Karoon Energy Acquires FPSO for Baúna Project in Brazil

Australian oil and gas company Karoon Energy has recently made a significant acquisition in the form of the Cidade de Itajaí FPSO for $115 million. The FPSO, previously owned by Altera & Ocyan, will now be under the ownership of Karoon’s Brazilian subsidiary, Karoon Petróleo & Gás.

The FPSO, which has been operating on Karoon’s Baúna project in the Santos Basin since 2013, has a fluid handling capacity of 80,000 barrels per day and a storage capacity of 631,000 barrels of oil. The acquisition is expected to close by April 30, 2025, pending customary approvals.

With the purchase of the FPSO, Karoon plans to appoint a new contractor to operate and maintain the unit while focusing on strategic optimization plans. The company has already initiated the process of selecting a new contractor, with a decision expected by mid-2025.

Julian Fowles, CEO and managing director of Karoon Energy, expressed confidence in the economic benefits of the acquisition, citing an expected rate of return above the company’s post-tax hurdle rate. The purchase is also projected to lead to a net unit operating cost reduction of $4-6 per barrel, with savings anticipated from 2026 onwards.

Furthermore, the acquisition secures the availability of the FPSO for the Baúna Project until the end of the field’s life, allowing Karoon to access a significant portion of Baúna’s contingent resource. This strategic move is aimed at ensuring the profitability of the field well into the 2030s.

Overall, Karoon Energy’s acquisition of the Cidade de Itajaí FPSO represents a key milestone in the company’s growth strategy, strengthening its position in the Brazilian offshore oil and gas sector and paving the way for sustained profitability and value creation.