Brazil’s Prio in talks with Sinochem to buy Peregrino oil field stake

(Reuters) – Brazilian oil company Prio is in talks with China’s oil and chemicals firm Sinochem (SASADA.UL) for the potential purchase of a stake in the Peregrino oil field, it said in a securities filing on Wednesday.

No binding agreement has been reached so far, Prio added, after newspaper Folha de S.Paulo reported earlier in the day that the firm was looking to close this week a deal valued at as much as $1.9 billion for Sinochem’s 40% stake in the field.

Shares in Prio slipped 2% in Sao Paulo morning trading, underperforming Brazil’s benchmark stock index Bovespa as global oil prices traded down.

State-backed Sinochem has been trying, since 2017, to sell the 40% stake in Peregrino it bought from Norway’s Equinor for $3.07 billion in 2010, when it beat out a raft of Chinese rivals chasing high-quality assets.

Equinor owns the other 60% stake and operates the field, its largest outside Norway, which last year reached production of 110,000 barrels of oil per day.

Peregrino is an offshore field east of Rio de Janeiro.

Reuters reported last month that Sinochem was also planning to sell its 40% stake in a U.S. shale joint venture with oil major Exxon Mobil, valued upward of $2 billion.