Australia’s Karoon has taken the Final Investment Decision to proceed with the development of the Patola project located offshore Brazil. Following the first production, expected in 2023, the project will more than double Karoon’s current production rates.
The Patola field is located within the 100 per cent Karoon-owned and operated BM-S-40 Production Licence in the Santos Basin, offshore Brazil and is adjacent to the producing Baúna and Piracaba accumulations.
The Patola will be tied back to the existing Baúna Floating Production, Storage and Offloading (FPSO) vessel, Cidade de Itajaí.
The development comprises two near-vertical subsea production wells, which will be drilled and completed using the recently contracted Maersk Developer rig immediately following the completion of the four-well Baúna intervention program.
The design, manufacture, and installation of subsea infrastructure (Christmas trees, flowlines, risers, umbilical, controls) will be done by TechnipFMC under an integrated Engineering, Procurement, Construction and Installation (iEPCI) contract.
The development also comprises minor works to tie back the two production wells to spare riser slots on the FPSO.
According to Karoon’s statement on Thursday, the Patola development budget is $175 – 195 million, of which approximately $17 million has already been invested to ensure that long lead items are available to meet the project timeline. The remaining capital costs will be funded through a combination of a newly arranged $160 million reserve-based, non-recourse, syndicated facility agreement, and cash flows from operations.
At present, it is anticipated that approximately 40 per cent of Karoon’s forecast production in year 1 of the loan and 30 per cent of Karoon’s forecast production in year 2 of the loan will be hedged.
Patola is expected to produce at an initial rate of more than 10,000 bopd from high-quality reservoirs of the same geological age as those in the adjacent Baúna and Piracaba fields. First oil production is targeted for the first quarter of the calendar year 2023.
About 14.7 mmbbl of 2C contingent resources, comprising 13.2 mmbbl in Patola and an additional 1.5 mmbbl in Baúna resulting from injecting Patola gas into the Baúna reservoir, will be accessed by the planned Patola development infrastructure.
Karoon Energy’s Chief Executive Officer and Managing Director, Dr Julian Fowles, said: “Together with the Baúna intervention program, Patola is expected to add materially to our production base, with total output forecast to reach approximately 30,000 bopd in early 2023, more than double current production rates.
“The Patola development is a nearfield expansion and will utilise existing infrastructure, including the FPSO and facilities at Karoon’s onshore base. Consequently, it is expected to be an efficient and value-accretive investment”.
Karoon Energy’s Chairman, Bruce Phillips, commented: “We are proud to be undertaking this exciting new project in Brazil, where the majority of our employees and long-term assets are located”.
Namely, Karoon has recently created a Brazil Business Unit and restructured its executive team. As a result, a new and expanded position of Executive Vice President and President Karoon Brazil, reporting directly to the CEO and Managing Director, has been created.
Phillips also said that the decision on the Patola Project now brings Karoon’s capital expenditure commitments in Brazil to nearly $1 billion.