Karoon’s Baúna Project 2P Reserves Jump 35% to 52.7 MMbbl
Karoon Energy has significantly upgraded its Baúna Project 2P Reserves by 35%, extending the field’s economic life by seven years to 2039, driven by the recent FPSO acquisition and improved reservoir performance.
- 35% increase in Baúna Project 2P Reserves as of June 2025
- Economic field life extended to 2039, aligned with Production Concession expiry
- Significant capital expenditure planned for FPSO revitalisation and life extension
- 2P recoverable volumes up 120% since Karoon’s 2020 acquisition
- Independent Competent Person’s Report validates reserve estimates within 5%
Baúna Project Reserves Upgrade
Karoon Energy has announced a substantial upgrade to the Baúna Project’s 2P Reserves, now estimated at 52.7 million barrels of oil equivalent (MMbbl) as of 30 June 2025. This represents a 35% increase compared to the end of 2024, reflecting a combination of factors including the acquisition of the Baúna FPSO vessel, an extension of the facility’s operating life, and better-than-expected reservoir performance.
The Baúna Project, located offshore Brazil within Concession BM-S-40, encompasses the Baúna, Piracaba, and Patola fields. The recent acquisition of the FPSO Cidade de Itajaí has been pivotal in reducing operating costs and enabling the company to access previously contingent resources, effectively converting much of these into proven reserves.
Extended Economic Life and Capital Investment
Karoon has extended the economic field life of Baúna by seven years, now projected to continue until 2039, coinciding with the expiry of the Production Concession. This extension is underpinned by lower-than-anticipated production decline rates observed over the past 18 months, which suggest a higher ultimate recovery from the reservoir.
To support this extended life, Karoon plans to invest approximately US$55-65 million in 2026 for FPSO revitalisation, followed by an additional US$80-90 million between 2030 and 2034 for life extension activities. These investments include equipment upgrades and flotel campaigns designed to maintain operational integrity and efficiency.
Independent Validation and Resource Reconciliation
An independent Competent Person’s Report (CPR) conducted by AGR (ABL Group Norway AS) confirms the reserve estimates within a 5% margin of Karoon’s internal assessment, lending credibility to the upgrade. Since Karoon’s acquisition of the Baúna asset in November 2020, recoverable volumes have increased by 120%, highlighting the success of operational improvements and strategic investments.
The reassessment also saw a reduction in 2C Contingent Resources from 11.2 MMbbl to 3.0 MMbbl, as much of this volume was reclassified into the 2P Reserves category. This shift reflects the maturing technical and commercial viability of the resources, supported by the extended facility operating life to 2040.
Financial and Operational Implications
While the reserve upgrade and life extension bode well for Karoon’s asset valuation and future production profile, the company also notes an increase in abandonment costs from US$174.9 million to US$260 million, driven by the inclusion of the FPSO and expanded scope of decommissioning activities. This highlights the complexity and cost considerations inherent in extending offshore oilfield operations.
Overall, the Baúna Project’s enhanced reserves and extended life position Karoon to capitalise on improved economics through reduced operating costs and sustained production, but also require careful management of capital expenditure and operational risks over the coming decade.
Bottom Line?
Karoon’s Baúna Project upgrade signals a stronger, longer-lived asset, but rising abandonment costs and concession expiry loom as key challenges ahead.
Questions in the middle?
- How will Karoon manage the increased abandonment costs amid extended field operations?
- What are the risks if reservoir performance deviates from current optimistic forecasts?
- How might the Production Concession expiry in 2039 impact long-term project economics and planning?
