Shell is considering selling a 20% stake in Brazil’s offshore Gato do Mato oil cluster to help finance the multibillion-dollar development, according to people familiar with the process.
Earlier this year, the UK-based supermajor agreed in an asset swap to acquire TotalEnergies’ interest in the cluster. It is now seeking to raise funds while remaining operator, the people said. They spoke on condition of anonymity because they were not authorized to discuss the matter.
Gato do Mato is scheduled to start production in 2029 with planned capacity of about 120,000 barrels of oil per day. The project is designed to support Shell’s goal of staying among Brazil’s largest oil producers and to compensate for falling output from older Brazilian fields that have been pumping for more than a decade. The cluster’s name means “jungle cat” in Portuguese.
In Brazil’s pre-salt province, Shell already holds minority positions in several other assets and, in an auction last week, increased its exposure by securing additional interests in two fields. Colombia’s Ecopetrol also owns a stake in Gato do Mato.
Parque das Conchas is currently the only producing Brazilian oilfield operated by Shell. Output there has already passed its peak and now stands at around 30,000 barrels per day.
In an emailed response to questions, Shell declined to say whether it is seeking a new partner for Gato do Mato.
The potential sale underscores how even the largest international oil companies frequently share ownership of offshore projects to spread investment costs. Shell took a final investment decision on Gato do Mato in March, following several years of delay linked to rising costs.
Consultancy Welligence Energy Analytics estimates the project will cost nearly $3 billion, assuming the production and storage vessel is leased. Shell has not published its own cost figure and declined to provide details on how large the investment will be.
The two fields that make up Gato do Mato were renamed Orca and Sul de Orca after they were declared commercial. Welligence Energy Analytics says they represent about 10% of Shell’s Brazilian portfolio.
Beyond Gato do Mato, Shell is also active in Brazil’s Equatorial Margin deepwater area, an environmentally sensitive region where national oil company Petroleo Brasileiro SA started drilling in October.
Gato do Mato holds around 370 million barrels of recoverable resources. While that volume is smaller than some of Brazil’s biggest deepwater discoveries, future output from the cluster is expected to help slow the pace of national production decline in the 2030s as flows from the largest fields begin to fall.
Andre Fagundes, who covers Brazil for Welligence Energy Analytics, said the assets face the kind of challenges typical of Brazil’s pre-salt developments, lying far offshore in deep reservoirs with demanding pressure and temperature conditions. He added that bringing in another partner would reduce Shell’s capital exposure while allowing the company to keep control of operations.
