Shell drills dry well in offshore region, says ANP

On June 13, Shell completed exploration of its first well in the Saturn block. However, the advice of the National Petroleum Agency (ANP), confirmed that it was a dry well, while the oil company said it could not comment due to the quiet period before the release of the balance sheet.

In 2018, Shell and Chevron beat Exxon Mobil in the dispute with a $780 million signing bonus for the block. The company also discovered oil in Alto de Cabo Frio Oeste, and Petrobras in Uirapuru, but preliminary information indicates that both wells may not overcome economic obstacles, according to Marcelo de Assis, head of upstream research at Wood Mackenzie. 

"If you eliminate all of these wells, future production tied to exploratory activities will decrease significantly," he told Bloomberg. "This will reduce interest in future bidding rounds and increase pressure in more favorable fiscal terms."

Moreover, the event could be a sign that Petrobras may have already picked up the best oil deposits in the region. "There is a risk that the best fields have already been discovered. The pre-salt polygon is a huge area and can be quite heterogeneous from a geological point of view," Assis said.

According to Bloomberg, the state-owned company also has a program to completely eliminate dry wells, using artificial intelligence to leverage accumulated exploration data and reduce the time it takes to start commercial production.