A consortium of companies, including Royal Dutch Shell plc (Shell), Petrobras, Total, CNPC and CNOOC, won a 35-year production sharing contract to develop the giant Libra pre-salt oil discovery located in the Santos Basin, offshore Brazil.

The Brazilian regulator, Agência Nacional do Petróleo (ANP), estimates Libra’s recoverable resources of between 8 to 12 billion barrels of oil.

“The Libra oil discovery in Brazil is one of the largest deep water oil accumulations in the world. We look forward to applying Shell’s global deep water experience and technology, to support the profitable development of this exciting opportunity,” said Peter Voser, Chief Executive Officer, Royal Dutch Shell.

Shell holds 20% in the consortium, with Petrobras 40% as operator, Total 20%, CNPC 10% and CNOOC 10%. The consortium will work together in an integrated fashion to support Petrobras, the most experienced operator in the Brazilian pre-salt, and will incorporate each company’s deep water skills, people and technology for the success of the venture.

The production sharing contract is expected to be signed in November 2013. As part of the winning bid, Shell will pay its 20-percent share of the total signing bonus of USD $1.4 billion [3.0 billion reais], and fulfill the minimum work program no later than end 2017.

The ultra-deep water Libra accumulation is located in Santos Basin, approximately 170 kilometers (105 miles) off the coast of Rio de Janeiro. The block covers approximately 1,550 square kilometers in water depths of around 2,000 meters (6,500 feet). The reservoir depth is around 3,500 meters below the sea floor (11,500 feet). The ANP estimates that total gross peak oil production could reach 1.4 million barrels per day. Further appraisal is required to firm up this estimate, the development concept and a first oil date.

Tags: Royal Dutch Shell plc