Danish oil and shipping group A.P. Moller-Maersk moved to shrink its Brazilian petroleum operations on Tuesday, selling its stake in its only producing Brazilian oilfield and saying it will write off $1.7 billion of investments in the country.

The write-off affects two exploration areas, Itaipu and Wahoo, which failed to deliver on oil volume expectations, and the Polvo field, both northeast of Rio de Janeiro in the Campos Basin, Maersk said.

Maersk bought the assets from South Korea’s SK Energy Co Ltd for $2.4 billion in 2011. On Tuesday, Brazil’s HRT Participacoes em Petroleo SA said it bought Maersk’s 40 percent Polvo stake for an undisclosed sum.

If Maersk’s assessment of Itaipu and Wahoo is correct, its Brazilian retreat could be followed by its partners in these areas: Britain’s BP Plc, U.S.-based Anadarko Petroleum Co and India’s IBV Brasil SA, a joint venture between Videocon Industries Ltd and Bharat Petroleum Corp .

“There was significantly less oil than we had expected,” Chief Executive Nils Smedegaard Andersen told reporters on a conference call. “In addition, the expectation for the price of oil back in 2011 was more optimistic than today.”

The CEO said Maersk’s move comes as Brazilian exploration and production costs soar. BP declined to comment, Anadarko and IBV officials could not be reached for comment.

Such costs have helped cool a Brazilian offshore oil boom that began with the 2007 announcement of giant, offshore fields near Rio. Since then stagnant oil production, increased government control and regulatory uncertainty have undermined the value of the country’s oil resources and the shares of Brazilian oil companies such as state-run Petroleo Brasileiro SA .

The Campos Basin lies next to the Santos Basin, which holds prolific fields such as Jupiter, Tupi and Libra. These gave rise to a flurry of international interest in Brazilian subsalt oil - reservoirs that lie underneath layers of salt.

The Campos basin had been seen as riskier, however, said Wood Mackenzie’s head of Latin America upstream research, Ivan Cima.

“There’s always been a big question mark over how good the Campos Basin is going to be,” Cima said.

“The Campos Basin has not been as prolific as the Santos, where we recently saw very good results,” he said, adding the energy consulting group now had to rework its estimates of the reserves in the two plays.

“As of this morning, our estimates have been thrown out of the window.”

The writedown didn’t affect the Maersk Group’s guidance for an underlying profit of about $4 billion in 2014.

Smedegaard Andersen described Itaipu and Wahoo’s appraisal results as “clearly unsatisfactory.” Jyske Bank analyst Frans Hoyer questioned the company’s longer-term oil ambitions.

“This is more a question of how to assess Maersk’s ability to succeed in the oil sector,” Hoyer said. “I think that strategy is being questioned today.”

Maersk has a target of 400,000 barrels per day (bpd) by 2020. It produced 235,000 bpd last year. The group received an average of 4,219 bpd from its 40 percent of Polvo in May, less than 2 pct of 2013 output.

Group oil production has fallen since 2005 as older North Sea fields decline. Maersk now spends $3-$5 billion a year developing new fields in Qatar, Kazakhstan, Algeria and Britain.

Its shares fell 1.4 percent to 13,420 Danish crowns.