Shell says its offshore Brazil development plans will not be affected by a Dutch court ruling this week mandating the major to reduce its CO2 emissions by the end of the decade.
"No impact or direct changes that we know of," the company told Argus in response to questions concerning possible changes following the 26 May decision from the Hague District Court.
"Urgent action is needed on climate change which is why we have accelerated our efforts to become a net-zero emissions energy company by 2050, in step with society, with short-term targets to track our progress," Shell said in response to the landmark decision, which the company plans to appeal.
Offshore Brazil has been a key driver of Shell's upstream growth strategy since the firm's $52bn acquisition of the UK's BG in 2016. Shell remains the non-Opec country's second-largest producer with net oil output of around 350,000 b/d, behind Brazil's state-controlled Petrobras.
Most of Shell's production comes from prolific pre-salt deposits such as Tupi, Sapinhoa and Mero. The company also holds a 50pc operating stake in the BC-10 block, the Campos basin cluster encompassing the Ostra, Abalone and Argonauta post-salt fields accounting for around 40,000 b/d 18°-24°API crude.
Shell has remained selectively active in the flurry of auctions for deepwater assets that Brazil launched starting in 2017. The company sat out two high-profile pre-salt auctions in late 2019 and has stepped up calls for a change to Brazil's production-sharing contract model it says hinders the country's ability to compete globally.
"We are interested in looking at opportunities in Brazil under any regulatory regime," Shell Brazil director Andre Araujo said last month.
Araujo says Brazil remains an important part of the company's push to be carbon neutral by 2050. In addition to deepwater assets, Shell is partnered with Cosan in ethanol joint venture Raizen and is exploring investment opportunities in electricity and wind energy.
The court decision against Shell was handed down on the same day that activist investors took aim at peers ExxonMobil and Chevron. Both firms are pursuing deepwater exploration opportunities in Brazil.
EU and US IOCs have been important actors in Brazil's push to restart exploration following the 2014 oil price collapse. The country has offered hundreds of offshore exploration licenses since 2017, and this year is expected to hold three upstream rounds covering more than 400 blocks.
