Karoon on the lookout for Marina well rig offshore Peru

Location of Marina prospect

Australian oil and gas explorer Karoon has started tendering for a drilling rig which will drill the Marina-1 well offshore Peru.

Karoon and its farm-in partner Tullow have set a target to drill the Marina-1 exploration well during early 2020.

This will be the first well drilled in the Block Z-38 where, following the changes to the hydrocarbon law in Peru, force majeure was lifted in September 2018.

Karoon said in its financial half-year report published on Thursday that it was continuing with preparations for the drilling of the well.

The company added that it began tendering for a drilling rig and services. It is also continuing discussions with regulators to clear final approvals and discussing a rig sharing opportunity in the region.

According to Karoon, exploration success at Marina-1 could significantly enhance the prospects for the region and potentially open the deeper water areas of the Tumbes Basin to further activity.

The Tumbes Basin has been a prolific oil-producing region onshore and nearshore northern Peru. Discoveries in deeper water could prove an extension of existing commercial fields into larger structures deeper in the basin.

That could, in turn, provide a meaningful change to Peru’s domestic reserves and production.

As for the Marina prospect, it has an unrisked best estimate gross prospective resource of 256 mmbbls. Karoon is the operator of the block with a 40 percent interest, Tullow owns 35 percent interest, while Pitkin holds 25 percent.

Tullow’s interest is subject to satisfying certain farm-out conditions including certain regulatory approvals while Karoon’s farm-in obligations to Pitkin are also still to be completed.

As per the terms of the farm-in agreement between Tullow and Karoon, Tullow will fund 43.75% of the cost of the first exploration well, capped at $27.5 million (at 100%), beyond which Tullow will pay its 35% share.

Tullow will also pay $2 million upon completion with a further $7 million payable upon declaration of commercial discovery and submission of a development plan to Perupetro.

Offshore Energy Today Staff

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