Oil and gas producer Karoon Energy (ASX:KAR) has halted production at the Baúna oil field off the coast of Brazil. This follows the failure of two anchor chains on the floating production storage and offloading (FPSO) vessel Cidade de Itajaí.
On 11 December 2024, the company and FPSO operator Altera&Ocyan implemented a controlled shutdown as a precautionary measure to protect onboard personnel and the environment.
The FPSO remains stable and on station, with Karoon expecting production to restart during the week of 23 December 2024, after repairs are completed on at least one of the chains and regulatory approvals are obtained.
The "shut-in" (the closure of valves to stop oil extraction) has affected Karoon's production guidance for Baúna for calendar year 2024, which has been revised downward from 7.5-7.7 MMbbl (Million Barrels of Oil) to 7.2-7.4 MMbbl.
Another shortfall
In other bad news, Karoon also reported a production shortfall at its Who Dat project in the Gulf of Mexico. Full-year guidance for Who Dat has been lowered from 3.0-3.1 MMboe (million barrels of oil equivalent) to 2.9 MMboe.
This was attributed to an extended maintenance shutdown caused by Hurricane Rafael, which increased downtime from the planned 10-14 days to 18 days.
Combined 2024 production guidance for Karoon’s operations has been revised down from 10.5-10.8 MMboe to 10.1-10.3 MMboe.
Shares in Karoon closed 9.68% lower at $1.26. Year to date, they're down 39.13%.
