Q2 2023 Petroleo Brasileiro SA Petrobras Earnings Call

August 4, 2023

[music].

Operator: Good morning, everyone. Welcome to Petrobras webcast with analysts and investors regarding our results for Q2 of 2023. It's a pleasure to be here today. This event will be presented in Portuguese with simultaneous translation into English. The links for both languages can be found on our investor relations page. We would like to inform that all participants will follow the broadcast over the internet as listeners. After our intro, we will have a Q&A session where you can send your questions to petroinvest@petrobras.com.br. Today with us, we have Carlos Travassos, Chief Engineering, Technology and Innovation Officer, Clarice Coppetti, Chief Corporate Affairs Officer, Claudio Schlosser, Chief Logistics, Commercialization and Markets Officer, Joelson Falcão Mendes, Chief Exploration and Production Officer, Mário Spinelli, Chief Governance and Compliance Officer, Mauricio Tolmasquim, Chief Energy Transition and Sustainability Officer.

Good morning, everyone welcome to Petrobras webcast with analysts and investors regarding our results for Q2 of 2023 it's a pleasure to be here today. This event will be presented in Portuguese with simultaneous.

Speaker 1: Good morning, everyone. Welcome to Petrobras webcast with analysts and investors regarding our results for Q2 of 2023. It's a pleasure to be here today. This event will be presented in Portuguese with simultaneous translation into English. The links for both languages can be found on our investor relations page.

Translation into English the links for both languages can be found on our Investor Relations page, we would like to inform that all participants will follow the broadcast over the internet at listener is after our intro you will have a Q&A session, where you can send your questions to petro invest at that.

Speaker 1: We would like to inform that all participants will follow the broadcast over the internet as listeners. After our intro, we will have a Q&A session where you can send your questions to Petro to invest at www.petrovrised.com.br.

But I stopped comed up B R.

Today with US we have Carlos Tavares, with Chief Engineering Technology, and innovation Officer.

Speaker 1: Today with us we have Carlos Travassa, Chief Engineering, Technology and Innovation Officer, Clarice Coppeci

Glad Easco patchy.

Speaker 1: teeth, core, bread, affairs officer, clouded, clouded your schlausser teeth, legit stick commercialization and market officer. Joel from Falco, Mendes.

Keith Corporate Affairs officer cloud or cloud, just schlosser, chief logistics commercialization and market Officer, Joe Al So Falco Mendez, Chief exploration and production Officer, Mario Spin Alley, Chief governance, and compliance officer, Mauricio So my skiing Chi.

Speaker 1: Chief Exploration and Production Officer, Mario Spinelli, Chief Governance and Compliance Officer, Mauricio Tomasquin, Chief Energy Transition and Sustainability Officer, Sergio Caetano Leite, Chief Finance and Investor Relations Officer, and William Prensa, Chief Industrial Processes and Products Officer.

This energy transition and sustainability Officer says Yo Kai Pan of nature, Chief Finance, and Investor Relations Officer, and William Transact, Chief industrial processes and products office or two.

Operator: Sergio Caetano Leite, Chief Finance and Investor Relations Officer, and William França, Chief Industrial Processes and Products Officer. To initiate, we will watch a video with a message from our President, Jean Paul Prates.

Speaker 1: To initiate, we will watch a video with a message from our president, Jean-Paul Pracy. Good morning. It's an honor to be here again to share our results with all of you.

Two initiate we will watch the video with a message from our President and John Paul.

Jean Paul Prates: Good morning. It is an honor to be here again to share our results with all of you. It has been six months of achievements and accomplishments which reflect the quality of the work that we are doing within Petrobras. In this H1 of management, we were able to establish a new commercial strategy that is producing the results we wanted so much, more flexibility and competitiveness for fuel prices. At the same time, we are committed to leading the energy transition in the country in a fair, safe, and inclusive way, driven by partnerships we are building with companies of technical excellence and by the growing decarbonization of our operations. One of these results is the neutralization of Scope 2 emissions, since all electricity purchased by Petrobras now has a proven renewable origin.

Here again to share our results with all of you.

Speaker 2: It has been six months of achievements and accomplishments.

It hasn't been six months of achievements and accomplishments, which reflect the quality of the work that we're doing within Petrobras.

Speaker 2: which reflects the quality of the work that we are doing within Petroba.

In this first semester of management, we were able to establish a new commercial strategy that is producing the results. We wanted so much more flexibility and competitiveness for fuel prices at the same time, we are committed to leading the energy transition in the.

Speaker 2: In this first semester of management, we were able to establish a new commercial strategy that is producing the results we wanted so much. More flexibility and competitiveness for fuel price.

Speaker 2: At the same time, we are committed to leading the energy transition in the country, in a fair, safe and inclusive way driven by partnerships we are building with companies of technical experts.

Country in a fair safe and inclusive way driven by partnerships. We are building with companies of technical excellence.

Speaker 2: and by the growing decarbonization of our options.

And by the growing decarbonization of our operations.

One of these results is the neutralization of scope two emissions since all electricity purchased by Petrobras now has a proven renewable origin. It is important to highlight that we approved the revision of the strategic elements for our 2024 2028.

Speaker 2: One of these results is the neutralization of scope 2 emissions since all electricity per se by Petrobras now has a proven renewable origin.

Jean Paul Prates: It is important to highlight that we approved the revision of the strategic elements for our 2024-2028 strategic plan, as well as the driver to increase low carbon investments to up to 15% of our total investments. In the operational side, FPSOs Anna Nery in the Campos Basin and Almirante Barroso in the Búzios field started up production. FPSOs Anita Garibaldi and Sepetiba are expected to join them soon, helping us to continue increasing pre-salt production. The utilization factor of our refineries reached 93% with the highest level since 2015, even with several scheduled shutdowns at our refineries, respecting safety, environment, and health issues. We achieved record sales in H1 with 10 PPM diesel accounting for 62% of the total diesel sales of Petrobras.

Speaker 2: It is important to highlight that we approved the revision of the strategic elements for our 2024-2028 strategic plan, as well as the driver to increase low carbon investors to up to 15% of our total

Strategic plan as well as the driver to increase low carbon investors to up to 15% of our total investments.

Speaker 2: In the operational side, FPSOs Ananeri in the campus basin and Almirante Bajozu in the busses field started up production. FPSOs Anita Garibaldi and Sepe Tiba are expected to join them soon, helping us to continue increasing pre-salt production.

In the operational side F. P. S. Those I'm not nearly in the Campos basin and Oh, My lunch about who is in the bushes field started up production F. P. S. Those are neither got about the Sippet T. But are expected to join them soon helping us to continue increasing pre salt.

Production.

Speaker 2: The utilization factor of our refineries reached 93% with the highest level since 2015, even with several scheduled shutdowns at our refineries, respecting safety, environment, and health.

The utilization factor of our refineries reached 93% with the highest level since 2015, even with several scheduled shutdowns at our refineries respecting safety environment and health issues and.

Speaker 2: And we achieved record sales in the first half with 10 ppm diesel accounting for 62% of the total diesel sales.

And we achieved record sales in the first half.

With 10 P. P M diesel accounting for 62% of the total diesel sales of Petrobras regarding diesel our which is our diesel with 5% of renewable content, we project to increase our processing capacity by 146 per cent later.

Jean Paul Prates: Regarding Diesel R, which is our diesel with 5% of renewable content, we project to increase our processing capacity by 146% later this year. We increased our investments to $5.7 billion in H1 of the year, and we kept our debt under control at a gross debt of $58 billion, while our operating generation reached $10 billion. In H1 2023, we continued with our total focus on people. We had an unprecedented initiative with the launch of our diversity supplement to reinforce awareness among our internal public and our society at large. All these results were achieved in H1 of this year, represent only the beginning of a journey that will take us increasingly further for our benefit and for the benefit of the shareholders and the society. Thank you very much.

Speaker 2: Regarding diesel R, which is our diesel with 5% of renewable content, we project to increase our processing capacity by 146% later this year.

This year, we increased our investments two $5.7 billion in the first half of the year and we kept our debt under control at a gross debt of $58 billion, while our operating generation reached 10 billion.

Speaker 2: We increased our investments to $5.7 billion in the first half of the year, and we kept our debt under control at a gross debt of $58 billion while our operating generation reached $10 billion.

Speaker 2: In the first half of 2023, we continued with our total focus on

In the first half of 2023, we continued with our total focus on people, we had an unprecedented initiative with the launch of our diversity supplement to reinforce awareness among our internal public and our society at large.

Speaker 2: We had an unprecedented initiative with the launch of our diversity supplement to reinforce awareness among our internal public and our society at large.

Speaker 2: All these results were achieved in the first half of this year represent only the beginning of a journey that will take us increasingly further for our benefit and for the benefit of the shareholders and the society. Thank you very much.

All these results were achieved in the first half of this year represent all at the beginning of a journey that will take us increasingly further for our benefit and for the benefit of the shareholders and the society. Thank you very much.

Yeah.

Sergio Caetano Leite: Now we will initiate our results of Q2 2023, and now I will hand it over to Sergio Caetano Leite. Good morning. I am very pleased to be here today to discuss our results for the second quarter. During this quarter, our gross recurring EBITDA was 12 billion BRL. This, our operational cash flow, demonstrates the resilience of our company despite an adverse foreign scenario. We have approximately 9.6 billion BRL in operating cash flow. Our net debt over EBITDA also shows the control of our indebtedness and the financial soundness of our company. That would be 0.74x. Now, the return on capital employed is almost 13%. This is 12.8%. Our net profit total 5.8 billion BRL. Free cash flow, $7 billion. We continue contributing sustainably.

Operator: Now we will initiate our results of Q2 2023, and now I will hand it over to Sergio Caetano Leite.

Speaker 1: Now we will initiate our results of few two of 2023, and now I will hand it over to Sejo Caetano-Late.

Now we will initiate a.

Our results of Q2 of 2023 and now I will hand, it over to Sasha Caetano nature.

Sérgio Caetano Leite: Good morning. I am very pleased to be here today to discuss our results for the second quarter. During this quarter, our gross recurring EBITDA was 12 billion BRL. This, our operational cash flow, demonstrates the resilience of our company despite an adverse foreign scenario. We have approximately 9.6 billion BRL in operating cash flow. Our net debt over EBITDA also shows the control of our indebtedness and the financial soundness of our company. That would be 0.74x. Now, the return on capital employed is almost 13%. This is 12.8%. Our net profit total 5.8 billion BRL. Free cash flow, $7 billion. We continue contributing sustainably.

Good morning.

I am very pleased.

Speaker 1: to be here today to discuss our results for the second quarter.

To be here today to discuss our results for the second quarter.

Okay.

Mismatched during this quarter.

Our house.

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Sure.

During this quarter, our gross recurring EBIT tow was 12 billion BRL. This our operational cash flow demonstrates the resilience of our company despite and Ed first foreign scenario we have.

Speaker 1: During this quarter, our gross recurring EBITDA was 12 billion BRL. Our operational cash flow demonstrates the resilience of our company despite an adverse foreign scenario. We have approximately 10 billion, 9.6 billion BRL in operating cash flow.

Approximately 10 billion 9.6 billion B R L and operating cash flow.

Speaker 1: Our dads are not dead over EBITDA.

Our debt.

Net debt over EBITDA also shows the control of our indebtedness and the financial soundness of our company that would be point 74 times now the return on capital applied is almost 13% this is 12.8%.

Speaker 1: also shows the control of our indebtedness and the financial soundness of our company that would be 0.74 times. Now the return on capital employed is almost 13%. This is 12.8%. Our net profit total 5.8 billion, a keep free cash flow, seven billion dollars and we continue contributing.

Our net profit totaled 5.8 billion free cash flow $7 billion, and we continue contributing sustainably.

Sergio Caetano Leite: We promote inclusive development, paying BRL 56.1 billion in taxes, contributing towards social development. Our dividends totaled $6.2 billion, and we have a comfortable cash flow of $15.8 billion. Despite external adversities, Petrobras' financial soundness is positive, and the results take us this is why we're this is one of the 10 best years of the company. Now, here you can see the foreign environment. There was a drop in Brent. It was significant. We're talking about Q2 2020 to $114 in Brent. Now during this quarter, $78 per barrel. This drop of the barrel price was highly significant, although the exchange rate is in line with last year's quarter.

Sérgio Caetano Leite: We promote inclusive development, paying BRL 56.1 billion in taxes, contributing towards social development. Our dividends totaled $6.2 billion, and we have a comfortable cash flow of $15.8 billion. Despite external adversities, Petrobras' financial soundness is positive, and the results take us this is why we're this is one of the 10 best years of the company. Now, here you can see the foreign environment. There was a drop in Brent. It was significant. We're talking about Q2 2020 to $114 in Brent. Now during this quarter, $78 per barrel. This drop of the barrel price was highly significant, although the exchange rate is in line with last year's quarter.

We promote inclusive development paving 56.1 billion reais in taxes.

Speaker 1: We promote inclusive development, paving $56.1 billion in taxes.

Contributing towards social development, our dividends totaled 6.2.

Speaker 1: contributing towards social development. Our dividends totaled $6.2 billion, and we have a comfortable cash flow of $15.8 billion. So despite external adversities, Petrobras financial, Soudness is positive and the results.

$6.2 billion, and we have a comfortable cash flow of $15.8 million. So despite external adversity, he's better Albright financial soundness is positive and the results.

Take us. This this is why we're this is one of the 10 best years of the company.

Speaker 1: Take us this, this is why we're this is one of the 10 best years of the company. Now here you can

Now here you can see.

The foreign <unk>.

Speaker 1: The foreign environment, there was a drop in Brent. It was significant. We're talking about the second quarter of 2020 to $114 in Brent. Now during this quarter $78 per barrel.

Environment, there was a drop in Brent today with significant worth talking about the SEC, good cute or quarter of 2020 to $114 in Brent now.

During this quarter $78 per barrel.

This is the drop of the barrel price was highly significant told though D exchange rate is in line with last year's quarter. The drop of Brent is another factor that I will comment subsequently and this is why this dropped are resolved.

Speaker 1: This is the drop of the barrel price was highly significant, although the exchange rate is in line with last year's quarter. The drop of Brent is another factor that I will comment subsequently. And this is why this dropped our results, although we continue with sustainable development and the company continues resilient.

Sergio Caetano Leite: The drop of Brent is another factor that I will comment subsequently, and this is why this dropped our results. Although we continue with sustainable development, the company continues resilient. Our EBITDA demonstrates that we are aligned with the drop of the Brent and the appreciation of the dollar. There is an important interpretation. Since the beginning of the year, I mean Q1 and Q2, our adjusted EBITDA is very close, almost at the same level of a recurrent EBITDA or recurring EBITDA. This is because there has been a lower disinvestment program because of our asset portfolio. Our company continues adjustment, presenting very important value. Below, you can see the devaluation of Brent, which impacts significantly our operations. There was a lower Brent reduction in Exploration and Production. Now Refining and Marketing captures the foreign scenario factors.

Sérgio Caetano Leite: The drop of Brent is another factor that I will comment subsequently, and this is why this dropped our results. Although we continue with sustainable development, the company continues resilient. Our EBITDA demonstrates that we are aligned with the drop of the Brent and the appreciation of the dollar. There is an important interpretation. Since the beginning of the year, I mean Q1 and Q2, our adjusted EBITDA is very close, almost at the same level of a recurrent EBITDA or recurring EBITDA. This is because there has been a lower disinvestment program because of our asset portfolio. Our company continues adjustment, presenting very important value. Below, you can see the devaluation of Brent, which impacts significantly our operations. There was a lower Brent reduction in Exploration and Production. Now Refining and Marketing captures the foreign scenario factors.

Although we continue with sustainable development in the content and the company continues resilient.

Our editor.

Demonstrate.

Speaker 1: that we are aligned with the drop of the Brent and the appreciation of the dollar. But there is an important interpretation since the beginning of the year. I mean Q1 and Q2 are adjusted. Edita is very close.

We are aligned with the drop of the Brent and the appreciation of the dollar but there is an important.

Interpretations since the beginning of the year at Q1 and Q2, our adjusted EBITA is very close almost at the same level ever recurrent avatar recurring avatar. This is because the.

Speaker 1: almost at the same level of a recurrent avatar, a recurring avatar. This is because...

There has been a lowered this investment program because of our asset portfolio.

Speaker 1: There has been a lower disinvestment program because of our effort for the poll loop. This, so our company continues adjustment presenting very important value below you can see the evaluation of Brent, which impacts significantly our operations.

This solar company continues adjustment presenting very important value below you can see the devaluation of Brent which impact significantly our operations.

Okay.

There was a lull or Brent reduction.

Speaker 1: There was a lower brand reduction in exploration and production. Now refining and marketing captures.

In exploration and production now refining and marketing captures.

Sergio Caetano Leite: If we consider the EBITDA with stock turnaround, we have a drop of 33% vis-a-vis Q1. With a replenishment cost, we have an EBITDA minus 42%. Gas and power aligned with the refining area, so we have a 33% drop if we consider Q1 in comparison to Q2. Now our cash generation, as I mentioned, continues strong and robust. There was a slight contribution of non-recurring results that are because of the sale of Potiguar and Norte Capixaba Complex. Our debt management from allowed us to amortize $0.7 million. These are data. This is data that is aligned with the market. In reality, in oil and gas, Petrobras has presented one of the best results despite an adverse scenario.

Sérgio Caetano Leite: If we consider the EBITDA with stock turnaround, we have a drop of 33% vis-a-vis Q1. With a replenishment cost, we have an EBITDA minus 42%. Gas and power aligned with the refining area, so we have a 33% drop if we consider Q1 in comparison to Q2. Now our cash generation, as I mentioned, continues strong and robust. There was a slight contribution of non-recurring results that are because of the sale of Potiguar and Norte Capixaba Complex. Our debt management from allowed us to amortize $0.7 million. These are data. This is data that is aligned with the market. In reality, in oil and gas, Petrobras has presented one of the best results despite an adverse scenario.

Speaker 1: the foreign scenario factors. If we consider the EBITDA with stock turn around, we have a drop of 33% visa VQ1 with a replenishment cost. We have an EBITDA minus 42% gas and power aligned with the refining area. So we have a 33% drop if we consider the first quarter in comparison to Q2.

The foreign scenario factors, if we consider the.

The editor, where the stocks turn around we have a drop of 33% vis vis Q1 with a replenishment cost we have another top minus 42% gas and power aligned with the refining area. So we have a 33% drop if we.

We consider the first quarter in comparison to Q2 <unk>.

Speaker 1: Now our cash generation, as I mentioned, continues strong and robust.

Now our cash generation as I mentioned continues strong and robust.

There was a slight.

Speaker 1: contribution of non-recurring results that are because of the sale of Pochiguara and Noche Capishava complex, our debt management allowed us to amortize 0.7% of our debt.

Contribution of non recurring resolved.

That are because of the sale of what your gladden, our Chicopee Charver complex arm that management from allowed us to.

To amortize 0.7.

Millions of dollars.

Speaker 1: And these are data, this is data that is aligned with the market in reality in oil and gas. PetroVise has presented one of the best results despite an adverse scenario. Now when we talk about our debt, there was a slight

And these are data. This is data that is aligned with the market in reality and oil and gas petrol that ice has presented one of the best results. Despite an adverse scenario now when we talk about our debt.

Sergio Caetano Leite: Now, when we talk about our debt, there was a slight spike in our total indebtedness because of the freight of Anna Nery and Almirante Barroso. Our financial debt maintains its dropping trajectory. We've lowered BRL 0.6 billion in debt. Our gross debt is within the limits that we establish and what we announced in our strategic plan. Now, our next slide. Now, portfolio management. This is a constant question mark from investors. We have a dynamic portfolio in Petrobras, so this means that we are going to work with this divestment, with investments, and with partnerships. There are assets that are of interest, and we can do this through partnerships. All our portfolio is being reassessed under a different view. This is a long-term view.

Sérgio Caetano Leite: Now, when we talk about our debt, there was a slight spike in our total indebtedness because of the freight of Anna Nery and Almirante Barroso. Our financial debt maintains its dropping trajectory. We've lowered BRL 0.6 billion in debt. Our gross debt is within the limits that we establish and what we announced in our strategic plan. Now, our next slide. Now, portfolio management. This is a constant question mark from investors. We have a dynamic portfolio in Petrobras, so this means that we are going to work with this divestment, with investments, and with partnerships. There are assets that are of interest, and we can do this through partnerships. All our portfolio is being reassessed under a different view. This is a long-term view.

There was a slight.

Speaker 1: fight in our total indebtedness because of

Spike in our total indebtedness because.

The freight of an annuity and I'll need them chip Bowser, but our financial that men paints, it's dropping trajectory, we drop we lowered 0.6% million in debt. Our gross debt is within the limits that we stablish and what we announced at an hour.

Speaker 1: the freight of Ananeri and Almeida to Bajoz, but our financial that maintains its dropping trajectory, we drop, we've lowered 0.6 million in debt. Our gross debt is within the limits that we establish and what we announced in our strategic plan. Now our next slide.

Strategic plan now our next slide.

Now part of Folio of management.

Speaker 1: This is a question, this is a constant question mark from our investments. We have a dynamic portfolio in Petrobras, so this means that we are going to work with this divestment, with investments and with partnerships. We, there are assets that are of interest and we can do this through.

This is a question. This is a constant constant question Mark from our investments we have a dynamic portfolio in Petrobras. So this means that we are going to work with this.

Divestments with investments and with partnerships we.

There are assets that are of interest and we can do this through.

Partnerships. So all our portfolio is being re assessed under a different <unk>.

Speaker 1: partnerships. So all our portfolio is being reassessed under a different view. This is a long-term view.

This is a long term view.

Sergio Caetano Leite: In addition or aligned with what we announced regarding the signed contracts for divestments, they remain. There are fields, Albacora Leste, that was sold in Q1. We have Norte Capixaba cluster or complex or Potiguar complex. Now, in terms of cash inflow generated from these divestments until June 2023, we're talking about the end of Q2. Well, this was $3.5 billion. Well, our net results reflect the stringency of the market, the drop in Brent, and the appreciation of the dollar vis-à-vis the dollar. What is important is the crack spread of the diesel. The market is being pressured by the low offering of Russian diesel, dropping 40%. Well, higher operating expenses, $0.4 billion, and this has been reduced when we compare it to other quarters.

Sérgio Caetano Leite: In addition or aligned with what we announced regarding the signed contracts for divestments, they remain. There are fields, Albacora Leste, that was sold in Q1. We have Norte Capixaba cluster or complex or Potiguar complex. Now, in terms of cash inflow generated from these divestments until June 2023, we're talking about the end of Q2. Well, this was $3.5 billion. Well, our net results reflect the stringency of the market, the drop in Brent, and the appreciation of the dollar vis-à-vis the dollar. What is important is the crack spread of the diesel. The market is being pressured by the low offering of Russian diesel, dropping 40%. Well, higher operating expenses, $0.4 billion, and this has been reduced when we compare it to other quarters.

Speaker 1: In addition, or aligned with what we announced regarding the signed contracts for divestments, they remain. There are fields, La Baccora Leste, that was sold in Q1. We have Noche, Capitada, Cluster or Complex or Potiguar Complex. Now, in terms of cash inflow,

In addition, or aligned with what we announced regarding the signed contracts for divestments. They remain there are fields Lal Backorder less Gee that was sold.

In Q1, we have nurtured coffee shop, a cluster or complex or what your water complex now in terms of cash inflow.

Generated.

Speaker 1: generated from these divestments until June of 2023. We're talking about the end of the second quarter. Well, this was $3.5 billion.

From these divestments had until June of 2023, we're talking about the end of the second quarter. While this was $3 $5 billion.

Okay.

Well our net results.

Speaker 1: Well, our net results reflect.

Reflect.

Okay.

Speaker 1: The stringent of the market, the top of the branch and the appreciation of the dollar, the Zabita dollar, what is important is the crack spread of the diesel. The market is being pressured by the low offering of Russian diesel dropping 40 percent that will hire operating expenses. The price is $1.4 billion.

The stringent ness of the Mark is the job of the branch and the appreciation of the dollar vis vis the dollar what is important is the.

Crack spread of the diesel the market is being pressured by the low offering of Russian diesel dropping 40% well higher operating expenses point $4 billion.

Speaker 1: and that this have been reduced to when we compare it to other quarters.

And this has been reduced to when we compare it to other quarters.

Sergio Caetano Leite: Now what we give back to society, this is part of our ESG program. It is highly consistent and strong. We give back to society in terms of taxes, and we gave back BRL 56.1 billion. Another important fact was that we reviewed the shareholders' remuneration policy. In this policy review, we will maintain important aspects that will guarantee the financial soundness of the company, the control of the debt. We maintain the same periods. We continue with the same guidance of indebtedness. We have a reference, we have our gross debt, and how we pay out quarterly our dividends. We've reformulated our formula going from 60% to 45% of free cash flow designated to dividend payout. This level is in line with the major worldwide enterprises up here, considering independent enterprises and also state companies. Remuneration to shareholders.

Sérgio Caetano Leite: Now what we give back to society, this is part of our ESG program. It is highly consistent and strong. We give back to society in terms of taxes, and we gave back BRL 56.1 billion. Another important fact was that we reviewed the shareholders' remuneration policy. In this policy review, we will maintain important aspects that will guarantee the financial soundness of the company, the control of the debt. We maintain the same periods. We continue with the same guidance of indebtedness. We have a reference, we have our gross debt, and how we pay out quarterly our dividends. We've reformulated our formula going from 60% to 45% of free cash flow designated to dividend payout. This level is in line with the major worldwide enterprises up here, considering independent enterprises and also state companies. Remuneration to shareholders.

Speaker 1: Now what we give back to society, this is part of our ESG.

Now what we give back to society.

This is part of our ESG.

Program It is highly consistent and strong.

Speaker 1: program, it is highly consistent and strong. We give back to society in terms of taxes and we gave back 56.1 billion BRLs.

We gave back to society in terms of taxes, and we gave back 56.1 billion be our house.

Okay.

Another important fact was.

Speaker 1: Another important fact was.

Speaker 1: We reviewed the shareholders' remineration policy. In this policy review, we...

We reboot re review the shareholders' remuneration policy in this policy review them.

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Speaker 1: We will maintain important aspects that will guarantee the financial soundness of the company, the control of the dot. We maintain the same periods. We continue with the same guides of indebtedness. We have a reference. We have our gross debt.

We will maintain important aspects that will guarantee the financial soundness of the company the control of the Dod we maintained the same periods. We continue with the same guides of indebtedness. We have of reference we have our grass that.

Yeah.

Speaker 1: and how we pay out quarterly our dividends and we've reformulated

And how we pay out quarterly our dividends and we've reformulated.

Okay.

Our formula.

Speaker 1: going from 60% to 45% of free cash flow designated to dividend payout. This level is in line with the major worldwide enterprises. I'm here considering inter independent enterprises and also state companies.

Going from 60% to 45% of free cash flow Destiny, two dividend payout. This level is in line with the major worldwide enterprises up here considering enter it in.

Independent enterprises and also state companies.

Speaker 1: remuneration to shareholders I would like to highlight the main date that we're already announced to the market here for the second quarter remuneration the base data will be August 21st. The first tranche will be paid of 20 the person will be paid November 21st and the second December 15th we continue controlling our debt using

Remuneration to shareholders I would like to highlight the main dates that were already announced to the market.

Sergio Caetano Leite: I would like to highlight the main dates that were already announced to the market here for the Q2 remuneration. The base date will be 21 August. The parcel will be paid November 21 and the second December 15. We continue controlling our debt using capital principle that is part of the guidance of the company. We continue committed to generate and to distribute value. Now, our buyback program. Well, Petrobras is one of the companies that communicates most with the market in Brazil and abroad. These are the shares that are mostly traded abroad. What we do have impacts, and this is why we have to be careful. Therefore, our buyback program will start in a conservative fashion. We will buy 157.8 million preferred shares.

Sérgio Caetano Leite: I would like to highlight the main dates that were already announced to the market here for the Q2 remuneration. The base date will be 21 August. The parcel will be paid November 21 and the second December 15. We continue controlling our debt using capital principle that is part of the guidance of the company. We continue committed to generate and to distribute value. Now, our buyback program. Well, Petrobras is one of the companies that communicates most with the market in Brazil and abroad. These are the shares that are mostly traded abroad. What we do have impacts, and this is why we have to be careful. Therefore, our buyback program will start in a conservative fashion. We will buy 157.8 million preferred shares.

Here for the second quarter remuneration the base data will be August 21st the first tranche will be paid out of.

<unk> 'twenty the Purcell will be paid November 21st and the second December 15, we continue controlling our debt using cap.

Capital principal that is part of the guidance of the company and we continue committed to generate and to distribute value.

Speaker 1: capital principle that is part of the guidance of the company. And we continue committed to generate and to distribute value.

Now our buyback program as well.

Speaker 1: Now our buyback program. Well, Petrobras is one of the companies that communicates most

<unk> is one of the companies that communicates most.

With the market in Brazil and abroad that these are the shares that are mostly traded abroad. What we do have impacts and this is why we have to be careful there.

Speaker 1: with the market in Brazil and abroad. These are the shares that are mostly traded abroad. What we do have impacts, and this is why we have to be careful. Therefore, our buyback program will start in a conservative fashion. We will buy 157.8 million preferred shares.

Therefore.

Our buyback program will start in a conservative fashion, we will buy a 157.8 million preferred share.

Sergio Caetano Leite: This will be done with preferred shares, which represent a small amount of these free float. That would be 3.5%. This is a pilot program, will last around 12 months. We expect to conclude this, we believe that this will not cause major price fluctuation, and it's the first share buyback program that Petrobras will use to remunerate their shareholders. They can be bought in parcels. With this, the main highlights. Here you can see more in our IR sites. Now I will give the floor to Mauricio Tolmasquim, Chief Energy Transition and Sustainability Officer.

This will.

Sérgio Caetano Leite: This will be done with preferred shares, which represent a small amount of these free float. That would be 3.5%. This is a pilot program, will last around 12 months. We expect to conclude this, we believe that this will not cause major price fluctuation, and it's the first share buyback program that Petrobras will use to remunerate their shareholders. They can be bought in parcels. With this, the main highlights. Here you can see more in our IR sites. Now I will give the floor to Mauricio Tolmasquim, Chief Energy Transition and Sustainability Officer.

Okay.

Speaker 1: This will be done with preferred shares which represent

This will be done with preferred shares which represent.

Speaker 1: a small amount of these free floats that would be

A small.

The amount of these free float that would be.

Speaker 1: 3.5% and this is a pilot program will last around 12 months. So we.

3.5% and this is a pilot program will last around 12 months. So we expect.

Two.

To conclude this we believe that this will not cause major price fluctuation and it's the first share buyback program that.

Speaker 1: To conclude this, we believe that this will not cause major price fluctuation and it's the first share buyback program that Petrobras will use to remunerate their shareholders so they can be bought in parcels.

Petrobras will use to remunerate their shareholders. So these.

So they can be bought in parcels.

So with this the main highlights.

Here you can see more in our IR sites and now I will give the floor to minorities Sue Thomas skiing.

Speaker 1: Here you can see more in our sites and now I will give the floor to Mauricio Tomas-Keen.

Chief sustainability and transition office Sir.

Speaker 1: Chief Sustainability and Transition Officer.

Okay.

Sure.

Okay.

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