Karoon gets nod from Brazilian regulator to take over Baúna field

Australian player Karoon Gas has received approval from a Brazilian oil and gas regulator to take over the Baúna field, located offshore Brazil, with completion expected at the end of the month.

Karoon in July 2019 presented the high bid in the process to acquire Petrobras’ 100 per cent operating interest in concession BM-S-40, which contains the producing Baúna light oil project.

A year later, Karoon negotiated a revised transaction to acquire the producing Baúna oil field.

The transaction completion is subject to certain conditions, including the key outstanding third-party/regulatory conditions precedent: Agência Nacional do Petróleo, Gás Natural e Biocombustíveis (ANP) approval, and FPSO charter assignment.

In an update on Friday, Karoon said that the Board of Directors of the ANP has approved with conditions, at a board meeting on 22 October 2020, the assignment of the rights and obligations under Concession Contract BM-S-40 related to the Baúna field.

Karoon expects satisfaction of the conditions to occur in the ordinary course of business.

Once written confirmation of the ANP’s board approval is issued, a further condition precedent to transaction close under the Baúna sale and purchase agreement and the last outstanding regulatory condition precedent will be satisfied.

The ANP board approval follows the issue of new environmental operational licences by IBAMA (the Brazilian Institute of the Environment and Renewable Natural Resources) in August.

Transaction close still remains subject to certain conditions precedent, including FPSO charter assignment. In relation to the FPSO charter assignment, Karoon does not consider that this will delay transaction close.

Karoon is aiming to close the transaction on 30 October 2020.

The Baúna oil field has been in production since February 2013 through the FPSO Cidade de Itajaí.

The FPSO is able to process up to 80,000 barrels of light oil (34º API) and 2,000,000 m3 of gas per day.

The unit is anchored at a water depth of 275 meters, 210 km off the coast.