Equinor to sell 60% stake in Peregrino oil field to PRIO SA in $3.5bn Brazil deal

Why Is Equinor Selling Its Operated Stake in the Peregrino Field?

Equinor Brasil Energia Ltda., a wholly owned subsidiary of Norwegian energy major Equinor ASA, has signed binding agreements with Prio Tigris Ltda.—a subsidiary of PRIO SA, Brazil’s leading independent oil and gas company—for the sale of Equinor’s 60% operated interest in the Peregrino offshore oil field. The transaction, valued at approximately USD 3.5 billion including contingent interest payments, marks a strategic pivot by Equinor as it rebalances its global upstream portfolio while retaining Brazil as a core long-term growth region.

The deal comprises two components: a USD 2.233 billion payment for a 40% stake and operatorship, followed by a second tranche worth USD 951 million for the remaining 20% interest. A maximum interest component of USD 150 million brings the total transaction value to USD 3.5 billion. Payment will be made in two tranches—one at signing and another closer to closing—with customary adjustments based on deductions and asset performance since the effective date of 1 January 2024.

What Is the Strategic Significance of the Peregrino Field Exit?

The Peregrino field has been a cornerstone of Equinor’s presence in Brazil since production began in 2011. Located in the Campos Basin, the heavy oil field is operated via a floating production, storage and offloading (FPSO) unit and three fixed platforms. As of 2024, it had produced over 300 million barrels of oil, with daily output averaging 110,000 barrels. Equinor’s share stood at approximately 55,000 barrels per day in Q1 2025.

Despite its scale and production success, the Peregrino asset had begun to mature. Equinor executives, including Philippe Mathieu, EVP for Exploration and Production International, positioned the transaction as part of a portfolio optimisation effort. According to Equinor, the company remains committed to Brazil, citing continued development of the Bacalhau oil project and the Raia offshore gas field. Combined, these ventures are expected to drive the company’s equity production in Brazil to 200,000 barrels per day by 2030.

Veronica Coelho, Senior Vice President and Country Manager for Equinor Brazil, described the Peregrino field as the “foundation” of Equinor’s Brazil strategy, but emphasised that the divestment is aligned with Equinor’s next growth phase, including investments in renewable hybrid projects through its subsidiary Rio Energy.

How Is PRIO Expanding Its Offshore Oil Footprint in Brazil?

PRIO SA (BVMF: PRIO3), formerly known as PetroRio, has significantly expanded its footprint in the Campos Basin over the past two years. In 2024, PRIO acquired Sinochem’s 40% stake in the Peregrino field, making this new deal a full consolidation move. With full ownership and operatorship of Peregrino, PRIO is poised to boost its production profile by at least 60,000 barrels per day. This acquisition firmly establishes PRIO as a key offshore player and reflects its long-term confidence in Brazil’s pre-salt and post-salt oil reservoirs.

PRIO will assume full operational control following regulatory clearance and deal closure. Equinor will retain responsibility for safe operations until that point, ensuring a smooth transition.

How Does This Fit Equinor’s Global Portfolio Strategy?

Equinor ASA has publicly stated that it is rebalancing its international oil and gas portfolio through selective asset divestments and acquisitions. The company continues to focus on high-margin, long-life assets that align with decarbonisation goals and operational scale. In Brazil, that means doubling down on the Bacalhau field, an ultra-deepwater pre-salt development, and the Raia project, which will play a key role in supplying domestic natural gas.

In parallel, Equinor is scaling up investments in renewables. The company’s Brazilian renewable portfolio, managed via Rio Energy, includes solar and wind assets, with the Serra da Babilônia hybrid project expected to begin operations shortly.

The departure from Peregrino, while symbolic given the field’s historical importance, fits within a wider capital allocation strategy that favours energy transition-aligned upstream and low-carbon energy plays.

What Is the Role of Innovation and IOR at Peregrino?

Peregrino served as a technological proving ground for Equinor’s Improved Oil Recovery (IOR) methods. Since first oil in 2011, the company implemented multiple IOR projects, including drilling new wells and using advanced subsurface models to boost recovery rates while minimising emissions per barrel. Equinor also launched drone-based inspection systems in collaboration with Pix Force under its Bridge innovation program. These AI-powered drones enhanced maintenance efficiency and platform safety through georeferenced visual inspections of platform hulls.

The lessons learned at Peregrino are expected to inform Equinor’s upcoming deepwater and hybrid energy projects, making the asset not just a production hub, but a technology incubator for future applications.

What Is the Investor Sentiment Around Equinor ASA?

Equinor ASA (NYSE: EQNR) reported Q1 2025 adjusted operating income of USD 8.65 billion and net income of USD 2.63 billion. However, its earnings per share of USD 0.66 slightly missed analyst forecasts. Despite solid underlying fundamentals, the stock has seen a modest retreat, trading roughly 26% below intrinsic value based on Morningstar’s valuation models.

Institutional sentiment remains stable, with the Norwegian government holding a 67% equity stake. Equinor has also authorised a USD 1.265 billion share buyback program for 2025, signalling continued confidence in its capital position. Analysts remain moderately bullish but caution that lower oil prices could pressure cash flows across the European energy sector.

How Has PRIO’s Stock Responded to the Acquisition?

PRIO SA (BVMF: PRIO3) has experienced a surge in investor interest following the deal announcement. The stock closed at R$36.43 on May 2, 2025, up 8.07% for the day. Over the past year, PRIO’s share price has fluctuated by nearly 28%, reflecting the volatility in oil markets and operational updates across its asset base.

Goldman Sachs & Co. LLC recently disclosed a 5.12% ownership stake in PRIO, highlighting increasing institutional appetite. Retail investors currently account for 58% of shareholding, with institutions owning 38%, according to Simply Wall St.

With full control of Peregrino and anticipated production synergies, analysts expect PRIO to significantly enhance both reserves and cash flow. Still, they advise monitoring regulatory timelines and integration risks as the asset transitions to new ownership.

What Lies Ahead for Brazil’s Offshore Oil Sector?

Brazil’s offshore energy sector continues to attract global and domestic investment, thanks to prolific basins, regulatory clarity, and operator-friendly frameworks. The Santos and Campos Basins remain the focal points for both oil and gas developments, with international companies including Equinor, Shell, TotalEnergies, and Petrobras deepening commitments.

The Brazilian government’s emphasis on energy self-sufficiency and gas monetisation is expected to further accelerate exploration and development activities, with companies like PRIO positioned to play a bigger role given their asset consolidation strategy.

For Equinor, Brazil remains a key part of its future, albeit with a different mix of upstream and renewable energy assets. The divestment from Peregrino provides capital flexibility to fund new projects while reaffirming long-term commitment to the region.