Equinor's $3.5 Billion Exit from Brazil's Peregrino Field: A Strategic Shift in the Petro Landscape

Equinor’s decision to sell its 60% operated stake in Brazil’s Peregrino oil field to PRIO SA for up to $3.5 billion marks a pivotal moment in the Norwegian energy giant’s portfolio optimization strategy. The transaction, effective January 1, 2024, underscores Equinor’s focus on divesting mature assets while retaining a strategic foothold in Brazil through newer projects. For PRIO, the deal solidifies its position as Brazil’s largest independent oil producer, consolidating control over a legacy asset with significant infrastructure.

The deal’s financial structure is layered: PRIO will pay $2.233 billion upfront for the initial 40% stake and operatorship, with an additional $166 million contingent on completing the second phase, which covers the remaining 20% at $951 million. A further $150 million is tied to performance-based adjustments, creating upside potential for Equinor if asset metrics meet targets. This structure reflects Equinor’s aim to balance immediate cash flow with long-term value capture.

The Peregrino field, a heavy oil asset in the Campos Basin, has produced roughly 300 million barrels since Equinor began operations in 2009. In Q1 2025, Equinor’s share averaged 55,000 barrels per day—a figure that underscores the field’s declining production profile, typical of mature assets. PRIO’s acquisition aligns with its strategy to expand in Brazil’s prolific offshore basins, where it already holds stakes in over 30 concessions.

For Equinor, the sale is part of a broader shift toward high-growth projects. The company emphasized that proceeds will fund initiatives like the Bacalhau field, expected to start production soon, and the Raia gas project, both of which are critical to Equinor’s goal of raising Brazil’s equity production to nearly 200,000 barrels per day by 2030. Equinor’s Brazil Country Manager, Veronica Coelho, noted the deal’s alignment with these objectives, stating the company would remain “deeply engaged” in Brazil through ventures like the Serra da Babilonia renewable hybrid project.

Market reaction to the deal has been muted but positive. Equinor’s stock has risen 14% year-to-date, outperforming peers like Chevron (+7%) and Exxon (+11%), suggesting investor confidence in the company’s strategic realignment. However, the contingent payments tied to Peregrino’s performance could introduce volatility, as PRIO assumes operational risks in a mature field with limited upside.

PRIO, meanwhile, gains a critical asset in a region where it already holds 40% of Peregrino following its 2023 acquisition of Sinochem’s stake. The company’s expertise in managing Brazil’s complex offshore infrastructure—exemplified by the FPSO unit and three fixed platforms at Peregrino—positions it to optimize the field’s remaining reserves. Yet challenges persist: heavy oil production often faces cost and logistical hurdles, which PRIO must navigate to justify the premium paid for full control.

The transaction also signals a broader trend in Brazil’s energy sector, where independent firms are capitalizing on majors’ portfolio shifts. With state-owned Petrobras also divesting non-core assets, the landscape is ripe for consolidation. PRIO’s move to acquire Peregrino fully could set a precedent for other independents to target similar opportunities.

Conclusion
Equinor’s sale of Peregrino to PRIO represents a masterclass in strategic asset management. By offloading a mature asset for $3.5 billion—a deal that includes performance-based upside—Equinor secures liquidity to reinvest in higher-growth projects like Bacalhau, which alone could add 80,000 barrels per day at peak. The company’s 2030 target of 200,000 barrels per day in Brazil is now within striking distance, supported by its remaining equity in fields like Roncador and new ventures.

For PRIO, the acquisition cements its role as a Brazilian energy powerhouse, though the field’s declining production (55,000 bpd in 2025 vs. 90,000 bpd at peak in 2013) suggests limited near-term growth. The deal’s contingent payments—potentially adding $150 million—will hinge on PRIO’s ability to manage costs and optimize output.

The transaction’s structure, regulatory approvals pending, reflects a balance of immediate value and future upside. For investors, Equinor’s stock performance and its progress in newer projects will be key metrics to watch. Meanwhile, PRIO’s success in revitalizing Peregrino could determine whether this deal becomes a model for Brazil’s energy transition—or a cautionary tale in an era of declining legacy assets.