A trading executive who has direct knowledge of this deal confirmed that the Asian trading firm Cathay Petroleum had agreed to an annual marketing deal for Brazilian crude oil throughout the Asia-Pacific region on behalf of independent producer Prio.

Cathay Petroleum's trading portfolio has expanded with the agreement to sell 110,000 barrels of oil per day for Rio de Janeiro based Prio. Last year, Cathay Petroleum sold nearly 300,000.

The trader declined to be identified because the transaction was not made public.

The agreement was signed in June, but it wasn't reported before.

Cathay Limited, a Hong Kong-incorporated physical crude oil trader that is active in the market, recently hired two prominent individuals to expand its business.

Cathay Petroleum has declined to comment.

A Prio spokesperson stated that the company doesn't comment on its business relationships.

The spokesperson stated that Prio’s crude oil production is expected to surpass 200,000 bpd in 2019 thanks to the beginning of production on the Wahoo Field and the completion by Equinor of the acquisition of a 60 percent stake in the Peregrino Field.

Prio's production was 100,000 bpd last year.

Since its establishment a decade back, Prio has increased production by acquiring a number of oilfields.

This includes the acquisition of a full stake in the Wahoo oil field, which was previously owned by TotalEnergies.com and BP. It also includes the purchase of a 40 percent stake by China's Sinochem Group on the Peregrino oil field operated by Equinor.

The executive said that Prio produces a lot of heavy crudes, including some with high viscosity, such as those produced from the Peregrino oil field.

According to Equinor, Peregrino crude oil is a heavy and high viscosity oil, with an API of 14.3 degrees, 1.63% sulfur content, and an API gravity.

Trading sources say that Asian refineries, which have more sophisticated processing units, are interested in Brazilian heavy grades, as they can produce a higher-value fuel using the cheaper feedstock.

Cathay Petroleum was founded by an ex-Chinese state oil trader. It employs 12 crude traders between Singapore and London. This makes it one of independent trading firms' largest crude trading desks. (Marta Nogueira contributed additional reporting from Rio de Janeiro, and Florence Tan and Kate Mayberry edited the article)

(source: Reuters)