Brazil and Mexico are fighting it out to lure the big oil giants to their waters, and Shell is attracted, a news report said.
As much of Big Oil scales back operations elsewhere, the governments of these two South American nations are putting reforms in place and amending contracts in a bid to convince the biggest global oil firms that cost reduction means working with them.
In terms of attractiveness, each has something to offer in terms of Brazil’s expensive but prolific deep-water reserves against Mexico’s cheaper oilfields.
Speaking to Reuters, Wael Sawan, Shell’s executive vice president for deepwater, said: “Both are attractive. Both have real potential. We have as a company, I think as an industry, scarce capital resources to be able to make the investments that the particular projects in deep water require.”
Despite Mexico’s political risks many companies could be tempted by the low set-up prices and the possibility of the large reserves the country may yet hold, yet infrastructure would need to be built for deep-water exploration.
Brazil, on the other hand, has a proven track record and a known skills base with a strong pedigree of locating, developing and producing lucrative fields.
Joao Carlos de Luca, an adviser to the Brazilian Petroleum, Gas and Biofuels Institute that represents oil companies working in the country said to Reuters: “In the last year we have made extraordinary advances in the regulatory framework that has put Brazil back on the map.”