Australia’s Karoon Gas is moving closer to making a Final Investment Decision (FID) for its Echidna and Kangaroo oil discoveries located in the Santos Basin off Brazil, following the end of the exploration phase on five offshore blocks.
Karoon said on Wednesday it has submitted the Final Discovery Evaluation Report (RFAD) for its wholly owned Santos Blocks S-M-1037, S-M-IIOI, S-M-1102, S-M-1165 and S-M-1166 along with a Declaration of Commerciality (DOC) relating to the Echidna and Kangaroo light oil accumulations to the Brazilian oil and gas regulator, Agéncia Nacional do Petröleo, Gés Natural e Biocombustiveis (ANP).
The RFAD and DoC documents submission to the ANP mark the end of the exploratory phase and, upon approval, the beginning of the development and production phase. Karoon clarified that, while approval marks the start of the development and production phase, this does not constitute the FID.
The documents outline two distinct areas identified for retention which remain subject to ANP approval. These include the Echidna and Kangaroo oil accumulations along with some near field prospective resource opportunities.
Prior to these documents submissions, Karoon last February received an approval for a variation of the previous work program, 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.
The company noted that the approval of the RFAD is expected within 60 days of submission to the ANP and Karoon will submit a development plan within 180 days of the DOC. The FID will be assessed by Karoon independently of these approvals and Karoon is expected to be a in position to decide on FID later in 2018.
Karoon currently has a request for proposals with tendering underway. Submitted proposals are expected to share risk and provide funding flexibility with possible deferred payment structures, equipment financing solutions, subsurface risk sharing, and / or equity ownership.
Karoon underlined that it remains committed to farming down equity in the 100% owned Santos Basin blocks prior to FID.
Karoon Managing Director, Robert Hosking said: “While the declaration of commerciality is largely procedural in nature, this is an important step in moving closer to making a final investment decision.”
Relaunch of Baúna field sales process
Karoon on Wednesday also acknowledged Petrobras’ announcement on April 3, 2018, regarding the relaunch of the Baúna oil field sales process.
Namely, Petrobras on Tuesday started the opportunity disclosure stage regarding the transfer of its total stake in Baúna field (BM-S-40 Concession), located in Santos Basin, in shallow waters. Petrobras is an operator of the Baúna field, with 100% working interest. The average oil production, in January 2018, was about 34 thousand barrels a day. All the gas produced is reinjected.
The Australian company said that Baúna remains an opportunity of interest and due to the proximity to its existing acreage position it would provide the possibility for material operational synergies.
Hosking added: “While Karoon is assessing various acquisition opportunities, we welcome the re-launch of the Baúna sales process. The company has existing strategic partnerships and has positioned itself to take advantage of acquisition opportunities that support Brazilian growth strategy.”
Offshore Energy Today Staff