Karoon to acquire FPSO to improve Baúna production, improve profitability

Karoon Energy, with its Brazilian subsidiary, Karoon Petróleo & Gás Ltda. (KPG), signed a deal with Altera & Ocyan (A&O) to acquire 100% of the Cidade de Itajaí floating production, storage and offloading vessel (FPSO). 

The move is aimed at reestablishing reliable production from the operator’s 100% owned Baúna project in the southern Santos basin, Brazil, the company said in a release Feb. 27. The FPSO is owned and operated by A&O and leased by KPG. 

Karoon said acquisition of the vessel could significantly improve Baúna profitability through better FPSO efficiency and reduce unit operating costs by $4-6/bbl from 2026.

"The expected decrease in operating costs and certainty on the long-term availability of the vessel should allow the field to operate profitably well into the 2030s. This would enable us to access a portion of the 8.7-16.4 [million bbl] of Baúna Project Contingent Resource (1C to 3C), subject to further technical and commercial evaluation," said Dr Julian Fowles, Karoon’s chief executive officer and managing director. 

In a fourth-quarter update, released separately, Fowles noted Baúna project production "is starting to benefit from the work completed to clear the most production-critical maintenance issues, FPSO efficiency in CY24 was 84.5%, well below our long term expectations of 90-95%."

In its fourth-quarter report, Karoon noted sales volumes in the quarter of 3.14 MMboe were 53% higher than third-quarter 2024 due to the timing of Baúna liftings, resulting in sales revenue of $222.2 million. This took sales revenue for full-year 2024 to a record $776.5 million.  

Cidade de Itajaí FPSO operations

Built in 1985 and converted to an FPSO in 2012, the vessel has been operating on Baúna project production since the field came onstream in 2013. It has a nameplate fluid handling capacity of about 80,000 b/d of liquid and a nameplate storage capacity of about 631,000 bbl of oil.

Karoon intends to contract a new operations and maintenance (O&M) contractor to maintain the FPSO on its behalf, while KPG will take over the overall ownership and optimization plans for the vessel. The selection process has begun, and a contract award is expected by mid-year, the company said.