Brazil's Prio talks to Sinochem about buying Peregrino Oil Field stake

In a filing with the Securities and Exchange Commission on Wednesday, Brazilian oil company Prio said that it is in discussions with Sinochem of China about the possible purchase of a stake within the Peregrino Oil Field.

Prio said that no binding agreement had been reached yet, after the newspaper Folha de S.Paulo published earlier in the day a report stating that Sinochem was hoping to close a deal this week valued up to $1.9 billion, for Sinochem’s 40% stake in this field.

Prio shares fell 2% during morning trading in Sao Paulo, underperforming Brazil’s benchmark index Bovespa due to the decline in global oil prices.

Sinochem, a state-backed company, has been trying to sell its 40% stake in Peregrino since 2017. It bought the stake from Equinor of Norway for $3.07billion in 2010 when it beat a number of Chinese rivals who were chasing high quality assets.

Equinor, the remaining 60% owner, operates the field. It is its largest oilfield outside Norway and produced 110,000 barrels per day last year.

Peregrino offshore field is located east of Rio de Janeiro.

Last month, it was reported that Sinochem is also a

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Its 40% stake in an U.S. joint venture for shale oil with Exxon Mobil is valued at upwards of $2 billion. (Reporting and editing by Kylie Madry; Gabriel Araujo)

(source: Reuters)