Melbourne-based Karoon Gas Australia Ltd. has entered into agreements with German company DEA Deutsche Erdoel AG to review and evaluate and, if appropriate, jointly bid for oil and gas assets in selected areas offshore Brazil.
As part of the arrangements, an exclusive option has been granted to DEA for the acquisition of a nonoperated interest of up to 50% in Karoon’s five exploration blocks in the Santos basin. These include the Echidna and kangaroo oil discoveries. The exercise of that option will be subject to satisfactory due diligence and agreement of terms.
DEA is a midsized global exploration and production company that is controlled by Russian billionaire Mikail Fridman’s LetterOne Holdings SA based in Luxembourg. L1 acquired DEA in March 2015.
Karoon managing director Robert Hosking said the agreement with DEA is significant in the context of realizing his company’s strategic ambitions to acquire meaningful oil production in Brazil.
Last week Karoon announced it had begun the front-end engineering and design phase for Echidna oil field (OGJ Online, July 26, 2017).
The company received approval from the Brazilian government for a revised development plan that comprises a leased floating production, storage, and offtake vessel initially supplied from two extended horizontal production wells at the field. A third well will be a gas injector.
The infrastructure will handle an expected peak production rate of 28,000 b/d of oil. Echidna is tentatively scheduled to be brought on stream in 2020.