Brazilian oil and gas producer Prio has signed a deal worth $1.92bn to acquire a 40% stake in the Peregrino and Pitangola offshore oilfields from China's Sinochem. The news confirms earlier media reports saying that the Brazilian company was close to a deal.

This acquisition marks a major expansion for Prio in the Campos Basin, off the coast of Brazil.

The deal involves Prio purchasing Sinochem Petroleum Netherlands Coöperatief, which holds the 40% interest in these fields.

Once the transaction is complete, Prio will join Equinor in the consortium operating the fields, with Equinor retaining its 60% stake and continuing as the operator.

The financial structure of the deal includes an initial payment of $191.5mn upon signing, with the remaining $1.72bn due at closing.

Additional adjustments for working capital and other standard considerations will also be made.

The acquisition is subject to standard regulatory approvals, including clearance from Brazil's antitrust authority, CADE, and the waiver or expiration of Equinor's pre-emption rights within a 30-day period.

This acquisition is poised to significantly boost Prio's production capacity, which it expects to increase by 35,000 barrels per day (bpd) once the deal is finalised.

The company said it also expects to achieve logistical synergies by combining Peregrino's oil production with its other operations.

The Peregrino field, discovered in 1994 and producing since 2011, is located 85 km offshore in the Campos Basin, with economically recoverable reserves estimated at around 338mn barrels. Prio's share of this is expected to be about 135mn barrels.

The field's infrastructure features the Peregrino floating, production, storage and offloading (FPSO) vessel, with a processing capacity of 110,000 bpd of oil and 300,000 bpd of water.
Additionally, three fixed platforms – A, B, and C – are equipped with drilling and well intervention capabilities.

The field is currently producing around 88,000 bpd through 26 producing wells and six injection wells.

State-backed Sinochem has been attempting to sell its 40% Peregrino stake since 2017. The Chinese firm originally acquired its stake in the project from Equinor for $3.07bn in 2010, outbidding other Chinese competitors seeking high-quality assets.

If you’d like to read more about the key events shaping Latin America’s oil and gas sector then please click here for NewsBase’s Latin America Oil and Gas Monitor.

©2024 bne IntelliNews , source Magazine