing in 2029 with a daily output capacity of 120,000 barrels.
“This project allows us to bring Shell’s best deepwater expertise to Brazil, generating jobs and tax revenues,” Sawan said. The company is also preparing for the upcoming pre-salt bidding round organized by Brazil’s oil regulator ANP in October.
Biofuels and Raízen
Shell also sees Brazil as a global leader in biofuels, mainly through Raízen (RAIZ4.SA), its joint venture with Cosan (CSAN3.SA). While avoiding specifics about Raízen’s search for a new partner, Sawan reinforced Shell’s confidence in the venture: “Raízen’s second-generation ethanol technology and potential in sustainable aviation fuel make it particularly attractive.”