Oil and gas exploration and production company Karoon Energy has entered into an agreement with Altera & Ocyan to purchase the Cidade de Itajaí floating production, storage and offloading facility (FPSO) for $115m (A$185.04m).
The deal, signed by Karoon’s wholly owned Brazilian subsidiary Karoon Petróleo & Gás (KPG), also includes approximately $8m of transaction costs.
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The FPSO, currently leased by KPG, is pivotal for Karoon’s 100%-owned Baúna project in the southern Santos Basin, Brazil.
The acquisition is set to enhance operational control and reduce costs for Karoon. Subject to customary approvals, the transaction is expected to close by 30 April 2025.
Upon completion, Karoon will own the vessel and employ a new operations and maintenance contractor to manage the FPSO, while KPG will oversee ownership and strategic optimisation.
The process to select a new O&M contractor has begun, with an expected contract award by mid-2025.
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By GlobalDataAltera & Ocyan will continue operating the FPSO until KPG has fully integrated FPSO management and the new contractor is prepared to assume services.
Funding for the acquisition will come from existing cash reserves, with a $30m deposit already paid into escrow. The balance is payable upon closing.
The purchase is projected to be economically beneficial, with returns exceeding the company’s post-tax hurdle rate and providing certainty on FPSO availability for Baúna’s lifespan.
The acquisition is also set to reduce net unit operating costs by approximately $4 to $6 per barrel (bbl) from 2026, reflecting the cessation of Altera & Ocyan lease payments.
The Cidade de Itajaí FPSO has been integral to Baúna’s production since 2013. Built in 1985 and converted in 2012, it can handle approximately 80,000bbl of liquid per day and a store approximately 631,000bbl of oil.
It is certified by Det Norske Veritas and operates in compliance with Brazilian regulations.
Karoon shipped its first oil from the Baúna production field in December 2020.
