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Historic deal could increase Prio's production by up to 40 barrels of oil per day
In a move that promises to make an impact, Prio (formerly PetroRio) is one step away from closing a memorandum of understanding to acquire 40% of the Peregrino field, one of the jewels of the Campos Basin, located in the Rio de Janeiro oil field. The transaction value could range from US$1,6 billion to US$1,9 billion (approximately R$8,7 billion to R$10,3 billion). With this acquisition, Prio takes a monumental step that could boost its oil production by 45% by 2026. Did someone say the sky’s the limit?
A negotiation between Prio and Sinochem, a Chinese giant that holds 40% of the Peregrino field, is about to be completed this week. The field, located 85 km from Cabo Frio, on the coast of Rio de Janeiro, is operated by Equinor, a Norwegian oil company, which holds the other 60% of the area. According to market experts, the purchase could increase Prio's production by 40 thousand barrels of oil per day, further consolidating the company’s presence in the sector.
Today, Prio produces around 89,8 thousand barrels of oil per day.
Currently, Prio produces around 89,8 thousand barrels per day, and with the new acquisition, this number could jump to approximately 129,8 thousand barrels per day by 2026. The market expectation, according to BTG Pactual, is that the Peregrino field, in the Rio de Janeiro oil field, reaches the impressive mark of 100 thousand barrels per day, which would boost Prio significantly.
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Acquisition by Prio will not bring immediate efficiency gains
Despite the euphoria, analysts keep their feet on the ground regarding efficiency gains. As Equinor will remain the operator of the Peregrino field, it is unlikely that Prio will be able to optimize the operation in the short term. However, the long-term potential of the acquisition is evident, as the company has been betting heavily on mergers and acquisitions to grow.
Expansion strategy consolidates in the oil sector
In recent years, Prio has stood out as one of the main players in the oil and gas sector. Since adopting the strategy of mergers and acquisitions, especially with Petrobras' divestment policy during the government of Jair Bolsonaro, the company saw its shares jump from R$3,50 to R$46, an extraordinary growth of 1200%. The purchase of fields that were neglected by Petrobras, such as the Peregrino field, allowed Prio to considerably increase its production capacity.
Although the company has not yet made an official statement about the agreement with Sinochem, the market is keeping an eye on the potential growth of Prio, which has already shown itself to be a force to be reckoned with in the Rio de Janeiro oil field.
With this new movement, Prio is positioning itself to become one of the major references in the sector, consolidating its role in oil exploration in Brazilian territory.
With this strategic acquisition in the Rio de Janeiro oil field, is Prio about to establish itself as one of the giants in the oil sector in Brazil? What do you think the future holds for the oil company?
