Equinor Transfers Peregrino Operatorship to Brazilian Partner

Equinor ASA said Wednesday it had completed the transfer of its 40 percent operating stake in the producing Peregrino field offshore Brazil to Prio SA for $2.33 billion.

Upon the consummation of the transfer of a further 20 percent from Equinor, the local company will become the sole owner of the Campos Basin field. Prio acquired Sinochem Holdings Corp Ltd's 40 percent last year.

Put onstream 2011, Peregrino's productive life has been extended to 2040 with the startup of phase 2 in 2022. The heavy-oil field produces about 110,000 barrels a day, Equinor says on its website. "Over the years, the field has produced approximately 300 million barrels of oil and has been a significant contributor to Equinor's growth in Brazil", Equinor said in an online statement Wednesday announcing the completed transaction.

Located east of Rio de Janeiro, the field has a floating production storage and offloading platform.

"The deal is part of our ongoing effort to high-grade our international portfolio by divesting more mature assets to redeploy capital to assets with greater robustness and more long-term value potential", said Philippe Mathieu, Equinor executive vice president for international exploration and production.

Equinor's disposition of its 60 percent interest in Peregrino is to be executed in two stages. For the 40 percent, Equinor is to receive "an additional payment of $166 million which is contingent on the completion of the second part of 20 percent", Equinor said May 2 in announcing the deal. The latter acquisition of 20 percent is priced $951 million. "The final component is $150 million of maximum interest", Equinor said then.

Equinor said Wednesday, "Equinor will continue as a non-operated partner until the closing of the remaining 20 percent share is completed".

Advertisement - Scroll to continue "Equinor's journey in Brazil continues with full momentum with Bacalhau, our Raia gas project, our partnership with Petrobras in Roncador and our growing exploration and renewables portfolio", said Veronica Coelho, senior vice president and country manager for Equinor in Brazil.

Last month Equinor and its partners started production in Bacalhau in Brazil's offshore Santos basin, which Equinor said is the biggest field it has developed overseas.

Discovered 2012 in Santos' pre-salt region by primarily state-owned Petroleo Brasileiro SA, the ultra-deepwater Bacalhau holds recoverable reserves exceeding one billion barrels of oil equivalent (boe), according to Equinor, which took over as operator 2016.

"Phase 1 development consists of 19 wells, producers and injectors, which will be brought online in sequence as we ramp up and sustain production", Equinor said in a press release October 16. "Equinor will be positioned to provide an update in 2026 during the ramp-up phase".

Bacalhau has one of the biggest floating production, storage and offloading (FPSO) vessels deployed in Brazil, designed to produce up to 220,000 barrels of crude a day and store at least two million barrels, according to contractor MODEC Inc.

Equinor operates Bacalhau with a 40 percent stake. "Bacalhau is the first field development in Brazil’s pre-salt to be developed by an international operator", it noted.

The partners are Exxon Mobil Corp (40 percent) and Petrogal SA (20 percent). The Brazilian government's Pre-Sal Petroleo SA manages the production sharing contract.

Bacalhau sits 185 kilometers (114.95 miles) from the coast of Ilhabela municipality in Sao Paulo state, according to Equinor.

To contact the author, email jov.onsat@rigzone.com

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