Karoon Gas Australia is moving into front-end engineering and design on its Echidna light oil discovery in the Santos Basin offshore Brazil.
The Echidna development concept consists of a leased floating production, storage, and offloading facility, with two extended horizontal production wells and one gas injection well. Expected peak production is about 28,000 b/d (14,000 b/d per well).
During FEED, Karoon plans to issue a request for tenders to select suppliers, then the firm hopes to make a final investment decision (FID) on the project in the June quarter 2018.
"The dramatic oil industry pull back over the past three years has led to lower vessel utilization rates and higher equipment inventory levels, globally and in Brazil. This cyclical downturn has presented a window of opportunity in which Karoon expects to receive tenders that provide significant funding flexibility," the firm says.
Based on recent supplier discussions, Karoon says it expects to receive tenders that substantially reduce upfront capital commitments including deferred payment structures, equipment financing solutions, subsurface risk / reward sharing and equity ownership.
The firm holds 100% in Echidna, but plans to farm down before FID.