Royal Dutch Shell plc (RDS.A) announced that its joint venture with 50% stake, Brunei Shell Petroleum made a notable oil discovery in deepwater offshore Southeast Asia. The company plans to carry out further appraisal processes, including drilling of additional wells over the next two years, to determine the full potential of the oil field.
As per the initial assessment, the new find, named Geronggong, is expected to hold a number of hydrocarbon reservoirs and contain a large amount of oil reserve. This find marks Brunei Shell Petroleum’s deepest hydrocarbon discovery in the Bruneian acreage.
Located at about 100 kilometers into the coastal water and at a depth of 1,000 meters, the well was drilled by the rig Noble Phoenix. This drillship, prior to its application, had complied with all the measures relating to the refurbishment and recertification on its thrusters, riser and blow-out preventer.
Management remains highly upbeat regarding the successful exploration activities in Brunei, which demonstrates a healthy production capacity of crude oil and natural gas.
The Hague, Netherlands-based Shell is a global energy company engaged in oil and gas exploration, production, refining and marketing with operations and assets across the globe. Given Shell’s strong operational and production efficiency along with contributions from numerous growth projects, we expect it continue the revenue and earnings growth momentum over the next few quarters.
We believe that the company offers meaningful long-term upside potential for investors and maintain our Outperform rating on the stock. However, the company faces stiff competition from peers such as BP plc (BP) and Exxon Mobil Corp. (XOM).
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