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Project Anticipates Production Start in 2029 with Dedicated FPSO and Capacity of Up to 50 Thousand Barrels per Day; Company Seeks Partner to Enable Exploration of the Neon Field.
Karoon Energy, an Australian oil company with a presence in Brazil, announced that the investments planned for the Neon field, located in the Santos Basin, could reach US$ 1.2 billion in the first phase of development. The final investment decision (FID) is scheduled for mid-2026, while initial oil production is estimated to begin in early 2029.
The project has recently entered the definition phase and involves the installation of a FPSO (floating production, storage, and offloading unit). The estimated maximum production rate is 40 thousand to 50 thousand barrels per day, according to the company’s statement to the press.
First Phase of the Neon Field Aims for Up to 70 Million Barrels
The initial development will focus on 60 to 70 million barrels (MMb) of a total of 108 MMb of contingent resources. Four subsea production wells and one well for gas disposal are planned, along with the associated subsea infrastructure.
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According to Karoon, a second phase with additional wells may occur in the future, increasing the recoverable volumes and extending the lifespan of the Neon field into the 2040s. The company is also assessing the feasibility of transforming Neon into an offshore hub, connecting it to resources from neighboring fields, such as Goiá, which already has 27 MMb of contingent resources.
Karoon Seeks Partner to Share Costs
The company plans to attract a partner to share investments in the field. A data room will be opened in the third quarter of 2025, with the goal of facilitating a 30% to 50% farm-down, that is, the partial sale of the interest in the asset to another industry operator.
Karoon confirmed that there are already interested parties in the project, although formal negotiations have not yet begun. The expectation is that, if economic and market conditions remain favorable, the partnership agreement and the final investment decision will be finalized by the end of 2026.
Initial Investment of Up to US$ 10 Million Begins in 2025
The oil company has taken a conservative approach given the current volatility in oil prices and uncertainties in the global market. Therefore, the initial investment commitment will be made gradually, with an input between US$ 7 million and US$ 10 million over the next six months.
This amount will be used for activities such as:
- Engineering studies for the FPSO and surface facilities
- Drilling campaign planning
- Layout research and optimization
- Economic reevaluation of the project
At the end of this phase, expected by the third quarter of 2025, the company will conduct a new technical and economic analysis before advancing to the next stages of the Neon project.
Total Investment in 2025 Could Reach US$ 25 Million
Adding to the amounts already spent in 2025 — about US$ 1 million on conceptual studies —, Karoon estimates that the total investment in the definition phase of the Neon field this year could reach up to US$ 25 million.
If all phases are executed according to schedule, the total costs for project definition up to the FID could reach US$ 30 million.
According to the company, the investment is considered viable with the Brent oil price in the range of US$ 65 per barrel (reference value for 2025). In this scenario, the first development phase is expected to pay for itself in approximately two years, starting from the commencement of production.
Neon Field May Compensate for Production Decline in Baúna
Located in block SM-1037, about 75 km northeast of the Baúna field, also operated by Karoon in the Santos Basin, the Neon field is strategic for maintaining the company’s production in Brazil.
With the natural decline of production in Baúna, the company expects the Neon project to offset this decline and significantly increase Karoon’s reserves starting from the FID. The future connection with other discovered fields in the region may also ensure greater operational efficiency and dilution of logistical costs.
FPSO in Brazil: Center of Karoon’s New Offshore Strategy
The project includes a FPSO dedicated exclusively to the Neon field, indicating an autonomous production model. The choice of this format demonstrates the company’s progress in consolidating its own infrastructure in Brazil, moving from a third-party dependent operation to a more integrated strategy.
The FEED (Front-End Engineering Design) phase, which has already begun, will include technical and economic assessments for contracting the FPSO, supplier analysis, and offshore logistics studies to ensure the viability of the autonomous model.
Caution in the Face of Oil Volatility
Despite the optimism regarding the field’s potential, Karoon emphasized that it adopts a cautious posture, especially due to instability in international oil prices and the need to maintain the company’s financial balance.
“We are committed to a disciplined capital allocation strategy, ensuring that each stage of the Neon project is accompanied by detailed technical and financial reviews,” the company informed.
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