Karoon in Santos Basin farmout talks ahead of Neon FID. FDP in Q3 2019

Australian oil and gas company has yet to find a farm-in partner for its Neon oil field offshore Brazil and is in talks with potential FPSO suppliers. The company might drill another well to de-risk the development further.

Karoon last year entered transitioned the Santos basin blocks containing two oil fields from the exploration phase to the next development and production phase.

As part of the transition, the oil fields, formerly known as Echidna and Kangaroo, were renamed into Neon and Goia, respectively. Karoon at the time said it might make the final investment decision for Neon in 2018, but this didn’t happen.

In an update on Friday, Karoon said that the Neon Development Plan was due for submission to the national oil and gas regulator ANP during the third quarter of 2019.

Karoon stressed that the development plan submission does not compel the company to make a Final Investment Decision. The Australian company has said its plan, as previously disclosed, is to find a farm-in partner prior to making the FID. Also, looking ahead, Karoon said it might drill another well before the FID decision.

The well would test the southern part of the field to reduce the uncertainty of the contingent resource estimate.

Apart from this objective the well would also help plan and design future development wells and thus reduce the development risk, and agree better terms with equipment and service providers, and potential partners.

The company said it was evaluating cost and benefit analysis of the additional well, without providing a timeline on when the well might be spudded. Back in 2017, Karoon picked a slim development concept consisting of two horizontal well s and one gas injection well with a leased FPSO unit.

This concept is still in place, and there will be an option to extend upon it over time, “as opportunities to create further value from nearby resources arise.”

The tie-in options for the future include the Neon field up-dip fault block, Neon Maastrichtian oil pool, Goia oil field, and the Emu up-dip prospect.

“Following adoption of the SDP concept, Karoon went through an extensive tender process with service and equipment providers seeking to contract an integrated field development solution comprising wells, subsea infrastructure, and an FPSO. These negotiations continued through 2018 and remain ongoing today,” Karoon said on Friday.

“In line with previous advice, Karoon remains committed to farming down equity in Neon prior to reaching FID on the development. Coincident with the foregoing work, a renewed farmout process for Neon and Goia is underway, with updated detailed geotechnical material recently being made available to interested parties.”

Offshore Energy Today Staff