Petróleo Brasileiro (Petrobras) has canceled its deal with Karoon Gas Australia for a stake sale in the Baúna and Tartaruga Verde oil fields offshore Brazil, however the Brazilian giant will continue its efforts to sell off its interest in the two fields.
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Image from OE Staff. |
Karoon confirmed it received the termination notice today (30 March), expressing disappointment.
“It is disappointing that Karoon is no longer in exclusive negotiations relating to the acquisition of Baúna and Tartaruga. The court proceedings, which are yet to be heard, made the timing and outcome of the sales process uncertain,” says Karoon Managing Director Robert Hosking.
The two companies first began negotiations for Karoon to buy 100% stake in the Baúna field in the shallow waters of post-salt Santos Basin, and 50% stake in the Tartaruga Verde field in deepwater post-salt Campos Basin in October 2016.
However, court proceedings were initiated the following month against the deal. The proceeding alleged that Petrobras did not comply with relevant Brazilian regulatory requirements, which resulted in an injunction granted on 19 November 2016 for Petrobras and the Agência Nacional do Petróleo, Gás Natural e Biocombustíveis (ANP) to suspend the potential sale.
Along with laying the axe on the sale yesterday (29 March), Petrobras also requested that the Federal Court of Aracaju terminate these court proceedings.
“On 15 March, TCU (Brazil’s Federal Accounting Court) revoked the preventive order, and among other measures, upheld the permission to proceed with this sale process for being in advanced stage of negotiation, with the determination of compliance with the Court’s rules,” says Petrobras. “In the face of this decision, the lack of conditions presented in the acquisition proposal and the maintenance of the effects of the judicial injunction, the continuation of this divestment process proved to be unfeasible, given the negotiation or procedural impossibility of resuming negotiations.”
Karoon is still holding out hope for a piece of the deal.
“Reinitiating the divestment process under Petrobras’ revised methodology will help to reduce the risk of any future court action against a potential sale, providing greater certainty for the successful bidder,” says Hosking. “Karoon remains engaged with interested potential partners and is committed to any future process relating to these assets. Based on Petrobras’ existing divestment program targets and the recent TCU ruling, Karoon believes any reinitiated process relating to these assets could be imminent.”
Baúna has been in operation since February 2013 and currently produces some 45,000 b/d. Tartaruga Verde is in initial development stages, with significant investments yet to be made.
The sale of Baúna and Tartaruga Verde fields was carried out through a competitive process, and is part of Petrobras' 2015-2016 divestment plan.
Read more:
Petrobras, Karoon deal remains suspended
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