Shell has 65% local content in top 20 contracts in Brazil


4 Jul 2018

Oil companies operating in Brazil begin to show data on purchases of domestic equipment and services as a demonstration that the local content rule has not lost its importance. After Equinor (formerly Statoil), Shell said yesterday that it bought R $ 700 million annually, on average, in the company’s 20 largest contracts signed in Brazil. According to Andre Araujo, president of Shell Brazil, the local content of these contracts is 65%. If you consider the ten largest contracts, the local content is 61%.

Shell invested R $ 170 million in Research and Development (R & D) in Brazil in 2017 and, according to the executive, the volume will be higher in 2018. The company is also attentive to investment opportunities in renewable energy in Brazil. According to Araujo, “it is not possible to think” about not meeting the emission reduction targets set in the Paris Agreement, noting that the industry is going through a moment of energy transition.

He also highlighted the contract signed with Petroserv to charter a drilling rig for the Parque das Conchas area. “It was the first national rig in our history.”

Worldwide, the company’s annual R & D investment is $ 1 billion. One of Shell’s goals this year is to use R & D funds to invest in startups. The executive reiterated the importance of the operation in the country, which already accounts for 50% of the oil it produces in deep waters.

Shell produced 730 thousand barrels of oil equivalent (boe) in the first quarter, of which 360 thousand barrels in Brazil. In mentioning the regulatory changes in the sector made in the country, Araujo highlighted the increase in the number of competitors, which brought multi-operators to the pre-salt, where previously only Petrobras could act in this condition.

“We look and say that [Brazil] is getting very expensive,” he joked. “But it’s salutary to have a very robust industry.” Regarding the decision of Minister Ricardo Lewandowski of the Federal Supreme Court that led Petrobras to suspend the sale of the Gas Associated Company (TAG) and the Nitrogen Factory in Araucária, he said that it is not yet possible to evaluate the consequences. “It’s all still very recent. I’m not really sure what’s going on and what’s not [the decision]. It is not clear yet, “explained the executive.


Cláudia Schüffner/Valor Economico

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