BP Prepares To Drill In Brazil Where Other Majors Have Failed To Find Oil

WATCH: BP will pause all shipments through the Red Sea following an escalation in attacks on merchant vessels by militants. Annmarie Hordern reports.Source: Bloomberg

(Bloomberg) -- BP Plc is preparing a deepwater well in Brazil in the latest attempt to break a streak of bad luck by oil majors who have paid billions for exploration rights and have little to show for it.

The London-based major is getting ready to drill at the Pau Brasil field in Brazil's so-called pre-salt region, BP said in a response to questions. BP has a contract to start using the Valaris DS-15 drillship on March 24 for a daily rate of $410,000, according to information on Valaris Ltd.'s website.

The pre-salt holds the country's most productive fields, but exploration efforts have fallen flat in recent years. Majors including Shell and Exxon Mobil Corp. have spent billions to acquire concessions and carry out exploration campaigns at pre-salt blocks without announcing significant discoveries, and have even returned some of the blocks to Brazil's oil regulator, known as ANP. Brazil's oil production is expected to start declining in the 2030s unless new deposits are discovered.

Read More: Shell Joins Exxon With $1 Billion Brazil Exploration Setback

For BP, Pau Brazil is its next shot at gaining a foothold in a major oil producing nation. BP hasn't produced any oil in Brazil since it sold a small field in 2013.

Then in 2020 it sold two deepwater discoveries it bought in 2011 as part of a $3.2 billion acquisition of Devon Energy Corp.'s exploration portfolio in Brazil. The following year it exited an environmentally sensitive region known as Foz do Amazonas off Brazil's northeastern coast where it was having difficulties getting drilling permits.

Read More: BP Backtracks on $3.2 Billion Brazil Offshore Acquisition

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