Brazil: Prio and Sinochem negotiate 40% stake in Peregrino

Negotiations between Prio and Sinochem are progressing for the acquisition of a 40% stake in the offshore Peregrino field, located in the Campos Basin, offshore Rio de Janeiro.
This stake could enable Prio to increase its production by 40,000 barrels of oil per day, in addition to the 80,000 barrels produced daily by the company.
The Peregrino field, which currently produces around 110,000 barrels a day, is operated by Equinor, which holds the remaining 60% stake.
The acquisition aims to integrate this strategic asset into Prio’s portfolio, with significant operational and geographic synergies.

Sinochem seeks to rationalize its portfolio

Since 2017, Sinochem has been looking to sell this stake, acquired in 2010 for $3.07 billion from Equinor (formerly Statoil).
The sale is part of a broader strategy by the Chinese company, which is seeking to refocus its investments on more profitable projects.
Sinochem’s disengagement extends beyond the Brazilian field, as the company has also initiated the sale of its 40% stake in a shale joint venture with ExxonMobil in the USA, valued at over $2 billion.
Sinochem is thus adjusting its portfolio in response to the dynamics of the global oil market and the Group’s new strategic priorities.

Benefits for Prio and consolidation of the Brazilian market

For Prio, this acquisition represents an opportunity to strengthen its presence in the Brazilian offshore sector, particularly in the Campos Basin.
By increasing its production capacity by a further 40,000 barrels per day, the company consolidates its position as one of Brazil’s leading independent hydrocarbon producers.
The acquisition also complements Prio’s expansion strategy, which has seen the company make several acquisitions in recent years to add to its portfolio of offshore assets.
The Brazilian oil sector is undergoing a major restructuring, with companies seeking to maximize the exploitation of offshore fields.
The Campos Basin, home to several of the country’s largest oil fields, remains a key focus for oil investments.
If the agreement goes ahead, it will mark a new stage in the consolidation of the sector, with a refocusing of Sinochem’s assets and a strengthening of Prio’s production capacities.

Outlook and challenges for the sector

The outcome of the negotiations remains uncertain, although both parties are optimistic that an agreement can be reached in the coming weeks.
Discussions are focusing on the financial and operational terms of the transaction, with particular attention to asset transfer conditions and regulatory obligations.
If finalized, the deal will mark one of the largest transactions in the Brazilian oil sector in recent years, with implications for both the local market and the international strategy of both companies.
The conclusion of this agreement would also strengthen Prio’s position in the face of growing competition in the Brazilian offshore sector, while offering Sinochem the opportunity to reorganize its investment priorities.
With global demand for oil in constant evolution, this transaction could provide Prio with long-term growth opportunities, notably by increasing its production volumes in a context of rising demand for crude oil.