Royal Dutch Shell to Invest $10Bn in Brazil

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Royal Dutch Shell to Invest $10Bn in Brazil

Royal Dutch Shell has earmarked $10 billion to invest in Brazil in the next five years.

oysoxvb.jpgThe investment is within the company's strategy to double its global deep water production by the early 2020s, according to Wael Sawan, the company’s executive vice president for deep water.

Just how committed is Shell to its deep water initiatives?

The $10 billion it expect to spend is in addition to the more than $30 billion the company has already deployed in Brazil -- capital it has used to fund some 5,500 energy stations and several oil-and-gas assets it has acquired in 2016.

Shell has become the Brazil's largest foreign investor, thanks to support it has received by the Brazilian government.

“We continue to be encouraged by what we hear, at the government level, at the ministerial level, what we read in the press, what we have in our meetings with government officials,” Sawan said, according to the Journal.

“The fundamental view that foreign investment is good for the country, and specifically in the oil and gas sector…gives us confidence that we are welcome here.”

Sawan, who expects to invest around $2 billion in Brazil each year, appreciates the policies of new Brazilian president, Michel Temer, who has begun to push for legislation that encourages investment in the oil sector.

The Netherlands-based energy company, as with its peers, continues to suffer from low oil prices. Shell, which earlier this year lowered its 2016 capital investment program from $47 billion to $29 billion, has had to cut jobs to boosts profitability. But it now appears that the company is once-again aiming for growth, suggesting better confidence in its capital position.

Source: Investopedia

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