Karoon Petróleo & Gás, a wholly-owned subsidiary of Australia’s oil and gas exploration company Karoon Energy, has signed an oil marketing agreement with Shell Western Trading and Supply (Shell West).
Shell West is a member of the Royal Dutch Shell group of companies.
Karoon will trade and ship crude oil production from the Baúna field located offshore Brazil. The five-year term agreement enables Karoon to access Shell West’s global marketing and shipping platform.
Shell West has now obtained a $50m term loan facility at Karoon’s Australian business level. According to Karoon, this loan facility is intended to be used as a reserve working capital facility. The company now looks to finalise the loan facility documents under usual commercial terms.
These agreements are expected to be finalised subject to financial completion of the Baúna deal.
In July 2019, Petrobras signed a contract with Karoon Petróleo & Gás to sell all its interests in the Baúna field in the Santos Basin off the coast of the state of São Paulo for $665m.
Karoon said that the entry into the term loan facility is subject to due diligence and negotiation completion as well as finalisation of definitive documentation.
Karoon managing director Robert Hosking said: “We are very pleased to be partnering with Shell for the marketing and shipping of the Baúna oil production.
“This agreement provides for value add through access to end buyers that are currently buying similar grade of oil out of Brazil and allows Karoon to coload on larger vessels, reducing transport costs.
“Overall Karoon expects to retain a higher net back pricing for FOB Baúna production.”