Shell’s planned acquisition of BG Group offers some relief to Petrobras at a time the Brazilian oil giant is mired in a graft probe.

With Petrobras engulfed in Brazil’s largest ever corruption scandal, Shell’s increasing influence in the country would help the state-run company develop its giant offshore oil reserves beneath a layer of salt, analysts said. The deal is “a big validation for Brazil,” according to UBS Group AG. Petrobras shares gained after the deal.

“Shell has much more financial and leverage capacity to undertake investments in the Brazilian presalt,” said Edmar Almeida, an energy specialist at the Federal University of Rio de Janeiro. “This changes quite a bit the context of oil in Brazil, putting a company like Shell in the presalt mainstream.”

Shell on April 8 agreed to buy BG for about 47 billion pounds (US$70 billion) in cash and shares, the oil and gas industry’s biggest deal in at least a decade. The acquisition will “provide Shell with enhanced positions in competitive new oil and gas projects, particularly in Australia LNG and Brazil deep water,” Shell said in announcing its takeover offer.

Brazil Energy Minister Eduardo Braga told lawmakers that Petrobras shouldn’t be forced to operate all presalt projects, calling for a review of what has been one of the cornerstones of government policy following the offshore discoveries. Petrobras had its credit rating cut to junk by Moody’s in February while Fitch Ratings said last month it may follow suit if it fails to complete offshore production equipment fast enough to accelerate output. Petrobras has until the end of May to book corruption losses in audited earnings or risk having its debt payments accelerated.

Key Driver

BG’s Brazilian portfolio will become a key growth driver for Shell, with production set to increase to 557,000 barrels a day (bbl/d) by 2020 from 144,000 in 2015, Jefferies analysts led by Jason Gammel wrote in a note to clients on April 8.

Preferred shares of Petrobras rose 1.7% to 11.07 reais ($3.62) at 11.15 a.m. in Sao Paulo and climbed as much as 4%. The stock headed to the highest close since Dec. 9.

“For Petrobras, Shell is a capable operator that already has experience operating in Brazil. It has the potential to provide support technically, and even possibly financially,” T.J. Conway, a research and advisory manager at Energy Intelligence Group, said by telephone from Washington. “Brazil, on the production side, is a near-term opportunity because of the growth that’s expected.”

Asset Combinations

Neither Petrobras nor Brazil’s oil regulator responded to e-mails seeking comment on the effect of the deal.

Petrobras’s asset valuation has been constrained by a lack of cash to develop projects and poor governance standards, UBS analysts led by Lilyanna Yang wrote in a research note.

“The Shell-BG offer implies that Petrobras could raise dozens of billions of dollars should it decide to sell minority stakes in pre-salt assets combined,” the analysts said. “UBS sees this deal as a big validation for Brazil.”

BG shares rose 30% to 1,182.50 pence ($17.67) in London. Shell dropped 3.9% to 2,011.50 pence ($30.06).

“Brazil is the key strategic driver,” the Jefferies analysts said. “The transaction makes Shell the leading foreign oil company in Brazil.”

Lula Delays

Shell also has operations in Brazil and partnerships with Petrobras, including the giant offshore Libra project. The difference is that for BG, Brazil is projected to account for a third of its production by 2020 while for Shell it’s not even 10% of its operations.

BG has non-operating stakes in five blocks in the presalt area, an offshore region where Petrobras made the world’s largest discovery in at least three decades from 2006 to 2007. The blocks already account for about a sixth of BG’s output.

The largest field there is Lula, a partnership between Galp and operator Petrobras, with recoverable reserves estimated at 9 billion to 11 billion barrels. Last month, Galp’s CEO Manuel Ferreira de Oliveira said the company hasn’t been able to receive confirmation from Petrobras on delays to platforms for Lula. Galp said the delay could be as much as a year.

BG, whose Brazilian offices are across the street from Petrobras’s offices in Rio, in 2013 announced that it would build its global technology center in the Brazilian city as a sign of the importance of their local operations.

‘More Patience’

Shell is one of Petrobras’s four partners in Libra, a field estimated to hold almost the equivalent of Brazil’s current reserves. The five-member group agreed in 2013 to pay a $6.9 billion signing bonus for a 35-year license over the project. Petrobras owns 40% of the project with Shell and Total SA both owning 20%. China National Petroleum Corp. and CNOOC. Ltd. hold the rest.

“Shell has more patience and financial strength,” Juan Ramon Fernandez Arribas, an independent analyst based in Madrid, said in an e-mail. “It can wait more to develop its projects and is a more solid operator than BG. That’s a big advantage in the discussions with Petrobras.”