“Shell has never invested as much in Brazil as it did in 2025. The country has become the group’s largest oil-producing operation worldwide,” Costa said. Among the key investments made during his tenure was the development of the Orca project (formerly Gato do Mato) in the Santos Basin pre-salt region. Shell also acquired acreage in licensing rounds covering the southern portion of the Santos Basin and the Pelotas Basin, between the states of Rio Grande do Sul and Santa Catarina, in partnership with Petrobras.

After 28 years with Shell, Costa will leave the company on July 31 to lead the expansion of XRG, a company created in 2024 by Abu Dhabi’s state-owned oil company Adnoc. The focus, he said, will be on petrochemicals, low-carbon businesses, and natural gas, backed by investments of between $100 billion and $150 billion through 2030. XRG plans to diversify its investments beyond the Middle East.

Beginning August 1, Costa will be succeeded by Portuguese executive João Santos Rosa, who most recently led Shell’s operations in Italy. According to Costa, XRG’s offer came just as he was planning to return to an international role. The opportunity aligned with XRG’s growth strategy, which includes expanding across the Americas, from Canada to Argentina. “I spent nearly 20 years of my career outside Brazil, and although I was very happy to return, I felt it was time to go back to the international market and take on a global role.”

In his view, Brazil offers opportunities that could become part of XRG’s future projects. At a time when geopolitics has increasingly shaped global energy markets, Brazil has gained strategic importance alongside the U.S. and Canada. Since the outbreak of the war in Ukraine in 2022, the pace of the global energy transition has slowed as countries prioritized energy security.

Brazil has emerged as a key player both in oil and gas and in the energy transition, thanks to its vast oil reserves, “fantastic” hydropower resources, strong wind and solar generation potential, and abundant feedstock for biofuels, particularly ethanol produced from sugarcane and corn, Costa said.

He expects the growing adoption of electric vehicles in Brazil to allow ethanol currently used in passenger cars to be redirected over the coming decades toward transportation segments that are harder to decarbonize, such as heavy-duty vehicles, shipping, and aviation. Shell, he added, is already testing ethanol blends in offshore support vessels by mixing the biofuel with conventional marine fuel to reduce carbon emissions.

Beyond its strong biofuels potential, Brazil has also become a major global oil exporter, driven by the development of the pre-salt fields over the past 15 years. According to Costa, Brazilian crude does not need to pass through any “complicated” shipping routes to reach key markets such as China and Europe.

Another positive development, he said, was the resumption of annual oil licensing rounds starting in 2021. “Brazil can become a major destination in the new global reallocation of investment capital if we get competitiveness, environmental licensing, and regulatory, legal, and fiscal stability right,” he said.

On that front, Costa argued that the government’s recent decision to extend the oil export tax effectively reopens existing contracts and increases the tax burden on an industry that already allocates two out of every three barrels produced to taxes, special participation payments, and royalties. That, he said, could leave Brazil at a disadvantage relative to competing oil frontiers such as Guyana, Argentina, and Namibia. In other producing countries, he noted, the tax burden typically rises when oil prices increase and falls when prices decline.

“Exploration and production concession models vary around the world. One reason Brazil has been attractive compared with other jurisdictions is that its model is independent of oil prices. You decide to take the risk. If prices rise, you earn more; if they fall, you bear the losses yourself,” he explained.

Costa continued, “It turns out that countries are choosing one contractual model, but then are adjusting it throughout the life of the contract depending on short-term needs. That also creates legal uncertainty—it changes the terms of the contract.”

According to Costa, his successor will inherit an organization whose commitment to Brazil is recognized within the Shell Group as stronger than that of most other countries. He said João Santos Rosa’s move to Italy was planned with an eye toward his eventual succession in Brazil. Although Italy is a smaller operation, he said, the two countries share similarities that should ease the transition. “I hope he will be as happy leading Shell Brasil as I was.”

*By Fábio Couto and Kariny Leal — Rio de Janeiro

Source: Valor International

https://valorinternational.globo.com/