Petrobras' plans to divest approximately 20% of its maturing onshore portfolio could be the first step in the creation of a diverse, competitive junior E&P sector in Brazil. The programme is the first meaningful opportunity for smaller companies to build viable portfolios since Brazil's upstream sector was opened to outside investment in the late-1990s.These companies, with lower cost bases and faster decision-making processes, are well placed to fully exploit the assets. From a Petrobras point of view, the assets on offer are peripheral and this is a long overdue effort at rationalising its bloated portfolio. This sale will not contribute significantly to Petrobras' 2016 divestment target; the main benefit will be increased operational efficiency. This divestment will strengthen and diversify the private oil and gas sector in Brazil, while reducing Petrobras' exposure and obligations to marginal fields.