Equinor’s $3.5 Billion Exit from Brazil’s Peregrino Field Signals a New Era in Energy Ownership

Norway’s Equinor has completed a landmark transaction, offloading its 60% operated stake in Brazil’s Peregrino oil field to PRIO SA, Brazil’s largest independent oil and gas company, for a total consideration of $3.5 billion. The deal, finalized in 2025, marks a pivotal moment in Equinor’s portfolio rebalancing strategy while positioning PRIO to consolidate control over one of Brazil’s most significant heavy oil assets.

A Strategic Exit for Equinor

Equinor’s decision to divest its stake in Peregrino—operated since 2009 and responsible for producing 300 million barrels of heavy oil—aligns with its broader portfolio optimization efforts. The company has long prioritized reducing its exposure to mature fields while doubling down on higher-growth opportunities in Brazil’s pre-salt regions and renewable energy. Philippe Mathieu, Equinor’s Executive Vice President for Exploration and Production International, emphasized the transaction’s strategic logic: “This sale allows us to focus on core projects like Bacalhau and Raia, where we can maximize value for shareholders.”

The $3.5 billion deal also reflects Equinor’s financial discipline. With the Brazilian oil sector facing scrutiny over declining production and rising operational costs, the sale price—split into a $3.35 billion base payment and up to $150 million in contingent adjustments—appears prudent. The transaction’s structure, involving two tranches (40% and 20% stakes), underscores the complexity of divesting an asset with ongoing operational responsibilities.

Equinor’s shares have trended upward amid its shift toward renewables and pre-salt projects, but the company’s valuation will hinge on its ability to redeploy proceeds into higher-margin ventures.

PRIO’s Consolidation Play

For PRIO, the acquisition represents a crowning achievement in its ambition to dominate Brazil’s oil sector. Having already purchased Sinochem’s 40% stake in Peregrino in 2024, the company now fully controls the field, which produces ~55,000 barrels per day (as of Q1 2025). The deal solidifies PRIO’s position as a leader in Brazil’s mature oil fields, where it can leverage its local expertise and cost efficiencies.

The Campos Basin, where Peregrino is located, remains a critical hub for Brazil’s oil industry. The field’s reliance on a floating production storage and offloading (FPSO) platform—a technology PRIO has experience managing—suggests operational synergies. However, PRIO must navigate challenges such as aging infrastructure and the need to invest in enhanced oil recovery to sustain production.

The Broader Energy Landscape

The transaction underscores two seismic shifts in the energy sector:
1. The Rise of Local Operators: PRIO’s ascent reflects a global trend of national champions and regional players acquiring stakes in mature assets, often at discounted prices, as international majors pivot to cleaner energy or higher-margin opportunities.
2. Portfolio Rationalization: Equinor’s exit mirrors moves by peers like Shell and TotalEnergies, which have sold non-core assets to fund renewables and low-carbon initiatives.

The $3.5 billion valuation also raises questions about the future of heavy oil assets. While Peregrino’s reserves are substantial, the field’s declining production rates and carbon intensity could deter investors in an era of ESG-driven capital allocation.

Conclusion: A Win for Both Parties—or a Risky Gamble?

On paper, the deal is a win-win. Equinor secures liquidity to fund its renewables push, while PRIO gains a foothold in a strategic asset. Yet risks linger. For Equinor, the success of its Brazil strategy now hinges on the Bacalhau and Raia projects, which must deliver returns exceeding those of Peregrino. For PRIO, the challenge is to extract maximum value from an aging field without overextending its balance sheet.

The transaction’s structure—$3.35 billion upfront plus contingent payments—hints at Equinor’s caution, as it avoids overvaluing a field with uncertain long-term prospects. Meanwhile, PRIO’s ability to monetize the asset through operational improvements or partnerships will determine whether this deal becomes a model for future energy transactions or a cautionary tale.

In a sector increasingly defined by reinvention, both companies are placing big bets on their visions of the future. The question remains: Will their strategies outpace the market’s shifting demands, or will they become relics of an energy paradigm now fading into history?

As Brazil’s oil output has plateaued in recent years, the outcome of this deal could offer a blueprint for how energy giants and local players navigate the delicate balance between legacy assets and the transition to cleaner energy.