Q1 2025 Petroleo Brasileiro SA Petrobras Earnings Call
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The links for both languages are available on our Investor Relations website.
We would like to inform you that all participants.
Our connected to the webcast in listen only mode. After our introductions, we will have a question and answer session and you'll be able to send your questions via E mail to Petro invest at Petrobras Dot Com BR.
magnetic schembri: Joining us today are magnetic schembri arent Petrobras as president.
Rules.
Speaker Change: Start our session, but we will not remain for the Q&A due to a prior commitment Clarissa <unk> executive director of corporate Affairs Clutter Schlosser executive director of logistics commercialization in markets Fernando <unk> Executive director of Finance and Investor Relations and Carnival.
Lee <unk>.
Speaker Change: Director of governance, and compliance are acetyl Mckee executive director of energy transition and sustainability Renata Baroody executive director of Engineering technology, and innovation, Sylvia Dis <unk> executive director of exploration and production and William <unk> Executive director of industrial processes and other products. So to begin I will handover.
Speaker Change: Two our president <unk> <unk> for her initial remarks. Please go ahead ma'am.
Speaker Change: Ladies and gentlemen, good afternoon.
Speaker Change: It's a great pleasure to join you today to talk a little bit about our performance in the first quarter of 2025.
Speaker Change: I believe that they were excellent results, but I will take this opportunity to also draw your attention to the challenging scenario that we.
Speaker Change: <unk> currently with the price of oil.
Speaker Change: This requires from us redoubled efforts.
Speaker Change: Going from $84 per barrel in the first quarter of 2024.
Speaker Change: To face this first quarter of 2025 with an average of $75 per barrel.
Speaker Change: And to post the results that we're posting.
Speaker Change: Was not an easy task.
Speaker Change: This isn't it.
Speaker Change: An arduous task that was carried forward with a lot of dedication and.
Speaker Change: A lot of wisdom by the Petrobras Board and all of its technical.
Speaker Change: Staff.
Speaker Change: Okay.
Speaker Change: While we will have in the future will be even more challenging. This is the second quarter of 2025.
And oil is at $65 per barrel, a difference of about $20 versus the first quarter of 2024.
Speaker Change: We are certain and we are committed to resolving this issue delivering.
Speaker Change: Good results and dedicating a lot of our effort.
Speaker Change: In.
Speaker Change: On capital discipline for 2025.
Speaker Change: This challenging scenario of $65 per barrel.
Speaker Change: Requires and will require from us simplified projects.
Speaker Change: And assurance that we will have good trading margins for our products.
Speaker Change: A significant cost reduction.
Speaker Change: And a lot of cooperation between the different areas in the company.
Speaker Change: So that we can have the best results possible for our business.
Speaker Change: This is what we are already addressing.
Speaker Change: And this is what all main.
Speaker Change: Oil companies are doing.
Speaker Change: And of course.
Speaker Change: We have to make this effort.
Speaker Change: To have better results in such a challenging scenario.
Speaker Change: Again, it's $65 per barrel.
Speaker Change: So in this scenario, we're going to talk about.
Speaker Change: Ah.
Speaker Change: <unk> words that you will hear constantly such as austerity simplification optimization.
Speaker Change: Reducing investment costs, reducing operational costs and overhead.
Speaker Change: Our products and we do this very well.
Speaker Change: Are priced by the international market and they vary.
Speaker Change: According to their prices and the exchange rate and this is out of our control.
What we know and we're certain of this is that we have the obligation to react to these fluctuations.
Speaker Change: Petrobras is absolutely aware of its obligations to react to these fluctuations.
Yeah.
Speaker Change: When prices go up.
Speaker Change: We have more comfort.
Speaker Change: To expand our initiatives, but when prices go down it's time to tighten our belts.
Speaker Change: But that being said.
Speaker Change: This is my message to you.
Speaker Change: Please remain confident we are addressing this cost reduction.
Speaker Change: In face of a challenging scenario.
Speaker Change: So that we can have the best results possible for our investors whether they are in the government or private.
Speaker Change: Okay.
But also I have to highlight the excellent results that we.
Okay.
Speaker Change: We have had in the first quarter of 2025.
Speaker Change: First of all I'd like to say that Theres, new future for an oil company without exploration.
Speaker Change: And I like saying that this is what we have been doing this is what we've been.
Speaker Change: Bring gate as a result for our company, we are constantly expanding our reserves.
Speaker Change: And building up our.
Speaker Change: Our efforts to expand the Brazilian equatorial margins, we believe in this potential and we will carry on.
Speaker Change: Uh huh.
Speaker Change: Pursuing the opportunity to show Brazilian Society, and our investors that we will have relevant gains that we can seek from ask Laurie oil and gas in the Brazilian equatorial margin.
Speaker Change: So in that aspect as I mentioned, we have been very successful.
Speaker Change: We have added a.
Speaker Change: We have added more reserves.
Yeah.
Speaker Change: Constantly, especially with the pre salt of later.
Speaker Change: Last week we.
Speaker Change: Disclosed a new discovery in the pre salt layer in the <unk> block that if everything works out we believe that.
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Speaker Change: We will have advanced production for the <unk> block.
Speaker Change: More pre salt with good quality oil without contaminants, but still with a challenging.
Speaker Change: Iraq.
Speaker Change: For our project, but this is within our potential. This is what we know how to do.
Speaker Change: Before the second discovery in Iran.
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Speaker Change: We.
Speaker Change: Made a new discovery and become pose basin.
Speaker Change: It.
Speaker Change: Ignores it proffer area. We also have made discoveries in Colombia, and we had an excellent.
Speaker Change: Test.
Speaker Change: In Colombia's offshore area.
Speaker Change: This is a block that if all works out will be responsible for supplying.
Speaker Change: All of the gas consumption in Colombia, and let's hope that this will happen.
Speaker Change: But that's not all ladies and gentlemen, we still have many opportunities ahead of us.
Speaker Change: Whether it is in the Brazilian eastern margin or in the equatorial margin.
Speaker Change: We have to remember the Pilotte This basin, where we're also exploring.
Speaker Change: And soon we will.
Speaker Change: Just consider drilling a well.
Speaker Change: Alastair.
Speaker Change: As we will hear later on we have about 50 exploratory wells to drill.
Speaker Change: And the next years and this repeats what I mentioned before we're very proud of it because it.
Speaker Change: Oil company will not have a future without exploration.
Speaker Change: And we want a strong long lasting company that contributes to our investors whether they are the government or private investors and all so contributes to Brazilian society in general.
Okay.
Speaker Change: We're seeking new reserves at the same time as we work to develop the fields that have already been discovered.
Speaker Change: And you have been seeing our results in the first quarter of 2025.
Speaker Change: Our production went up five point or per said.
Speaker Change: Versus the previous quarter.
Speaker Change: This increase.
Speaker Change: The decisive contribution to our financial results.
Speaker Change: Oil is our main product.
Speaker Change: And with it, especially because of that we are generating 8.5 billion U S dollars in cash.
Yeah.
Sure.
Speaker Change: With our operations and.
Speaker Change: And we reached a net income of 6 billion U S dollars.
Speaker Change: After my message, our director, Nevada 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.
Speaker Change: Okay.
Speaker Change: 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 it.
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.
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: Okay.
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 <unk>.
Yeah.
Speaker Change: Byproducts and our oil with the best.
Speaker Change: On profit margins as we can.
Speaker Change: But we need to do it.
Okay.
Speaker Change: And this moment is propelling us in that direction, but we need to do it with capital discipline.
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Speaker Change: And 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.
Speaker Change: And.
Speaker Change: They justify the capacity that the company has.
Speaker Change: On February 15 F yourself Admiral Chairman there at went into production and the Buzzi as fields. It was the first of a series of five oil rigs.
Speaker Change: That will make hoosiers fields, the biggest field 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 of the facilities around the Goofiest fields.
Speaker Change: On March 3rd at Merrell, and a shortage of good smell Clinton to the field.
Speaker Change: On a Saturday Chico's smell.
<unk> operate in the pre salt in the Santos basin.
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.
Okay.
Speaker Change: They will begin its protection.
Speaker Change: Towards the end of the second quarter of this here.
Speaker Change: The beginning of the third quarter.
And with that.
Speaker Change: It will be another 180000 barrels a day.
Speaker Change: Operated by Petrobras in the pre salt.
Thank you.
Speaker Change: Along with.
Speaker Change: Refining.
Speaker Change: We also completed the revamping of train one.
Okay.
Speaker Change: Of our refinery.
Speaker Change: Going from 80 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 S X C N N plus a small revamp.
Speaker Change: Yeah.
Speaker Change: Involving maintenance, we basically doubled.
Speaker Change: The capacity of <unk>.
Speaker Change: Greenness 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.
Speaker Change: 7% of this capacity 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 260000 barrels per day processed in 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, we're undertaking more efforts around diesel.
Speaker Change: And as 10 diesel.
Speaker Change: Which emits 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 and economically feasible. This refinery is.
Speaker Change: Okay.
Speaker Change: And the second module of natural gas processing.
Speaker Change: Well going to operations in the second half the above into a complex and a temporary near Geneva.
Speaker Change: Added 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: Liquid natural gas.
Speaker Change: Also on the brink of.
Speaker Change: Like you're adding the new Audi T. At re plan. This new unit will have the capacity to produce 63000 barrels per day of S tenant diesel.
Speaker Change: I told you our efforts around increasing capacity.
Yeah.
Yes.
Speaker Change: And increasing the supply and production of diesel.
Speaker Change: Specially the S 10 diesel is real 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.
Yes.
Speaker Change: The S 10 diesel has a high.
Speaker Change: Added value embedded emits much less.
Speaker Change: It sounds much less sulfur into the atmosphere.
Speaker Change: Almost negligible and this I added 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 for the opportunities to Decarbonize, which means.
Yes.
Speaker Change: That.
Speaker Change: And this is what it means and that is why in February.
Speaker Change: We sold the first bunker of a vessel fuel with a 25, 24% of renewable content in the Asian market. This is a huge achievement.
Speaker Change: We now set foot in.
Speaker Change: In the ancient market 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 a used car.
Speaker Change: Looking 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 values in 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 <unk>.
Speaker Change: National Development Bank of Brazil.
Speaker Change: Two three.
Speaker Change: Three forest the Amazon.
Speaker Change: And the pro Forest plus program one of the biggest problems for Macquarie.
Speaker Change: 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: Z football fields and to capturing 15 milium carbon.
Speaker Change: Times, which is equivalent to what is annually emitted by around 9 million net.
Speaker Change: Gas.
Speaker Change: Fuel gas fuel cars. This is a structuring project around the climate, but also in terms of our reputation and it is a project and initiative that sows 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.
Speaker Change: 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.
This is part of our values.
Speaker Change: The commitment.
Speaker Change: With 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 in 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: 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.
Speaker Change: B C.
Speaker Change: Sixth.
Highest consuming.
Speaker Change: Zero.
Speaker Change: Highest 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.
Speaker Change: Our common goal at Petrobras is 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: Ploys.
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.
Fernando: Performance of the first quarter of 2025, I'll give the floor to Fernando Mill Eurasia, Our financial director Fernando you have the floor good morning Vince.
Mark: Mark Thank you for the message.
Speaker Change: I want to thank you all for being here for.
Speaker Change: Yet another webcast I'll start by looking at the.
Speaker Change: Highlights of the first SKU of 2025 after the presentation, both me and the other directors will be here for the Q&A session.
Speaker Change: Yeah.
Speaker Change: This slide shows the financial highlights of the company with an adjusted EBITDA.
Speaker Change: Excluding one off events of a $10 billion, 8% above the last quarter and a net income of $4 billion hour.
Speaker Change: Cash generation is still strong with an operational cash flow of $8 $5 million and a 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.
Speaker Change: Related to the first quarter of.
Speaker Change: This year and repaid more than 50 65 billing highs in net taxes this growth.
Speaker Change: 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.
Speaker Change: The EBITDA and the operational cash flow on the right hand side.
Speaker Change: Here I want to highlight the effects of our operational performance on the result, with the greater production and volumes traded the <unk>.
Speaker Change: EBITDA was $10 $7 billion in the quarter.
Speaker Change: With a growth of 8%.
Speaker Change: Compared to the fourth quarter.
Speaker Change: 'twenty 'twenty four and as I said this was driven mainly by the increased oil sales belfield, the internal and the external market.
Speaker Change: 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.
Speaker Change: Totaling $8 five.
Speaker Change: $1 billion.
The next slide.
Speaker Change: Shows that our net profit was $6 billion not considering the one off events. The result was 4 billion.
Speaker Change: An increase of 31% vis vis the previous quarter.
Speaker Change: And the table below you can see the external scenario.
Speaker Change: Part of the results reflects an increase of 25, 28% of the diesel crack spread the appreciation of 1% in the brand quarter by quarter and the appreciation of 7% of the U L versus the <unk>.
Speaker Change: I know the euro dollar.
Speaker Change: 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 'twenty 'twenty four this volume of investments.
Speaker Change: 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.
Speaker Change: F 'twenty '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.
Yeah.
Speaker Change: 24, 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 protection systems in the Booth and a couple fields slide nine.
Speaker Change: <unk>.
Speaker Change: The investments.
Speaker Change: That work performed you can see that we're investing more but also delivering more these are investments connected see greater physical deliveries that support eight <unk>.
Speaker Change: 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.
With the.
Speaker Change: 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.
Speaker Change: 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 advance Mab. In addition to that we also started the construction of two more rigs reaching seven units.
Speaker Change: In construction this year, our higher capex because of that of last year reflects the higher number of.
Speaker Change: On platforms that we're building.
Speaker Change: 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.
Speaker Change: The result.
Speaker Change: And for the last eight years, we had 27.
Speaker Change: Drill interventions for new wells the growth of 13% vis vis that of the first quarter of 'twenty 'twenty four we are working were.
Speaker Change: 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.
Speaker Change: Slide 10 shows that reconciliation between Capex and 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.
Speaker Change: First of all it's important to clarify that there is a normal lag between measurements and payments. This means that all quarters, we observe a certain level of time lag.
Speaker Change: 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.
Speaker Change: In January and this impacted the cash investment of the first quarter of 2025.
Speaker Change: To illustrate this atypical effect, we detailed the impact of this time lag between measurement and payment in this point grass.
Speaker Change: 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>.
Speaker Change: Normal.
Speaker Change: I'd like to take 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.
Speaker Change: It is classified as an outflow of resources used in financing activities since it refers to leases.
Speaker Change: We now turn to slide 11, which shows the company's debt levels.
Speaker Change: And the first quarter of 2025, we found an increase in gross debt mainly due to the entry of the S. P. S. O. All me round taped among direct this is a chartered units that impacts our leasing costs.
Speaker Change: 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 20 to 25 2029 business plan with a debt ceiling of $75 billion.
Speaker Change: In this way, we maintained an efficient and more flexible capital structure.
Speaker Change: 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.
Speaker Change: 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.
Speaker Change: Sure, which will be paid in two equal installments in August and September.
Speaker Change: Okay.
Slide 13 shows the important 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.
Speaker Change: 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.
Speaker Change: We always make a point of bringing these values to show you how Petrobras is performance materializes and positive impacts for Brazilian Society.
Speaker Change: Here, we have our direct and indirect.
While these are our direct covenants, but we also have indirect.
Speaker Change: Sponsorships.
Speaker Change: 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.
Speaker Change: On the current moment and how the company is prepared for this lower bread scenario.
Speaker Change: 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.
Speaker Change: 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.
Speaker Change: Our E&P projects need to demonstrate a positive NPV and scenarios of up to $45 per barrel.
Speaker Change: In addition to prospective breakeven grant for our E&P portfolio is on average $28 per barrel.
Speaker Change: Our plan also has a portfolio under evaluation, which is made up of our projects subject to the condition that they do not affect the company's capital structure.
Speaker Change: In addition to improving their results excuse me their return in 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.
Speaker Change: We therefore have confidence in our strategy and our governance.
Speaker Change: 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.
Speaker Change: So let's move on to the next slide.
Speaker Change: We are incorporating cost cutting actions and adapting the business plan to the new reality.
Speaker Change: Yeah on the last slide are some examples of what we're doing.
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.
Speaker Change: Second actions aimed at mitigating the impact of lower prices on our free cash flow, let me give you some examples.
Speaker Change: Refining engineering projects, we're already doing this with the <unk>.
Speaker Change: C App of projects reassessment of the scope of recently tendered projects that were not very attractive. Examples include the rapid albacore, our marlin zoom or lend less D and Bart Cuda and car Kingdom.
Speaker Change: Reduced hibor initial costs for systems awaiting decommissioning.
Speaker Change: Reassessment of the cost structure of mature systems, such as encore fields.
Speaker Change: And finally in our portfolio, we're going to prioritize projects that generate cash flow in Florida Timeframes.
Speaker Change: 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 and we will continue to study appropriate measures to strengthen our resilience. We will keep you informed of the.
Speaker Change: Elements and impacts of these actions.
Speaker Change: I'll, let my presentation here and thank you once again for your attention and I give the floor to Eduardo who will start the question and answer session.
Eduardo: Thank you everyone.
Eduardo: 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 Emily: 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 and.
Speaker Change: How that you're buying back that refinery and by IATA 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: So I'd just like to confirm if thus far you don't believe there are any changes necessary to the investment plan and as a follow up there.
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.
Bruno Fernando: 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.
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 celebrated 72nd 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 $45 per barrel.
Speaker Change: And if it doesn't pass the projects are not continued.
Speaker Change: 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.
Speaker Change: Thank you Fernando now we will receive questions from Kai <unk> from Bank of America.
Speaker Change: Hi, Joe.
Speaker Change: Good afternoon. Thank you.
Speaker Change: Yeah.
Speaker Change: First of all recently shell.
Speaker Change: 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 off score assets.
Speaker Change: Would you be interested in assessing or even taking over this participation from shell if echo petrol is seeking a new partner for these fields.
Speaker Change: Secondly.
Speaker Change: Despite the adjustments to diesel prices recently, we still see a premium on E.
Speaker Change: E D.
Speaker Change: For diesel of about 6%, especially gasoline, which is close to 10% according to our calculations. So.
Speaker Change: Can you give us some color about this decision with.
Speaker Change: This recent decision on changing diesel prices, but not gasoline and do you see a reason for new adjustments. Thank you.
Speaker Change: Thank you <unk> I'll, let Sylvia answer the first question and then just loss will answer the second question.
Speaker Change: Hi, good afternoon <unk>.
Speaker Change: Yes shell is.
Speaker Change: Letting go of this asset.
Speaker Change: And.
Speaker Change: But just like this one were assessing others in our portfolio. So it is a constant.
Speaker Change: Process in which we assess opportunities to see what has.
Speaker Change: 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 had always says cannot continue indefinitely.
Speaker Change: Yeah.
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 is when a surgeon.
Speaker Change: Yeah.
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.
Thank you Sylvia Schlosser please.
Speaker Change: Hi, Tayo. Good afternoon. Thank you for that question before I talk about your specific points, it's important to highlight that.
Speaker Change: Obviously, we are trying to see.
Speaker Change: Movements from the international market, but the companies for tea strategy does it only take into consideration.
International prices.
Speaker Change: And now.
Speaker Change: 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.
Speaker Change: To try to address this issue of diesel out and gasoline.
Speaker Change: We think each product deserves a specific look why am I, saying that contrary to diesel which is going.
Speaker Change: Going down in the international market gasoline.
Speaker Change: Is.
Speaker Change: Going up.
Speaker Change: So inventories will probably be re composed in the U S, especially where the consumption of gasoline will go up and that pressures international.
Speaker Change: Prices so not only are we looking at us but.
Speaker Change: We're also seeing our own internal potential in Brazil, especially in our.
Speaker Change: Refining capacity for the oil.
Speaker Change: Produce and our logistics.
Speaker Change: So in diesel and gasoline.
Speaker Change: We have a broader.
Speaker Change: Perspective.
Speaker Change: And external volatility is also a factor there are extremely.
Speaker Change: Our strong geopolitical factors, putting pressure on prices prices of oil spreads for products.
Speaker Change: 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.
Speaker Change: Well.
Because of fake news oil went up $4 in.
Speaker Change: 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.
Speaker Change: 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.
Speaker Change: Fuel prices, which insurers some stability.
Speaker Change: Just to give you a comparison for diesel.
Speaker Change: We were nearly four 400 days with stable prices.
Speaker Change: And that has a significant value for society for our economy in general.
Speaker Change: And this is within our strategy, we have gasoline adjustments and as you mentioned the last one was in.
Speaker Change: June 2024, so we have had stable prices for over 300 days, while the market is.
Speaker Change: Having a lot of volatility.
Speaker Change: So we're looking at prices every day and we.
Speaker Change: 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.
Speaker Change: The first quarter was very interesting.
Speaker Change: We advanced in the Midwest. It grew 9.7% we captured a very significant part of this increase in the mid west.
Speaker Change: And it represented an expansion of about 72.
Speaker Change: 274% of the diesel market.
Speaker Change: So we have been making use of that but we also saw some effects.
Speaker Change: Tariff wars, there was another announcement from.
Speaker Change: Uh huh.
Speaker Change: OPEC to continue their production and that's why we have three reductions just to give you an idea.
Speaker Change: They all completed is zero point 45 says.
Speaker Change: And our expectation for.
Speaker Change: Is that zero point 39 would be reflected as a cost reduction for our consumers, but this also has not happened.
Speaker Change: In conclusion, we're looking at all of these elements to decide how we're going to.
Speaker Change: Leigh Readjustments and do our commercial strategy and the best way possible.
Speaker Change: Okay.
Thank you we will now hear from Rodolfo <unk> from Jpmorgan go ahead Sir.
Rodolfo: Thank you good afternoon, everyone.
Speaker Change: My first question is about costs.
Speaker Change: The message from the CEO was very interesting.
Speaker Change: And adjusting the company for lower oil prices.
Speaker Change: And.
Speaker Change: We've noticed and we've had a discussion with investors we.
Speaker Change: Posted a report on the fact that lifting costs have gone up so.
Speaker Change: 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 their 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: Of 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.
Fernando Mill: Thank you Rodolfo and afford to Fernando Hi.
Speaker Change: Are your Adolfo let's start with your second question about Capex.
Fernando Mill: First one of them.
Fernando Mill: Reiterate that.
Fernando Mill: They commitment.
Fernando Mill: Our commitment is with the sustainability of the company to be important.
Fernando Mill: To society and to adequately compensate all of our investors.
Fernando Mill: So.
When you come across a lower brand.
Fernando Mill: You have to take some measures as we said.
Fernando Mill: Are we optimizing cross sectional penetrance to makeup for the inflation and to go back to historical levels. This is one objective simplifying projects that we had a project.
Fernando Mill: That was postponed.
Fernando Mill: To undergo an engineering review and to make it more efficient and also prioritizing projects that are bringing about positive cash flows.
Fernando Mill: And my back.
Fernando Mill: Okay. So.
Fernando Mill: And our investment portfolio.
Fernando Mill: Obviously, we have been.
Fernando Mill: Trying to prioritize the most important project 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>.
Fernando Mill: Costs, so that we can keep the capex at the current level and to execute the projects today's projects are Petrobras future as.
Fernando Mill: 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.
Speaker Change: Ben.
Speaker Change: Talking to the performance area, we could increase our operational efficiency, which is a way for us to bring down the costs of our offshore areas.
Speaker Change: In the onshore areas that we're talking about a significant reduction of all costs so that.
Speaker Change: They become profitable.
So for all of our assets they 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.
Speaker Change: Thank you Fernando and Sylvia now onto the next question's 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: We haven't seen some F. P. S shows delivering growth for quite some time now and an Ariane Maria Cataria there are projects that have been.
Speaker Change: 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 may be resell these assets and my second question is about gas and energy.
Speaker Change: Which dropped expressively in this quarter.
Speaker Change: As was explained in the release is it possible to say that the company will recover.
Speaker Change: Yeah, it's a bit down with the route free ramp up and if so at what levels will the EBIDTA.
Sylvia: Lies after this ramp up thank you. Thanks for St Chi I'll give the floor to Sylvia.
Speaker Change: Essentially when we are dealing with revamping projects.
Sylvia: While they're mature fields and <unk>.
Speaker Change: In order for them.
Speaker Change: To resume that prediction levels, they need more water injection more producing wells so differently from the pre salt.
Speaker Change: He holds 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.
As anticipated, but our forecast.
Speaker Change: Is that it will only reach peak levels towards the end of year.
Speaker Change: So these are areas that really require more wells more water injection and they take.
Speaker Change: Longer did produce results this is more or less taken into account when it comes to developing these wells Renata.
You're right the productivity of the pre salt wells.
Speaker Change: Beaches at 50, or 60000 barrels per day from one well only that's why with four wells three can top up a platform, which is different from what Sylvia said about the at revamping projects, but I'd like to reinforce that all of these are a revamp projects. They are some.
Speaker Change: Minutes of our robustness.
Speaker Change: Factors and one of our best projects is the Alba Cora and excellence a tier V. P. L. So we will keep on.
Speaker Change: Implementing these.
Speaker Change: Projects.
Speaker Change: 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.
Speaker Change: The possibilities to measure.
Speaker Change: 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 lots of conversations with the market and suggestions to simplify the projects. So of the Alba corner project is really one of our best.
Speaker Change: <unk> on our portfolio today.
Speaker Change: You.
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.
Speaker Change: 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.
Speaker Change: There is also this incentive policy that was launched.
Speaker Change: A premium for.
Speaker Change: For increased demand on.
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 in the barbell sort of complex route three which well 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 good expectations around.
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, so or the so called <unk>.
Speaker Change: The so-called via range.
Speaker Change: And we.
Speaker Change: Our.
Speaker Change: Now asking for the amounts.
Speaker Change: Paid by Petrobras and the other players to be considered equally so our expectations for the next quarters.
Speaker Change: And one of improvement. Thank you you bring them on scenario from Morgan Stanley you have the floor Brunel.
Brunel: Good afternoon, and thanks for answering my questions.
Speaker Change: First about the Capex.
Speaker Change: Yeah.
Speaker Change: In terms of.
Speaker Change: What we can expect for the Capex for the next quarters of 2025.
It probably makes sense to think that.
Speaker Change: Was a bit higher than what we normally see at the beginning of the ear and that being the case may be 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 the beginning of the year was very good for oil production in Brazil, maybe even above the expectations. So I'd like to hear from you.
Speaker Change: 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 predict from maintenance and how much comes from the ramp up. Thank you I'll give the floor to Fernando for your first question Hi, Bruno. Thank you for your question.
Bruno: The first question about Capex.
Bruno: It's important to say that there was a transfer of carryover from the measurement that was done in December and the first payment occurred in the first quarter of 2025. So there was this carryover effect and also.
Bruno: 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.
Bruno: And we'll no longer see these extraordinary events so it will become.
Bruno: Regular.
Bruno: Our guidance remains at $18 5 billion of course with the FX range suggests mens.
Bruno: And our goal is.
Bruno: To deliver the guidance of $18 five as I said.
Speaker Change: Would you like to add anything.
Bruno: Hi, Bruno.
Bruno: The downtime the scheduled downtime Zurich are essential for maintenance of the rig.
Speaker Change: And for safety purposes. So we have a schedule of our scheduled maintenance is for all of the rigs in the first quarter was no different a downtime.
Bruno: Resulted.
Bruno: 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.
Bruno: And I should.
Bruno: Reiterate this it was very good from the perspective of production and also from the perspective of new discoveries we had three.
Bruno: We made two discoveries in Iran, and also the north of Brava.
Bruno: And if.
Bruno: If we combine the F.
Bruno: Forno Bravo and the north of Brava, basically we have a pre salt unit around the Santos.
Bruno: 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 assault 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.
Bruno: The Campos basin and also the Santos basin.
Thank you Renato Ronaldo would you like to add anything.
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.
Bruno: 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.
Speaker Change: Thank you Renata Silvia Fernando.
Bruno: Next question from MS. Mattel's from UBS, but tells you have the floor.
Speaker Change: Thank you good afternoon.
Speaker Change: My first question is about dividends.
Bruno: The way our policy and setup.
Bruno: In our accounts with oil close to or below $60 per barrel of Petrobras me be required to issue debts to pay the dividends of 45% in terms of free cash flow if.
Bruno: It comes to that wouldn't make sense to for you to change the policy.
Bruno: 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.
Speaker Change: 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.
Speaker Change: Well increase the number of refineries.
Fernando Mill: As the revamped plant for the next five years. Thanks, those were my questions well. Thank you mottos I'll give the floor to Fernando.
Fernando Mill: Good afternoon mottos.
Fernando Mill: First I'd like to reiterate our commitment.
Fernando Mill: To the ordinary dividend sequence of the methodology.
Fernando Mill: 45% over the free cash flow.
Fernando Mill: And itself adjustable because the bases as it increases it will increase and vice versa. So Ed.
Fernando Mill: Gets adjusted according to our base.
Fernando Mill: And as for the debt.
Fernando Mill: When we defined the strategic plan at the end of the year, we decided that we would change the size of the debt.
Fernando Mill: $275 billion.
Fernando Mill: It was 65 before.
Fernando Mill: And with.
Fernando Mill: 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.
Fernando Mill: Account for the <unk>.
Affreightment, because with the beginning of the first oil in many Catania and someone there at all.
Fernando Mill: It had an impact on the worsening of the dead.
Fernando Mill: So he acknowledged the debt with the first toilet as expected and with the first point that's associated with the revenue. So it's an increase in the debt with an associated our revenue which is.
Fernando Mill: Positive in the third aspect is cash management, if there was any change to 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.
Fernando Mill: 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.
Fernando Mill: 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 the cash flow above the adequate levels undoubtedly we will distribute special dividends.
Fernando Mill: Thanks Fernando.
Schleifer: Schleifer about the LNG. Please.
Speaker Change: Well, Tim it's about the LNG and the infrastructure at one thing we have prepared for the future.
Speaker Change: 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.
Speaker Change: The most relevant fact is bourbon tourer.
Speaker Change: We have to trains for the processing of natural gas starting up with a very significant production. So this infrastructure that.
Was initiated or will.
Speaker Change: Yield relevant production levels and the logistic aspects related to the distribution of LNG is being planned by the department there or.
Speaker Change: Projects involving the investments of third parties companies, especially in distributors.
Speaker Change: Which.
Speaker Change: 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 of LNG, but the company has been increasing the production of LNG.
Speaker Change: Especially given that Bob and tour has the highest of levels right now.
Speaker Change: Two if I may add to that.
Speaker Change: Before we begin the C O 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.
And we have some for term measures to see if we can.
Speaker Change: Make some short term reductions, but we also have some medium and long term initiatives, but this is all in our strategic plan. So.
Speaker Change: 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.
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'd like to.
Speaker Change: Ask your long term view.
Phil: On the equatorial margin.
Phil: I 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.
Phil: But if we start developing assets in the region.
Phil: How do you believe the business plan will support these additional investments.
Phil: And capex than in developing the region.
Phil: Would you be willing to share these assets with other partners to help fund these projects.
Phil: Or are you, having a portfolio of recycling plan for other assets too.
Phil: Finance the development of the Equatorial margin. Thank you.
Phil: Thank you I'll pass it over to Roger to children piracy.
Speaker Change: Hi, Rodrigo so yes, we have some expectations for the equatorial margins, we've already complied all the requirements from Ibama. They have 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.
Closer to hearing by year.
Speaker Change: So now what we need to do is to.
Speaker Change: <unk> received 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 salt demand and principal.
Speaker Change: And at the end of the year, South Africa as well.
Rodrigo Almeida: Hi, Rodrigo Thats, an excellent question because it gives us the opportunity of.
Speaker Change: I'm, telling you about something we just recently had a simulation native Petrobras with OEM book here with over 200 people involved.
Speaker Change: We went through all the exercise is responding to emergencies.
Speaker Change: Skewing in treating on.
Speaker Change: 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.
Speaker Change: Even talked about cleaning the robe we.
Already have a licensed.
Speaker Change: Paula we have a license to operate from semi.
Speaker Change: Okay.
Speaker Change: And in OEM bulky, we're also bringing a contingency of equipment and trained professionals.
Speaker Change: To respond to emergencies so.
Speaker Change: Everything that is in our is our environmental defense systems are present in all air pocket as well.
Speaker Change: Every week, we've communicated to bummer, all the steps that the company has taken and we're demonstrating our our readiness to.
Speaker Change: 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 our OTC I got a presentation from Renata about this.
Speaker Change: And this has been an important topic for the company, especially in a contracting not only services, but also projects. So.
Speaker Change: In this presentation Renata discussed.
Speaker Change: Best soles.
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 have him into water and with the.
Speaker Change: Highest capacity for gas in a market that.
Speaker Change: As not having higher demands and that still has a high price.
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.
Speaker Change: I'll start with director Hinata. Thank you for your questions and then we'll answer the second question.
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 top side.
Speaker Change: Of the projects. This is one of the complexity measures that we have.
Yeah.
Speaker Change: When we had the first F. P S. Those 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 yours 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.
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 avocado, which is simple.
Speaker Change: We've implemented many simplifications 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 should be.
And the last year.
Speaker Change: This has grown because of.
Speaker Change: A lack of competition.
Speaker Change: We had basically two suppliers there.
Speaker Change: And we 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.
Speaker Change: 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 rice 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.
On a kudos one had 1800 employees and now they have 5000 employees in upgrades to save they also have 5000 employees and their demand is so high that there already is reading it to other partners like nuclear B after the Smith Barney so.
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, <unk> you're right. This is a much more competitive environment than we had in the past in about three years with <unk>.
Thomas King: No market opening we have had 19.
Thomas King: <unk> suppliers in the market. So these are 19 potential competitors.
Thomas King: And this creates a challenge for us we have to.
Thomas King: Find new clients.
Thomas King: So in order to do that we have created a.
Thomas King: Significant.
Thomas King: Significantly aggressive.
Thomas King: <unk> strategy.
Thomas King: With pricing and this has had its results.
Thomas King: The results in the last few.
Thomas King:
Thomas King: 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.
Thomas King: As the contracts are signed.
Thomas King: We have a policy because our contracts with distributors have a clause.
Thomas King: And which we can reduce the contract if a re consumer has a contract in the free market.
Thomas King: So.
Thomas King: This.
Thomas King: Has also hindered gas distributors work.
Thomas King: 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.
Thomas King: Get a bidder.
Thomas King: Share of the market.
Speaker Change: Thank you Thomas scheme, let's continue with the next question from Luzkhov value of BTG go ahead Sir.
Thomas King: Okay.
Speaker Change: Hello, Good afternoon. Thank you for taking my.
Thomas King: My question I also have two.
Thomas King: The first is for director hand NAFTA.
Thomas King: Referring back to one of the questions that was asked about.
Thomas King: President Mike does initial comments on cost reduction simplifying projects.
Thomas King: I was trying to quantify the potential impact of the simplification process and a reduction of the topside wait we.
Thomas King: 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.
Speaker Change: How does that match the impact on the total capex that is projected for this plan Mike.
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 a resilience at different oil levels. So my question is what is the ideal maximum.
Speaker Change: Our level of leverage for you, especially with lower oil prices.
Considering this current context. Thank you.
Speaker Change: I'll hand, it over to her 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 $3 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.
Renata Louie: Thank you Renata Louie.
Speaker Change: Luis Thank you for those questions and for notable answer your second question.
Renata Louie: 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 and payment capacity.
Speaker Change: So this is how we're seeing our leverage.
Fernando Mill: 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 the investment 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.
Speaker Change: Will 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 this growth strategy and petrochemicals have they advanced thank you.
Lilly: Thank you Lilly.
Speaker Change: We're not terrible answer.
Your first question Fernando please.
Lilly: Louisiana.
Lilly: We don't see any possibility, surpassing our capex guidelines.
Lilly: Fernando.
Fernando Mill: And it's looking at me sideways and he is dead.
Lilly: Definitely.
Lilly: Demanding that we don't surpass it, especially because the prices are already defined so there is no reason for us to have any.
Lilly: <unk> prices above those that we forecast for 2026, we are now planning.
The next five years, so right now we don't have those numbers, yet, but we will abide by whatever is defined.
Lilly: Hugh.
Liliana Young: Liliana, Yes liliana.
Liliana Young: Hi, Liana. Thank you for your question.
Speaker Change: Good afternoon, everybody, both petrochemicals and fertilizers.
Speaker Change: And 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 value 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 a J O.
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 and by year end for G. P.
Speaker Change: 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 to mentioned that we're at now and performing that you were in the middle of a tender process for the U F N T central initiate some storage and a training.
Speaker Change: Activities sooner and Tony 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: F N train 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 at train one and now are starting train two so we'll be expanding it to 50%.
Speaker Change: Our polyethylene production capacity in Rio.
Speaker Change: What they know Vanore investments.
Speaker Change: 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.
Speaker Change: In the Rio Grande Chi.
Speaker Change: Refining plant with our partners brisk EM group of ultra will be starting the phase one.
Speaker Change: Have a transforming into a.
Speaker Change: Catalytic.
Speaker Change: Plant producing gas is for the production 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.
For oil producing companies Renata.
Speaker Change: Oh about F N. Three at 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.
Rajeev: Now there's a question from wrenches Cardoso from XP 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'd like to hear your comments about that I know that we have a guidance for an average of 25.
Speaker Change: Or is there are any.
Speaker Change:
Speaker Change: Downtime still scheduled or maybe I can hear your comments about the production by December <unk>.
Speaker Change: And the and attorney to five given the ramp up of these rigs and I also I T. Here.
Speaker Change: A few examples.
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 and know what the higher tier ones or the ones that haven't even been higher D add in the 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.
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 2.7 and for 2025, we also.
Expect to remain within the range of 2.8 and with that these important platforms. The ones that came from Murrow and boozy OS they'll go into production.
With a ramp up.
Speaker Change: On the second quarter and ultimate array at towards the end of 'twenty to 'twenty five and Meera for.
Speaker Change: Next year.
Speaker Change: So that is.
Speaker Change: Strictly within our production.
Speaker Change: <unk> levels.
In addition to the rheumatology patient ramp ups.
Speaker Change: So all of these scheduled downtime are scheduled and.
Speaker Change: 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 downtime where ibama for instance, we've been attempting to include them in our analysis.
Speaker Change: Just to give us a bit more accuracy for of the results. After we do not change any projects already in execution, because that's how for us it generates claims and.
Speaker Change: But not so we don't temporary 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.
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 well, 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.
Speaker Change: Now we have questions from George <unk>.
Speaker Change: Bread from Scotia Bank.
Speaker Change: George over to you.
Speaker Change: Yeah.
Speaker Change: Thank you.
Speaker Change: We looked at the utilization factor of refineries.
Speaker Change: And they.
Speaker Change: It 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 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 were 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: <unk> of the company.
George: Even in the face of in the face of a downtime for revamp at re nest, which is the refinery at that it was I went into a downturn for 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.
George: <unk> 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.
George: Units, we were able to maintain the utilization factor above 90 for this year, we will have the downtime at the Cooper town and refinery with two units one of them a coke that basically produces diesel and S N and towards the end of the year, we'll 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 HDD unit, allowing us to produce more as 10 diesel so it's three downtime, but due to the.
George: Len and the shorter length of time, we do expect the 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 level of the company.
George: Is still very good in terms of the.
International Availabilities six out of 10 refineries are already on the first quartile of.
Renata Louie: The solo indicator. Thanks for your question Renata.
Renata Louie: So what have we learned okay.
Renata Louie: First we are.
Renata Louie: And monitoring.
Renata Louie: Everything that's done at the shipyards much more closely.
Renata Louie: We discussed for instance, which welding operations will be performed on a given day.
Renata Louie: And we've frozen.
Okay.
Renata Louie: So.
Renata Louie: That's one thing we've been doing that at the shipyards so as to.
Renata Louie: Guarantee and also.
Renata Louie: Move the deliveries of forward.
Renata Louie: Each day matters in terms of moving these dates forward.
Renata Louie: And we're constantly trying to do that so what are we doing differently. After the rig is ready once the rig gets here have to anchor it you have to interconnect the wells through lines.
Magnus: And as Magnus said.
Speaker Change: I'm astounded at Chico's smell.
Renata Louie: Reached.
Renata Louie: Record breaking anchoring levels, what we did differently once that before we received the rig we launched at the two P. Though.
Renata Louie: Piles, which do the anchoring once the platform got here they weren't already here and we just needed to.
Renata Louie: That's the line to the platform so anything that we would wait.
Renata Louie: Wait in.
Renata Louie: In the past.
Renata Louie: 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 and the other thing is that at.
Renata Louie: For the.
Chartered platforms, they are manned and.
Renata Louie: 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 once 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.
Renata Louie: Days 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.
Renata Louie: 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 you were not there and this is the end of the Q&A session.
Speaker Change: If there are additional questions.
Fernando Mill: You can send them to our Investor relations team I'll give the floor to Fernando for if you additional comments.
Speaker Change: Well I also want to thank everybody for participating.
Speaker Change: This is very significant for Petrobras and our final 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 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 in 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 we.
Speaker Change: We only 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 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.
Unknown Executive: [music] This meeting is being recorded.
Unknown Executive: The links for both languages are available on our Investor Relations website.
Unknown Executive: We would like to inform you that all participants are connected to the webcast in listen-only mode.
Unknown Executive: After our introductions, we will have a question and answer session, and you'll be able to send your questions via email to petroinvest at petrobras.com.br.
Unknown Executive: Joining us today are Magda Chambriard, Petrobras' president. who will start our session but will not remain for the Q&A due to a prior commitment, Clarice Coppetti, Executive Director of Corporate Affairs, Claudia Schlosser, Executive Director of Logistics, Commercialization and Markets, Fernando Melgarejo, Executive Director of Finance and Investor Relations, and Carlo Valli, Director of Governance and Compliance, Mauricio Tomaschini, Executive Director of Energy Transition and Sustainability, Renata Baruzzi, Executive Director of Engineering, Technology and Innovation, Sylvia Anjos, Executive Director of Exploration and Production, and William Franca, Executive Director of Industrial Processes and Other Products.
Unknown Executive: So to begin, I will hand over to our president, Magda Chambriard, for her initial remarks. Please go ahead, ma'am.
Magda Chambriard: Ladies and gentlemen, good afternoon. It's a great pleasure to join you today to talk a little bit about our performance in the first quarter of 2025. I believe that they were excellent results, but I will take this opportunity to also draw your attention to the challenging scenario that we. as currently with the price of oil. This requires from us a redoubled going from $84 per barrel in the first quarter of 2024. to face this first order of 2025 with an average of $75 per barrel and to post the results that we are posting was not an easy task.
Magda Chambriard: This is an arduous task that was carried forward with a lot of dedication and a lot of wisdom by the Petrobras board and all of its technical staff. What we will have in the future will be even more challenging. This is 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 Capital Discipline for 2025. This challenging scenario of $65 per barrel requires and will require from us simplified project.
Magda Chambriard: and assurance that we will have good trading margins for our product. 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, it's $65 per barrel.
Magda Chambriard: 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 do 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. 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.
Magda Chambriard: But when prices go down, it's time to tighten our belt.
Magda Chambriard: 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.
Magda Chambriard: But also I have to highlight the excellent results that we have had in the first quarter of 2025. First of all, I'd like to say that there's no 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.
Magda Chambriard: So in that aspect, as I mentioned, we have been very successful. We have added a We have added more reserves. constantly, especially with the pre salt light. Last week, we disclosed a new discovery of the pre-salt layer in the Aram block. And if everything works out, we believe that we will have advanced production for the Aram 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 made a new discovery in the Campos Basin in the North Brava area.
Magda Chambriard: We also made discoveries in Colombia and we had an excellent test. in Columbia'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.
Magda Chambriard: But that's 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 Pelotas 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 in the next year.
Magda Chambriard: 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 also 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 5.4% versus the previous quarter. The thin crease was the decisive contribution to our financial results.
Magda Chambriard: oil is our main product. And with it, especially because of it, we are generating 8.5 billion US dollars in cash with our operation. And we reached a net income of 6 billion US dollars.
Magda Chambriard: After my message, our director, Norberto 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. And you will be reminded that in the previous quarter. The foreign exchange for the Brazilian now had a negative impact in our company's results. This quarter, the opposite happened. We recovered a part of those losses. The appreciation of the Brazilian how had an impact on our results again. And without these foreign exchange effects, our results would have been four billion U.S. dollars. which is not bad.
Magda Chambriard: But It was even better on the fact that it was six billion.
Magda Chambriard: Our results are often impacted by the price of oil and by the foreign exchange rate, as happens with all oil companies, and both of these variables are out of our control. And that is why we are saying that right now is a moment for austerity. 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 and its byproducts, and trading these byproducts and our oil with the best profit margins as we can have, but we need to do it.
Magda Chambriard: And this moment is propelling us in that direction. But we need to do it with capital discipline. and seeking major cost reductions, the highest we can have. So after that message, which I think will soothe your thoughts about how much the company is spending. We are not here for that.
Magda Chambriard: 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 they justify the capacity that the company has.
Magda Chambriard: On February 15, FPSO Admiral Timanderet went into production in the Buzios field. It was the first of a series of five oil rigs. that will make Pouzos Field the biggest field in Brazil by far. That rig has a production capacity of 225,000 barrels of oil per day, in addition to gas. As I said, it was the first of a series of five giant rigs. that will comprise the facilities around the Búzios Field.
Magda Chambriard: On March 3rd, Admiral Alexandre de Guzmão went into the Guzmão Field. Alexandre G. Guzman, will also operate in the pre-salt in the Santos Basin. and it was finally anchored in 10 days. I need to draw your attention to these 10 days, which is a record breaking period for Petrobras. It will begin its production. towards the end of the second quarter of this year. The beginning of the third quarter. And with that, will be another 180,000 barrels a day operated by Petrobras in the pre-salt.
Magda Chambriard: along with refining We also completed the revamping of chain one of our refinery. going from 80 barrels per day of refined oil to 130,000 barrels a day in terms of processing capacity. So with very little investment with the introduction of the SOX unit, plus a small revamp. involving maintenance, we basically doubled the capacity of Renastrain 1. It may sound simple, but it's no small feat. We're talking about 15,000 additional barrels per day in terms of processed load, 70% of this capacity generating diesel, which is our main product. 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 260,000 barrels per day processed in the northeast of Brazil.
Magda Chambriard: The market that's hungry for diesel. I used to say that among all of the refineries, we're undertaking more efforts around diesel. and S10 Diesel. which emits much less and adds more value. But especially at Renest, among all of the refineries, this has the highest conversion of crude into diesel. We're talking about a conversion of around 70 percent, which shows how modern and economically feasible this refinery is.
Magda Chambriard: And the second module of natural gas processing. And we'll go into operations in the second half. The Boa Ventura complex in Itaboraí, Rio de Janeiro, added to the first module the total processing capacity of that unit. will achieve 21 million cubic meters per day. increasing the supply of natural gas and also of its byproducts, including liquid natural gas. We're also on the brain curve.
Magda Chambriard: inaugurating the new RDT at Replan. This new unit will have the capacity to produce 63,000 barrels per day of S10 diesel. As I told you, our efforts around increasing capacity and increasing the supply and production of diesel, especially the S10 diesel is real. These are our highest added value products. And as I told you, we are seeking the highest possible level of attractiveness for our investment. S10 diesel has a high added value in that it emits much less, it throws much less sulfur into the atmosphere. almost negligible. And this iEdit Valley office shows us that Not only are we looking for more value, we're also looking for products with the lowest possible emission.
Magda Chambriard: we're still on the lookout for the opportunities to decarbonize, which means that And this is what it means.
Magda Chambriard: And that is why in February, we sold the first bunker of vessel fuel with a 24% of renewable content in the Asian market. This is a huge achievement. We now set foot in the Asian market with a high edit value product. That is Produced and traded by Petrobras, the product is a mixture of 76% of mineral fuel oil and 24% of biofuels. produced from use Cooking Oil And again, The mixture of these two components allows us to create a product that's highly valued in the international market.
Magda Chambriard: 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 enabling solutions around new energies and decarbonization.
Magda Chambriard: In March... We signed a contract with the National Development Bank of Brazil to refers to the Amazon. in the Pro Forest Plus program, one of the biggest programs for acquiring carbon credits in Brazil, will promote the reforestation of up to 50,000 hectares of degraded and now degraded areas in the Amazon. To give you one idea, this is equivalent to 50,000 football fields and to 15 million carbon Cons, which is equivalent to what is annually emitted by around nine million gas fuel gas fuel cars.
Magda Chambriard: This is a structuring project around the climate, but also in terms of reputation. And it is a project and initiative that sows the seed of decarbonization. when right when Petrobras is planning on making money with the capture of CO2.
Magda Chambriard: We are confident in our 2050 strategic plan, not forgetting that a low Brent price brings about additional challenges and that we should review our plan, generating a 2026 2030 business plan considering the need for us to overcome these extremely high challenges imposed by price reduction. We'll do that by preserving our cash, reducing costs and through capital discipline. This is part of our value. the commitment with Brazil and with our investors. whether they're governmental or private, all of that is part of our values. And that is why we'll keep on investing and keep on focusing on more projects that are financially feasible.
Magda Chambriard: and making money for our investors. whether they're from the government or from the private market. This is what we're doing here.
Magda Chambriard: with the Highest possible dedication and strictness, 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 this because our results depend on the optimal conditions of the Brazilian market. The Brazilian market is currently the six highest consuming Brazilian highest consuming market of oil products in the world. So it is a market that should be see enough. for the value, for the importance it has. That's why I say that we walk hand in hand. Petrobras benefits from the appreciation of Brazil and vice versa.
Magda Chambriard: It's a two-way street. That is why we're committed to this path. And that is why we're committed to our planning. and with making expenditures that are in line with the current level of oil prices.
Magda Chambriard: You can rest assured that our common goal at Petrobras is to have a long-lived and strong company. the workforce at Petrobras, the board, investors, and Brazilian society.
Magda Chambriard: Having said that. I want to thank you for your trust. our shareholders, partners.
Magda Chambriard: Unknown Employee. 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.
Magda Chambriard: Thank you for your presence.
Magda Chambriard: And now I will give the floor to my colleagues for the presentations.
Magda Chambriard: Unfortunately, I will not be able to stay for the presentations, but I wish you a great presentation. And please analyze your purchase recommendations. We want all of you investing in Petrobras and we'll make you proud of your investments.
Magda Chambriard: Thank you.
Unknown Executive: Now, let's start the presentation about the performance of the first quarter of 2025.
Fernando Melgarejo: I'll give the floor to Fernando Melgarejo, our financial director. Fernando, you have the floor.
Fernando Melgarejo: Good morning. This is Magda. Thank you for the message. I want to thank you all for being here for yet another webcast. I will start by looking at the. highlights of the first Q of 2025.
Fernando Melgarejo: After the presentation, both me and the other directors will be here for the Q&A session. This slide shows the financial highlights of the company with an adjusted EBITDA excluding one-off events of $10 billion, 8% above the last quarter and a net income of $4 billion. Our cash generation is still strong with an operational cash flow of $8.5 million and a net cash flow of $4.5 billion. I also want to highlight our contributions. We approved $11.7 billion in dividends. related to the first quarter of this year, and we paid more than 65 billion reais in taxes.
Fernando Melgarejo: This growth is the result of Arches' work in a well-implemented strategy demonstrating Petrobras' financial solidity. Our commitment is clear to keep on generating return for our shareholders, including the Brazilian society, in a responsible and consistent manner.
Fernando Melgarejo: Slide six shows the details of the EBITDA and the operational cash flow on the right-hand side. here I want to highlight the effects of our operational performance on the result with the greater production and volumes traded. The EBITDA was $10.7 billion in the quarter with a growth of 8%. compared to the fourth quarter of 2024. As I said, this was driven mainly by the increased oil sales both in the internal and the external markets. In addition to the increased crack spread of diesel, in terms of OCF on the right hand side, we had a growth of 4% versus the previous quarter.
Fernando Melgarejo: totaling $8.5 billion.
Fernando Melgarejo: The next slide. shows that our net profit was $6 billion, not considering the one-off events, the result was $4 billion. an increase of 31% vis-a-vis the previous quarter. and the table below you can see the external scenario. Part of the results reflect an increase of 28% of the diesel crack spread, the appreciation of 1% in the brand quarter by quarter and the appreciation of 7% of the Hial versus the end of the year dollar.
Fernando Melgarejo: Moving on to slide number eight. In the first quarter of 2025, investments totaled $4.1 billion, which represents a reduction of 29 vis-a-vis the last quarter of 2024. This volume of investment corroborates 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. of 2024 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 booster's field.
Fernando Melgarejo: The capex of the first quarter of 2025 was lower than that of the fourth quarter of 2024. But it's higher if compared to the capex of the last year. There was an increase of 34%, especially as a result of the big advancements and the investments in the pre-salt in the Centros Basin, and also the new production systems in the Búzios and Acapulco fields.
Fernando Melgarejo: Slide nine shows The investments. that were performed. You can see that we're investing more but also delivering more. These are investments connected to greater physical deliveries that support a production curve and ensure the entry into production of new systems. The acceleration of CAPEX towards the end of 2024 allowed us to shorten the physical financial gap by 14 percentage points, reflecting our commitment With the 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 that the five rigs that were undergoing constructions in the first quarter of 2024, went from 51 to 76% in terms of physical advancement.
Fernando Melgarejo: In addition to that, we also started the construction of two more rigs, reaching seven units. in construction this year, our higher capex was that of last year reflects the higher number of Owned platforms that we're building. which bring about the benefit of not having affected 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 result. and for the last eight years, we had 27 Drill interventions for new wells a growth of 13% vis-a-vis that of the first quarter of 2024.
Fernando Melgarejo: We are working. We're 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.
Fernando Melgarejo: Slide 10 shows a 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. First of all, it's important to clarify that there is a normal lag between measurements and payments. This means that all quarters, we observe a certain level of time lag. 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 in January.
Fernando Melgarejo: And this impacted the cash investment of the first quarter of 2025. To illustrate this atypical effect, we detail the impact of this time lag between measurement and payment in this point graph. 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 normal.
Fernando Melgarejo: I'd like to take this opportunity to draw your attention to the part relating to IFRS 16. This amount is considered in the CAPEX competence, but in the cash view, it is classified as an outflow of resources used in financing activities since it refers to leasing.
Fernando Melgarejo: We now turn to slide 11, which shows the company's debt level. In the first quarter of 2025, we saw an increase in gross debt, mainly due to the entry of the FPSO Almirante de Mandaray. This is a chartered unit that impacts our leasing costs. It's important to emphasize that it has a capacity of 250 barrels a day, and it can ramp up still this year. And it's also important to emphasize here that that remains within the limits defined in the 2025-2029 business plan, with a debt ceiling of $75 billion. In this way, we maintain an efficient and more flexible capital structure.
Fernando Melgarejo: Now let's go to slide 12. As you can see, we remain committed to the distribution of the results generated and the financial sustainability of the company. 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 of 11.7 billion Reais, equivalent to 0.91 cents per share, which will be paid in two equal installments in August and September.
Fernando Melgarejo: Slide 13 shows the important contribution our activities make in terms of taxes. All in all, R$65.7 billion were paid in taxes to the Union, states and municipalities, including government participation. In addition, we have earmarked around 66 million reais in voluntary social and environmental investments and sponsorships. There are more than 200 initiatives, including social and environmental projects and cultural, sports and science technology sponsors. We always make a point of bringing these values to show you how Petrobras' performance materializes in positive impacts for Brazilian society. Here we have our direct and indirect, well, these are our direct covenants, but we also have indirect sponsorship.
Fernando Melgarejo: Continuing with the last slide. We've just seen how we performed in the first quarter of 2025. But our attention and certainly yours too, is on the current moment and how the company is prepared for this lower-bred scenario. 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. Here we see a screenshot of our business plan released last year, in which we talked about our robustness, even in low oil price scenarios. Our E&P projects need to demonstrate a positive NPV in scenarios of up to $45 per barrel.
Fernando Melgarejo: In addition, the prospective break-even grant for our E&P portfolio is, on average, $28 per barrel. Our plan also has a portfolio under evaluation, which is made up of our projects subject to the condition that they do not affect the company's capital structure. In addition to proving their result, excuse me, their return in a robust scenario, like all the other projects, as for our shareholder remuneration policy, the formula already ensures dividends compatible with different oil prices without compromising the company's financial sustainability. We therefore have confidence in our strategy and our governance. 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.
Fernando Melgarejo: So let's move on to the next slide. We are incorporating cost-cutting actions and adapting the business plan to the new reality. Here on the last slide are some examples of what we're doing. We have three work fronts, mainly first measures to minimize the effects of inflation by optimizing spending. Here we're basically talking about reducing transversal corporate spending, seeking to return to levels of the past. 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 SeaApp project.
Fernando Melgarejo: Reassessment of the scope of recently tendered projects that were not very attractive. Examples include the Revit, Abacora, Marlin Sioux, Marlin Leste, and Barracuda and Caratinga. Reduced hibernational costs for systems awaiting decommissioning. Reassessment of the cost structure of mature systems, such as on-floor fields. And finally, in our portfolio, we are going to prioritize projects that generate cash flow in a shorter timeframe. Actions on this front include greater rigidity in the inclusion of new projects in the portfolio under implementation, reprioritization of projects under implementation with higher returns in the short and medium term. And we will continue to study appropriate measures to strengthen our resilience.
Fernando Melgarejo: We will keep you informed of the developments and impacts of these actions.
Fernando Melgarejo: I'll end my presentation here and thank you once again for your attention.
Fernando Melgarejo: I give the floor to Eduardo, who will start the question and answer session. Thank you, everyone.
Fernando Melgarejo: Thank you, Fernando.
Unknown Executive: We will now continue with the question and answer session.
Bruno Amorim: The first question was asked by Bruno Amorim from Goldman Sachs. Bruno, over to you. Hi, thank you. Thank you for taking my question. My first question is about capital allocation. If you can tell us a bit more about the potential processes and how that you're buying back that refinery in Bahia also ethanol if you have progress to there. And as you've shown, most of the company's projects are resilient to oil prices or oil prices being low. So I just like to confirm if thus far, you don't believe there are any changes necessary to the investment plan.
Bruno Amorim: And as a follow up there, Let's imagine a scenario in which oil prices go down even more. Are there specific areas in which you can make adjustments? whether it is by making onshore investments or investments in other areas where returns are lower. than in deep waters. So that's a broader question about your capital allocation. Thank you.
Fernando Melgarejo: Thank you, Bruno. Fernando, if you may. Hi Bruno. So about Relam, we didn't have any changes, we still follow the same logic. So we can look at any investments and any M&As, but We need to have compatible returns to our investment. But for Ritalin, we don't see any news. There have not been any advances. considering capital. And this is important to mention to you. Petrobras will celebrate its 72nd anniversary this year. And we're working on a commodity that has intrinsic volatility. And our 70 year experience has created a structure in which everything is thought out for volatile moments.
Fernando Melgarejo: And it was not different when we built this strategic plan for 2025 to 2029. So that was taken into consideration. Some important things about resilience, our break even is $28 per barrel. So We always work with testing and modeling at $45 per barrel. And if it doesn't pass, then the projects are not continued. So this year, or at least thus far, we didn't see any changes to what we had planned. with our cat bags. So we've maintained what we wanted to do without any further. Thank you, Fernando.
Caio Ribeiro: Now we will receive questions from Caio Ribeiro from Bank of America.
Caio Ribeiro: Good afternoon. Thank you.
Caio Ribeiro: First of all, recently Shell mentioned that it's going to some blocks in the Caribbean where they have some participation with Eco Patrol. So since Petrobras has some presence in Caribbean offshore assets. Would you be interested in assessing or even taking over this participation from Shell if Ecopetrol is seeking a new partner for these fields?
Caio Ribeiro: Secondly, despite the adjustments to diesel prices made recently, we still see a premium on PPE for diesel of about 6%, especially gasoline, which is close to 10% according to our calculations. So 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. Thank you, Caillou.
Sylvia Anjos: I'll let Sylvia answer the first question and then Schloss will answer the second question. Hi, good afternoon, Caillou. Yes, Shell is letting go of this asset. And just like this one, we're assessing others in our portfolio. So it's a constant process in which we assess opportunities to see what has the best adjustment, what provides the best returns and the ones that are the most significant. And we have to say that exploration, as our head always says, cannot continue indefinitely. So of course we have to look at our full portfolio and we are assessing everything. But in Colombia, not only do we have this discovery, we're drilling two wells.
Sylvia Anjos: One is Buenos Aires. 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.
Claudia Schlosser: Thank you, Sylvia.
Claudia Schlosser: Flosser, please. Hi, Caio. Good afternoon. Thank you for that question. Before I talk about your specific points, it's important to highlight that Obviously, we are trying to see movements from the international market, but the company's strategy doesn't only take into consideration international price. And now. On May 19, we will celebrate our second year after implementing the new commercial strategy, which considers all of these aspects. To answer your question, Caillou, I think there are two points that we need to clarify here. to try to address this issue of diesel and gasoline. We think each product deserves a specific look.
Claudia Schlosser: Why am I saying that? Contrary to diesel, which is going down in the international market, gasoline is going up. So inventories will probably be recomposed in the US, especially where the consumption of gasoline will go up and that pressures international prices. So not only are we looking at this, but We're also seeing our own internal potential in Brazil, especially in our refining capacity for the oil that we produce and our logistics. So in diesel and gasoline, we have a broader perspective. And external volatility is also a factor. There are extremely strong geopolitical factors, putting pressure on prices, prices of oil, spreads for products.
Claudia 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 Because of fake news, oil went up $4 in 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 the client as we did in the past. In the past, in previous commercial strategies, you have in some years more than 90 adjustments or readjustments of fuel prices, which ensures some stability. just to give you a comparison for diesel.
Claudia Schlosser: We were nearly for 400 days with stable price. 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 June 2024. So we have had stable prices for over 300 days, while the market is having a lot of volatility. So we're looking at prices every day and we assess our logistics capacity and our infrastructure and this helps us to keep it balanced. So I just like to underscore that for diesel with the market parameters and our commercial strategy, we recently had three price reductions.
Claudia Schlosser: The first corridor was very interesting. We advanced in the Midwest, it grew 9.7%. We captured a very significant part of this increase in the Midwest. And it represented an expansion of about 72. to 74% of the diesel market. So we have been making use of that. But we also saw some effects. The terror force, there was another announcement from hope to continue their production. And that's why we have three reductions. Just to give you an idea, they all completed 0.45 cents. and our expectation for is that 0.39 would be reflected as a cost reduction for our consumers.
Claudia Schlosser: But this also has not happened. In conclusion, we're looking at all of these elements to decide how we're going to apply readjustments and do our commercial strategy in the best way possible. Thank you.
Rodolfo Angeli: We will now hear from Rodolfo Angeli from IGP Morgan.
Rodolfo Angeli: Go ahead. Thank you.
Rodolfo Angeli: Good afternoon, everyone. My first question is about cost. The message from the CEO was very interesting. and adjusting the company for lower oil prices and We've noticed and we've had a discussion with investors, we posted a report on the fact that lifting costs have gone up. So we like to see this focus on cutting costs. So My question is, can you give us some more color about what initiatives you are taking? What is the highest potential for cost cutting? And if possible, what is your ambition? What value do you expect to capture? That's my first question.
Rodolfo Angeli: second question is, with lower price scenarios, we will obviously see companies getting more conservative about their cash use, but We would also like to know if, considering capital allocation, if there's any space for you know, this effort. of reviewing expenses and so on. If we see we'll see lower capex level. and maybe some extraordinary dividends throughout the year. Thank you. Thank you, Rodolfo.
Fernando Melgarejo: I'm going to report to Fernando. Hi. How are you Rodolfo?
Fernando Melgarejo: Let's start with your second question about CAPEX. But first I want to reiterate that The Commitment. Our commitment is with the sustainability of the company to be important to society and to adequately compensate all of our investors. So when you come across a lower brand. You have to take some measures. As we said, we are optimizing cross-sectional expenditures to make up for the inflation and to go back to the historical levels. This is one objective. Simplifying projects. We had a project that was postponed to undergo an engineering review and to make it more efficient. And also prioritizing project that are bringing about positive cash flow.
Fernando Melgarejo: Am I back? Okay, so. in our investment portfolio. Obviously, we've been trying to prioritize the most important projects from a financial and strategic perspective. But before we can come up with a rationale of reducing the capex, we need to analyze our possibilities around reducing 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 they'll be prioritized.
Sylvia Anjos: Sylvia, Renata, would you like to say anything about the cause? Well, one way for us to assess the optimization of costs, we've been talking to the performance area, we could increase our operational efficiency, which is a way for us to bring down the costs of our offshore areas. And in the onshore areas, we're talking about a significant reduction of all costs, so that they become profitable. So for all of our assets, we have a positive ROI, and we'll keep on improving it with the optimizations and with the search for lower costs. so as to produce results.
Sylvia Anjos: and to lower the costs, as I said. Thank you, Fernando and Sylvia.
Vicente Falanga: Now on to the next questions from Vicente Falanga from Rodesco BBI. Vicente, you have the floor. Thank you.
Sylvia Anjos: I also have two questions. Well, first, we haven't seen some FPSOs delivering growth for quite some time now in Anaria and Maria Kateria. They're projects that have been 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 and maybe resell these assets?
Sylvia Anjos: And my second question is about gas and energy, which dropped expressively in this quarter, as was explained in the release. Is it possible to say that the company will recover its EBITDA with the route-free ramp-up? And if so, at what levels will the EBITDA stabilize after this ramp-up? Thank you.
Sylvia Anjos: Thanks, Vincenci. I'll give the floor to Sylvia. Essentially, when we deal with revamping projects, while they're mature fields, and in order for them to resume their production levels. They need more water injection, more producing wells. So differently from the pre-salt fields that are quick to achieve the peak, they take more time. In the case of these fields, the forecast is 2026. The same thing happens with Maria Kateria, as anticipated, but our forecast. is that it will only reach peak levels towards the end of the year. So these are areas that really require more wells, more water injection, and they take longer to produce results.
Renata Baruzzi: This is more or less taken into account when it comes to developing these wells.
Renata Baruzzi: Renata. Um, you're right. The productivity of the pre-salt wells reaches 50 or 60,000 barrels per day from one well only. That's why with full wells, we 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 revamp projects, they are submitted to our robustness, but I'm Factors. And one of our best projects is the Alba Cora, an excellent tier VPL. So we'll keep on Implementing these projects. As we said before, we're looking for simplification. And once again, Revisioned Alba Cora. We have a topside, which is one of the possibilities to measure the possibility of a project.
Renata Baruzzi: It's 35,000 tons. And with other projects, we're looking at 60 or 70,000 tons. We're able to truly simplify Alba Cora after lots of conversations with the market and suggestions to simplify the project. So the Alba Cora project is really one of our best projects on our portfolio today.
Renata Baruzzi: Thank you.
Renata Baruzzi: When it comes to gas recently A series of initiatives indicate that we'll probably see 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 in this quarter. And we will keep on seeing. this progress. There's also this incentive policy that was launched. a premium for increased demand on the market that applies to distributors and the free market equally. And this also generates more revenue and more clients. A third important factor that shows that our results will get better is, I think I mentioned this, the full operations of the OPGN in the Baventura complex routes free, which will improve our private portfolio.
Renata Baruzzi: and increase will increase our competitiveness.
Renata Baruzzi: There's two more important aspects. The first one being the auction, which is scheduled to happen. And we have nine existing plants already registered for this tender, and two new plants with good expectations around hiring these plants. And finally, The last important factor in terms of producing results is a very solid initiative involving several stakeholders around the discussion of the regulatory framework for the transportation assets or the so-called BRF. the so called BRA and we are now asking for the amounts paid by Petrobras and the other players to be considered equally. So our expectations for the next quarters is one of improvement.
Bruno Montanari: Thank you, Bruno Montanari from Morgan Stanley.
Bruno Montanari: You have the floor, Bruno. Good afternoon and thanks for answering my questions. first about the CAPEX. In terms of what we can expect for the CapEx for the next quarters of 2025, it probably makes sense to think that it was a bit higher than what we normally see in the beginning of the year. And that being the case, maybe the second and the third quarter will probably go to lower levels before it goes up again to regular levels towards the end of the if that's to be expected. And secondly, as the President said, the beginning of the year was very good for oil production in Brazil, maybe even above the expectations.
Bruno Montanari: So I'd like to hear from you what was the scheduled maintenance pipeline like for these months and which units have a scheduled maintenance have maintenance scheduled for the next few months, just so we can understand how much of this... Results from maintenance and how much comes from the ramp up.
Fernando Melgarejo: Thank you.
Fernando Melgarejo: I'll give the floor to Fernando for your first question. Hi, Bruno. Thank you for your question. The first question about CAPEX. Well, it's important to say that there was a transfer, a carryover from the measurement that was done in December, and the first payment occurred in the first quarter of 2025. So there was this carryover effect and also 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 and will no longer see these extraordinary events.
Fernando Melgarejo: So it will become. Regular Our guidance remains at $18.5 billion, of course, with effects rates adjustments. And our goal is to deliver a guidance of 18.5 as I said.
Fernando Melgarejo: Would you like to add anything? Hi, Bruno. The downtimes, the scheduled downtimes are essential for maintenance of the rig. And for safety purposes, we have a schedule of scheduled maintenances for all of the rigs and the first order was no different. Our downtime resulted in 245,000 barrels due to P-68-70FPSO Maricay and the Santos Basin. So basically we did what we had planned in terms of a scheduled downtime for the first quarter. And I should reiterate this, it was very good from the perspective of production and also from the perspective of new discoveries. We had three, we made two discoveries in Aram, also the north of Brava.
Fernando Melgarejo: And if we combine the Forno Brava in the north of Brava, basically we have a pre-salt unit around the Santos the campus basin, which is really a reconstruction of the campus basing using not only the oil 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 production, these discoveries also strengthen the campus basin and also the Santos basin.
Fernando Melgarejo: Thank you, Renato.
Fernando Melgarejo: Renato, would you like to add anything? Yes, please, about the CAPEX, Bruno. Last year, we reviewed our planning process, our CAPEX planning process and how it would behave throughout the year. So, we're pretty sure that we'll stay within the guidance, 18.5, more or less 10%, and one thing that reassures us is 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 we'll really Thank you Renata, Sylvia, Fernando.
Mateus: Next question from Mattels from UBS, Mattels you have the Thank you. Good afternoon. My first question is about dividends. The way our policy is set up. in our accounts with oil close to or below $60 per barrel, Petrobras may be required to issue debts to pay the dividends of 45% in terms of free cash flow. It comes to that wouldn't make sense to for you to change the policy. 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 the fact that the company has to depend on the LNG market.
Mateus: How do you see the competition in this industry, given the higher costs in terms of import infrastructure? And how do you think about increasing the availability of LNG? Will we increase the number of refineries? as the revamp plan for the next five years states? Those are my questions.
Fernando Melgarejo: Well, thank you, Mateus. I'll give the floor to Fernando. Good afternoon, Mateus. First, I'd like to reiterate our commitment to the ordinary dividends according to the methodology. 45% over the pre-cash flow. And it's self adjustable, because the basis as it increases, it will increase and vice versa. So it gets adjusted according to our base. And as for the debt When we defined the strategic plan at the end of the year, we decided that we would change the size of the debt. is $75 billion. It was $65 before. and with 3 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.
Fernando Melgarejo: And that's why we considered a debt of around $65 billion, approximately. The second thing was to account for the because with the beginning of the first oil in Maricateria in Samandaray, it had an impact on the worsening of the debt. So we acknowledge the debt with the first oil as expected, and with the first oil that's associated with the revenue, so it's an increase in the debt with an associated revenue, which is positive and 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 with the company in moving forward and facing any occasional turbulences.
Fernando Melgarejo: So the nothing changes in terms of the debt 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 the constant commitment on our part towards maintaining the payment of dividends, as for the extraordinary dividends, it will depend on the capacity to generate cash flow. If there is a cash flow above the adequate levels, undoubtedly we will distribute special dividends.
Fernando Melgarejo: Thanks, Fernando.
Claudia Schlosser: Schlafer about the L&T, please. Well, Mateus, about the LNG and the infrastructure, one thing we have prepared for the future. is an increase in the production of LNG. Investments in refining and expansion of capacity are highly focused on diesel, but also they focus on LNG. In terms of infrastructure, the production of LNG in Brazil, the most relevant fact is Boa Ventura. We have two trains for the processing of natural gas starting up with a very significant production. So this infrastructure that was initiated will yield relevant production levels and the logistic aspects related to the distribution of LNG is being planned by the department.
Claudia Schlosser: There are projects involving the investments of third parties, companies, especially in distributors, which have 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 of LNG. But the company's been increasing the production of LNG, especially given that Porventura has the highest levels right now.
Fernando Melgarejo: Eduardo, if I may add to that. Before we begin, the CEO gave us an important message of austerity. So we have three major fronts that I've discussed before with you, and we're going to continue with this austerity plan, and we have some short-term measures to see if we can make some short-term reductions, but we also have some medium and long-term initiatives. But this is all in our strategic plan. So It's not that we're increasing our debt.
Fernando Melgarejo: Thank you, Fernando, and thank you, Schlosser.
Rodrigo Ameda: And now we will receive questions from Rodrigo Ameda from Santander Bank. Go ahead. Good afternoon, everyone. Thank you for taking my question. 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 month. with the licensing process. and the exploration process in the region if you have a license approved. still on the same topic, I'd like to past your long term view on the equatorial margin.
Rodrigo Ameda: I know that we don't have all of the details, but I think we'll have a relevant part of the exploratory session in the plan. We've been talking about this for a long time. But if we start developing assets in the region, how do you believe the business plan will support these additional investments? in CAPEX and in developing the region. would you be willing to share these assets with other partners to help fund these projects? for having a portfolio recycling plan for other assets to finance the development of the equatorial margin.
Sylvia Anjos: Thank you.
Sylvia Anjos: I'll pass it over to Sylvia and Clarice. Hi, Rodrigo. So, yes, we have some expectations for the equatorial margins. We've already complied all the requirements from IBAMA. They have been handed to Director Clarice. We have two centers in Belém and Oyapóki awaiting Ibama to go and see if everything is fine. We already have a probe being Costi here in Bahia. So now what we need to do is to receive approval for the probe and start drilling. In our strategic plan, we have foreseen three billion dollars for the margin. The first well for this year is included in that.
Sylvia Anjos: And for all of the margin, we will we have 15 wells planned for the next five years. So. Once the discovery started. We are delimitating the field so We have some margins in our budget to do this. But this will take four or five additional years for production to begin once the field has been marked. So that will be outside of this five year limit and we can reschedule our investments. according to the future investment plan. However, what we need is to truly have a discovery so that we can think about the future of the planet.
Sylvia Anjos: Getting to Work in Production. But meanwhile, we don't depend only on this. We have other wells to drill here in the southeast margin. And we even have some wells planned for abroad in Colombia. and also Santame and Principe, where we also have some drills planned. We are optimizing our fields, the Campos and Santos fields, improving our efficiency, adding complementary wells. And we're making strong investments to obtain a license in the equatorial margin. But meanwhile, other areas are being worked on. such as the Columbia well and also Sontame and Principe. and at the end of the year, South Africa as well.
Clarice Coppetti: Hi, Rodrigo, that's an excellent question because it gives us the opportunity of I'm telling you about something. We just recently had a simulation in Petrobras with Oyapoki with over 200 people involved. We went through all the exercises, responding to emergencies, rescuing and treating fauna. And across all of these exercises, our results were according to the IBAMA manuals. So that's very important. It demonstrates that we are ready. And Sylvia has. even talked about cleaning the probe. We already have a licensed owner we have a license to operate from And in Oyapoki, we're also bringing a contingency of equipment and trained professionals to respond to emergencies.
Clarice Coppetti: So everything that is in our is our environmental defense systems are present in OYAPOC as well. Every week we've communicated to Obama all the steps that the company has taken, and we're demonstrating our readiness to have the pre-operational assessment, which is one step before the license to operate.
Clarice Coppetti: Thank you.
Clarice Coppetti: Thank you, Clarice.
Clarice Coppetti: Thank you, Sylvia.
Gabriel Barra: We'll now hear questions from Gabriel Barra. Gabriel, can you hear us? Hi, everyone. Can you hear me? Yes, go ahead. Thank you. Thank you for taking my questions. I have two. The first is we recently had OTC, I got a presentation from Renata about this. And this has been an important topic for the company, especially in contracting not only services, but also projects. So. In this presentation, Renata discussed Fest Souls vessels here in Brazil. We also saw some news from Magda with Some meetings she had with people in other countries who are trying to bring investments to the country with shipyards.
Renata Baruzzi: So I'd like to hear from Renata how we can solve this equation with oil prices being low. We also see that prices or excuse me, services have also received conservative investments. So if you can give us that feedback on OTC. How we can understand this issue from your perspective, that would be an important point.
Thomas King: And my second point is about the gas market. For a while, Brazil has had discussions about opening the gas market, the price of gas in Brazil. And there has been a long discussion on how to make gas prices lower in Brazil. So I'd like to hear your take on that. What would the company's strategy be? with Aventura and with the highest capacity for gas in a market that is not having higher demands and that still has a high price. So I'd just like to hear what your strategy is. You've signed some agreements in the free market with the ceramics industry.
Thomas King: So I'd just like to hear about your strategy in the gas market and how this will impact the company's results from now on.
Thomas King: Thank you.
Renata Baruzzi: I'll start with Director Renata. Thank you for your questions, and then we'll answer the second. Hi, Gabriel. So we have been simplifying our project. I had mentioned a couple of other times. talking again about the top side of the project. This is one of the complexity measures that we have. When we had the first FPSOs installed in the pre-salt layer, The weight of these topsides was not over 30,000 tons, and the ones in Búzios are over 60,000 tons. So we really need to go back to basics. This is the effort we're making. We took a project from RepliCunches, and what we need to do is...
Renata Baruzzi: have minimal changes to have a very lean project. So we made this effort, we concluded this study, and we're implementing it in several projects. I've mentioned Alba Cota, which is simple. We've implemented many simplifications with CF one and two. The tender winners, or excuse me, the tender organizers asked for some more days to organize this, but we also have to look at in the last year. This has grown because of A Lack of Competition We had basically two suppliers there, and we made a strong effort with the market. We tried to find new suppliers. And in the last bid tender, we were pleasantly surprised by receiving four proposals that were far below the other ones that we had carried out.
Renata Baruzzi: 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. As a company, and just as with any other company, we prefer to have our suppliers nearby. Geopolitical issues are on the top of mind. So we need to understand, you know, if our projects can be carried out here in Brazil. Of course, quality and price are factors. And we're not going to let go of that, but we want to have it in Brazil. And we're inviting partners from other companies and from other countries to join.
Renata Baruzzi: One example is Singapore. Citrium, which is the merge of the previous Kappelfelds with Jurong. has two shipyards in Brazil. They are completely full. The Aracurus one had 1,800 employees, and now they have 5,000 employees. In Angra dos Reis, they also have 5,000 employees, and their demand is so high that they're already spreading it to other partners like Nuclep, Epismidani. This is about making waves in the market.
Renata Baruzzi: So our strategy is to simplify projects so that we can attract more suppliers in order to become more competitive with our bid tender process.
Renata Baruzzi: Thank you, Renata.
Renata Baruzzi: Director Thomas King will now answer. Yes, Gabriel. You're right. This is a much more competitive environment than we had in the past. In about three years with the market opening, we have had 19 suppliers in the market. So these are 19 potential competitors. And this creates a challenge for us. We have to Find new clients So in order to do that, we have created a significantly aggressive strategy. with pricing and this has had its results in the last few quarters. We've talked about three buyers who have signed contracts with Petrobras and we can't give details but we are negotiating with many others and this will be announced as the the contracts are signed.
Thomas King: We have a policy because our contracts with distributors have a clause. in which we can reduce the contract if a free consumer has a contract in the free market. So this 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... Get a better share of the market.
Thomas King: Thank you, Tomaschi.
Luiz Carvalho: Let's continue with the next question from Luiz Carvalho, BTG. Go ahead, sir. Hello, good afternoon. Thank you for taking my question. I also have two. First is for Director Renata. Referring back to one of the questions that was asked about President Magda's initial comments on cost reduction, simplifying projects, I was trying to quantify the potential impact of the simplification process and the reduction of the topside weight. We saw PSOs that had a total cost of $2.5 billion and this went up to $4 billion. Do you have any estimates or any expectations about the cost of these units?
Renata Baruzzi: if it will be between $2.5 or $3 billion or between $3 or $4 billion and How does that match the impact on the total capex that is projected for this plan?
Fernando Melgarejo: 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 dollars, and that was very close to that 75 limit. and your cash is close to your minimal or your ideal level. 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? considering this current context.
Fernando Melgarejo: Thank you.
Renata Baruzzi: I'll hand it over to Renata and then Fernando will answer your second question. Hi, Luis. Our expectation is for platforms to be below $3.5 billion, for rigs to be below $3.5 billion. Of course, this depends on the complexity of each rig, but Our expectation is that it will not be above $3.5 billion.
Renata Baruzzi: Thank you, Renata.
Fernando Melgarejo: Luis, thank you for those questions, and Fernando will answer your second. Go ahead, Fernando. Hi Luis. First, leasing is 70% of our leverage. and leasing is most of all connected to generating revenue. So when it comes to leverage in a company that has leasing, we have to consider this point. financial leverage is much lower. But As we've been seeing, leverage is related to the indebtedness cap that we have. No one is considering having something that is outside that indebtedness level of 75. And of course, as a financial manager, this is something that we keep an eye on sustainability, cash generation and payment capacity.
Fernando Melgarejo: So this is how we're seeing our leverage.
Fernando Melgarejo: Thank you, Fernando.
Liliana Young: Let's continue with the next question.
Liliana Young: Liliana Young from HSBC will ask the next one. Go ahead. Hi, thank you for taking my question. You've talked a lot about the investment plan execution for 2025. But I'd like to understand what cost pressures you're facing today. And if there's any possibility of executing CapEx above $18.5 billion in the budget. Dr. Fernando mentioned the foreign exchange as a caveat. And I also have the same question for 2026.
Renata Baruzzi: That's my first question.
Renata Baruzzi: If you'll allow me a second question. Can you talk about the status of the investment plans in fertilizers? Are there any ongoing studies for Petrobras' growth strategy in petrochemicals? Have they advanced? Thank you.
Renata Baruzzi: Thank you, Lily. Renata will answer your first question. Renata, please. We don't see any possibility of surpassing our campus guidelines, Fernando. is looking at me sideways and he is definitely demanding that we don't surpass it, especially because the prices are already defined. So there is no reason for us to have any prices above those that we forecast for 2026. We are now planning the next five years. So right now we don't have those numbers yet, but we will abide by whatever is defined.
Renata Baruzzi: Thank you.
Renata Baruzzi: Juliana.
Renata Baruzzi: Yes. Liliana. Hi Liliana, thank you for your question. And good afternoon, everybody, both petrochemicals and fertilizers. according to our, 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 value generation for Petrobras for fertilizers. in May will be completing the scheduled downtime of the Parna plant and as of the end of the month we'll be resuming the operations of that plant. Concerning Unit Geo It was approved by our board as well as the The term of settlement of outstanding amounts was approved and along with arbitration, we'll initiate a tender so that as of October, we'll go back to the operations of Fosfam Bahia and Serchipi.
Renata Baruzzi: putting them back on our portfolio. The agreement provides for the return of these plants to the Petrobras assets. And also, I don't know if Renata wants to mention that we're now performing in the middle of the tender process for the UF&Ts and will initiate some storage and trading activities soon in 2026 and the completion of the loading operations in 2028 or 2029.
Renata Baruzzi: Would you like to say anything? Oh, I'm sorry about petrochemicals. and FN3 petrochemicals were also seeking opportunities and PROSCAM announced two or three weeks ago the kickoff between the Novenor and Petrobras shareholders to expand the Rio hub, the Braskem Rio de Janeiro hub, given that we initiated train one and now starting train two. So we'll be expanding it to 50% of polyethylene production capacity in Rio. with a Novenor investment. And with a surplus of ethane in the hub, we are now assessing a plant of acetic acid, and that's an opportunity in terms of petrochemicals. In terms of energy transition, we've carried out a test for the production of green ethane at RECAP.
Renata Baruzzi: And as of July, in the Rio Grande refining plant with our partners Braskem and Grupo Ultra will be starting the phase one of transforming into a Catalytic plant producing gases for the production of NAFTA. So be operating only with renewables, the cracking process producing green NAFTA, and green methane, which are raw materials for petrochemicals as well. So both in terms of raw materials, and in the in case of plastics, we are working on opportunities and investments that are able to generate value for the company in petrochemicals, especially because This synergy and integration between refining and petrochemicals is increasingly required globally for oil producing companies.
Renata Baruzzi: Renata. all about EFN3. We are now in the middle of a tender process, and we'll 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 the MANT packages that we launched and lots of questions being asked at Petronet and the collaboration room. So we're pretty excited about that project as well.
Regis Cardozo: Thank you, Miriam and Renata.
Regis Cardozo: Now there's a question from Regis Cardozo from XP. Regis, over to you. Thank you, Eduardo and the board of Petrobras. I have a specific question about production. That was an important schedule in terms of some platforms going into production and some of them going into ramp up I'd like to hear your comments about that. I know that we have a guidance for an average of 25 or is there any. downtime still scheduled or maybe I could hear your comments about the production by December and the end of 2035 given the ramp up of these rigs and I'd also like to hear A few examples.
Regis Cardozo: In terms of flexibilizing the investment plans to make adjustments 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. Maybe I know if what the hired ones or the ones that haven't been hired yet in the five year plan.
Renata Baruzzi: Can I start? Regis Given the production schedule, Our entire production is submitted to a risk analysis that's been pretty consistent. and Reassuring. So last year, we stayed within the range of 2.7, and for 2025, we also expect to remain within the range of 2.8. And with that, these important platforms, the ones that came from Mero and Buzios, they'll go into production. with a ramp up second quarter, Admiral Temandre at towards the end of 2025 in Meroe 4. next year. So that is. Strictly within our production levels, in addition to the revitalization ramp up. So all of these scheduled downtimes are scheduled, and we can say that 260-270 barrels a day per year are not produced because of the downtimes.
Renata Baruzzi: But that's already considered by our risk analysis and also with occasional downtimes, where Obama, for instance, we've been attempting to include them in our analysis to give us a bit more accuracy for the results. We do not change any projects already in execution, because that's hell for us. It generates claims and whatnot. So we don't temper with projects in execution, except if it's for security. or safety purposes, we don't change any projects, we only change the projects that have not been hired yet. So we're strongly working on the projects that we're still hiring, or for those that will still initiate the hiring process.
Renata Baruzzi: And we don't see we don't forecast any changes. Like we said, our projects are resilient. to a brand of 45. So there is no perspectives of making any changes. But in terms of simplification, well, that's our motive moving forward to simplify the project and to attract more suppliers so as to increase the competitiveness in the tender process.
Unknown Executive: Thanks, everybody, for the questions.
Gabriel Barra: Now we have questions from George.
Gabriel Barra: Gabriel from Scotiabank. George, over to you. Thank you. Probably, we looked at the utilization factor of refineries, it decreased in the first quarter. How can we think about normalizing the load for the next quarters? And my second question is, we saw a successful task in anticipating the production systems. What are the learning points, both in terms of processes and contracts that were generated? And is there any other opportunity for another production system to be anticipated, to be moved forward?
William Franca: Thanks for your questions, George.
William Franca: I'll give the floor to William and Renata, William. Hello, George, and thank you for your question. Actually, our utilization factor was really good. It didn't go down. It may sound like a paradox, but it's not. We were able to maintain our utilization factor for the refineries at above 90% with a strong efforts from refinement and logistics and trading areas of the company. Even in the face of in the face of a downtime for revamp at ReNest, which is a refinery that was went into downtime for 60 days, we stopped desolation, coking, diesel, NAFTA. And we also did the revamp of desolation from 115 to 130,000 in addition to SNOX maintenance.
William Franca: and given us the possibility of reaching 130,000. So it was a long downtime. But even with this downtime. with the logistic planning. and the high availability of the other units who are able to maintain the utilization factor above 90. For this year, we'll have the downtime at the Cubatown refinery with two units, one of them Coke that basically produces diesel and S10. And towards the end of the year, we'll have a downtime for the replan, revamp. It will be revamped to 73,000 cubic meters day. almost 450,000 barrels per day, a big refinery. We're expanding it even further and producing more S10.
William Franca: And the revamped downtime as of September for distillation and amplification of the HDT unit, allowing us to produce more S10 diesel. So it's three downtimes, but due to the length and the shorter length of time, we do expect a utilization factor in some months in the range of 95, 96 and an average at around 92 or 93 percent, which is what the strategic planning defines. So. of the reliability level of the company is still very good in terms of the international availability. Six out of 10 refineries are already on the first quarter of the solo indicator.
Renata Baruzzi: Thanks for your question, Renata.
Renata Baruzzi: So what have we learned? Okay. first we are monitoring Everything that's done at the shipyards much more closely. We discussed, for instance, which welding operations will be performed on a given day. Are we frozen? Okay, so. That's one thing we've been doing that at the shipyards so as to Guarantee, and also move the deliveries forward. Each day matters in terms of moving these dates forward. And we're constantly trying to do that. So what are we doing differently after the rig is ready? Once the rig gets here, you have to anchor it, you have to interconnect the wells through lines.
Renata Baruzzi: And as Magda said, Alexandre Chico Simão have reached record breaking anchoring levels. What we did differently was that before we received the rig, we launched the torpedo piles, which do the anchoring. Once the platform got here, they were already here, and we just needed to attach the line to the platform. So, anything that we would wait in the past, after the rig was delivered, we do that before the rig's been delivered, because once it gets here, we have completed lots of tasks already. And that's been allowing us to anticipate many things. Another thing is that for the chartered platforms, they are manned, and they say that they're hot, 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 at Guanabara Bay, the crew would come on board and start switching everything on, the machinery would take 15 days to start running, to then go to the location for P-38, we'll do a manned trip, it will leave Singapore already manned, once it gets here it will go to the location, and that will give us an additional month in terms of moving prediction forward.
Renata Baruzzi: So those are things that we've been thinking every day about what can be done differently because each day matters, as I said.
Unknown Executive: Thank you, Renata, and this is the end of the Q&A session.
Unknown Executive: If there are additional questions.
Unknown Executive: We can send them to our investor relations team.
Fernando Melgarejo: I'll give the floor to Fernando for a few additional comments. Well, I also want to thank everybody for participating. This is very significant for Petrobras. And our final message is that the entire company is fully aware of the volatile situation we are going through and the Brent price levels. We're committed to analyzing several scenarios. to allow us to understand the possible effects on the balance sheet of the company, production, CapEx, cash flow, So all of that is being taken into account very carefully to allow us to make the best possible decisions with a technical base so that we can make the best possible decisions.
All right. make the best fossil progress in the company. There's also the austerity measures that, in our opinion, will be very productive. And this will bring about. more reliability to the company. And we should never forget that We always talk about long term results. So a short term decision that disregards the long term between the exploration of the first oil, we're talking about 70 years. So it's not such a short period, any decisions need to consider that.
So this is. the commitment of the board. We are concerned, but we're also highly optimistic about 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.