Karoon Energy, an ASX-listed oil and gas exploration and production company, has confirmed an uptick in operating efficiency at a floating production, storage, and offloading (FPSO) unit deployed on an oil field off the coast of Brazil.
Following a revitalization and maintenance campaign, the FPSO Cidade de Itajai, which is operating on the Baúna field, reached operating efficiency of 97.2%, above the target range of 90-95%, in the second quarter of 2026, compared to 96.1% in 1Q 2026. This campaign reinstated approximately 10,000 barrels of oil equivalent per day (bopd) of production in the aftermath of SPS -92 and PRA -2 well activities.
Karoon produced 1.08 million barrels of oil equivalent (boe) in 2Q 2026, producing at an average rate of 9,202 bopd, compared to 17,350 bopd in 1Q 2026, and generated sale revenue of $116.4 million, driven by materially higher realized oil prices. The total Baúna production in the Santos Basin is currently around 22,000 bopd.
The operator emphasizes that the quarter-on-quarter production variance reflected the planned 28-day maintenance shutdown and the temporary shut-in of SPS -92, one of the field’s main production wells, for intervention work to replace the electrical submersible pump. The FPSO Cidade de Itajaí has a nameplate fluid handling capacity of approximately 80,000 bpd and storage capacity of around 631,000 bbl of oil.
The company underlines that two cargoes were lifted during the period, totalling 0.98 million bbl, with cargoes delivered to refineries in Europe and Asia. The average realized price for the cargoes sold was $94.56/bbl, 33% higher than the average realized price in the prior quarter, reflecting the increase in global oil prices.
The firm elaborates that several milestones were delivered during the quarter, most notably the transfer of control of the FPSO operatorship and the 28-day FPSO planned full shutdown for facility maintenance, inspections and upgrades, including the hull inspection and production header replacement, which were completed in May 2026, while the flotel-supported FPSO revitalization campaign was finalized in June 2026.
After production was restored at SPS -92, following a well intervention to replace the electrical submersible pump (ESP), the PRA -2 well was also brought back online, following an operation to reconnect the umbilical and re-establish connectivity to the ESP, enabling all production wells associated with the Baúna project to be in service.
Carri Lockhart, Karoon’s CEO and MD, commented: “At the start of 2026, we commenced a clear and ambitious program to strengthen Karoon’s operations at Baúna. In the second quarter, we delivered these commitments.
“We transitioned FPSO operatorship, completed the largest maintenance and revitalisation program in the company’s history, restored production from the SPS -92 and PRA-2 wells, and established a stronger operating platform for higher operational efficiency, structurally lower operating costs and stronger cash generation going forward.”
Karoon completed the acquisition of 100% of concession BM-S-40, comprising the Baúna and Piracaba producing oil fields and the Patola discovered resource, collectively known as the Baúna project, from Petrobras in November 2020. The acquisition price was $380 million plus a tiered contingent consideration of up to $285 million and accrued interest, dependent on future realized oil prices over the period 2022 – 2026.
The project consists of 12 subsea wells, including two Patola wells which were bought online in 2023. Baúna crude is a high-quality oil with an API between 33 and 38 degrees and is low in impurities. Oil from the field is sold under a marketing arrangement with Shell Western Supply and Trading, an affiliate of Shell.
Lockhart underscored: “With the Baúna work program substantially complete, we expect strong free cash flow in the second half of 2026, assuming oil prices average US$60 –70/bbl and operational performance remains in line with guidance.”
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