Release Date: February 27, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Petroleo Brasileiro SA Petrobras (NYSE:PBR) generated over 200 million reisis in cash and paid over 102 billion reisis in dividends in 2024.
• Investments increased by 31% to $16 billion, and financial debt was reduced to the lowest level since 2008.
• The company started operations of an FPSO in the Bozio's field, which is the largest deepwater operations field in the world, with a capacity of 225,000 barrels of oil a day.
• Petroleo Brasileiro SA Petrobras (NYSE:PBR) set new records in its pre-sal project, which now accounts for 80% of the company's production.
• The company returned to the Dow Jones index of sustainability, recognized for its efforts in environmental, social, and governance areas.

Negative Points

• Petroleo Brasileiro SA Petrobras (NYSE:PBR) reported a loss of 17 billion reisis in Q4 2024 due to an accounting event related to exchange rate variations.
• The depreciation of Brent crude and the diesel crack spread negatively impacted the company's financial results.
• There were several impacts from maintenance shutdowns in 2024, affecting production levels.
• The company faced challenges with environmental licensing, particularly in the equatorial margin, which could impact future exploration activities.
• There was a significant increase in the cost of new units, attributed to industry inflation and increased complexity.

Q & A Highlights

• Warning! GuruFocus has detected 3 Warning Sign with PBR.

Q: Can you explain the rationale behind the anticipation of CapEx and its impact on production? A: (President Magda Chambrard) The anticipation of CapEx was primarily focused on the Buzios field, which is a high-value asset. This effort allowed us to advance production timelines, such as the Almirante Tamandare FPSO arriving in 2024 instead of 2025. This anticipation is expected to increase present net value and production capacity, ultimately benefiting the company and its investors.

Q: What are the reasons for the increased costs of new units, and how does this affect Petrobras's strategy? A: (Renata Barruzzi, Executive Director of Engineering, Technology, and Innovation) The increase in costs is due to global inflation and the complexity of new units, especially after the Ukraine war. Despite these challenges, the new units, with capacities of 225,000 barrels, are expected to bring high returns. We are working to streamline projects and maintain deadlines.

Q: How does Petrobras plan to address the challenges in the equatorial margin exploration? A: (Clarisse Caetti, Executive Director of Corporate Affairs) We have structured an unprecedented emergency response plan for the equatorial margin, including a fauna rehabilitation center and environmental defense center. We are committed to meeting environmental agency requirements and are confident in the potential of this new frontier for reserve replenishment.

Q: What impact did maintenance shutdowns have on production in 2024, and what are the expectations for 2025? A: (Sylvia Deanjos, Executive Director of Exploration and Production) Maintenance shutdowns, along with licensing delays, impacted production in 2024. We expect fewer shutdowns in 2025, and our production forecasts already account for necessary maintenance, ensuring minimal disruption to our output.

Q: How does Petrobras plan to manage its fleet and chartering strategy moving forward? A: (Renata Barruzzi) Our strategy remains focused on chartering for support vessels and drills. For FPSOs, we assess market conditions and may choose between leasing or build-operate-transfer models. This approach allows us to maintain flexibility and optimize costs.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.