Q1 2025 Petroleo Brasileiro SA Petrobras Earnings Call
The second quarter of 2025.
And oil is at $65 per barrel, a difference of about $20 versus the first quarter of 2024.
We are certain and we are committed to resolving this issue delivering.
Good results and dedicating a lot of our effort.
In.
On capital discipline for 2025.
This challenging scenario of $65 per barrel.
Requires and will require from us simplified projects.
And assurance that we will have good trading margins for our products.
A significant cost reduction.
And a lot of cooperation between the different areas in the company.
So that we can have the best results possible for our business.
This is what we are already addressing.
And this is what all main.
Oil companies are doing.
And of course.
We have to make this effort.
To have better results in such a challenging.
Scenario.
Again at $65 per barrel.
So in this scenario, we're going to talk about.
A few words that you will hear constantly such as austerity simplification optimization.
Reducing investment costs, reducing operational costs and overhead.
Our products and we know this very well.
Are priced by the international market and they vary.
According to their prices and the exchange rate and this is out of our control.
Yeah.
What we know and we're certain of this is that we have the obligation to react to these fluctuations.
Petrobras is absolutely aware of its obligations to react to these fluctuations.
When prices go up.
We have more comfort.
To expand our initiatives, but when prices go down it's time to tighten our belts.
With that being said.
This is my message to you.
Please remain confident we are addressing this cost reduction.
In face of a challenging scenario.
So that we can have the best results possible for our investors whether they are in the government or private.
Okay.
But also I have to highlight the excellent results that we.
We have had in the first quarter of 2025.
First of all I'd like to say that Theres, new future for an oil company without exploration.
And I like saying that this is what we have been doing this is what we've been.
Bringing.
As a result for our company, we are constantly expanding our reserves.
And building up.
Our efforts to expand the Brazilian equatorial margins, we believe in this potential and we will carry on.
Pursuing the opportunity to show Brazilian Society, and our investors that we will have relevant gains that we can seek from exploring oil and gas in the Brazilian equatorial margin.
So in that aspect as I mentioned we.
<unk> have been.
Very successful.
We have added a.
We have added more reserves.
Constantly, especially with the pre salt of later.
Last week we.
Disclosed a new discovery in the pre salt layer in the <unk> block and then if everything works out we believe that we will have advanced production worthy around block.
More pre salt with good quality oil without contaminants, but still.
With a challenging.
Rock.
For our project, but this is within our potential. This is what we know how to do.
Before the second discovery in Iran. We.
<unk>.
<unk> made a new discovery and become post base said.
In.
North of Prosper area. We also have made discoveries in Colombia, and we had an excellent.
Test.
In Colombia's offshore area.
This is a block that if all works out will be responsible for supplying.
All of the gas consumption in Colombia, and let's hope that this will happen.
But thats not all ladies and gentlemen, we still have many opportunities ahead of us.
Whether it is in the Brazilian eastern margin or in the equatorial margin.
We have to remember the Pilotte This basin, where we're also exploring.
And soon we will.
Consider drilling wells there.
As we will hear later on we have about 50 exploratory wells to drill.
And the next years.
And this repeats what I mentioned before we're very proud of it because.
An oil company will not have a future without exploration.
And we want a strong long lasting company that contributes to our investors whether they are in the government or private investors and all so contributes to Brazilian society in general.
We're seeking new reserves at the same time as we work to develop the fields that have already been discovered.
And you have been seeing our results in the first quarter of 2025.
Our production went up five 4%.
Versus the previous quarter.
This increase.
Was the decisive contribution to our financial results.
Oil is our main product.
And with it, especially because of that we are generating $8 5 billion U S dollars in cash.
With our operations and.
And we reached a net income of $6 billion U S dollars.
Speaker Change: After my message our director Noga Asia will go into details about our financial performance and he will draw our attention to the impact of variations in Brent oil prices and our exchange rate.
Okay.
And you will be reminded that in the previous quarter.
Speaker Change: The foreign exchange for the Brazilian real had a negative impact in our company's results.
Speaker Change: This quarter the opposite happened.
Speaker Change: Recovered apart of those losses.
Speaker Change: The appreciation of the Brazilian Hal add.
Speaker Change: And impact on our results again.
Speaker Change: And without these foreign exchange effects, our results would have been 4 billion U S dollars.
Speaker Change: Which is not bad.
Speaker Change: But.
Speaker Change: It was even better and the fact that it was $6 billion.
Speaker Change: Our results are often impacted by the price of oil and by the foreign exchange rate.
Speaker Change: As happens with oil companies and both of these variables.
Speaker Change: Out of our control.
Speaker Change: And that is why we are seeing that right now is a moment for austerity.
Speaker Change: It's a moment in which we will have to control our costs in general we will have to do what we still do well, which is exploring producing oil in its byproduct and trading these byproducts and our oil with the best.
Speaker Change: Profit margins as we can.
Half, but we need to do it.
Speaker Change: And this moment is.
Speaker Change: Telling us in that direction, but we need to do it with capital discipline.
Speaker Change: Seeking major cost reductions the highest we can have.
Speaker Change: So after that message, which I think will suit your.
Speaker Change:
Speaker Change: Thoughts about how much the company is spending we are not here for that I have to repeat we're going to highlight our physical results for the first quarter and as I said they were very good and.
Speaker Change: They justify.
Speaker Change: The capacity that the company has.
Speaker Change: On February 15.
Speaker Change: And then ultimately rent went into production and the Bucyrus field.
Speaker Change: It was the first of a series of five oil rigs.
Speaker Change: That will make hoosiers fields, the biggest fields in Brazil by far.
Speaker Change: That rig has a production capacity of 225000 barrels of oil per day.
Speaker Change: In addition to gas.
Speaker Change: As I said it was the first of a series of five giant rigs.
Speaker Change: That will comprise the facilities around the <unk> fields on.
Speaker Change: On March 3rd Admiral and they show that as you can smell Clinton to the field.
Speaker Change: On the sugar at Chico's smell.
Speaker Change: Upper right in the pre salt in the center space in <unk>.
Speaker Change: And it was.
Speaker Change: Finally anchored.
Speaker Change: In 10 days.
Speaker Change: Need to draw your attention to these 10 days, which is a record breaking period for Petrobras.
Speaker Change: They will begin its protection.
Speaker Change: Towards the end of the second quarter of this year.
Speaker Change: At the beginning of the third quarter.
Speaker Change: And with that.
Speaker Change: It will be another 180000 barrels a day.
Speaker Change: Operated by Petrobras in the pre salt.
Speaker Change: Along with.
Speaker Change: Refining.
Speaker Change: We also completed the revamping of train one.
Speaker Change: Of our refinery.
Speaker Change: From any barrels per day of refined oil.
Speaker Change: 230000 barrels a day in terms of processing capacity.
Speaker Change: So with very little investment with the introduction of the <unk> plus a small revamp.
Speaker Change: Yeah.
Speaker Change: Involving maintenance, we basically doubled the capacity arenas chain one it may sound simple, but it's no small feat, but talking about 15000 additional barrels per day in terms of process to load at 7% of this.
Speaker Change: Past any generating diesel which is our main product.
Speaker Change: As I said this means more diesel on the market and once we complete train two which is undergoing a bidding process. It will be 216000 barrels per day.
Speaker Change: Since then the northeast of Brazil.
Speaker Change: A market that's hungry for diesel.
Speaker Change: I used to say that.
Speaker Change: Among all of the refineries.
Speaker Change: Undertaking more efforts around diesel.
Speaker Change: And as 10 diesel.
Which I mean, it's much less and adds more value.
Speaker Change: But especially at <unk> among all of the refineries. This has the highest conversion of crude into diesel we're talking about a conversion of around 70%.
Speaker Change: Which shows how modern.
Speaker Change: And economically feasible this refinery is.
Speaker Change: Yeah.
Speaker Change: And the second module of natural gas processing.
Speaker Change: And well go into operations in the second half they bought into a complex and a temporary Geneva.
Speaker Change: Add it to the first module the total processing capacity of that unit.
Speaker Change: We'll achieve 21 million cubic meters per day.
Speaker Change: Increasing the supply of natural gas and also of its byproducts, including <unk>.
Speaker Change: With natural gas.
Speaker Change: Also on the brink of.
Speaker Change: Inaugurating the new Audi T. At Replant. This new unit will have the capacity to produce 63000 barrels per day.
Speaker Change: S 10 diesel.
Speaker Change: As I told you our efforts around increasing capacity.
Speaker Change: And increasing the supply and production of diesel.
Speaker Change: Nationally B S 10 that diesel is real these.
Speaker Change: These are our highest.
Speaker Change: Added value products and as I told you we are.
Speaker Change: Seeking the highest possible level of attractiveness for our investments.
Speaker Change: The S 10 diesel has a high.
Speaker Change: Added value in that and it emits much less.
Speaker Change: It sounds much less sulfur into the atmosphere.
Speaker Change: Almost negligible and this I add at Valley also shows us that.
Speaker Change: Not only are we looking for more value. We're also looking for products with the lowest possible emissions.
Speaker Change: We're still on the lookout and for the opportunities to Decarbonize, which means.
Speaker Change: That.
Speaker Change: And this is what it means and that is why in February we sold the first bunker of a vessel fuel with a 24% of renewable content in the Asian market. This is a huge achievement.
Speaker Change: We now set foot.
Speaker Change: And the Asian market.
Speaker Change: With a.
Speaker Change: High added value product.
Speaker Change: That is.
Speaker Change: Produced and traded by Petrobras the product is a mixture of 76% of mineral fuel oil and 24% of Biofuels.
Speaker Change: Produced from used.
Cooking oil.
Speaker Change: And again.
Speaker Change: The mixture of these two components.
Speaker Change: Allows us to create a product that's highly value our families and the international market. We are developing new products also involving the low carbon market, which is extremely attractive as a market to us innovating to generate value and.
Speaker Change: Enabling solutions around new energies and to decarbonization.
Speaker Change: In March.
Speaker Change: We signed a contract with the.
Speaker Change: National Development Bank of Brazil.
Speaker Change: Two.
Speaker Change: For us the Amazon.
Speaker Change: And the probe Forest plus program one of the biggest problems for them.
Acquiring carbon credits in Brazil will promote the reforestation of up to 50000 hectares of degraded and now degraded areas in the Amazon to give you an idea this is equivalent to 15.
Speaker Change: <unk> thousand football fields and to capturing 15 million carbon.
Speaker Change: Times, which is equivalent to one is annually emitted by around 9 million.
Speaker Change: Gas.
Speaker Change: Fuel gas fuel cars. This is structuring project around the climate, but also in terms of reputation and it is a project and initiative.
Speaker Change: So the seed of decarbonization.
Speaker Change: When right when Petrobras is planning on making money with the capture of C O two.
Speaker Change: We are confident in our 2015 strategic plan not forgetting that a.
Speaker Change: Low Brent price.
Speaker Change: Brings about additional challenges and that we should review our plan generating a tuning 'twenty six 'twenty 30 business plan, considering the need for us to.
Speaker Change: To overcome these.
Speaker Change: Extremely high challenges imposed by price reductions will do that by preserving our.
Speaker Change: Cash reducing costs and through capital discipline.
Speaker Change: This is part of our values.
Speaker Change: The commitment.
Speaker Change: Brazil and with our investors.
Speaker Change: Whether there.
Speaker Change: Governmental or private all of that is part of our values and that is why we will keep on investing and key plan focusing on it.
Speaker Change: More.
Speaker Change: Projects that are financially.
Speaker Change: Feasible.
Speaker Change: And making money for our investors.
Speaker Change: Whether they're from the government or from the private market. This is what we're doing here.
Speaker Change: Yeah.
Speaker Change: With the.
Speaker Change: The highest possible dedication and strictness, but we are now here to believe in the potential of Brazil, knowing that if Brazil. If we are doing well, Brazil will also be well, it's fundamental that we all understand is because our results.
Speaker Change: Depend on it.
Speaker Change: The optimal conditions of the Brazilian market the Brazilian market is currently.
B C.
Speaker Change: Sixth.
Speaker Change: Highest consuming.
Speaker Change: Zero.
Speaker Change: Hi, it's consuming market of oil products in the world. So it is a market that should be.
Speaker Change: Sin.
Speaker Change: Before the value for the importance. It has that's why I say that we work hand in hand, Petrobras benefits from the appreciation of Brazil, and vice versa.
Speaker Change: To waste stream that is why we're committed to this path.
Speaker Change: And that is why we're committed to our planning.
Speaker Change: And with.
Speaker Change: Making expenditures that are in line with the current level of oil prices you can rest assured that.
Our common goal that Petrobras has to have a long lived and strong company.
Speaker Change: The work for Petrobras to board investors in Brazilian Society.
Speaker Change: Having said that.
Speaker Change: I want to thank you for your trust.
Speaker Change: Our shareholders partners.
Speaker Change: <unk>.
Speaker Change: And.
Speaker Change: You can rest assured that we are here to overcome the challenges ahead of us and to take all of the possible opportunities along the way. Thank you for your presence and now I will give the floor to my colleagues for their presentations. Unfortunately, I will not be able.
Speaker Change: To stay for the presentations, but I wish.
Speaker Change: Hugh.
Speaker Change: Okay great.
Speaker Change: Presentation and please analyze your purchase recommendations we want all of you investing in Petrobras and will make you proud of your investments. Thank you.
Magda: Thank you Magda.
Magda: Now, let's start the presentation about the.
Magda: Performance of the first quarter of 2025, I'll give the floor to Fernando inauguration, our financial director Fernando you have the floor. Good morning, since Mark Doug. Thank you for the message.
Magda: I want to thank you all for being here for.
Magda: Yet another webcast I will start by looking at the.
Magda: Highlights of the first SKU of 2025 after the presentation, both me and the other directors will be here for the Q&A session.
Magda: Yeah.
Magda: This slide shows the financial highlights of the company with an adjusted EBITDA, excluding one off events of a $10 billion, 8% above the last quarter and a net income of $4 billion our cash.
Magda: Cash generation is still strong with an operational cash flow of $8 $5 million and net cash flow of $4 $5 billion. I also want to highlight our contributions we approved 11 point set 7 billion. He is in dividends.
Magda: Related to the first quarter of.
Magda: This year and repaid more than 50 65 billing highs in net taxes this growth.
Magda: Is the result of Argus work and well implemented strategy demonstrating Petrobras is financial solidity. Our commitment is clear to keep on generating return for our shareholders, including the Brazilian society in a responsible and consistent manner slide six shows the details of.
Magda: The EBITDA and the operational cash flow on the right hand side.
Magda: Here I want to highlight the effects of our operational performance on the result, with the greater production and volumes traded the it.
Magda: EBITDA was $10 $7 billion in the quarter.
Magda: With the growth of 8%.
Magda: Compared to the fourth quarter.
Magda: 'twenty 'twenty four and as I said this was driven mainly by the increased oil sales, both the internal and the external market.
Magda: In addition to the increased crack spread of diesel in terms of Oc <unk> on the right hand side, we had a growth of 4% versus the previous quarter.
Magda: Totaling $8 five.
Magda: Billion.
Magda: The next slide.
Magda: Shows that our net.
Magda: It was $6 billion not considering the one off events. The result was 4 billion.
Magda: An increase of 31% vis vis the previous quarter.
Magda: In the table below you can see the external scenario.
Magda: Part of the results reflects an increase of 25, 28% of the diesel crack spread the appreciation of 1% of the brand quarter by quarter and the appreciation of 7% of the yeah versus the <unk>.
Magda: And have a euro dollar.
Magda: Moving on to slide number eight in the first quarter of 2020 five investments total to $4 $1 billion, which represents a reduction of 29 vis vis the last quarter of 2020 for this volume of investments.
Magda: Corroborate the message that I brought to you on our last webcast. When we said that we wouldn't see the level of capex of the first quarter.
Magda: F 'twenty to 'twenty four in the first quarter of 2025, you can remember that in the last quarter of last year. The Capex was higher because of the reduction of this mismatch between the physical and financial advancement of our own units towards the bushes fields. The capex of the first quarter of 2025 was lower than that of the fourth quarter of 'twenty.
Magda: 74, but its higher if compared to the capex of the first quarter of last year. There was an increase of 34%, especially as a result of the big advancements and the investments of the pre salt in the Santos Basin and also the news production systems in the Booth and a couple fields slide nine <unk>.
Magda: Jos.
Magda: The investments.
Magda: That work performed you can see that we're investing more but also delivering more these are investments connected to greater physical deliveries that support eight.
Magda: Production curve and ensure the enter into production of new systems, the acceleration of Capex towards the end of 'twenty 'twenty, four and allowed us to shorten the physical financial gap by 14 percentage points, reflecting our commitment.
Magda: With the.
Magda: Packages and with the reduction of delay risks some of these results show the evolution of deliveries over the course of the last 12 months I must highlight.
Magda: That the five rigs that were undergoing constructions in the first quarter of 'twenty 'twenty four went from 51% to 76% in terms of physical advancement. In addition to that we also started the construction of two more rigs reaching seven units.
Magda: In construction this year, our higher capex because of that of last year reflects the higher number of.
Magda: Owned platforms that we're building.
Magda: Which bring about the benefit of not having effective platforms with an impact on our debt. We also doubled the number of interconnections and wells in one year. It was 16 wells interconnected in the first quarter of 2025 and eight in the same period of last year, It's our best.
Magda: Result.
For the last eight years, we had 27.
Magda: The drill interventions for new wells the growth of 13% vis vis that of the first quarter of 'twenty 'twenty four we're working we're.
Magda: Drilling more and interconnecting wells and advancing towards the construction of the new units that will give support to our production curve. These are investment projects that generate value for our shareholders and will translate into profitable growth for the next few years.
Magda: Slide 10 shows that reconciliation between Capex competence and the cash Capex for the first quarter of 2025, you can see that the cash investment of the quarter was impacted by a higher capex in the fourth quarter of 2024.
Magda: First of all it's important to clarify that there is a normal lag between measurements and payments. This means that all quarters, we observed a certain level of time lag.
Magda: This is absolutely normal however, as there was a large concentration of measurements at the end of the fourth quarter of 2024, especially in December due to our efforts to recover the physical and financial gap of the new systems, a significant portion of the payments were only made it.
Magda: In January and this impacted the cash investment of the first quarter of 2025.
Magda: To illustrate this atypical effect, we detailed the impact of this time lag between measurement and payment in this point grass.
Magda: In the first quarter of 2025 around $1 billion that came out of our cash for investments were related to the measurements of the fourth quarter of 2024, while $400 million were measured in the first quarter of 2025 and will only come out of cash in the second quarter of 2025 returning to <unk>.
Magda: Normal.
Magda: I won't predict this opportunity to draw your attention to the part relating to Ifr 16. This amount is considered in the capex competence, but in the cash view.
Magda: It is classified as an outflow of resources used in financing activities since it refers to leases.
Magda: We now turn to slide 11, which shows the company's debt levels.
Magda: And the first quarter of 2025, we found an increase in gross debt mainly due to the entry of the S. P. S O I'll be around to take them on direct this is a chartered units that impacts our leasing costs.
Magda: It's important to emphasize that it has a capacity of 250 barrels a day and it can ramp a ramp up still this year and it's also important to emphasize here that that remains within the limits defined in the 'twenty to 'twenty five 'twenty 'twenty nine business plan with a debt ceiling of $75 billion.
Magda: In this way, we maintained an efficient and more flexible capital structure.
Magda: Now, let's go to slide 12, as you can see we remain committed to the distribution of the results are generated and the financial sustainability of the company.
Magda: With gross debt under control within the level established in the business plan and positive results. Our board of directors approved the distribution of remuneration to shareholders for the first quarter of 2025 up $11 7 billion reais equivalent to 0.91 cents or.
Magda: Sure, which will be paid in two equal installments in August and September.
Magda: Okay.
Magda: Slide 13 shows the importance of the contribution our activities make in terms of taxes. All in all $65 7 billion Reais were paid in taxes to the union states and municipalities, including government participation.
Magda: In addition, we have earmarked around 66 million highs in voluntary social and environmental investments and sponsorships there are more than 200 initiatives, including social and environmental projects and cultural sports in science technology sponsorships.
Magda: We always make a point of bringing these values to show you how Petrobras is performance materializes and positive impact for Brazilian Society.
Magda: Here, we have our direct and indirect.
Magda: While these are our direct covenants, but we also have indirect.
Magda: Sponsorships.
Magda: Continuing with the last slides, we've just seen how we performed in the first quarter of 2025, but our attention and certainly yours too is.
Magda: On the current moment and how the company is prepared for this lower Brent scenario.
Magda: The first thing I'd like to remind you is that Petrobras has a strategic plan and a project renewal governance that prepares the company to generate value in adverse price scenarios.
Magda: Here, we see a screenshot of our business plan released last year, and which we talked about our robustness even in low oil price scenarios.
Magda: Our E&P projects need to demonstrate a positive NPV in the scenarios of up to $45 per barrel.
Magda: In addition to prospective breakeven grant for our E&P portfolio is on average $28 per barrel.
Magda: Our plan also has a portfolio under evaluation, which is made up of a project subject to the condition that they do not affect the company's capital structure.
Magda: In addition to improving their result, excuse me their return and a robust scenario like all the other projects as for our shareholder remuneration policy the formula already insures dividends compatible with different oil prices without compromising the companys financial sustainability.
Magda: We therefore have confidence in our strategy and our governance.
Magda: I emphasize that our long term strategy has been maintained but that doesn't mean, we aren't fully aware of and attentive to the global scenario of lower prices in our industry.
Magda: So let's move on to the next slide.
Magda: We are incorporating cost cutting actions and adapting the business plan to the new reality.
Magda: Here on the last slide are some examples of what we're doing.
Magda: We have three work fronts, especially mainly first measures to minimize the effects of inflation by optimizing spending give are basically talking about reducing trends versatile corporate spending seeking to return to levels of the past.
Magda: Second actions aimed at mitigating the impact of lower prices on our free cash flow. Let me give you. Some examples simplifying engineering projects, we're already doing this with the.
Magda: See Apple projects reassessment of the scope of recently tendered projects that were not very attractive. Examples include the rabbit albacore, our marlin zoom or lend less D and Bart Cuda and car Kingdom.
Magda: Reduced hibor initial costs for systems awaiting decommissioning.
Magda: Reassessment of the cost structure of mature systems, such as encore fields.
Magda: And finally in our portfolio, we're going to prioritize projects that generate cash flow in shorter time frames.
Magda: Actions on this front include greater rigidity and the inclusion of new projects in the portfolio under implementation re prioritization of projects under implementation with higher returns in the short and medium term.
Magda: We will continue to study appropriate measures to strengthen our resilience. We will keep you informed of the developments and impacts of these actions.
Magda: I'll, let him a presentation here and thank you once again for your attention I'll give the floor to Eduardo who will start the question and answer session.
Eduardo: Thank you everyone.
Speaker Change: Thank you Fernando we will now continue with the question and answer session. The first question was asked by Bruno Emily <unk> from Goldman Sachs.
Speaker Change: Bruno over to you.
Bruno: Hi, Thank you. Thank you for taking my question.
Speaker Change: My first question is about capital allocation, if you can tell us a bit.
Speaker Change: More about the potential processes.
Speaker Change: <unk>.
Speaker Change: How that.
Speaker Change: Buying back that refinery and by also ethanol if your progress there and as we've shown most of the companies projects are resilient to oil prices or oil prices being low.
Speaker Change: I'd just like to confirm if thus far you don't believe there are any changes necessary to the investment plan.
Speaker Change: And as a follow up there let's.
Speaker Change: Let's imagine a scenario in which oil prices go down even more are there specific areas in which you can.
Speaker Change: Make adjustments.
Speaker Change: Whether it is by making onshore investments or investments in other areas where returns are lower.
Speaker Change: Then in deep waters. So that's a broader question about your capital allocation. Thank you.
Speaker Change: Thank you Bruno Fernando if you may.
Speaker Change: Hi, Bruno so about <unk>, we didn't have any changes we still follow the same logic. So we can look at any investments in any M&A, but.
Speaker Change: We need to have compatible returns to our investments.
Speaker Change: But for a real long, we don't see any news there have not been any advances.
Speaker Change: Considering capital and this is important intervention to U Petrobras will celebrate its 70 <unk> anniversary this year and we're working on a commodity that.
Speaker Change: Has intrinsic volatility.
Speaker Change: And our 70 year experience has created a structure in which everything is thought out.
Speaker Change: For volatile moments and it was not different when we built this strategic plan for 2025 to 2029.
Speaker Change: So that was taken into consideration some important things about resilience, our breakeven is $28 per barrel.
Speaker Change: So.
Speaker Change: We always work with testing and modeling at $45 per barrel.
Speaker Change: And if it doesn't pass the projects are not continued.
So this year or at least thus far we didn't see any changes to what we had planned.
Speaker Change: With our Capex.
Speaker Change: So we've maintained what we wanted to do without any further changes.
Fernando: Thank you Fernando now we will receive questions from Kai <unk> from Bank of America.
Speaker Change: Hi, Joe.
Fernando: Yeah.
Good afternoon. Thank you.
Fernando: First of all recently shell.
Fernando: You mentioned that it's going to some blocks in the Caribbean, where they have some participation with HEICO patrol. So since Petrobras has some presence in Caribbean offshore assets would.
Fernando: Would you be interested in assessing or even taking over this.
Fernando: Artist a patient from shell if echo petrol is seeking a new partner for these fields.
Fernando: Secondly.
Fernando: Despite the adjustments to diesel prices made recently, we still see a premium on <unk>.
Fernando: E D.
Fernando: For diesel of about 6%, especially gasoline, which is close to 10% according to our calculations. So.
Fernando: Can you give us some color about this decision.
This recent decision on changing diesel prices, but not gasoline and do you see a reason for new adjustments. Thank you.
Fernando: <unk>.
Fernando: Thank you <unk> I'll, let Sylvia answer the first question and then just lastly will answer the second question.
Sylvia: Hi, good afternoon <unk>.
Sylvia: Yes shell is.
Letting go of this asset.
Sylvia: And.
Sylvia: And just like this one we are assessing others in our portfolio. So it is a constant.
Sylvia: Process in which we assess opportunities to see what.
Sylvia: Has the best adjustment what provides the best returns and the ones that are the most significant.
Speaker Change: And we have to say that exploration as our head always says cannot continue indefinitely.
Speaker Change: So.
Speaker Change: Of course, we have to look at our full portfolio and we are assessing everything but.
Speaker Change: In Colombia, not only do we have this discovery we're drilling two wells one has been a soft.
Speaker Change: Which will hopefully give us good luck as its name implies but yes. We are assessing these possibilities, but this is in our global portfolio.
Sylvia Schlosser: Thank you Sylvia Schlosser please.
Sylvia Schlosser: Hi, Good afternoon. Thank you for that question before I talk about your specific points, it's important to highlight that.
Sylvia Schlosser: Obviously, we are trying to see.
Sylvia Schlosser: Movements from the international market, but the companies for tea strategy does it only take into consideration.
Sylvia Schlosser: International prices.
Sylvia Schlosser: And now.
Sylvia Schlosser: On May 19, we will celebrate our second year after implementing the new commercial strategy, which considers all of these aspects.
Speaker Change: To answer your question Tayo I think there are two points that we need to clarify here.
Sylvia Schlosser: To try to address this issue of diesel out and gasoline.
Sylvia Schlosser: We think each product deserves a specific look why am I, saying that contrary to diesel which is.
Sylvia Schlosser: Going down in the international market gasoline.
Sylvia Schlosser: Is.
Sylvia Schlosser: Going up.
Sylvia Schlosser: So inventories will probably be re composed in the U S, especially where the consumption of gasoline will go up and that pressures international.
Sylvia Schlosser: Prices so not only are we looking at us but.
Sylvia Schlosser: We're also seeing our own internal potential in Brazil, especially in our.
Sylvia Schlosser: Refining capacity for the oil.
Sylvia Schlosser: Produce and our logistics.
Sylvia Schlosser: So in diesel and gasoline.
Sylvia Schlosser: We have a broader.
Sylvia Schlosser: Perspective.
Sylvia Schlosser: And external volatility is also a factor there are extremely.
Sylvia Schlosser: Our strong geopolitical factors, putting pressure on prices prices of oil spreads for products.
Sylvia Schlosser: They're all very pressured and they have a high level of volatility to give you. An example in early April and this was recent.
Sylvia Schlosser: Well.
Sylvia Schlosser: Because of fake news oil went up $4 in.
Sylvia Schlosser: A couple of minutes and after that was debunked. It went down again, so the market is very volatile and we're not transferring this volatility to.
Sylvia Schlosser: To the client as we did in the past in the past and previous commercial strategies.
Speaker Change: You had enough in some years more than 90 adjustments for readjustments of.
Sylvia Schlosser: Fuel prices, which insurers some stability.
Just to give you a comparison for diesel.
Sylvia Schlosser: We were nearly four 400 days with stable prices.
Sylvia Schlosser: And that has a significant value for society for our economy in general.
And this is within our strategy, we have gasoline adjustments and as you mentioned the last one was in.
Sylvia Schlosser: June 2024, so we have had stable prices for over 300 days, while the market is.
Sylvia Schlosser: Having a lot of volatility.
Sylvia Schlosser: So we're looking at prices every day and we.
Sylvia Schlosser: Assess our logistics capacity and our infrastructure and this helps us to keep it balanced so I'd just like to underscore that for default with the market parameters and our commercial strategy. We recently had three price reductions.
Sylvia Schlosser: Well first quarter was very interesting.
We advanced in the Midwest It grew 9.7.
Sylvia Schlosser: 7%, we captured a very significant part of this increase in the mid west.
Sylvia Schlosser: And it represented an expansion of about 72.
Sylvia Schlosser: 274% of the diesel market.
Sylvia Schlosser: So we have been making use of that but we also saw some effects.
Sylvia Schlosser: Tariff wars, there was another announcement from.
Sylvia Schlosser: Uh huh.
Sylvia Schlosser: OPEC to continue their production and that's why we have three reductions just to give you an idea. They all completed zero 45 cents.
Sylvia Schlosser: And our expectation for.
Sylvia Schlosser: Is that zero point 39 would be reflected as a cost reduction for our consumers.
Sylvia Schlosser: This also has not happened.
Sylvia Schlosser: In conclusion, we're looking at all of these elements to decide how we're going to <unk>.
Sylvia Schlosser: Why readjustments and do our commercial strategy and the best way possible.
Sylvia Schlosser: Yeah.
Sylvia Schlosser: Thank you we will now hear from Rodolfo <unk> from Jpmorgan go ahead Sir.
Sylvia Schlosser: Thank you and good afternoon, everyone.
Sylvia Schlosser: Okay.
My first question is about costs.
Sylvia Schlosser: The message from the CEO was very interesting.
Sylvia Schlosser: And adjusting the company for lower oil prices.
Sylvia Schlosser: And.
Sylvia Schlosser: We've noticed and we've had a discussion with investors we.
Sylvia Schlosser: Posted a report on the fact that lifting costs have gone up so well.
Sylvia Schlosser: We like to see this focus on cutting costs. So.
Speaker Change: My question is can you give us some more color about what initiatives you are taking what has the highest potential for cost cutting.
Speaker Change: And if possible what is your ambition what value do you expect to capture that's my first question.
Speaker Change: The second question is with lower price scenarios, we will obviously see.
Speaker Change: Companies getting more conservative about other cash use but.
Speaker Change: We would also like to know if considering capital allocation, if theres any space or.
Speaker Change: You know in this effort.
Speaker Change: Reviewing expenses and so on.
Speaker Change: If we see we will see lower capex levels.
Speaker Change: And maybe some extraordinary dividends throughout the year. Thank you.
Speaker Change: Thank you Rodolfo under the floor to Fernando Hi.
Speaker Change: Thank you Rodolfo let's start with your second question about Capex.
Speaker Change: First one of them.
Speaker Change: Reiterate that.
Speaker Change: The commitment.
Speaker Change: Our commitment is with the sustainability of the company to be important.
Speaker Change: To society and to adequately compensate all of our investors.
Speaker Change: So when.
Speaker Change: When you come across a lower brand.
Speaker Change: Yeah.
Speaker Change: You have to take some measures as we said.
Speaker Change: We are optimizing cross sectional penetrance to makeup for the inflation and to go back to historical levels. This is one objective simplifying projects, we had a project.
Speaker Change: That was postponed.
Speaker Change: To undergo an engineering review and to make it more efficient and also prioritizing projects that are bringing about positive cash flows.
Speaker Change: And my back.
Speaker Change: Okay. So.
Speaker Change: And our investment portfolio.
Speaker Change: Obviously, we've been.
Speaker Change: Trying to prioritize the most important projects from a financial and a strategic perspective, but before we can come up with a rationale of reducing the capex, we need to analyze our possibilities around reducing <unk>.
Speaker Change: Costs, so that we can keep the capex at the current level and to execute the projects today's projects are Petrobras future as we all know and there'll be prioritized.
Speaker Change: Sylvia Renata, which let's say anything about costs.
Speaker Change: Well, one way for us to assess the automation and optimization of costs would be.
Speaker Change: Ben.
Speaker Change: Talking to the performance area.
Speaker Change: We could increase our operational efficiency, which is a way for us to bring down the costs of our offshore areas.
Speaker Change: And in the onshore areas that we're talking about a significant reduction of all costs so that they.
Speaker Change: They become profitable.
Speaker Change: For all of our assets may have a positive ROI and we'll keep on improving it with the optimizations and with the search for lower costs.
Speaker Change: So as to produce results.
Speaker Change: And to lower the costs as I said thank.
Speaker Change: Thank you Fernando and Sylvia now onto the next question is from vicinity for longer from Bradesco BBB Ive essentially you have the floor.
Speaker Change: Thank you.
Speaker Change: I also have two questions first.
Speaker Change: Hum, who haven't seen some F paso's delivering growth for quite some time now and an Ariane Maria Cataria their.
Speaker Change: Projects that have been a more or less flat for some time are there any difficulties being faced by these projects are the revamps profitable or is it about time that we rethought. These assets maybe resell these assets and my second question is about.
Speaker Change: In gas and energy, which dropped expressively in this quarter.
Speaker Change: As was explained in the release is it possible to say that the company will recover and it's a bit down with the route free ramp up and if so at what levels.
Speaker Change: Will the EBIDTA.
Sylvia Schlosser: Stabilize after this ramp up thank you. Thanks for St Chi I'll give the floor to Sylvia.
Sylvia Schlosser: We sent to you when we are dealing with revamping projects.
Sylvia Schlosser: They're mature fields and in order for them.
Sylvia Schlosser: To resume that prediction levels, they need more water injection more producing wells so differently from the pre salt.
Sylvia Schlosser: Fields that are quick to achieve the peak, but they take more time in the case of these fields are the forecast is 2026, the same thing happens with Maria Cataria.
Sylvia Schlosser: As anticipated, but our forecast is.
Sylvia Schlosser: Is that it will only reach peak levels towards the end of year.
Sylvia Schlosser: So these are areas that really require more wells more water injection and they take <unk>.
Sylvia Schlosser: Longer to produce results this is more or less taken into account when it comes to developing these wells Renata.
Sylvia Schlosser: You're right the productivity of the pre salt wells.
Renata: Which is at 50 or 60000 barrels per day from one well only and that's why with four wells three can top up a platform, which is different from what Sylvia said about the revamping projects, but I'd like to reinforce that all of these are revamp projects. They are submitted.
Sylvia Schlosser: Two our robustness.
Sylvia Schlosser: Factors and one of our best projects is the Alba Cora and excellence.
Sylvia Schlosser: Tier V P. L. So we'll keep on.
Sylvia Schlosser: Implementing these.
Sylvia Schlosser: Projects.
Sylvia Schlosser: As we said before we're looking for simplification and once again retention number Cora we have a top side, which is a one of a.
Sylvia Schlosser: The possibilities to measure that.
Sylvia Schlosser: The possibility of a project, it's a 35000 tons and with other projects. We're looking at 60 or 70000 tons, we're able to truly simplify albacore after.
Sylvia Schlosser: Lots of conversations with the market and suggestions to simplify the project. So the other corner project is really one of our best projects in our portfolio today.
Speaker Change: Thank you.
Speaker Change: When it comes to gas with century.
Speaker Change: A series of initiatives.
Speaker Change: Indicate that we'll probably see.
Speaker Change: An improvement in the performance and the results of gas. The first one is a quite aggressive policy.
Around capturing new clients in the free market, we saw significant progress.
Speaker Change: In this quarter.
Speaker Change: And we will keep on seeing.
Speaker Change: This progress there is also this incentive policy that was launched.
Speaker Change: A premium for.
Speaker Change: For increased demand.
Speaker Change: On the market that applies to distributors in the free market equally.
Speaker Change: And this also generates more revenue and more clients.
Speaker Change: Third important factor that shows that our results will get better.
Speaker Change: Is I think you mentioned this the full operations of the O P. G N and the barbell sort of complex routes, three which will improve our.
Speaker Change: Product portfolio.
Speaker Change: And then Kris will increase our competitiveness there is two more important aspects. The first one being the auction which is scheduled to happen.
Speaker Change: And we have.
Speaker Change: Nine.
Speaker Change: Existing plants already registered for this tender and two new plants with expectations around it.
Speaker Change: Hiring these plants and finally.
Speaker Change: The.
Speaker Change: Last important factor in terms of producing results.
Speaker Change: Is.
Speaker Change: A very solid initiative involving several stakeholders around the discussion of the regulatory framework for the transportation assets or the so called <unk>.
Speaker Change: The so-called via rain.
Speaker Change: And we.
Speaker Change: Our.
Speaker Change: Now asking for the M ounce.
Speaker Change: Paid by Petrobras and the other players to be considered equally so our expectations for the next quarters and.
And one of improvement. Thank you you bring them on scenario from Morgan Stanley you have the floor Brunel.
Speaker Change: Good afternoon, and thanks for answering my questions.
Speaker Change: First about the Capex.
Speaker Change: Yeah.
Speaker Change: In terms of what we can expect for the Capex for the next quarters of 2025.
Speaker Change: It probably makes sense to think that.
Was it a bit higher than what we normally see at the beginning of the here and that being the case, maybe the second and third quarter. It will probably go to lower levels before.
Speaker Change: It goes up again to regular levels towards the end of the year, if that's to be expected and secondly, as the president said at the beginning of the year was very good for oil production in Brazil.
Speaker Change: Maybe even above the expectations, so I'd like to hear from you.
Speaker Change:
Speaker Change: What was the schedule maintenance pipeline like for these months and which units have a scheduled maintenance.
Speaker Change: Have maintenance schedule for the next few months just so we can understand how much of this.
Speaker Change: Results from protect from maintenance and how much comes from the ramp up.
Speaker Change: I'll give the floor to Fernando for your first question Hi, Bruno. Thank you for your question.
Speaker Change: The first question about Capex.
Speaker Change: It's important to say that there was a.
Speaker Change: Transfer of carryover from the measurement.
Speaker Change: That was done in December and the first payment occurred in the first quarter of 'twenty 'twenty fives. So there was the carry over effects and also.
Speaker Change: Some measurements that were not completed in December and that were just completed in the first quarter and therefore in the second quarter, we're going to see additional payments and after that period it will normalize.
Speaker Change: And we'll no longer see these extraordinary events so it will become.
Speaker Change: Regular.
Speaker Change: Our guidance remains at $18 5 billion of course with the FX rates adjustments.
Speaker Change: And our goal is.
Speaker Change: To deliver our guidance of $18 five as I said.
Speaker Change: Do you like to add anything.
Bruno: Hi, Bruno.
Speaker Change: The downtime the scheduled downtime Zurich are essential for maintenance of the rig.
Speaker Change: And for safety purposes, we have a schedule of our scheduled maintenance is for all of the rigs in the first quarter was no different a downtime.
Speaker Change: Resulted.
Speaker Change: In the 245000 barrels due to P. 68, 70 F. P. S summary client the Santos basin. So basically we did what we had planned in terms of scheduled downtime for the first quarter.
Speaker Change: And I should.
Speaker Change: Reiterate this it was very good from the perspective of production and also from the perspective of new discoveries we had three.
Speaker Change: We made two discoveries in Iran, and also the north of Bravo.
Speaker Change: And.
Speaker Change: If we combine the F.
Speaker Change: Forno Bravo and the north of Brava, basically we have a pre salt unit around the Santos.
Speaker Change: The Campos basin out, which is really a reconstruction of the campus spacing using not only the oil of that we have there and the pre salt, but also in the salt area. This is very significant and very soon we'll be seeing results for the other units. In addition to protection. These discoveries also strength then.
Speaker Change: The Campos basin and also the Santos basin.
Ronaldo: Thank you Ronaldo Ronaldo would you like to add anything.
Ronaldo: Yes. Please about the Capex are Bruno last year, we reviewed our planning process or our Capex planning process and how it would behave throughout the year. So we're pretty sure that will.
Ronaldo: Staying within the guidance 18.5, more or less 10% and the one thing that we assures us that most of the big projects are already hired so there won't be too many bumps along the road for this year and our forecast is that will really.
Thank you Renata Silvia Fernando.
Speaker Change: Next question from MS. Mattel's from UBS, but tells you have the floor.
Ronaldo: Thank you good afternoon.
My first question is about dividends.
Ronaldo: The way our policy and setup.
In our accounts with oil close to or below $60 per barrel that Petrobras may be required to issue debts to pay the dividends of 45% in terms of free cash flow if.
Ronaldo: It comes to that wouldn't make sense to for you to change the policy.
Ronaldo: That's my first question and the second question is that in terms of LNG, we understand that there is restrictions in terms of the supply and a L.
Ronaldo: Oh, the fact that the company has to depend on the LNG market. How do you see the competition in this industry given the higher costs are in terms of import infrastructure and then how do you think about increasing the availability of LNG.
Ronaldo: Well, we increased the number of refineries.
Fernando: As the revamped plant for the next five years States. Those are my questions well. Thank you Matteo solid given the floor to Fernando.
Speaker Change: Good afternoon mottos.
Speaker Change: First I'd like to reiterate our commitment.
Speaker Change: To the ordinary dividend sequence of the methodology.
Speaker Change: 45% over the free cash flow.
Speaker Change: And itself adjustable because the bases as it increases it will increase and vice versa. So Ed.
Speaker Change: Gets adjusted according to our base.
Speaker Change: And as for the debt.
Speaker Change: When we defined the strategic plan at the end of the year, we decided that we would change the size of the debt.
Speaker Change: $275 billion.
Speaker Change: It was 65 before.
Speaker Change: And with.
Speaker Change: Three main motivations the first one being potential investments that we were not able to see back then and are still not able to see that would lead to an increase in the debt and that's why we considered a debt of around 65 billion approximately the second thing was to.
Speaker Change: Account for the <unk>.
Speaker Change: Affreightment, because with the beginning of the first oil in Monique Italia and someone there at all.
Speaker Change: It had an impact on the worsening of the dead.
Speaker Change: So acknowledged the debt with the first toilet as expected and with the first oil that's associated with the revenue. So it's an increase in the debt with an associated our revenue which is.
Speaker Change: Positive in the third aspect is cash management, if there was any change in the scenario like the Brent price, we would need to have flexibility in terms of accounting for the cash flow of the company and moving forward and facing any.
Speaker Change: Occasional turbulence is so big nothing changes in terms of the that size. It's still at 75 and that's why it's possible that the 65 that we said would be our goal for the entire strategic planning might see some oscillations, but of course with.
Speaker Change: The constant commitment on our part towards maintaining the payment of dividends are asked for the extraordinary dividends. It will depend on the capacity to generate cash flow. If there is cash flow above the adequate levels undoubtedly we will distribute special dividends.
Speaker Change: Thanks Fernando.
Speaker Change: Schleifer about the LNG. Please.
Fernando: Well, Tim it's about the LNG and the infrastructure at one thing we have prepared for the future.
Fernando: Is an increase in the production of LNG investments in our refining and expansion of capacity are highly focused on diesel but also they focus on LNG in terms of infrastructure the prediction of LNG in Brazil.
Fernando: The most relevant fact is bourbon tourer.
Fernando: We have to trains for the processing of natural gas starting up with a very significant production. So this infrastructure that.
Fernando: Was initiated or will.
Fernando: Yield a relevant production levels and the logistic aspects related to the distribution of LNG is being planned by the department there are.
Fernando: Projects involving the investments of third parties companies, especially in distributors.
Which.
Fernando: Had been doing that for quite some time, but which have not materialized, yet, but they would effectively be very helpful. When it comes to the supply.
Fernando: <unk> LNG, but the company has been increasing the production of LNG.
Fernando: Especially given that bore Ventura has the highest of levels right now.
Fernando: Sort of if I may add to that.
Fernando: Before we begin the Seo gave us an important message of austerity. So we have three major fronts that I have discussed before with you and we're going to continue with this austerity plan.
Fernando: And we have some for term measures to see if we can.
Fernando: Make some short term reductions, but we also have some medium and long term initiatives, but this is all in our strategic plan. So.
Fernando: It's not that we're increasing our debt.
Speaker Change: Thank you Fernando and thank you Schlosser and now.
Speaker Change: We will receive questions from Rodrigo Almeida from Santander Bank go.
Speaker Change: Go ahead.
Rodrigo Almeida: Good afternoon, everyone. Thank you for taking my question.
Rodrigo Almeida: I have a specific point about the equatorial margin I think there were some advances at this or at least it seems to have advanced looking at it from outside so I'd just like to get an update on what we can expect and monitor for the next months.
Rodrigo Almeida: With the licensing process and the exploration process in the region. If you have a license approved.
Phil: Phil on the same topic I would like to.
Phil: Ask your long term view.
Speaker Change: On the equatorial margin.
Speaker Change: Know that we don't have all of the details, but I think we'll have a a relevant part of the exploratory session in the plan we've been talking about this for a long time.
Speaker Change: But if we start developing assets in the region.
How do you believe the business plan will support these additional investments.
Speaker Change: And capex and in developing the region.
Speaker Change: Would you be willing to share these assets with.
Speaker Change: Other partners to help fund these projects.
Speaker Change: Or are you, having a portfolio of recycling plan for other assets too.
Speaker Change: Finance the development of the Equatorial margin. Thank you.
Speaker Change: Thank you I'll pass it over to Roger to sugar and privacy.
Speaker Change: Hi, Rodrigo so yes, we have some expectations for the equatorial margins, we've already complied all the requirements from Ibama. They had been handed to director of cloud E C.
Speaker Change: We have two centers in billing and OE up balky awaiting ibama to go and see if everything is fine we already have a probe being.
Speaker Change: Costa here and by year.
Speaker Change: So now what we need to do is to.
Speaker Change: Receive approval for the probe and start to grilling.
Speaker Change: In our strategic plan, we have foreseen at $3 billion for the margin.
Speaker Change: The first well for this year is included in that and for all of the margin. We will we have 15 wells planned for the next five years. So.
Speaker Change: Once the discovery.
Speaker Change: Started.
Speaker Change: Weird Delimitate the fields so.
Speaker Change: We have some margins in our budget to do this.
Speaker Change: But this will take four or five additional years for production to begin once the field has been March.
Speaker Change: So that will be outside of this five year, a limit and we can reschedule our investments.
Speaker Change: According to the future investment plan. However, what we need is to truly have a discovery. So that we can think about.
Speaker Change: Getting to work and production.
Speaker Change: But meanwhile.
Speaker Change: We don't depend on your only on this we have other wells to drill here in the southeast.
Speaker Change: Margin.
Speaker Change: And we even have some wells planned for a broad in Colombia.
Speaker Change: And also send some demand principally where we also have some odd drills planned so.
Speaker Change: We are optimizing our.
Speaker Change: Fields, the Campos and Santos fields, including improving our efficiency.
Speaker Change: Adding complementary wells.
Speaker Change: And we're making strong investments to obtain a license in the equatorial margin, but Meanwhile, other areas are being worked on.
Speaker Change: Such as the Columbia, while and also sentiment and principal.
Speaker Change: And at the end of the year, South Africa as well.
Rodrigo Almeida: Hi, Rodrigo that's an excellent question because it gives us the opportunity of.
Speaker Change: I'm, telling you about something we just recently had a simulation and Petrobras with <unk> with over 200 people involved.
Speaker Change: We went through all the exercise is responding to emergencies.
Speaker Change: Skewing in treating on.
Rodrigo Almeida: And across all of these exercises are results were according to the Ibama manuals. So that's very important it demonstrates that we are ready and Sylvia has ear.
Speaker Change: Even talked about cleaning the robe we.
Rodrigo Almeida: Already have a license.
Rodrigo Almeida: Paula we have a license to operate from semi.
Rodrigo Almeida: Okay.
Rodrigo Almeida: And in OEM bulky, we're also bringing a contingency of equipment and trained professionals.
Rodrigo Almeida: To respond to emergencies.
Rodrigo Almeida: Everything that is in our is our environmental defense systems are present in all air pocket as well.
Rodrigo Almeida: Every week, we've communicated to you bummer all the steps that the company has taken and we're demonstrating our readiness to.
Rodrigo Almeida: Have the pre operational assessment, which is one step before the license to operate thank you.
Speaker Change: Thank you Clarice. Thank you Sylvia we'll now hear questions from company owned Baja.
Speaker Change: February Al Qaeda heroes.
Speaker Change: Hi, everyone can you hear me.
Speaker Change: Yes go ahead.
Speaker Change: Thank you. Thank you for taking my questions I have two.
Speaker Change: The first is we recently had a T C. I got a presentation from Renata about this.
Speaker Change: And this has been an important topic for the company, especially in a.
Speaker Change: Contracting not only services, but also projects so.
Renata: In this presentation Renata discussed.
The vessels.
Speaker Change: Vessels here in Brazil, We also saw some news from mine with.
Speaker Change: Some meetings she had with people in other countries, we're trying to bring investments to the country.
Speaker Change: Shipyards.
Speaker Change: So I'd like to hear from him out to how we can solve this equation with oil prices being low. We also see the prices are or excuse me services have also received conservative investments so.
Speaker Change: If you can give us that feedback on OTC.
Speaker Change: How we can understand this issue from your perspective that would be an important point and my second point is about the gas market.
Speaker Change: Okay.
Speaker Change: For a while Brazil has had discussions about opening the gas market the price of gas in Brazil.
Speaker Change: And there has been a long discussion on how to make gas prices lower in Brazil.
Speaker Change: So I'd like to hear your take on that what would the company's strategy be.
Speaker Change: We are having to tie in with the.
Speaker Change: Highest capacity for gas in a market that.
Speaker Change: It's not having higher demands and that still has a high priced.
Speaker Change: So I'd just like to hear what your strategy is you've signed some agreements in the free market with the ceramics industry. So just like to hear about your strategy in the gas market and how this will impact the company's results from now on thank you.
Hinata: I'll start with director Hinata. Thank you for your questions and then we'll answer the second question.
Speaker Change: Hi, everybody out.
Speaker Change: So we.
Speaker Change: We have been simplifying our projects I had mentioned a couple of other times.
Speaker Change: Talking again about the topside.
Of the projects. This is one of the complexity measures that we have.
Speaker Change: Yeah.
Speaker Change: When we had the first <unk> installed in the pre salt layer.
Speaker Change: The weight of these top sites was not over 30000 tons and the ones in Bull's use are over 60000 tons. So we really need to go back to basics. This is the effort were making we took a project from Ripley countries and what we need to do is.
Speaker Change: We have minimal changes to have a very lean project. So.
Speaker Change: So we've made this effort we concluded the study and we're implementing it in several projects I've mentioned Alba quota, which is simple.
Speaker Change: We've implemented many simplification with CF, one and two.
Speaker Change: The.
Speaker Change: Tender winners or excuse me the tender organizers asked for some more days to organize this but we also have to look at sure.
Speaker Change: And the last year.
Speaker Change: This has grown because of.
Speaker Change: A lack of competition we.
Speaker Change: We had a basically two suppliers there and we've made a strong effort with the market we try to find new suppliers and then the last bid tender we were pleasantly surprised.
Speaker Change: By receiving four proposals that were far below the other ones that we had carried out.
Speaker Change: So this is what we have been trying to do we're trying to find more suppliers, we went to China to try to see if we can attract.
Partners to Brazilian shipyards.
Speaker Change: As a company and just as with any other company, we prefer to have our suppliers nearby.
Speaker Change: Geopolitical issues are on the top of mind, so we need to.
Speaker Change: Understand.
Speaker Change: If our projects can be carried out here in Brazil of course quality and price are factors.
Speaker Change: Factors.
Speaker Change: And we're not going to let go of that but we want to have it in Brazil, and we're in fighting partners from other companies and from other countries to join us.
Speaker Change: One example of Singapore.
Speaker Change: <unk>, which is the merge of the previous Keppel Fels with Jerome.
Speaker Change: As to shipyards in Brazil.
Speaker Change: They are completely full.
Speaker Change: Our kudos one had 1800 employees and now they have 5000 employees in other words do save they also have 5000 employees and their demand is so high that they are already reading it to other partners like new class B App to sniff Donnie so.
Speaker Change: This is about making waves in the market. So our strategy is to simplify projects. So that we can attract more suppliers in order to become more competitive.
Speaker Change: With our bid tender processes. Thank you Renata.
Thomas King: Director Thomas King will now answer.
Thomas King: Yes couple of yellow Youre right. This is a much more competitive environment than we had in the past in about three years with.
Thomas King: The market opening we have had 19.
Speaker Change: <unk> suppliers in the market. So these are 19 potential competitors.
Speaker Change: And this creates a challenge for us we have to.
Speaker Change: Find new clients.
Speaker Change: So in order to do that we have created a.
Significant.
Significantly aggressive.
Speaker Change: Strategy.
Speaker Change: With pricing and this has had its.
Speaker Change: The results in the last few.
Speaker Change:
Speaker Change: Quarters, we've talked about re buyers, who have signed contracts with Petrobras and we can't give details, but we are negotiating with many others in this will be announced.
Speaker Change: As the contracts are signed.
Speaker Change: We have a policy because our contracts with distributors have a clause.
Speaker Change: And which we can reduce the contract if a re consumer has a contract in the free market.
Speaker Change: So.
This.
Speaker Change: Has also hindered gas distributors work.
So this is an environment that we're facing but we believe we are prepared and we will continue to launch new products in order to.
Speaker Change: Get a bidder.
Speaker Change: Share of the market.
Unidentified Moderator: Thank you Thomas Kim Let's continue with the next question from Luiz Carvalho BTG go ahead Sir.
Speaker Change: Yeah.
Speaker Change: Hello, Good afternoon, Thank you for taking.
Speaker Change: My question I also have two.
Speaker Change: The first is for director had NAFTA.
Speaker Change: Referring back to one of the questions that was asked about.
Speaker Change: President Mike does initial comments on cost reduction simplifying projects.
Speaker Change: I was trying to quantify the potential impact of the simplification process and a reduction of the topside wait we.
Speaker Change: We saw Dsos that had a total cost of $2 $5 billion and this went up to $4 billion.
Speaker Change: Do you have any estimates or any expectations about the cost of these units.
Speaker Change: If it will be between 2.5, or 3 billion or between three or $4 billion and.
How does that match the impact on the total capex that is projected for this plan.
Speaker Change: My second question is for director Fernando about leverage this quarter, we saw that the company's net leverage reached nearly 1.5 times and it was 0.8 times a year ago gross debt was at $65 billion and that was very close to that 75 limit.
Speaker Change: And your cash is close to your minimal or your ideal levels.
Speaker Change: In your presentation, you were showing your capex resilience at different oil levels. So my question is what is the ideal maximum level of leverage for you, especially with lower oil prices.
Speaker Change: Considering this current context. Thank you.
Speaker Change: Climate over to hand, naphtha, and then Fernando will answer your second question.
Speaker Change: Hi, Louise our expectation is for platforms to be below $3 5 billion for rigs to be below three 5 billion of course this depends on the complexity of each rig but.
Speaker Change: Our expectation is that will it will not be above $3 5 billion.
Speaker Change: Thank you Renata Louie.
Speaker Change: Luis Thank you for those questions and for notable answer your second question.
Fernando: Go ahead Fernando.
Speaker Change: Okay.
Speaker Change: Hi, Louise first leasing is 70%.
Speaker Change: Our leverage.
Speaker Change: And leasing is most of all connected to generating revenue.
Speaker Change: So when it comes to leverage and a company that has leasing we have to consider at this point.
Speaker Change: Financial leverage is much lower.
Speaker Change: But.
Speaker Change: As we've been saying love fridge is related to the indebtedness cap that we have.
Speaker Change: No one is considering having something that is outside that indebtedness level of 75.
Speaker Change: And of course as a financial manager. This is something that we keep an eye on sustainability cash generation when payment capacity.
Speaker Change: So this is how we're seeing our leverage.
Unidentified Moderator: Thank you Fernando let's continue with the next question Liliana Young from HSBC will ask the next one.
Speaker Change: Go ahead.
Liliana Young: Hi, Thank you for taking my question, you've talked a lot about b.
Speaker Change: <unk> plan execution for 2025, but I'd like to understand what.
Speaker Change: Cost pressures, you're facing today, and if theres any possibility of executing capex above $18 5 billion in the budget Buster Fernando mentioned, the foreign exchange as a caveat.
Speaker Change: And I also have the same question for 2026. That's my first question if you'll allow me a second question.
Speaker Change: Can you talk about the status of the investment plans and fertilizers.
Speaker Change: Are there any ongoing studies for Petrobras as gross strategy in petrochemicals have they advanced thank you.
Speaker Change: Thank you Lily Renata will answer you.
Speaker Change: Your first question Renato please.
Speaker Change: Louisiana.
We don't see any possibility, surpassing our capex guidelines.
Speaker Change: Fernando.
Speaker Change: And it's looking at me sideways and he is.
Speaker Change: Definitely.
Speaker Change: Demanding that we don't surpass it, especially because the prices are already defined so there is no reason for us to have any.
Speaker Change: Prices above those that we forecast for turning 26, we are now planning.
Speaker Change: The next five years, so right now we don't have those numbers, yet, but we will abide by whatever is defined.
Speaker Change: <unk>.
Liliana Young: Liliana, Yes liliana.
Speaker Change: Hi, Liana. Thank you for your question.
Speaker Change: Good afternoon, everybody, both petrochemicals and fertilizers.
Speaker Change: According to our and they are in our strategic planning approved by our board given that the company is an integrated energy company and therefore, they're part of our investment portfolio and also valley generation for Petrobras for fertilizers.
Speaker Change: In May we'll be completing the scheduled downtime of the Parnell plant and as of the end of the month will be resuming the operations of that plant.
Speaker Change: Concerning in jail.
Speaker Change: And it was approved by our board as well as the.
Speaker Change: The.
Speaker Change: Term.
Speaker Change: Of settlement of outstanding amounts that was approved and along with arbitration will initiate a tender so that as of October we'll go back to the operations of phosphate, but he answered G. P.
Putting them back on our portfolio.
Speaker Change: The agreement provides for the return of these plants to the Petrobras assets and also in our furnaces at once dimension that we're at now and performing that you were in the middle of the tender process for the U F N T central in a shape some storage and a train.
Speaker Change: Training activities sooner than 'twenty sinks and the completion of the loading operations in 2028 or 2029 would you like to say anything Oh, I'm, sorry about petrochemicals.
Speaker Change: And Ah F N. Three petrochemicals, we're also seeking opportunities and press Cam announced two or three weeks ago.
Speaker Change: The kickoff between the <unk> and Petrobras shareholders to expand the Rio hub at the breast Cambria Janiero hub given that we initiated.
Speaker Change: Train, one and now us starting train two so we'll be expanding it to 50% of our polyethylene production capacity in Rio.
Speaker Change: What they know Vanore investments.
And her with a surplus of ethane in the hub we are now.
Speaker Change: Assessing a plant or a cynic acid and that's an opportunity in terms of petrochemicals in terms of energy transition.
Speaker Change: We've carried out a test for the prediction of Green ethane at recap and as of July <unk>.
Speaker Change: In the Rio Grande G.
Speaker Change: Refining plant with our partners brisk Ehman Triple Ultra will be starting the phase one.
Speaker Change: It's a transforming into a.
Speaker Change: Catalytic.
Speaker Change: Planned producing gases for the prediction of NAFTA, so be operating only with renewables the cracking process, producing green naphtha and green ethane, which are raw materials for petrochemicals as well so both in terms of raw materials and in the in case of plastics we are.
Speaker Change: Working on opportunities and investments that are able to generate value for the company and petrochemicals, especially because.
Speaker Change: This synergy and integration between.
Speaker Change: Refining and petrochemicals is increasingly required globally.
Speaker Change: For oil producing companies Renata.
Speaker Change: Oh about F. N. Three that we are now in the middle of a tender cross process and will be receiving proposals in June and I can tell you that the market is pretty excited we're seeing a lot of interest in all of the night and packages that we launched and lots of questions being asked and <unk>.
Speaker Change: Net and the collaboration room, so we're pretty excited about that project as well.
Speaker Change: Thank you Miriam and Renata.
Speaker Change: Now there is a question from wrenches Cardoso from X P rajeev over to you.
Speaker Change: Thank you Eduardo and the board of Petrobras.
Speaker Change: I have a specific question about.
Speaker Change: Production.
Speaker Change: There was an important schedule in terms of some platforms going into production and some of them going into ramp up I would like to hear your comments about that I know that we have a guidance for an average of 25.
Speaker Change: Or is there any.
Speaker Change: Downtime still scheduled or it maybe I can hear your comments about the production probably December and the and attorney through five given the ramp up of these rigs and I also I T. Here.
Speaker Change: A few examples.
Speaker Change: In terms of flexible Isaac the investment plans to make adjustments.
Speaker Change: Based on the lower oil prices discussed in the beginning of the call I was under the impression that there may be a possibility to change the scope of the top side of the rigs.
Speaker Change: Maybe a know if what the hired are ones or the ones that haven't even been hired yet in that five year plan.
Speaker Change: Can I start.
Speaker Change: Oh Register.
Speaker Change: Given the production schedule.
Speaker Change:
Speaker Change: Our entire production.
Speaker Change: Is.
Speaker Change: Submit it to a risk analysis, that's been pretty consistent.
Speaker Change: And reassuring.
Speaker Change: So last year, we stayed within the range of $2 seven and for 2025, we also.
Speaker Change: Spec to remain within the range of 2.8 and with that the.
Speaker Change: These important platforms the ones that came from Murrow and Boozy OS they'll go into production.
Speaker Change: With a ramp up.
Speaker Change: On the second quarter and the ultimate array at towards the end of 2025 and mayor of four.
Next year.
Speaker Change: So that is.
Speaker Change: Strictly within our production.
Speaker Change: <unk> levels.
Speaker Change: In addition to the utilization ramp ups.
Speaker Change: So all of these scheduled downtime are scheduled and we can say that a 260 270 barrels a day per year are not produced because of the and downtime and but that's already considered by our risk analysis and also with occasional.
Speaker Change: Downtime, where ibama for instance, we've been attempting to include them in our analysis to give us a bit more.
Speaker Change: Accuracy for the results I'm, sorry, we do not change any projects already in execution, because that's held for us it generates claims and whatnot.
Speaker Change: Whatnot, so we don't tamper with projects in execution accepted if it's for.
Speaker Change: Security.
Speaker Change:
Speaker Change: Or safety purposes, we don't change any projects, we only changed the projects that have not been hired yet. So we're strongly working on the projects that were still hiring or for those that will still initiate the hiring process in.
Speaker Change: And we don't see we don't forecast any changes like we said our projects our resilience.
Speaker Change: To a brand of 45. So there is no perspectives of making any changes, but in terms of simplification all of that's our motor moving forward to simplify the projects and to attract more suppliers. So as to increase the competitiveness in the tender processes. Thanks.
Speaker Change: Thanks, everybody for the questions.
George: Now we have questions from George <unk>.
Speaker Change: Bread from Scotia Bank.
Unidentified Moderator: George over to you.
Speaker Change: Yeah.
Speaker Change: Thank you.
Speaker Change: Probably we looked at the utilization factor of refineries.
Speaker Change: And they decreased in the first quarter, how can we think about it normalizing the load for the next quarters and my second question is.
Speaker Change: We saw a successful task and anticipating the protection systems.
Speaker Change: Are the learning points, both in terms of processes and contracts that were.
Speaker Change: Generated and is there any other opportunity for another prediction system to be anticipated to be moved forward.
George: Thanks for your questions George.
Speaker Change: I'll give the floor to William and Renata.
George: William.
George: Hello, George and thank you for your question.
George: Actually our utilization factor it was really good it didn't go down it may sound like a paradox, but it's not that we are able to maintain our utilization factor for the refineries that are above 90%.
George: With a strong efforts from refinement and logistics and training.
George: He is of the company.
George: Even in the face of in the face of a downtime for revamp at <unk>, which is the refinery at that it was it went into doubt temporary 60 days, we stopped distillation coking diesel naphtha and we also did the revamp of distillation.
George: From 115 to 130000 in addition to astronauts maintenance.
George: And <unk>.
George: Given us the possibility of reaching 130000, so it was a long downtime.
George: But even with this downtime.
George: With the logistic planning.
George: And the high availability of the other <unk>.
George: And it's we were able to maintain the utilization factor above 90 for this year, we will have the downtime at the Cooper town a refinery with two units one of them a coke that basically produces diesel and S N and towards the end of the year, we will have a downtime for the re plan a revamp.
George: It will be revamped to 73000 cubic meters Dave.
George: Almost 450000 barrels per day, a big refinery, we're expanding it even further and producing more S 10, and the revamped downtime as of September.
George: Four distillation and amplification of the H D T unit, allowing us to produce more S 10 diesel so its three downtime, but due to the.
George: Len and the shorter length of time, we do expect a utilization factor in some months in the range of 90, 596, and an average at around 92, or 93%, which is what the strategic planning defines.
George: So.
George: The reliability the level of the company.
George: Is still very good in terms of the.
George: International Availabilities six out of 10 refineries are already on the first quartile.
Speaker Change: The solo indicator. Thanks for your question Renata.
Speaker Change: So what have we learned okay.
Speaker Change: First we are.
Speaker Change: And monitoring.
Speaker Change: Everything that's done at the shipyards much more closely.
Speaker Change: We discuss for instance, which welding operations will be performed on a given day.
Speaker Change: We've frozen.
Speaker Change: Okay.
Speaker Change: So.
Speaker Change: That's one thing we've been doing that at the shipyards so as to.
Speaker Change: Guaranteed.
Speaker Change: And also.
Speaker Change: Move the deliveries of forward.
Speaker Change: Each day matters in terms of moving these dates forward.
Speaker Change: And we're constantly trying to do that so what are we doing differently. After the rig is ready once the rig gets theory have to anchor. It you have to interconnect the wells through lines.
Magnus: And as Magnus said.
Speaker Change: I mentioned that the chico's smell.
Speaker Change: Reached at record breaking anchoring levels, what we did differently once that before we received the rig we launched the two P, though piles, which do the anchoring once the platform got here they werent already here and we just needed to.
Speaker Change: Attached the line to the platform so anything that we would.
Speaker Change: Wait.
Speaker Change: In the past.
Speaker Change: After the rig was delivered we do that before the rigs been delivered because once it gets here we have completed a lots of tasks already and that's been allowing us to anticipate many things another thing is that for.
Speaker Change: For the.
Speaker Change: Chartered platforms, they are manned and.
Speaker Change: They say that they are high and the systems are already connected all of them and our own platforms in the past the way. We did it was we would bring them to Brazil, they would be standing and Guanabara Bay. The crew would come on board and start as switching everything on the machinery will would take 15 day.
Speaker Change: As Ed to start running to then go to the location for a P. 38 will do Amanda a trip it will leave Singapore or demand once it gets here. It will go to the location and that will give us an additional month in terms of.
Speaker Change: Moving prediction forward. So those are things that we've been thinking every day about what can be done differently, because each day matters as I said.
Speaker Change: Thank you Renata and this is the end of the Q&A session.
Speaker Change: If there are additional questions.
Speaker Change: You can send them to our Investor relations team I'll give the floor to Fernando for if you have additional comments.
Speaker Change: Well I also want to thank everybody for participating.
Speaker Change: This is very significant for Petrobras and are front of message is that the entire company is fully aware of the volatile situation, we are going through and the Brent price levels.
Speaker Change: We are committed to analyzing several scenarios.
Speaker Change: To allow us to understand the possible effects on.
Speaker Change: The balance sheet of the company production Capex cash flow deaths.
Speaker Change: So all of that is being taken into account very carefully to allow us to make the best possible decisions with it.
Speaker Change: Technical base, so that we can.
Speaker Change: Make the best fossil progress and the company. There is also the austerity measures that in our opinion will be very productive.
Speaker Change: And this will bring about.
Speaker Change: More reliability to the company and we should never forget that.
Speaker Change: We always talk about long term results. So a short term decision that disregards that long term between the exploration of the first oil we're talking about 70 years. So it's.
Speaker Change: Not such a short period any decisions.
Speaker Change: Need to consider that.
Speaker Change: So this is.
Speaker Change: The commitment of the board we are concerned, but we're also highly optimistic about the the possibility to increase production and we are confident in our resilience that's been mirrored by our strategic plan. So I wish you a great day, a great week and see you next time.
Speaker Change: [music].
Speaker Change: Sure.
Speaker Change: Okay.
[music].
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: Yes.