Pictured: The Peregrino FPSO. Images courtesy of Equinor.
(Reuters) — Brazilian oil company Prio announced on Monday that the local regulator, ANP, has mandated a production halt at the Peregrino FPSO due to necessary improvements in risk management documentation and adjustments to the deluge system. According to a Reuters report, the stop-work order has negatively impacted Prio’s stock, as the Peregrino field is crucial to its output, especially since the company is in the process of acquiring the remaining stake from Equinor.
Equinor is currently working on these adjustments, which are expected to take three to six weeks. Prio plans to operate the Peregrino field after purchasing Equinor’s 60% stake for up to $3.5 billion; the company had previously acquired a 40% stake from Sinochem last year for nearly $2 billion.
Equinor confirmed that it is complying with the authorities’ requirements and noted that Peregrino produced 97,500 boed in the second quarter. Following the announcement, Prio’s shares on the Sao Paulo exchange dropped over 5%, while Brazil’s Bovespa index was up 1%. Analysts from Santander estimated that a five-week halt could result in a revenue loss of approximately $192 million, and expressed uncertainty about the timeline for resuming production after maintenance, as ANP will likely need to conduct a re-inspection.
