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The Australian Oil And Gas Company Karoon Has Not Yet Found A Partner For Its Neon Offshore Oil Field In Brazil And Is In Negotiations With Potential FPSO Suppliers. The Company May Drill Another Well To Not Further Risk Development.
Last year, Karoon transitioned the blocks in the Santos basin containing two oil fields from the exploration phase to the next phase of development and production. As part of the transition, the oil fields, previously known as Echidna and Kangaroo, were renamed Neon and Goia, respectively. At the time, Karoon said it could make the final investment decision for Neon in 2018, but that did not happen.
In an update this Friday, Karoon reported that the Neon Development Plan is expected to be submitted to the national oil and gas regulator (ANP) during the third quarter of 2019.
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Karoon emphasized that the presentation of the development plan does not obligate the company to make a final investment decision. The Australian company stated that its plan, as previously disclosed, is to find a farm-in partner before making the FID. Furthermore, looking ahead, Karoon said it could drill another well before the FID decision.
The well would test the southern part of the field to reduce the uncertainty of the contingent resources estimate.
In addition to this objective, the well would also help plan and design future development wells, thus reducing development risk, as well as securing better terms with equipment and service providers, and potential partners.
The company said it is evaluating the cost-benefit analysis of the additional well, without providing a timeline on when the well might be drilled. In 2017, Karoon selected a fine development concept consisting of two horizontal wells and a gas injection well with a leased FPSO unit.
Ideal Partner For Karoon
This concept is still in place, and there will be an option to extend it over time, “as opportunities arise to create more value from nearby resources.”
The future tie-in options include the immersion fault block in the Neon field, the Neon Maastrichtian oil pool, the Goia oil field, and the Emu up-dip prospect.
“Following the adoption of the SDP concept, Karoon has undergone an extensive bidding process with service and equipment providers seeking to contract an integrated field development solution, including wells, subsea infrastructure, and an FPSO. These negotiations continued until 2018 and are still ongoing today,” Karoon said on Friday.
“According to the previous board, Karoon remains committed to reducing Neon’s equity before reaching the FID on development. Coinciding with the above work, a renewed farmout process for Neon and Goia is underway, with detailed geotechnical material recently made available to interested parties.”
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