Well intervention ops on the cards to bring Brazilian offshore well back online

Australian oil and gas company Karoon Energy is working on sorting out the issues impeding the restart of production from a well located on a field in the Santos Basin offshore Brazil. To this end, well intervention activities are seen as the likely solution for the well to come back online.

Karoon’s production from the Baúna project, which consists of 12 subsea wells connected through seabed flowlines to the FPSO Cidade de Itajaí, was impacted by operational issues during November 2023 related to equipment in the gas lift dehydration unit on the FPSO. This led to the formation of hydrates in two wells, impacting production rates.

One of these wells was returned to production within a week. However, the second one has been offline since late November 2023. As a result, Karoon has been working with Altera and Ocyan, the operator of the FPSO, to remediate these issues, resulting in the replacement of equipment in the gas lift dehydration unit and gas stimulation of the impacted well, SPS-88, which was completed on January 20, 2024.

The topside issues have been resolved and the hydrates were removed by circulating fluids. Despite this, the SPS-88 well has not been returned to production due to what appears to be a mechanical blockage in the well’s gas lift valve, part of the well completion. Karoon has now determined that a well intervention is likely to be required to return SPS-88 to production.

Furthermore, the Australian player plans to undertake this work with a lightweight well intervention vessel (LWIV) over approximately 20 days for $5-10 million. According to Karoon, the timing of the well intervention will be subject to the engagement of a LWIV and ancillary services and equipment along with the receipt of all necessary regulatory approvals.

Constructed at Singapore’s Jurong shipyard in 1995 and converted in 2012, the FPSO Cidade de Itajaí, which is capable of operating in water depths of up to 1,000 meters, started operating in Brazil in February 2013. This FPSO can produce 80,000 barrels of oil per day and compress 2 million cubic meters of gas per day.

The Baúna crude is a high-quality oil with an API between 33 and 38 degrees and is low in impurities. The oil from the field is sold under a marketing arrangement with Shell Western Supply and Trading Limited and realizes a price related to Brent crude.

Karoon has revised its CY24 production forecast based on the assumption that the well intervention work will be undertaken during the fourth quarter of CY24. Therefore, the Australian firm expects its production for CY24 to be in the range of 7.2 to 9.0 million barrels (MMbbl) in Brazil compared to the previous range of 8.0 to 10.0 MMbbl.

On the other hand, the firm’s CY24 total production, including the recently acquired Who Dat assets, is estimated to be in a range of 11.2 to 13.5 million barrels of oil equivalent (MMboe), compared to the previous range of 12 to 14.5 MMboe, with Who Dat guidance unchanged.

Moreover, Karoon’s unit production costs for the 12 months are anticipated to be in the range of $10.5 to $15.0 per boe, compared to the previous range of $9.0 to $14.0 per boe, driven by the reduced production and the intervention costs, partly offset by opex phasing.