Fast-track development studies are being carried out for a group of deepwater oil discoveries offshore Brazil that DI understands will see a new floating production system – most likely a leased FPSO – selected in order to hit a target first oil date of late 2017 or early 2018.

Australian independent Karoon Gas is already pushing hard, having awarded Worley Parsons-IntecSea a pre-Front End Engineering and Design (FEED) study for its Kangaroo discovery early in September, to be carried out in parallel with a planned drilling campaign in an effort to fast-track any potential development decision.

No further details on the concepts are emerging, although a standalone leased FPSO is tipped as the favorite, competing against possible subsea tieback options to other producing fields in the vicinity such as Bauna and Piracaba (formerly Tiro and Sidon) in block BM-S-40. They have been producing since earlier this year via the 80,000 b/d capacity Cidade de Itajai FPSO located on Bauna.

Petrobras also has another discovery, Piracuca, about 5 km east of Karoon’s blocks in a similar water depth, that has estimated reserves of 550 MMbbl of oil and could also be a factor in any development decision.

Karoon has been emitting increasingly optimistic estimates for its two initial finds it has made in the southern Santos Basin, which lie approximately 112 km offshore in comparatively shallow waters compared to some of Brazilian major Petrobras’ giant but ultra-deepwater finds to the north. With the company’s operated Kangaroo and Bilby discoveries lying in water depths averaging ‘only’ about 400 m (1,312 ft), the technological and commercial challenges of developing these fields are not nearly so intimidating as many of the other emerging developments offshore Brazil.

The operator hit a 76 m (249 m) oil column in Eocene and Maastrichtian interbedded sands with its initial discovery well on Kangaroo, with oil of 40 degrees API. Additional updip hydrocarbon potential exists with a gross column in the structure of approximately 650 m (2,133 ft), says the company. Karoon has estimated Kangaroo’s size at up to 489 MMbbl of oil, although the likely net recoverable figure at this stage is understood to be closer to 250 MMbbl.

However, with Karoon’s relatively small size and financial resources, it will have to farm out another share in its five blocks that contain the two discoveries plus several other promising prospects to access further funds. Last year the Australian indie agreed to sell a 35% stake in its wholly-owned blocks to Pacific Rubiales for S-M-1101, S-M-1102, S-M-1037, S-M-1165 and S-M-1166 to Pacific Rubiales for US $40 million in cash plus up to $210 million in exploration costs, although the deal is still awaiting the expected final regulatory approval.

The company says it is “committed to farming down approximately 15% equity interest ahead of Phase 2 drilling,” and that it has “good interest from a number of prospective oil and gas companies”.

Karoon has received written notification from the Agência Nacional do Petróleo (ANP) that its Discovery Appraisal Plan for the blocks has been approved, meaning the company can push forward with its appraisal work program commitments, to be completed by the end of 2014, with further contingent commitments to be completed by the end of 2016. First on the list will be to firm up a rig contract for Phase 2 of the exploration and appraisal drilling campaign, with a well planned for spudding before mid-year.

The firm commitments for this coming year include drilling the Kangaroo-2 appraisal well, an exploration probe on the Kangaroo West prospect, as well as seismic reprocessing and quantitative inversion studies on the Bilby discovery and the Emu and Emu East prospects.

The contingent work program for 2015 and 2016 will be determined by the results of the coming year’s work, but could include further wells on the Kangaroo, Kangaroo West and Emu reservoirs.

The Kangaroo discovery is the primary focus for Phase 2, said Karoon, “due to its favourable contingent resource size, oil quality and water depth”. The Kangaroo-2 appraisal will be located 290 m (951 ft) updip of Kangaroo-1 to confirm the size of the oil column and to determine the reservoir continuity and properties in an updip setting. If successful, a production test is expected to be carried out. The Kangaroo West well has the potential to “add meaningful resource to any Kangaroo development. Preliminary internal economic evaluation is highly supportive of a commercially significant project,” added Karoon.

The Bilby discovery, while hitting a 320 m (1,050 ft) oil column with a probable gross oil column of 560 m (1,837 ft) and oil of 28 degrees API, has a lower net to gross ratio and a poorer reservoir than Kangaroo, meaning it needs more appraisal and evaluation work.

The company also has two nearby pre-salt targets, Stingray and Great White, that it has begun preliminary engineering studies on, examining the technical challenges of drilling these targets. It is also making preparations for a targeted 3D seismic acquisition expected to get underway mid-2014. Seismic processing and interpretation, as well as the engineering studies are expected to be completed by mid-2015.