Karoon ‘remains committed’ to buying Brazilian assets from Petrobras

Karoon Gas remains committed to buying Petrobras’ Baúna and Tartaruga Verde assets, offshore Brazil, after their exemption from any further suspension by the Brazilian court. 

Petrobras and Karoon started negotiating the sale of an operated 100% interest in the Baúna oil project and a non‐operated 50% interest in the Tartaruga Verde oil development in October this year.

The sale is part of Petrobras’ plan to divest approximately $35 billion of assets between 2015‐2018 to reduce debt.

However, in November, the pair came across an obstacle in the process. Namely, Petrobras was ordered by a court in Brazil to stop the sale of these assets. The reason behind the court injunction was a lawsuit initiated by José Hunaldo Nunes Santos against Petrobras and the Brazilian oil and gas regulator ANP due to alleged non-compliance with relevant Brazilian regulatory requirements which require an open public bidding process.

According to the class action suit, the correct sale procedure was not followed.

Petrobras filed an appeal against the injunction in November disputing the allegations. The Brazilian company said the sales process was conducted in compliance with the stages laid down in its divestment system.

Several of Petrobras’ other proposed and announced transactions have been challenged in other lawsuits on the basis they do not meet the requirements of a public tender.

On December 7, 2016, the Brazilian Federal Court of Accounts announced it has suspended any further sale of assets by Petrobras, except for five projects that are in the final stages of negotiation until it decides on the merits of whether Petrobras’ divestment system observes applicable laws and regulations.

Karoon said it has been advised by Petrobras that the Baúna and Tartaruga Verde assets are included in the five exempted projects and as such, will not be subject to any suspension by the court.

Due to a court recess period from December 20, 2016, until January 20, 2017, Karoon said it does not expect any resolution on the injunction until after the recess period at the earliest. The company is required to file its defense in respect of the merits during February 2017.

“Karoon remains committed to these negotiations relating to Baúna and Tartaruga Verde, however the outcome of these court proceedings, and timing of a resolution, remains uncertain,” the Australian company said.

Offshore Energy Today Staff