Sinochem to buy 10% in five Brazilian offshore blocks from Perenco

Sinochem Group, China's biggest chemical company, has agreed to buy 10 per cent stake each in five deep water natural-gas and oil exploration blocks off the Brazilian coast, from Perenco SA.

Both companies did not disclose the financial terms of the deal.

Perenco, which holds 50 per cent stakes and is the operator of the blocks, will farm out 10 per cent of its interest in the Espirito Santo basin, offshore Brazil to Sinochem Petróleo Brasil Ltda, a wholly owned subsidiary of Sinochem.

OGX Petróleo e Gás holds the remaining 50 per cent stake in the blocks.

The offshore blocks are located in the deep water of the Espirito Santo basin covering 3,625kms.  Perenco, together with OGX, were awarded the concessions in the 9th Brazilian licensing round.

The purchase ''lays the foundation for the company's further development in South America,'' Sinochem said in a statement.

The acquisition comes after Beijing-based Sinochem last year acquired a 40 per cent stake in the Peregrino oilfield off the Brazilian coast, from Norway-based Statoil, for $3 billion, making its first entry into the high-risk deepwater exploration.

Sinochem is looking to expand in the lucrative offshore oilfields in Brazil, and last year signed an accord with Petroleo Brasileiro SA, Brazil's state-controlled oil producer, to cooperate on exploration and production.