Q2 2024 Petroleo Brasileiro SA Petrobras Earnings Call

Operator: 4. It's a pleasure to have you here. This event will be held in Portuguese, but it is being simultaneously translated into English. You may access the links to both languages on our investor relations website. All participants will be in listen-only mode during the company's presentation, and after that, we will have a question and answer session. You may send your questions via email, petroinvest@petrobras.com.br. We have with us Clarice Coppetti, Executive Director of Corporate Affairs, Cláudio Schlosser, Executive Director for Logistics, Commercialization and Markets, Fernando Melgarejo, Executive Director of Finance and Investor Relations, Mario Spinelli, Executive Director for Governance and Compliance, Maurício Tolmasquim, Executive Director for Energy Transition and Sustainability, Renata Baruzzi, Executive Director for Engineering, Technology and Innovation, Wagner Victer, Executive Director for Production and Processes, and William França, Executive Director for Industrial Processes and Products. We also have other executives from the company with us.

Magda Chambriard: We will begin with a video bearing a message of our CEO, Magda Chambriard. Good morning, everyone. I want to thank investors, analysts, and the entire audience that joined us today. Concerning the results of Q2 2024, I can say that they were very solid and occurred as expected. A non-recurring event, such as the tax agreement with the Ministry of Finance, brought significant advantages to the company and to the Federal Union that were recognized by the market. Moreover, the strong exchange rate volatility in the period with no impact on the company's cash flow or equity affected our internal accounting, impacting the quarterly results.

Operator: Since our CFO, Fernando, will present our results in more detail, highlighting our free cash flow, net income, and the recurring and non-recurring event that influenced our results, I will take this opportunity to talk about the future we envision for our company. Ladies and gentlemen, our top priority is to pave the way for Petrobras to be enduring and as relevant or even more so to Brazil than it is today. This will only be possible if we continue to grow efficiently and with profitability. This means that we must be agile with full adherence to operational safety, people, and established governance rules. We need to be agile in maintaining our track record of replenishing reserves, while on the path to net zero, we seek more sources of clean energy. It's important to note that without the replacement of oil and gas reserves, Petrobras would be doomed to failure.

Operator: All our achievements have been conquered through technological capabilities and our employees' firm willingness to overcome challenges and surpass the countless difficulties inherent to offshore exploration and production with safety and respect for the environment. These efforts culminated in the transformation of the pre-salt operation into an undeniable wealth for Brazil. Ladies and gentlemen, although there are still exploration opportunities in the pre-salt and southeast basins, we cannot forego the responsible exploration of the Brazilian Equatorial Margin basins. It is essential for both Petrobras and Brazil that we obtain the license to drill exploratory wells. This is because if the potential of the area is confirmed, our society will see undeniable results in employment and income. In addition to the Equatorial Margin, we need to continue exploring the Pelotas Basin, another promising area in the south of Brazil.

Operator: We're also on the lookout for opportunities in foreign territories, especially in South America and the Atlantic basins of Africa. We recall that last weekend we discovered natural gas off the coast of Colombia in a block with high potential for new discoveries. Ladies and gentlemen, it is our agility and skills that will allow us to initiate production this year ahead of schedule at the FPSO Maria Quitéria in the Jubarte field. We have excellent, highly profitable assets, and we will apply all of our expertise to generate more value for our governmental and private shareholders. Later this year, we will also initiate operations for the Rota 3 gas pipeline, increasing the supply of pre-salt gas to the Brazilian market. Within this context, we are attentive to opportunities for expanding the gas market, which include its use both as fuel and as raw material.

Operator: We will seek to resume fertilizer and petrochemical operations, which add value to our natural gas production. Our long-term vision focuses on investments in E&P and the pursuit of diverse renewable energy sources. These two elements are essential to ensure the company's growth and profitability in the coming months. To our investors, we guarantee respect for business logic, transparency, and our governance, which is recognized as above average for companies in Brazil, including oil companies operating in our country. We guarantee capital discipline and controlled leverage. We ensure that we will do this by considering the investments necessary for the company's growth and the demand from state and private shareholders for dividends. We understand that in this way, we will be contributing to stimulating the country's economy and meeting the expectations of our shareholders.

Operator: Lastly, I thank you for your attention and trust, and emphasize that we are firmly committed to maintaining an open dialogue with transparency to demonstrate the relevance of the choices we will make to build an even more solid and profitable company. Thank you very much. Thank you to Magda, our CEO. We will now begin our presentation on the results for Q2 2024. Our second slide presents our usual disclaimer about forward-looking statements. We'll now hand it over to our financial and investor relations officer, Fernando, who will continue. Go ahead, Fernando. Good morning, everyone. It's a pleasure to have you here with a discussion on our results for Q2 2024. As we just heard, we are in a growth journey.

Operator: This is our vision, and that's why all of our team here, our top brass and our employees, have stuck to this journey to become more relevant for our society and provide the right dividends and returns to all stakeholders and shareholders. Here we have our operational highlights. I would like to underscore a few of them. We delivered in Q1 2024 the planned production for the first two quarters of the year. In the last 12 months, our oil and gas production went up by about 2.4%. The contribution of the pre-salt in Q2 2024 reached 81% of the company's total oil and gas volume, so new production systems will be important for our growth.

Operator: Marechal Duque de Caxias has the capacity of producing 180,000 barrels of oil and compressing 12 million cubic meters of gas per day. FPSO Maria Quitéria arrived last Monday and will be redirected to the Jubarte field. It can produce 100,000 barrels of oil and 5 million cubic meters of gas per day. Almirante Tamandaré in Búzios has left the shipyard in July and is expected to arrive in Brazil later this year. It will be the first high-capacity unit for Petrobras, and its potential is 225,000 barrels of oil per day and 12 million cubic meters of gas. It's expected to start operations next year.

Operator: All of these units are part of a new generation of more efficient platforms with a nominal capacity of about 400,000 barrels a day, which is 15% of our current production. As you can see, we have good future perspectives, so we can start a new growth cycle. On refining, we have maintained a high level of processing with a utilization factor above 90%, about 91% to be exact, in Q2, and with the highest sale of byproducts than the previous quarter. We had a better performance with diesel, gasoline, QAV, reaching about 70% of the total volume produced. This demonstrates our continuous efforts, efficiency, and versatility in the processing plants. Another piece of good news is that processing plants are in the final stage.

Operator: In August, we will have a milestone for this work, which is starting reverse pressurizing of the pipeline, equalizing the pressure from the deep and shallow layers. They are already in operation. We expect to see the first commercial gas in the third quarter. The Rota 3 pipeline, which includes UPGN, is strategic for Petrobras and for the entire country because it will allow 21 million cubic meters of natural gas to be processed, which will increase the offer of natural gas to the Brazilian market, reducing imports of GNL. This was essential for the results we will see on the next slide.

Operator: We sustained consistent results with robust cash generation, reaching the lowest financial debt level since Q3 2008, 16 years ago. Our CapEx increased by 12.5% this quarter in comparison to last year. Later on, we will discuss some events that were excluded from the first half of 2024, which are essentially in accounting and that have only a residual impact to the company's cash. Excluding these events, our net income was $5.4 billion. Our EBITDA was $12 billion, and operating cash flow was around $10 billion, in line with the previous quarter. We would also like to highlight that this quarter, the ANSA operation resumed, allowing the reversal of an impairment loss.

Operator: Finally, concerning our contribution to society, we had a 24% increase in tax payments in comparison to Q2 2023. It's always important to highlight that over half of the company's cash generation is being paid back to society. In Q2 2024 alone, we had BRL 70 billion in taxes paid to the federal, state, and city governments. It's a significant and expressive contribution from the company to all of society. The next slide shows one-off events that impacted this quarter, especially our accounting results, with only a residual cash effect, as we mentioned before. In Q2 2024, we saw a significant exchange rate variation, as you were able to see.

Operator: A depreciation of 11% of the Brazilian real versus the US dollar, which led to a negative impact of $2.3 billion. It's important to note that this impact took place due to a dollar obligation between Petrobras companies, which does not generate a true effect to our company. This is accounting only. We also complied to a tax transaction, and this was widely communicated, which resulted in an expense of $2.1 billion, and that settled major legal disputes totaling BRL 45 billion. From an economic perspective, this was a very advantageous negotiation for the company, and other companies in our industry are also entering this program. We also had other one-off events of about $1.3 billion. This led to an accounting loss of $300 million.

Operator: Writing off these events, our net income was $5.4 billion, which is the same that we had in Q1 2024. The next slide shows that we have reached an expressive result in EBITDA and operating cash flow. Excluding these one-off events affecting our quarter, our EBITDA reached $12 billion, in line with what was reported last quarter. Operating cash flow was around $10 billion, also in line with the previous quarter. We had a significant change in the foreign scenario, a reduction of 34% in diesel crack spread from $30 in Q1 to $20 in Q2 2024, and this is per barrel. Slide eight shows our cash flow generation. It remained consistent. We had a positive free cash flow of...

Operator: A positive cash flow generation of $9.1 billion and a positive free cash flow of $6.1 billion. This was enough to sustain our investments and financial investments. We also were able to pay out dividends throughout the quarter. As you can see on the right-hand side of the graph, we use our cash to pay dividends as approved in the previous quarter, of around $7.3 billion, including share buybacks. We also made $2.9 billion in investments and made payments of leasing and liabilities of $2 billion. Net financial debt amortizations were $700 million and financial expenses accounted to $400 million. Our CapEx totaled $6.4 billion in the first half of 2024, 12% higher than the first half of 2023.

Operator: We project to end 2024 with investments ranging from $13.5 to 14.5 billion, which is an increase of 7% to 15% compared to 2023. It's important to note that this revision has no impact in the company's production curve. Slide 9 discusses our financial debt. It has reached its lowest level since Q3 2008. We are now at BRL 26 billion, a reduction of 2.5 billion versus the previous quarter. Gross debt went down to BRL 59.6 billion. Our cash position is robust, and we have reached over BRL 13 billion at the end of the quarter.

Operator: We concluded the quarter with a spread to the US Treasury rate of 2.2, the lowest in the last years, and an average debt maturity of nearly 12 years. The next slide shows our commitment to shareholder remuneration and financial sustainability. Our board recently approved dividends and interest on own capital for Q2 2024 of BRL 1.05 per share, which will be paid in two equal installments in November and December 2024. Shareholder remuneration for the second quarter is BRL 14.3 billion, and this includes share buybacks amounting to BRL 700 million and dividends plus interest on capital of BRL 13.6 billion. Our strong cash generation has allowed us to pay these dividends according to our current policy.

Operator: The next slide shows an accrued vision for this half, in which dividends exceed our results due to these one-off events that had a residual impact on cash. This has allowed us to comply with our shareholder remuneration as we have paid investments, taxes, salaries, and so on. We are using our capital reserve created in 2023 to ensure resources for dividend payments, among other things, helping to balance eventual gaps between cash and earnings. In 2023, our results were above our cash, which was enough to pay dividends and constitute a remuneration reserve. This half of the year, we had the opposite situation, now we are using the reserve for what it was created. To speak in numbers, in the April General Assembly, we approved BRL 21.9 billion to this reserve.

Operator: Considering we had BRL 27 billion and the available cash of BRL 20 billion, we are using BRL 6.4 billion from our remuneration reserve to pay dividends and interest on our own capital. The balance remains relevant, BRL 15.5 billion. We continue with the next and final slide. Here we can see how we were able to have a total shareholder return above the majors. Despite these advances, we still have a gap on enterprise value to EBITDA. This is an opportunity for the company, so we have to continue working to deliver value through growth and profitability with discipline, especially in capital and governance. We see many opportunities for Petrobras. We have profitable projects, we can expand our production, decarbonize it, and also provide more value to our shareholders and to Brazil.

Operator: This concludes my presentation, and I will now pass it over to Eduardo, who will begin our questions and answer session. Thank you, everyone.

Operator: Thank you, Fernando. We'll start the Q&A session. I kindly ask each participant to ask at most two questions so that we can have as many participants asking their questions in the session as possible. The first question comes from Bruno Montanari from Morgan Stanley. Over to you, Bruno. Good morning, and thanks for accepting my questions. My first question is about the compensation to shareholders and thinking about a decision where we're potentially gonna be paying more extraordinary dividends. What's the company's perspective for the best moment to make this decision? Would you wait until the end of the fiscal year, or could we think about a payment after the closing of the first or the third quarter of 2024, where the cash flow must be very high?

Fernando Melgarejo: Concerning compensation to shareholders, the company concluded very successfully the pilot purchasing program. How successful was the compensation strategy? Should we expect maybe a bigger buyback program? My second question is about international exploration. Could you talk about the strategic fit of potentially diversifying the exploration portfolio, such as, for instance, in Namibia's basins? Potential disbursements with these acquisitions, are they considered in the investment plan? My question is because expenses with exploration add up to approximately $1.3 billion. This could be small. These are the same opportunities that we can see, such as the case of Namibia, for instance. Thank you. Thank you, Bruno. I'll ask Fernando to answer these questions. Over to you, Fernando.

Operator: Thanks, Bruno. I think you mentioned an important aspect that we have to clarify. A lot's been discussed about that, so I'll take the opportunity to clarify about how the reserve works. Having a reserve does not mean that we have cash flow. It's an accounting reserve. It's different concepts in that regard. The reserve is an accounting provision that's associated to the allocation of profit and in the fiscal years. We know that there is no perfect correlation between the generation of profit and cash generation. These are different concepts. They can happen differently. Last quarter, we had a low profit, but we maintained the cash flow generation stable. I'd like you to understand that when you decide to pay dividends, whatever they are.

Fernando Melgarejo: We consider the company's cash flow and the capacity to generate the flows in the future and not to the reserve. In 2023, Petrobras had more profit than what it paid in dividends, as I showed in the pre-presentation, and that's why it created a BRL 21.9 billion reserve. The opposite happened in Q2 due to the losses of the quarter, due to exclusive items associated to a strong cash flow generation. We used the reserve to subsidize payments. By the way, I wish to remind you that this possible mismatch between the profit and cash flow were served as a motivation for the creation of the reserve in 2023. If we didn't have a reserve today, it would be difficult to pay the quarterly dividends for us since our dividends amounted to BRL 27 billion, and the profit was BRL 20 billion.

Fernando Melgarejo: It's a difference of approximately BRL 6 billion, and that's why we resorted to the reserve. About the decision, to us, it's just natural to assess it when we approve the strategic planning once the extraordinary payments depend on future flows and not the capital compensation reserve. To highlight, the decision to use the reserve yesterday will not affect our capacity to pay the extraordinary dividends. About the buyback program, we have had no formal discussion about that. We completed the program in August at almost $1 billion. What we're doing now, I asked my team to assess the real effectiveness and efficiency of the capital for that operation. To your second question about Namibia, our intention is to diversify the portfolio, and that's key for the growth of the company.

Fernando Melgarejo: As a reminder, according to the current strategic planning, we have an expectation to reduce production as of 2030. I consider that that's far from ideal, and therefore, we need to make efforts in Brazil or in the equatorial margin, in Pelotas Basin or abroad to have an adequate profile for long-term production. I wanna emphasize that we'll only enter into agreements at adequate prices. We wanna generate value with our experience in deep waters. About the CapEx, as you mentioned, we have not published how much we have allocated for bids and et cetera, because that's a business secret. From a practical perspective, the lack of allocation will not prevent us from leveraging opportunities. Of course, we'll assess every opportunity we have as long as they adequately reflect the allocation of capital.

Vicente Falanga Neto: We just need to keep the yearly budget stable. Thanks, Fernando. Now, Vicente from Bradesco, you have the floor. Thanks to you and Fernando and everybody for your attendance. I have two questions. We're now entering a period of higher demand for diesel, and apparently, Russia is prioritizing the supply of other markets. I think the shipments to Brazil are decreasing. What's Petrobras strategy to supply diesel to Brazil in Q3? Are you going to work along with other importers, or not? The second question I'd like to understand, from a technical standpoint, what based the decisions to change the ANP agency? Can we expect anything different for the development programs, especially if we think about costs? Thank you. Well, I'll ask Director Schlosser to answer your first question. Schlosser, please. Good morning, Vicente.

Fernando Melgarejo: You did a perfect analysis. We have a seasonality in the second half of the year, which is related to an additional consumption of diesel, whether it is to the crops in Brazil or due to stock formation in the north. There's a bigger pressure on diesel, definitely. About the supply, Petrobras is not the only company that supplies to Brazil. We have private refineries, petrochemical companies. We have importers that also operate in this market. Let's talk about planning. What we do is a multi-annual planning, knowing that there is a certain seasonality, and it is recurrent every year. Our plan already provides for a series of measures. The most important one is about the downtimes, the maintenance downtimes.

Fernando Melgarejo: We try to allocate them to periods where the demand is a little lower, like January, for instance. We also do active management of our inventories. Knowing about this demand fluctuation, we try to take advantage from our exports of byproducts to Asia. We also, using the backhauling, send back diesel to replenish the inventories. He also talked about the Russian diesel and its prioritization by the domestic market. We do not import diesel from Russia, so it will not affect our plans. We're fully prepared to cater to the demands of our customers. Thanks, Schlosser. Good morning. Vicenti, it's a pleasure to speak to you and everybody that's watching this conversation.

Fernando Melgarejo: Well, from the perspective of the forming new teams in the exploration and production department, we have decided to replace some executive managers. Petrobras has a very solid process whereby it educates and trains its workforce. Historically speaking, it has always trained excellent workers. The new director, and she's the one that makes the decisions about the new management positions, especially the executive managers and general managers. She is a geologist with 40-year experience, and she participated in many discoveries and of the company. The fact that the company selected her for this position in itself indicates that the company wishes to expand its portfolio of reserves. When she sets up a team, she chooses experienced professionals that basically come from the technical staff of the company.

Fernando Melgarejo: If we take, for instance, the two new representatives of deep and ultra-deep waters, one of them will remain in his position. Paulo Marinho that's been with the company for 20 years, and Cesar has been with the company for 22 years. If you talk about E&P, there is Jean Nilton, geologist, extremely renowned, with a 37-year experience with the company. Genaldo that's replacing Bruno, he's also an acknowledged professional in several areas. He's a professor in several departments, and he has 21 years of experience. Saive, I have a 37-year experience, and Bruno, he has a 20-year experience. Professor Eduardo, that he been working as a consultant to the presidency, has a fantastic experience with a PhD, and he's a reference not only for the internal market but also for the foreign market.

Fernando Melgarejo: It's an extremely robust team and a very solid one, and we basically have professionals with long-term experience. If we draw a parallel with the law of S.A.s in Article 17, they can certainly occupy positions as directors or higher in any state-owned company of Brazil. It's a very robust team that's been widely discussed by Director Silva and President Magda. About Búzios, to your point, I spent this morning at our operations center already, and right now we have a platform with programmed downtime, and we're producing thousands of barrels of oil, and we'll reach a record-breaking production that's in excess of 800,000 barrels. We expect to ramp up from Almirante Barroso. We received authorization for additional production vis-à-vis the original project.

Fernando Melgarejo: With the arrival of Almirante Tamandaré that's underway, it left China a week ago, we are going to incorporate a big platform to the Búzios system with a processing plant of 225 barrels. What we have ahead of us is extremely promising, especially for Búzios. As soon as the platform arrives, we're thinking about initiating an internal motivational process to move towards 1 million barrels of oil in Búzios, within a timeframe that's to be defined. It's quite promising with robust teams, with extremely acknowledged professionals, especially with deep knowledge about the market trained by Petrobras, and that's acknowledged by the internal body of the company. Thanks, Victor. On to the next questions from Pedro Soares, BTG Pactual. Pedro, over to you. Good morning, everyone. I have two questions.

Pedro Soares: The first question goes to Fernando. I think you were very clear when you explained that extraordinary dividends are not attached. Your decision about them is not attached to the reserve itself, but rather the cash flow of the company in the context of what you forecast for investment. Maybe you could explain to us what you imagine were an ideal cash flow for the company to the $13 billion seem to be above or below, so that we can try to have a better understanding about the expectations for the extraordinary moving forwards, given that your investments are apparently very well funded by the quarterly cash flow generation. About production, I'd like to hear from you about the July production levels.

Fernando Melgarejo: We're a bit in the dark, as it were, with the daily information from ANP. Also, how long will it take us to normalize and to go back to normal in the exit rate for 2024? That's it. Thank you. Thanks, Pedro. First of all, give the floor to Victor, who'll talk about production, and then Fernando will talk about the cash flow. Well, about production, we're working within the projected levels, and this is our perspective up until the end of the year, to work within the limits of our business plan. At 3.8 billion oil equivalents, we're within average, and we'll certainly attempt to remain as such up until the end of the year. We really had a few hindrances to the production curve forecast for July.

Fernando Melgarejo: A few downtimes that are being postponed. Like I said, the P-74 and some occurrences, some incidents that we had that we are correcting. We had a downtime at P-38 due to an unforeseen problem. The measures are being taken, and we're in a process of recovery, and I believe that in 30 or 45 days, that will go back to normal. P-53 also was faced a problem, and it's being solved. P-53 ANP is being solved already. We also had a problem with the whaler at Broncodor. These issues will be compensated. They've already been considered according to our expectations. Of course, we always work within the margins of our business plan. As I said, we also have positive perspectives for production, not only July, but also next year.

Fernando Melgarejo: Based on our risk department, especially this growth that we're having at Almirante Barroso. With Almirante Barroso, there's also the arrival of Maria Quitéria to the Jubarte fields. We'll probably anticipate that vis-a-vis the previously existing business plan. Maria Quitéria is already moving to its location in Espírito Santo, and there's Almirante Tamandaré that's arriving. We'll make every effort with the team to anticipate that vis-a-vis the business plan. We did have some incidents that were, of course, unforeseen, and that's just part of our activity, our relationship with the control agencies and to maintain the safety levels. That's fundamental. We also had positive incidents that will put us back on track. Thanks, Wagner. Well, about the optimal or optimized cash flow. Thanks for the question.

Fernando Melgarejo: I think this is a discussion in finance, in the finance department of any institution, we're constantly discussing. It's a living organism that depends on the current scenario and the investment scenario. If you're divesting or investing or if you're going through a flat period inside the company, all that interferes with the ideal cash flow size that we will try to achieve for the company that we call an optimized cash flow. Of course, this is not an accurate number. We always work with a range, and we use every piece of information we have in terms of flows, inflows, outflows. Strategic planning is an important input that we need to have access to because this is what generates the biggest outflow. There's also the operational resources.

Fernando Melgarejo: We feed all of that into a modeling, and we add stress situation data, and its size is a size that's able to support or to withstand high impacts in unexpected events with low probability. High impact, low probability events. You have to be able to have a plan that will allow you to have enough cash flow to withstand that situation. You're talking about the tail of a curve, statistically speaking, and these tests have been modeled very robustly at Petrobras. When I came to Petrobras, I was dedicated to understanding that. I was truly happy about the modeling that we have, and it's in this sense that we're trying to achieve that.

Gabriel Barra: The curve has reached 13.5 now, and there were some points in the past where we reached BRL 8 billion. We have a metric, which is a number that we don't publish, but we're, we understand that optimization is not working a hundred percent yet, but by 2025, we're gonna get there. Thanks, Fernando. Gabriel Barra from Citi. Gabriel. Thanks, Naji and Fernando. I'm going to focus on my two questions, picking up on the conversation about internationalization, lots been said about licensing and Magda, she mentioned that the equatorial margin and Pilões are very important for the company, but we've been seeing some delays in obtaining the licenses. My question is, would internationalization be a B plan to mitigate these impacts or delays regarding Pilões?

Fernando Melgarejo: Is it a structural plan of the company? If so, how should we think about it moving forward? About CapEx, maybe that's the question that received the most this morning. There's a lot of questions about the shape of the curve of investments. If there was a decrease in the guidance for this year and if without the decrease in production, or did it have a little bit more of fat than it should, or did the company gain efficiency over time and it's now adjusting for it? It's two questions actually. One, if we look at the lower CapEx, would that be postponed to next year, or is it really an efficiency gain?

Fernando Melgarejo: The shape of the curve of investments moving forward, should that be modified given that we're being more conservative in terms of the investment plans of the company, especially about the upstream, and how would that communicate with the slightly tighter industry in terms of contracting FPSOs and vessels, and how can we expedite that in the next few years? Those are my questions. Thank you. I'll give the floor to Fernando about CapEx and maybe Victor. Thank you, Gabriel. Our plan last year was really $18.5 billion, and now it's between $13.5 and $14.5 billion. It's still too early. We're still in the middle of the strategic plan. It's still early to accurately say what the final amount's gonna be.

Fernando Melgarejo: What I can tell you is that we're gonna try to deliver a CapEx that's realistic and that provides growth for the company. Our CapEx for this year is higher than the CapEx for last year, and certainly, the one for next year is gonna be higher than this year's CapEx. I can guarantee that to you. We need our plan, and that's what we are trying to do. We need to have an efficient and effective CapEx that brings about an increase to our production curve. Now talking about the latest news and licensing, it's just obvious that our strategy is to focus on the replacement of reserves. We've been declaring that. President Magda Chambriard, since she arrived, she's been talking about the replacements of reserves.

Fernando Melgarejo: We're not comfortable with the previous strategic planning that shows a reduction as of 2030. We're trying to revert that. Each drop of oil matters to us, and that's why we're going to analyze any opportunity that is economically feasible. It needs to bring about a generation of value to the shareholders. About the Equatorial Margin, of course, the fewer opportunities we have in Brazil, the greater the need to go international. Of course, if you want to supply the energy needs of the country, you need to go beyond our borders, and we will do that if necessary. With the purpose of catering to the domestic demands for electricity at least. I'd like to reinforce the importance of the Equatorial Margin. We'll move forward with the licensing process.

Fernando Melgarejo: It's a moment for exploration, not production, but our expectation is pretty high. We're pretty optimistic about the exploration and that we will have a positive production. About the licenses, we are also quite positive in that, we're very close to being granted the licenses, and we feel really optimistic. That's as it should be, right? Wagner Victer, you wanna add anything? Yes, certainly. What I would like to add is that last week we had a meeting, and when we start talking about the behavior of CapEx, it is the planned CapEx. We had this meeting, and we opened the curves. So when you analyze the CapEx, you can analyze it as a whole or for specific periods. We started opening up the curves platform by platform, including Búzios.

Fernando Melgarejo: We saw that sometimes the physical progress is much higher than the current progress. As Gabriel said, it could be seen as a gain of efficiency. Oftentimes, the fact that the CapEx is a bit lower, this does not always represents a delay related to the process. There is also a way to recompose the acceleration of the CapEx. What we can see platform by platform is that we have the physical behavior of the platform, and of course, the deadlines are readjusted for each review of the business plan, but the behavior of the physical curve is above that of the financial curve.

Fernando Melgarejo: Of course, this learning will be used in the future for new bidding routes because we effectively always attempt to have a physical behavior very close to that of the financial behavior, which influences the future prices and all that. Director Renata can also maybe add something about the meeting. Good morning, I wanna thank everybody that's attending. Like Victor said, the most important factor preventing us from realizing the CapEx was this mismatch between the financial payment with the physical milestones. We're adjusting that, and that will not get in the way of the first period. Another thing that happened was that we postponed signing the contracts of the new projects. They're outside of the horizon of the plan. They're only for 2029 and 2030, and they will not impact the oil curve now.

Fernando Melgarejo: Another aspect that had an impact on the CapEx was that we have a pool of rigs, and this pool of rigs caters to the needs of the CapEx and OpEx. The allocation of these rigs occurs by analyzing the best results for the company. We had planned much more specifically for the CapEx, but there was an opportunity around well maintenance, and we could get more oil now. We reallocated that from CapEx to OpEx. Another thing that had an impact on the CapEx was the postponement of downtimes in refineries. We're having construction works at RNEST, and we're gonna have to have some downtimes for RNEST.

Fernando Melgarejo: In order for us not to have two downtimes at the refinery, we postponed the first downtime to coincide with it with the beginning of the construction works for next year. Those were the reasons. There is no impact on the oil curve for this year. Quite the opposite, we're being able to anticipate Maria Quitéria, as you all saw. It's already in Brazil. It has already gone through customs, and it will probably go to the location in the next few days, and then it will be ready for anchoring and line connection so that we extract the first oil. As Wagner Victer had said, Almirante Tamandaré is already on its way to Brazil, and we will make every effort to be able to anticipate or to move its production forward. Basically, that's what I had.

Fernando Melgarejo: I don't know if you have any more comments. Thank you, Victor, and thank you, Fernando. Let's continue with the next question from Luiz Carvalho. Go ahead.

Luiz Carvalho: Hi. Good afternoon, everyone. Thank you for taking my question, and congratulations on your results. I have a couple of questions. The first is for Fernando. Let's go back to the capital allocation point. I'd just like to talk about rebalancing M&As, your minimal cash position that you mentioned before, and your gross debt vis-à-vis dividends. As Director Wagner Victer mentioned, the company has four units affected that will be brought into the line in the next months, and the debt for them would need to go into the balance. If the company temporarily goes beyond its gross debt limit set by the plan $65 billion, would it still be possible to pay dividends according to your 45% policy in the cash flow? And how would that impact the possibility of paying out the extraordinary dividends from 2023?

Operator: My second question is about M&As. You've discussed this, but I'd like to ask about RLAM. How are the discussions going on a transaction there? Would you intend to have controls? Would you see a possibility of having a minority stake? Would you wait for the CADE for approval? How do you deal with these M&A disbursements and the potential for dividend payouts?

Fernando Melgarejo: Thank you, Luiz. Fernando will answer your first question. Go ahead, Fernando. Thank you, Luiz. Well, it's important to clarify that ordinary dividends aren't mandatory. We have a policy that given the three conditions we set, which are having a positive accumulated result, debt under BRL 65 billion, and sustainability in the company, then dividends can be paid out.

Operator: The policy is set by CA. If we had an excess debt, then we could look into it and see what is the company's cash conditions. If this is a temporary situation or if it's structural, then we can propose payments. Luiz, I want to assure you that we don't expect our model, which is quite robust, even with random simulations. None of it says that we would go over BRL 65 billion in debt. Or excuse me, $65 billion in debt. We feel very confident in saying that there's really no risk of not having ordinary dividend payouts. For the remainder, the extraordinary payouts, we will need to study this during our strategic plan.

Operator: That's when we will have a better view of how much financing our investments require, what will be our availability, for cash, how robust our risk models will be, and that will ensure that the company is sustainable. Hi, everyone. This is William. Thank you for being here. Regarding our refinery in Bahia, I'm happy that you mentioned its name because it's one of the most significant refineries in the country's history. Yes, we are speaking to the Mubadala group about two things. First, a possible partnership. We don't know what percentage we would have with RLAM, and there's also a biorefinery plant that can be built next to the refinery. That's a possible partnership. About the refinery itself, we're concluding our due diligence process.

Operator: Evaluation, of course, looking at economic viability, integration, and the synergy with our refineries, so that in the right moment, we can make a proposal for the Mubadala group. We are concluding with our due diligence so that at the right time, we can make a proposal, and things are going well. If I can add to that answer, the importance of always. It's important to always refer back to something. It was the company that initiated the process. They came to Petrobras with a possible joint business. What does that mean? That means that any sort of possibility can happen. Nothing is set in stone. What is important here is what will give us the best return for our shareholders, the best capital allocation. That is what matters. Thank you, Fernando. Thank you, William.

Regis Cardoso: The next question will be asked by Regis Cardoso from XP. Hi, everyone. Thank you for taking my question. I'll start with a question on RLAM. I'd also like to ask, what is the rationale for Petrobras to buy it back? Would you need an approval from the CADE, considering that this refinery was listed as a divestment? I know that the refinery changed significantly. It was upgraded. If you could tell us a little bit more about what changed. There's also a green refinement process, refining process there that I think you can mention. Basically, I would like to ask about RLAM. A different question would be about the integrity of the pre-salt. There are some platforms in the Tupi and Sapinhoá fields that have been producing for more than 10 years.

Operator: If you could tell us a little bit about maintenance, system integrity. Do you have a measurement? Have you assessed how much the utilization rate has changed? And what about maintenance or life extension? If you could tell us a little bit more about that. Thank you. Thank you, Regis. I'm going to pass this question to William, and the rest of the team will answer your second question. Okay, let me begin before I pass it over to Fernando. There was no material change. RLAM is working with the same hardware.

This event will be held in Portuguese, but it is being simultaneously translated into English you.

You may access the links to both languages on our Investor Relations website, all participants will be in listen only mode. During the Companys presentation.

And after that we will have a question and answer session. You may send your questions via E Mail Petro invest at Petrobras Dot Com Dot BR, we have with US Clarissa <unk> executive director of Corporate Affairs, Claudio Slusser Executive director for logistics trade and Mark.

<unk>.

Fernando <unk> executive director of Finance and Investor Relations.

Speaker Change: Mario Spinelli executive director for governance, and compliance Mauricio Thomas King Executive director for energy transition and sustainability.

Operator: There were some investments, but this was just regular downtimes with the catalyst unit, that's the conversion unit, that reduces residue and increases high octane gasoline production. Also dredging, early dredging, in the channel that would allow bigger vessels to come in and makes the refinery more flexible. But there was no significant change. We continue with the same hardware. Concerning the rationale, I'll pass it over to Fernando, but I can say that we are working with some synergy, not only integrating refineries, but you know that there's a lot of synergy between petrochemicals and refining. Over to Fernando. Yes. This synergy is very important to consider in our rationale. If these synergies are captured and if we understand that this is a good deal, we're talking about a profitable business that will generate results and value for our shareholder.

Speaker Change: Not to bore Osee executive director for engineering technology and innovation.

Victor Executive director for production and processes and William Francis Executive Director for industrial processes and products. We also have other executives from the company with us we.

Speaker Change: We will begin with a video bearing a message of our CEO Mark distributor.

Mark distributor: Good morning, everyone I want to thank investors analysts and the entire audience that joined us today.

Mark distributor: Concerning the results of the second quarter of 2024.

Mark distributor: I can say that they were very solid and occurred as expected.

And nonrecurring events, such as the tax agreement with the Ministry of Finance brought significant advantages to the company and to the federal Union that were recognized by the market.

Mark distributor: Moreover, the strong exchange rate volatility in the period with no impact on the company's cash flow or equity affected our internal accounting impacting the quarterly results since our CFO Fernando will present, our results in more detail highlighting our free cash flow.

Operator: This is the goal since I was invited by Magda to start it. We've always been business-minded, and we're obviously looking at the social, environmental, and governance aspects. But if it makes sense, if synergies are captured, and if the right price is set, then why shouldn't we do it? Any deal, if it has the right ESG aspects, the right price, and if it generates value for our shareholders and for Brazilian society, we will analyze it. Thank you for your question. I think that's a great question that allows us to explain a couple of things. Most of our production is in the pre-salt layer. This concern about the future of pre-salt is very important for the company, for our shareholders, and the entire market.

Speaker Change: <unk> net income and the recurring and nonrecurring event that influenced our results I will take this opportunity to talk about the future we envision for our company.

Ladies and gentlemen, our top priority is to pave the way for Petrobras to be enduring.

And as relevant or even more so to Brazil than it is today.

Speaker Change: This will only be possible, if we continue to grow efficiently and with profitability.

Speaker Change: This means that we must be agile with full adherence to operational safety people and established governance rules.

Speaker Change: We need to be agile and maintaining our track record of replenishing reserves, while on the path to net zero, we seek more sources of clean energy.

Speaker Change: It's important to note that without the replacement of oil and gas reserves Petrobras would be doomed to failure.

Operator: Pre-salt does not only contribute to the company's results, but also to society, and to our shareholders with special participations and royalties. We have a very robust system to manage our reserves, the flexibility between the injection of water or gas. Well, excuse me. We're very close to the wells, but there are a few conditions that ensure that this will continue in the future. First, you mentioned Tupi, so we have very experienced partners. This discussion is not only happening within the company. We're discussing it with partners in this process. This contribution is very important. We're reinforcing our teams with engineers. We have about 140 reserve engineers. We've contracted 30 more engineers. They are usually the people who analyze this entire process and the entire lifespan. It takes about 10 years to train one.

Speaker Change: All our achievements have been conquered through technological capabilities and our employees' firm a willingness to overcome challenges and surpassed the countless difficulties inherent to offshore exploration and production with safety and respect for the environment.

Speaker Change: These efforts culminated in the transformation of the pre salt operation into an undeniable wealth for Brazil, ladies and gentlemen, although there are still exploration opportunities in the pre salt and southern excuse me Hal.

Speaker Change: So southeast basins, we cannot forego the responsible exploration of the Brazilian equatorial margin basins.

Speaker Change: It is essential for both Petrobras in Brazil that we obtained the license to drill exploratory wells.

Speaker Change: This is because if the potential of the area is confirmed.

Speaker Change: Our society will see undeniable results in employment and income.

Speaker Change: In addition to the equatorial margin, we need to continue exploring the pelotas basin another promising area in the south of Brazil.

Operator: We're investing to assess 4D seismic, and that's the traditional 3D seismic analysis with a fourth dimension, which is time. This allows you to have the best management of your reserves. Above all, we have something that is unique to the company's history. We have two executive managers, which are very experienced, who are reserve engineers. One of them is Chimal, which is our executive manager. We have something that is different. We have a CEO who is a reserve engineer, and that's very interesting. I'll tell you something. This week we had a meeting, and I brought in engineers from basically all of our areas with the CEO. It was a three-hour meeting, and the level of details, our CEO is not simply a reserve engineer, but she actually worked in regulations.

Speaker Change: We're also on the lookout for opportunities in foreign territories, especially in South America, and the Atlantic Basin of Africa.

Speaker Change: We recall that last weekend, we discovered natural gas off the coast of Colombia, and a block with high potential for new discoveries.

Speaker Change: Ladies and gentlemen, it is our agility and skills that will allow us to initiate production. This year ahead of schedule at the Fps. So Maria Cataria ended Jabar T field.

Excellent highly profitable assets and we will apply all of our expertise to generate more value for our governmental and private shareholders.

Speaker Change: Later this year, we will also initiate operations for the Rota, three gas pipeline, increasing the supply of pre salt gas to the Brazilian market.

Speaker Change: Within this context, we are attentive to opportunities for expanding the gas market.

Speaker Change: Which include its use both as fuel and as raw material.

Speaker Change: We will seek to resume fertilizer and petrochemical operations, which add value to our natural gas production.

Speaker Change: Our long term vision of focuses on investments in E&P and the pursuit of diverse renewable energy sources. These two elements are essential to ensure the company's growth and profitability in the coming months.

Operator: It really demonstrated how much our teams are aligned in managing our reserves. How we will have more requirements there because, you know, in this meeting, we were very firm. It was long. We had teams from Chimal and everyone else, and the entire team went in deep into the topic. I don't think that in our history we have ever been as aligned as we are right now. That makes us very confident with the teams we have, especially due to how skillful our leaders are at that. I'm very happy and proud to tell you that we have a very close technical alignment, especially in this area, which is essential for the company's future. Wagner, this is William. I just want to add and say that she's also a...

Speaker Change: To our investors, we guarantee respect for business logic transparency and our governance, which is recognized as above average for companies in Brazil, including oil companies operating in our country.

Speaker Change: We guarantee capital disciplined and controlled leverage we ensure that we will do this by considering the investments necessary for the company's growth and the demand from state and private shareholders for dividends.

Speaker Change: We understand that in this way, we will be contributing to stimulating the country's economy and meeting the expectations of our shareholders.

Speaker Change: Lastly, I. Thank you for your attention and trust and emphasize that we are firmly committed to maintaining an open dialogue with transparency to demonstrate the relevance of the choices, we will make to build an even more solid and profitable company.

Operator: She has a master's in chemical engineering. In different areas of the process, we have a lot of requirements. Yes. She is also-

Speaker Change: Thank you very much.

Fernando Melgarejo: Very detail-oriented in her requirements. It's not just an engineer who looks at a spreadsheet. She is an engineer that really understand things and is demanding. That's important because it drives teams, and it shows them that they are being supervised from the top. Recently, she visited our COI, our integrated operations center, and she spoke to our representatives who are there 24/7. Each of our fields, each of our operations centers has an engineer 24/7 to manage that field and to extract as much as we can. That, of course, will be the company's future. Thank you. The next question comes from Caio Ribeiro from Bank of America. Over to you, Caio. Good afternoon, and thanks for the opportunity.

Speaker Change: Thank you to monitor our CEO, we will now begin our presentation.

Speaker Change: On the results for the second quarter of 2024.

Our second slide presents our usual disclaimer about forward looking statements.

Speaker Change: We will now hand, it over to our financial and Investor Relations Officer, Fernando who will continue go ahead Fernando.

Fernando: Good morning, everyone.

Fernando: It's a pleasure to have you here.

Fernando: With a discussion on our results for the second quarter of 2024.

Fernando: As we just heard we are in a growth journey. This is our vision and.

Fernando: And that's why all of our team here, our top brass and our employees.

Fernando:

Fernando: Have.

Fernando: Stuck to this journey to become more relevant for our society and provide the right to dividends and returns to all stake and shareholders.

Fernando: Here, we have our operational highlights.

Fernando: I would like to underscore a few of them we.

Fernando: We delivered in the first quarter of 2020 for the planned production for the first choose a quarters of the year.

Caio Ribeiro: Well, first at Petrobras, you were talking about the possible purchasing of assets of renewable energy, and can you give us an idea about that? Has anything changed regarding the timing and the magnitude of the projects? Secondly, Petrobras clearly has a very robust process to approve new investments. Clearly, we can see a greater appetite for accelerating and increasing investments. We were talking about the strategic plans. Do you intend to implement any changes to this process, this investment process, or do you consider the current process an ideal process? Director Maurício Tolmasquim and Fernando can answer your questions. Maurício Tolmasquim. Thank you for your question, Caio Ribeiro. Well, Caio Ribeiro, as you know, we have two main types of investments, the M&As and the internally generated investments. Your question focuses more on M&As.

Fernando: In the last 12 months.

Fernando: At our oil and gas production went up by about two 4%.

Fernando: The contribution of the pre salt in the second quarter of 2024 reached 81 per said of the company's total oil and gas volume. So new production systems will be important for our growth.

Fernando: Marshalls Dookie because she is has the capacity of producing 180000 barrels of oil and compressing 12 million cubic meters of gas per day F. P. S. So Maria criteria.

Fernando: Yeah.

Fernando: Arrived at last Monday, and will be redirected to the usual bar to field. It can produce 100000 barrels of oil and 5 million square excuse me cubic meters of gas per day I'll be around data mandara in Booz use has left the shipyard in July.

And is expected to arrive in Brazil later this year it will be the first high capacity unit for Petrobras and its potential is 225000 barrels of oil per day and $12 million.

Fernando: <unk> meters of gas.

It is expected to start operations next year. All of these units are part of a new generation of more efficient platforms with a nominal capacity of about 400000 barrels a day, which is 15% of our current production as you can see we have good future perspectives. So we can start.

Fernando Melgarejo: When it comes to M&As, we're focusing on platforms. The M&As are currently much more connected to onshore wind power, albeit not exclusively. The idea is to have investment platforms. What are those about? They're about finding partners, large-sized partners that are highly experienced with a project portfolio, that may be underway or, even greenfield projects or projects under construction so that we can establish a partnership. The idea here is that it's 50% of Petrobras' participation and 50 from the partner, but that could be negotiated. To start this analysis, the board of directors have to approve the analysis of this opportunity. They have to approve the opportunity for it to be taken into the portfolio.

Fernando: A new growth cycle.

Fernando: On refining we have maintained a high level of processing with a utilization factor above 90% about 90, 91% to be exact in the second quarter and with the highest sale of byproducts than the previous quarter.

Fernando: We had a better performance with diesel gasoline UAV, reaching about 70% of the total volume produced this demonstrates our continuous efficiency efforts efficiency and versatility in the processing plants. Another piece of good news is that.

Fernando: Our processing plants are in the final stage in August we will have a milestone for this work, which is starting reverse pressurizing of the pipeline of equalizing the pressure from the deep and shallow layers. They are already in operation, we expect to see.

Fernando: The first commercial gas in the third quarter. The Rota three pipeline, which includes O. P. G. N is strategic for Petrobras and for the entire country because it will allow 21 million cubic meters of natural gas to be processed which will increase the offer of natural gas to the Brazilian market.

Fernando Melgarejo: The board has approved 5 potential platforms to be added to the portfolio, and they amount to more than 3GW capacity. Our goal for the plan was to achieve the five-year period with 5GW in terms of the renewable projects. For one of these 5 platforms, after an authorization from the board, we presented a non-binding offer. As is common with these negotiations, we did not execute the agreement with them. Now we have four being analyzed and under negotiation. I know that people expect us to communicate that, but it can only be communicated if we really close the deal, and that'll be part of the process, of course.

Fernando: Reducing imports of odd Sheerness.

Fernando: This was essential for the results we will see on the next slide.

Fernando: Okay.

Fernando: We sustained consistent results with robust cash generation, reaching the lowest financial debt level since the third quarter of 2008 16 years ago.

And our Capex increased by 12, 5% this quarter in comparison.

Fernando: Two last year.

Fernando: Later on we will discuss some.

Fernando: Events that were excluded from the first half of 2024, which are essentially in accounting.

Fernando: And that has only a residual impact to the company's cash excluding these events. Our net income was $5 4 billion U S dollars. Our EBITDA was 12 billion U S dollars and operating cash flow was around $10 billion U S dollars in line with the previous quarter and we would also like to highlight that this.

Fernando Melgarejo: In addition to the 4 under analysis, there are other, big companies, and we're also thinking about bringing them into the portfolio. The M&A model we're working on is that one. In terms of organic investments or internally generated opportunities, we have a portfolio with 4 pilot projects and 10 projects that we're analyzing for opportunities. They encompass CCUS, hydrogen, and whatnot. I mean, it's other types of projects, but I understand that this is not the focus of your question. Still on M&A, over the last few months, we've been seeing a certain improvements in the prices of energy in the market, of solar and wind, which makes it more interesting and easier for us to close these deals, if that's the case. Can we move to the next question?

Fernando: Quarter.

Fernando: The answer operation resumed.

Fernando: Bowing the reversal of an impairment loss.

Fernando: Finally <unk>.

Fernando: Concerning our contribution to society, we had a 24% increase in tax payments in comparison to the second quarter of 2023, it's always important to highlight that over half of the company's cash generation is being paid back to society in the second quarter of 'twenty four alone we had 70 billion Brazilian reals.

In taxes paid to the federal state and city governments.

Fernando: It's a significant an expressive contribution from the company to all of Society.

The next slide shows one off events that impacted this quarter.

Fernando: Especially our accounting results.

Fernando: With only a residual.

Fernando: Cash effect as we mentioned before in the second quarter of 2024, we saw a significant exchange rate variation as you were able to see a depreciation of 11% of the Brazilian real versus the U S dollar, which led to a negative impact of $2 3 billion U S dollars.

Fernando: It's important to note that this impacts took place due to a dollar obligation between Petrobras companies, which does not generate a true effect to our company to our company. This is accounting only.

Fernando Melgarejo: We don't intend to make any changes to the methodologies or to the governance. Like the president said, actually, we've been an example of governance among the domestic companies, and we intend to maintain governance as it is. It's robust, it's adequate, it provides robustness to our models and possible scenarios. We don't intend to make any changes to the governance at all. We want actually to keep on doing what we're doing. What we did create at the company with the arrival of the new president was a department that intends to improve the company's interfaces across its different departments. That's our main focus, these interfaces. And Wagner Victer is the officer in charge. He is interim director right now, and he is in charge of achieving this internal synergy.

Fernando: We also are complied toy tax transaction and this was widely communicated.

Fernando: Which resulted in a an expense of $2 1 billion U S dollars and that settled major legal disputes totaling 45 billion in Brazilian reals.

Fernando: From an economic perspective, this was a very advantageous negotiation for the company and other companies in our industry are also.

Fernando: Entering this program. We also had other one off events of about 1.3 billion U S dollars.

Fernando: And.

Fernando: This led to an accounting loss of $300 million.

Fernando: Writing off these events. Our net income was 5.4 billion, which is the same that we had in the first quarter of 2024.

Fernando: The next slide shows that we have reached an expressive result in EBITDA and operating cash flow.

Fernando: Excluding these one off a fence affecting our quarter, our EBITA reached $12 billion in line with what was reported last.

Fernando Melgarejo: The interfaces need to be perfected if we wanna be able to generate the required speed and energy to expedite our plans in this growth trajectory so that there is no drop in our oil reserves. I agree. The integration process is following very strictly our internal governance principles. Of course, there's always opportunities for improvement in any organization, and that's what we permanently try to achieve. Next questions come from Lilyanna Yang from HSBC. Please go ahead, Lily. Hello, and thanks for the opportunity. I have three questions, if you allow me. The first one about the supply chain. Could you please share with us your perspective about the global supply chain and the need for local suppliers? What's the role of Petrobras in developing the domestic naval industry and guaranteeing more efficient deliveries at fair prices?

Fernando: Last quarter.

Operating cash flow was around $10 billion also in line with the previous quarter.

Fernando: We had a significant change in the foreign scenario a reduction of 34% in diesel crack spread from $30 in the first quarter to $20 in the second quarter of 2024 and this is per barrel.

Fernando: Slide eight.

Fernando: Shoes, our cash flow generation at.

Fernando: It remained consistent.

Fernando: We had a positive free cash flow of.

Speaker Change: Excuse me a positive cash flow generation of $9 1 billion and a positive free cash flow of $6 $1 billion.

Speaker Change: This was enough to sustain our investments and financial investments.

Speaker Change: We also were able to pay out dividends.

Speaker Change: About the quarter.

Speaker Change: As you can see on the right hand side of the graph, we use our cash to play to pay dividends as approved in the previous quarter of around 7.3 billion U S dollars, including share buybacks.

Speaker Change: We also made 2.9 billion in investments.

Speaker Change: And.

Speaker Change: Made payments of Leasing's and liabilities of $2 billion.

Lilyanna Yang: I understand that the company's focus moving forward would be more upstream-centered, but what are Petrobras' opportunities of investment in downstream and energy transition? You did touch upon fertilizers and generation of electricity, but petrochemicals or fuel distribution, for instance. Along the same lines, do you see any needs to change the governance for the approval of acquisition processes, especially due to the requirement of a positive VPL for the set of projects? Given that Petrobras just changed this internal regulation for the statutory committees that subsidize the administrative committee.

Speaker Change: Net financial debt Amortizations were 700 million in financial expenses accounted.

Two $400 million.

Speaker Change: Also our Capex totaled $6 4 billion in the first half of 'twenty 'twenty, 412% higher than the first half of 'twenty three we projected to end of 'twenty 'twenty four with investments ranging from 13 five to $14 5 billion U S dollars, which is an increase of 7% to 15% compared to.

Speaker Change: 2023.

Speaker Change: It's important to note that this.

Speaker Change: Uh huh.

Speaker Change: Revision has no impact in the Companys production curve.

Speaker Change: Slide nine discusses our financial debt.

Speaker Change: It has reached its lowest level since the third quarter of 2008.

Fernando Melgarejo: The third and last question is if you expect to issue debts moving forward, or do you intend to leave a room in the balance sheet for debts that come with the production platform so that your reference cap of $65 billion in terms of the raw debt is not exceeded. Those are my questions. Thank you. Thanks, Lily. Director Renata. Concerning the supply market, first I wanna highlight that any company prefers to have local suppliers, and suppliers that are close to them. This makes it much easier for us to have a relationship with our vendors, you know, the possibility to be close to them.

Speaker Change: We are now it's 26 billion.

Billion, a reduction of $2 5 billion versus the previous quarter.

Speaker Change: Gross debt went down.

Speaker Change: $259 6 billion.

Speaker Change: Our cash position is robust.

Speaker Change: And we have reached over 13 billion at the end of the quarter. We concluded the quarter with a spread to the U S. Treasury rate of 2.2, the lowest in the last years and an average debt maturity of nearly 12 years.

Speaker Change: The next slide shows our commitment to shareholder remuneration and financial sustainability.

Speaker Change: Our board recently approved dividends and interest on own capital for the second quarter of 2024 of 1.05, Brazilian real per share, which will be paid in two equal installments in November and December of 2020 for.

Fernando Melgarejo: We do intend to be closer to our suppliers and to understand their needs and difficulties so that we can adjust, if necessary, our hiring formats, so that we can add more and more domestic vendors to our database. Of course, we must always follow our governance principles, and it must be advantageous for Petrobras, otherwise it won't make any sense. We will work on developing this portfolio of suppliers, as it's extremely favorable to have the suppliers close to us. We've been working with the pre-qualification of certain suppliers. We've been working very closely with Director Spinelli concerning aspects related to governance, and we are trying to recover our market with some different hiring strategies to allow smaller companies to provide smaller packages till they become strong enough and big enough to get involved in bigger projects in the future.

Speaker Change: Shareholder remuneration.

Speaker Change: For the second quarter is $14 3 billion and this includes.

Speaker Change: Share buybacks.

Speaker Change: Amounting to 700 million and dividends plus interest on capital of $13 6 billion in Brazilian Reals.

Speaker Change: Our strong cash generation has allowed us to pay these dividends according to our current policy.

The next slide shows.

Speaker Change: And accrued vision for this half.

Speaker Change: And which dividends exceed our results due to these one off events that had a residual impact on cash. This has allowed us to comply with our shareholder remuneration as we have paid.

Speaker Change: Investments taxes salaries and so on.

Speaker Change: So we are using our capital reserve created in 2023 to <unk>.

Speaker Change: Ensure resources for dividend payments, among other things, helping to balance eventual gaps between cash and earnings in 2023, our results were above our.

Speaker Change: Our cash which was enough to pay dividends and constitute a remuneration reserve.

Fernando Melgarejo: Yes, we do have some difficulty with suppliers, and it's not restricted to Brazil. We have problems related to suppliers abroad as well. Yesterday I had a meeting with the company. I've been having lots of meetings myself to understand the difficulties of our suppliers. They said that after the war in Ukraine and now with the conflicts in the Middle East, the number of purchases from their customers has skyrocketed because other companies are having to develop their own infrastructure to support their demand since it's not catered to either by Ukraine or the Middle East. The global market is quite busy, and in Brazil, we're trying hard to recover our suppliers.

Speaker Change: This.

Speaker Change: Half of the year, we had the opposite situation. So now we are using the reserve it for what it was created.

Speaker Change: To speak in numbers in the April General Assembly, we approved a 21.9 billion to this deserve to this reserve.

Speaker Change: And.

Speaker Change: Considering we had 27 1 billion.

Speaker Change: And the available cash of 20 billion, we are using $6 4 billion from our remuneration reserve too.

Speaker Change: Pay dividends and interest on own capital the balance remains relevant and $15 5 billion in Brazilian reals.

Speaker Change: We continue with the next and final slide.

Speaker Change: Here, we can see how we were able to.

Speaker Change: Xavi total shareholder return above the majors. Despite these advances we still have a gap.

Speaker Change: On a enterprise value to EBITDA. This is an opportunity for the company. So we have to continue working to deliver value through growth and profitability with discipline, especially in capital and governance, we see many opportunities for Petrobras we have profitable.

Fernando Melgarejo: Well, that's a very good question because after COVID and after the crises, like the war in Ukraine that had an impact on several suppliers that provided services to platforms abroad, the world started rethinking its supply chain and of course, looking for a change that brings about lower risk to their supplies. The Brazilian industry is based on a principle created by a law from 1997 that was celebrated in the first auction from 1999, that we should focus on local content. It's not simply something that's up to the company to do, but rather it's regulated by law. Petrobras has been managing that very effectively in terms of production development and for every subsea activity. We have a very competitive subsea industry.

Speaker Change: <unk>, a we can expand our production decarbonize it and also provide more value to our shareholders and to Brazil. This concludes my presentation and I will now pass it over to Eduardo who will begin our question and answer session. Thank you everyone.

Eduardo: Thank you Fernando and we'll start the Q&A session.

Speaker Change: I kindly ask each participant to ask at most two questions. So that we can have as many participants asking their questions in the session as possible. The first question goes from comes from Bruno Montanari from Morgan Stanley over to you Bruno.

Good morning, and thanks for answering.

Bruno Montanari: My question. So my first question is about the compensation to shareholders and thinking about a decision where we're potentially going to be paying more extraordinary dividends, what's the company's perspective for the best moment to make this decision would you wait until the end of the fiscal year or could we think about.

Fernando Melgarejo: Last week we were discussing that with Renata and Sylvia, talking about expanding the production capacity of flexible lines and adding new technologies in Brazil. We do that in a way that's extremely advantageous, especially because our manufacturers are already exporting to other countries, not only flexible lines, but also manifolds and wet Christmas trees. In the naval industry, there was a downturn. Now it's recovering again. Of course, that is being observed in the industry as a whole. A good example of a local content and local developments associated to technology is HISEP, which is a technology that was developed by CENPES at Petrobras, applied to the E&P activities, which is hugely innovative.

Bruno Montanari: Our payments after the closing of the first of the third quarter of 2024, where the cash.

Bruno Montanari: Cash flow must be very high and concerning.

Bruno Montanari: The compensation to shareholders of the company.

Speaker Change: Concluded very successfully the pilot and purchasing program. So what was how successful it was the compensation strategy and should we expect maybe a bigger buyback program and my second question is about international exploration could you talk about the strategic fit and potentially diversifying the exploration.

Speaker Change: Such as for instance, in maybe ash basins and potential disbursements, but these acquisitions are they considered and the investment plan and my question is.

Fernando Melgarejo: That'll allow us to have great gains in terms of reducing waste on top sides and platforms, and it's being done here in Brazil. A very disruptive technology developed by CENPES, by engineer Passarelli, that led the process. Fundamentally speaking, we are able to develop it very close to us here in Rio. These are very positive examples, and this is not merely a requirement for us, but also a business strategy that major oil companies will adopt, especially in Brazil, because in Brazil, we developed, over the course of decades, a very competitive local industry.

Speaker Change: Is because expenses with exploration and up to approximately $1 $3 billion. This could be smart because it would be some opportunities that we can see such as the case of Namibia for instance, thank you.

Bruno Montanari: Thank you Bruno.

Speaker Change: And I'll ask Fernando to answer these questions over to you Fernando Thanks, Bruno I think he mentioned an important aspects that we have to clarify.

Fernando: We've been a lot's been discussed about that so I'll take the opportunity to clarify about how the reserve. It works, having a reserve does not mean that we have cash flow. It's an accounting reserve it's different concepts in that regard. The reserve is an accounting provision that's associated to them.

Operator: I'll pass it over to Fernando. Thank you. He's going to tell us about that. Okay. As I said before, there are no changes in governance, metrics, foreseen. Obviously, we want to perfect our process, as we mentioned before, and this happens all the time. In CapEx and OpEx, this is a company perspective. In CapEx, we are trying to seek efficiency. Excuse me. In OpEx, we're trying to increase efficiency, and in CapEx, to get better returns on the capital we are allocating. We are doing things by the book according to the best financial practices, and this goes for everything. OpEx, CapEx, purchases, and whatever. About new paths forward, I don't know if this question has been answered, but we want to find opportunities that have the right levels of return. If they do, we will pursue them.

Fernando: The allocation of profit and in the fiscal years, and we know that there is no perfect correlation between the generation of profit and cash generation. These aren't different concepts, they and they can happen differently.

Last quarter, we had a low profit, but we maintained the cash flow generation stable. So I'd like you to understand that when you decided to pay dividends. So whatever they are.

Fernando: We consider the company's cash flow and the capacity to generate.

Fernando:

The flows in the future and not.

Fernando: So the reserve in 2023, Petrobras had more profit than when it paid in dividends as I showed in the prevalent in a presentation and that's why it's created at $21 9 billion reserve and the opposite happened to end the second quarter due to the losses of the quarter due to exclusive items associated.

Fernando: Two a strong cash flow generation, we use the reserve to subsidized payments.

Fernando: The way I wish to remind you that this possible mismatch between the profit profit and cash flow.

Rodrigo Almeida: Our focus, as we've been saying, is EP. EP provides the results, and it's with these results that we're going to have resources to do the energy transition that we need, at the right time, according to the development that our society needs, and that companies are developing new technologies. Thank you, Fernando Ado. I'll pass it over to Rodrigo Almeida from Santander. Go ahead, Rodrigo. Good afternoon, Fernando Ado and the entire Petrobras team. I'd like to refer back to the topic of the last question, and it connects to maintaining the gross debt within limits and liability management. I'm referring back to that point of should Petrobras be more active in bonds and rolling over the debt and bonds, and the debt that's expiring and or coming to term in the next quarters.

Fernando: Were served as a motivation for the accretion of the reserve in 2023 if we didn't have a reserve today, we it would be difficult to pay these quarterly dividends.

Fernando: Our us since our dividends amounted to 27 and to the profit was 20 billion and it's a different difference of our press release 6 billion highs and that's why we resorted to the reserve.

Fernando: About the decision to us it's just natural to assess it when we approved the strategic planning one.

Fernando: Once the.

Fernando: The extraordinary payments depend on future flows and not the.

Fernando: Capital Company.

Compensation.

Fernando: Reserve.

Fernando: And to highlight the decision to use the reserve yesterday will not affect our capacity to pay the extraordinary dividend to bounce. The buyback program. We have had no formal discussion about that we completed the program in August at almost $1 billion in what we're doing now I asked my team to assess the real effectively.

Operator: Are there any studies to do that for your gross debt? I would like to understand what you're thinking when you assess M&As. Are there any M&As that can bring any gross debt into the company? For example, RLAM, we know that its corporate tax number has some gross debt between BRL 5 billion and 6 billion. How do you assess this kind of M&A if it is including a significant gross debt to your balance? My next question is about the gas and power segment. I'd like to understand a bit more about how you are rebuilding your client portfolio in gas and electric power. What should we expect for the next quarters? Thank you. Thank you, Rodrigo. I'll answer your second question with Director Palasquin, and then Fernando will answer your first questions.

Fernando: There's an efficiency of the capital for that operation.

Fernando: And to your second question.

Fernando: About in Namibia.

Fernando: Our intention is to diversify the portfolio and that's a key for the growth of the company and as a reminder, the according to the.

Fernando: Current strategic planning, we have an expectation.

Fernando: To reduce production as of 2013 I consider that that's far from ideal and therefore, we need to make efforts in Brazil or in the equatorial margin and pluses basin or abroad.

Fernando: To have an adequate profile, where long term production and I want to emphasize that will only.

Fernando: Enter into agreements and adequate price since we won't generate we want to generate value with our experience in deep waters about the Capex as you mentioned we.

Fernando: Have not public.

Operator: Go ahead, Palasquin. Thank you, Rodrigo. Well, we had a reduction in the demand for gas in Brazil overall because there was a reduction in the use of thermal power. This is now going the opposite way. We're seeing thermal plants being used. We have a new reality now. We currently have 15 gas suppliers competing with Petrobras, which is very different from what we had before. Despite all of that, we have a very aggressive policy to maintain our market. Despite having 15 competitors, we have 70% of the market, so we are competing freely. How do we maintain this market? We created a new product. In Q2 of 2024, we created a premium for performance for our distribution companies.

Fernando: Published how much we have allocated for bids and etcetera, because that's a business secret, but from a practical perspective, the lack of allocation will not prevent us from leveraging opportunities and of course, we'll assess every opportunity we have as long as they adequately.

Fernando: Back to the allocation of capital, we just need to keep.

Fernando: Keep the yearly budget stable. Thanks, Fernando now we send Chi from Bradesco you have the floor.

Speaker Change: Thanks to do and Fernando and everybody for your attendance.

Chi: Two questions.

Chi: We're now in.

Chi: Entering a period of higher demand for diesel.

Chi: And apparently Russia is prioritizing the supply of other markets I think the shipments to Brazil are decreasing what's Petrobras strategy too.

Supply diesel to Brazil in the third quarter are you going to work along with other importers.

Operator: As we announced, this means that you have a discount of 10% on price if your consumption is above 60%. With that, we were able to attract many distributors to have contracts with us. We had an interesting situation. I'm not going to mention anything, any details, but there was a client that had a contract with us a long time ago, GME, that they thought was advantageous, and now they've. If they are buying from Petrobras, they would be having much lower prices than they had in this deal some time ago. Our policy is to maintain our clients and maintain, of course, responsible prices. The other policy we have is very aggressive, and our intention is to capture free consumers to this market. This has attracted the industry.

Chi: Or not the second question I like to understand from a technical standpoint.

Chi: One based the decisions to change the N. P agency can we expect anything different or the development programs, especially if we think about costs. Thank you.

Speaker Change: Well I'll ask.

Speaker Change: As director Schlosser to answer your first question.

Speaker Change: Schlosser please.

Speaker Change: Good morning, the century, you did a perfect analysis.

Speaker Change: We have a seasonality.

Speaker Change: And the second half of the year.

Speaker Change: Which is related to an additional consumption of diesel whether it is to the crops in Brazil or due to stock formation in the North Sea.

Speaker Change: So there is a.

Speaker Change: Finger pressure on diesel definitely in about the supply.

Speaker Change: To supply them.

Speaker Change: But it is not the only company that supplies to Brazil, we have private refineries petrochemical companies, who have importers that also operate in this market. So let's talk about planning.

Operator: We've announced a number of contracts with CSN, Gerdau. I can't tell you names, but we have a very significant queue of major companies that are about to close a deal. We also have some perspectives, and again, I can't give you many details, but we are going to launch competitive products with cheaper gas, like from Rota 3 and so on. So this gives us a competitive advantage. Regarding energy, so really there are many thermal plants that were recently removed from the contract, so we're looking at the capacity tender or bid tender that the ministry has announced. Our aim is not only to recontract them, but eventually we hope to have a new thermal plant for this market.

Speaker Change: What we do is a multiannual planning knowing that there is a certain seasonality and it is recurring every year. Our plan already provides for a series of measures and the most important one is bounce of the downtime.

Speaker Change: The maintenance downtime as we try to allocate them to periods, where the demand is a little lower like January for instance, we also do active management of our inventories.

Speaker Change: So knowing about this demand.

Speaker Change: Fluctuation of we try to.

Speaker Change: To take advantage from our exports of byproducts to Asia and we also.

Speaker Change: Using the backwards shipping we also sent back diesel.

Speaker Change: To replenish the inventories and he also talked about the Russian does diesel.

And it's funny taste participation by the domestic market, we do not import diesel from Russia. So it will not affect our plants were fully prepared to cater to the demands of our customers.

Operator: We're looking at this carefully, and we have a lot of hope and expectations that this bid tender will happen, especially with the plants we already have built. We have a very big competitive advantage because a part of the investments have already gone through amortization. We have a good possibility to be competitive in this bid tender. Thank you. Thank you, Maurício Tolmasquim. I'll pass it over to Director Fernando, who will discuss your other questions. Okay. I think we have given some details on ideal cash levels. This is approved according to our strategic plan, according to the needs we may have due to how financeable projects are.

Schlosser: Thanks Schlosser.

Speaker Change: Good morning.

Speaker Change: Essentially it's a pleasure to.

Speaker Change: Speak to you and to everybody that's watching this conversation well from the perspective of the.

Speaker Change: Forming new teams and the exploration and production departments, we have the Senate to replace some executive managers, but Petrobras has a very solid process whereby it educates in trains its workforce. So historically speaking it as always Trey.

Speaker Change: <unk>.

Speaker Change: Excellent.

Speaker Change: Workers, the new director.

Speaker Change: And she is the one that makes the decisions about the new management that positions, especially at the executive management managers and general managers as she is a geologist with.

A 40 year experience and she participated in many discoveries and of the company and the in fact that the company selected her for disposition and itself indicates that the company wishes to expand its portfolio of reserves and when she has set up a team she chooses experienced professional.

Operator: I usually work with minimal cash, or I have good projects that generate value for our shareholders, or I need to distribute this as ordinary or extraordinary dividends. Also having idle cash in the company has a cost in availability. This is not what we're seeking. About issuing debt, extending debt and advancing payments, this is what, you know, our managers have been looking at, and they've been awarded for it. They're seeking opportunities that will make our debt come to the lowest level possible. We have the best spread in government bonds in the last years, and we presented this in the company, and this is a part of our daily work. Our idea is to continue being efficient and recognized by the market. Thank you, Fernando. Let's continue with Rodolfo Angele, question from. He's from JPMorgan.

Speaker Change: Was that.

Speaker Change: That basically come from the technical staff of the company. If we take for instance, the two new representatives of deep and ultra deep waters, one of them will remain in his position polymer ring you know that's been with the company for 20 years and says or that's been with the company for 22 years, if you could talk about.

Speaker Change: N P. During June Hilton.

Speaker Change: Geologist the extremely renowned a with a 37 year experience with the company Gerardo that's replacing Bruno. He is also an acknowledged professional in several areas. He is a professor and several departments and he has a 21 years of experience I have.

Speaker Change: I have a 37 year experience and Bruno he has a 20 year experience professor Eduardo that.

Speaker Change: He been working as a consultant to the presidency has a fantastic experience with a ph D and ease of for reference not only for the internal market, but also for the foreign markets. So it's an extremely robust team and a very solid one and.

Rodolfo Angele: Go ahead. Good morning. I'll ask a single question. I know we've been here for a long time. I just want to refer back to dividends again. We've mentioned several things here, but I just want to understand if I got it right. What I heard from you is that extraordinary dividends will be based on perception and the company's cash generation, and that includes CapEx and your strategic plan. Whenever you have a better understanding of the strategic plan, you might announce extraordinary dividends. What I want to be sure of is this. Let's imagine that something happens and the company generates far more cash than was expected for any reason when that was not planned for. That could be a situation in which you would have some space to pay extraordinary dividends. Is that a possibility?

Speaker Change: And we basically have professionals with a long term experience and if we draw a parallel with the law of assays and article 17.

Speaker Change: Zane and certainly occupying positions as directors or higher in any state owned company in Brazil. So it's a very robust team that's been widely discussed by our director of silver in present bugged out about <unk>.

Speaker Change: And to your point.

Speaker Change: I'd spent.

Speaker Change: This morning at our Operation Center already and right now we have a platform with.

Speaker Change: Program to downtime and we're producing.

Thousands of barrels of oil and will reach a record breaking production. So that's that's in excess of 800000 barrels and we expect to ramp up from Admiral burn Hawser, we received authorization for additional production vis vis the original project and so.

Speaker Change: With the arrival of Emerald some under and that's.

Speaker Change: Underway.

Speaker Change: It left China, a week ago.

Speaker Change: We are going to incorporate a big platform to the <unk> system with a processing plant of 225 barrels so what we have.

Operator: Can you really make an extraordinary payout at any moment? A decision on extraordinary payouts, as you mentioned, will depend on our future cash generation possibilities and our current cash, considering our investments and our strategic plans. If we find cash for it above what we need, and again, I like to say that we do things by the book. Cash above what is necessary for a company has a cost, and we're trying to be more efficient. If we find any availability or any possibility, or the possibility, to make extraordinary payouts, then we will. The most appropriate thing is to have a good strategical plan, a good volume that can reflect our strategic plan on the short term, and then take these values, if possible, as soon as we can.

Speaker Change: Have ahead of us is extremely promising, especially for booz yours as soon as the platform arrives.

We're thinking about initiating an internal motivational processes to move towards a 1 million barrels of oil in booz use within a time frame that's to be defined so it's quite promising with robust teams with extremely acknowledged it professionals, especially with our deep knowledge.

Speaker Change: About the market trained by Petrobras and that's acknowledged by the internal body of the company. Thanks Victor.

Speaker Change: Onto the next question from Pedro Soares BTG.

Actual danger over to you.

Speaker Change: Good morning, everyone.

Speaker Change: I have two questions. The first question goes to Fernando I think you were very clear when he explains that extraordinary dividends arent not attached.

Speaker Change: The decision about them is is not attached to the reserve itself, but rather.

Speaker Change: The cash flow of the company.

Speaker Change: In the context of what you forecast for investments so maybe.

Speaker Change: You could explain to us.

Speaker Change: What you imagine.

Bruno Amorim: That means that we haven't ruled out an extraordinary dividend payout for 2024. Thank you, Fernando, and thank you, Rodolfo, for that question. The next question will be asked by Bruno Amorim. Go ahead, Bruno. Good afternoon, everyone. Thank you for taking my question. I have two quick ones. First, referring back to the potential M&A with RLAM. You mentioned that you might see some synergy in these assets to what you do. If you could give us some more details on that, what synergies do you believe can happen? Would it be upstream with the current refining structure that you have? And what is your current projected projection for next year? Licenses have been delayed by IBAMA, and how much does that affect you for 2025?

Speaker Change: We're an ideal cash flow for the company and to the $13 billion seem to be above or below so that we can try to have a better understanding about the expectations for the extraordinary moving forwards given that your investments are apparently.

Speaker Change: Very well funded by the quarterly cash and cash flow generation.

Speaker Change: And about production I'd like to hear from you about the July production levels.

Speaker Change: Ah we're a bit in the dark as it were with a daily information from A&P and also how long will it take us to normalize and to go back to normal and the exit rate for 2024.

Speaker Change: That said thank you.

Speaker Change: Thanks, Pedro first of all I'll give the floor to Victor.

<unk>, who will talk about production and then Fernando.

Speaker Change: Talk about the cash flow all about production were working.

Operator: When will IBAMA go back to its regular pace, so that we don't see any impact to your 2025 production? Thank you.

Speaker Change: Within the projected levels and this is our perspective up until the end of the year to work within the limits of our business plan at $3 8 billion of oil equivalents are where within average and will certainly attempt to remain as such until the end of the year.

Fernando Melgarejo: Director William can start, and Director Victor can complement that. Thanks for your question. This is William. Well, there are several different synergies. I'm gonna give you a typical example of a refinery that's close to us. It's Reduc. It has a lot of synergy, for instance, with Braskem exchanging raw materials. There are propane and polypropylene. In cracker, there is a leftover of hydrogen, which supplements our hydrogen needs for refinement, and especially for the production of gasoline and low-sulfur diesel. There's several different synergies in terms of logistics. At RLAM, for instance, there's also a synergy with Braskem. Actually more than that, there is a logistic synergy inside Petrobras.

Speaker Change: We really have had a few hindrances to the production curve forecast for July if you'd downtime.

Speaker Change: That arent being postponed some like I said the piece of 84 and some occurrences some incidents that we had that we arent correcting we had a downtime at peak 38 due to an unforeseen problem.

Speaker Change: The measures are being taken and we're in a process of recovery and I believe that.

Speaker Change: In 30, or 45 days that will go back to normal a P. 53 are also.

Speaker Change: Was faced a problem and it's being solved and deep into three N. P is being solved already and we also had a problem with the whaler at Bronco door. So these issues will be compensated they've already been considered.

Fernando Melgarejo: When we had RLAM, we used to leverage these synergies in exchanging byproducts during scheduled and unscheduled downtimes that would prevent us from leaving some markets without supplies. In Bahia, for instance, when they had a downtime, they would be supplied by other refineries. There are several different synergies across the refineries, among other synergies. Another example, before I give the floor to Fernando. At the GasLub, we have a UPGN that will produce natural gas and C2+, which is a very important raw material for petrochemicals, and that will give us the possibility to have a PET plant or maybe depending on our negotiations, maybe even expanding Braskem in Rio de Janeiro using these raw materials. Fernando, over to you. I think you covered it. Thank you. Victor.

Speaker Change: According to our expectations and of course, we only worked within the margins of our business plan as I said, we also have positive perspectives for production not only July but also next year also.

Based on our risk department, especially this growth that we're having at AMR in Chiba hawser with dominant Youre Hawser Theres also the arrival of Maria Cataria to these your bacci fields will probably anticipate that vis a vis the previously existing business plan Maria Cataria is already moving.

Speaker Change: Two its location in Espirito Santo and Theres enrolled some under and that's arriving and we'll make every effort with the team to anticipate and that vis a vis the business plan. So we did have some incidents that Oh, we're of course unforeseen and that's just part of our activity.

Speaker Change: Our relationship with the control agencies and to maintain the safety levels. That's fundamental but we also had positive incidents that will put us back on track.

Thanks Victor.

Speaker Change: Okay.

Speaker Change: Well about the optimal or optimize to cash flow. Thanks for the question I think this is a discussion that at finance and the finance department of any institution. We're constantly discussing it's a living organism that depends on the current scenario and the investments.

Fernando Melgarejo: Well, the question about IBAMA is very important. First, I want to highlight the efforts of Director Clarice and her team. I've been monitoring that for a long time, the licensing process. She has a very robust, very competent team, Fabra, Daniel Loma, and Director Clarice is frequently managing that very closely with IBAMA. President Magda, she had a meeting with Directors Clarice and Sylvia recently in Brasília to expedite, not in ANP, except for the license of the equatorial margin, which is something that we have to achieve. Basically, it's not licenses, but it's actually authorizations that the Environmental Licensing Agency requires you to have so that you can be sure that the process is being strictly followed.

Speaker Change: <unk>, if you're divesting or investing or if you're going through a flat period inside the company all of that interferes with the ideal cash flows signs that we will try.

Speaker Change: Try to achieve for the company that we call and optimize cash flow of course. This is not an accurate number we always work with a range and we use them.

Speaker Change: Every piece of information we have.

Speaker Change: In terms of flows.

Speaker Change: Inflows outflows.

Speaker Change: Strategic planning.

Speaker Change: He is an important input that we need to have access to you because this is what.

Speaker Change: Generates the biggest outflow there is also the operational resources and so are we.

Speaker Change: Feed all of that into our modeling.

Fernando Melgarejo: There was a strike at IBAMA, and that impacted our curve this year by 2%. However, this 2% impact is being offset within our margin, which is 2.8 billion barrels of oil equivalent. It's absorbed by our margin. Of course, IBAMA is working normally, and it will produce positive results. We will continue to collaborate with them for H2 and for the next years. Yesterday, at the end of the day, we were told that we were given the license for the Anita Garibaldi FPSO. That was something that was among our liabilities, and Director Clarice was working on it. The Sepetiba is still pending. We also received important authorizations, the expansion of the production capacity of our Almirante Barroso vessel. That was issued by IBAMA.

Speaker Change: And we add a stress situation of data <unk>.

Speaker Change: And its size.

Speaker Change: Is the size that's able to support.

Speaker Change: In order to withstand a high impacts in unexpected events with low probability so our high impact low probability event needs to be you have to be able to have a plan and that will allow you to have enough cash flow to withstand that situation.

Speaker Change: You're talking about the tail of a curve statistically speaking and these tests have been modeled very robustly at Petrobras when I came to Petrobras I was dedicated to understanding that I was truly I'm happy about the modeling that we have and it's in the sense that we're trying.

Speaker Change: To achieve that the.

Speaker Change: Curve has reached 13.5 now and there were at some points in the past, where we reached 8 million I don't have a metric which is a <unk> number.

Speaker Change: Number that's one we don't publish but we're we understand the optimization is not working 100% yet but by 20 to 25, we're going to get there.

Fernando Melgarejo: Yes, it does have an impact. It was discussed by our investor relations area, but it's absorbed by our plans, and we do expect to see these issues solved very soon, not only those related to IBAMA but also to the National Oil Agency. Because it's not impacting only Petrobras and its investors but also society. Because, of course, if a field is not working, you have a delay in the payment of royalties from the federal government to the states and municipalities involved. Director Claris, would you like to add to that? Sure. Good afternoon. As you probably know, IBAMA has been working on that since January this year, between the beginning of the process and the strike itself.

Speaker Change: Thanks Fernando.

Speaker Change: Gabriel Baja city.

Speaker Change: Ill.

Speaker Change: Thanks, Nanci inched Fernando.

Speaker Change: So I'm going to focus on my two questions.

Speaker Change: Picking up on.

Speaker Change: The conversation of bounce internationalization.

Speaker Change: A lots been said about licensing and Mazda.

Speaker Change: Yeah.

Speaker Change: She mentioned that the equatorial margin and prolonged says are very important for the company, but we've been seeing some delays in obtaining the licenses and my question is.

Speaker Change: <unk>.

Speaker Change: Wood internationalization B, a b plan to mitigate.

Speaker Change: These impacts or delays are.

Speaker Change: Regarding pilotte says or is it a structural plan of the company.

Speaker Change: And if so.

Speaker Change:

Speaker Change: How should we think about it moving forward and about Capex.

Fernando Melgarejo: During that entire period, Petrobras has been given 25 licenses and authorizations in spite of the strike. Out of these 25 authorizations and licenses, 8 were related to production. As a result of a very present administration and a close relationship with IBAMA, we were able to acquire or to be given a series of licenses during this period. The Ministry of Management and Innovation in Public Services submitted a new proposal to the IBAMA representatives. When they were analyzing them in their meetings, now we know that 9 big groups inside IBAMA have already approved the proposal. I have no doubts that this movement had an impact on the production of not only Petrobras but the entire production chain of Brazil.

Speaker Change: Maybe that's a question that I received the most this morning.

There's a lot of questions about the shape of the curve of investments if there was a decrease.

Speaker Change: And the guidance for this year and if without a decrease in production.

Speaker Change:

Speaker Change: More did it have a little bit more of fats and then it should or that accompany gain efficiency over time and it's now adjusting for it. So it's two questions actually one if we look at the lower Capex could we.

Speaker Change: Would that be postponed to next year or is it really an efficiency gain and the shape of the curve of investments moving forward should that be modified giving that we're being more conservative in terms of the investment plans of the company, especially about the upstream and how would that communicate with them.

Speaker Change: The slightly tighter.

Speaker Change: Industry in terms of contracting F. B S shows and vessels and how can we expedite that in the next few years. Those are my questions. Thank you.

Fernando Melgarejo: In addition to working on these processes, we're also working with the government and the results of the meetings that will be completed by the end of the day today. We believe that we'll go back to normalcy with a huge number of processes that we will have to solve. Petrobras acquired or was given 25 licenses as a result of the involvement of all of the departments of Petrobras. Thank you. Thank you, Claris. Now, Monique Greco from Itaú BBA. Monique, please. Hello, everybody. Good afternoon, and thanks for the opportunity to ask questions. I'm gonna ask one question since it's pretty late. It's a follow-up to Maurício Tolmasquim's answer about the gas policy.

Speaker Change: So I'll give the floor to Fernando.

Speaker Change: Capex.

And maybe.

Speaker Change: Maybe victor.

Speaker Change: Thank you Gabriel.

Speaker Change: Our plan last year was really $18 5 billion and now it's between a 3.5 and $14 5 billion.

Speaker Change: But it's still too early we're still in the middle of the strategic plan.

It's still early and to accurately say, what the final amount is going to be and.

Speaker Change: When it can telling us that we're going to try to deliver a capex that's realistic and that.

Speaker Change: It provides to growth for the company our Capex for this year is higher than our Capex for last year and certainly the one for next year is going to be higher than this year's capex I can guarantee that to you.

Speaker Change: And we need our plan.

Speaker Change: And that's what we're trying to do we need.

Monique Greco: We've been seeing lots of statements in the media about this perception about the gas prices being high in Brazil and an expectation for a structural reduction in the gas prices in Brazil. My question is, what has the company been doing, and what can we expect to see included in the next business plan? What are the initiatives towards trying to bring down the gas prices, like increasing supply and beyond Rota 3, involving the reduction of the reinjection levels or a search for new sources of supply in Bolivia, for instance, or rediscussing the tariffs offered to the partners? Which of these initiatives are being discussed internally, please? Thank you. Maurício Tolmasquim. That's a great question.

Speaker Change: To have a an efficient and effective capex.

Speaker Change: That brings about an increase to our production curve and now talking about the latest news.

Speaker Change: And licensing.

Speaker Change: It's just obvious that and our strategy is to focus on the replacement of reserves, we've been declaring that since magda him. Since he arrived she's been talking to bounce the replacement of reserves.

Speaker Change: And we are not comfortable with and he's with the previous strategic planning that shows a reduction as of 2030. So we're trying to revert that.

Speaker Change: So each drop of oil matters to us and that's why we're going to analyze.

Speaker Change: Any opportunity that is economically feasible.

Speaker Change: It needs to bring about a journey.

Speaker Change: Generation of value to the shareholders about the equatorial margin of course, the fewer opportunities we have in Brazil, the greater the need to go international of course, if he wants to supply the energy needs of the country you need to go beyond our borders and we will do that if necessary.

Fernando Melgarejo: Well, first, I'm gonna say that all the changes to the gas prices, they're based on the gas costs of opportunity. A structural way of reducing the gas prices would be to increase the gas supply, the supply of cheaper gas. You can do that by increasing the domestic supply, which is the case of Rota 3 or the Raia project, and so on and so forth. Those are internal ways of increasing the offer. Another way, which you mentioned, would be to import gas. For that, we'd have three possibilities. There's gas from Colombia. That's a possibility. Since Colombia imports gas, it's not clear that we'll be able to import it from them, but it is a possible route.

Speaker Change: With the purpose of.

Speaker Change: Catering to the domestic demands for electricity at least and I'd like to reinforce the importance of the equatorial margin. We will move forward with licensing process. It's a moment for exploration not production, but our expectation is pretty high.

Speaker Change: Pretty optimistic about the exploration.

Speaker Change: And that now we will have a positive production and.

Speaker Change: And about the licenses.

Speaker Change: We are also quite positive.

Speaker Change: And that.

We are very close to being granted the licenses and we feel really optimistic that's.

Speaker Change: And as it should be right and Victor you want to add anything.

Fernando Melgarejo: There is Bolivia, but they have the reserves, so it depends on whether we'll be able to increase discovery and production over there. There's a third possibility, which is Argentina, which is very interesting in terms of potentiality, especially because we already have a pipeline, GASBOL, and there is a connection between Argentina and Bolivia. Of course, if we want to increase the gas volume significantly, we have to complete the investments that they're planning to make in Argentina. Certainly, they have a good potentiality. Argentina is the world's second-largest shale gas reserve, so that could benefit us. I could say that in the short term, I see these two possibilities. Increasing the internal supply, Rota 3 is now going into operation.

Speaker Change: Yes, certainly one.

Speaker Change: I would like to add.

Speaker Change: Does that last year and last week, we had a meeting.

Speaker Change: And when we start talking about the behavior of Capex appears to be the planned capex.

Speaker Change: Capex, we had this meeting and we opened the curves when he N lines. The Capex you can analyze it as a whole or for specific periods and we started opening up the curves a platform by platform, including Booze yours, and we saw that sometimes the physical progress is a much higher than the.

Speaker Change: Current progress as Gabriel said it could be seen as a gain of efficiencies. So oftentimes are the fact that the capex is a bit lower this does not.

Speaker Change: Always represent a delay related to the process. There is also a way to recompose the acceleration of the capex, but what we can see platform by platform is that we have the physical behavior of the platform and of course, the deadlines are readjusted for each review of the business plan, but the.

Speaker Change: Here of the physical curve is above that of the financial curve of course. This learning will be used to in the future for new bidding rounds, because we effectively always attempt to have a physical behavior very close to that of the financial behavior.

Fernando Melgarejo: Maybe we've been discussing that, maybe bringing gas from Argentina. I believe that these would be a few possibilities for us to structurally lower the gas prices in Brazil. As a side comment, there's been a significant reduction. We've reduced the gas prices by 25% last year. More than 25%, partially due to the reduction in the Brent price, but also partially because of the fact that, we have a better

Speaker Change: Which influences the future prices and all of that and.

Speaker Change: Director Renata can also maybe add something about the meeting.

Speaker Change: Yeah.

Speaker Change: Good morning.

Speaker Change: And I'm going to thank everybody that's attending.

Victor: Victor said.

Victor: The most important factor preventing us from realizing the Capex was dismissed match between the financial payment with the physical milestones, we're adjusting that and that will not get in the way.

Operator: structure to supply more competitive gas.

Victor: The first period be another thing that happened was that we postponed.

George Gabrigi: Thanks, Thomas Kane. Now on to the last questions. I'll give the floor to George Gabrigi from Scotiabank. George, you have the floor. Good afternoon. Thank you for the meeting. My question is about the Namibia assets. I'd like to understand what's the minimum share that Petrobras could consider, given that we have seen a lot of discussion about joining this acquisition with a partner. What would be the investments program if the offer is successful? And is there any asset in the region that you are considering for that region as well, another asset? Fernando.

Victor: Signing the contracts of the new projects there outside of the horizon of the plan are there only for 'twenty 'twenty, nine and 2030 and they will not impact the oil curve now.

Another aspect that had an impact on the capex.

Victor: Was that we have a pool of rigs.

Victor: And this pool of rigs.

Victor: Caters to the needs of the Capex and Opex and the allocation of these rigs occurs by analyzing the best results for the company and we had planned.

Victor: Planned much more specifically for the Capex, but there was an opportunity around them.

Victor: While maintenance and that we could get more oil now so we reallocated that from Capex to Opex and then I think that had an impact on the Capex was the postponement of downtime and refineries were having construction works have been asked and we're going to have to have some downtime for arena stand.

Operator: Thank you, George, for the last question. We do not discuss specific cases, as is the case here. What I can guarantee to you is that Petrobras is interested in assessing any exploration possibilities. Exploration is not the same as production, but of course, whenever we can explore new possibilities, we'll always consider them so that we can search for good deals and increase the value delivered to our shareholders. Of course, we'll only join deals that are adequate, that create synergy and value for the company.

Victor: Oh the <unk>.

Victor: In order for us not to.

Victor: I have two downtime at the refinery we postponed to the first downtime.

Victor: To coincide with the beginning of the construction works for it next year. So those were the reasons. There is no impact on the oil curve for this year quite the opposite where being able to anticipate Maria Cataria as you all saw him.

Victor: And it's already in Brazil, It has already gone through customs and well probably go to the location of the next few days and then it will be ready for anchoring and lined connection so that we extract the first oil and as Victor had said enrolled some on there and is already on its way.

Fernando Melgarejo: Thank you, Fernando. Thank you for attending. Now we are officially closing the Q&A session. If there are any additional questions, our team will be pleased to answer all of them. I'll give the floor to Fernando for your final comments.

Victor: <unk> to Brazil, and we will make every effort to be able to anticipate or to move its production forward basically that's what I had I don't know if you have any more comments.

Operator: Thank you to all of the directors available here and everyone who participated in this earnings call, especially our viewers, analysts, investors, reporters, and all of society. Our goal is to become better and better and increasingly relevant for society, and that includes shareholders, stakeholders, and civil society overall. I would really like to count on you. I know that your coverage is very important. Your opinion is very important. If you have any question in mind, our team will be available to answer. I'm also available for anything you might need if you have any questions and contributions. Thank you. Enjoy your Friday, and have a good weekend. Thank you. This presentation is available on our investor relations website, and this webcast will soon be available as well. Thank you. Have a good day and a great weekend.

Speaker Change: Thank you Victor and thank you Fernando let's continue with the next question from Luis Carvalho go ahead.

Speaker Change: Hi, good afternoon, everyone.

Speaker Change: Thank you for taking my question and congratulations on your results.

Speaker Change: I have a couple of questions. The first is for Fernando So let's go back to the capital allocation point I'd just like to talk about rebalancing M&A is your minimal cash position that you mentioned before and your gross debt vis vis dividends.

Speaker Change: As director Victor mentioned the company has four units effective that will be.

Be brought into the line in the next months and the debt.

Speaker Change: For them would need to go into the balance so.

Speaker Change: If the company temporarily goes beyond its gross debt limit set by the plan $65 billion.

Speaker Change: Would it still be possible to pay dividends. According to your 45% policy in the cash flow and how would that impact.

Speaker Change: The possibility of paying out the extraordinary dividends from 2023. My second question is about M&A.

Speaker Change: You've discussed this but I'd like to ask about Red alum. So.

Speaker Change: How are the discussions going on a transaction.

Are there would you intend to have.

Speaker Change: Controls would you.

Speaker Change: C ability of having a minority stake.

Speaker Change: Would you wait for the C D for approval and how do you deal with these M&A disbursements.

Speaker Change: And the potential for dividend payouts.

Speaker Change: Thank you Luis Fernando will answer your first question go ahead Fernando.

Speaker Change: Thank you Louise.

Speaker Change: It's important to clarify that.

Speaker Change: Ordinary dividends arent mandatory we have a policy that.

Speaker Change: Given the three conditions, we set.

Speaker Change: Which are.

Speaker Change: Having a positive accumulated result that under 65 billion and sustainability in the company there.

Speaker Change: Then dividends can be paid out.

Speaker Change: But the policy is set by CA. So if we had an excess debt.

Speaker Change: Then we could look into it and see what is the company's cash conditions. If this is a temporary situation or if it's structural and then we can propose payments, but luis I want to sure.

Speaker Change: I assure you that we don't expect our our model, which is quite robust even with random simulations.

Speaker Change: None of it sees that we would go over 65 billion reais in debt or excuse me $65 billion in debt.

Speaker Change: So.

Speaker Change: We feel very confident.

Speaker Change: And in saying that there's really no risk of not having ordinary dividend payouts.

Speaker Change: For the remainder of the extraordinary payouts, we will need to study this during our strategic plan.

Speaker Change: That's when we'll have a better view of how much financing our investments require what will be our availability.

For cash how robust our risk models are will.

Speaker Change: We will be.

Speaker Change: And that.

Speaker Change: We'll ensure that the company is sustainable.

Speaker Change: Okay.

Speaker Change: Hi, everyone. This is William.

Speaker Change: Thank you for being here.

Speaker Change: Regarding our refinery in by E M.

Speaker Change: I'm happy that you mentioned, it's the name because it's one of the most.

Speaker Change: Significant refineries in the country's history. So yes, we are speaking to the about the old group.

Speaker Change: About two things first a possible partnership we don't know what percentage, we would have with Ryland and Theres also a bio refinery plant that can be built next to the refinery.

Speaker Change: That's a possible partnership.

Speaker Change: About the refinery itself, we're concluding our due diligence process.

Speaker Change: Evaluation of course, looking at economic viability integration and the synergy with our refineries.

Speaker Change: So that in the right moment, we can.

Speaker Change: Make a proposal for the buy dollar group.

Speaker Change: So we are concluding.

Speaker Change: With our due diligence so that at the right time, we can make a proposal and things are going well.

Speaker Change: If I can add to that answer.

Speaker Change: The importance of always.

It's important to always refer back to something it was the company that initiated the process. They came to Petrobras with a possible joint.

Business.

Speaker Change: But what does that mean.

That means that any societal possibility can happen.

Speaker Change: Nothing is set in stone.

Speaker Change: What is important here is what will give us the best return for our shareholders. The best capital allocation that is what matters.

Speaker Change: Thank you Fernando Thank you William.

Speaker Change: The next question will be asked by ratios Cardoso from XP.

Speaker Change: Hi, everyone. Thank you.

Speaker Change:

Speaker Change: For taking my question so.

Speaker Change: Yeah.

Speaker Change: I'll start with a question on Ryland.

Speaker Change: And.

Speaker Change: I'd also like to ask what is the rationale for Petrobras to buy it back and would you need an approval from the C E D.

Okay.

Speaker Change: Considering that this.

Speaker Change: Our refinery was listed as the divestment.

Speaker Change: I know that the refinery changed significantly.

Speaker Change: Significantly it was upgraded.

Speaker Change: So if you could tell us a little bit more about what has changed.

And there's also a green refinement process of refining process. There that I think you can mention.

Speaker Change: Basically I would like to ask about <unk>.

Speaker Change: And a different question would be about the integrity of the pre salt.

Speaker Change: There are some platforms in the two P ends up being off fields that have been producing for more than 10 years. So if you could tell us a little bit about maintenance system integrity.

Speaker Change: Yeah.

Speaker Change: Do you have a measurement have you assessed how much the utilization rate has changed.

Speaker Change: Changed.

Speaker Change: Oh and what about maintenance.

Speaker Change: Or.

Speaker Change: Life extension.

Speaker Change: Extension, if you could tell us a little bit more about that thank you.

Speaker Change: Thank your hedges I'm going to pass this question to a doctor Willie's William and.

Speaker Change: The rest of the team will answer your second question.

Speaker Change: Okay, Let me begin before I pass it over to Fernando so.

Speaker Change: There was no material change we rely them is working with the same hardware there were some investments, but this was just regular downtime.

Speaker Change: With the catalyst units, that's the conversion unit.

That reduces residue and increases high octane gasoline production.

Speaker Change: And also dredging early dredging.

Speaker Change: And the channel that would allow.

Speaker Change: Bigger vessels to come in and makes the refinery more flexible, but there were no significant change we continue with the same hardware.

Speaker Change: Concerning the rationale I'll pass it over to Fernando but.

Speaker Change: I can say that we are working.

Speaker Change: With some synergy not only integrating refineries but.

Speaker Change: But you know that there's a lot of synergy between petrochemicals and refining.

Fernando: Over to Fernando.

Fernando: Yes. This synergy is very important to consider in our rationale. If these synergies are captured and if we understand that this is a good deal we're talking about a profitable business that will generate results and value for our shareholder.

And this is the goal since I was invited by Mazda two started.

Fernando: We've always been business minded and we're obviously looking at the social environmental and governance aspects, but if it makes sense that synergies are captured and if the right price. Aside then why shouldn't we do it.

Fernando: Any deal if it has the right ESG aspects the right price and if it generates values value for our shareholders and for Brazilian Society, we will analyze it.

Speaker Change: Thank you for your question.

Speaker Change: I think that's a great question that allows us to explain a couple of things most of our production is in the pre salt layer. So this concern about the future of our pre salt is very important for the company for our shareholders and the entire market.

Speaker Change: Pre salt does not only contribute to the company's results, but also to society and to our shareholders with special participations of royalties, we have a very robust system to manage.

Speaker Change: Our reserves the flexibility between the injection of air what excuse me water or gas.

Speaker Change: We're very close to the wells, but.

There are a few conditions that ensure that this will continue in the future first you mentioned to be so we have very experienced partners. This discussion is not only happening within the company we're discussing it with partners.

Speaker Change: In this process. So this contribution is very important.

Speaker Change: We're reinforcing our teams with our engineers, we have about 140 reserve engineers, we've contracted 30 more engineers.

Speaker Change: They are usually the people who analyze this entire process in it the entire lifespan.

Speaker Change: And it takes about 10 years to train one so.

Speaker Change: We're investing to.

Speaker Change: Assess or D seismic and that's the traditional three D seismic analysis with a fourth dimension, which is time so.

This allows you to have the best management of your reserves, but above all.

Speaker Change: We have.

Speaker Change: Something that is unique to the company's history.

Speaker Change: We have two executive managers, which are very experienced who are.

Speaker Change:

Speaker Change: Reserve Engineers.

Speaker Change: One of them is Jamal, which are is our executive manager, but we have something that is different we have a CEO who is a reserve engineer and that's very interesting.

Speaker Change: Yeah.

Speaker Change: I'll tell you.

Speaker Change: Something this week before.

Speaker Change:

Speaker Change: We had a meeting.

Speaker Change: And I brought in engineers from basically all of our areas with the CEO. It was a three hour meeting and the level of details. Our CEO is not simply a reserve engineer, but she actually worked in regulations.

Speaker Change: And it really demonstrated how much our teams are aligned and managing our reserves.

Speaker Change: And how we will.

Speaker Change: Have more requirements there because.

Speaker Change: In this meeting we were very firm it was a long we had teams from Schmuhl.

Speaker Change: And everyone else.

Speaker Change: And the entire team went in deep into the topic.

Speaker Change: I don't think that in our history, we have ever been as aligned as we are right now so that makes us very confident with the teams we have especially.

Speaker Change: Due to how skillful our leaders are are.

Speaker Change: At that so I'm very happy and proud to tell you that we have a very close technical alignment, especially in this area, which is essential for the company's future.

Speaker Change: This is William I, just want to add.

Speaker Change: And say that she is also a she has a master's in chemical engineering. So in different areas of the process. We have a lot of our requirements, yes, and she is also.

Speaker Change: Very detail oriented and her requirements.

Speaker Change: And it's not just an engineer who looks at a spreadsheet. She is an engineer that really understand things and is demanding and that's important because it drives teams and it shows them that they are being supervised.

Speaker Change: From the top.

Speaker Change: Recently, she visited our C O E R integrated operations Center.

Speaker Change: And she spoke to our representatives are.

Who are there.

Speaker Change: A 24 seven so each of our fields each of our operations centers has a.

Speaker Change: Engineer.

Speaker Change: 24, seven to manage that field and to extract as much as we can.

Speaker Change: And that of course will be the company's future.

Speaker Change: Thank you the next.

Speaker Change: Questions come from kind of a manner from bank of America or do you Kyle.

Speaker Change: Good afternoon, and thanks for the opportunity.

Speaker Change: Well first I Petrobras Oh.

Speaker Change: We're talking about some of the possible purchasing of assets of renewable energy and can you give us an idea about that has anything changed regarding the timing and the magnitude of the.

Speaker Change: Projects.

Speaker Change: So.

Speaker Change: And secondly.

Speaker Change: Petrobras is clearly has a very robust process to.

Speaker Change: To approve new investments.

Speaker Change: And clearly we can see a greater appetite.

Speaker Change: We're accelerating and increasing investments.

Speaker Change: And we were.

Speaker Change: Talking about the strategic plans do you plan to Zane you intend to implement any changes to this process. This investment process or do you consider the current process.

Speaker Change: An ideal process.

Speaker Change: Director, Thomas Kane, and Fernando can answer your questions Thomas skin.

Speaker Change: Thank you very question Kyle.

Speaker Change: Well Kyle as you know we have two main at times seven investments.

Speaker Change: The M&A is and the internally generated investments.

Speaker Change: My question focuses more on M&A is.

Speaker Change: When it comes to M&A, we're focusing on platforms. The M&A is aren't currently much more connected to onshore wind power.

Speaker Change: Albeit not exclusively.

Speaker Change: So the idea is to have investment platforms.

Speaker Change: And what are those abouts.

They're about finding partners.

Speaker Change: Large sized partners that are highly experienced with a project portfolio.

Speaker Change: That may be.

Speaker Change: Underway or.

Speaker Change: Even greenfield projects for projects under construction, so that we can establish a partnership so the idea here is that.

Speaker Change: It's 50% of our Petrobras as participation and 15 and from the partner, but that has to be negotiated.

Speaker Change: And to start this analysis the board of directors have to approve.

Speaker Change: The analysis of this opportunity they have to approve.

Speaker Change: The opportunity for it to be taken into the portfolio and the board has approved.

Five potential platforms.

Speaker Change: To be added to the portfolio and they amount to more than three gigawatt.

Speaker Change: Capacity, our goal or the plan was to achieve the five year period.

Speaker Change: With five gigawatt in terms of the renewable projects.

Speaker Change: Or one of these five platforms after an authorization from the board we.

Speaker Change: Presented in non binding offer but as is common with these negotiations we did not execute the agreement with them. So now we have four being analyzed and under.

Speaker Change: Negotiation.

Speaker Change: And I know that people expect us to communicate that but it can only be communicated if we really closed the deal.

Speaker Change: And that'll be part of the process of course.

Speaker Change: In addition to the four.

Speaker Change: Under analysis, there are other big companies.

Speaker Change: And are also.

Speaker Change: Thinking about bringing them into the portfolio.

Speaker Change: So the M&A model, we're working on there is that one.

Speaker Change: And in terms of.

Speaker Change: Organic investments or internally generated opportunities.

Speaker Change: We have a.

Speaker Change: Portfolio with four pilot projects and 10.

Speaker Change: Projects that were analyzing for opportunities.

Speaker Change: And then encompass C C O S hydrogen and whatnot. So I mean, it's other types of projects, but I understand that this is not.

Speaker Change: The focus of your question and still on M&A.

Speaker Change: Over the last few months, we've been seeing a certain improvements and the prices of.

Speaker Change: Energy in the market, both solar and wind.

Speaker Change: Which makes it more interesting and easier for us to close these deals.

Speaker Change: If that's the case.

Speaker Change: Can we move to the next question.

Speaker Change: So.

Speaker Change: We don't intend to make any changes to the methodologies or to the governance. Unlike the president said actually we've been an example of governance among the domestic companies and we intend to maintain our governance as it is it's robust it's adequate.

Speaker Change: <unk>.

Speaker Change: It provides robustness to our.

Speaker Change: Materials and hospitals.

Speaker Change: Hospital scenarios, so we don't intend to make any changes to the governance at all.

Speaker Change:

Speaker Change: We want actually to keep on doing what we're doing what.

Speaker Change: What we did create at the company with the arrival of the New President was department.

Speaker Change: That intends to improve the company's interfaces across its different departments. So that's our main focus these interfaces and Victor is the officer in charge his interim director right now and he is in charge of.

Speaker Change: Achieving this internal synergy the interfaces need to be perfected if we want to be able to.

Generate the required speed and energy.

Speaker Change: To expedite.

Speaker Change: Our plans.

Speaker Change: And this.

Speaker Change: Growth trajectory.

Speaker Change: So that there is no drop in our oil reserves.

Speaker Change: I agree the integration process.

Speaker Change: Is following very strictly our internal governance principles of course, there's always opportunities for improvement in any organization and that's what we permanently try to achieve.

Speaker Change: Next questions come from Liliana young from HSBC.

Speaker Change: Please go ahead Lily.

Liliana Young: Hello, and thanks for the opportunity I have three questions. If you allow me.

Liliana Young: The first one about the supply chain.

Liliana Young:

Speaker Change: Could you please share with us your perspective about the global supply chain and the need for a local supplier.

Speaker Change: Suppliers once they were all of Petrobras and developing the.

Speaker Change: Stick naval industry, and guaranteeing or efficient.

Speaker Change: He brings at fair prices.

Speaker Change: Angie.

Speaker Change: I understand that the company's focus moving forward would be.

Speaker Change:

Speaker Change: More upstream centered but what Petrobras is opportunities of investment in downstream and energy transition.

Speaker Change: You did touch upon fertilizers and generation of electricity, but petrochemicals or fuel distribution for instance, and along the same lines do you see any needs to change the governance for the approval of acquisition processes, especially for <unk> due to their requirement.

Speaker Change: A positive V P L for the summer projects and given that Petrobras just changed this internal regulation for the statutory committees that subsidize the administrative committee.

Speaker Change: And the third and last question.

Speaker Change: As if you expect to issue debts moving forward or do you intend to leave room in the balance sheet for a desk that come with the predictions platform. So that your reference cap of $65 billion in terms of the raw that is not exceeded.

Speaker Change: Those are my questions. Thank you.

Renata: Thanks, Lilly director Renata.

Speaker Change: Concerning the supply market.

First I wanted to highlight that any company prefers to have.

Speaker Change: Local suppliers and suppliers that aren't close to them. This makes it much easier for us to have a relationship with our vendors.

You know the possibility to be close to them.

Speaker Change: So.

Speaker Change: We do intend to be closer to our suppliers and to understand their needs and difficulty so that we can adjust if necessary our.

Speaker Change: Hiring formats.

Speaker Change: So that we can add more and more domestic vendors to our database and of course we.

Speaker Change: We must always follow our governance.

Speaker Change: The principles and it must be advantageous for Petrobras otherwise it won't make any sense.

Speaker Change: So.

Speaker Change: We will work on developing this portfolio of suppliers as it's extremely favorable to have the suppliers close to us.

Speaker Change: We've been working with the Prequalification of certain suppliers are we've been working very closely with directors spin that Lee concerning.

Speaker Change: Aspects related to governance, and we are trying to recover our market.

With some different our hiring strategies to allow smaller companies to provide smaller packages until they become strong enough and big enough to get involved in bigger projects in the future. So yes, we do have some difficulty with suppliers and it's not restricted to Brazil.

Speaker Change: We have promised related to suppliers abroad, as well yesterday I had a meeting with the company.

Speaker Change: I have been having lots of companies myself lots of meetings myself to understand the difficulties of our suppliers and they said that after the war in Ukraine, and now with the conflicts in the Middle East.

Speaker Change: The AR number.

Speaker Change:

Speaker Change: Purchases.

Speaker Change: From there our customers has skyrocketed because other companies.

Our having to develop their own infrastructure to support their demand since it's not a kitty either by Ukraine or the middle East. So the global market is whites I'm busy ads in Brazil, where.

Speaker Change: Trying hard to recover our suppliers.

Speaker Change: Well, that's a very good question because after COVID-19 and after the crises like.

Speaker Change: They weren't in the Ukraine that's.

Speaker Change: <unk> had an impact on several suppliers that provided services to platforms are more abroad. The world started rethinking its global change and of course looking for a change that bring about lower risk to there supplies the prison industry.

Speaker Change: Is based on a principal created by a law from 1997 that was celebrated in the first auction from 1999 that we should focus on local content. So it's not simply something that's up.

Speaker Change: To the company to do but rather it's regulated by law and Petrobras has been managing that very effectively.

Speaker Change: In terms of production development.

Speaker Change: And.

Speaker Change: For every subsea activity and we have a very competitive subsea industry.

Speaker Change: Last week, we were discussing that with Renata and Sylvia talking about expanding the prediction capacity of flexible lines and.

Speaker Change: And adding new technologies in Brazil and.

Speaker Change: And we do that in a way that's.

Speaker Change: Extremely advantageous, especially because our manufacturers.

Speaker Change: Our Rd and exporting to other countries not only flexible lines, but also many faults and a wet Christmas trees and the naval industry.

Speaker Change: There was a downturn now it's recovering again, but.

Speaker Change: Of course that is being observed.

Speaker Change: And the industry as a whole and.

Speaker Change #100: A good example of our local content and local development associated with the technology is or rice, App, which is a technology that was developed spy Sam pays at Petrobras applied to the N P activities, which is a hugely innovative that'll allow us to have a great game.

<unk> in terms of reducing waste on top sides and platforms and it's being done.

Speaker Change #100: Here in Brazil, a very disruptive technology developed by a cent piece by engineered passer alley that led the process, but fundamentally speaking we.

Speaker Change #100: Are able to develop it very close to us here in Rio. So these are very positive examples and.

Speaker Change #100: Now this is not merely a requirement for us, but it's also a business strategy that major oil companies will adopt especially in Brazil, because in Brazil, we developed over the course of decades of very competitive local industry.

Speaker Change #101: I'll pass it over to Fernando Thank you and he's going to tell us about that.

Fernando: Okay. So as I said before there are no changes in governance metrics.

Fernando: Foreseen.

Fernando: Obviously, we want to perfect our process as we mentioned before and this happens all the time, but in Capex and Opex. This is the company perspective. So in Capex. We are trying to seek efficiency excuse me an opex, we're trying to increase efficiency and in capex to get better returns.

Fernando: On the capital we are allocating so.

Fernando: We are doing things by the book According to the best financial practices and this goes for everything Opex.

Fernando: Opex capex purchases and whatever.

Fernando: Yes.

Fernando: About new paths board I don't know.

Speaker Change #102: This question has been answered, but we wanted to find opportunities that have the right levels of return if they do we will pursue them.

Speaker Change #102: Our focus as we've been saying is E P.

Speaker Change #102: E. P provides the results then.

Speaker Change #102: It's with these results that we're going to have resources to do the energy transition that we need.

Speaker Change #102: At the right time.

Speaker Change #102: According to the development that our society needs in that.

Speaker Change #102: Companies are.

Speaker Change #102: Our developing new technologies.

Speaker Change #102: Thank you Fernando I'll pass it over to Rodrigo Almeida from Santander go ahead Rodrigo.

Rodrigo Almeida: Good afternoon Fernando are due in the entire Petrobras team I'd like to refer back to.

Rodrigo Almeida: The topic.

Of the last question and connected to our maintaining the gross debt within limits and liability management.

Rodrigo Almeida: I'm, referring back to that point of should Petrobras be more active in.

Rodrigo Almeida: Bonds and rolling out the debt bank.

Rodrigo Almeida: And the net that's expiring in or coming determined the next.

Rodrigo Almeida: Quarters are there any studies to do that.

Okay.

Rodrigo Almeida: For your gross debt and also I would like to understand what you're thinking.

Rodrigo Almeida: When you assess and mayonnaise are there any M&A as that can bring.

Rodrigo Almeida: Bringing any gross debt into the company. So for example, red lung we know.

Speaker Change #104: That is our.

Speaker Change #104: Corporate tax number has some gross debt between five and 6 billion. So how do you assess this kind of M&A. If it is including a significant gross debt to your balance.

Speaker Change #105: And my next question is about the gas and power segment I'd like to understand a bit more about how you are rebuilding your client portfolio in gas and electric power. So what should we expect for the next quarters. Thank you.

Speaker Change #106: Thank you Rodrigo I'll ask I'll answer your second question with director Paula scheme, and then Fernando will answer your first questions go ahead policy.

Speaker Change #107: Thank you Rodrigo well.

Speaker Change #108: We had a reduction in the demand and the demand for gas in Brazil overall, because there was a reduction in the use of thermal power, but this is now going the opposite way, we're seeing thermal plants being used but we have a new reality now.

Speaker Change #108: We currently have 15 gas suppliers competing with Petrobras.

Speaker Change #108: Which is very different from what we had before despite all of that we have a very aggressive policy to maintain our market.

And despite having 15 competitors, we have 70% of the market. So we are competing freely.

So how do we maintain this market.

Speaker Change #108: We created a new product so and.

Speaker Change #108: In the second quarter of 2024, we created a premium for performance or our distribution companies as we announced this means that you have a discount of 10% on price if your consumption is above 60%.

Speaker Change #108: So with that we were able to attract many distributors too.

Speaker Change #108: Have contracts with us.

Speaker Change #108: We had and interesting situation I'm not going to mention.

Speaker Change #108: Hi.

Speaker Change #108: <unk> any details, but there was a client that had had a contract with us a long time ago <unk>.

Speaker Change #108: That they thought was advantageous and now Dave.

Speaker Change #108: If they are buying from Petrobras they would be having much lower prices.

Speaker Change #109: They had in this deal some time ago. So.

Speaker Change #109: Our policy is to maintain our clients and maintain of course Ah.

Speaker Change #109: Responsible prices.

Speaker Change #109: The other policy, we have is very aggressive and our intention is to.

Speaker Change #109: Capture.

Speaker Change #109: Free consumers.

Speaker Change #109: To this market this has attracted the industry.

We've announced.

Speaker Change #109: A number of contracts with CSN gerdau.

Speaker Change #109: I can't tell you names, but we have a very significant queue of major companies.

Debt.

Speaker Change #109: Are about to close a deal.

Speaker Change #109: We also have some perspective and again I can't give you many details, but we are going to launch competitive products.

Speaker Change #109: With.

Speaker Change #109: Cheaper gas like from Rota, three and so on so this gives us a competitive advantage.

Speaker Change #109: Regarding energy.

Speaker Change #109: So really there are many thermal plants that.

Speaker Change #109: Where recently a D are removed from the contract. So we're looking at the capacity tender our bid tender that the Ministry has announced.

And our aim is not only to re contract them.

Speaker Change #109: But eventually we hope to have a new thermal plants to you for this market. So.

Speaker Change #109: We're looking at this carefully and we have a lot of hope and expectations that.

Speaker Change #109: This bid tender will happen.

Happen, especially with the plants, we already are.

Speaker Change #109: <unk> built we have a very big competitive advantage because a part of the investments have already been got has I've already gone through amortization. So we have a good possibility to be competitive.

Speaker Change #109: In this bid tender.

Thank you.

Speaker Change #110: Thank you Thomas skiing, I'll pass it over to director Fernando who will discuss your other questions.

Speaker Change #111: Okay. So I think we have.

Speaker Change #112: I've given some details on ideal cash levels.

Speaker Change #112: This is approved according to our strategic plan. According to the needs we may have.

Speaker Change #112: Due to how our finance the bowl projects are.

Speaker Change #112: I, usually work with minimal cash or I have good projects that generate value for our shareholders or I need to distributor says ordinary or extraordinary dividends.

Speaker Change #112: And also having idle cash and the company has a cost in availability. So this is not what we're seeking.

Speaker Change #112: Ah.

Speaker Change #112: About issuing debt extending dead end.

Speaker Change #112:

Speaker Change #112: Advancing payments this is what.

Speaker Change #112: You know our managers have been looking at and they've been awarded for it so theyre seeking opportunities that will make our debt to the lowest level possible.

Speaker Change #112: We have.

Speaker Change #112: The best spread and.

Speaker Change #112: Government bonds.

In the last years that we presented this in the company and this is a part of our daily work.

Speaker Change #112: Our idea is to continue.

Speaker Change #112: Being efficient and are recognized by the market.

Speaker Change #113: Thank you Fernando.

Speaker Change #114: Let's continue with Radeau four Oh julie's.

Speaker Change #114: Question for him and he's from Jpmorgan go ahead.

Speaker Change #115: Good morning, I'll ask a single question I know we've been here for a long time I just want to refer back to dividends again.

Speaker Change #115: We've mentioned several things here, but I just wanted to understand if I got it right what I heard from you.

Speaker Change #115: Is that extraordinary dividends will be based on.

Perception and the company's.

Speaker Change #115: Cash generation and that includes Capex in your strategic plan. So.

Speaker Change #115: Okay.

Speaker Change #115: Whenever you have a.

Speaker Change #115: Better understanding of the strategic plan you might have.

Speaker Change #115: <unk> extraordinary dividends.

Speaker Change #115: What I want to be sure of.

Speaker Change #115: Is this.

Speaker Change #115: Let's imagine that something happens and the company generates.

Far more cash than was expected for any reason.

Speaker Change #115:

When that was not planned for.

Speaker Change #115: So that could be a situation in which you would have some space to pay extra ordinary dividends.

Speaker Change #116: So is that a possibility.

Speaker Change #117: Can you really make an extraordinary payout at any moment.

Speaker Change #118: A decision on extraordinary P. O. It's as you mentioned will depend on our future cash generation possibilities and our current cash.

Speaker Change #118: Considering our investments and our strategic plans.

Speaker Change #118: If we find.

Speaker Change #118: Our cash for it.

Speaker Change #118: Above what we need it and again I like to say that we do things by the book.

Speaker Change #118: So cash above.

Speaker Change #118: What is necessary for a company has a cost.

Speaker Change #118: And we're trying to be more efficient.

Speaker Change #118: So if we find.

Speaker Change #118: Any availability or any possibility or the possibility.

Speaker Change #118: To make extraordinary payouts than we will.

Speaker Change #118: The most appropriate thing is to have.

Speaker Change #119: Goods are good strategical plan.

Speaker Change #119: Okay.

Speaker Change #119: A good volume that can reflect our strategic plan on the short term and then take these values if possible as soon as we can.

Speaker Change #119: That means that we havent ruled out an extraordinary dividend payout for 2024.

Speaker Change #120: Thank you Fernando and thank you Rodolfo for that question. The next question will be asked by Bruno a marine.

Speaker Change #121: Go ahead Bruno.

Bruno Montanari: Good afternoon, everyone. Thank you for taking my question I have two quick ones.

Bruno Montanari: First referring back to the potential M&A with rare Lam you mentioned that.

Bruno Montanari: You might see some synergy in this assets to what you do if you could give us some more details on that what synergies do you believe can happen would it be would it be upstream with the current refining structure that you have and what is your.

Bruno Montanari: Current projected projection for next year.

Speaker Change #122: Licenses have been delayed.

By Ibama and how much does that affect you for 2025.

Speaker Change #122: And when will Ibama go back to its regular pace.

Speaker Change #123: So that we don't see any impact to your 2025 production. Thank you.

Speaker Change #124: Doctor William can start and director of Victor and complement that thanks for your question. The Sui Liam while there are several different Senate James I'm going to give you. A typical example ever refinery that's close to us it's redo it.

Speaker Change #125: It has a lot of synergy for instance, with brass camera.

Speaker Change #125: Exchanging raw materials, there propane in polypropylene.

Speaker Change #125: And if on propane and <unk> and Cracker Theres, a leftover of hydrogen which supplements our hydrogen needs for a refinement.

Speaker Change #125: And especially for the production of gasoline and low sulfur diesel.

Speaker Change #125: So there's several different synergies in terms of logistics.

Speaker Change #125: And at root of Lam for instance, there is also a synergy with braskem and actually more than that.

Speaker Change #125: There is a logistics synergy.

Speaker Change #125: Inside Petrobras.

Speaker Change #125: When we had a really lam.

We used to lever leverage these synergies and exchanging byproducts do during scheduled and unscheduled downtime.

Speaker Change #125: That's a wedge preventing us from leaving some markets are without supplies in by year for instance, when they had a downtime.

Speaker Change #125: It would be supplied by other refineries so.

Speaker Change #125: There are several different synergies across.

Speaker Change #125: The refineries among other synergies. Another example.

Speaker Change #126: Before I give the floor to Fernando.

Speaker Change #127: And the gods Lube I wouldn't have a PJM that will produce natural gas and.

C. Two pas switches and a very important raw material or petrochemicals and that will give us the possibility.

Speaker Change #127: To have a hat plants.

Speaker Change #128: Or maybe depending on our negotiations maybe even expanding braskem in Rio de Janeiro, using these raw materials Fernando over to you.

Speaker Change #129: I think you covered it.

Speaker Change #130: Thank you.

Speaker Change #130: Victor.

Speaker Change #131: Well the question about Ibama is very important first I want to highlight.

Speaker Change #131: The efforts of director Aquarius and her team.

Speaker Change #131: And I've been monitoring that for a long time the licensing process. She has a very robust very competent team Farnborough Danielle Loma.

Speaker Change #131: Director of Claris as frequently.

Speaker Change #131: Managing that very closely with Ibama present smog that she had a meeting with a director is clara's since Sylvia recently in Brasilia.

Speaker Change #131: To expedite.

Speaker Change #131: And not and E&P.

Speaker Change #131: Except for the license of the Equatorial margin, which is something that we have to achieve but basically.

Speaker Change #131: For the.

Speaker Change #131: It's not the licenses, but it's actually authorizations that the environmental licensing agency requires you to have so that he.

Speaker Change #131: Can be sure that the process is being strictly followed.

Now there was a strike at Ibama and that impacted our curve this year.

Speaker Change #131: At 2% by 2%.

Speaker Change #131: However, this 2% impact is being offsets within our margin, which is $2 8 billion.

Speaker Change #131: Billions of barrels of oil equivalent so it's absorbed by our margin and.

Speaker Change #131: And of course.

Speaker Change #131: The bomber is working normally and it will.

Speaker Change #131: Produced positive results, we will continue to collaborate with them for H two and for the next years yesterday at the end of the day and we were told that we were given the out license for the annuity Gary voluntary U P. S. So.

Speaker Change #131: That was something that was among our liabilities and director of Claris was working on it but the hum to be Chiba.

Speaker Change #131: Is still pending.

We also received important authorizations the extension of the production capacity of our Orange Bahasa vessel.

Speaker Change #131: That was issued by Ibama. So yes. It does have an impact it was discussed.

Speaker Change #131: By our.

Speaker Change #131: Investor Relations area, but it's absorbed by our plants and so we do expect.

Speaker Change #131: To see these issues salt very soon.

Speaker Change #131: <unk> not only those related to ibama, but also to the national oil agents, saying because.

Speaker Change #131: Because it's not impacting only Petrobras and its investors, but also society because of course, if a field is not working you have a delay in the payment of royalties.

Speaker Change #131: From the federal government as to the states and municipalities involved.

Speaker Change #132: Director of Claris would you like to add to that.

Speaker Change #132: Sure good afternoon.

Speaker Change #132: As you probably know Ibama.

Speaker Change #132: Has been working on that since January this year.

Speaker Change #132: Between.

Speaker Change #132: <unk>.

Speaker Change #132: The beginning of the process and the strike itself and during that entire period Petrobras has.

Speaker Change #132: <unk> been given twenty-five licenses and authorizations in spite of the strike.

Speaker Change #132: Out of these 25 authorizations and licenses eight were related to production so as a.

Speaker Change #132: Salt of very presence administration, and a close relationship with Ibama.

Speaker Change #132: We were able.

Speaker Change #132: To.

Speaker Change #132: Acquire or to be given a series of licenses. During this period, the ministry of innovation and managements of public services submitted a new proposal to the Ibama Representatives.

Speaker Change #132: When there are analyzing them and there are meetings and now we know that nine.

Speaker Change #132: <unk>.

Speaker Change #132: Big groups inside Ibama have already approved the proposal.

Speaker Change #132: So.

Speaker Change #132: I have no doubts that this movement had an impact on the production of not only Petrobras, but the entire production chain of Brazil.

Speaker Change #132: But in addition.

Speaker Change #132: Two working on there.

Speaker Change #132: These processes. We're also are working with the government and the results of the meetings that will be completed by the end of the day to day.

Speaker Change #132: And we believe that.

Speaker Change #132: Oh, we'll go back to normalcy.

Speaker Change #132: Now with a huge.

Speaker Change #134: Number of processes that we will have to solve but Petrobras acquired or was given 25 licenses as a result of the involvement of all of the departments of Petrobras. Thank you.

Speaker Change #134: Claris.

Speaker Change #135: Now when Nike Graco from Ito BBA Ananke. Please.

Nike Graco: Hello, everybody and good afternoon, and thanks for the opportunity to ask questions.

Speaker Change #137: I'm going to ask one question since it's pretty late it's.

Speaker Change #138: Follow up to Thomas' skins his answer.

Speaker Change #138: The gas policy.

We've been seeing lots of statements in the media.

Speaker Change #138: About this perception about the gas prices being high in Brazil.

Speaker Change #138: And and expectation.

Speaker Change #138: For a structural reduction in the gas prices in Brazil.

Question is what has the company been doing and what can we expect.

Speaker Change #138: To see included in the next business plan what are the initiatives.

Speaker Change #138: <unk> towards trying to bring down the gas prices like increasing supply.

Speaker Change #138: And beyond that.

Speaker Change #138: Routes three involving the reduction of the reinjection levels or a search for a new for new.

Speaker Change #139: Sources of supply and believe you have for instance, or and we discussing the tariffs are offered to the partners which of these initiatives are being discussed internally. Please. Thank you.

Thomas Kim: Thomas Kim.

Speaker Change #141: That's a great question.

Thomas Kim: First.

Thomas Kim: I must say that all of the changes to the gas prices they were based on.

Thomas Kim: The gas cost save opportunity.

Thomas Kim: So a structural way of reducing the gas prices would be to increase the gas supply and the supply of cheaper gas and you can do that by increasing the domestic supply which is the case of roto three where the leroy of projects and so on and so forth.

Speaker Change #142: Our internal ways of increasing the offer and another way she mentioned would be to import gas.

Speaker Change #142: And.

Speaker Change #142: For that we'd have three possibilities.

Speaker Change #142:

Speaker Change #142: This gas.

Speaker Change #142: Gas from Colombia, that's a possibility.

Speaker Change #142: And since Colombia imports gas.

Speaker Change #142: It's not clear.

Speaker Change #142: That will be able to imported from them.

Speaker Change #142: But it is it possible routes there is bolivia, but they have the reserves. So it depends on whether we'll be able to increase discovery and production over there and there is a third possibility which is Argentina.

Speaker Change #142: Which.

Speaker Change #142: It's very interesting.

Speaker Change #142: In terms of potentiality.

Speaker Change #142: Especially because we already have.

Speaker Change #142: The pipeline of gas ball and there is a connection between Argentina, and Bolivia and of course, if we want to increase the gas volume.

Speaker Change #143: Uh huh.

Speaker Change #143: Significantly we have to complete the investments that they're planning to make in Argentina, but that's certainly a they have a good potentiality Argentina is the world's second largest shale gas reserves, so that could benefit us so I could say that in the short term.

Speaker Change #143: Term.

Speaker Change #143: I see these two possibilities.

Speaker Change #143: <unk>.

Speaker Change #143: Increasing the internal supply.

Speaker Change #143: <unk> wrote three is now going into operation and maybe.

Speaker Change #143: And we've been discussing that maybe bringing gas from Argentina.

Speaker Change #143: So I believe that these would.

Speaker Change #143: It would be.

Speaker Change #143: A few possibilities for us to structurally lower the gas prices in Brazil.

Speaker Change #144: As a side comment there's been a significant reduction.

Speaker Change #144: We've reduced the gas prices by 25% last year more than 25%, partially due to the reduction in the Brent price, but also partially because.

Speaker Change #144: No.

Speaker Change #144: The fact.

Speaker Change #144: That Oh, we have a better.

Structure.

Speaker Change #144: To supply more competitive gas.

Speaker Change #144: Okay.

Speaker Change #144: Thanks, Thomas can now onto last questions.

Speaker Change #144: I'll give the floor to Georgia Dobrinja from Scotiabank, George you have the floor.

Georgia Dobrinja: Good afternoon.

Georgia Dobrinja: Thank you.

Georgia Dobrinja: For.

Speaker Change #146: The meeting my question is about the Namibia assets I want to understand what's the minimum share that Petrobras could consider given that we have seen a lot of discussion about discussions about joining this acquisition with a partner where are what would be the investments program. If the offer is successful and is there any asset.

Speaker Change #146: In the region that you are considering for that region as well another asset Fernando.

Speaker Change #147: Thank you George for the last question.

Speaker Change #147: So.

Speaker Change #147: We do not discuss specific cases as is the case here what I can guarantee to you is that.

Speaker Change #147:

Speaker Change #147: At your brass is interesting interested in accessing any exploration possibilities exploration is not the same as production but of course whenever we can explore new possibilities will always consider them. So that we can.

Speaker Change #147: Search for good deals and increase the value delivered to our shareholders and of course, we'll only join deals that are adequate that create synergy and value for the company.

Speaker Change #148: Thank you Fernando.

Speaker Change #149: Thank you for attending.

And now we are officially closing the Q&A session. If there are any additional questions.

Speaker Change #149: Our team will be pleased to answer all of them I'll give the floor to Fernando for your final comments.

Fernando: Thank you to all of the directors are available here and everyone who participated in this earnings call, especially our viewers analysts investors reporters and all of society.

Speaker Change #150: Our goal is to become a better and better and increasingly relevant for society and that includes shareholders stakeholders and civil Society overall.

Speaker Change #150: I would really like to count on you.

Speaker Change #150: I know that your coverage is very important to your opinion is very important so.

Speaker Change #150: If you have any question in mind, our team will be available to answer.

Speaker Change #150: And I'm also available for anything you might need if you have any questions and contributions.

Speaker Change #151: Thank you enjoy your Friday and have a good weekend.

Speaker Change #152: Thank you. This presentation is available on our Investor Relations website.

Speaker Change #152: And this webcast will soon be available as well.

Speaker Change #153: Thank you have a good day and a great weekend.