UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
Report of Foreign Private
Issuer
Pursuant to Rule 13a-16 or 15d-16 of the
Securities Exchange Act of 1934
For the month of August, 2024
Commission File Number
PETRÓLEO BRASILEIRO S.A. – PETROBRAS
(Exact name of registrant as specified in its charter)
Brazilian Petroleum Corporation – PETROBRAS
(Translation of Registrant's name into English)
Federative Republic of
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F ___X___ Form 40-F _______
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes _______ No___X____
EXPLANATORY NOTE
Unaudited Condensed
Consolidated Interim
Financial Statements
PETRÓLEO BRASILEIRO S.A. – PETROBRAS
As of June 30, 2024, with the independent registered public accounting firm report
INDEX Petróleo Brasileiro S.A. – Petrobras |
2 |
Unaudited Condensed Consolidated Statements of Financial Position
PETROBRAS
As of June 30, 2024 and December 31, 2023 (Expressed in millions of US Dollars, unless otherwise indicated)
Assets | Note | 06.30.2024 | 12.31.2023 |
Cash and cash equivalents | 3 | ||
Marketable securities | 3 | ||
Trade and other receivables | 9 | ||
Inventories | 10 | ||
Recoverable income taxes | 12 | ||
Other recoverable taxes | 12 | ||
Others | 16 | ||
Current assets other than assets classified as held for sale | |||
Assets classified as held for sale | 23 | ||
Current assets | |||
Trade and other receivables | 9 | ||
Marketable securities | 3 | ||
Judicial deposits | 14 | ||
Deferred income taxes | 12 | ||
Other recoverable taxes | 12 | ||
Others | 16 | ||
Long-term receivables | |||
Investments | 22 | ||
Property, plant and equipment - PP&E | 17 | ||
Intangible assets | 18 | ||
Non-current assets | |||
Total assets |
Liabilities | Note | 06.30.2024 | 12.31.2023 |
Trade payables | 11 | ||
Finance debt | 24 | ||
Lease liability | 25 | ||
Income taxes payable | 12 | ||
Other taxes payable | 12 | ||
Dividends payable | 26 | ||
Provision for decommissioning costs | 15 | ||
Employee benefits | 13 | ||
Others | 16 | ||
Current liabilities other than Liabilities on assets classified as held for sale | |||
Liabilities related to assets classified as held for sale | 23 | ||
Current liabilities | |||
Finance debt | 24 | ||
Lease liability | 25 | ||
Income taxes payable | 12 | ||
Deferred income taxes | 12 | ||
Employee benefits | 13 | ||
Provisions for legal proceedings | 14 | ||
Provision for decommissioning costs | 15 | ||
Others | 16 | ||
Non-current liabilities | |||
Current and non-current liabilities | |||
Share capital (net of share issuance costs) | 26 | ||
Capital reserve and capital transactions | |||
Profit reserves | 26 | ||
Retained earnings (losses) | |||
Accumulated other comprehensive deficit | ( |
( | |
Attributable to the shareholders of Petrobras | |||
Non-controlling interests | |||
Equity | |||
Total liabilities and equity |
The notes form an integral part of these unaudited condensed consolidated interim financial statements. |
3 |
Unaudited Condensed Consolidated Statements of Income
PETROBRAS
Three and Six-month periods ended June 30, 2024 and 2023 (Expressed in millions of US Dollars, unless otherwise indicated)
Note | Jan-Jun/2024 | Jan-Jun/2023 | Apr-Jun/2024 | Apr-Jun/2023 | |
Sales revenues | 4 | ||||
Cost of sales | 5 | ( |
( |
( |
( |
Gross profit | |||||
Income (expenses) | |||||
Selling expenses | 5 | ( |
( |
( |
( |
General and administrative expenses | 5 | ( |
( |
( |
( |
Exploration costs | 20 | ( |
( |
( |
( |
Research and development expenses | ( |
( |
( |
( | |
Other taxes | ( |
( |
( |
( | |
Impairment (losses) reversals, net | 19 | ( |
( | ||
Other income and expenses, net | 6 | ( |
( |
( |
( |
Total Income (expenses) | ( |
( |
( |
( | |
Income before net finance expense, results of equity-accounted investments and income taxes | |||||
Finance income | |||||
Finance expenses | ( |
( |
( |
( | |
Foreign exchange gains (losses) and inflation indexation charges | ( |
( |
|||
Net finance expense | 7 | ( |
( |
( |
( |
Results of equity-accounted investments | 22 | ( |
( |
( | |
Net income (loss) before income taxes | ( |
||||
Income taxes | 12 | ( |
( |
( | |
Net income (loss) for the period | ( |
||||
Net income (loss) attributable to shareholders of Petrobras | ( |
||||
Net income attributable to non-controlling interests | |||||
Basic and diluted earnings (losses) per common and preferred share - in U.S. dollars | 26 | ) | |||
The notes form an integral part of these unaudited condensed consolidated interim financial statements. |
4 |
Unaudited Condensed Consolidated Statements of Comprehensive Income
PETROBRAS
Three and Six-month periods ended June 30, 2024 and 2023 (Expressed in millions of US Dollars, unless otherwise indicated)
Note | Jan-Jun/2024 | Jan-Jun/2023 | Apr-Jun/2024 | Apr-Jun/2023 | |
Net income (loss) for the period | ( |
||||
Items that will not be reclassified to the statement of income: | |||||
Actuarial gains (losses) on post-employment defined benefit plans | 13 | ||||
Recognized in equity | ( |
||||
Deferred income tax | |||||
Actuarial gains (losses) on defined benefit pension plans, net | ( |
||||
Items that may be reclassified subsequently to the statement of income: | |||||
Unrealized gains (losses) on cash flow hedge - highly probable future exports | 27 | ||||
Recognized in equity | ( |
( |
|||
Reclassified to the statement of income | |||||
Deferred income tax | ( |
( | |||
Unrealized gains / (losses) on cash flow hedge-highly probable future exports, net | ( |
( |
|||
Translation adjustments (1) | |||||
Recognized in equity | ( |
( |
|||
Share of other comprehensive income (loss) in equity-accounted investments | 22 | ||||
Recognized in equity | ( |
( |
|||
Other comprehensive income (loss) | ( |
( |
|||
Total comprehensive income (loss) | ( |
( |
|||
Comprehensive income (loss) attributable to shareholders of Petrobras | ( |
( |
|||
Comprehensive income (loss) attributable to non-controlling interests | ( |
( |
(1) | It includes cumulative translation adjustments in associates and joint ventures. |
The notes form an integral part of these unaudited condensed consolidated interim financial statements. |
5 |
Unaudited Condensed Consolidated Statements of Cash Flows
PETROBRAS
Six-month periods ended June 30, 2024 and 2023 (Expressed in millions of US Dollars, unless otherwise indicated)
Note | Jan-Jun/2024 | Jan-Jun/2023 | |
Cash flows from operating activities | |||
Net income for the period | |||
Adjustments for: | |||
Pension and medical benefits | 13 | ||
Results of equity-accounted investments | 22 | ( | |
Depreciation, depletion and amortization | 29 | ||
Impairment of assets (reversals), net | 19 | ( |
|
Inventory write down (write-back) to net realizable value | 10 | ( |
|
Allowance for credit loss on trade and other receivables, net | |||
Exploratory expenditure write-offs | 20 | ||
Gain on disposal/write-offs of assets | 6 | ( |
( |
Foreign exchange, indexation and finance charges | |||
Income taxes | 12 | ||
Revision and unwinding of discount on the provision for decommissioning costs | |||
Results from co-participation agreements in bid areas | 6 | ( |
( |
Early termination and cash outflows revision of lease agreements | 6 | ( |
( |
Losses with legal, administrative and arbitration proceedings, net | 6 | ||
Decrease (Increase) in assets | |||
Trade and other receivables | |||
Inventories | ( |
||
Judicial deposits | ( | ||
Other assets | ( |
||
Increase (Decrease) in liabilities | |||
Trade payables | ( | ||
Other taxes payable | ( |
( | |
Pension and medical benefits | ( |
( | |
Provisions for legal proceedings | ( |
( | |
Other employee benefits | ( |
( | |
Provision for decommissioning costs | ( |
( | |
Other liabilities | ( |
( | |
Income taxes paid | ( |
( | |
Net cash provided by operating activities | |||
Cash flows from investing activities | |||
Acquisition of PP&E and intangible assets | ( |
( | |
Acquisition of equity interests | ( |
( | |
Proceeds from disposal of assets - Divestment | |||
Financial compensation from co-participation agreements | |||
Investment in marketable securities | ( |
( | |
Dividends received | |||
Net cash used in investing activities | ( |
( | |
Cash flows from financing activities | |||
Changes in non-controlling interest | ( | ||
Proceeds from finance debt
|
24 | ||
Repayment of principal - finance debt | 24 | ( |
( |
Repayment of interest - finance debt | 24 | ( |
( |
Repayment of lease liability | 25 | ( |
( |
Dividends paid to Shareholders of Petrobras | 26 | ( |
( |
Share repurchase program | 26 | ( |
|
Dividends paid to non-controlling interests | ( |
( | |
Net cash used in financing activities | ( |
( | |
Effect of exchange rate changes on cash and cash equivalents | ( |
||
Net change in cash and cash equivalents | ( |
||
Cash and cash equivalents at the beginning of the period | |||
Cash and cash equivalents at the end of the period |
The notes form an integral part of these unaudited condensed consolidated interim financial statements. |
6 |
Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity
PETROBRAS
Six-month periods ended June 30, 2024 and 2023 (Expressed in millions of US Dollars, unless otherwise indicated)
Share capital (net of share issuance costs) | Accumulated other comprehensive income (deficit) and deemed cost | Profit Reserves | ||||||||||
Share Capital | Share issuance costs | Capital reserve, Capital Transactions and Treasury shares | Cumulative translation adjustments | Cash flow hedge - highly probable future exports | Actuarial gains (losses) on defined benefit pension plans | Other comprehensive income (loss) and deemed cost | Profit Reserves | Retained earnings (losses) | Equity attributable to shareholders of Petrobras | Non-controlling interests | Total consolidated equity | |
Balance at December 31, 2022 | ( |
( |
( |
( |
( |
|||||||
107,101 | 1,144 | (105,187) | 66,434 | − | 69,492 | 344 | 69,836 | |||||
Capital transactions | ( |
( | ||||||||||
Net income | ||||||||||||
Other comprehensive income (loss) | ( |
|||||||||||
Appropriations: | ||||||||||||
Dividends | ( |
( |
( |
( |
( | |||||||
Balance at June 30, 2023 | ( |
( |
( |
( |
( |
|||||||
107,101 | 1,144 | (99,103) | 59,570 | 8,206 | 76,918 | 332 | 77,250 | |||||
Balance at December 31, 2023 | ( |
( |
( |
( |
( |
|||||||
107,101 | 410 | (101,569) | − | 78,583 | 392 | 78,975 | ||||||
Treasury shares | ( |
( |
( | |||||||||
Capital transactions | ||||||||||||
Net income | ||||||||||||
Other comprehensive income (loss) | ( |
( |
( |
( |
( |
( | ||||||
Expired unclaimed dividends | ||||||||||||
Appropriations: | ||||||||||||
Dividends | ( |
( |
( |
( |
( | |||||||
Balance at June 30, 2024 | ( |
( |
( |
( |
( |
|||||||
107,101 | 29 | (107,239) | 65,463 | 1,831 | 67,185 | 463 | 67,648 | |||||
The notes form an integral part of these unaudited condensed consolidated interim financial statements. |
7 |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
1. | Basis of preparation |
1.1. | Statement of compliance and authorization of unaudited condensed consolidated interim financial statements |
These unaudited condensed consolidated interim financial statements of Petróleo Brasileiro S.A. (“Petrobras” or “Company”) have been prepared and presented in accordance with IAS 34 – “Interim Financial Reporting” as issued by the International Accounting Standards Board (IASB). They present the significant changes in the period, avoiding repetition of certain notes to the annual consolidated financial statements previously reported. Hence, they should be read together with the Company’s audited annual consolidated financial statements for the year ended December 31, 2023, which include the full set of notes.
In the preparation of these unaudited condensed consolidated interim financial statements for in the the six-month period ended June 30, 2024, the Company assessed the impacts of extreme weather events that occurred in the state of Rio Grande do Sul in the second quarter of 2024 on its operations and concluded that they did not materially affect the Company’s assets and results in the the six-month period ended June 30, 2024.
These unaudited condensed consolidated interim financial statements were approved and authorized for issue by the Company’s Board of Directors in a meeting held on August 8, 2024.
1.2. | New standards and interpretations |
On January 1, 2024, amendments to standards issued by the IASB came into force and were adopted by the Company, as disclosed in note 6 of the financial statements of December 31, 2023. According to the assessment carried out by Management, there were no material impacts on the initial application of these amendments in these unaudited condensed consolidated interim financial statements.
2. | Material accounting policies |
The accounting policies and methods of computation followed in these unaudited condensed consolidated interim financial statements are the same as those followed in the preparation of the annual financial statements of the Company for the year ended December 31, 2023.
3. | Cash and cash equivalents and marketable securities |
3.1. | Cash and cash equivalents |
They include cash, available bank deposits and short-term financial investments with high liquidity, which meet the definition of cash equivalents.
06.30.2024 | 12.31.2023 | |
Cash at bank and in hand | ||
Short-term financial investments | ||
- In Brazil | ||
Brazilian interbank deposit rate investment funds and other short-term deposits | ||
Other investment funds | ||
- Abroad | ||
Time deposits | ||
Automatic investing accounts and interest checking accounts | ||
Other financial investments | ||
Total short-term financial investments | ||
Total cash and cash equivalents |
Short-term financial investments in Brazil primarily consist of investments in funds holding Brazilian Federal Government Bonds that can be redeemed immediately, as well as reverse repurchase agreements that mature within three months as of the date of their acquisition. Short-term financial investments abroad comprise time deposits that mature in three months or less from the date of their acquisition, highly-liquid automatic investment accounts, interest checking accounts and other short-term fixed income instruments.
8 |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
3.2. | Marketable securities |
06.30.2024 | 12.31.2023 | |
Fair value through profit or loss | ||
Amortized cost - Bank Deposit Certificates and time deposits | ||
Amortized cost - Others | ||
Total | ||
Current | ||
Non-current |
Marketable securities classified as fair value through profit or loss refer mainly to investments in Brazilian Federal Government Bonds (amounts determined by level 1 of the fair value hierarchy). These financial investments have maturities of more than three months.
Securities classified as amortized cost refer to investments in Brazil in floating rate Bank Deposit Certificates with daily liquidity, with initial maturities between one and two years, and to investments abroad in time deposits with maturities of more than three months from the contracting date.
4. | Sales revenues |
Jan-Jun/2024 | Jan-Jun/2023 | Apr-Jun/2024 | Apr-Jun/2023 | |
Diesel | ||||
Gasoline | ||||
Liquefied petroleum gas | ||||
Jet fuel | ||||
Naphtha | ||||
Fuel oil (including bunker fuel) | ||||
Other oil products | ||||
Subtotal oil products | ||||
Natural gas | ||||
Crude oil | ||||
Renewables and nitrogen products | ||||
Breakage | ||||
Electricity | ||||
Services, agency and others | ||||
Domestic market | ||||
Exports | ||||
Crude oil | ||||
Fuel oil (including bunker fuel) | ||||
Other oil products and other products | ||||
Sales abroad (1) | ||||
Foreign market | ||||
Sales revenues |
(1) | Sales revenues from operations outside of Brazil, including trading and excluding exports. |
9 |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
Jan-Jun/2024 | Jan-Jun/2023 | Apr-Jun/2024 | Apr-Jun/2023 | |
Domestic market | ||||
China | ||||
Americas (except United States) | ||||
Europe | ||||
Asia (except China and Singapore) | ||||
United States | ||||
Singapore | ||||
Others | ||||
Foreign market | ||||
Sales revenues |
In the six-month period ended June 30, 2024, sales to two clients of the refining, transportation and marketing segment represented individually 15% and 10% of the Company’s sales revenues; in the same period of 2023, sales to two clients of the same segment represented individually 16% and 11% of the Company’s sales revenues.
5. | Costs and expenses by nature |
5.1. | Cost of sales |
Jan-Jun/2024 | Jan-Jun/2023 | Apr-Jun/2024 | Apr-Jun/2023 | |
Raw material, products for resale, materials and third-party services (1) | ( |
( |
( |
( |
Depreciation, depletion and amortization | ( |
( |
( |
( |
Production taxes | ( |
( |
( |
( |
Employee compensation | ( |
( |
( |
( |
Total | ( |
( |
( |
( |
(1) | It Includes short-term leases and inventory turnover. |
5.2. | Selling expenses |
Jan-Jun/2024 | Jan-Jun/2023 | Apr-Jun/2024 | Apr-Jun/2023 | |
Materials, third-party services, freight, rent and other related costs | ( |
( |
( |
( |
Depreciation, depletion and amortization | ( |
( |
( |
( |
Allowance for expected credit losses | ( |
( |
||
Employee compensation | ( |
( |
( |
( |
Total | ( |
( |
( |
( |
5.3. | General and administrative expenses |
Jan-Jun/2024 | Jan-Jun/2023 | Apr-Jun/2024 | Apr-Jun/2023 | |
Employee compensation (1) | ( |
( |
( |
( |
Materials, third-party services, rent and other related costs | ( |
( |
( |
( |
Depreciation, depletion and amortization | ( |
( |
( |
( |
Total | ( |
( |
( |
( |
(1) | In the three and six-month periods ended June 30, 2024, it mainly refers to the actuarial revision of the Saúde Petrobras - AMS health care plan, reflecting the change in the benefit, in the amount of US$ 78. For more information, see note 13. |
10 |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
6. | Other income and expenses, net |
Jan-Jun/2024 | Jan-Jun/2023 | Apr-Jun/2024 | Apr-Jun/2023 | |
Pension and medical benefits - retirees (1) | ( |
( |
( |
( |
Stoppages for asset maintenance and pre-operating expenses | ( |
( |
( |
( |
Losses with legal, administrative and arbitration proceedings | ( |
( |
( |
( |
Profit sharing | ( |
( |
( |
( |
Variable compensation programs | ( |
( |
( |
( |
Operating expenses with thermoelectric power plants | ( |
( |
( |
( |
Institutional relations and cultural projects | ( |
( |
( |
( |
Expenses with contractual fines received | ( |
( |
( |
( |
Amounts recovered from Lava Jato investigation (2) | ||||
Gains (losses) with commodities derivatives | ( | |||
Ship/take or pay agreements and fines imposed to suppliers | ||||
Government grants | ||||
Results from co-participation agreements in bid areas | ||||
Results of non-core activities | ||||
Fines imposed on suppliers | ||||
Early termination and changes to cash flow estimates of leases | ||||
Reimbursements from E&P partnership operations | ||||
Results on disposal/write-offs of assets | ||||
Others (3) | ( |
( |
( | |
Total | ( |
( |
( |
( |
(1) | In the second quarter of 2024, it mainly refers to the actuarial revision of the Saúde Petrobras - AMS health care plan, reflecting the change in the benefit, in the amount of US$ 1,000. For more information, see note 13. |
(2) | The total amount recovered from the Lava Jato Investigation through December 31, 2023 was US$ 1,727, recognized through collaboration and leniency agreements entered into with individuals and legal entities. |
(3) | It includes, in the six-month period ended June 30, 2023, expenses with compensation for the termination of a vessel charter agreement in the amount of US$ 317. |
7. | Net finance income (expense) |
Jan-Jun/2024 | Jan-Jun/2023 | Apr-Jun/2024 | Apr-Jun/2023 | |
Finance income | ||||
Income from investments and marketable securities (Government Bonds) | ||||
Other finance income | ||||
Finance expenses | ( |
( |
( |
( |
Interest on finance debt | ( |
( |
( |
( |
Unwinding of discount on lease liability | ( |
( |
( |
( |
Capitalized borrowing costs | ||||
Unwinding of discount on the provision for decommissioning costs | ( |
( |
( |
( |
Other finance expenses (1) | ( |
( |
( |
( |
Foreign exchange gains (losses) and indexation charges | ( |
( |
||
Foreign exchange gains (losses) (2) | ( |
( |
||
Reclassification of hedge accounting to the Statement of Income (2) | ( |
( |
( |
( |
Indexation to the Selic interest rate of anticipated dividends and dividends payable | ( |
( |
( |
( |
Recoverable taxes inflation indexation income | ( |
( |
||
Other foreign exchange gains and indexation charges, net (1) | ||||
Total | ( |
( |
( |
( |
(1) | It includes, in the three and six-month periods ended June 30, 2024, finance expense of US$ 1,930 and indexation charges of US$ 220 related to the tax settlement program - federal taxes. For more information, see note 12.3. |
(2) | For more information, see notes 27.2.2 a and 27.2.2 c. |
11 |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
8. | Information by operating segment |
8.1. | Net income by operating segment |
Consolidated statement of income by operating segment | ||||||
Jan-Jun/2024 | ||||||
Exploration and Production (E&P) | Refining, Transportation & Marketing (RT&M) | Gas and Low Carbon Energies (G&LCE) | Corporate and other businesses | Eliminations | Total | |
Sales revenues | ( |
|||||
Intersegments | ( |
|||||
Third parties | ||||||
Cost of sales | ( |
( |
( |
( |
( | |
Gross profit (loss) | ( |
|||||
Income (expenses) | ( |
( |
( |
( |
( | |
Selling expenses | ( |
( |
( |
( |
( | |
General and administrative expenses | ( |
( |
( |
( |
( | |
Exploration costs | ( |
( | ||||
Research and development expenses | ( |
( |
( |
( | ||
Other taxes | ( |
( |
( |
( |
( | |
Impairment (losses) reversals, net | ( |
|||||
Other income and expenses, net | ( |
( |
( |
( |
( | |
Income (loss) before net finance income (expense), results of equity-accounted investments and income taxes | ( |
( |
||||
Net finance income (expense) | ( |
( | ||||
Results of equity-accounted investments | ( |
( |
( | |||
Net income / (loss) before income taxes | ( |
( |
||||
Income taxes | ( |
( |
( |
( | ||
Net income (loss) for the period | ( |
( |
||||
Attributable to: | ||||||
Shareholders of Petrobras | ( |
( |
||||
Non-controlling interests | ( |
12 |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
Jan-Jun/2023 | ||||||
Exploration and Production (E&P) | Refining, Transportation & Marketing (RT&M) | Gas and Low Carbon Energies (G&LCE) | Corporate and other businesses | Eliminations | Total | |
Sales revenues | ( |
|||||
Intersegments | ( |
|||||
Third parties | ||||||
Cost of sales | ( |
( |
( |
( |
( | |
Gross profit (loss) | ( |
|||||
Income (expenses) | ( |
( |
( |
( |
( |
( |
Selling expenses | ( |
( |
( |
( |
( |
( |
General and administrative expenses | ( |
( |
( |
( |
( | |
Exploration costs | ( |
( | ||||
Research and development expenses | ( |
( |
( |
( |
( | |
Other taxes | ( |
( |
( |
( |
( | |
Impairment (losses) reversals, net | ( |
( |
( | |||
Other income and expenses, net | ( |
( |
( |
( | ||
Income (loss) before net finance income (expense), results of equity-accounted investments and income taxes | ( |
|||||
Net finance expense | ( |
( | ||||
Results of equity-accounted investments | ( |
|||||
Net income / (loss) before income taxes | ( |
|||||
Income taxes | ( |
( |
( |
( |
( | |
Net income (loss) for the period | ( |
|||||
Attributable to: | ||||||
Shareholders of Petrobras | ( |
|||||
Non-controlling interests | ( |
13 |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
Consolidated statement of income by operating segment | ||||||
Apr-Jun/2024 | ||||||
Exploration and Production (E&P) | Refining, Transportation & Marketing (RT&M) | Gas and Low Carbon Energies (G&LCE) | Corporate and other businesses | Eliminations | Total | |
Sales revenues | ( |
|||||
Intersegments | ( |
|||||
Third parties | ||||||
Cost of sales | ( |
( |
( |
( |
( | |
Gross profit (loss) | ( |
|||||
Income (expenses) | ( |
( |
( |
( |
( | |
Selling expenses | ( |
( |
( |
( | ||
General and administrative expenses | ( |
( |
( |
( |
( | |
Exploration costs | ( |
( | ||||
Research and development expenses | ( |
( |
( | |||
Other taxes | ( |
( |
( |
( |
( | |
Impairment (losses) reversals, net | ||||||
Other income and expenses, net | ( |
( |
( |
( |
( | |
Income (loss) before net finance income (expense), results of equity-accounted investments and income taxes | ( |
( |
||||
Net finance income (expense) | ( |
( | ||||
Results of equity-accounted investments | ( |
( |
( | |||
Net income / (loss) before income taxes | ( |
( |
( | |||
Income taxes | ( |
( |
( |
|||
Net income (loss) for the period | ( |
( |
( | |||
Attributable to: | ||||||
Shareholders of Petrobras | ( |
( |
( | |||
Non-controlling interests |
14 |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
Consolidated statement of income by operating segment | ||||||
Apr-Jun/2023 | ||||||
Exploration and Production (E&P) | Refining, Transportation & Marketing (RT&M) | Gas and Low Carbon Energies (G&LCE) | Corporate and other businesses | Eliminations | Total | |
Sales revenues | ( |
|||||
Intersegments | ( |
|||||
Third parties | ||||||
Cost of sales | ( |
( |
( |
( |
( | |
Gross profit (loss) | ||||||
Income (expenses) | ( |
( |
( |
( |
( |
( |
Selling expenses | ( |
( |
( |
( |
( | |
General and administrative expenses | ( |
( |
( |
( |
( | |
Exploration costs | ( |
( | ||||
Research and development expenses | ( |
( |
( |
( | ||
Other taxes | ( |
( |
( |
( | ||
Impairment (losses) reversals, net | ( |
( |
( | |||
Other income and expenses, net | ( |
( |
( |
( | ||
Income (loss) before net finance income (expense), results of equity-accounted investments and income taxes | ( |
|||||
Net finance income (expense) | ( |
( | ||||
Results of equity-accounted investments | ( |
( | ||||
Net income / (loss) before income taxes | ( |
|||||
Income taxes | ( |
( |
( |
( |
( | |
Net income (loss) for the period | ( |
|||||
Attributable to: | ||||||
Shareholders of Petrobras | ( |
|||||
Non-controlling interests | ( |
The amount of depreciation, depletion and amortization by segment is set forth as follows:
Exploration and Production (E&P) | Refining, Transportation & Marketing (RT&M) | Gas and Low Carbon Energies (G&LCE) | Corporate and other businesses | Total | |
Jan-Jun/2024 | |||||
Jan-Jun/2023 | |||||
Exploration and Production (E&P) | Refining, Transportation & Marketing (RT&M) | Gas and Low Carbon Energies (G&LCE) | Corporate and other businesses | Total | |
Apr-Jun/2024 | |||||
Apr-Jun/2023 |
15 |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
8.2. | Assets by operating segment |
Exploration and Production (E&P) | Refining, Transportation & Marketing (RT&M) | Gas and Low Carbon Energies (G&LCE) | Corporate and other businesses | Elimina-tions | Total | |
Consolidated assets by operating segment - 06.30.2024 | ||||||
Current assets | ( |
|||||
Non-current assets | ||||||
Long-term receivables | ||||||
Investments | ||||||
Property, plant and equipment | ||||||
Operating assets | ||||||
Under construction | ||||||
Intangible assets | ||||||
Total Assets | ( |
|||||
Consolidated assets by operating segment - 12.31.2023 | ||||||
Current assets | ( |
|||||
Non-current assets | ||||||
Long-term receivables | ||||||
Investments | ||||||
Property, plant and equipment | ||||||
Operating assets | ||||||
Under construction | ||||||
Intangible assets | ||||||
Total Assets | ( |
9. | Trade and other receivables |
9.1. | Trade and other receivables |
06.30.2024 | 12.31.2023 | |
Receivables from contracts with customers | ||
Third parties | ||
Related parties | ||
Investees (note 28.1) | ||
Subtotal | ||
Other trade receivables | ||
Third parties | ||
Receivables from divestments and Transfer of Rights Agreement | ||
Lease receivables | ||
Other receivables | ||
Related parties | ||
Petroleum and alcohol accounts - receivables from Brazilian Federal Government | − | |
Subtotal | ||
Total trade and other receivables, before ECL | ||
Expected credit losses (ECL) - Third parties | ( |
( |
Expected credit losses (ECL) - Related parties | ( |
( |
Total trade and other receivables | ||
Current | ||
Non-current |
Trade and other receivables are generally classified
as measured at amortized cost, except for receivables with final prices linked to changes in commodity price after their transfer of control,
which are classified as measured at fair value through profit or loss, amounting to US$
16 |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
The balance of receivables from divestment and
Transfer of Rights Agreement is mainly related to the Earn Out of the Atapu and Sépia fields, totaling US$
On June 26, 2024, the amount of US$
9.2. | Aging of trade and other receivables – third parties |
06.30.2024 | 12.31.2023 | |||
Trade and other receivables | Expected credit losses | Trade and other receivables | Expected credit losses | |
Current | ( |
( | ||
Overdue: | ||||
1-90 days (1) | ( |
( | ||
91-180 days | ( |
( | ||
181-365 days | ( |
( | ||
More than 365 days | ( |
( | ||
Total | ( |
( |
(1) | On January 10, 2024, Petrobras received US$ 298 from Carmo Energy as the last installment relating to the sale of the Carmópolis cluster, which was due on December 20, 2023. |
9.3. | Changes in provision for expected credit losses – third parties and related parties |
2024 Jan-Jun |
2023 Jan-Jun | |
Opening balance | ||
Additions | ||
Write-offs | ( |
( |
Reversals | ( |
( |
Translation adjustment | ( |
|
Closing balance | ||
Current | ||
Non-current |
10. | Inventories |
06.30.2024 | 12.31.2023 | |
Crude oil | ||
Oil products | ||
Intermediate products | ||
Natural gas and Liquefied Natural Gas (LNG) | ||
Biofuels | ||
Fertilizers | ||
Total products | ||
Materials, supplies and others | ||
Total | ||
In the six-month period ended June 30, 2024, the
Company recognized a US$
At June 30, 2024, the Company had pledged crude
oil and oil products volumes as collateral for the Term of Financial Commitment (TFC) related to Pension Plans PPSP-R, PPSP-R Pre-70 and
PPSP-NR Pre-70 signed by Petrobras and Fundação Petrobras de Seguridade Social – Petros Foundation in 2008,
in the estimated amount of US$
17 |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
11. | Trade payables |
06.30.2024 | 12.31.2023 | |
Third parties in Brazil | ||
Third parties abroad | ||
Related parties (note 28.1) | ||
Total | ||
Forfaiting
The Company has a program to encourage the development of the oil and gas production chain called “Mais Valor” (More Value), operated by a partner company on a 100% digital platform.
By using this platform, the suppliers who want to anticipate their receivables may launch a reverse auction, in which the winner is the financial institution which offers the lowest discount rate. The financial institution becomes the creditor of invoices advanced by the supplier, and Petrobras pays the invoices on the same date and under the conditions originally agreed with the supplier.
Invoices are advanced in the “Mais Valor” program exclusively at the discretion of the suppliers and do not change the terms, prices and commercial conditions contracted by Petrobras with such suppliers, as well as it does not add financial charges to the Company, therefore, the classification is maintained as Trade payables in Statements of Cash Flows (Cash flows from operating activities).
As of June 30, 2024, the balance advanced by suppliers,
within the scope of the program, is US$
12. | Taxes |
12.1. | Income taxes |
Current assets | Current liabilities | Non-current liabilities | ||||
06.30.2024 | 12.31.2023 | 06.30.2024 | 12.31.2023 | 06.30.2024 | 12.31.2023 | |
Taxes in Brazil | ||||||
Income taxes | − | − | ||||
Income taxes - Tax settlement programs | − | − | ||||
Taxes abroad | − | − | ||||
Total | ||||||
Reconciliation between statutory income tax rate and effective income tax rate
The following table provides the reconciliation of Brazilian statutory tax rate to the Company’s effective rate on income before income taxes:
18 |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
Jan-Jun/2024 | Jan-Jun/2023 | Apr-Jun/2024 | Apr-Jun/2023 | |
Net income (loss) before income taxes | ( |
|||
Nominal income taxes computed based on Brazilian statutory corporate tax rates (34%) | ( |
( |
( | |
Adjustments to arrive at the effective tax rate: | ||||
Tax benefits from the deduction of interest on capital distributions | ||||
Different jurisdictional tax rates for companies abroad | ( | |||
Brazilian income taxes on income of companies incorporated outside Brazil (1) | ( |
( |
( |
( |
Tax incentives | ( |
|||
Tax loss carryforwards (unrecognized tax losses) (2) | ( |
( | ||
Non-taxable income (non-deductible expenses), net | ( | |||
Enrollment to the tax settlement program (3) | ( |
( |
||
Post-employment benefits | ( |
( |
( |
( |
Results of equity-accounted investments in Brazil and abroad | ( |
( |
||
Non-incidence of income taxes on indexation (SELIC interest rate) of undue paid taxes | ||||
Others | ( |
|||
Income taxes | ( |
( |
( | |
Deferred income taxes | ( |
( | ||
Current income taxes | ( |
( |
( |
( |
Effective tax rate of income taxes |
(1) | It relates to Brazilian income taxes on earnings of offshore investees, as established by Law No. 12,973/2014. |
(2) | Petrobras recognized a tax loss and a negative basis of the CSLL of a subsidiary in the amount of US$ 53, within the scope of the incentivized self-regulation program for taxes administered by the Federal Revenue of Brazil (Law No. 14.740/23 and RFB Normative Instruction No. 2.168/23), to settle a debt amounting to US$ 112, with a US$ 59 down payment. |
(3) | For the more information, see note 12.3. |
Deferred income taxes - non-current
The changes in the deferred income taxes are presented as follows:
Jan-Jun/2024 | Jan-Jun/2023 | |
Opening balance | ( |
( |
Recognized in the statement of income for the period | ( | |
Recognized in shareholders’ equity | ( | |
Translation adjustment | ( | |
Use of tax loss carryforwards | ( |
|
Others | ( |
|
Closing balance | ( |
( |
The composition of deferred tax assets and liabilities is set out in the following table:
Nature | Realization basis | 06.30.2024 | 12.31.2023 |
Depreciation, amortization and write-offs of assets | ( |
( | |
Amortization, impairment reversals and write-offs of assets | |||
Depreciation, amortization and write-offs of assets | ( |
( | |
Depreciation, amortization and write-offs of assets | ( |
( | |
Payments, receipts and considerations | ( | ||
Appropriation of the considerations | |||
Payments and use of provisions | |||
Payments and use of provisions | |||
Taxable income compensation | |||
Sales, write-downs and losses | |||
Payments and use of provisions | |||
Total | ( |
( | |
Deferred tax assets | |||
Deferred tax liabilities | ( |
( |
19 |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
Uncertain treatments on Corporate Income Tax (CIT)
In 2023 and 2024, the Company received additional
charges from the Dutch tax authority, due to a final assessment on the calculation of the Corporate Income Tax (CIT) of subsidiaries in
the Netherlands from 2018 to 2020, arising from the valuation for tax purposes of platforms and equipment nationalized under the Repetro
tax regime, in the amount of US$
Tax treatments of certain subsidiaries from 2020
to 2022 have not yet been assessed by this tax authority. Any charges by the Dutch tax authority for those years, on a similar basis to
the periods already assessed, could reach the amount of US$
The Company continues to defend its position but understands that it is not probable that the tax authority will fully accept this tax treatment. Thus, a liability was recognized with a corresponding effect in income taxes within the statement of income in 2023, by means of the expected value method, constituted by the sum of amounts weighted by the probability of loss.
12.2. | Other taxes |
Current assets | Non-current assets | Current liabilities | Non-current liabilities (1) | |||||
06.30.2024 | 12.31.2023 | 06.30.2024 | 12.31.2023 | 06.30.2024 | 12.31.2023 | 06.30.2024 | 12.31.2023 | |
Taxes in Brazil | ||||||||
Current / Non-current ICMS (VAT) | − | − | ||||||
Current / Non-current PIS and COFINS | ||||||||
Claim to recover PIS and COFINS | − | − | − | − | − | − | ||
Production taxes | − | − | − | − | ||||
Withholding income taxes | − | − | − | − | − | − | ||
Enrollment to the tax settlement program (2) | − | − | − | − | − | − | − | |
Others | ||||||||
Total in Brazil | ||||||||
Taxes abroad | − | − | ||||||
Total |
(1) | Other non-current taxes are classified within other non-current liabilities in the statement of financial position. |
(2) | For more information, see note 12.3. |
12.3. | Enrollment to the tax settlement program |
In June 2024, Petrobras enrolled to a Transaction Notice published in the same month by the Attorney General's Office of the Brazilian National Treasury (PGFN) and the Brazilian Federal Revenue (RFB), for the settlement of relevant litigation related to the taxation of remittances abroad, arising from the bipartition of the legal transaction agreed in a chartering contract for vessels and platforms, and in another contract for services.
The Transaction Notice provided for the settlement
of debts under dispute relating to the taxation of CIDE, PIS and COFINS, from 2008 to 2013, whose updated amount on June 28, 2024, date
of the enrollment, was US$
The enrollment to this program brings economic benefits, as continuing the discussions would require further financial effort to provide and maintain judicial guarantees related to the Negotiated Legal Proceeding (NJP) agreed with the PGFN, in addition to other procedural costs and expenses.
The Transaction Notice provided for a 65% discount
on the agreed amount in Brazilian reais, after the conversion of related judicial deposits into definitive payment. Therefore, on the
enrollment date, the Company recognized a US$
· | use, in June 2024, of nominal amounts of judicial
deposits related to the debts to be settled through this program, in the amount of US$ |
· | use, in June 2024, of tax loss carryforwards of subsidiaries,
in the amount of US$ |
20 |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
· | down payment of US$ |
The calculation of the liability related to this transaction is presented as follows:
06.30.2024 | |
Enrollment to the program | |
Use of judicial deposits | ( |
Use of tax credits | ( |
Down payment | ( |
Balance at June 30, 2024 |
As part of this tax transaction is related to projects
in which the Company operates in partnership in E&P consortia, Petrobras started negotiations with its partners for the reimbursement
of the corresponding amounts to their respective interests, in the expected amount of US$ ,
· | US$ |
· |
Effects or the tax transaction in the statement of income
Jan-Jun/2024 | |
Principal and fines | |
Indexation to the SELIC interest rate | |
Total debt enrolled in the tax settlement program | |
PIS and COFINS tax credits after enrolling the program (1) | ( |
Use of tax loss carryforwards | ( |
Indexation to the Selic interest rate of Judicial deposits and taxes over tax credits | |
Income taxes (2) | ( |
Effect in the statement of income before reimbursement of partners in joint ventures | |
Reimbursements approved by partners in joint ventures until June 30, 2024 | ( |
Income taxes (2) | |
Total effect in the statement of income | |
Other taxes | |
Net finance income (expense) | |
Income taxes | ( |
Total effect in the statement of income |
(1) | It arises from the debts included in the tax transaction, after discount applied, as provided for in the transaction notice, recognized as an asset in the statement of financial position, within other recoverable taxes. |
(2) | Tax effects resulting from the tax transaction. |
13. | Employee benefits |
Employee benefits are all forms of consideration given by an entity in exchange for service rendered by employees or for the termination of employment. It also includes expenses with directors and management. Such benefits include salaries, post-employment benefits, termination benefits and other benefits.
21 |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
06.30.2024 | 12.31.2023 | |
Liabilities | ||
Short-term employee benefits | ||
Termination benefits | ||
Post-employment benefits | ||
Total | ||
Current | ||
Non-current |
13.1. | Short-term employee benefits |
06.30.2024 | 12.31.2023 | |
Variable compensation programs | ||
Accrued vacation and 13th salary | ||
Salaries and related charges and other provisions | ||
Profit sharing | ||
Total | ||
Current | ||
Non-current (1) |
(1) | Remaining balance relating to the four-year deferral of 40% of the PPP portion of executive officers and the upper management. |
The Company recognized the following amounts in the statement of income:
Expenses recognized in the statement of income | Jan-Jun/2024 | Jan-Jun/2023 | Apr-Jun/2024 | Apr-Jun/2023 |
Salaries, accrued vacations and related charges | ( |
( |
( |
( |
Variable compensation programs (1) | ( |
( |
( |
( |
Profit sharing (1) | ( |
( |
( |
( |
Management fees and charges | ( |
( |
( |
( |
Total | ( |
( |
( |
( |
(1) | It includes adjustments to provisions related to previous years. |
13.1.1. | Variable compensation programs |
Performance award programs (Programa de Prêmio por Desempenho - PRD and Programa de Prêmio por Performance - PPP)
In the six-month period ended June 30, 2024, the Company:
· | paid US$ |
· | provisioned US$ |
Profit Sharing (Participações nos lucros ou resultados - PLR)
In the six-month period ended June 30, 2024, the Company:
22 |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
· | paid US$ |
· | provisioned US$ |
13.2. | Termination benefits |
Termination benefits are employee benefits provided in exchange for the termination of labor contract as a result of either: i) the Company’s decision to terminate the labor contract before the employee’s normal retirement date; or ii) an employee’s decision to accept an offer of benefits in exchange for the termination of their employment.
Voluntary severance programs
The Company has voluntary severance programs (PDV), specific for employees of the corporate segment and of divestment assets, which provide for the same legal and indemnity advantages. These programs are currently closed for enrollment.
Recognition of the liability and the expense for termination benefits occur as employees enroll to the programs.
The Company disburses the severance payments in two installments, one at the time of termination and the remainder one year after the termination.
13.3. | Employee benefits (post-employment) |
The Company maintains a health care plan for its employees in Brazil (active and retiree) and their dependents (“Saúde Petrobras”), and five major post-employment pension plans (collectively referred to as “pension plans”).
The following table presents the balance of post-employment benefits:
06.30.2024 | 12.31.2023 | |
Liabilities | ||
Health Care Plan - Saúde Petrobras | ||
Petros Pension Plan - Renegotiated (PPSP-R) | ||
Petros Pension Plan - Non-renegotiated (PPSP-NR) | ||
Petros Pension Plan - Renegotiated - Pre-70 (PPSP-R Pre 70) | ||
Petros Pension Plan - Non-renegotiated - Pre-70 (PPSP-NR Pre 70) | ||
Petros 2 Pension Plan (PP-2) | ||
Total | ||
Current | ||
Non-current |
Health Care Plan
The health care plan Saúde Petrobras – AMS is managed and run by Petrobras Health Association (Associação Petrobras de Saúde – APS), a nonprofit civil association, and includes prevention and health care programs. The plan offers assistance to all employees, retirees, pensioners and eligible family members, according to the rules of the plan and the Collective Bargaining Agreement (ACT), and is open to new employees.
Benefits are paid by the Company based on the costs incurred by the participants. The financial participation of the Company and the beneficiaries on the expenses are provided for in the plan rules and in the ACT, being 60% by the Company and 40% by the participants until March 31, 2024.
As provided in clause 37 paragraph 2 of the ACT, if the resolutions No. 42/2022 and No. 49/2023 of the Commission on Corporate Governance and the Administration of Corporate Holdings of the Brazilian Federal Government (Comissão de Governança Corporativa e de Administração de Participações Societárias da União – CGPAR) were revoked or amended, allowing adjustments in the cost-sharing of health care plans, the Company and the labor unions would discuss a new cost-sharing arrangement, in order to minimize the impact on the income of its beneficiaries.
23 |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
On April 26, 2024, the aforementioned resolutions were revoked and, for this reason, the Company and the unions entered into an agreement, in June 2024, via amendment to the current collective bargaining agreement, to resume the costing relationship previously practiced, with 70% covered by Petrobras and 30% by the beneficiaries, effective since April 2024. Due to this change, the Company carried out an intermediate remeasurement of the actuarial liabilities of this plan.
Intermediate remeasurement
The other actuarial assumptions used to carry out the intermediate remeasurement had no change.
13.3.1. | Sensitivity analysis of the defined benefit plans |
The effect of a 100 basis points (bps) change in the discount rate and in the estimated future medical costs is set out below:
Discount Rate |
Expected changes in medical and hospital costs
| |||||
Medical Benefits | Medical Benefits | |||||
+100 bps | -100 bps | +100 bps | -100 bps | |||
Pension Obligation | ( |
( | ||||
Current Service cost and interest cost | ( |
( | ||||
Pension plans
The Company’s post-retirement plans are managed by Petros Foundation (Fundação Petrobras de Seguridade Social), a nonprofit legal entity governed by private law with administrative and financial autonomy.
The net obligation with pension plans recorded by the Company is measured in accordance with the requirements of IFRS which has a different measurement methodology to that applicable to pension funds, regulated by the Post-Retirement Benefit Federal Council (Conselho Nacional de Previdência Complementar – CNPC).
On March 28, 2024, the Deliberative Council of Petros Foundation approved the financial statements of the pension plans for the year ended December 31, 2023, sponsored by the Company.
The following table below presents the reconciliation of the deficit of Petros Plan registered by Petros Foundation as of December 31, 2023 with the net actuarial liability registered by the Company at the same date:
PPSP-R (1) | PPSP-NR (1) | |
Deficit registered by Petros | ||
Ordinary and extraordinary future contributions - sponsor | ||
Contributions related to the TFC - sponsor | ||
Financial assumptions (interest rate and inflation), changes in fair value of plan assets and actuarial valuation method | ( |
( |
Net actuarial liability recorded by the Company |
(1) | It includes the balance of PPSP-R pre-70 and PPSP-NR pre-70. |
• Sponsor Contributions – in the calculation of the obligation, Petros considers the future cash flow of ordinary and extraordinary sponsor and participants contributions, discounted to present value, according to the CNPC criteria, while the Company only considers them as they are made.
24 |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
• Financial Assumptions - the main difference is the definition of the real interest rate established by Petros, which is according to the expected profitability of the current investment portfolios and the parameters published by the CNPC, considering a moving average of recent years in setting safety limits. On the other hand, the Company determines the real interest rates through an equivalent rate that combines the maturity profile of pension and health care obligations with the future yield curve of long-term Brazilian Federal Government securities (“Tesouro IPCA”, formerly known as NTN).
• Changes in the fair value of plan assets – Petros measures government securities based on its curve, with a portfolio immunization strategy, while in the Company measures at market value.
13.3.2. | Changes in the actuarial liabilities recognized in the statement of financial position |
Net actuarial liabilities represent the obligations of the Company, net of the fair value of plan assets (when applicable), at present value.
Changes in the actuarial liabilities related to pension and health care plans with defined benefit characteristics is presented as follows:
2024 | |||||
Pension Plans | Health Care Plan | Total | |||
PPSP-R (1) | PPSP-NR (1) | Petros 2 | Saúde Petrobras-AMS | ||
Balance at December 31, 2023 | |||||
Recognized in the Statement of Income | |||||
Past service cost | |||||
Current service cost | |||||
Net interest | |||||
Recognized in Equity - other comprehensive income | ( |
( | |||
Remeasurement effects (2) | ( |
( | |||
Cash effects | ( |
( |
( |
( |
( |
Contributions paid | ( |
( |
( |
( |
( |
Payments related to Term of financial commitment (TFC) | ( |
( |
( | ||
Other changes | ( |
( |
( |
( |
( |
Translation Adjustment | ( |
( |
( |
( |
( |
Balance at June 30, 2024 |
(1) | It includes the balance of PPSP-R pre-70 and PPSP-NR pre-70. |
(2) | Effects of the intermediate remeasurement on the health care plan, which changed the benefit costing. |
2023 | |||||
Pension Plans |
Health Care Plan |
Total | |||
PPSP-R (1) | PPSP-NR (1) | Petros 2 |
Saúde Petrobras-AMS |
||
Balance at December 31, 2022 | |||||
Recognized in the Statement of Income | |||||
Current service cost | |||||
Net interest | |||||
Recognized in Equity - other comprehensive income | |||||
Remeasurement effects (2) | |||||
Cash effects | ( |
( |
( |
( |
( |
Contributions paid | ( |
( |
( |
( |
( |
Payments related to Term of financial commitment (TFC) | ( |
( |
( | ||
Other changes | |||||
Others | |||||
Translation Adjustment | |||||
Balance at June 30, 2023 |
(1) | It includes the balance of PPSP-R pre-70 and PPSP-NR pre-70. |
(2) | It relates to a complement of 2022. |
The net expense with pension and health care plans is presented below:
25 |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
Pension Plans | Health Care Plan | Total | |||
PPSP-R (1) | PPSP-NR (1) | Petros 2 | Saúde Petrobras | ||
Related to active employees (cost of sales and expenses) (2) | ( |
( |
( |
( |
( |
Related to retirees (other income and expenses) (3) | ( |
( |
( |
( |
( |
Net costs for Jan-Jun/2024 | ( |
( |
( |
( |
( |
Related to active employees (cost of sales and expenses) | ( |
( |
( |
( |
( |
Related to retirees (other income and expenses) | ( |
( |
( |
( |
( |
Net costs for Jan-Jun/2023 | ( |
( |
( |
( |
( |
(1) | It includes the balance of PPSP-R pre-70 and PPSP-NR pre-70. |
(2) | It includes the effects of the intermediate remeasurement on the health care plan, which changed the benefit costing by US$ 291. |
(3) | It includes the effects of the intermediate remeasurement on the health care plan, which changed the benefit costing by US$ 1,000. |
Pension Plans | Health Care Plan | Total | |||
PPSP-R (1) | PPSP-NR (1) | Petros 2 | Saúde Petrobras | ||
Related to active employees (cost of sales and expenses) (2) | ( |
( |
− | ( |
( |
Related to retirees (other income and expenses) (3) | ( |
( |
( |
( |
( |
Net costs for Apr-Jun/2024 | ( |
( |
( |
( |
( |
Related to active employees (cost of sales and expenses) | ( |
( |
( |
( |
( |
Related to retirees (other income and expenses) | ( |
( |
( |
( |
( |
Net costs for Apr-Jun/2023 | ( |
( |
( |
( |
( |
(1) | It includes the balance of PPSP-R pre-70 and PPSP-NR pre-70. |
(2) | It includes the effects of the intermediate remeasurement on the health care plan, which changed the benefit costing by US$ 291. |
(3) | It includes the effects of the intermediate remeasurement on the health care plan, which changed the benefit costing by US$ 1,000. |
13.3.3. | Contributions |
In the six-month period ended June 30, 2024, the
Company contributed with US$
14. | Provisions for legal proceedings, judicial deposits and contingent liabilities |
14.1. | Provisions for legal proceedings |
The Company recognizes provisions for legal, administrative and arbitral proceedings, based on the best estimate of the costs, for which it is probable that an outflow of resources embodying economic benefits will be required and that can be reliably estimated. These proceedings mainly include:
· | Labor claims, in particular: (i) several individual and collective labor claims; (ii) opt-out claims related to a review of the methodology by which the minimum compensation based on an employee's position and work schedule (Remuneração Mínima por Nível e Regime - RMNR) is calculated; and (iii) actions of outsourced employees. |
· | Tax claims including: (i) tax notices for alleged non-compliance with ancillary obligations; (ii) claims relating to benefits previously taken for Brazilian federal tax credits applied that were subsequently alleged to be disallowable, including disallowance of PIS and COFINS tax credits; (iii) claims for alleged non-payment of CIDE on imports of propane and butane; and (iv) claims for alleged non-payment of social security contributions on allowances and bonuses. |
· | Civil claims, in particular: (i) lawsuits related to contracts; (ii) legal and administrative proceedings involving fines applied by the ANP - Brazilian Agency of Petroleum, Natural Gas and Biofuels (Agência Nacional de Petróleo, Gás Natural e Biocombustíveis), mainly relating to production measurement systems; and (iii) collective and individual claims that discuss topics related to pension plans managed by Petros. |
· | Environmental claims, specially: (i) fines relating to an environmental accident in the State of Paraná in 2000; (ii) fines relating to the Company’s offshore operation; and (iii) public civil action for oil spill in 2004 in Serra do Mar-São Paulo State Park. |
26 |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
Provisions for legal proceedings are set out as follows:
Non-current liabilities | 06.30.2024 | 12.31.2023 |
Labor claims | ||
Tax claims | ||
Civil claims | ||
Environmental claims | ||
Total |
Jan-Jun/2024 | Jan-Jun/2023 | |
Opening Balance | ||
Additions, net of reversals | ||
Use of provision | ( |
( |
Revaluation of existing proceedings and interest charges | ||
Others | ( | |
Translation adjustment | ( |
|
Closing Balance |
In preparing its unaudited condensed consolidated interim financial statements for the six-month period ended June 30, 2024, the Company considered all available information concerning legal proceedings in which the Company is a defendant, in order to estimate the amounts of obligations and probability that outflows of resources will be required.
14.2. | Judicial deposits |
The Company makes deposits in judicial phases, mainly to suspend the chargeability of the tax debt and to maintain its tax compliance. Judicial deposits are set out in the table below according to the nature of the corresponding lawsuits:
Non-current assets | 06.30.2024 | 12.31.2023 |
Tax | ||
Labor | ||
Civil | ||
Environmental | ||
Others | ||
Total |
Jan-Jun/2024 | Jan-Jun/2023 | |
Opening Balance | ||
Additions | ||
Use (1) | ( |
( |
Accruals and charges | ||
Others | ( | |
Translation adjustment | ( |
|
Closing Balance |
(1) | It includes, in the six-month period ended June 30, 2024, US$ 1,276 referring to the nominal values of deposits used when enrolling to the tax settlement program on the incidence of CIDE, PIS and Cofins on remittances abroad under a vessel and platform charter agreement as detailed in note 12. |
The Company maintains a Negotiated Legal Proceeding
(NJP) agreement with the Brazilian National Treasury Attorney General's Office (PGFN), aiming to postpone judicial deposits related to
federal tax lawsuits with values exceeding US$
To achieve this, the Company makes production capacity available as a guarantee from the Tupi, Sapinhoá, and Roncador fields. As the judicial deposits are made, the mentioned capacity is released for other processes that may be included in the NJP.
The Company’s management understands that
the mentioned NJP provides greater cash predictability and ensures the maintenance of federal tax regularity. As of June 30, 2024, the
balance of production capacity held in guarantee in the NJP is US$
27 |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
14.3. | Contingent liabilities |
The estimates of contingent liabilities are indexed to inflation and updated by applicable interest rates. As of June 30, 2024, estimated contingent liabilities for which the possibility of loss is classified as possible are set out in the following table:
Nature | 06.30.2024 | 12.31.2023 |
Tax | ||
Labor | ||
Civil | ||
Environmental | ||
Total |
The main contingent liabilities are:
· | Tax matters comprising: (i) income from foreign subsidiaries and associates not included in the computation of taxable income (IRPJ and CSLL); (ii) collection of customs taxes and fines related to imports under the Repetro regime in the Frade consortium; (iii) disapproval of PIS and COFINS tax compensation due to credit disallowance; (iv) withholding income tax (IRRF) on remittances for payments of vessel charters; (v) collection of IRPJ and CSLL on transfer price; (vi) collection of PIS and COFINS, resulting from the payment of taxes negotiated with the Brazilian Federal Government, excluding the payment of fines; (vii) collection of ICMS involving several states; and (viii) incidence of social security contributions on the payment of bonuses. |
· | Labor matters, comprising: (i) mainly actions requiring a review of the methodology by which the minimum compensation based on an employee's position and work schedule (Remuneração Mínima por Nível e Regime - RMNR) is calculated; and (ii) several labor claims. |
· | Civil matters comprising mainly: (i) lawsuits related to contracts; (ii) administrative and legal proceedings challenging an ANP order requiring Petrobras to pay additional special participation fees and royalties (production taxes) with respect to several fields, including unitization; (iii) regulation agencies fines, mainly ANP; (iv) collective and individual claims that discuss topics related to pension plans managed by Petros; and (v) judicial and arbitration proceedings that discuss disposal of assets carried out by Petrobras. |
· | Environmental matters comprising indemnities for damages and fines related to the Company operations. |
14.3.1. | Minimum Compensation Based on Employee's Position and Work Schedule (Remuneração Mínima por Nível e Regime - RMNR) |
There are lawsuits related to the Minimum Compensation Based on Employee's Position and Work Schedule (RMNR), with the objective of reviewing its calculation criteria.
The RMNR consists of a minimum remuneration guaranteed to employees, based on salary level, work schedule and geographic location. This policy was created through collective bargaining with union entities and was approved at employee meetings, being finally put into practice by Petrobras in 2007, but started being the subject of lawsuits three years after its implementation.
In 2018, the Brazilian Superior Labor Court (TST) ruled against the Company, which filed extraordinary appeals to the Brazilian Supreme Federal Court (STF), suspending the effects of the decision issued by the TST and determined the national suspension of the ongoing proceedings related to the RMNR.
In July 2021, a monocratic decision was published in which the STF’s Judge-Rapporteur granted an extraordinary appeal filed, accepting the Company's thesis and recognizing the validity of the collective bargaining agreement freely signed between Petrobras and the unions, reversing the decision of the TST.
In November 2023, the First Panel of the Supreme Federal Court decided in favor of the Company (with 3 votes against 1), confirming that there is an understanding of recognizing the merit of the collective bargaining agreement signed between the companies and the unions. In January 2024, the ruling was published by the STF. Against this ruling, the complainant and union entities filed an appeal for clarification, which were not recognized by unanimous decision of the first Panel of the Supreme Court, maintaining the decision in favor of Petrobras. This decision was published in March 2024, becoming final and unappealable. The Company monitors the application of the Supreme Federal Court decision in the lower courts.
The Company has been adjusting the expectation of loss, according to the decisions in which the understanding of the STF applies, and monitors the evolution of the subject in the TST for possible future changes in the amounts and expectations of this litigation.
28 |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
As of June 30, 2024, the balance of provisions
for legal proceedings regarding RMNR amounts to US$
14.4. | Class action and related proceedings |
14.4.1. | Class action in the Netherlands |
On January 23, 2017, Stichting Petrobras Compensation Foundation ("Foundation") filed a class action in the Netherlands, at the District Court of Rotterdam, against Petróleo Brasileiro S.A. – Petrobras, Petrobras International Braspetro B.V. (PIB BV), Petrobras Global Finance B.V. (PGF), Petrobras Oil & Gas B.V. (PO&G) and some former Petrobras managers. The Foundation alleges that it represents the interests of an unidentified group of investors and asserts that, based on the facts revealed by the Lava-Jato Operation, the defendants acted illegally before the investors. On May 26, 2021, the District Court of Rotterdam decided that the class action should proceed and that the arbitration clause of Petrobras' bylaws does not prevent the Company's shareholders from having access to the Dutch Judiciary and have their interests represented by the “Foundation”. However, the interests of investors who have already started arbitration against Petrobras or who are parties to legal proceedings in which the applicability of the arbitration clause has been definitively recognized are excluded from the scope of the action. The collective action moved to the discussion phase of merit issues.
On July 26, 2023, the Court issued an intermediary decision on the merits, ordering the production of evidence, in relation to which the parties should express their views until August 27, 2024 for the issuance of the decision on the merits, which is appealable. In addition, the Court expressed in advance some understanding, which must be included in the decision on the merits, among which: (i) the requests made against PIB BV, PO&G and certain former members of the Company’s management were rejected; (ii) the Court declared that Petrobras and the PGF acted illegally in relation to their investors, although the Court expressed it does not consider itself sufficiently informed about relevant aspects of Brazilian, Argentine and Luxembourger laws to definitively decide on the merits of the action; and iii) the alleged rights under Spanish legislation are prescribed.
The Foundation cannot claim compensation under the class action, which will depend not only on a final result favorable to the interests of the investors in the class action, but also on the filing of subsequent actions by or on behalf of the investors by the Foundation itself, an opportunity in which Petrobras will be able to offer all the defenses already presented in the class action and others that it deems appropriate, including in relation to the occurrence and quantification of any damages that must be proven by the potential beneficiaries of the decision or by the Foundation. Any compensation for the alleged damages will only be determined by court decisions in subsequent actions mentioned above.
This class action involves complex issues and the outcome is subject to substantial uncertainties, which depend on factors such as: the scope of the arbitration clause of the Petrobras Bylaws, the jurisdiction of the Dutch courts, the scope of the agreement that ended the Class Action in the United States, the Foundation's legitimacy to represent the interests of investors, the several laws applicable to the case, the information obtained from the production phase of evidence, the expert analyses, the timetable to be defined by the Court and the judicial decisions on key issues of the process, possible appeals, including before the Dutch Supreme Court, as well as the fact that the Foundation seeks only a declaratory decision in this class action.
The Company, based on the assessments of its advisors, considers that there are not enough indicative elements to qualify the universe of potential beneficiaries of a possible final decision unfavorable to Petrobras' interests, nor to quantify the supposedly compensable damages.
Thus, it is currently not possible to predict whether the Company will be liable for the effective payment of damages in any future individual claims, as this analysis will depend on the outcome of these complex procedures. In addition, it is not possible to know which investors will be able to bring subsequent individual actions related to this matter against Petrobras.
Furthermore, the claims formulated are broad, cover a multi-year period and involve a wide variety of activities and, in the current scenario, the impacts of such claims are highly uncertain. The uncertainties inherent in all of these issues affect the value and duration of final resolution of this action. As a result, Petrobras is unable to estimate an eventual loss resulting from this action. However, Petrobras reiterates its condition as a victim of the corruption scheme revealed by the Lava-Jato operation and intends to present and prove this condition before the Dutch court.
Petrobras and its subsidiaries deny the allegations made by the Foundation and will continue to defend themselves vigorously.
14.4.2. | Arbitration and other legal proceedings in Argentina |
In relation to the arbitration in Argentina, the Argentine Supreme Court denied the appeal, but the Consumidores Damnificados Asociación Civil para su Defensa (formerly Consumidores Financieros Asociación Civil, "Association") filed a new appeal to the Argentine Supreme Court, which was also denied, thus the arbitration was sent to the Arbitration Court. This arbitration discusses Petrobras' liability for an alleged loss of market value of Petrobras' shares in Argentina, as a result of the Lava Jato Operation. The Company is unable to provide a reliable estimate of the potential loss in this arbitration.
29 |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
In parallel to such arbitration, the Association also initiated a collective action before the Civil and Commercial Court of Buenos Aires, in Argentina, with Petrobras appearing spontaneously on April 10, 2023, within the scope of which it alleges Petrobras' responsibility for an alleged loss of the market value of Petrobras' securities in Argentina, as a result of allegations made within the scope of Lava Jato Operation and their impact on the company's financial statements prior to 2015. Petrobras presented its defense on August 30, 2023. Petrobras denies the allegations presented by the Association and will defend itself against the accusations made by the author of the class action. The Company is unable to provide a reliable estimate of the potential loss in this arbitration.
Regarding criminal proceeding in Argentina related to an alleged fraudulent offer of securities, aggravated by the fact that Petrobras allegedly declared false data in its financial statements prior to 2015, the Court of Appeals revoked, on October 21, 2021, the lower court decision that had recognized Petrobras' immunity from jurisdiction and recommended that the lower court judge take steps to certify whether the Company could be considered criminally immune in Argentina for further reassessment of the issue. After carrying out the steps determined by the Court of Appeals, on May 30, 2023, the lower court denied the recognition of immunity from jurisdiction to Petrobras. Petrobras filed an appeal against this decision, which was recognized by the Court of Appeals on April 18, 2024. However, the Association filed a new appeal. The Court of Appeals had already recognized that the Association could not act as a representative of financial consumers, due to the loss of its registration with the competent Argentine bodies, which was also the subject of an appeal upheld by the Court of Appeals on September 15, 2022, recognizing the Association the right to represent financial consumers. The Company presented its defense, as well as other procedural defenses, still subject to assessment by the Argentine Court of Appeals. This criminal action is being processed before the Economic Criminal Court No. 2 of the City of Buenos Aires.
As for the other criminal action for alleged non-compliance with the obligation to publish a “press release” in the Argentine market about the existence of a class action filed by Consumidores Damnificados Asociación Civil para su Defensa before the Commercial Court, there are no developments in the six-month period ended June 30, 2024.
14.4.3. | Lawsuit in United States regarding Sete Brasil Participações S.A (“Sete”) |
The EIG Energy Fund XIV, L.P. and affiliates (“EIG”) filed a lawsuit against Petrobras, before the District Court of Columbia, United States, to recover alleged losses related to its investment in Sete Brasil Participações S.A. On August 8, 2022, the judge upheld EIG's claim as to Petrobras' responsibility for the alleged losses (which was recorded in 2022 as provisions for legal proceedings) but denied the motion for summary judgment with respect to damages, whereby the award of compensation will be subject to the proof of damages by EIG at a hearing and to the consideration of the defenses by the Company. In the same decision, whose effects were recognized in the Company's financial statements in 2022, the judge denied the request to dismiss the case based on Petrobras' immunity from jurisdiction, when an appeal was filed with the Federal Court of Appeals for the District of Columbia, which was denied in June 2024. Petrobras then submitted a request to review the issue, which was rejected on July 24, 2024. As a result, the process, which had been suspended by the lower court judge on October 26, 2022 due to the filing of the appeal by Petrobras, will resume its course.
On August 26, 2022, on another procedural front initiated by the EIG, the District Court of Amsterdam granted a precautionary measure to block certain Petrobras assets in the Netherlands. This granting was based on the decision of the District Court of Columbia, on August 8, 2022, and was intended to ensure the satisfaction of EIG's claims contained in the aforementioned US lawsuit. For the purpose of this injunction, the District Court of Amsterdam limited EIG's claims to a total of US$ 297, although the US Court ruled that any award of damages would depend on evidence of damages by EIG at a trial hearing. There are some discussions about the scope of the assets blocked by EIG, but there is no related lawsuit pending in the Netherlands. This precautionary block does not prevent Petrobras and its subsidiaries from complying with their obligations to third parties.
14.4.4. | Arbitrations proposed by non-controlling shareholders in Brazil |
In the six-month period ended June 30, 2024, there were no events that changed the assessment and information of arbitrations proposed by non-controlling shareholders in Brazil. For more information, see explanatory note 19.5 to the financial statements for the year ended December 31, 2023.
15. | Provision for decommissioning costs |
The following table details the amount of the provision for decommissioning costs by producing area:
30 |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
06.30.2024 | 12.31.2023 | |
Onshore | ||
Shallow waters | ||
Deep and ultra-deep post-salt | ||
Pre-salt | ||
Total | ||
Current | ||
Non-current |
Changes in the provision for decommissioning costs are presented as follows:
Non-current liabilities |
2024 Jan-Jun |
2023 Jan-Jun |
Opening balance | ||
Adjustment to provision | ||
Transfers related to liabilities held for sale (1) | ( |
− |
Use of provisions | ( |
( |
Interest accrued | ||
Others | ( | |
Translation adjustment | ( |
|
Closing balance |
(1) | It refers to the transfer of US$ 332 related to the Cherne cluster, in Rio de Janeiro state. |
16. | Other assets and liabilities |
Assets | 06.30.2024 | 12.31.2023 | |
Escrow account and/ or collateral | |||
Advances to suppliers | |||
Prepaid expenses | |||
Derivatives transactions | |||
Assets related to E&P partnerships | |||
Others | |||
Current | |||
Non-Current | |||
Liabilities | 06.30.2024 | 12.31.2023 | |
Obligations arising from divestments | |||
Contractual retentions | |||
Advances from customers | |||
Provisions for environmental expenses, research and development and fines | |||
Other taxes | |||
Unclaimed dividends | |||
Derivatives transactions | |||
Obligations arising from acquisition of equity interests | |||
Various creditors | |||
Others | |||
Current | |||
Non-Current | |||
31 |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
17. | Property, plant and equipment |
17.1. | By class of assets |
Land, buildings and improvement |
Equipment and other assets (1) |
Assets under construction (2) |
Exploration and development costs (3) | Right-of-use assets | Total | |
Balance at December 31, 2023 | ||||||
Cost | ||||||
Accumulated depreciation and impairment (4) | ( |
( |
( |
( |
( |
( |
Additions | ||||||
Decommissioning costs - Additions to / review of estimates | ||||||
Capitalized borrowing costs | ||||||
Write-offs | ( |
( |
( |
( |
( |
( |
Transfers (5) | ( |
( |
( |
|||
Transfers to assets held for sale | ( |
( |
( |
( | ||
Depreciation, amortization and depletion | ( |
( |
( |
( |
( | |
Impairment reversal (note 19) | ||||||
Translation adjustment | ( |
( |
( |
( |
( |
( |
Balance at June 30, 2024 | ||||||
Cost | ||||||
Accumulated depreciation and impairment (4) | ( |
( |
( |
( |
( |
( |
Balance at December 31, 2022 | ||||||
Cost | ||||||
Accumulated depreciation and impairment (4) | ( |
( |
( |
( |
( |
( |
Additions | ||||||
Decommissioning costs - Additions to / review of estimates | ||||||
Capitalized borrowing costs | ||||||
Signature Bonuses Transfers (6) | ||||||
Write-offs | ( |
( |
( |
( |
( | |
Transfers (5) | ( |
|||||
Transfers to assets held for sale | ( |
( |
( |
( |
( | |
Depreciation, amortization and depletion | ( |
( |
( |
( |
( | |
Impairment recognition (note 19) | ( |
( |
( |
( | ||
Impairment reversal (note 19) | ||||||
Translation adjustment | ||||||
Balance at June 30, 2023 | ||||||
Cost | ||||||
Accumulated depreciation and impairment (4) | ( |
( |
( |
( |
( |
( |
(1) | It is composed of production platforms, refineries, thermoelectric power plants, natural gas processing plants, pipelines, and other operating, storage and production plants, including subsea equipment for the production and flow of oil and gas, depreciated based on the units of production method. |
(2) | See note 8 for assets under construction by operating segment. |
(3) | It is composed of exploration and production assets related to wells, abandonment and dismantling of areas, signature bonuses associated with proved reserves and other costs directly associated with the exploration and production of oil and gas, except for assets under "Equipment and other assets". |
(4) | In the case of land and assets under construction, it refers only to impairment losses. |
(5) | It mainly includes transfers between classes of assets and transfers from advances to suppliers. |
(6) | Transfer from Intangible Assets. In 2023, it refers to the declaration of commerciality of the Manjuba field. |
Additions to assets under construction are mainly due to investments in the production development of the Búzios field and other fields in the Espírito Santo, Santos, and Campos basins. As for additions to right-of-use assets, they are related to the chartering of drilling rigs for E&P operations, vessels and to the chartering of the Regasification Vessel Sequoia, operating at the LNG Terminal in Bahia.
17.2. | Estimated useful life |
The useful life of assets depreciated are shown below:
32 |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
Asset | Weighted average useful life in years |
Buildings and improvement | |
Equipment and other assets | |
Exploration and development costs | Units of production method |
Right-of-use |
17.3. | Right-of-use assets |
The right-of-use assets comprise the following underlying assets:
Platforms | Vessels | Properties | Total | |
Balance at June 30, 2024 | ||||
Cost | ||||
Accumulated depreciation and impairment | ( |
( |
( |
( |
Balance at December 31, 2023 | ||||
Cost | ||||
Accumulated depreciation and impairment | ( |
( |
( |
( |
17.4. | Unitization agreements |
Petrobras has Production Individualization Agreements (AIP) signed in Brazil with partner companies in E&P consortia. These agreements result in reimbursements payable to (or receivable from) partners regarding expenses and production volumes mainly related to Agulhinha, Albacora Leste, Berbigão, Budião Noroeste, Budião Sudeste, Caratinga and Sururu.
Provision for equalizations (1)
The table below presents changes in the reimbursements payable relating to the execution of the AIP submitted to the approval of the ANP:
Jan-Jun/2024 | Jan-Jun/2023 | |||||
Opening balance | ||||||
Additions on PP&E | ||||||
Payments made | ( |
− | ||||
Other income and expenses | ||||||
Translation adjustments | ( |
|||||
Closing balance (1) |
(1) | Notably Berbigão, Sururu and Agulhinha. |
Closed agreements
In May 2024, the Agreement on Expenditure and Volume
Equalization, provided for in the Brava AIP, was signed. The amount paid by Petrobras to Pré-sal Petróleo S.A. (PPSA) on
June 24, 2024 was US$
17.5. | Capitalization rate used to determine the amount of borrowing costs eligible for capitalization |
The capitalization rate used to determine the amount
of borrowing costs eligible for capitalization was the weighted average of the borrowing costs applicable to the borrowings that were
outstanding during the period, other than borrowings made specifically for the purpose of obtaining a qualifying asset. For the six-month
period ended June 30, 2024, the capitalization rate was
33 |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
18. | Intangible assets |
18.1. | By class of assets |
Rights and Concessions (1) | Software | Goodwill | Total | |
Balance at December 31, 2023 | ||||
Cost | ||||
Accumulated amortization and impairment | ( |
( |
− | ( |
Addition | ||||
Capitalized borrowing costs | ||||
Transfers | ||||
Amortization | ( |
( |
( | |
Translation adjustment | ( |
( |
( |
( |
Balance at June 30, 2024 | ||||
Cost | ||||
Accumulated amortization and impairment | ( |
( |
− | ( |
Estimated useful life in years | ( |
Indefinite | ||
Balance at December 31, 2022 | ||||
Cost | ||||
Accumulated amortization and impairment | ( |
( |
− | ( |
Addition | ||||
Capitalized borrowing costs | ||||
Write-offs | ( |
( | ||
Transfers | ||||
Signature Bonuses Transfers (3) | ( |
( | ||
Amortization | ( |
( |
( | |
Translation adjustment | ||||
Balance at June 30, 2023 | ||||
Cost | ||||
Accumulated amortization and impairment | ( |
( |
− | ( |
Estimated useful life in years | ( |
Indefinite |
(1) | It comprises mainly signature bonuses (amounts paid in concession and production sharing contracts for oil or natural gas exploration), in addition to public service concessions, trademarks and patents and others. |
(2) | Mainly composed of assets with indefinite useful lives, which are reviewed annually to determine whether events and circumstances continue to support an indefinite useful life assessment. |
(3) | Transfer to PP&E Assets. In 2023, it refers to the declaration of commerciality of the Manjuba field. |
19. | Impairment |
Statement of income | Jan-Jun/2024 | Jan-Jun/2023 | Apr-Jun/2024 | Apr-Jun/2023 |
Impairment (losses) reversals | ( |
( | ||
Impairment of equity-accounted investments | ||||
Net effect within the statement of income | ( |
( | ||
Losses | ( |
( |
( |
( |
Reversals |
Statement of financial position | Jan-Jun/2024 | Jan-Jun/2023 | Apr-Jun/2024 | Apr-Jun/2023 |
Property, plant and equipment | ( |
( | ||
Assets classified as held for sale | − | − | − | |
Investments | − | |||
Net effect within the statement of financial position | ( |
( |
34 |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
The Company tests annually its assets for impairment
or when there is an indication that their carrying amount may not be recoverable. In the six-month period ended June 30, 2024, net impairment
reversals were recognized in the amount of US$
· | a US$ |
· | a US$ |
· | a US$ |
In the six-month period ended June 30, 2023, the
Company recognized net impairment losses amounting to US$
20. | Exploration and evaluation of oil and gas reserves |
Changes in the balances of capitalized costs directly associated with exploratory wells pending determination of proved reserves and the balance of amounts paid for obtaining rights and concessions for exploration of oil and natural gas (capitalized acquisition costs) are set out in the following table:
Capitalized Exploratory Well Costs / Capitalized Acquisition Costs (1) | Jan-Jun/2024 | Jan-Jun/2023 |
Property plant and equipment | ||
Opening Balance | ||
Additions | ||
Write-offs | ( |
( |
Transfers | ( | |
Translation adjustment | ( |
|
Closing Balance | ||
Intangible assets | ||
Opening Balance | ||
Additions | ||
Write-offs | ( | |
Transfers | ( | |
Translation adjustment | ( |
|
Closing Balance | ||
Capitalized Exploratory Well Costs / Capitalized Acquisition Costs |
(1) | Amounts capitalized and subsequently expensed in the same period have been excluded from this table. |
Exploration costs recognized in the statement of income and cash used in oil and gas exploration and evaluation activities are set out in the following table:
Jan-Jun/2024 | Jan-Jun/2023 | Apr-Jun/2024 | Apr-Jun/2023 | |
Exploration costs recognized in the statement of income | ||||
Geological and geophysical expenses | ( |
( |
( |
( |
Exploration expenditures written off (includes dry wells and signature bonuses) | ( |
( |
( |
( |
Contractual penalties on local content requirements | ( |
( |
||
Other exploration expenses | ( |
( |
||
Total expenses | ( |
( |
( |
( |
Cash used in: | ||||
Operating activities | ||||
Investment activities | ||||
Total cash used |
35 |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
21. | Collateral for crude oil exploration concession agreements |
The Company has granted collateral to ANP in connection
with the performance of the Minimum Exploration Programs established in the concession agreements for petroleum exploration areas in
the total amount of US$
22. | Investments |
22.1. | Investments in associates and joint ventures |
0 | Joint Ventures | Associates (1) | Total |
Balance at December 31, 2023 | |||
Investments | |||
Transfer to assets held for sale | − | ( |
( |
Restructuring, capital decrease and others | − | ( |
( |
Results of equity-accounted investments | ( |
( | |
Translation adjustment | ( |
||
Other comprehensive income | − | ( |
( |
Dividends | ( |
( |
( |
Balance at June 30, 2024 |
(1) | It includes other investments. |
Joint Ventures | Associates (1) | Total | |
Balance at December 31, 2022 | |||
Investments | |||
Restructuring, capital decrease and others | − | ||
Results of equity-accounted investments | ( |
||
Translation adjustment | ( |
( | |
Other comprehensive income | − | ||
Dividends | ( |
( |
( |
Balance at June 30, 2023 |
(1) | It includes other investments. |
23. | Disposal of assets and other transactions |
The major classes of assets and related liabilities classified as held for sale are shown in the following table:
06.30.2024 | 12.31.2023 | ||||
E&P | G&LCE | Corporate and other businesses | Total | Total | |
Assets classified as held for sale | |||||
Investments | − | − | |||
Property, plant and equipment | − | − | |||
Total | − | ||||
Liabilities on assets classified as held for sale | |||||
Finance debt | − | - | |||
Provision for decommissioning costs | - | − | |||
Total | − |
36 |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
23.1. | Sales pending closing at June 30, 2024 |
Cherne and Bagre fields
On April 25, 2024, the Company signed an agreement with Perenco Pétroleo e Gás Ltda (“Perenco”) for the sale of its entire interest in the Cherne and Bagre fields, located in shallow waters of the Santos Basin.
23.2. | Contingent assets from disposed investments and other transactions |
Some disposed assets and other agreements provide for receipts subject to contractual clauses, especially related to the Brent variation in transactions related to E&P assets.
The transactions that may generate revenue recognition, accounted for within other income and expenses, are presented below:
Transaction | Closing date | Contingent assets at the closing date |
Assets recognized in 2024 |
Assets recognized in previous periods |
Balance of contingent assets as of June 30, 2024 | |
Sales in previous years | ||||||
− | ||||||
− | ||||||
− | ||||||
− | ||||||
− | ||||||
− | ||||||
Surplus volume of the Transfer of Rights Agreement | ||||||
Total |
24. | Finance debt |
24.1. | Balance by type of finance debt |
In Brazil | 06.30.2024 | 12.31.2023 |
Banking market | ||
Capital market | ||
Development banks (1) | ||
Others | ||
Total | ||
Abroad | ||
Banking market | ||
Capital market | ||
Export credit agency | ||
Others | ||
Total | ||
Total finance debt | ||
Current | ||
Non-current |
(1) | It includes BNDES, FINAME and FINEP. |
Current finance debt is composed of:
37 |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
06.30.2024 | 12.31.2023 | |
Short-term debt | ||
Current portion of long-term debt | ||
Accrued interest on short and long-term debt | ||
Total |
The capital market balance is mainly composed of
US$
The balance in global notes has maturities between
2025 to 2115 and does not require collateral. Such financing was carried out in dollars, euros and pounds,
The debentures and the commercial notes, with maturities between 2024 and 2037, do not require collateral and are not convertible into shares or equity interests.
On June 30, 2024, there were no default, breach of covenants or adverse changes in clauses that would result in changes to the payment terms of loan and financing agreements. There was no change in the guarantees required in relation to December 31, 2023. Petrobras fully, unconditionally and irrevocably guarantees its global notes issued in the capital markets by its wholly-owned subsidiary PGF and the loan agreements of its wholly-owned subsidiary PGT.
24.2. | Changes in finance debt |
In Brazil | Abroad | Total | |
Balance at December 31, 2023 | |||
Proceeds from finance debt | |||
Repayment of principal (1) | ( |
( |
( |
Repayment of interest (1) | ( |
( |
( |
Accrued interest (2) | |||
Foreign exchange/ inflation indexation charges | |||
Translation adjustment | ( |
( |
( |
Balance at June 30, 2024 |
In Brazil | Abroad | Total | |
Balance at December 31, 2022 | |||
Proceeds from finance debt | |||
Repayment of principal (1) | ( |
( |
( |
Repayment of interest (1) | ( |
( |
( |
Accrued interest (2) | |||
Foreign exchange/ inflation indexation charges | ( |
( | |
Translation adjustment | |||
Modification of contractual cash flows | ( |
- | ( |
Balance at June 30, 2023 |
(1) | It includes pre-payments. |
(2) | It includes premium and discount over notional amounts, as well as gains and losses by modifications in contractual cash flows. |
24.3. | Reconciliation with cash flows from financing activities |
Jan-Jun/2024 | Jan-Jun/2023 | |||||
Proceeds from finance debt | Repayment of principal | Repayment of interest | Proceeds from finance debt | Repayment of principal | Repayment of interest | |
Changes in finance debt | ( |
( |
( |
( | ||
Deposits linked to finance debt (1) | ( |
( | ||||
Net cash used in financing activities | ( |
( |
( |
( |
(1) | Deposits linked to finance debt with China Development Bank, with semiannual settlements in June and December. |
In the six-month period ended, the Company repaid
several finance debts, in the amount of US$ 3,313, notably the pre-payment of US$
38 |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
24.4. | Summarized information on current and non-current finance debt |
Maturity in | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 onwards | Total (1) | Fair Value |
Financing in U.S.Dollars (US$): | ||||||||
Floating rate debt (2) | ||||||||
Fixed rate debt | ||||||||
Average interest rate p.a. | ||||||||
Financing in Brazilian Reais (R$): | ||||||||
Floating rate debt (3) | ||||||||
Fixed rate debt | ||||||||
Average interest rate p.a. | ||||||||
Financing in Euro (€): | − | − | − | |||||
Fixed rate debt | − | − | − | |||||
Average interest rate p.a. | ||||||||
Financing in Pound Sterling (£): | − | − | ||||||
Fixed rate debt | − | − | ||||||
Average interest rate p.a. | ||||||||
Total as of June 30, 2024 | ||||||||
Average interest rate | ||||||||
Total as of December 31, 2023 | ||||||||
Average interest rate |
(1) | The average maturity of outstanding debt as of June 30, 2024 is 11.76 years (11.38 years as of December 31, 2023). |
(2) | Operations with variable index + fixed spread. |
(3) | Operations with variable index + fixed spread, if applicable. |
• | The fair value of the Company's finance debt is mainly determined and categorized into a fair value hierarchy as follows: |
• | Level 1- quoted prices in active markets for identical liabilities, when applicable, amounting
to US$ |
Level 2 – discounted cash flows based on
discount rate determined by interpolating spot rates considering financing debts indexes proxies, taking into account their currencies
and also Petrobras’ credit risk, amounting to US$
Regarding the Interest Rate Benchmark Reform (IBOR Reform), there was a necessity to amend the Company's contracts referenced in these indexes, considering the end of the publication of LIBOR (London Interbank Offered Rate) in dollars (US$), of one, three and six months.
As of June 30, 2024, 21% of the Company's finance debt has been indexed to SOFR (Secured Overnight Financing Rate) and has the CSA (Credit Spread Adjustment) negotiated with the creditors serving as a parameter, while 0.2% will still undergo contractual changes to switch to this new index.
The renegotiations performed so far have been solely for the replacement of the LIBOR benchmark and are necessary as a direct consequence of the reform of the reference interest rate. In these renegotiated cash flows, the change of the index is economically equivalent to the previous basis. Thus, the changes were prospective with the recognition of interest at the new index in the applicable periods.
Therefore, the Company does not expect material effects for the contracts that will still undergo contractual changes for the new index, considering that they will occur under market conditions.
The sensitivity analysis for financial instruments subject to foreign exchange variation is set out in note 27.2.2.
A maturity schedule of the Company’s finance debt (undiscounted), including face value and interest payments is set out as follows:
39 |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
Maturity | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 and thereafter | 06.30.2024 | 12.31.2023 |
Principal | ||||||||
Interest | ||||||||
Total (1) |
(1) | A maturity schedule of the lease arrangements (nominal amounts) is set out in note 25. |
24.5. | Lines of credit |
06.30.2024 | ||||||
Company |
Financial institution |
Date | Maturity |
Available (Lines of Credit) |
Used | Balance |
Abroad | ||||||
PGT BV (1) | Syndicate of banks | − | ||||
PGT BV | Syndicate of banks | − | ||||
Total | − | |||||
In Brazil | ||||||
Petrobras | Banco do Brasil | − | ||||
Petrobras (1) | Banco do Brasil | − | ||||
Transpetro | Caixa Econômica Federal | Not defined | − | |||
Total | − |
(1) | On April 08, 2024, Petrobras reduced part of the Revolving Credit Facility to US$ 4,110 compared to the US$ 5,000 contracted in 2021. Thus, US$ 5,000 will be available for withdrawal until November 16, 2026 and US$ 4,110 from November 16, 2026, to November 16, 2028. On June 18, 2024, Petrobras renewed the RCF with Banco do Brasil, extending its maturity to October 4, 2029, and increasing its amount from US$ 360 (R$ 2 billion) to US$ 720 (R$ 4 billion). |
25. | Lease liability |
Changes in the balance of lease liabilities are presented below:
Lessors in Brazil |
Lessors abroad |
Total | |
Balance at December 31, 2023 | |||
Remeasurement / new contracts | |||
Payment of principal and interest (1) | ( |
( |
( |
Interest expenses | |||
Foreign exchange losses | |||
Translation adjustment | ( |
( |
( |
Balance at June 30, 2024 | |||
Current | |||
Non-current |
(1) | The Statement of Cash Flows comprises US$ 30 relating to changes on liabilities held for sale. |
Lessors in Brazil |
Lessors abroad |
Total | |
Balance at December 31, 2022 | |||
Remeasurement / new contracts | |||
Payment of principal and interest | ( |
( |
( |
Interest expenses | |||
Foreign exchange losses | ( |
( |
( |
Translation adjustment | |||
Balance at June 30, 2023 | |||
Current | |||
Non-current |
A maturity schedule of the lease arrangements (nominal amounts) is set out as follows:
Nominal Future Payments | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 onwards | Total |
Balance at June 30, 2024 | |||||||
Balance at December 31, 2023 |
In certain contracts, there are variable payments and terms of less than 1 year recognized as expenses:
40 |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
06.30.2024 | 06.30.2023 | ||
Variable payments | |||
Up to 1 year maturity | |||
Variable payments x fixed payments |
At June 30, 2024, the nominal amounts of lease
agreements for which the lease term has not commenced, as they relate to assets under construction or not yet available for use, is US$
The sensitivity analysis of financial instruments subject to exchange variation is presented in note 27.2.
26. | Equity |
26.1. | Share capital (net of share issuance costs) |
As of June 30, 2024 and December 31, 2023, subscribed and fully paid share capital, net of issuance costs, was US$
, represented by common shares and preferred shares, all of which are registered, book-entry shares with no par value.Preferred shares have priority on returns of capital, do not grant any voting rights and are non-convertible into common shares.
As of June 30, 2024, the Company held
treasury shares, amounting to US$ (US$ as of December 31, 2023), of which are common shares and are preferred shares.26.2. | Profit Reserves |
The following table presents the final balance of profit reserves as disclosed in the Statements of changes in shareholders’ equity:
06.30.2024 | 12.31.2023 | |
Legal | ||
Statutory - R&D | ||
Statutory – Capital remuneration | ||
Tax incentives | ||
Profit retention | ||
Additional dividends proposed | ||
Total |
26.3. | Distributions to shareholders |
Share repurchase program
On August 3, 2023, the Board of Directors approved a Share Repurchase Program, for the acquisition of up to
million preferred shares issued by the Company, on the Brazilian Stock Exchange (B3), to be held in treasury with subsequent cancellation, without reduction of share capital. This program is carried in the scope of the revised Shareholder Remuneration Policy, approved on July 28, 2023, within a maximum period of 12 months.On August 4, 2024, the Program was closed, resulting
in the repurchase of
i. |
ii. |
The cancellation of the treasury shares will occur in the future by decision of the Company’s Board of Directors.
41 |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
Dividends relating to 2023
On April 25, 2024, shareholders approved, at the
Annual General Shareholders Meeting, the appropriation of the results for 2023 with a change to the management's original proposal made
on March 7, 2024, of dividends referring to the application of the Shareholder Remuneration Policy formula (US$
Amount per Share | Amount | |||
Anticipated dividends approved throughout 2023, including indexation to the SELIC interest rate, and paid until March 2024 | ||||
Dividends approved on March 7, 2024 (1) (2) | ||||
Total dividends referring to the application of the Shareholder Remuneration Policy formula | ||||
Extraordinary dividends (2) | ||||
Total dividends relating to 2023 |
(1) | The amount per share of dividends was updated in relation to that disclosed in the financial statements for 2023 due to the current share repurchase program. |
(2) | The dates of the shareholding position of the dividends referring to the application of the Policy formula and extraordinary dividends are April 25 and May 2, 2024, respectively. |
Following the Annual General Shareholders Meeting,
the amount of complementary dividends is US$
Dividends and interest on capital relating to the first quarter of 2024
On May 13, 2024, Petrobras’s Board of Directors
approved the distribution of remuneration to shareholders in the amount of US$
Date of approval | Date of record | Amount per common and preferred share | Amount | |
Interim dividends (1) | ||||
Interim interest on capital (1) | ||||
Total anticipated dividends |
(1) | The amount of dividends and interest on capital per share was updated due to the share repurchase program, which reduced the number of outstanding shares. |
These dividends and interest on capital will be paid in two equal installments, in August and September 2024. The amounts will be adjusted by the SELIC rate from the date of payment of each installment until the end of the year and will be deducted from the remuneration that will be distributed to shareholders relating to 2024.
This anticipation of interest on capital resulted
in a deductible expense which reduced the income tax expense by US$
Dividends payable
Changes in the balance of dividends payable are set out as follows:
42 |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
Jan-Jun/2024 | Jan-Jun/2023 | |
Consolidated opening balance of dividends payable | ||
Opening balance of dividends payable to non-controlling shareholders | ||
Opening balance of dividends payable to shareholders of Petrobras | ||
Additions relating to complementary dividends | ||
Additions relating to anticipated dividends | ||
Payments made | ( |
( |
Monetary restatement | ||
Transfers to unclaimed dividends | ( |
( |
Withholding income taxes over interest on capital and monetary restatement | ( |
( |
Translation adjustment | ( |
|
Closing balance of dividends payable to shareholders of Petrobras | ||
Closing balance of dividends payable to non-controlling shareholders | − | |
Consolidated closing balance of dividends payable |
Unclaimed dividends
As of June 30, 2024, the balance of dividends not
claimed by shareholders of Petrobras is US$
Jan-Jun/2024 | Jan-Jun/2023 | |
Changes in unclaimed dividends | ||
Opening balance | ||
Prescription | ( |
|
Transfers from dividends payable | ( | |
Translation adjustment | ( |
|
Closing Balance |
26.4. | Earnings per share |
Jan-Jun/2024 | Jan-Jun/2023 | |||||
Common | Preferred | Total | Common | Preferred | Total | |
Net income attributable to shareholders of Petrobras | ||||||
Weighted average number of outstanding shares | ||||||
Basic and diluted earnings per share - in U.S. dollars | ||||||
Basic and diluted earnings (losses) per ADS equivalent - in U.S. dollars (1) | ||||||
Apr-Jun/2024 | Apr-Jun/2023 | |||||
Common | Preferred | Total | Common | Preferred | Total | |
Net income attributable to shareholders of Petrobras | ( |
( |
( |
|||
Weighted average number of outstanding shares | ||||||
Basic and diluted earnings (losses) per share - in U.S. dollars | ||||||
Basic and diluted earnings (losses) per ADS equivalent - in U.S. dollars (1) | ( |
( |
( |
(1) | Petrobras' ADSs are equivalent to two shares. |
Basic earnings per share are calculated by dividing the net income attributable to shareholders of Petrobras by the weighted average number of outstanding shares during the period. The change in the weighted average number of outstanding shares is due to the Share repurchase program (preferred shares) which is ongoing at the Company.
43 |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
Diluted earnings per share are calculated by adjusting the net income attributable to shareholders of Petrobras and the weighted average number of outstanding shares during the period taking into account the effects of all dilutive potential shares (equity instrument or contractual arrangements that are convertible into shares).
Basic and diluted earnings are identical as the Company has no potentially dilutive shares.
27. | Financial risk management |
The Company is exposed to a variety of risks arising from its operations, including price risk (related to crude oil and oil products prices), foreign exchange rates risk, interest rates risk, credit risk and liquidity risk. To manage market and financial risks, the Company prefers structuring measures through adequate capital and leverage management.
The Company presents a sensitivity analysis of factors relating to its corporate risk management process. The reasonably possible and remote scenarios are related to events with low and very low probability of occurrence, respectively. The period of application of the sensitivity analysis is one year, except for operations with commodity derivatives, for which a three-month period is applied, due to the short-term nature of these transactions.
27.1. | Derivative financial instruments |
Assets and liabilities
06.30.2024 | 12.31.2023 | |
Fair value Asset Position (Liability) | ||
Open derivatives transactions | ( |
|
Closed derivatives transactions awaiting financial settlement | ||
Recognized in Statements of Financial Position | ( |
|
Other assets (note 16) | ||
Other liabilities (note 16) | ( |
( |
The following table presents the details of the open derivative financial instruments held by the Company as of June 30, 2024, and represents its risk exposure:
Statement of Financial Position | |||||
Fair value | |||||
Notional value | Asset Position (Liability) | Maturity | |||
06.30.2024 | 12.31.2023 | 06.30.2024 | 12.31.2023 | ||
Derivatives not designated for hedge accounting | |||||
Future contracts - total (1) | ( |
||||
Long position/Crude oil and oil products | − | - | |||
Short position/Crude oil and oil products | ( |
( |
− | - | |
Swap (2) | − | ||||
Long position/ Soybean oil | − | - | − | ||
Short position/ Soybean oil | - | ( |
- | − | |
Forward contracts (3) | |||||
Short position/Foreign currency forwards (BRL/USD) | ( |
( |
− | - | |
Swap (3) | − | ||||
Swap - CDI X IPCA | R$ |
R$ |
|||
Foreign currency / Cross-currency Swap (3) | US$ |
US$ |
( |
( |
|
Total open derivative transactions | ( |
(1) | Notional value in thousands of bbl. |
(2) | Notional value in thousands of tons. |
(3) |
Amounts in US$ and R$ are presented in million. |
44 |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
Profit or loss
Gains/ (losses) recognized in the statement of income | ||||
Jan-Jun/2024 | Jan-Jun/2023 | Apr-Jun/2024 | Apr-Jun/2023 | |
Commodity derivatives | ||||
Other commodity derivative transactions - Note 27.2.1 (a) | ( | |||
Recognized in Other Income and Expenses | ( | |||
Currency derivatives | ||||
Swap CDI x Dollar - Note 27.2.2 (b) | ( |
( |
||
Others | − | − | − | |
( |
( |
|||
Interest rate derivatives | ||||
Swap - CDI X IPCA | ( |
( |
||
( |
( |
|||
Cash flow hedge on exports -Note 27.2.2 (a) | ( |
( |
( |
( |
Recognized in Net finance income (expense) | ( |
( |
( |
( |
Total open derivative transactions | ( |
( |
( |
( |
Comprehensive income
Gains/ (losses) recognized in other comprehensive income | ||||
Jan-Jun/2024 | Jan-Jun/2023 | Apr-Jun/2024 | Apr-Jun/2023 | |
Cash flow hedge on exports - Note 27.2.2 (a) | ( |
( |
||
Collateral
Guarantees given as collateral | ||||
06.30.2024 | 12.31.2023 | |||
Commodity derivatives |
27.2. | Market risks |
27.2.1. | Risk management of products prices |
The Company is exposed to commodity price cycles, and it may use derivative instruments to hedge exposures related to prices of products purchased and sold to fulfill operational needs and in specific circumstances depending on business environment analysis and assessment of whether the targets of the Strategic Plan are being met.
a) | Other commodity derivative transactions |
Petrobras, by use of its assets, positions and market knowledge from its operations in Brazil and abroad, may seek to optimize some of its commercial operations in the international market, with the use of commodity derivatives to manage price risk.
b) | Sensitivity analysis of commodity derivatives |
The probable scenario uses market references, used in pricing models for oil, oil products and natural gas markets, and considers the closing price of the asset on June 30, 2024. Therefore, no variation is considered arising from outstanding operations in this scenario. The reasonably possible and remote scenarios reflect the potential effects on the statement of income from outstanding transactions, considering a variation in the closing price of 20% and 40%, respectively. To simulate the most unfavorable scenarios, the variation was applied to each asset according to open transactions: price decrease for long positions and increase for short positions.
45 |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
Financial Instruments | Risk | Probable Scenario | Reasonably possible scenario |
Remote Scenario |
Derivatives not designated for hedge accounting | ||||
Future and forward contracts | Crude oil and oil products - price changes | - | ( |
( |
Future and forward contracts | Soybean oil - price changes | - | ( |
( |
Option | Soybean oil | - | - | - |
Forward contracts | Foreign currency - depreciation BRL x USD | - | ( |
( |
− | ( |
( |
27.2.2. | Foreign exchange risk management |
a) | Cash Flow Hedge involving the Company’s future exports |
The carrying amounts, the fair value as of June 30, 2024, and a schedule of expected reclassifications to the statement of income of cumulative losses recognized in other comprehensive income (shareholders’ equity) based on a US$ 1.00 / R$ 5.5589 exchange rate are set out below:
Present value of hedging instrument notional value at 06.30.2024 | |||||
Hedging Instrument | Hedged Transactions |
Nature of the Risk |
Maturity Date |
US$ million | R$ million |
Foreign exchange gains and losses on proportion of non-derivative financial instruments cash flows | Foreign exchange gains and losses of highly probable future monthly exports revenues |
Foreign Currency – Real vs U.S. Dollar Spot Rate |
July 2024 to June 2034 |
Changes in the present value of hedging instrument notional value | US$ million | R$ million |
Amounts designated as of December 31, 2023 | ||
Additional hedging relationships designated, designations revoked and hedging instruments re-designated | ||
Exports affecting the statement of income | ( |
( |
Principal repayments / amortization | ( |
( |
Foreign exchange variation | - | |
Amounts designated as of June 30, 2024 | ||
Nominal value of hedging instrument (finance debt and lease liability) at June 30, 2024 |
In the six-month period ended June 30, 2024, the Company recognized a US$ 90 loss within foreign exchange gains (losses) due to ineffectiveness (a US$ 228 gain in the same period of 2023).
The average ratio of future exports for which cash flow hedge accounting was designated to the highly probable future exports is 55.12%.
A roll-forward schedule of cumulative foreign exchange losses recognized in other comprehensive income as of June 30, 2024 is set out below:
Exchange rate variation | Tax effect | Total | |
Balance at December 31, 2023 | ( |
( | |
Recognized in Other comprehensive income | ( |
( | |
Reclassified to the statement of income - occurred exports | ( |
||
Balance at June 30, 2024 | ( |
( | |
Exchange rate variation | Tax effect | Total | |
Balance at December 31, 2022 | ( |
( | |
Recognized in Other comprehensive income | ( |
||
Reclassified to the statement of income - occurred exports | ( |
||
Balance at June 30, 2023 | ( |
( |
46 |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
Additional hedging relationships may be revoked or additional reclassification adjustments from equity to the statement of income may occur as a result of changes in forecasted export prices and export volumes following a revision of the Company’s strategic plan. Based on a sensitivity analysis considering a US$ 10/barrel decrease in Brent prices stress scenario, when compared to the Brent price projections in the Strategic Plan 2024-2028, would not indicate a reclassification from equity to the statement of income.
A schedule of expected reclassification of cumulative foreign exchange losses recognized in other comprehensive income to the statement of income as of June 30, 2024, before tax effect, is set out below:
2024 | 2025 | 2026 | 2027 | 2028 | 2029 onwards | Total | |
Expected realization | ( |
( |
( |
( |
( |
( |
( |
b) | Information on ongoing contracts |
As of June 30, 2024, the Company has outstanding swap contracts - IPCA x CDI and CDI x Dollar.
Swap contracts – IPCA x CDI and CDI x Dollar
In September 2019, Petrobras contracted a cross currency swap aiming to protect against exposure arising from the 7th issuance of debentures, for IPCA x CDI operations, maturing in September 2029 and September 2034, and US$ 240 for CDI x U.S. Dollar operations, maturing in September 2024 and September 2029.
In July 2023, the 1st repurchase plan for these debentures was closed. During the term of this plan, which started in July 2022, only an immaterial amount of this debt had been effectively repurchased. Thus, the position in this swap remains unchanged.
Changes in interest rate forward curves (CDI interest rate) may affect the Company's results, due to the market value of these swap contracts. In preparing a sensitivity analysis for these curves, a parallel shock on this curve was estimated based on the average maturity of these swap contracts, in the scope of the Company’s Risk Management Policy. For reasonably possible and remote scenarios, parallel shocks of 40% and 80% were applied to the interest rate forward curves, which resulted in effects of 496 b.p. and 992 b.p., respectively, on the estimated interest rates. The effects of this sensitivity analysis, keeping all other variables remaining constant, are shown in the following table:
Reasonably possible scenario | Remote scenario | |
SWAP Exchange rate (IPCA x USD) | ( |
( |
The methodology used to calculate the fair value of this swap operation consists of calculating the future value of the operations, using rates agreed in each contract and the projections of the interest rate curves, IPCA coupon and foreign exchange coupon, discounting to present value using the risk-free rate. Curves are obtained from Bloomberg based on forward contracts traded in stock exchanges.
The mark-to-market is adjusted to the credit risk of the counterparts, which effect is immaterial.
c) | Sensitivity analysis for foreign exchange risk on financial instruments |
The sensitivity analysis of foreign exchange risk presented in the table below is carried out for a twelve-month term. The probable scenario is computed based on external data, while the reasonably possible and remote scenarios considers 20% and 40% changes in the foreign exchange rates prevailing on June 30, 2024, respectively, except for assets and liabilities of foreign subsidiaries, when transacted in a currency equivalent to their respective functional currencies. This analysis only covers the exchange rate variation and maintains all other variables constant.
47 |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
Risk | Financial Instruments | Exposure at 06.30.2024 | Probable Scenario (1) | Reasonably possible scenario |
Remote Scenario |
Dollar/Real | Assets | ( |
|||
Liabilities | ( |
( |
( | ||
Exchange rate - Cross currency swap | ( |
( |
( | ||
Cash flow hedge on exports | ( |
||||
Total | ( |
( |
( | ||
Euro/Dollar | Assets | ||||
Liabilities | ( |
( |
( |
( | |
Total | ( |
( |
( |
( | |
Pound/Dollar | Assets | ||||
Liabilities | ( |
( |
( |
( | |
Total | ( |
( |
( |
( | |
Pound/Real | Assets | − | − | − | |
Liabilities | ( |
( |
( | ||
Total | ( |
( |
( | ||
Euro/Real | Assets | − | |||
Liabilities | ( |
( |
( | ||
Total | ( |
( |
( | ||
Peso/Dollar | Assets | ( |
( |
( | |
Total | ( |
( |
( | ||
Total at June 30, 2024 | ( |
( |
( |
(1) | At June 30, 2024, the probable scenario was computed based on the following risks: R$ x U.S. dollar - a 7.18% appreciation of the real; peso x U.S. dollar - a 60.7% depreciation of the peso; euro x dollar: a 2.7% appreciation of the euro; pound sterling x U.S. dollar - a 2.07% appreciation of the pound sterling; real x euro: a 4.7% depreciation of the real; real x pound sterling - a 5.3% depreciation of the real;. Source: Focus and Thomson Reuters. |
27.2.3. | Interest rate risk management |
The Company considers that interest rate risk does not create a significant exposure and therefore, preferably does not use derivative financial instruments to manage interest rate risk, except for specific situations faced by certain subsidiaries of Petrobras.
The sensitivity analysis of interest rate risk presented in the table below is carried out for a twelve-month term. Amounts referring to reasonably possible and remote scenarios mean the total floating interest expense if there is a variation of 40% and 80% in these interest rates, respectively, maintaining all other variables constant.
The following table presents the amounts to be disbursed by Petrobras with the payment of interest related to debts with floating interest rates at June 30, 2024:
Risk | Probable Scenario (1) |
Reasonably possible scenario |
Remote Scenario | |
LIBOR 6M | ||||
SOFR 3M (2) | ||||
SOFR 6M (2) | ||||
SOFR O/N (2) | ||||
CDI | ||||
TR | ||||
TJLP | ||||
IPCA | ||||
(1) | The probable scenario was calculated considering the quotations of currencies and floating rates to which the debts are indexed. |
(2) | It represents the Secured Overnight Financing Rate. |
27.3. | Liquidity risk management |
The possibility of a shortage of cash to settle the Company’s obligations on the agreed dates is managed by the Company. The Company mitigates its liquidity risk by defining reference parameters for treasury management and by periodically analyzing the risks associated to the projected cash flow, quantifying its main risks through Monte Carlo simulations. These risks include oil prices, exchange rates, gasoline and diesel international prices, among others. In this way, the Company is able to predict cash needs for its operational continuity and for the execution of its strategic plan.
48 |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
In this context, even these unaudited condensed consolidated interim financial statements presenting a negative net working capital, management believes it does not compromise its liquidity.
Additionally, the Company maintains revolving credit facilities contracted as a liquidity reserve to be used in adverse scenarios (see note 24.5). The Company regularly assesses market conditions and may enter into transactions to repurchase its own securities or those of its subsidiaries, through a variety of means, including tender offers, make whole exercises and open market repurchases, since they are in line with the Company's liability management strategy, in order to improve its debt repayment profile and cost of debt.
The maturity schedules for the Company’s undiscounted finance debt and lease liability are presented in note 24.4 and 25, respectively.
27.4. | Fair value of financial assets and liabilities |
Level I | Level II | Level III |
Total fair value recorded | |
Assets | ||||
Commodity derivatives | - | - | ||
Interest rate derivatives | - | - | ||
Balance at June 30, 2024 | - | |||
Balance at December 31, 2023 | − | |||
Liabilities | ||||
Foreign currency derivatives | - | ( |
- | ( |
Balance at June 30, 2024 | − | ( |
- | ( |
Balance at December 31, 2023 | − | ( |
− | ( |
The fair value of other financial assets and liabilities is presented in the respective notes: 3 – Marketable securities; 9 – Trade and other receivables; and 24 – Finance debt (estimated amount).
The fair values of cash and cash equivalents, current debt and other financial assets and liabilities are equivalent or do not differ significantly from their carrying amounts.
28. | Related party transactions |
The Company has a policy for related party transactions, which is annually revised and approved by the Board of Directors in accordance with the Company’s by-laws.
The related-party transactions policy also aims to ensure an adequate and diligent decision-making process for the Company’s key management.
28.1. | Transactions with joint ventures, associates, government entities and pension plans |
The Company has engaged, and expects to continue to engage, in the ordinary course of business in numerous transactions with joint ventures, associates, pension plans, as well as with the Company’s controlling shareholder, the Brazilian Federal Government, which include transactions with banks and other entities under its control, such as financing and banking, asset management and other transactions.
The balances of significant transactions are set out in the following table:
49 |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
06.30.2024 | 12.31.2023 | |||
Assets | Liabilities | Assets | Liabilities | |
Joint ventures and associates | ||||
Petrochemical companies (associates) | ||||
Other associates and joint ventures | ||||
Subtotal | ||||
Brazilian government – Parent and its controlled entities | ||||
Government bonds | − | − | ||
Banks controlled by the Brazilian Government | ||||
Petroleum and alcohol account - receivables from the Brazilian Government (note 9.1) | − | − | − | |
Brazilian Federal Government (1) | − | |||
Pré-Sal Petróleo S.A. – PPSA | − | − | ||
Others | ||||
Subtotal | ||||
Petros | ||||
Total | ||||
Current | ||||
Non-Current |
(1) | It includes amounts related to lease liability. |
The income/expenses of significant transactions are set out in the following table:
2024 | 2023 | 2024 | 2023 | |
Jan-Jun | Jan-Jun | Apr-Jun | Apr-Jun | |
Joint ventures and associates | ||||
Petrochemical companies (associates) | ||||
Other associates and joint ventures | ||||
Subtotal | ||||
Brazilian government – Parent and its controlled entities | ||||
Government bonds | ||||
Banks controlled by the Brazilian Government | ( |
( |
( | |
Petroleum and alcohol account - receivables from the Brazilian Government | ||||
Brazilian Federal Government | ( |
( |
( |
( |
Pré-Sal Petróleo S.A. – PPSA | ( |
( |
( |
( |
Others | ( |
( |
( |
( |
Subtotal | ( |
( |
( |
( |
Petros | ( |
( |
( |
( |
Total | ||||
Revenues, mainly sales revenues | ||||
Purchases and services | ||||
Income (expenses) | ( |
( |
( |
( |
Foreign exchange and inflation indexation charges, net | ( |
( |
( |
( |
Finance income (expenses), net | ||||
Total |
The liability related to pension plans of the Company's employees and managed by the Petros Foundation, including debt instruments, is presented in note 13.
28.2. | Compensation of key management personnel |
The criteria for compensation of members of the Board of Directors and the Board Executive Officers is based on the guidelines established by the Secretariat of Management and Governance of the State-owned Companies (SEST) of the Ministry of Management and Innovation in Public Services, and by the MME. The total compensation is set out as follows:
50 |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
Parent Company | ||||||
Jan-Jun/2024 | Jan-Jun/2023 | |||||
Executive Officers | Board of Directors | Total | Executive Officers | Board of Directors | Total | |
Wages and short-term benefits | − | |||||
Social security and other employee-related taxes | − | − | ||||
Post-employment benefits (pension plan) | − | − | ||||
Variable compensation | − | − | − | − | ||
Benefits due to termination of tenure | − | − | ||||
Total compensation recognized in the statement of income | − | |||||
Total compensation paid (1) | − | − | ||||
Monthly average number of members | ||||||
Monthly average number of paid members |
(1) | It includes Variable Compensation Program (PPP) for Executive Officers. |
In the six-month period ended June 30, 2024, expenses related to compensation of the board members and executive officers of Petrobras amounted to US$ 7.2 (US$ 5.7 for the same period of 2023).
The compensation of the Advisory Committees to the Board of Directors is separate from the fixed compensation set for the Board Members and, therefore, has not been classified under compensation of Petrobras’ key management personnel.
In accordance with Brazilian regulations applicable to companies controlled by the Brazilian Federal Government, Board members who are also members of the Statutory Audit Committees are only compensated with respect to their Audit Committee duties. The total compensation concerning these members was US$ 163 thousand for the six-month period ended June 30, 2024 (US$ 194 thousand with tax and social security costs). For the same period of 2023, the total compensation concerning these members was US$ 221 thousand (US$ 266 thousand with tax and social security costs).
On April 25, 2024, the Company’s Annual Shareholders’
Meeting set the threshold for the overall compensation for executive officers and board members at US$
29. | Supplemental information on statement of cash flows |
Jan-Jun/2024 | Jan-Jun/2023 | |
Amounts paid/received during the period: | ||
Withholding income tax paid on behalf of third-parties | ||
Transactions not involving cash | ||
Purchase of property, plant and equipment on credit | ||
Lease | ||
Provision for decommissioning costs | ||
Use of tax credits and judicial deposit for the payment of contingency | ||
Remeasurement of property, plant and equipment acquired in previous periods | ||
Earn Out related to Atapu and Sépia fields |
29.1. | Reconciliation of Depreciation, depletion and amortization with Statements of Cash Flows |
Jan-Jun/2024 | Jan-Jun/2023 | |
Depreciation of Property, plant and equipment | ||
Amortization of Intangible assets | ||
Capitalized depreciation | ( |
( |
Depreciation of right of use - recovery of PIS/COFINS | ( |
( |
Depreciation, depletion and amortization in the Statements of Cash Flows |
51 |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
30. | Subsequent events |
Redemption of global notes
On July 29, 2024, the Company’s wholly-owned
subsidiary PGF concluded the early redemption of the
Distribution of remuneration to shareholders
On August 08, 2024, Petrobras’s Board of
Directors approved
Date of approval | Date of record | Amount per common and preferred share | Amount | |
Interim dividends | ||||
Interim interest on capital | ||||
Total anticipated dividends | ||||
Intermediate dividends by use of a portion of profit retention reserve | ||||
Total distribution to shareholders |
These dividends and interest on capital will be paid in two equal installments, on November 21, 2024, and December 20, 2024. The amounts will be adjusted by the SELIC rate from the date of payment of each installment until the end of the year and will be deducted from the remuneration that will be distributed to shareholders relating to 2024.
52 |
Report
of Independent Registered Public Accounting Firm
KPMG Auditores Independentes Ltda.
Rua do Passeio, 38 - Setor 2 - 17º andar - Centro
20021-290 - Rio de Janeiro/RJ - Brasil
Caixa Postal 2888 - CEP 20001-970 - Rio de Janeiro/RJ - Brasil
Telefone +55 (21) 2207-9400
kpmg.com.br
Report of Independent Registered Public Accounting Firm
To Shareholders and Board of Directors of
Petróleo Brasileiro S.A. – Petrobras
Rio de Janeiro - RJ
Results of Review of Condensed Consolidated Interim Financial Statements
We have reviewed the condensed consolidated statement of financial position of Petróleo Brasileiro S.A. - Petrobras and subsidiaries (the “Company”) as of June 30, 2024, the related condensed consolidated statements of income and comprehensive income for the three and six-month periods ended June 30, 2024 and 2023, the related condensed consolidated statements of changes in shareholders’ equity and cash flows for the six-month periods ended June 30, 2024 and 2023, and the related notes (collectively, the condensed consolidated interim financial statements). Based on our review, we are not aware of any material modifications that should be made to the condensed consolidated interim financial statements for them to be in accordance with IAS 34 - Interim Financial Reporting, as issued by the International Accounting Standards Board (IASB).
We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statement of financial position of the Company as of December 31, 2023, and the related consolidated statements of income, comprehensive income, changes in shareholders’ equity, and cash flows for the year then ended (not presented herein); and in our report dated April 11, 2024, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated statement of financial position as of December 31, 2023, is fairly stated, in all material respects, in relation to the consolidated statement of financial position from which it has been derived.
Basis for Review Results
These condensed consolidated interim financial statements are the responsibility of the Company’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our reviews in accordance with the standards of the PCAOB. A review of condensed consolidated interim financial statements consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
/s/ KPMG Auditores Independentes Ltda.
Rio de Janeiro - RJ
August 8, 2024
KPMG Auditores Independentes Ltda., uma sociedade simples brasileira, de responsabilidade limitada e firma-membro da organização global KPMG de firmas-membro independentes licenciadas da KPMG International Limited, uma empresa inglesa privada de responsabilidade limitada. |
KPMG Auditores Independentes Ltda., a Brazilian limited liability company and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. |
53 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: August 8, 2024
PETRÓLEO BRASILEIRO S.A–PETROBRAS
By: /s/ Fernando Sabbi Melgarejo
______________________________
Fernando Sabbi Melgarejo
Chief Financial Officer and Investor Relations Officer