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Karoon eyes Campos, Santos, Espirito Santo basins in Brazil auction
September 13, 2017 / 4:01 AM / a month ago

Karoon eyes Campos, Santos, Espirito Santo basins in Brazil auction

RIO DE JANEIRO (Reuters) - Karoon Gas Australia Ltd is eyeing prospects in Brazil’s Campos, Santos and Espirito Santo basins in this month’s auction of oil and gas exploration rights, a company executive told Reuters.

Tim Hosking, Karoon’s general manager for South America, said in an interview on Tuesday that the company has not made final bidding decisions yet, but is in the final stages of getting internal approval ahead of the Sept. 27 auction.

“We are looking in the main key basins in the southeast of Brazil, which are our favorites,” he said, flagging the three basins, including Santos, where the company already has five offshore exploration blocks. It “makes sense to build our footprint in that area.”

On offer in Brazil’s 14th bidding round are 287 offshore and onshore blocks to be awarded as concessions.

Hosking says Karoon will not participate in auctions scheduled for October in Brazil’s pre-salt area. But the company is interested in picking up more discovered or producing fields, such as mature fields recently released by state-controlled oil company Petroleo Brasileiro SA, also known as Petrobras.

“Petrobras is diversifying some of their assets and there are even some international companies that are farming out, so we are looking at a wide range of different opportunities and hopefully we will grab two or three,” he said.

Karoon is aiming to propose a suite of assets to DEA Deutsche Erdoel AG by December, said Hosking, after it inked a deal in July with the German firm to review and potentially jointly bid for Brazilian assets.

DEA was also granted an exclusive option to acquire 50 percent of Karoon’s current offshore blocks in Brazil. If the deal falls through, Karoon has other irons in the fire.

“We have been approached by five or six other companies that are not Brazilian but are in Brazil,” he said. “On a need-be basis we will pair up at the appropriate time.”

Karoon is hoping to declare its Brazilian discoveries commercial by the end of the year or in early 2018 and get environmental licenses by the end of 2019. Production is expected to begin in 2020 and quickly approach a peak of around 28,000 barrels per day.

In the meantime, Karoon has closed the door on efforts to buy the Baúna and Tartaruga Verde oil fields from Petrobras, after the state company withdrew an appeal against a court-imposed injunction on the sale earlier this year.

“From our perspective it is dead,” he said.

Reporting by Alexandra Alper; Additional Reporting by Marta Nogueira; Editing by Christian Schmollinger

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