Karoon Energy said it has entered into a long term, fixed price agreement with Shell to purchase credits to offset carbon emissions at the Baúna-Patola development in the Santos Basin, offshore Brazil.

KaroonPetróleo e GásLtda, a wholly-owned subsidiary of Karoon Energy, has entered into an agreement with Shell Western Supply and Trading Limited (SWST) to purchase more than 480,000 Verified Emission Reductions (VERs), or carbon credits, between 2022 and 2030, to offset an estimated 60% of total Baúna-Patola Scope 1 and 2 greenhouse gas (GHG) emissions.

This agreement, which includes the purchase of VERs to offset 60% of Karoon’s FY2021 Baúna emissions, complements Karoon’s purchase of 19,810 VERs in November 2021, and will result in Karoon’sBaúna operations being carbon neutral for FY2021.

This marks a significant milestone in the implementation of Karoon’s Carbon Management Action Plan, a core element of the Company’s Sustainability Strategy announced on 28 October 2021. The agreement will ensure Karoon has access to a supply of VERs at fixed prices to offset the majority of Baúna-Patola’s estimated Scope 1 and 2 emissions.

Karoon is continuing to work toward avoiding and reducing emissions in operations where possible and is actively pursuing opportunities to invest in projects to offset residual emissions.

“Entering this VER agreement is a major milestone for Karoon on our sustainability journey and demonstrates our commitment to achieving our GHG emissions goals.

Karoon has set ambitious targets to be carbon neutral(1) for Scope 1 and 2 emissions in Baúna-Patola from FY2021 onwards, while working toward a net zero(2) target for Scope 1 and 2 emissions by 2035. These VERs, together with the VERs purchased in November 2021, enable us to achieve carbon neutrality for FY2021, and take us towards reaching our longer-term objectives.

We are delighted to have entered into this agreement with SWST which, together with other Shell affiliates, has significant experience in carbon markets and with nature-based carbon credits. Shell exercises a high level of due diligence in selecting projects, consistent with Karoon’s commitment to using high-quality VERs.

The agreement provides both supply of VERs and price certainty for the majority of our estimated Baúna-Patola Scope 1 and 2 emissions.

As an oil producer, Karoonrecognises the importance of facing the global challenge of climate change. We are committed to continuing to look for ways to avoid and reduce emissions within our operations, such as the recent mooring buoy project which enables vessels to anchor safely when not in use, reducing the need to burn fuel and mitigating substantial GHG emissions. In addition, we are pursuing opportunities for investment in carbon offset projects in Brazil that can provide both climate related and social benefits in line with Karoon’s strategy,”Dr Julian Fowles, Karoon’s Chief Executive Officer and Managing Director, said.

(1) Carbon neutral refers to having a balance between emitting and offsetting greenhouse gas (GHG) emissions. To be achieved through acquiring carbon offsets in respect of Scope 1 and 2 GHG emissions.
(2) Net zero refers to reducing GHG emissions as far as possible and balancing the residual GHG emissions produced and GHG emissions removed from the atmosphere. To be achieved through future transition planning in respect of Scope 1 and 2 emissions.