Petróleo Brasileiro S.A. – Petrobras (PBR) Q4 2023 Earnings Call Transcript

Petróleo Brasileiro S.A. – Petrobras (NYSE:PBR) This autumn 2023 Earnings Convention Name March 8, 2024 9:30 AM ET

Firm Members

Jean Paul Prates – President

Clarice Coppetti – Company Affairs

Sergio Caetano Leite – Monetary and IR Director

Mario Spinelli – Governance and Compliance Director

Mauricio Tolmasquim – Power Transition and Sustainability Director

Joelson Mendes – Exploration and Manufacturing Director

William Franca – Industrial Processes and Merchandise

Claudio Schlosser – Logistics, Commerce and Markets

Carlos Travassos – Engineering, Expertise and Innovation

Maiza Goulart – CENPES

Convention Name Members

Rodolfo Angele – JPMorgan

Bruno Montanari – Morgan Staley

Monique Greco – Itau BBA

Luiz Carvalho – UBS Financial institution

Caio Ribeiro – Financial institution of America Merrill Lynch

Pedro Soares – BTG Pactual

Gabriel Barra – Citi

Vicente Falanga – Bradesco

Operator

Good morning, and welcome to Petrobras’s Earnings Name for the Fourth Quarter of 2023. It is a pleasure to have you ever with us at this time. This occasion will likely be in Portuguese, and we now have simultaneous translation into English. You will discover the hyperlinks to each on our Investor Relations web page. All contributors will likely be in listen-only mode through the firm’s presentation, after which we can have a Q&A session. And you could ship us your inquiries to, petroinvest@petrobras.com.br.

We now have Jean Paul Prates, President of Petrobras; Clarice Coppetti, Company Affairs; Sergio Caetano Leite, Monetary and Investor Relations Director; Mario Spinelli, Governance and Compliance Director; Tolmasquim, Power Transition and Sustainability Director; Joelson Mendes, Exploration and Manufacturing Director; William Franca, Industrial Processes and Merchandise; Claudio Schlosser, Logistics, Commerce and Markets; Carlos Travassos, Engineering, Expertise and Innovation; and Maiza Goulart, CENPES.

We’ll begin with a phrase from our CEO. Go forward, sir.

Jean Paul Prates

Thanks. Good morning, everybody.

Expensive shareholders, buyers, I am very completely satisfied to speak to you at this time, not solely due to the superb financial and monetary outcomes we will current at this time, however particularly as a result of I’m satisfied we’re constructing a extra sturdy Petrobras that’s extra resilient and is healthier capable of generate worth on the long-term to its shareholders and for society dealing with the quite a few challenges that we all know and do not know created by this world in transition.

From the start of our administration, we now have emphasised this have to adapt the corporate to a brand new vitality context through which the primary driver is decarbonizing operations and vitality sources. This is because of a reliable request from society, and it requires new options to scale back using fossil fuels. We’re conscious of the problem, and so we constructed a strategic plan that was based mostly on realism and being coherent.

We purpose to be accountable and clear in our plan. We perceive that we must undergo a gradual transition. And so, we’ll proceed investing in producing and exploring oil and gasoline, an business that generates the most important returns, and in addition in integrating our downstream logistics, provides and refinement. We’re additionally going to generate worth by way of a good and accountable transition course of.

We needed to — once more, we needed to be honest and accountable, diversifying our operations into worthwhile low carbon companies by prioritizing partnerships. And as I’ve emphasised, we wish to do what we all know how you can do. In every business, we now have synergy between what we used to do and what we’ll begin doing as effectively.

And all of it will likely be finished by specializing in capital self-discipline and on a stable governance, remaining rational throughout all determination processes. And this rationality has guided the business technique that we have carried out. We’re aiming to extend the corporate’s competitiveness to attain new markets and to create extra stability for our decision-making course of and for our customers, in addition to our payout coverage as a result of we wish to think about greater investments and we now have a necessity of sustaining our monetary well being.

So I might like to spotlight the proposed dividends for 2023, BRL72.4 billion that will likely be paid to Brazilian society, which owns 37% of Petrobras shares. They usually’ve benefited from over BRL240 billion in taxes. We have additionally had market worth information since our administration began. In 2023, the full returns from our preferential shares within the New York Inventory Alternate in U.S. {dollars} reached 112%, which is way above the very best returns of the majors, 20%. 20% versus 112%.

This was all potential as a result of we put folks first. And to present them worth, we created a variety, fairness and inclusion coverage and a racial equality program. Persons are positively our highest asset on account of their effort, because of the love for what they do and we’re constructing a stable and promising future for our firm. Really, folks had been the motive force behind our greatest outcomes this yr, particularly now that we’re celebrating 15 years of exploring the pre-salt layer. We’re reaching file oil and gasoline manufacturing ranges with fewer emissions.

We have additionally inaugurated 4 new platforms. We have reached file refinement ranges. And we had the very best vitality effectivity in our historical past. We expanded our bio refinement capability and we had been capable of course of 100% of soybean oil in an industrial refinement unit with a Petrobras patent. We additionally improved our carbon effectivity, reducing 1.8 million tons of CO2 from our emissions. And that is not all. We gained the primary world offshore award, OTC Distinguished Achievement Award in 2024. So we’re being acknowledged for our efforts in renewing the Campos Basin, which has grow to be a benchmark for the worldwide business.

We had been additionally file holders in patents. That is solely part of what we have achieved. We had so many victories that it might be a complete ebook. In order that’s why I all the time say to our pricey shareholders that Petrobras is again. It is again to prosperity, producing long-term worth and constructing a greater world. We will face the challenges we now have and make use of the synergies in our enterprise based mostly on our experience, which is well-known by all. We have by no means uncared for and we by no means will neglect producing financial worth, which is a requirement for any firm that wishes to be aggressive and perpetuate its worth for future generations.

As I stated a couple of yr in the past, it’s totally pleasing to steer Petrobras. And these outcomes are a supply of satisfaction for all Brazilians and for all shareholders and buyers as effectively. Believing in Petrobras, trusting our administration has paid off. These are the outcomes that we’re giving to the people who find themselves sticking with us, who know that we’re heading in the right direction and who know that we will get it much more proper sooner or later.

Sergio Caetano Leite

Thanks, Jean. We’ll start our presentation on fourth quarter earnings outcomes, so I am going to move it over to our Company Affairs Director, Clarice.

Clarice Coppetti

Howdy. Good morning.

I’ve a couple of highlights from our company affairs division at Petrobras. I do know that you’re in all probability extra concerned with different subjects, so I am going to go very briefly by way of a couple of highlights. I might like to start out by thanking my fellow administrators for letting me go first due to the quite a few actions we now have within the firm presently for Worldwide Girls’s Day.

So I’ll begin with one thing that was essential for the corporate, which is reorganizing our workforce. Within the final yr, we took on practically 2,300 new workers, all finishing the coaching program. No worker can go into the corporate with out these coaching programs, which might take 4 months to much more than a yr, relying on the place they will work for. Within the present world, in our society, we additionally invested in — this might not be totally different.

We created a variety, fairness and inclusion division within the firm, and we additionally established objectives to attain higher fairness and variety within the firm’s management positions. We additionally launched a variety, fairness and inclusion coverage. All of our phrases of cooperation have a variety clause, and we additionally gained some awards because of the achievements that our groups had final yr.

Another highlights. I’ve to say our supercomputers, which aren’t solely designed to have vitality effectivity, however they’re additionally lowering processing time for our simulations. Petrobras does a variety of simulations for our oil and gasoline reservoirs. We’re additionally investing on quantum computing research. That is the subsequent degree that we hope to have some outcomes on this yr nonetheless. We had coaching periods on human rights for all of our safety professionals and everybody who works with company safety. And this was for our models and our headquarters.

One other vital spotlight that we had final yr is that Petrobras is beginning to work throughout the nation, making the most of regional potentials. And we began inserting our groups in a few of our areas that had been in hibernation within the northeast of Brazil, particularly within the states of Bahia and Rio Grande do Norte. We additionally made investments into synthetic intelligence. There’s an enormous dialogue in society, and so our groups have been engaged on that as effectively.

And naturally, I’ve to spotlight this not solely as a result of at this time is Worldwide Girls’s Day, but additionally as a result of we’re making devoted investments in any respect ranges of the corporate in actions geared toward ladies within the workforce. After we speak concerning the workforce, we’re not solely speaking about our Petrobras workers, we’re additionally referring to our outsourced workforce. We now have a lot of actions for this. We can even be obtainable to enter particulars about them if any analyst is .

One other important spotlight is our commitments to environmental, social and governance elements. We now have a program titled Dedication with Life, which encompasses our surroundings, operational security, excellence and well being and well-being initiatives. We had nice information final yr, and I’ve a couple of highlights for you. We had over 700,000 hours of HSE coaching. We’re additionally working within the firm to be constructive in water. So we’re launching a lot of packages for water security. And never solely can we wish to deal with all of the water we used, however we additionally wish to return clear water to society.

We additionally had an important course of coaching our management within the firm in psychological well being. That is additionally a major dialogue that I am certain is happening in all corporations that you just analyze.

Let’s proceed with the subsequent slide. Additionally wish to spotlight the social duty actions equivalent to getting into the technical cooperation settlement with the Ministry of Human Rights and Citizenship, selling an enhancement in public insurance policies and enterprise governance practices relating to human rights. The launch of our Racial Fairness Program final yr.

Additionally, the 2023 public collection of the Petrobras socio-environmental program. 432 million are to be invested in over 60 tasks over the course of the three years of execution in segments the place Petrobras operates. So this can be a program that we have been dedicating ourselves to very dearly as a result of it has direct affect on the communities that encompass our operations. Moreover, the replace of our social duty coverage and in addition a recognition of our sustainability report as one of many 10 finest reviews of 2023.

That is my final slide. I do know that we’re masking a number of totally different segments and I might wish to make myself obtainable and make Investor Relations obtainable to reply any questions you may need.

And with that, I might like to present the ground to our pricey Monetary Director, Sergio Caetano. Over to you, Sergio.

Sergio Caetano Leite

Good morning, everyone, and a really big day to ladies on this Girls’s Worldwide Day.

Like President Jean Paul stated, our market valuation was manner above our ADR 120 — 112%, whereas the others at 20%. Within the first slide, you see the valuation of Petrobras in Brazil. The ONs and PNs are highlighted the place you see superb numbers and in addition a comparability with the opposite majors, the TSRs. With the return to buyers, you may see Petrobras.

We added worth to the corporate within the quantity of BRL150 billion and compensation to shareholders 20.4 billion with 19.7 billion in dividends and $0.7 billion within the repurchase of shares. To society, we paid between taxes and governmental shares, BRL240 billion, BRL36.6 billion of all dividends paid by Petrobras went to the controlling group that is comprised by the federal authorities. We additionally contributed one other BRL54 billion within the valuation of the general public belongings of the state. So along with including worth, that was additionally an vital collaboration to society by way of reverting these assets in taxes and dividends.

These are some extra knowledge by way of our monetary earnings. An EBITDA of 52.4 billion is the second greatest in historical past. The operational money circulate, 43.2 billion, the second greatest in historical past. A free money circulate, $31.1 billion, the third greatest in historical past. A internet income, a internet revenue of 24.9 billion, the second greatest in historical past. And these numbers, the second highest and third highest, they had been produced in a really adversarial exterior atmosphere. So we achieved second and third place with a particular spotlight. We will take a look at the devaluation to buyer, to purchasers however there was no lower in funding. Fairly the other Petrobras has been investing, which brings much more worth to those outcomes.

Our gross debt in line between 55 billion and 65 billion. And it is vital to inform you that on the finish of 5 years, the debt has been forecast to attain a discount vis-a-vis the tip of final yr. One other vital side relating to our monetary debt of 28.8 billion, with a discount of $1.2 billion this yr. Return on capital employed 11.2%, which is according to the earlier outcomes.

We additionally introduced concerning the lowest distinction vis-a-vis, the American bond to the market. And with that, we gained an award, the Quasi-Sovereign Bond Deal of the 12 months award by issuing $1.5 billion in 10-year bonds. Additionally, it is price mentioning the transparency motion by the UN World Compact. It is an effort that requires the funding and the involvements of your entire firm, and we have been disclosing these outcomes to buyers and shareholders. Within the exterior state of affairs, on common, as compared with final yr, we had a valuation of 18% within the model, which is important and has impacts on our monetary outcomes. And as , the diesel is the oil byproduct that Petrobras sells essentially the most.

Between the Brent oil and the diesel offered, we had a margin devaluation of 23%. In 2022, the oil appreciated, reflecting the start of the Russia-Ukraine battle. And with the stabilization of the battle, it went again to the margin. However we had an affect of minus 18 on the Brent, crack unfold minus 23, within the FX minus 3%, the true appreciated 3% as compared with the greenback. So this mixture of things has large impacts on the web outcomes and the EBITDA.

And we are able to see that according to Brent and crack unfold, you see a discount of 21% to our EBITDA. You possibly can see the Brent costs on the backside of the slide. However we will see that despite these adversarial circumstances, Petrobras did effectively.

Right here, you may see our energy, displaying utilization sources, displaying our money technology and the way it was allotted in 2023. You see a money circulate of 12.1 billion in investments. We truly invested $12.1 billion in 2023. And there is additionally an affect on the debt of 8.7 billion with the commerce of recent platforms. There’s additionally a peak within the debt on the finish of the yr as a result of we anticipated the addition of an FPSO and that will likely be felt additional forward with the anticipation of income in oil curve, our dividends together with repurchase 20.4 billion, monetary bills and monetary amortizations.

You possibly can see on the backside of the tower, a comparability of the impacts of those eventualities and these are the teams that we evaluate ourselves to. The free money circulate of Petrobras at 31.1 billion and we had been second to Shell solely with the second highest free money circulate within the phase — within the phase of peer corporations. In case you take a look at the oil manufacturing as Director Joelson will provide you with the small print about, we ended first in a tie with Chevron. And we’re by far the leaders within the highest technology, the natural technology of reservoirs. That is the results of the E&P teamwork, one thing that didn’t begin final yr and entails numerous folks.

Our EBITDA, among the best within the segments, we completed third behind Shell and Exxon, that are a lot greater corporations than Petrobras. However we’re there combating for the third place with them. It is vital to speak about downstream with an expressive improve in foot. This comes from a choice of Petrobras to win market share. We’re an built-in oil firm. The largest — the larger the foot of our refineries, the larger the operational outcomes we are able to current to our buyers.

And now, speaking about our debt, you see the indebtedness trajectory since 2019 in a reducing curve. In 2023, you see slight improve that occurred because of the anticipation of platforms with further inflation prices within the provide chain, which is felt throughout the business, and the 28 billion line with a reducing trajectory. There was a discount between 2023 and 2022. And that is a distinction that refers to freights.

In case you take a look at the amortization, Petrobras closed ’23 with a money of shut — one thing within the vary of $18 billion and money obtainable within the quick time period of 8 billion, which is stable and according to the market turbulence, which reassures us that Petrobras will be capable to face the scenario. Within the line, you may see the amortization profile that is forecast for our debt. As we stated earlier than, our internet revenue suffered an affect of the adversarial state of affairs, however it was nonetheless capable of ship to the market the second highest internet revenue in historical past with out divestments, contemplating solely our work, even within the face of adversarial circumstances with the crack went — taking place and the greenback going up.

Our contribution to the society, we additionally coated that. You possibly can see the info near BRL277 billion, of which 36.6 billion — virtually 37 billion are associated to the cost of dividends to the controlling shareholder or the Brazilian state, 61.4 billion in authorities takes and 178.8 billion in taxes paid.

Era to shareholders. General, we remunerated the shareholders in BRL78.4 billion Ais in 2023, out of 72.4 billion, they’re deducted from the repurchase program. This was the primary yr the place Petrobras carried out, on a continuing foundation, a repurchase program. And on this program, we repurchased 3.6 billion shares from the market. This quantity is deducted from the full and we distributed in dividends the 72.4 billion in 2023.

It is vital to say that the web adjusted revenue, after deducting the funds of dividends and anticipation of dividends and capital curiosity in 2023, what we had been left with on the finish of the yr, we allotted to the executive council to kind a capital remuneration reserve. As we all know, that was extensively mentioned in 2023, and the aim of this reserve is to pay dividends.

There have been some questions as as to whether the assets might be utilized in investments. And no, they won’t be able for use to purchase investments. That is for dividend distribution alone. So we allotted its revenue — the Petrobras’ revenue surplus to that line, and that is the place it’ll keep allotted. To place it merely, these had been the outcomes. As I stated, and as President Jean Paul stated, these are very important outcomes for the primary yr of an administration. That is the results of the work of your entire firm. This makes us very proud.

And with that, I might like to present the ground to Director Spinelli, Director of Governance and Compliance at Petrobras.

Mario Spinelli

Good morning, everyone. Good morning to these watching us. Particular greetings to ladies.

Some highlights in governance and compliance. 2023 was an important yr. And in 2024, our Board will have a good time its tenth anniversary. In 2023, we had the primary main restructuring within the division, creating new managements and broadening our potentialities by way of disciplinary responsibilization. I might like to spotlight that Petrobras is the entity that applies the anti-corruption regulation most closely in Brazil. Round 20% of the sanctions are utilized to corporations underneath Petrobras’ duty.

We additionally created an space to work with knowledge science, making Petrobras more and more extra succesful to detect irregularities and in addition a particular part to cope with violence on the office. Final yr, we as soon as once more did our survey, a compliant survey with 80% total. It is a weighted common between the entire replies. And this can be a clear demonstration of how the compliance tradition is disseminated throughout the corporate.

We had been awarded a number of prizes, of which I might like to spotlight two. The Public Ethics Committee awarded us prize. We had been the one awarded firm within the 5 classes within the UN World Pacts 100% transparency, which can be a transparent demonstration of how our integrity and governance actions are sturdy. And our professionals additionally gained awards in a number of totally different classes.

Now, to inform you a bit about one thing that I believe is related for everybody in our decision-making course of. We now have a governance technique at Petrobras that provides privilege to technical elements, so each determination is both shared or finished by way of a collegiate course of. In some circumstances, we have to have statutory committees or technical committees current, in order that the decision-making course of is fully based mostly on technical elements.

We even have a governance construction that offers with compliance, and it’s totally sturdy. We now have a director’s workplace for compliance, which is among the eight govt administrators’ places of work in Petrobras, together with our CEO. Moreover that, we even have inner audits, that are additionally impartial. We now have a reporting channel that’s — works in three languages 24/7 throughout all of the international locations the place Petrobras is. We’re supervised by a lot of regulatory our bodies. And all of it goals to make sure that we now have technical choices. We wish to forestall undue political interference and make sure that our tasks are executed with a monetary return for the corporate.

It is also vital to spotlight a couple of points on this course of that ensures that we now have technical choices. The compliance officer has the ability of veto within the govt board, and it may be used if any choices don’t adjust to the relevant laws or our inner rules. As I stated, the chief governance and compliance officer is impartial. They’re chosen from the market and have a two-year time period, which might solely be interrupted if there is a majority of Board members elected by minority shareholders, and that ensures that they’re impartial sufficient to do their actions.

I’ve 25 years of expertise in anti-corruption and governance. And I performed many roles within the federal authorities and in addition state and metropolis governments, and in addition within the non-public sector. I’ve talked about strengthening governance final yr. As I stated, our most important spotlight was the most important restructuring for the governance and compliance workplace within the firm since 2014. So we created new administration positions chargeable for your entire disciplinary course of within the firm. So now we now have a really sturdy construction, as we have by no means had earlier than. It is vital to spotlight that as a result of it demonstrates how this space was strengthened within the earlier yr.

Effectively, that is what I needed to say, and I am going to now move it over to our Govt Officer for Power Transition and Sustainability, Mauricio Tolmasquim, and I will be right here for any questions you could have on the finish of the shows.

Mauricio Tolmasquim

Good morning.

I might wish to greet everybody, particularly ladies who could also be watching us. So I am going to begin speaking a bit concerning the gasoline business. This was an excellent yr for it, however we launched new merchandise with extra flexibility and phrases, indexing, and we made a lot of modifications that had been accepted very effectively by the market. That led to a file variety of new contracts signed in 2023. We had 34 new contracts with 15 distributors, a complete of BRL167 billion in estimated revenues.

We additionally traded 22 million cubic meters per day beginning in 2024. That is about 55% of the full consumption within the thermal market in Brazil. We additionally made important strides in resolving a lot of disputes, particularly with a couple of of our distributors. So we had been capable of attain offers and allowed us to signal new contracts.

Subsequent slide, please. I might additionally wish to briefly talk about the significance of thermal technology for our vitality transition. Some folks would possibly assume, how are thermal crops associated to renewable vitality. We all know that renewable technology is intermittent. You possibly can solely generate wind energy when you will have wind or solar energy when you will have daylight.

The graph on the left reveals the way it modifications throughout two regular days. In yellow, we see daylight, however as we attain the tip of the day, it reduces as a result of you will have much less daylight and you could have sources to interchange it through the nighttime. And right here, we now have two most important sources, wind — or excuse me, hydroelectric energy when it’s obtainable, however normally it isn’t sufficient. You additionally want to enhance it with some thermoelectric energy.

So for instance this problem, on the precise hand aspect graph, we see the variation in thermal technology. You possibly can see that important improve round 12. And that represents thermal technology. So in lower than 4 hours, we have to add 2 gigawatts to our energy technology. That is about the identical as what’s generated within the Angra 2 and Angra 1 crops.

Subsequent slide, please. We additionally had an excellent yr in decarbonizing our processes. At E&P, we had a ten% discount in our carbon depth, which is essential for Petrobras to proceed to make use of its oil sooner or later. Sooner or later, we’ll solely be capable to take oil to the market for those who can scale back its emissions. In 2022 to 2023, the refining business diminished carbon depth as effectively, and the identical occurred to the thermoelectric business. There was additionally a major discount in methane emissions, 51%. Why is it so important? As a result of methane’s affect on world warming is way greater than CO2. In 100 years, a methane molecule has a 25-fold greater affect than CO2.

Lastly, that is the most recent part, renewables. Within the first yr and truly our time period is not even one yr lengthy, it will likely be in Might. However throughout this final yr, we created a governance program to approve tasks for renewables. And that is finished in a really secure and accountable method. We signed MoUs with about 45 corporations. So we now have 45 enterprise alternatives which might be being analyzed, and this doesn’t suggest that we’re going to take all of them. Really, it will likely be a a lot smaller proportion than this whole quantity. However it’s vital to have this variety of potentialities as a result of this enables us to pick issues higher.

In carbon seize, we’re taking a look at a brand new enterprise which is offering carbon seize companies for different industries, like refinement. So we will run a pilot in Rio de Janeiro, and we additionally wish to spotlight the low carbon product space. We now have, for instance, a partnership with the logistics space launching Podium gasoline, a carbon impartial gasoline that has a sure market area of interest.

The refinement workplace can be engaged on diesel are which can be essential to make sure that our refineries, even after the age of oil nonetheless have a use, nonetheless can add worth. We can also produce, for instance, low emission asphalt.

And I might identical to to conclude by displaying this graph, which was created by BCG. It is a very fascinating slide. The primary graph reveals that basically for those who take a look at that inexperienced curve, it reveals low carbon corporations and in blue, a collection of oil and gasoline corporations. We are able to see that on the quick time period, the returns of oil and gasoline corporations can’t be denied. On the whole, they’re much greater on common than the returns paid by the collection of corporations which have low carbon emissions.

However what properties can we see right here? Oil and gasoline corporations have a variable ROCE. They’ll go to fairly low values, whereas the typical ROCE for low carbon corporations is secure. So we are able to see that investments into these actions and companies, the low carbon ones, I imply, mitigate dangers and generate worth whilst you’re nonetheless defending and gaining market share. A superb instance is Diesel R. If you do not have Diesel R, your biodiesel mandates would little by little lose market. So Diesel R is a manner of combating for this area with our merchandise as effectively.

Podium gasoline is an instance of how one can acquire market share in a particular area of interest, and this may be finished on the similar time. The technique permits you to mitigate dangers of getting, for instance, rising CO2 prices. So over the long run, and that is proven by the final graph, buyers who’ve invested $1 in a pool of corporations within the oil and gasoline business versus an investor who invested $1 in a low carbon firm. In 2022, they might have about the identical returns in whole for that funding. This reveals the significance of this technique in the long run.

If in case you have any questions, please let me know. And with that, I might like to present the ground to our colleague, Joelson Mendes, Director of Exploration and Manufacturing.

Joelson Mendes

Good morning to all of you who’re watching us.

I wish to begin out by displaying the numbers of our operated manufacturing. Final yr, there was a major improve vis-a-vis the earlier yr. That was on account of the truth that many tasks began manufacturing part. Our operated manufacturing grows much less as a result of many of those tasks that began to function, we’re working. So a part of the manufacturing goes to the companions. We additionally had very important numbers and the pre-salt manufacturing in our combine has been rising from ’22 to ’23, it grew from 73% to 78%.

We had vital information final yr. The operated manufacturing surpassed 4.05 barrels of oil per day, which is in comparison with the majors and that may be a very sturdy operation. Our pre-salt manufacturing additionally broke information final yr and in addition essential is the IUGA index. Within the fourth Q, it reached 98%. Excellent numbers.

Our manufacturing final yr surpassed our preliminary forecast, however staying inside what we name the danger tunnel, we have been working very exhausting to research the entire elements that may affect the manufacturing up or down over the course of the yr. And this degree of accuracy of our projection has been round 96% over the course of the previous few years, which may be very reassuring by way of what we forecast for the present yr.

The highlights in manufacturing, and I am going to repeat myself, we began to function main manufacturing tasks beginning with the renovation of the Marlim subject, which is one thing that we labored very exhausting on. The environmental licensing of those tasks had been very advanced, however we gained and we had been capable of get well virtually to get entangled in tasks that may get well virtually 1 billion barrels of oil equal. Our fifth unit in Buzios subject is now working at most manufacturing. The FPSO Sepetiba additionally began manufacturing within the marrow fields with the big capability of 180 Kbpd and Petrobras accounts for 40% of that manufacturing. And in 2023, two tasks that had began within the earlier yr, Guanabara and 71, they’ve reached a peak manufacturing in a really quick timeframe.

So that is our lifting value and whole value of produced oil. The lifting value went down from 5.8 to five.6 barrels of oil equivalents produced, very important quantities. The presence of the pre-salts from 73 to 78, as I stated earlier than, largely accounts for this lower within the whole manufacturing value in deep waters and shallow waters, somewhat greater than 20% of our manufacturing, with very engaging numbers.

Despite the fact that we’re speaking about mature fields, there are nonetheless essential numbers. And our whole value of produced oil has gone down, largely because of the lower within the value of the oil barrel overseas, which permits us to pay our governmental participations based mostly on the oil value. So with this lower, we see this vital affect on Brent, and $35 per barrel is a really sturdy value.

This is among the most related information to us. Director Sergio had already talked about this. We closed the reserves of 2023 with an natural recomposition of greater than 150%, which is extraordinarily important for those who think about the universe of majors on the earth. And over the course of the previous few years, we have been reaching 200% in reserve alternative, which reveals the consistency of our manufacturing curve for the longer term.

That is the reserve that we have been reaching. We have been managing to extend yr after yr and we had been capable of change these reserves after a variety of exhausting work in Buzios, Tupi, Atapu, Raia Manta, Raia Pintada fields, and the approval of recent complementary tasks, particularly within the Campos Basin. So this work round reserves entails prices, tasks, and many simulations, and a really exhausting technical work by the crew that coordinates this phase.

Lastly, these are some highlights within the manufacturing space with our operations in Africa and in addition within the Pelotas Basin. We’re additionally exploring Latin America as an entire and West Africa. These are areas that we all know very — very effectively and we’re all the time on the lookout for alternatives. And I even have to say that we are going to proceed to discover the equatorial margin. And now we’re drilling a effectively within the Potiguar Basin and sooner or later, hopefully, we’re going to have the ability to drill new wells. We’re additionally exploring new wells within the Campos and Santos Basins as a routine.

So that is what I had. If in case you have any questions, please let me know. Director William, you will have the ground.

William Franca

Thanks, Director Joelson. Good morning.

I’ll speak concerning the RTC phase with probably the very best leads to historical past, each from an operational and monetary standpoint, in addition to from a sustainability perspective, with HSC outcomes and in addition with superb progress in vitality effectivity. The utilization issue must be highlighted.

We reached 92% on common and in some months we reached greater than 97% within the utilization issue because of the integration throughout your entire RTC division. And likewise with the RP division reaching superb outcomes for the corporate, which has actually contributed to us reaching the monetary incomes outcomes with the pre-salt load of 65% within the processing of the pre-salt oil throughout all refineries.

And this utilization issue comes together with a rise within the worth, reaching 68%. We’re speaking about diesel and aviation kerosene. So we’re utilizing our refineries with higher yields. Our present CapEx BRL3.1 billion in 2023 with essential stops for our refinery system, with the longest downtime in Kubaton, with essential tasks to optimize the refinery REFAP with vital downtimes and REGAP and our Duque de Caxias refinery, together with the downtime of one of many lube trains. For 2024, we predict BRL3.8 billion in present CapEx.

We’ll transfer ahead with the upkeep of our models resulting in excessive availability of our models to refine oil, particularly pre-salt oil. We ended the yr at 60% of participation from diesel S10 and you may see on the left-hand aspect a couple of vital manufacturing numbers in a number of of our manufacturing models, with our refineries having contributed to those unbelievable operational leads to 2023.

The most effective historic leads to vitality effectivity with our RefTOP program with discount in carbon depth and in addition with an elevated vitality depth within the refineries, resulting in a decrease consumption of gasoline pure gasoline with very important outcomes, placing us on the trail to even sooner vitality transition. We additionally reached our lowest historic degree of gasoline flaring charge and a file in pre-salt gasoline processed in our PGNs.

In 2023, we noticed the return of investments in fertilizers and petrochemical sectors and fertilizers. We’re working in the direction of reaching a definitive answer for Bahia and Sergipe crops. We additionally shut research for the Araucaria crops, Parana, and UFN-III Tres Lagoas. So we quickly will return to being a powerful participant within the fertilizer sector and never solely a plant. And for that we have been partaking in discussions with a number of companions and in addition with the strategic partnerships involving biomethane, inexperienced ammonia, and different fascinating byproducts that may result in a carbon footprint discount. As I stated, we’re specializing in high-value, low-carbon merchandise.

And with that we’re working in Kubaton and gasoline lube crops in Kubaton the place we’re getting into Part 3 this yr in addition to in GASLUB and Travassos will speak about RNEST Prepare 2 and EGM with the Routes 3 being accomplished by the start of the second half of this yr. And we now have superb outcomes that give us energy to face the challenges concerned in increasing our downstream according to our strategic planning, as I stated. So it is a yr of feat and we’ll proceed to work strongly in that route to attain these objectives.

With that, I might like to present the ground to our Director of Logistics, Commerce and Markets, Claudio Schlosser.

Claudio Schlosser

Due to William. Good afternoon, everyone.

It is a pleasure to be with you at this time to speak about our 2023 outcomes. I might wish to take the chance to greet all ladies each in individual and on-line. The primary slide covers the promoting of byproducts each in Brazil and overseas. The gross sales of gasoline grew they usually had been powered by a larger competitiveness of gasoline versus ethanol. In case you take a look at diesel, you see a discount of 1% as in comparison with 2022, mainly due to two elements.

REMAN had been thought-about up till the tip of 2023 and in addition due to the necessary combine with biodiesel that went from 10% to 12% in April. Regarding the exports of byproducts, there was a rise of 5% and I might like to spotlight the rise within the exports of gasoline due to the change in high quality, which is sort of constructive for the operation.

Regarding the oil gross sales, we had a rise — ensuing from an elevated manufacturing in exploration and manufacturing, as Director Joelson talked about. What I might like to spotlight in 2023 is that we added three new refineries as purchasers, along with increasing the buying of our oil by different refineries, which resulted in a major improve within the refining of oil. And now we now have 26 new pairs in our buyer portfolio, which permits us to seize and diversify in new locations for our oil. We’re consistently attempting to increase our buyer database to maximise the worth of our oil, which is extraordinarily beneficial by way of high quality and in addition carbon footprint.

Speaking about market share, our share of the market is secure compared to 2022. And as you may see right here, by including up the blue elements of the graph. The share of gasoline imported and produced is a consequence of optimizing manufacturing and the change in high quality with the international market. So we’re capturing extra worth for Petrobras. The diesel market grew total. We had been capable of preserve our share. And the diesel produced by the corporate elevated on account of greater degree of refinement. And this greater availability of refineries and our logistics park utilization in 2023 was talked about by William and it contributed to lowering diesel imports and capturing margins from the Brazilian market, which is a greater vacation spot to monetize our reserves.

Right here, Director Tolmasquim has additionally made a degree of mentioning every subject right here. We talked about our dedication to low-carbon merchandise. So the Petrobras Podium Gasoline, Diesel R, Cap Professional, our asphalt line. And I might add as a spotlight that we began promoting our R Diesel in Sao Paulo. That is a major marketplace for us and it was a milestone. We had been capable of advance in that space. Additionally associated to Diesel R, that is voluntary consumption.

We have no mandates for it. So we’re working by way of partnerships with nationwide and regional distributors, particularly CIM and Ipiranga. Merely, if you do not know, it’s a regional distributor within the State of Rio Grande do Sul and it has values associated to lowering a carbon footprint and it is the one firm that has a particular contract to purchase Diesel R.

Another highlights that we now have for you’re on the subsequent slide. Associated to how we execute our business technique, this was talked about by the President. We had been very profitable all year long, contemplating the very best logistics and refinement circumstances we now have. We’re providing to our purchasers a really aggressive value, maximizing how we optimize our belongings and we’re capturing good margins from the Brazilian market as we stated earlier than.

Contemplating gross sales hubs, we created two of them according to our technique to enhance entry in numerous markets of the nation. It is a manner of bettering our logistics chain and in addition to be in communication with our purchasers. In 2023, we expanded our operations in Rondonopolis within the State of Mato Grosso and not too long ago we began promoting diesel and gasoline in Rio Verde. One remaining spotlight is platform recycling, we’re decommissioning a few of our vessels and that is making Petrobras a reference firm by way of the shipbreaking platform NGO in accountable vessel disposal. It is a essential milestone for us.

So these had been our most important highlights on this space. And I am going to move it over to Travassos.

Carlos Travassos

Thanks, Schlosser. Good morning and I might additionally wish to greet everybody, particularly any ladies watching us.

I’ll proceed speaking about know-how with the OTC award, the very best award within the oil and gasoline business. In 2023, we obtained seven awards by OTC, two from OTC Brazil and 5 from OTC Worldwide. In Brazil, this was about our know-how that permits us to make use of dynamic wells and secure waters, and this offers us a better decommissioning capability. The OTC award we obtained and will refers back to the improvements and applied sciences that had been utilized in our revitalization course of in Marlim and different areas of the Campos Basin.

We’re celebrating the fiftieth Anniversary of its discovery. So we’re now receiving one other award for its revitalization. It is a very present strategy for the oil and gasoline business as a result of this can be a very resilient course of from an environmental standpoint as a result of we diminished greenhouse gasoline emissions by 55% and in addition makes it extra economically viable as a result of we’re rising manufacturing capability by changing 9 models with two new ones.

It is a peculiar challenge as a result of not solely are we putting in new traces, however we’re additionally eradicating energetic traces, decommissioning outdated wells, and constructing new wells. We now have about 60 wells that will likely be linked, and I highlighted three of the 9 pioneering applied sciences we now have been growing. TOT-3P effectively design that accelerates the development of post-salt wells lowering 110 days to 56 days on common.

That is within the Campos Basin. We even have versatile pipe envelopes that scale back engineering processes and permit us to reuse traces, and that even reduces our stock. And the final know-how I might like to spotlight is a brand new methodology and extension instruments that allowed us to increase the lifetime of Moist Christmas Bushes and pipelines. So this may all add to how financial our tasks are.

The following slide refers to a different milestone that we had within the final 12 months. We had been the one firm that put in 5 manufacturing methods in 12 months, from December 2022, when the P-71 unit began, to December 2023, when FPSO Sepetiba was began. We’re highlighting FPSOs, however we truly began 5 manufacturing methods with 1,300 kilometers of traces and 106 wells. So that provides the corporate an put in capability to supply 630,000 barrels in 12 months.

We might additionally like to spotlight FPSO Almirante Barroso, the fifth unit in Buzios that began its manufacturing in lower than 5 months, one other file for the corporate. This was once P-76 that reached this manufacturing degree in eight months. This is because of a joint effort with the corporate, however we’re additionally delivering models at a really excessive reliability and security degree and this can be a benchmark for your entire world.

The following slide additionally highlights how we’re decommissioning some platforms. This was an effort that began with our exploration and manufacturing corporations we had been ready for decommissioning the unit and it is a important spotlight for the submarine groups that disconnect and unmore the unit and in addition the wells crew. It is a essential portfolio for Petrobras. In our strategic plan, we’ll decommission 23 models, and after 2028, we can have a further 4 models to decommission. So it is a round economic system market. We’re constructing alternatives for Brazilian corporations.

Schlosser has talked about that we had been acknowledged by a Belgian NGO referred to as Shipbreaking Platform for establishing a brand new inexperienced disposal coverage. This is a company that represents a number of environmental businesses that monitor how maritime models are being decommissioned and we had been acknowledged by them. And that is very related for our practices and the way aligned they’re to sustainability and governance.

Let’s proceed with the subsequent slide. Right here we now have a few of our highlights downstream, a few of the advances we have had within the Duque de Caxias refinery, adapting our hydro remedies, Diesel S-10. We even have a hydro remedy space for Diesel S10 being constructed by REPLAN and in addition REFAP. We’re additionally rising our diesel capability. We heard about RNEST, this isn’t on the display, however we’re additionally conducting some works there.

And within the subsequent weeks, probably subsequent week, we’ll obtain proposals for the second adaptation and that will permit it to course of 260,000 barrels of oil a day. We signed a contract to amass HEFA Expertise, which will likely be adopted in RPBC’s devoted plant, and one other important milestone was that we’re finishing our pure gasoline unit in Itaborai. That will likely be UPGN gasoline lube, which can improve our capability. That is forecast to be concluded within the second half of 2024.

The following slide will likely be my final. One other factor I might like to spotlight about our know-how is that we began lab assessments and a pilot plant. And in November final yr we concluded industrial scale assessments to supply bio aromatics. So merchandise that can be utilized for the petrochemical business based mostly on vegetable inputs, on this case soybean oil. This was additionally developed by our analysis middle and we simply needed to spotlight how we’re adapting our merchandise to seek out new markets. So we’re not concluding with me this time.

We’re nonetheless going to speak somewhat bit about CENPES, however I might like to ask a younger govt, Maiza Goulart to do this. She’s been within the firm for 20 years. She’s labored offshore. She’s launched platforms. She’s led FPSOs. Our manufacturing improvement space has been led by her and now she is a pacesetter for the most important analysis middle in Latin America, CENPES.

So I am going to move it over to her.

Maiza Goulart

Thanks, Travassos, for that introduction.

It is a pleasure to be right here on this Worldwide Girls’s Day. And it will likely be a chance to speak about a few of the achievements by some feminine researchers at CENPES. Earlier than I point out them, I might identical to to say that we’re the most important utilized analysis middle in Latin America. We now have over 1,000 workers, practically 1,000 researchers, and we invested BRL3.6 billion in RDI final yr.

After all, we’re very pleased with the outcomes we had in implementing our applied sciences at Petrobras, the business for which we work and we’re additionally celebrating the totally different awards that we have obtained. Travassos and our CEO have talked about our OTC award, however I might additionally like to spotlight that we had been finalists for 5 classes in NP awards, and we gained 4 of them.

We had been among the many High 20 Most Progressive Firms in Brazil, in line with the MIT Expertise Evaluation. We had been the second place holders for Valor in Brazil, an award for corporations that work throughout a number of industries. So being in second place was our highest place. It was the very best for oil and gasoline. And we additionally had an excellent placement within the High 100 Corps Rating on innovation with startups.

Final yr, we additionally celebrated a nationwide file of partnerships in our Connections for Innovation program. And for the third yr in a row, we had the nationwide file of registered patents. However I am right here to speak a bit about ladies. If we are able to return only one slide. No, excuse me, go forward. We used to have an image, and the image you see behind the slide was an image that we took this week at CENPES.

It would not embrace all ladies in our analysis middle, however I am very completely satisfied to see each smile and each story there. We now have sensible ladies in our analysis middle. 25% of our researchers are — excuse me 25% of our workers are ladies, 32% of our leaders are ladies, and 21% of our researchers are ladies.

I might say one thing about every one in every of them out of those 270, however we — in fact, we now have to pick a couple of of them. I might like to start out out by speaking about Aline Machado, who was awarded the Brazilian Girls in Chemistry Award final yr; Marcia Khalil, a really skilled advisor chief in one of many analysis traces at CENPES.

In 2023, we wish to spotlight her Digital Monitoring of assure of circulate occurrences tasks that avoids many losses on account of hydrate formation. Director Travassos talked concerning the check on the Riograndense refinery, behind that, there is a sensible advisor, Andrea Pinho. Thamires, she is among the youngest researchers in a model new sector, the seek for geological hydrogen with distant sensing, use of AI and satellite tv for pc knowledge to seek out, what the business calls the fairy circles, the place there’s indication of geological hydrogen formation.

Katia Moniz, she labored within the improvement of carbon-neutral gasoline that began on the CENPES labs and behind that, there’s this sensible researcher, Katia Moniz. Teresa Villano. She developed an anticorrosion adhesive constructed from 100% recycled PET.

You should utilize that on surfaces which might be beginning to corrode, and that is going by way of the event part with the market. Ana Musse, she additionally leads the analysis line for the seize of CO2. And Helga and Priscilla for the implementation of one thing that resulted in one of many highest VPRS. The implementation and scope of magnetic units and on prime aspect methods to scale back falling.

As I stated, I might speak concerning the achievements of every one in every of these 270 ladies, however by way of these few ladies, I might wish to pay this tribute to each lady at CENPES. And I might wish to convey this message to every lady watching us. I believe that our greatest achievement is to be what we wish to be and we’re revered for that.

Query-and-Reply Session

Operator

Thanks, Maiza. Now we’ll begin the Q&A session. I might wish to ask every participant to please ask as much as two questions. The primary query comes from Mr. Rodolfo Angele. Go forward, Rodolfo.

Rodolfo Angele

Good afternoon, everyone. Thanks for the chance to speak to the Board. I’ve only one query concerning the dividends. Until the start of final yr, Petrobras would pay minimal and extraordinary dividends every quarter. One of many modifications for this tier is that the extraordinaries are now not paid on a quarterly foundation and with that, the buyers created the expectation of seeing that after the publication of the fourth Q outcomes. However the Board determined to pay solely the minimal dividends and didn’t approve any extraordinary dividends, which is type of against what the market anticipated. So, as mentioned on the decision, Petrobras had very important outcomes final yr with very low leveraging, and it appears that evidently there’s leeway, however nonetheless the Board determined to not pay the extraordinary dividends. And it is roughly $9 billion that had been allotted within the capital reserve account. My query is, we might actually such as you to assist buyers to grasp how you can see the extraordinary dividends transferring forwards. Taken into consideration, 4 elements.

First, perhaps a very powerful one, what is the rationale behind not paying extra, if apparently there was some leeway to take action? Secondly, the periodicity. So, for the extraordinary dividends, ought to we count on them to be paid solely on the finish of 2024, or do we now have a unique chance? The third one is concerning the reserves, how they work. I perceive they can’t be used for investments, however can they be reverted and capitalized? And if that’s the case, when will it begin getting used to pay dividends? And lastly, if that impacts the repurchase program in any manner. Thanks.

Sergio Caetano Leite

Thanks on your query, Rodolfo. This provides us the likelihood to go over this topic that may actually be questioned about. As you stated, we had important outcomes and low indebtedness. And this results in your query about this leeway to pay extraordinary dividends. Actually, that was true, however the Board determined to allocate that to the reserves accounts based mostly on what was revealed within the strategic plan, the seek for a strong stability and a dedication to watch out in utilizing capital in years, particularly ’25 and ’24, that require enormous funding efforts from Petrobras.

The rationale behind it’s mainly that the years ’24 and ’25 would require important investments and a portfolio that is already been thought-about. And that, in flip, leads us to having to handle the money circulate in a different way, and which will result in misunderstandings. So this useful resource that is allotted to the reserve, can or not it’s used for investments? And the reply is not any. The assets allotted to that reserve are for use to pay dividends. So from the BRL43 billion or $9 billion of surplus, that are the web revenue minus what was paid in 2023. They had been allotted to the cost of dividends and never investments. That’s vital. I do know that is not a part of your query, however I am utilizing your query to reply different questions that we obtained within the chat regarding dividends.

Regarding the periodicity, you in contrast it to the change that was made to the remuneration of shareholders. We’ll maintain ready for the outcomes of extraordinary outcomes on the finish of every interval, not each quarter, that is in line with what the coverage says. As for the time-frame, we now have no indication of a timeframe proper now. What we do have is a research of the variables that led to the choice to allocate this to the capital remuneration reserve. So behind this determination of the Board, there’s this preservation of capital and this cautious money circulate management. And we’re nonetheless monitoring — we maintain monitoring these points. In order of now, we don’t know of a timeframe.

Operator

Thanks, Sergio. And thanks, Rodolfo. The following query is from Monique Greco from Itau BBA. Monique, go forward, please. Within the meantime, let’s transfer to the subsequent query from Bruno Montanari from Morgan Staley. Bruno, you will have the ground. Go forward, Bruno.

Bruno Montanari

Thanks. So, according to Rodolfo’s query, I’ve three questions. I am going to attempt to be fast since he solely requested one concerning the extraordinary dividends. Possibly you could possibly share with us your — the method that passed off through the Board assembly, and the proposal by the administration and the way this determination to retain 100% of the quantity was made. Was it an unanimous determination or not? That would assist us perceive the method and in addition concerning the dividends.

So does it make sense for us to assume that through the 2024 quarters, in a hypothetical state of affairs, the place the CapEx is decrease, which was the case of 2023, that we might count on that the reserve might be reallocated — the capital remuneration reserve might be reallocated? And likewise concerning the dividends, in what hypothetical state of affairs, would you make the choice so as to add this reserve to the capital of the corporate, which in line with the Articles of Affiliation is a chance?

My second query is about manufacturing. I do know it is nonetheless early within the yr, however the previous few months had been fairly stable. So perhaps you could possibly speak about your views for manufacturing for this yr, if there’s any downtime that is been scheduled within the quick time period. And perhaps if we might count on the manufacturing to occupy the higher vary of roughly 4%.

And the third one is that the corporate was very clear in its communication to the market concerning the market — the contract with Unigel, and congratulations on that. For the reason that topic led to anxiousness out there, perhaps you could possibly clarify to us the decision-making course of that led you to decide on the tolling. And please appropriate me if I am fallacious, I perceive that that is the least damaging answer for the corporate amongst all choices.

Jean Paul Prates

Thanks, Bruno, on your questions. Despite the fact that I’d wish to, I can’t make any feedback on the conferences that happen with the Board. Governance doesn’t permit us to. The minutes are public although. And naturally, you may obtain them and browse them. So I can’t reply that query. Very briefly, Rodolfo — Bruno, because the minutes are public, in fact, for those who do analysis, you are going to see that the federal government counselors voted for 100% of the reserve. The non-public councils voted for 100% of exclusion.

And because the President, I abstained from voting as a result of it will make no distinction, and I used to be along with my Board of Administrators. They proposed 50-50. That was our proposal. The discussions had been regular, and people had been the outcomes. We will work on these outcomes. We’ll respect the sovereign determination of the council. And naturally, as a reminder, it might change. We might return to doing a dividend distribution at any second. So the story goes on. And concerning the allocation, I am going to give the mic again to Sergio.

Sergio Caetano Leite

About integralization of capital, that is allowed by regulation, and it is also supplied for by regulation that the corporate makes use of any reserves to pay for its losses. We don’t forecast these conditions for the subsequent few months. It was allotted for dividends and should be used as such. Talking about transparency, thanks on your feedback. Thanks for the acknowledgments. We have been actually making each effort to present transparency to the market.

I am going to speak about Unigel, a really quick reply, after which I am going to give the ground to Joelson, the Director of Exploration and Manufacturing, to speak about Manufacturing.

So Unigel, since we had these two conferences with Brazilians and foreigners, we talked concerning the firm’s governance and their position within the determination. You requested concerning the course of, proper? So, if I am not mistaken, we had over 70 folks taking a look at this contract all through months. So the scenario is, final yr, the Board allowed Petrobras to proceed to spend money on petrochemicals and fertilizers.

So we have been taking a look at processes, and Unigel was began, so 70 folks began engaged on that. And the method carried on usually. We signed, licensed it and acknowledged it in line with the totally different powers in Petrobras. And also you’re proper, the director and the managers concerned selected the very best answer within the current state of affairs. So it was a traditional course of with your entire firm’s governance.

I am going to move it over to Joelson.

Joelson Mendes

Sure. In case you’ll permit me, I might identical to to emphasise it and say it to William and to you, this episode doesn’t have an effect on our administration in any respect. This isn’t a standalone challenge. It is not a brand new challenge. We’re not shopping for belongings. So within the governance course of, it should not even be taken to the Board. It is a service contract to keep up two of our crops at Petrobras. So, for instance — this refers to our personal belongings with an operation that does not indicate on promoting gasoline. We’re delivering uncooked supplies and receiving industrialized merchandise.

And it is for 18 months, which is the time we have to consider an answer and implement it for these crops that weren’t offered effectively or weren’t rented effectively to appropriate the continuing course of. As Sergio stated, this appeared in the long run of the strategic decision-making course of. We could not work on fertilizers earlier than it was permitted. So these 18 months began then, and we will submit this activation to the totally different ranges of determination makers. This was good. So we really feel — the method was good. So we be happy to deliberate on this course of, if that is what the administrators vote on.

Sergio Caetano Leite

Hello everybody. Good afternoon. Sure, the decision-making course of for this industrialization course of was handed, as Sergio stated, by way of the corporate’s leaders. The danger group labored with many areas of the corporate, producing a report. And with that, we made the choices we needed to, in line with the governance, to signal our contract. And we voluntarily, as quickly as we signed the contract, contacted TCU, and we voluntarily had a gathering with them within the first quarter in January.

So we determined to go to the courtroom of accounts and to tell them underneath their request concerning the various things associated to the contract itself. As a spotlight, this contract has a number of potentialities and we understood that this was the very best one for the group. We understood that this was essentially the most advantageous for the corporate, as a result of these are our crops, though they’re rented, in order that they should be cared for. They’re Petrobras crops, and we’re persevering with the permitted course of to do it in essentially the most strategic manner potential.

So this contract will give us some leeway to research what’s occurring. And this group is working within the firm to discover a definitive answer for it in line with our pursuits, in line with the nation’s pursuits, and our technique to scale back our dependence on fertilizers — imported fertilizers.

Jean Paul Prates

Good afternoon, Bruno. Thanks for that query. Concerning the downtimes you talked about, they’re all according to what had been foreseen, nothing new. The manufacturing from the primary quarter is according to what we have forecasted. Final yr, we had 4 new manufacturing methods and two that had been ramping up. So we had been a bit above the manufacturing ranges that we had foreseen final yr, however nonetheless inside that vary.

We now have some forecasts that luckily didn’t materialize by way of potential delays and so forth. This yr, we now have fewer foreseen issues, proper? We now have one FPSO that is ramping up and a few areas in decline. So I might say that, effectively, you requested if we might be above the vary, and I might say that our greatest guess is 12.8 equal barrels per day, and we will announce a sure vary, however I might guess that we might be about, on that common, in the course of that common.

Operator

Thanks, Bruno, on your query. Monique, we’ll move it over to you for the subsequent query.

Monique Greco

Hello. Are you able to hear me?

Jean Paul Prates

Sure, we are able to hear you.

Monique Greco

Good afternoon, everybody. I apologize for the technical concern earlier than. I might wish to thanks for this chance to ask questions. This is essential for us on the opposite aspect. So I’ve two questions right here for you. The primary one is a follow-up query about two factors that Jean and Sergio talked about. Jean talked about throughout his speech that because the reserve was constituted, this may proceed to — there would proceed to be a chance for us to pay extraordinary dividends. However Sergio talked about that this might solely be inspected on the finish of the yr. So my first query is, if we are able to count on another choices all year long, or would it not solely be on the finish of the yr?

And my second query is about your funding intentions in integrating downstream. This was within the launch and in your strategic arguments. Jean talked about that you just anticipated to spend money on logistics and refinement. So my query is the way you imagine that this integration will occur, the way it will combine downstream. Moreover that partnership that you just talked about with Roland, what different investments are on this technique? Returning to distribution, would that be within the scope? In order that’s my query. Thanks.

Sergio Caetano Leite

Good morning, Monique. Congratulations for Worldwide Girls’s Day. So that you requested about two various things, I believe. Since there was a remark about extraordinary dividends being inspected quarterly and since there was a change on the finish of the yr, I used to be referring to that query. So it would nonetheless be on the finish of the yr with each fiscal yr.

And the opposite query is about what’s being analyzed, the assets which might be being analyzed that may be redistributed at any level. Earlier than I move it over to William, who’s going to reply your query concerning the downstream integration, I am going to ask if Jean needs to say something.

Jean Paul Prates

Effectively, by way of the downstream integration, there are lots of dimensions, in fact, however it’s a must to take a look at, not less than two dimensions. The primary is logistics belongings that may be misplaced. And we additionally have to adapt, modernize and replace a few of our logistics processes. So we have to adapt, for instance, to biofuels. We’ll have to adapt to new fuels, not simply those which might be a part of the combo proper now.

So different forms of gasoline are becoming a member of and can must be part of the method. So these two dimensions must be analyzed. It is not solely — folks would possibly assume that it is all about shopping for refineries and APRs. So we’re not doing the identical outdated factor. We’re trying on the future. So, we spent practically 10 years taking a look at belongings and promoting them. And we have to do this once more, however it will likely be accountable in line with our perspective and in line with what we all know how you can do.

William Franca

Thanks on your query. And I believe it is vital to say that integration for the corporate, particularly downstream, is everlasting in its execution. Final yr, we had a terrific instance the place we noticed our refinery park working. We processed extra nationwide oil in Brazil. We processed extra pre-salt oil. And we are able to see this occurring in a state of affairs of excessive inflation, robust strain on delivery. And after we combine or course of our oil, we are able to seize the freight prices from Europe and China, and we’re capturing a margin and nonetheless gaining the delivery prices. So integration for itself is an train on that. So our integration relies on that as a result of it would permit us to compete for the totally different markets, and that is important. So the way forward for oil will likely be based mostly in the marketplace. And that is how we’re positioning ourselves.

We’re taking a look at integration. And if we glance in the direction of the longer term, we are able to see alternatives in vitality transition and what’s forward. And integration is a really related issue at that. Main customers like Tolmasquim talked about the renewable vitality generated will in all probability be based mostly on the belongings we have already got, and their integration is extraordinarily related.

So after we speak about hydrogen, the Petrobras — our park is the most important consumer of hydrogen within the nation, or the most important producer of hydrogen. And that is essential after we speak about vitality transition, transformation of our refineries. And on the finish of the day sooner or later, after we transfer away from the age of oil and change to renewables, we might want to use all of this transition that I am mentioning. So HVO models processing renewable cargo, this integration has a variety of worth.

So it is quite simple. We captured margins. We captured outcomes for the corporate because of this integration. And sooner or later, we can have much more than that. In order that’s the worth of integration proper now. That is a really robust aggressive benefit. And thanks on your query.

Operator

Thanks. The following query comes from Luiz Carvalho from the UBS Financial institution.

Luiz Carvalho

Howdy. Good afternoon. Are you able to hear me?

Jean Paul Prates

Sure.

Luiz Carvalho

Effectively, I’ve two questions. And my apologies on insisting on the topics, however I might wish to benefit from President Jean Paul’s expertise as an skilled politician to grasp the significance of Petrobras within the means of building of the regulation of the federal authorities and the way that dialog between the corporate and the governmental businesses occur based mostly on their forecasts.

And if the forecasts will not be met, the federal government should present explanations and et cetera. And alongside the identical traces and based mostly on information revealed within the media, how an settlement with espresso might have had an affect or guided the choice of the council by way of retained little extra cash, despite the fact that that is allotted to dividends. And likewise the second query, might you shed some gentle on the allocation of capital? The President has been vocal by way of SLM. And this week, there was information about Vibra. Possibly you could possibly speak about Braskem as effectively.

Jean Paul Prates

Luiz, relating to the regulation, we — on the finish of the third quarter, we normally submit an earnings forecast, which isn’t an in depth forecast. And that may be a results of this means of state-owned — whereby state-owned corporations ship their forecasts to the federal government with none detailed data. However from then onwards, we do what we are able to by way of the dividends. And the dialogue about dividends is just not associated to that.

It did not seem to me that — that had a direct relationship with the returns for the federal authorities, which can be mirrored in taxes and royalties. And on this case, the dividends to majority shareholders and 37% goes to the federal government. So in that regard, there’s a sure stability in that course of. It is only a matter of defining the timing.

And I perceive that, that was the case. It is mainly associated to timing. The reserve is allotted to dividends in any manner. We must always not propagate the wrong data that that dividend particularly can be utilized to pay money owed or to speculate. That was already mentioned, if that might be invested. However that is revenue. So, having stated that, I believe that this concern goes away as a result of we all know that these reserves are allotted the dividend in any case.

And I am going to go away espresso with you. And likewise by way of the place we’re going, by way of acquisitions, all that Luiz is said to governance and the processes that we should endure. B&R is just not on our radar. As I all the time say, we now have no ongoing research associated to reacquiring our Vibra like that. We now have a relationship with the primary purchasers and we now have common conversations with Vibra, particularly as a result of they’ve the utilization concession of our model. So we are able to have joint plans on some tasks. However all of that’s coated by the umbrella of our confidentiality and the governance levels that we now have to and due respect.

Braskem entails a means of promoting and acquisition that is carried out by Novonor, not us. And naturally, we’re concerned as a result of we now have the precise of choice, and in addition as a result of we wish to know and interact in preliminary conversations with the potential proponents which will grow to be companions together with us and grow to be administration of that firm.

Regarding SLM, we now have course of that is been overtly revealed, the place we’re combining tasks for biofuels for the longer term and in addition for the current from the angle of reintegrating the refinery of Bahia to the Petrobras refinery system to convey concerning the benefits that it misplaced and to see how the group works. And this complete course of is ongoing and is being disclosed as per the norms that we now have to observe.

And Sergio, perhaps you may speak about taxation.

Sergio Caetano Leite

Thanks for the chance, Luiz, to shed some gentle on the off-subjects. Since final yr, we have been seeing information being revealed. I do not know the place they got here from speaking about agreements between Petrobras and CAF. Petrobras has all the time engaged in conversations with the bodily areas, the a number of totally different governmental businesses throughout all governmental ranges, state, municipal and federal. And at any time when an operation produces a constructive VPL and is financially advantageous for Petrobras and is permitted throughout all ranges, there isn’t any discretionary concerned in one of these operation.

Whether it is useful for Petrobras, if we now have money in hand and that will likely be finished, we do this with the states, with the municipalities. We have engaged in a number of of these with the federal authorities. It was a routine process in Petrobras that already existed and can in all probability live on earlier than and after this present administration. So there isn’t any particular settlement with CAF. Different folks from the media and analysts have requested us about that, extra particularly about retention of dividends for cost. That is even much less potential.

Because the president stated, if there’s one topic to the place there’s an settlement between private and non-private, it’s receiving dividends. Everyone needs to obtain dividends, each non-public and public shareholders. So we’re aligned. So there wasn’t any affect on the choice by way of transferring the extraordinary dividends to the reserve.

And it is also price mentioning that at any level, the executive Board of Petrobras can redefine that the assets which might be within the reserve and allocate them to the cost of dividends. And we now have the help of authorized with that. However it’s for the cost of dividends. It may well occur at any time. Not for any fiscal agreements or investments, just for the cost of dividends. Thanks.

Operator

Thanks, Sergio. Thanks, Luiz. Subsequent query comes from Caio Ribeiro from Financial institution of America Merrill Lynch. Caio, your microphone is open. Please proceed.

Caio Ribeiro

Good morning and thanks for the chance. Given the choice to not pay extraordinary dividends this half and in addition that you just say that that is associated to a choice to protect the stability given the investments that should be made sooner or later perhaps you could possibly give us a bit extra particulars, a bit extra element about this determination and an expectation round M&As occurring within the quick time period or is it solely associated to Greenfield and Brownfield investments within the quick time period, and in addition about releasing the assets allotted to the reserve, this half, perhaps can we assume that if an M&A transaction doesn’t occur this yr, might that be a set off to announce that these quantities will likely be paid?

Sergio Caetano Leite

Thanks on your query. That is associated to the earlier query. I perceive the strategy, however that is not truly associated to M&A or acquisition tasks. The tasks underneath evaluation by Petrobras at this time are the tasks that had been disclosed within the strategic plan. It is two portfolios, implementation and evaluation.

And the brand new governance was carried out in order that the tasks within the portfolio underneath evaluation will migrate to the confirmed CapEx. The PE in Petrobras is funded by the operational money circulate, ideally. And this yr we launched this time period, ideally, as a result of in some M&A tasks different forms of operations might be concerned equivalent to a finance — financing challenge. However the administration of the corporate all the time works with a really conservative perspective by way of money circulate.

So what’s within the plan that was revealed entails the money technology. In case you take a look at the plan and the strategic plan, there’s a provision for the cost of extraordinary dividends. It is already there within the tower that signifies using sources. So within the PE, we now have this provision for investments for all tasks underneath evaluation and the confirmed tasks, and in addition for the cost of dividends.

What the administration board justifies by making this determination is to higher perceive the factors, exterior standards included which will have an effect on the 2024 and 2025 yr. So I imagine that this can be a course of the place, because the board sees this extra clearly, it would decide.

Operator

Thanks, Sergio. The following query comes from Pedro Soares from BTG Pactual. Pedro, in all probability your microphone is already open. Please proceed.

Pedro Soares

Good afternoon. Thanks. My first query is to attempt to perceive the capital construction of the corporate within the context of those investments that may happen. Provided that the leverage of Petrobras is at extraordinarily wholesome ranges, would it not make sense for us to assume that the corporate may go with extra leverage to leverage investments, and perhaps M&As sooner or later? And if that may be a chance, would you be prepared to alter the dividend’s coverage?

And my query is as a result of presently within the present remuneration coverage, 45% of money circulate much less CapEx that solely occurs if the gross debt can be under the utmost debt established by the marketing strategy, $65 billion. So, because the present debt is just not too removed from that quantity perhaps it will be good to grasp if you are going to prioritize sustaining the extent of indebtedness under that degree or if it will likely be potential to scale back the dividends to one thing nearer to the minimal necessary ranges, as per the regulation.

And likewise about M&As, I believe that a number of current messages from the corporate and the Administrators, they are saying that, sure, extra inorganic investments will likely be made however that won’t reinvolve the renationalization, as you stated, of any asset. Is that also legitimate for investments underneath analysis or is there any chance of Petrobras having stakes greater than 50%? Thanks.

Jean Paul Prates

Effectively, I can reply the final query first, after which I am going to give the ground to you, Sergio. Regarding the rationalization, this isn’t solely a part of our vocabulary. We take a look at any of those belongings as a enterprise asset. If we want a majority to have management for strategic causes, we’ll if not, we cannot.

If it is an asset that is vital for us, we’ll analyze it. If it isn’t that vital, if it is a part of the previous and it isn’t price trying into it won’t submit a proposal or strategy it. So after I say that there will likely be no regionalization, it is as a result of there isn’t any motive for us to make use of this time period.

We’re not right here to renationalize or convey one thing again to the state or re-privatize something. Within the case of Bahia, we’re speaking to them as a result of we received an invite to mix your entire course of that was ongoing and we thought it will be constructive, so we’re analyzing it. So I simply assume that we now have to rule out this old school terminology. Thanks.

Sergio Caetano Leite

Pedro, thanks on your query. And there’s no indication and I imagine that may stay like that for some time predicted for — to alter the remuneration to buyers. And what’s behind the coverage that we permitted? There was a coverage of 65% on the free money circulate prior to now with a number of particulars that you just’re accustomed to however there was an vital element that was 65% much less investments.

However curiously sufficient, it was not CapEx as we see in literature. If there was an acquisition, it will not be deducted from the 65%. However, it didn’t clarify which CapEx was underneath evaluation. So now, on this extra clear course of, we began to spotlight the CapEx that is underneath evaluation, that there may be mergers on this quantity.

However, we began to incorporate CapEx as literature places it, by way of what’s deducted within the coverage, and we diminished it to 45%. In case you evaluate the 2 towers that point out using sources, you are going to clearly see a migration from shut to twenty% of the CapEx transferring from dividends and going to investments. And why was that call made? First, as a result of the longer term is more difficult. Like President Jean Paul stated, this isn’t thought-about a transition, however slightly a metamorphosis. And second as a result of Petrobras needs to proceed to generate revenue and remuneration for the subsequent 100 years.

And thirdly, as a result of Petrobras is a world-class firm, and as proved, it would resume its internationalization course of. So it made no sense for belongings like Petrobras high quality belongings to pay such a unique dividend than the majors. So we seemed on the majors, we checked the typical. It was at 39%, 40%.

And since this can be a new administration, we determined so as to add a small threat premium. And we added to this reserve one other apply, which is the acquisition of shares. And with that, we at the moment are leveling with the majors. So there isn’t any motive for us to alter the dividend coverage.

There is no such thing as a indication that there is any willingness to alter that. The coverage will likely be maintained. Leveraging has a direct reference to the coverage, as you talked about very effectively, Petrobras works between the BRL55 billion, BRL65 billion vary. If there’s any change to the vary, that requires a brand new coverage and modifications within the firm.

Now we’re near BRL62 billion or BRL63 billion. On the finish of 5 years, the leverage forecast is of round 57, decrease than 59 contemplating the common amortization and extra investments that we will make over the course of the plan. So, along with a strong stability and a dedication to capital administration, so the upkeep of the leveraging degree is among the pillars of this administration.

And never going over this degree of leveraging is among the outstanding options of Petrobras proper now. The M&As that you just see within the PE think about that may preserve the indebtedness degree. So proper now, we do not see any want to consider further leveraging for an M&A. We’re working with the thought of sustaining the vary.

Pedro Soares

Okay, we can’t go over this vary. What can we do inside the — what’s outlined within the plan and never the opposite manner round.

Sergio Caetano Leite

That is essential. Sustaining the leveraging degree capital administration is sort of like a mantra internally at Petrobras. So I might like to choose it up in your query. I might wish to as soon as once more reiterate we’re trying on the chat, and there is a sign that there’s nonetheless some confusion concerning the reserves.

The reserve was created to stability out the cost of dividends, interval. There’s a chance, which is supplied for in regulation, any reserve has that chance of being integrated into the capital. However for that to occur, it requires sure triggers which might be removed from occurring at Petrobras, and this must be determined by the excessive administration of the corporate.

And there is one other chance that is equally distant. If Petrobras has losses in 24 months, the probabilities of Petrobras to generate money with its capital construction and contemplating the way it manages its finance of producing loss in 2024 is a really small chance. And these two circumstances are supplied for in regulation, however they don’t seem to be even a distant chance in any state of affairs that we’re working with.

So this reserve goes to be allotted to dividends. The cash that is there’s for the cost of dividends. The administration board taking a look at ’25, ’24, with our present strategic plan and with the urge for food for investments, and with the plan of BRL0.5 trillion. If it isn’t the most important, it is one of many greatest plans.

It is a clear guess sooner or later. So Petrobras will proceed to develop for greater than a century, no matter it sells sooner or later, electrical energy, liquid vitality or if it would proceed to promote oil, the longer term goes to point out us. However this reserve once more is just not for use for investments or fiscal agreements. There is no such thing as a indication that it will likely be integrated into the capital. It’s not going for use to fill any gaps or losses. That is for the cost of dividends. And what I can’t inform you is the time-frame it’ll be paid like this or like that. The council is now analyzing this topic.

It is involved with the worldwide state of affairs in ’24 and ’25. That is the very best administration’s degree of the corporate. Every time they really feel comfy, they will determine. And that may occur subsequent week, subsequent months, in 45 days, in six months. It could occur at any time, however sadly, at this time we now have no indication of that.

Jean Paul Prates

However simply to repeat, it won’t be used for investments, for any offers, for M&As. That is within the plan. It is to pay dividends. Thanks, Pedro.

Pedro Soares

Thanks, Sergio. That was very clear.

Operator

So the subsequent query will likely be requested by Gabriel Barra from Citi. Go forward, Gabriel.

Gabriel Barra

Hello, everybody. Good morning. Thanks for taking my questions. First, thanks on your initiative. That is going to make our dialogue significantly better for the time that we now have right here after the outcomes. We talked loads about dividends and M&As, and I might identical to to ask about CIM once more. I’ve a few factors right here. First, we have been seeing a difficult state of affairs in companies. The corporate has been discussing reductions. We all know how a lot inflation can affect the longer term. So I might identical to to grasp how we are able to mitigate the danger?

Prior to now, we noticed some actions to capitalize belongings, and I am referring to constructing probes, constructing vessels. So contemplating future contracts and the corporate’s robust progress pipeline, I might identical to to grasp what your technique is, not solely in probes and vessels, but additionally FPSOs and so forth? We have additionally heard a powerful dialogue concerning the strike in Ibama. We have talked about it Petroleo margin, how a lot it is impacted the corporate, the way forward for the corporate and future worth technology? So I might identical to to grasp how that impacts the corporate presently, tasks timeline for this yr and for the subsequent years? Is there something that we should always take note of on the quick time period?

And my third query is, we noticed related progress within the firm’s manufacturing within the final years, particularly led by the pre-salt layer and we have additionally heard an vital dialogue in Brazil about consolidating the business. We see that the corporate is eradicating investments within the final years. So might there be opposite motion, perhaps future acquisitions, not solely in Brazil however overseas, and never solely taking a look at natural progress, but additionally inorganic progress? if that will be part of the corporate’s progress technique? That is all. Thanks.

Sergio Caetano Leite

Thanks on your query, Gabriel. I believe you addressed not less than one to Travasso and a few them to Joel. So I am going to move it over to Travassos, who’s our Engineering Director at Petrobras.

Carlos Travassos

Thanks, Sergio. Thanks, Gabriel. Thanks for that query. So your notion is appropriate. We’re trying on the provider market, and we see an atypical motion from what we had within the final years. It was a motion that was rather more aligned to bench costs, the costs of our inputs and tools. Within the final 18 to 24 months, we noticed that it was disattaching itself to that, and it was a bit random.

And naturally, that is attributable to the COVID pandemic and by the continuing conflicts. You talked about capitalizing belongings. So to reply that clearly, that is not on our radar. We’re not taking a look at capitalizing belongings. What we’re doing is a continuing studying of the market. We’re establishing a system for every of those processes.

Constructing a collaboration room, the place we will, little by little, take a look at the market, perceive its wants, and modify our processes to make sure its competitiveness. So this does not solely occur within the FPSO market, we had a major oscillation within the probes market. We have had over 50% of probes contracted, so we’ll probably not have the identical affect as we had in 2023. And equally to that, we additionally see altering behaviors attributable to the demand of Petrobras. We are the greatest customers of the marine system on the earth, so we’re establishing a manner of analyzing the market and adjusting our inner merchandise, in order that we are able to seize the market and scale back its affect. So I am going to move it over to Joel, who will reply your subsequent two questions.

Joelson Mendes

Thanks for the query. Sure, you are proper. It’s regarding to see that Ibama strike. We renew many licenses daily. So apart from that’s, effectively, for instance, license for waste materials, for instance. We do not have a license for the third effectively, so it might have an effect. We even have licenses to drill some blocks within the Southeast of Brazil. That is not our forecast, however we’d want to alter our portfolio.

So it’s regarding. We have been speaking to Ibama consultants, however that is additionally in our threat evaluation. So our exploration crew, with the info it has, is attempting to amass extra knowledge from Latin America and West Africa, particularly. So we now have been speaking to governments, to see corporations, and we’re additionally taking a look at alternatives to amass producing belongings as effectively.

It is not quite common, however it is part of what we do. We now have people who find themselves all the time taking a look at that. So we’d have extra concrete research to amass exploration blocks and in addition to research manufacturing. So if we now have a negotiation for that, we now have a variety of governance, we now have many steps. So going into a brand new nation would require authorization by a board. So we now have been working in that route.

Operator

Thanks. And the subsequent query will likely be from Vicente Falanga from Bradesco. Go forward, Vicente.

Vicente Falanga

Thanks. Thanks, Jean Paul and Sergio. I’ve a few questions. I identical to to grasp if what was stated within the board yesterday, for those who added any metrics to what could be the drivers so that you can pay the extraordinary, proper, perhaps gross improve or one thing like that? And I might additionally wish to know if this reserve has been utilized by Webex for the buyback program? So no metrics, simply trying deeper into some evaluation and we’ll simply discover that in a while.

Sergio Caetano Leite

Thanks, Vicente. I have never seen you for a while. Good to listen to from you. So buyback is taken into account, after which some pilot, we now have some objectives. We’re delivering month-to-month reviews to CVM on the way it’s doing. It is at 80% or near 80% execution, BRL157 million in preferential shares and we use a financial institution rotation system, in order that we do not get any criticism that we’re being discretionary. So we do not — we’re all the time taking a look at every day operations, at any time when we now have an vital occasion, like on this course of, we droop purchases and it has been working very effectively.

The distinction, one of many greatest drivers of EBITDA, has diminished even when we depend the price of doing enterprise in Brazil and alternate variations. That is one other parameter that Petrobras might overcome sooner or later. So we’re doing effectively. The buyback processes all over the world have a median of 70% to 80%. So we are able to nonetheless complement it in a while.

We’ll see if we are able to take this ahead. It’s the intention of the corporate to proceed with this program. So you may name Nardi, ask him. However we’re making ready a brand new program to be proposed and to research it. That is an attribution of the Board to approve a proposal from our administration. It is a manner of redistributing worth for our buyers as effectively. It is part of our remuneration coverage. So it is sensible. Thanks.

Vicente Falanga

Thanks, Sergio. The final query will likely be requested by Rodrigo Almeida from Santander.

Rodrigo Almeida

Good afternoon. Are you able to hear me?

Jean Paul Prates

Sure, we are able to hear you.

Rodrigo Almeida

Thanks. I even have a query and a follow-up. So we see internet debt near 73 billion. So contemplating the quantity of lease values that may nonetheless are available in, is there any legal responsibility which may require your money to be above the reference worth. So, trying on the plan, perhaps essentially the most CapEx heavy second will likely be between 2024 and ’25, due to the variety of platforms. So I might identical to to grasp that it will be vital to have that for the subsequent quarters. So with the totally different spreads, it’d assist us to think about that the valuation could be greater than earlier than. So how is Petrobras working with the trial of accounts to justify it. These are my questions. Thanks.

Jean Paul Prates

Thanks, Rodrigo, on your query. Beginning with legal responsibility administration, the height within the debt was particularly on account of anticipating a receivable from 1R FPSOs. Normally, it will not attain 62. We might have amortization for it, after which that will create the curve. We offered a slide for the debt amortization course of, even what we name the productive debt, that may be a good debt from the rental.

So it is underneath management as a result of it permits you to create a forecast for the oil curve. And that reveals a discount versus the start of that interval. What I am seeing right here is that it is underneath management. It is underneath management. It is near 65, sure, however contemplating the receivables from FPSOs and the amortizations calendar, it is taking place and regressing in line with our projections. This was mentioned. This was one thing that we analyzed. We seemed on the totally different threat eventualities in finance’s affect to money. So there are dozens if not a whole bunch of analyses that we run earlier than we determine on that. However the curve is underneath management. And I perceive your query, however it’s underneath management.

Contemplating legal responsibility administration, Petrobras has gained awards and issued a worldwide bond of 1.25 thousand {dollars}. And it used these assets for legal responsibility administration. The distinction in charges and different issues, the unfold of these charges and different issues permit us to scale back the debt to an analogous quantity, 1.2 billion from a monetary debt.

It is vital to say that we received the bottom charge compressions on this operation and the very best charges for the interval. So we checked out our money. We noticed if we would have liked to do it and Petrobras was exterior of the issuance marketplace for variety of years and we determined to check it. It was a really profitable operation. We even obtained awards as the very best in Latin America and among the best on the earth.

So it actually was an operation that we studied. The 1.25 billion was used for legal responsibility administration. And at any time when the market presents a positive unfold for VPL for Petrobras, Petrobras might go to the marketplace for LP. There is not any want as a result of our monetary debt may be very low. In case you take a look at an organization like ours, our debt is almost negligible. The 0.8 that we current is lower than one, and that is rather more associated to our productive debt than a monetary debt. So the reply is sure, we’re taking a look at legal responsibility administration, in order that we are able to handle this. Every time the unfold presents itself, we prolong our debt. That is an ongoing course of at Petrobras. So thanks on your query.

We forgot to reply one in every of them on M&A processes. As Jean Paul stated, there’s an instance that we all the time use. In case you are on a conveyer belt and also you strive to return, even for those who soar, you are not going to return to the identical level. What we’re analyzing is the entire inexperienced gasoline for aviation. There is a rising demand for that. Individuals who name us, who ask about biorefineries, this can be a new horizon, proper? We needn’t purchase 100%, however that is all being analyzed proper now.

However we’re not contemplating getting debt for this acquisition, as I defined earlier than. So we had been invited for an evaluation. We’re consistently in talks with others. It is a regular Petrobras course of. It is not gentle. It is a heavy governance course of. So it takes a while. Thanks.

Operator

Thanks, Sergio. This concludes our Q&A. If in case you have any further questions, they are often despatched to our Investor Relations crew. We’ll be completely satisfied to reply them. I am going to now move it over to Jean for his closing remarks.

Jean Paul Prates

Thanks. So I simply have a really constructive and upbeat be aware to say goodbye. That is one thing that we talked about to our workers, however we wish to spotlight how good of a end result this was. And we do not wish to be influenced by asset gross sales bonuses or refinery bonuses or the rest, as Brent goes down, as diesel cracking goes down.

We’re nonetheless reaching the second finest leads to our historical past in EBITDA, in operational money circulate, the very best income amongst publicly-traded Brazilian corporations, the third highest in world corporations under Exxon and Shell, however above Chevron and Complete, 13 operational information, gasoline processing, refining, logistics, patents engineering, lowering monetary debt. I believe we’re displaying that regardless of going by way of challenges, this primary yr was extraordinarily passable and rewarding. That is one thing that we have been attempting to do. And I believe any firm like ours would want to do this. We have to do it daily. It is not one thing particular.

That is our mission. Our mission is to match the pursuits of our stakeholders and we have clearly been capable of do it. Our returns had been the very best within the business. We made rationality prevail by being insistent and by being respectful.

So I might wish to ask you to stay round and to belief us. We’re doing critical, moral, clear work and we’re being environment friendly. We will present you that for you who’re investing in us, we’re attempting to be a supply of improvement and there is just one manner of creating it constant and perennial. It is making that occur as typically as we are able to. There may be some noise, but when we are able to do this, that is the profitable components for Petrobras and for any firm that has our capital composition.

Thanks, everybody.

Operator

Thanks, Jean. Thanks everybody for listening to this webcast. Have a terrific day.