Anglo-Dutch supermajor Shell has started production at the second developmental phase of a block off Brazil.

Phase two of development on Block BC-10, also known as Parque das Conchas, sees a fourth reservoir connected to a floating production, storage and offloading unit on the field.

Shell is operator of the block on 50% with Petrobras on 35% and Indian’s Oil & Natural Gas Corporation (ONGC) on 15%.

Production from the first phase began in 2009 with the partners deciding in July to move forward with the third phase, which involves development of the Massa and Argonauta O-South reservoirs

The second phase has connected the Argonauta O-North reservoir to the Espirito Santo FPSO.

Peak production from the second phase is set to hit 35,000 barrels of oil equivalent per day.

Petrobras had agreed to sell its stake in Parque das Conchas to China’s Sinochem in a deal worth $1.54 billion.

However, Shell and ONGC are reportedly ready to exercise their respective pre-emption rights to increase their holding in the play, thereby scuppering Sinochem’s intended farm-in.