Shell sheds minor stake in Brazil’s deepwater oil & gas project to Middle Eastern firm

February 4, 2026, by Melisa Cavcic

Shell Brasil Petróleo (Shell Brasil), a subsidiary of the UK-headquartered energy giant Shell, has struck a deal to offload a minor interest in an oil and gas development off the coast of Brazil to Energy Development Corporation (EDC), an affiliate of Kuwait Foreign Petroleum Exploration Company (KUFPEC), which is a subsidiary of Kuwait Petroleum Corporation (KPC).

Shell has entered into an agreement to sell a 20% interest in the Orca project, formerly known as Gato do Mato, deepwater oil and gas development in the pre-salt area of the Santos Basin offshore Brazil to KUFPEC. Upon completion of the transaction, the UK-headquartered firm will continue as operator, retaining a 50% stake.

Peter Costello, President of Upstream at Shell, commented: “We are pleased to welcome KUFPEC as a partner in Orca, a key project to sustain the liquids production of our Upstream portfolio. With this breakthrough, we hope to build on the good results of our collaboration with KUFPEC in Egypt.

“This move further deepens our long-term commitment and strategic partnership in Kuwait, in alignment with the strong collaboration we have with Kuwait Petroleum Corporation.”

The deal is said to strengthen the strategic partnership between the two companies in several Upstream markets. The transaction is subject to regulatory approval, the exercise of preferential rights and closing conditions. The completion is expected to occur by the end of 2026.

The development plan for Orca includes the installation of a floating production storage and offloading (FPSO) vessel to produce up to 120,000 barrels of oil per day. The current estimated recoverable resource volumes of the development are approximately 370 million barrels, with production expected to start in 2029.

Eisa Al-Maraghi, KUFPEC’s CEO, emphasized: “The transaction is a significant milestone for KUFPEC as we enter Brazil’s pre-salt Santos Basin, one of the world’s most attractive offshore oil provinces. It aligns strongly with our strategy to build a balanced high-quality international portfolio through disciplined investments in world-class assets.

“We are pleased to strengthen our long-standing partnership with Shell and to establish a new collaboration with Ecopetrol, looking forward to working together to unlock the full value of this asset.”

The Orca project is a unitized development encompassing the BM-S-54 concession agreement and the Sul de Orca production sharing agreement (CPP). Currently, the partners are Shell (operator, with a 70% stake), Ecopetrol (30%), and Pré-Sal Petróleo S.A. (PPSA) as the CPP manager.

Orca’s partners made the final investment decision in March 2025. With the conclusion of the transaction, the ownership structure will change to Shell (operator with 50%), Ecopetrol (30%), and KUFPEC (20%). Vallourec was recently hired to supply line pipes for the project.

The project is designed to produce up to 120,000 barrels of oil per day (boepd). The start-up of production is scheduled for 2029. TechnipFMC is tasked with the integrated engineering, procurement, construction, and installation (iEPCI) work.