Australia’s Karoon Gas has received an approval from Brazilian authorities to change the work program on its blocks offshore Brazil in favor of progressing Echidna and Kangaroo projects to a future development phase.
Karoon has a 100% equity interest in Blocks S-M-1037, S-M-1101, S-M-1102, S-M-1165 and S-M-1166 in the Santos Basin located approximately 200 kilometers off the coast in the State of Sáo Paulo, Brazil.
Karoon’s drilling campaigns in the Santos Basin Blocks resulted in the Kangaroo and Bilby light oil discoveries in 2013 which were followed by the Echidna light oil discovery on Block S-M-1102 in 2015.
As reported earlier this year, Karoon has already launched a request for tender to select suppliers for the Echidna development. The Front End Engineering and Design (FEED) work started last July and is expected to be ongoing for the first half of 2018.
On Tuesday, February 20 Karoon announced “a positive development” in the FEED process for the Echidna light oil development proposal.
Namely, in order to proceed to a Declaration of Commerciality on the Echidna and Kangaroo oil discoveries, Karoon has now received an approval for a variation of the existing work program.
The board of directors of the Brazilian oil and gas regulator, Agência Nacional do Petróleo, Gás Natural e Biocombustíveis, has approved Karoon Petróleo & Gás Ltda’s application to review the appraisal plan relating to Santos Basin exploration blocks S-M-1037, S-M-1101, S-M-1102, S-M-1165 and S-M-1166, thereby removing the appraisal phase commitments to drill two wells and acquire 3D seismic, in favor of progressing Echidna and Kangaroo to a future development phase.
In addition, the board resolved to close the current appraisal period, Karoon informed.
Karoon will now present the Final Appraisal Report and submit a Declaration of Commerciality application on the areas it intends to retain to progress a future development.
According to the company, the approval to vary the work program and remove the drilling and seismic commitments in the blocks, which represented a significant portion of the group’s exploration and evaluation commitmments, provides greater certainty of the future development cost requirements and is positive for the current tender process and farm-out intentions.
Offshore Energy Today Staff