Australian independent Karoon Energy has sanctioned its Patola subsea tie-back oilfield development offshore Brazil, with TechnipFMC and Maersk Drilling landing contract awards.

The final investment decision on the development, which is set to cost between $175 million and $190 million, came just days after Norwegian state-controlled oil giant Equinor sanctioned the $8 billion Bacalhau first-phase development, also on the Santos basin.

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London-headquartered TechnipFMC secured the engineering, procurement, construction and installation deal for the Patola scheme, which will see the field tied back to the Cidade de Itajai floating production, storage and offloading vessel on Karoon’s producing Bauna field.

TechnipFMC will design, manufacture and install the subsea equipment — including christmas trees, flowlines, risers, umbilicals and controls — under an integrated EPCI contract.

The subsea contractor did not reveal any deal value.

Delivery and installation of the equipment is scheduled for the second half of next year, with Karoon eyeing first oil in the first quarter of 2023, with initial flow rates of more than 10,000 barrels per day of oil expected.

Danish rig owner Maersk Drilling has secured a two-well contract extension from Karoon for the semi-submersible Maersk Developer to drill production probes on Patola.

The contract extension, secured after Karoon firmed up an option, has a firm duration of 120 days and a contract value of around $27 million.

Before drilling at Patola, the semisub will continue drilling at the Bauna field.

Minor works are also required to tie back the two wells to spare riser slots on the FPSO, which is currently running at about 50% liquids-handling capacity.

The Patola field lies in the BM-S-40 production licence, which is 100% operated by Karoon.

Some 14.7 million barrels of best estimate contingent resources will be accessed by the planned Patola development infrastructure, Karoon said.

This is comprised of 13.2 million barrels in Patola and an additional 1.5 million barrels in Bauna resulting from injecting Patola’s gas into the Bauna reservoir.

Development concept: for the Patola project Photo: KAROON ENERGY

Karoon chief executive Julian Fowles called the project sanction “a major milestone in (the company’s) journey to becoming a substantial oil producer”.

“Together with the Bauna intervention programme, Patola is expected to add materially to our production base, with total output forecast to reach approximately 30,000 bpd in early 2023, more than double current production rates,” he added.

Of the up-to $190 million to be spent on the Patola development, $17 million has already been invested “to ensure that long lead items are available to meet the project timeline”, Karoon said.

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The remaining capital costs will be funded through a combination of a newly arranged $160 million syndicated financial facility agreement as well as cash flow from operations.

Equinor’s first-phase Bacalhau development will involve a single FPSO with production capacity of 220,000 bpd and storage capacity of 2 million barrels.

First oil from that project is envisaged in 2024, with Equinor saying it will have a breakeven of less than $35 per barrel.