Just three months after installing a brand-new electrical system to boost its flagship Brazilian offshore field, Karoon Energy, an ASX-listed international oil and gas exploration and production player, is heading back to the drawing board.
After noting a fault on the monitoring system of the SPS-92 well at the Baúna field, Karoon undertook a controlled shut down of the well on September 22, 2026, to preserve pump integrity and investigate the system.
The company explains that a fault has been confirmed in one of the three electrical phases in the newly installed power cable for the downhole electrical submersible pump (ESP), following analysis and testing over the past few days.
While disclosing that the pump is now operating on two phases in a conservative manner to maintain safe and secure operations, the firm elaborates that a rig-based well intervention to replace the faulty cabling system will be required to reinstate full operability.
Karoon, which underlines that it has an existing option over a suitable drilling rig, has started intervention planning, including securing permitting, equipment, and services, but the timing is dependent on securing the permit approvals and services.
The operator estimates that approximately 3,500 barrels oil oil equivalent per day (bopd) will be deferred until the cable system is replaced. The production deferral is currently not expected to affect Baúna reserves.
Carri Lockhart, Karoon’s CEO and Managing Director, commented: “The electrical fault on SPS-92 is clearly very disappointing, especially given that this new ESP and cable system was in operation less than three months. Prior to the electrical fault, the well was performing in line with expectations, benefiting from increasing reservoir pressures following the resumption of water flood operations.
“Our key focus now is on planning the intervention and bringing SPS-92 back into full production to capture the deferred barrels, and maximising production from the other Baúna wells. In parallel, the company is actively pursuing avenues for equipment warranty and insurance recoveries. We will keep the market informed once we have more clarity on intervention timing.”
While the firm continues to investigate the root cause of the SPS-92 failure and assess the event against the applicable policy terms, based on its current understanding and preliminary nonbinding advice from its insurance advisers, it believes its insurance program may partially offset the resulting loss of production revenue and reimburse substantially all costs associated with the required intervention and repair, subject to applicable deductibles, policy terms, and final confirmation of coverage by insurers.
As a result of reduced SPS-92 output, Karoon has revised its 2026 full-year Baúna project production guidance from 6.0–6.7 million bbl to 5.4–5.7 million bbl, with the lower end reflecting a conversion to gas lift, if necessary. With Who Dat guidance unchanged, total production for 2026 is now expected to be 6.6–7.2 million boe.