Sinochem Ups China’s Oil Buys In Brazil

China’s Sinochem will acquire a 10% stake in five Brazilian oil concessions from UK-based exploration and production company Perenco, as part of an exploration farm-out agreement. In exchange for the stake in five offshore blocks of Brazil’s Espirito Santo basin, the Chinese company has agreed to fund several exploration wells, Perenco says. Perenco will retain a 40% stake and maintain its role as sole operator of the projects, while OGX Petroleo e Gas will keep a 50% stake. The financial terms of the deal were not revealed. The companies could not immediately be reached for additional details of the transaction. The Brazilian government awarded the concessions for the deep water wells during the 9th licensing round held in December 2007. Perenco’s agreement with Sinochem comes almost five months after it was forced to cancel a planned IPO for its Brazilian unit, led by BTG, Itau and Morgan Stanley, citing market upheaval. The share offering was meant to raise funds to finance the development of the five blocks.