Petróleo Brasileiro SA Q4 FY2024 earnings call

• Cash generation: Generated over BRL 200 million in cash and paid over BRL 102 billion in dividends in 2024.
• Investments: Investments increased by 31% to $16 billion, and debt was reduced to the lowest level since 2008.
• Operational highlights: Started operations of FPSOs like Almirante Tamandare in Buzios, Maria Quiteria in Jubarte field, and Marshal Duque de Caxias in Mero field; refineries had highest operating factor in 10 years; replenished 1.2 billion barrels to reserves; exploring equatorial margin and Pelotas Basin; set records in S10 diesel production.

In 2024, Petrobras had various segment performances. In exploration and production, the company produced 900 million barrels of oil and replenished 1.2 billion barrels to its reserves. The Buzios field saw the start of operations of FPSO Almirante Tamandare, contributing to production. In refining, gasoline and S10 diesel production set records, with refineries operating at the highest factor in 10 years, and 70% of deepwater oil in the processed mix. Revenue contribution: Presale projects account for 80% of Petrobras' production, which are world-class, highly productive assets.

• 2025 production: Planning an increase of 100,000 barrels per day.
• New units: Three new producing units to go fully operational in 2025; revamp of Train 1 in Pernambuco refinery and new HDT to be fully operational by end of 2025; return to fertilizer business with Enza operation and resumption of UFN3 works; expansion of fleet by acquiring four range vessels and eight additional coastal navigation vessels.

• Accounting impact: Q4 loss was due to exchange rate variation impact on debt, an accounting event with no cash flow impact.
• External factors: Brent crude and diesel crack prices lower affected results.
• Operational challenges: Maintenance shutdowns, license issues from environmental agency Ibama, and post-COVID technical review backlog affected production.

Q: Focus on investment side, which units will be advanced and when can see first oil?

A: Investments in Buzios were advanced, with FPSO Almirante Tamandare starting operations in 2024, Maria Quiteria in 2024, and P-78 rig expected in July 2025.

Q: Increase in cost of new units, economic rationale?

A: Handed over to Renata Baruzzi who mentioned price increase due to global factors like Ukraine war, but units like Buzios rigs bring high returns.

Q: Impact of maintenance shutdowns on 2025 production?

A: Scheduled maintenance shutdowns are common, but efforts to recover production, with annual average remaining same.

Q: Discussions on equatorial margin, licenses, and challenges?

A: Planning to drill pioneer well in equatorial margin, structured emergency response plan, but facing environmental agency comments; geology similar to Namibia Basin with potential.

Q: CapEx and capitalizing on SRVs and drills?

A: Model for FPSOs has options, but for support vessels, launch vessels, and drills, model remains chartering.