completed its purchase in November 2020. Baúna cumulative oil production from commencement of production up to 30 June 2021 is 135 MMbbl, with an estimated 34.7 MMbbl of 2P recoverable reserves remaining (excluding Patola – see Reserves and Resources Report on page 36). The Baúna and Piracaba development comprises six production wells, three water injection wells and one gas injection well. All wells have subsea completions, which are tied back to the FPSO. The leased FPSO is owned by Altera and operated by a joint venture, Altera & Ocyan (A&O), under an ‘operations and maintenance’ contract with Karoon. It has a processing capacity of 80,000 bopd and a storage capacity of approximately 600,000 bbl. The Baúna Oligocene reservoirsare located at a depth of approximately 2,000 metres subsea in combined stratigraphic and structural traps, which are well imaged on high resolution 3D seismic data. The reservoirs have excellent porosity and permeability (greater than 30% and 2 - 6 darcys, respectively), with net pay ranging from 10 metres to 40 metres in laterally extensive sandstone reservoirs, providing strong aquifer pressure support and high oil recovery factors. The water depth at the Baúna location is approximately 280 metres. Production and sales FY2021 production performance • Regular safety visits to the FPSO from the Karoon Operational After a smooth transition of operatorship from Petrobras to HSSE Coordinator. Karoon, with no safety incidents or interruptions to production, • Pre-embarkation safety procedures enhanced. oil production from Baúna was 3.14 MMbbl during the period Strict protocols implemented to manage COVID risks. from 7 November to 30 June 2021, produced at an average rate • of 13,317 bopd. While unfortunately one Lost Time Incident occurred during Karoon was successful in partially mitigating the annual production FY2021 (on a supply vessel during a pre-operatorship training decline rate over its first eight months of operation, from more session), there were no significant environmentalincidents or than 15% over the past few years to approximately 10%. ThisCOVID-related interruptions to production. Thisstrong HSSE was achieved largely through the optimisation of gas-lift supply to performance reflected the excellent commitment of all Karoon production wells, which led to higher total liquids production. In staff and contractors, in both the onshore and offshore operations addition, despite the maturity of the field, reservoir performance teams, to delivering production safely and reliably. was stronger than expected.Operational uptime, excluding 11 (See Sustainability section on page 24 for further details) days of scheduled maintenance, was 97%. This reflected eight days of unplanned outages, during which several maintenance FY2021 oil sales activities were implemented proactively to ensure the ongoing During the year, Karoon lifted six oil cargoes from Baúna, totalling integrity and reliability of the FPSO. 2.9 MMbbl. The average price realised for the crude, net of selling The Company is continuing to look for opportunities to enhance expenses, was US$59/bbl. production by refining its production management practises and The cargoes were sold under the Company’s oil marketing improving operational reliability, with a target of maintaining annual agreement with ShellWestern Supply and Trading Limited (a decline rates below 15%, subject to the reservoir response over time. member of the Royal Dutch Shell Plc group). This agreement, which Focus on safe and reliable operations was signed in October 2019 for a term of up to five years, provides the Company with access to Shell’s global marketing and shipping Karoon’s highest priority is maintaining safe and reliable operations. platform. Baúna crude is marketed by Shell on behalf of Karoon, During the year, the Company focused on ensuring its strong safety with the selection of the final customer made by Karoon. The oil is culture was adopted for all Baúna operations. This included: loaded onto shuttle tankers and then co-loaded with other similar • Direct engagement between the FPSO owner, Altera, grade oil produced in Brazil to larger vessels, to be transported to and Karoon up to CEO level to establish that Health, Safety, the end-user. Security and Environment (HSSE) isthe primary priority The Baúna sweet light oil is regarded positively by the market, with in decision making. the crude’s excellent qualities attracting strong competition for • Targeted safety behaviour campaigns during and following cargoes from a range of global refiners. handover of operatorship by Petrobras. Karoon Energy Ltd 17 Annual Report 2021