Sinochem may sell 40pc stake in Peregrino oilfield

SINGAPORE/NEW DELHI/ BEIJING: China's Sinochem is exploring the sale of its 40 percent stake in Brazil´s Peregrino offshore oilfield, four people familiar with the matter told Reuters, a deal that could see the state-owned conglomerate walk away from what was once touted as a key overseas asset because of historically low oil prices.

The oil and chemicals firm agreed to buy the stake from Norway´s Statoil for $3.07 billion in 2010 - beating out a raft of Chinese rivals chasing high-quality assets. The Norwegian giant owns the other 60 percent of Peregrino, the largest heavy oilfield it operates outside its home patch.

But two of the people with knowledge of the matter said Sinochem is moving to sell its largest overseas upstream stake - with capacity to pump 100,000 barrels a day - as it reshapes its assets to reflect oil prices having halved in the last two and a half years.

With that in mind, one person said, Sinochem was pitching the sale at a big discount to its purchase price. "Peregrino has been a success story for Statoil, not just technically but also financially. It provides a lot of value and has a good operator in Statoil," said Horacio Cuenca, Rio de Janeiro-based research director for upstream Latin America at energy consultancy Wood Mackenzie.

Long term expectations of oil prices, however, and capital expenditure required in the next two to three years to develop the second phase of production will determine the value of any potential stake sale, he said.

Earlier this month, Reuters reported Sinochem was in early talks to buy a stake in Singapore-listed commodity trader Noble Group, a move that would further its ambitions to become more active in global energy trade and also develop China´s gas industry.