Home Fossil Energy Brazilian FPSO on track to change hands by month end
April 2, 2025,
by
Melisa Cavcic
Australia’s oil and gas company Karoon Energy is moving forward with the acquisition of a floating production, storage, and offloading (FPSO) vessel, which is deployed on its project off the coast of Brazil. Once the firm takes over the ownership of the unit from the FPSO’s current owner and operator, Altera & Ocyan (A&O), it will pick a new operation and maintenance (O&M) contractor.
FPSO Cidade de Itajaí; Source: Altera Infrastructure
After entering into negotiations with Altera & Ocyan regarding the potential acquisition of the FPSO Cidade de Itajaí, which is working at its operated Baúna project in BM-S-40, Karoon Energy has now confirmed this purchase is progressing in line with the timetable issued in February 2025.
As a result, the transaction remains on schedule to close at the end of April 2025, with the selection of the new O&M contractor for the FPSO Baúna targeted to be completed by midyear. The company will update its production guidance once it assumes ownership of the FPSO, handpicks the new O&M contractor, and completes the planning for the next phase of maintenance.
In addition, the updated 2025 cost guidance is expected to be provided once the terms of the new O&M contractor are known. The FPSO was expected to be offline for a month during the replacement of a faulty gas lift valve as part of the Australian operator’s scheduled production shutdowns for planned maintenance.
Karoon claims the SPS-88 well intervention has been completed, with the well resuming production on March 28, sooner than anticipated due to earlier intervention vessel availability and a shorter duration operation than expected.
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According to the firm, the initial flow rates are in line with expectations, with the well currently producing at approximately 2,000 bopd on a restricted choke and gradually being opened further. Therefore, the Baúna project, which was shut down on March 7 for annual scheduled maintenance, recommenced production on March 27.
Karoon highlights that the output has since ramped up to around 26,500 bopd, above pre-shut-in levels with the resumption of SPS-88. Following a short period of flush production, a natural decline of approximately 15% per annum is expected to resume.
Moreover, the flotel that has been moored adjacent to the FPSO Cidade de Itajaí since February is expected to remain on site until April 6. This flotel has been used to accommodate additional manpower for an extended maintenance campaign aimed at reducing the FPSO maintenance backlog and improving equipment reliability.
The campaign, which took advantage of the annual planned maintenance shutdown, has largely taken place while the FPSO has been operating normally. However, further backlog maintenance work is planned to take place throughout 2025 and into 2026 and may involve another flotel campaign during 2026.
Dr Julian Fowles,