Karoon Energy has secured a five-year marketing agreement with Shell West to trade and ship crude oil production from the Baúna field in Brazil.
As part of the marketing agreement, Karoon will have access to Shell West’s global marketing and shipping platform. Shell West will obtain internal credit approval for a US$50 million ($73 million) term loan facility at Karoon’s Australian business level.
Part of the marketing agreement negotiation, the loan facility is set to be used as a reserve working capital facility and Karoon will seek to finalise the loan facility documents under usual commercial terms.
The agreements are subject to financial completion of the Baúna transaction and entry into the loan facility is subject to completion of due diligence and negotiation and finalisation of definitive documentation.
Karoon managing director Robert Hosking was pleased to be partnering with Shell West for marketing and shipping of the Baúna oil production.
“This agreement provides for value add through access to end buyers that are currently buying a similar grade of oil out of Brazil and allows Karoon to co-load on larger vessels, reducing transport costs,” Hosking said.
“Overall, Karoon expects to retain a higher net back pricing for FOB Baúna production.”