Karoon Lowers Production Forecast at Baúna Field as it Plans Well Intervention

Australian oil and gas company Karoon Energy has revised oil production forecast for its Baúna Field offshore Brazil, as it prepares for SPS-88 well intervention to resolve the issues relating to equipment on the Cidade de Itajaí FPSO.

Due to operational issues encountered at its Baúna Field, located approximately 210 kilometres offshore Brazil in the southern Santos Basin, Karoon Energy has reduced the 2024 production forecasts.

The company expects Brazil production to be in the range of 7.2 to 9.0 million barrels (MMbbl) compared to the previous expectations of 8.0 to 10.0 MMbbl.

Therefore, the total production for the year, including the Who Dat assets, will be in the range of 11.2 to 13.5 million barrels of oil equivalent (MMboe), compared to the previous range of 12 to 14.5 MMboe, with Who Dat guidance unchanged.

The forecasts are impacted by Baúna project’s production due to operational issues relating to equipment in the gaslift dehydration unit on the Cidade de Itajaí FPSO employed on the field.

This led to the formation of hydrates in two wells that has impeded production rates. While one of the wells was returned to production within a week, the second well has been unable to be produced since late November 2023, Kaoon Said.

The company has been working with Altera & Ocyan, the operator of the FPSO, to remediate these issues, resulting in the replacement of equipment in the gaslift dehydration unit and gas stimulation of the impacted well, SPS-88, which was completed on January 20, 2024.

The topside issues have been resolved, and the hydrates are believed to have been removed by circulating fluids, Karoon said.

However, the SPS-88 well has not been able to be returned to production due to what now appears to be a mechanical blockage in the well’s Gas Lift Valve, part of the SPS-88 well completion.

Consequently, based on the current information, Karoon has determined that a well intervention is likely to be required to return SPS-88 to production.

Karoon’s current planning basis is that this work will be undertaken by a Lightweight Well Intervention Vessel (LWIV) and will take approximately 20 days to complete at a cost of $5-10 million, which will be fully by Karoon.

The timing of the intervention will be subject to the engagement of a LWIV and ancillary services and equipment, in addition to the receipt of all necessary regulatory approvals.

The revised production forecast is based on Karoon’s assumption that this work will be undertaken during the fourth quarter of 2024.

Based on the analysis of the cause of the production loss at well SPS-88 and the ongoing remediation plan, Baúna Project resources are not expected to be impacted.

Karoon estimates that its unit production costs in 2024 will be in the range of $10.5 to $15.0 per boe, compared to the previous lower costs in the range of $9.0 to $14.0 per boe.