Karoon, Woodside hit Brazil snag

A court has ordered state oil giant Petrobras to cease the sale of its Bauna and Tartaruga Verde oilfields.

Karoon shares had surged since early October on news it was in exclusive talks to acquire the fields.

Karoon Gas Australia and Woodside Petroleum have hit a snag in their $US1 billion-plus plans to enter Brazil’s offshore Santos Basin, with a court order issued for state oil giant Petrobras to cease the sale of its Bauna and Tartaruga Verde oilfields.

Karoon shares had surged since early October on news it was in exclusive talks to acquire the fields. They fell on today’s announcement, shedding 43c, or 18 per cent to $1.90 by 2.19pm, but were still up from the $1.39 price they traded at before the original announcement.

Shares in Woodside — which is understood to have been in talks to partner Karoon in what would be a $1 billion purchase but has not publicly confirmed this — were up 1.3 per cent at $29.79.

Karoon said the court proceeding were initiated by Jose Hunaldo Nunes Santos against Petrobras and the Brazilian oil and gas regulator.

“The court proceedings contend that the sales process did not comply with relevant Brazilian regulatory requirements,” Karoon said.

“As part of these proceedings, an interim injunction has been made which orders Petrobras and the (regulator) ANP to cease the sale process at this time. The interim injunction is not final and is subject to appeal proceedings which have now been initiated.”