Karoon Reports Increase in 2P Reserves in Brazil’s Bauna Project

Karoon Energy Ltd reported an increase of 13.7 million barrels (MMbbl) of 2P reserves in the Bauna project in the southern post-salt region of the Santos Basin, Brazil.

The increase in 2P reserves, which are 35 percent higher as of June 30 from six months ago, reflect the acquisition of the Baúna floating production, storage and offloading vessel (FPSO), facility operating life extension, and “better reservoir performance than anticipated,” Karoon said in a news release.

The project’s economic field life has also been extended by seven years to 2039, limited by the current production concession expiry, the company said. The Bauna Project comprises the Bauna, Piracaba and Patola fields in Concession BM-S-40 offshore Brazil

The asset’s 2C contingent resources have been reduced from 11.2 MMbbl to 3.0 MMbbl over the same period, reflecting an upwards revision of 5.5 MMbbl, less the transfer of 13.7 MMbbl to the 2P reserves category. The reassessment of contingent resources was based on the potential to produce until the assessed end of the facility’s operating life of 2040, according to the release.

Karoon said it expects to invest $55 million to $65 million in an FPSO revitalization campaign in 2026, and approximately $80 million to $90 million in life extension activities between 2030 and 2034. Life extension capital expenditures are expected to include two flotel campaigns and associated equipment upgrades.

The reassessment included an updated reservoir performance, modelling and activities outlook, as well as the removal of Altera & Ocyan FPSO charter costs, leading to a reduction in minimum economic production rates. It also included an updated assessment of long-term operating costs and field abandonment costs, with the production concession expiry date of February 2039 factored in, Karoon said.

“One of the key drivers underpinning the [first-half] Baúna FPSO acquisition was the potential to reduce future operating costs, which would allow us to access some or all of the existing contingent resources,” Karoon CEO and Managing Director Julian Fowles said.

“A comprehensive analysis has now been completed, which has confirmed that, with our expected new cost structure and implementation of life extension plans, the economic life of the Baúna Project can be extended by approximately seven years, from 2032 to 2039, when the production concession expires. In addition, over the past 18 months, the Baúna decline rate has been lower than our expectations, indicating a higher Ultimate Recovery from the project,” Fowles continued.

“The Reserves upgrade highlights the material value that has been added by the Baúna FPSO purchase and the continued strong performance of the Baúna Project reservoirs,” he concluded.

In May, Karoon subsidiary Karoon Petróleo & Gás Ltda completed the acquisition of the Baúna floating production, storage and offloading vessel (FPSO), the Cidade de Itajaí, from Altera & Ocyan.

The total consideration for the FPSO was $115 million plus approximately $8 million in transaction costs, with the final payment of $85 million made on April 30, Karoon said in an earlier statement.

The Cidade de Itajaí FPSO has operated on the Baúna project production since the field came onstream in 2013. It has a nameplate fluid handling capacity of approximately 80,000 barrels of liquid per day and a nameplate storage capacity of approximately 631,000 barrels of oil.

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