The marketing agreement is for a term of up to 5 years and provides Karoon with access to Shell West’s global marketing and shipping platform
Image: Royal Dutch Shell head office in the Netherlands. (Credit: P.L. van Till at nl.wikipedia)
Karoon Energy Ltd (“Karoon”) is pleased to announce that its wholly-owned subsidiary, Karoon Petróleo e Gás Ltda (“KPG”), has signed a marketing agreement with Shell Western Trading and Supply Limited (“Shell West”), a member of the Royal Dutch Shell plc group of companies, to trade and ship crude oil production from the Baúna field Brazil.
The marketing agreement is for a term of up to 5 years and provides Karoon with access to Shell West’s global marketing and shipping platform.
As part of the marketing agreement negotiation, Karoon and Shell West have now agreed terms, and Shell West has obtained internal credit approval, for a US$50 million term loan facility at Karoon’s Australian business level. It is intended that this loan facility will be used as a reserve working capital facility. Karoon will now seek to finalise the loan facility documents under usual commercial terms.
These 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 said, “we are very pleased to be partnering with Shell for the marketing and shipping of the Baúna oil production. This agreement provides for value add through access to end buyers that are currently buying similar grade of oil out of Brazil and allows Karoon to co-load on larger vessels, reducing transport costs. Overall Karoon expects to retain a higher net back pricing for FOB Baúna production.”
Source: Company Press Release