New owner takes over Brazilian FPSO

Australia’s oil and gas company Karoon Energy has closed the acquisition of a floating production, storage, and offloading (FPSO) vessel, which is working on its project off the coast of Brazil.

Following 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 ironed out the purchase deal, which was scheduled to be completed at the end of April 2025.

The firm’s wholly owned subsidiary, Karoon Petróleo & Gás, has now acquired this FPSO from its previous owner for a total consideration of $115 million plus approximately $8 million in transaction costs, with the final payment of $85 million made on April 30, 2025.

Furthermore, Karoon has signed a transition services agreement with A&O to ensure continuity of operations and a smooth handover process as the firm assumes greater operational control of the vessel. The tender process for a new service provider, who will support Karoon as operator of the FPSO in the future, is underway and expected to be concluded in mid-2025.

Dr Julian Fowles, Karoon’s CEO and Managing Director, commented: “Taking ownership of the Cidade de Itajaí FPSO marks a significant milestone in Karoon’s evolution over the past five years from an explorer to an operator of offshore oil and gas production assets. Owning the FPSO gives Karoon direct strategic control over the facility.

“This will enhance our ability to manage operational performance and reduce long-term operating costs, as well as provide us with greater flexibility to revitalise the facility, thereby potentially extending field life and increasing the value of the Baúna project.”

The FPSO Cidade de Itajaí, which is capable of operating in water depths of up to 1,000 meters, was constructed at Singapore’s Jurong shipyard in 1995 and converted in 2012.

This unit, which began operating in Brazil in February 2013, can produce 80,000 barrels of oil per day and compress 2 million cubic meters of gas a day.