With assets in Peru and Brazil, Australia’s Karoon has been progressing developments within South America’s oil and gas segment. Yet, Brazil is seen as a very strategic country for the company.

In 2017 Karoon expanded its presence in Latin America’s largest oil-producing country, acquiring its sixth block—S-M-1537—in the Santos Basin for about $6.3 million during Brazil’s 14th bidding round. The company has a decade of technical and operational experience in the southern Santos Basin with five blocks—S-M-1037, S-M-1101, S-M-1102, S-M-1165 and S-M-1166—acquired in the 9th bidding round.

“We always believed that Karoon’s first oil would be produced in Brazil,” Karoon South America General Manager Tim Hosking said.

The company’s activities in Brazil have been hot. Since 2013 Karoon has operated two drilling campaigns and a total of six wells, and it has made three oil discoveries: Echidna, Kangaroo and Bilby fields.

However, the company is making a big bet on the Echidna oil field.

“Echidna is a project that represents our future in the country with constant investment in research, analysis and professional training. This field is a milestone for us to constantly evaluate our progress in terms of strict environmental guidelines and prospects for productive development in the medium term,” Hosking said.

According to the manager, Karoon has been talking to different suppliers to contract the FPSO unit to be deployed in Echidna. “We believe [that] by the second half of 2018 we will have a final decision on this hiring,” he said. The field is expected to start producing oil by 2020. The amount of investment estimated for the field development plan is $300 million.

The development concept comprises two extended horizontal production wells and one gas injection well and a leased FPSO unit. Peak production is forecast to reach about 28,000 bbl/d.

Currently, the project is in the pre-development, engineering and basic design phase. The phase includes reservoir modeling, production scenario analysis, wellbore feasibility studies and development optimization.

In April 2017 Wood Group was awarded a multiyear contract from Karoon Petróleo & Gás to provide engineering services to support the full field development for the Echidna field offshore. According to the engineering services company, the partnership represents the first project between the two companies. The contract focuses on the technical requirements of a floating production unit (FPU) and subsea structures, and all bid package evaluations and execution phase. The equipped FPU will be located in the Echidna Field in the Santos Basin and moored in a maximum water depth of 400 m (1,312 ft).

Hosking also hailed Brazil’s current moment for investment opportunities in the country’s oil and gas industry. “Karoon has always believed in the potential of the offshore oil and gas market in Brazil. The company has observed the resumption of investments in the sector and significant advances in the decentralization of the segment, structuring new ANP [bidding] rounds with valuable assets and the growth of the national production,” he said. “Karoon wishes to be present in this historic scenario focused on generating value for the entire Brazilian oil and gas production chain.”

Brazil is a positive for the oil and gas industry, according to Hosking. He said the Brazilian government is making assertive moves to provide legal certainty and business stability for foreign investors.

Hosking said that the company eyes other opportunities in Brazil's oil and gas industry. “The development of the Brazilian market will be significant in the coming years. That’s why Karoon is looking for valuable assets across the country. As I said, we believe in the resumption of the national oil and gas segment. That is why we want to strengthen our presence in Brazil more and more,” he said.

This article originally appeared in Subsea Engineering News.