LONDON (Alliance News) - Royal Dutch Shell PLC has predicted that oil prices will rebound in 2016 to levels that will allow its Brazilian deep-water assets to operate at a breakeven level, the Financial Times reported Monday.
Brazil has become a more integral part of Shell's business after the oil major formally completed its acquisition of BG Group PLC on Monday, expanding its operations in the country.
Brazil was the key attraction of BG Group, but oil prices have sunk since the deal was agreed and questions have been raised about the viability of the Brazilian assets at current prices, with Brent trading a touch below USD34 a barrel on Tuesday - considerably lower than the price when the deal was agreed.
There are also concerns about Petrobras, Brazil?s state-controlled oil company, which is sole operator in the fields, because the group has been hit by a corruption scandal and is contending with a huge debt load, the FT reported.
However, Shell Chief Executive Ben van Beurden told reporters in Rio de Janeiro on Monday: "I would expect the pre-salt in Brazil, the break-even price, to be very favourable, probably in the sort of [oil] price ranges that we think we are going to see in the course of this year."
http://www.ft.com/cms/s/0/e8c07066-d3ec-11e5-969e-9d801cf5e15b.html#axzz40K6Rx0GG
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
Copyright 2016 Alliance News Limited. All Rights Reserved.
