Karoon signs agreement with Altera & Ocyan to acquire FPSO Cidade de Itajai

Australian oil company Karoon announced that it has signed a Sale and Purchase Agreement (SPA) with Altera & Ocyan to acquire 100% of FPSO Cidade de Itajaí for $115 million, plus approximately $8 million in transaction costs. The unit operates in the Baúna field, which is fully operated by Karoon. The agreement is subject to customary approvals. The agreement is expected to be completed by April 30, 2025, when Karoon will become the owner of the vessel.

Karoon intends to hire a new Operation and Maintenance (O&M) contractor to operate and maintain the FPSO on its behalf. The process of selecting a new O&M contractor has already begun, and the Company expects to award a contract to the successful bidder by mid-2025. Altera & Ocyan will continue to operate the FPSO until Karoon has fully absorbed the management of the FPSO and the new contractor is ready to take over integrated operation and maintenance services for the vessel.

Karoon has established a transition team to work with Altera & Ocyan and the new O&M contractor (once selected), with the aim of facilitating safe, efficient and reliable production during the transition period and the fastest transfer of operational control. The duration of the transition period is expected to be between 6-9 months and remains subject to further planning and regulatory approvals.

“We are delighted to have reached an agreement with Altera & Ocyan for the acquisition of the FPSO Cidade de Itajaí. The FPSO is critical to our Baúna operations and ownership will provide us with direct strategic direction over the facility, enabling us to improve operational efficiency in line with a timetable determined by Karoon,” said Karoon CEO Julian Fowles. The executive also said that the expected reduction in operating costs and certainty about the long-term availability of the vessel should allow the field to operate profitably until the 2030s. This would allow the oil company to access a portion of the 8.7 – 16.4 million barrels of Baúna Project Contingent Resources (1C to 3C), subject to further technical and commercial assessment.