Shell Brasil Warns Fewer Oil Auctions Threaten Reserves

Energy · Brazil

Shell Brasil is warning that Brazil risks reversing its oil-production growth unless it holds more exploration auctions and cuts environmental-licensing red tape, pointing to a sharp fall in the number of exploratory wells drilled.

A Call for More Auctions

Shell Brasil, one of the largest foreign operators in the country, is pressing the case for a faster pace of exploration. Its message is that reserves do not replace themselves, and Brazil must keep offering new acreage.

The company says it is watching a possible auction of non-contracted areas and a new production-sharing cycle. Access to fresh blocks is the raw material for future output.

The Drilling Slowdown

Shell frames the challenge with a stark comparison: it says just 19 exploratory wells were drilled in Brazil in 2025, compared with roughly 150 in 2011. Fewer wildcat wells mean fewer discoveries to feed the production pipeline years later.

On the company’s telling, that drop threatens to reverse a production curve that has been climbing thanks to the pre-salt. The warning is aimed at policymakers weighing the pace of licensing and bidding.

Licensing as the Bottleneck

Beyond auctions, Shell points to environmental licensing as a brake on activity. It argues that slow permitting delays drilling and raises the cost of doing business offshore.

The company has itself been licensing new wells in the Campos Basin pre-salt, part of an expansion from about 15 blocks in 2021 to some 50 areas now. Its own build-up underlines the appetite it says the system is failing to match.

The Bigger Picture

Brazil is one of the world’s top sources of new oil supply this decade, and government revenue leans heavily on it. Balancing that against climate goals and environmental review is a live political question.

For investors, Shell’s stance is a reminder that today’s record output rests on yesterday’s exploration. Whether Brazil accelerates auctions and licensing will shape production well into the 2030s.

Frequently Asked Questions

What is Shell Brasil warning about?

Shell Brasil says Brazil must hold more exploration auctions and speed up environmental licensing, or risk reversing its oil-production growth as exploratory drilling declines.

How much has exploratory drilling fallen?

According to Shell, only 19 exploratory wells were drilled in Brazil in 2025, compared with about 150 in 2011.

What does Shell want from the government?

Shell is seeking a new auction of non-contracted areas and a production-sharing round, along with faster environmental licensing for offshore drilling.

Sources

• Agência iNFRA
• eixos