Petrobras withdraws from Karoon deal with plans to restart sale

Australian oil company Karoon Gas is no longer in exclusive talks with the Brazilian state-owned oil giant Petrobras regarding the sale of interest in two fields off Brazil as Petrobras is starting a new process. 

On October 7, 2016, Karoon Gas Australia confirmed the award of the right to negotiate a final agreement with Petrobras, subject to conducting confirmatory due diligence, on the potential sale of an interest in the Baúna and Tartaruga Verde oil fields, located offshore Brazil.

Shortly after, court proceedings were initiated against the potential sale of the assets, alleging that Petrobras did not follow the correct sale process. An injunction was granted on November 19, 2016, suspending the potential sale.

According to Karoon’s statement on Thursday, Petrobras notified Karoon that day that the process relating to the sale of Baúna and Tartaruga Verde has now been withdrawn.

In addition, Petrobras has advised that it intends to reinitiate a sales process for the assets, adhering to Petrobras’ revised divestment process methodology which complies with the Brazilian Federal Accounting Court’s (TCU) requirements.

To remind, TCU earlier in March ordered Petrobras to restart its assets sale program and adopt its reviewed divestment process methodology, except for two projects.

The projects that were allowed to be continued without restarting the process included the sale of interest in the Baúna and Tartaruga Verde fields and sale of interest in Saint Malo field, in the U.S. Gulf of Mexico.

However, Karoon later stated that this TCU decision was separate and distinct from the court proceedings initiated on October 25, 2016, in the Federal Court of Sergipe against Petrobras, the Brazilian oil and gas regulator Agência Nacional do Petróleo, Gás Natural e Biocombustíveis (ANP) and Karoon, alleging that the correct sale procedure was not followed for the potential sale of an interest in the Baúna and Tartaruga Verde fields.

Therefore, the injunction granted last November remained in force.

Karoon’s Managing Director, Robert Hosking, said: “It is disappointing that Karoon is no longer in exclusive negotiations relating to the acquisition of Baúna and Tartaruga. The court proceedings, which are yet to be heard, made the timing and outcome of the sales process uncertain. Reinitiating the divestment process under Petrobras’ revised methodology will help to reduce the risk of any future court action against a potential sale, providing greater certainty for the successful bidder. Karoon remains engaged with interested potential partners and is committed to any future process relating to these assets.

“Based on Petrobras’ existing divestment program targets and the recent TCU ruling, Karoon believes any reinitiated process relating to these assets could be imminent.”

Offshore Energy Today Staff

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