UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 6-K

 

Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of the

Securities Exchange Act of 1934

 

For the month of November, 2021

 

Commission File Number 1-15106

 

 

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)

 

Avenida República do Chile, 65 
20031-912 – Rio de Janeiro, RJ
Federative Republic of Brazil

(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____

 

 

 
 

 

 

 

Financial Information

Jan-Sep/2021

 

 

 

1 
 

 

 

B3: PETR3 (ON) | PETR4 (PN)

NYSE: PBR (ON) | PBRA (PN)

 

www.petrobras.com.br/ir

petroinvest@petrobras.com.br

+ 55 21 3224-1510

 

 

 

 

 

Disclaimer

 

This presentation contains some financial indicators that are not recognized by GAAP or the IFRS. The indicators presented herein do not have standardized meanings and may not be comparable to indicators with a similar description used by others. We provide these indicators because we use them as measures of company performance and liquidity; they should not be considered in isolation or as a substitute for other financial metrics that have been disclosed in accordance with IFRS. See definitions of EBITDA, Adjusted EBITDA, LTM Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Cash and Cash Equivalents, Net Debt, Gross Debt, Free Cash Flow, Leverage in the Glossary and their reconciliations in sections Liquidity and Capital Resources, Reconciliation of LTM Adjusted EBITDA, Gross Debt/LTM Adjusted EBITDA and Net Debt/LTM Adjusted EBITDA metrics and Consolidated Debt.

2 
 

 

TABLE OF CONTENTS

CONSOLIDATED RESULTS  
Key Financial Information 4
Sales Revenues 4
Cost of Sales 5
Income (Expenses) 5
Net finance income (expense) 6
Income tax expenses 6
Net Income attributable to shareholders of Petrobras 6
   
CAPITAL EXPENDITURES (CAPEX) 7
   
LIQUIDITY AND CAPITAL RESOURCES 8
   
CONSOLIDATED DEBT 9

 

RECONCILIATION OF LTM ADJUSTED EBITDA, GROSS DEBT/ LTM ADJUSTED EBITDA AND NET DEBT/LTM ADJUSTED EBITDA METRICS

 
Adjusted EBITDA 10
LTM Adjusted EBITDA 11
Gross Debt/LTM Adjusted EBITDA and Net Debt/LTM Adjusted EBITDA Metrics 12
   
RESULTS BY OPERATING BUSINESS SEGMENTS  
Exploration and Production (E&P) 13
Refining, Transportation and Marketing 14
Gas and Power 15
   
GLOSSARY 16
3 
 

 

 

CONSOLIDATED RESULTS

The main functional currency of the Petrobras Group is the Brazilian real, which is the functional currency of the parent company and its Brazilian subsidiaries. As the presentation currency of the Petrobras Group is the U.S. dollar, the results of operations in Brazilian reais are translated into U.S. dollars using the average exchange rates prevailing during the period (average exchange rate of R$/US$ 5.33 in the period Jan-Sep/2021 compared to R$/US$ 5.08 in the period Jan-Sep/2020).

 

Key Financial Information

 

US$ million Jan-Sep/2021 Jan-Sep/2020

Change

(%)

Sales revenues 59,935 39,772 50.7
Cost of Sales (29,712) (22,811) 30.2
Gross profit 30,223 16,961 78.2
Income (expenses) (2,961) (19,858) (85.1)
Consolidated net income (loss) attributable to the shareholders of Petrobras 14,310 (10,669) -
Net cash provided by operating activities 28,595 21,818 31.1
Adjusted EBITDA 32,279 19,580 64.8
Average Brent crude (US$/bbl) 67.73 40.82 65.9
Average Crude Oil sales price (US$/bbl) 64.19 38.90 65.0
Average Domestic basic oil products price (US$/bbl) 75.21 50.20 49.8

 

US$ million 09.30.2021 12.31.2020

Change

(%)

Gross Debt 59,588 75,538 (21.1)
Net Debt 48,132 63,168 (23.8)
Gross Debt/LTM Adjusted EBITDA ratio 1.45 2.66 (45.5)
Net Debt/LTM Adjusted EBITDA ratio 1.17 2.22 (47.3)

 

Sales Revenues

 

US$ million Jan-Sep/2021 Jan-Sep/2020

Change

(%)

Diesel 17,480 10,241 70.7
Gasoline 8,148 4,518 80.3
Liquefied petroleum gas (LPG) 3,327 2,461 35.2
Jet fuel 1,456 1,113 30.8
Naphtha 1,219 1,364 (10.6)
Fuel oil (including bunker fuel) 1,268 540 134.8
Other oil by-products 3,080 1,915 60.8
Subtotal Oil By-Products 35,978 22,152 62.4
Natural gas 4,086 2,692 51.8
Renewables and nitrogen products 34 45 (24.4)
Revenues from non-exercised rights 200 368 (45.7)
Electricity 2,172 466 366.1
Services, agency and others 648 594 9.1
Total domestic market 43,118 26,317 63.8
Exports 16,103 12,308 30.8
   Crude oil 11,642 9,171 26.9
   Fuel oil (including bunker fuel) 3,624 2,551 42.1
   Other oil by-products and other products 837 586 42.8
Sales abroad * 714 1,147 (37.8)
Total foreign market 16,817 13,455 25.0
Total 59,935 39,772 50.7

* Sales revenues from operations outside of Brazil, including trading and excluding exports.

 

     
4 
 

 

 

 

Sales revenues were US$ 59,935 million for the period Jan-Sep/2021, a 50.7% increase (US$ 20,163 million) when compared to US$ 39,772 million for the period Jan-Sep/2020, mainly due to:

(i) a US$ 13,826 million increase in domestic oil product revenues, of which US$ 11,752 relates to increase in average Brent prices, and US$ 2,074 relates to increase in volume; and

 

(ii) a US$ 2,471 million increase in crude oil revenues, of which US$ 4,037 million relates to increase in average Brent prices, which was partially offset by US$ 1,566 million related to decrease in volume.

 

Cost of Sales

 

US$ million Jan-Sep/2021 Jan-Sep/2020

Change

(%)

Raw material, products for resale, materials and third-party services * (13,505) (9,487) 42.3
Depreciation, depletion and amortization (6,770) (7,237) (6.4)
Production taxes (7,962) (4,386) 81.5
Employee compensation (1,475) (1,701) (13.3)
Total (29,712) (22,811) 30.3

* It includes short-term leases and inventory turnover.

 

Cost of sales was US$ 29,712 million for the period Jan-Sep/2021, an 30.3% increase (US$ 6,901 million) when compared to US$ 22,811 million for the period Jan-Sep/2020, mainly due to:

higher sales volumes of domestic oil by-products; and
higher production taxes due to higher Brent prices.

Income (Expenses)

 

US$ million Jan-Sep/2021 Jan-Sep/2020

Change

(%)

Selling expenses (3,137) (3,756) (16.5)
General and administrative expenses (870) (1,011) (13.9)
Exploration costs (538) (437) 23.1
Research and development expenses (415) (255) 62.7
Other taxes (369) (761) (51.5)
Impairment of assets 2,918 (13,358) -
Other income and expenses, net (550) (280) 96.4
Total (2,961) (19,858) (85.1)

 

Selling expenses were US$ 3,137 million for the period Jan-Sep/2021, a 16.5% decrease (US$ 619 million) compared to US$ 3,756 million for the period Jan-Sep/2020, led by lower shipping costs and lower exported volume, partially offset by an increase in logistics expenses related to natural gas, whose contracts were readjusted at the end of the last quarter of 2020.

General and administrative expenses were US$ 870 million for the period Jan-Sep/2021, a 13.9% decrease (US$ 141 million) compared to US$ 1,011 million for the period Jan-Sep/2020, mainly due to the depreciation of Brazilian reais against the US dollars, lower employee expenses due to reduction of headcount, optimization and lower expenses with consulting services.

Impairment reversal of US$ 2,918 million for the period Jan-Sep/2021 represent an increase of US$ 16,276 million over the expenses of US$ 13,358 million for the period Jan-Sep/2020, mainly due to brent price increase in the current period as compared to the prior period which had resulted in a revision in the Brent price assumptions at the outbreak of the Covid-19 pandemic.

5 
 

 

Net finance income (expense)

 

US$ million Jan-Sep/2021 Jan-Sep/2020

Change

(%)

Finance income 555 406 36.7
Income from investments and marketable securities (Government Bonds) 174 166 4.8
Other income, net 381 240 58.8
Finance expenses (4,270) (4,570) (6.6)
Interest on finance debt (2,325) (2,825) (17.7)
Unwinding of discount on lease liabilities (895) (994) (10.0)
Discount and premium on repurchase of debt securities (1,098) (783) 40.2
Capitalized borrowing costs 747 707 5.7
Unwinding of discount on the provision for decommissioning costs (579) (499) 16.0
Other finance expenses and income, net (120) (176) (31.8)
Foreign exchange gains (losses) and indexation charges (4,767) (6,830) (30.2)
Foreign exchange gains (losses) (1,956) (5,127) (61.8)
Reclassification of hedge accounting to the Statement of Income (3,339) (3,586) (6.9)
Recoverable taxes inflation indexation income * 489 1,861 (73.7)
Other foreign exchange gains (losses) and indexation charges, net 39 22 77.3
Total (8,482) (10,994) (22.8)

* Includes PIS and COFINS inflation indexation income - exclusion of ICMS (VAT tax) from the basis of calculation.

 

Net finance expenses were US$ 8,482 million for the period Jan-Sep/2021, a 22.8% decrease (US$ 2,512 million) compared to the expense of US$ 10,994 million for the period Jan-Sep/2020, due a decrease in foreign exchange losses mainly due to fluctuations of the Brazilian real over the US dollar (US$ 3,171 million), and lower interest on finance debt (US$ 500 million). This movement was partially offset by lower inflation indexation income on recoverable taxes (US$ 1,372 million decrease), and higher premium on repurchase of debt securities (US$ 315 million increase).

 

Income tax expenses

Income tax presented a US$ 5,970 million expense for the period Jan-Sep/2021, a US$ 9,869 million increase compared to a US$ 3,899 million net benefit for the period Jan-Sep/2020, mainly due to the net income before income taxes in the period Jan-Sep/2021 compared to the loss before income taxes in the comparative period.

 

Net Income (loss) attributable to shareholders of Petrobras

 

Net income (loss) attributable to shareholders of Petrobras presented a US$ 14,310 million net income for the period Jan-Sep/2021, a US$ 24,979 million increase compared to a US$ 10,669 million net loss for the period Jan-Sep/2020, mainly due to the impairment losses recognized in Jan-Sep/2020, impairment reversal in Jan-Sep/2021, and business performance improvement, led by higher oil prices, increased margins and sales volumes.

 

 

 

6 
 

 

 

CAPITAL EXPENDITURES (CAPEX)

Capital expenditures, or CAPEX, based on the cost assumptions and financial methodology adopted in our strategic plans, which includes acquisition of intangible assets and property, plant and equipment, investment in investees and other items that do not necessarily qualify as cash flows used in investing activities, comprising geological and geophysical expenses, research and development expenses, pre-operating charges, purchase of property, plant and equipment on credit and borrowing costs directly attributable to works in progress.

 

CAPEX (US$ million) Jan-Sep/2021 Jan-Sep/2020

Change

(%)

Exploration and Production 5,030 5,038 (0.2)
Refining, Transportation & Marketing 673 593 13.5
Gas and Power 252 270 (6.7)
Corporate and other businesses 186 108 72.2
Total 6,140 6,008 2.2

 

We invested a total of US$ 6,140 million in the period Jan-Sep/2021, of which 81.9% was in the E&P segment, a 2.2% increase when compared to our Capital Expenditures of US$ 6,008 million in the period Jan-Sep/2020. In line with our Strategic Plan, our Capital Expenditures were primarily directed toward investment projects in which Management believes are most profitable, relating to oil and gas production.

 

In Jan-Sep/2021, investments in the E&P segment totaled US$ 5.0 billion, mainly concentrated on: (i) the development of ultra-deep water production in the Santos Basin pre-salt complex (US$ 0.6 billion); (ii) development of new projects in deep water (US$ 0.1 billion); and (iii) exploratory investments (US$ 0.2 billion).

 

 

 

 

 

7 
 

 

LIQUIDITY AND CAPITAL RESOURCES

US$ million Jan-Sep/2021 Jan-Sep/2020
Adjusted Cash and Cash Equivalents at the beginning of period 12,384 8,265
Government bonds and time deposits with maturities of more than 3 months at the beginning of period * (659) (888)
Cash and cash equivalents at the beginning of period 11,725 7,377
Net cash provided by operating activities 28,595 21,818
Acquisition of PP&E and intangibles assets (4,640) (4,486)
Investments in investees (15) (941)
Proceeds from disposal of assets – (Divestments) 2,906 1,038
Financial compensation for the Búzios co-participation agreement 2,938 -
Dividends received 294 201
Divestment (Investment) in marketable securities 117 (5)
Net cash provided by (used in) investing activities 1,600 (4,193)
(=) Net cash provided by operating and investing activities 30,195 17,625
Proceeds from finance debt 1,754 15,897
Repayments of finance debt (22,360) (22,256)
Net change in finance debt (20,606) (6,359)
Repayment of lease liability (4,381) (4,371)
Dividends paid to shareholders of Petrobras (5,828) (1,020)
Dividends paid to non-controlling interest (75) (38)
Investments by non-controlling interest (11) (64)
Net cash used in financing activities (30,901) (11,852)
Effect of exchange rate changes on cash and cash equivalents (94) (446)
Cash and cash equivalents at the end of period 10,925 12,704
Government bonds and time deposits with maturities of more than 3 months at the end of period * 537 670
Adjusted Cash and Cash Equivalents at the end of period 11,462 13,374
     
Reconciliation of Free Cash Flow    
Net cash provided by operating activities 28,595 21,818
Acquisition of PP&E and intangibles assets (4,640) (4,486)
Investments in investees ** (15) (941)
Free Cash Flow 23,940 16,391

* Includes short-term government bonds and time deposits and cash and cash equivalents of companies classified as held for sale.

** In accordance with the Shareholders’ remuneration policy, the additions (reductions) in investments shall not be considered in the calculation.

As of September 30, 2021, the balance of Cash and cash equivalents was US$ 10,925 million and Adjusted Cash and Cash Equivalents totaled US$ 11,462 million.

The nine-month period ended September 30, 2021 had net cash provided by operating activities of US$ 28,595 million, proceeds from disposal of assets (divestments) of US$ 2,906 million, financial compensation for the Búzios co-participation agreement of US$ 2,938 million and proceeds from financing of US$ 1,754 million. Those resources were allocated to debt prepayments and to amortizations of principal and interest due in the period of US$ 22,360 million, repayment of lease liability of US$ 4,381 million and to acquisition of PP&E and intangibles assets of US$ 4,640 million.

The Company repaid several finance debts, in the amount of US$ 22,360 million notably: (i) prepayment of banking loans in the domestic and international market totaling US$ 6,344 million; (ii) US$ 9,617 million to repurchase and withdraw global bonds previously issued by the Company in the capital market, with net premium paid to bond holders amounting to US$ 1,095 million; and (iii) total prepayment of US$ 593 million for loans from development agencies.

The Company raised US$ 1,442 million through bonds issued in the international capital market (Global Notes) maturing in 2051.

 

 

 

 

 

 

 

 

 

8 
 

 

 

CONSOLIDATED DEBT

Debt (US$ million) 09.30.2021 12.31.2020 Change (%)
Capital Markets 22,213 30,137 (26.3)
Banking Market 10,524 18,597 (43.4)
Development banks 813 1,516 (46.4)
Export Credit Agencies 2,972 3,424 (13.2)
Others 194 214 (9.3)
Finance debt 36,716 53,888 (31.8)
Lease liabilities 22,872 21,650 5.6
Gross Debt 59,588 75,538 (21.1)
Adjusted Cash and Cash Equivalents 11,456 12,370 (7.4)
Net Debt 48,132 63,168 (23.8)
Leverage: Net Debt/(Net Debt + Shareholders' Equity) 41% 51% (19.6)
Average interest rate (% p.a.) 6.0 5.9 1.7
Weighted average maturity of outstanding debt (years) 13.50 11.71 15.3

 

 

The cash flow generation and continuous liability management allowed a significant reduction in our indebtedness. Gross debt decreased 21.1% (US$ 15,950 million) to US$ 59,588 million on September 30, 2021 from US$ 75,538 million on December 31, 2020. Gross debt was lower than the US$ 60,000 target established for 2021 and 2022, mainly due to debt prepayments.

Net debt was reduced by 23.8% (US$ 15,036 million), reaching US$ 48,132 million on September 30, 2021, compared to US$ 63,168 million on December 31, 2020.

In addition, our liability management strategy, which involved the issuance of new long-term debt and the payment of debt due in the shorter term, helped increase the weighted average maturity of outstanding debt to 13.50 years as of September 30, 2021 from 11.71 years as of December 31, 2020.

 

 

 

 

 

9 
 

 

 

 

RECONCILIATION OF LTM ADJUSTED EBITDA, GROSS DEBT/ LTM ADJUSTED EBITDA AND NET DEBT/LTM ADJUSTED EBITDA METRICS

 

LTM Adjusted EBITDA reflects the sum of the last twelve months of Adjusted EBITDA, which is computed by using the EBITDA (net income before net finance income (expense), income taxes, depreciation, depletion and amortization) adjusted by items not considered part of the Company’s primary business, which include results in equity-accounted investments, reclassification of comprehensive income (loss) due to the disposal of equity-accounted investments, results from disposal and write-offs of assets and on remeasurement of investment retained with loss of control, impairment and results from co-participation agreements in bid areas.

LTM Adjusted EBITDA represents an alternative to the company's operating cash generation. This measure is used to calculate the metrics Gross Debt/LTM Adjusted EBITDA and Net Debt/LTM Adjusted EBITDA, to support management’s assessment of liquidity and leverage.

 

Adjusted EBITDA

US$ million Jan-Sep/2021 Jan-Sep/2020 Change (%)
Net income (loss) 14,310 (10,669)             -   
Net finance income (expense) 8,482 10,994 (22.8)
Income taxes 5,970 (3,899)             -   
Depreciation, depletion and amortization 8,786 9,209 (4.6)
EBITDA 37,548 5,635 566.3
Results in equity-accounted investments (1,500) 677             -   
Impairment (2,918) 13,358             -   
Reclassification of comprehensive income (loss) due to the disposal of equity-accounted investments 41 43 (4.7)
Results on disposal/write-offs of assets and on remeasurement of investment retained with loss of control (225) (133) 69.2
Results from co-participation agreements in bid areas (667) -             -   
Adjusted EBITDA 32,279 19,580 64.9

 

 

10 
 

 

LTM Adjusted EBITDA

  US$ million
  Last twelve months (LTM) at        
  09.30.2021 12.31.2020 4Q-2020 1Q-2021 2Q-2021 3Q-2021
Net income (loss) 25,927 948 11,617 200 8,156 5,954
Net finance (expense) income 7,118 9,630 (1,364) 5,639 (2,019) 4,862
Income taxes 8,695 (1,174) 2,725 319 3,784 1,867
Depreciation, depletion and amortization 11,022 11,445 2,236 2,856 2,822 3,108
EBITDA 52,762 20,849 15,214 9,014 12,743 15,791
Results in equity-accounted investments (1,518) 659 (18) (183) (1,026) (291)
Impairment (8,937) 7,339 (6,019) 90 90 (3,098)
Reclassification of comprehensive income (loss) due to the disposal of equity-accounted investments 41 43 34 - 7
Results on disposal/write-offs of assets and on remeasurement of investment retained with loss of control (589) (499) (366) (49) (56) (118)
Results from co-participation agreements in bid areas (667) - - - - (667)
Adjusted EBITDA 41,092 28,391 8,811 8,906 11,751 11,624
Income taxes (8,695) 1,174 (2,725) (319) (3,784) (1,867)
Allowance (reversals) for credit loss on trade and other receivables 6 144 20 (15) 11 (10)
Trade and other receivables, net (1,417) 1 70 (128) (607) (752)
Inventories (2,182) 724 (18) (1,973) 394 (585)
Trade payables 895 216 45 616 (276) 510
Deferred income taxes, net 6,441 (1,743) 2,443 200 3,683 115
Taxes payable 4,742 2,914 1,237 977 1,367 1,161
Others (5,215) (2,931) (2,811) (1,020) (1,716) 332
Net cash provided by operating activities - OCF 35,667 28,890 7,072 7,244 10,823 10,528

 

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Gross Debt/LTM Adjusted EBITDA and Net Debt/LTM Adjusted EBITDA Metrics

The Gross Debt/LTM Adjusted EBITDA ratio and Net debt/LTM Adjusted EBITDA ratio are important metrics that support our management in assessing the liquidity and leverage of Petrobras Group. These ratios are important measures for management to assess the Company’s ability to pay off its debt, mainly because Gross Debt became a Top Metric as identified in our Strategic Plan 2021-2025.

The following table presents the reconciliation for those metrics to the most directly comparable measure derived from IFRS captions, which is in this case the Gross Debt Net of Cash and Cash Equivalents/Net Cash provided by operating activities ratio:

  US$ million
     
  09.30.2021 12.31.2020
Cash and cash equivalents 10,919 11,711
Government securities and time deposits (maturity of more than three months) 537 659
Adjusted Cash and Cash equivalents 11,456 12,370
Finance debt 36,716 53,888
Lease liability 22,872 21,650
Current and non-current debt - Gross Debt 59,588 75,538
Net debt 48,132 63,168
Net cash provided by operating activities - LTM OCF 35,667 28,890
Income taxes 8,695 (1,174)
Allowance (reversals) for impairment of trade and other receivables (6) (144)
Trade and other receivables, net 1,417 (1)
Inventories 2,182 (724)
Trade payables (895) (216)
Deferred income taxes, net (6,441) 1,743
Taxes payable (4,742) (2,914)
Others 5,213 2,931
LTM Adjusted EBITDA 41,090 28,391
Gross debt net of cash and cash equivalents/LTM OCF ratio 1.36 2.21
Gross debt/LTM Adjusted EBITDA ratio 1.45 2.66
Net debt/LTM Adjusted EBITDA ratio 1.17 2.22

 

 

 

12 
 

RESULTS BY OPERATING BUSINESS SEGMENTS

Exploration and Production (E&P)

Financial information

 

US$ million Jan-Sep/2021 Jan-Sep/2020 Change (%)
Sales revenues 39,803 25,400 56.7
Gross profit 22,661 11,331 100.0
Income (Expenses) 2,728 (13,991)             -   
Operating income (loss) 25,389 (2,660)             -   
Net income (loss) attributable to the shareholders of Petrobras 16,847 (1,910)             -   
Average Brent crude (US$/bbl) 67.73 40.82 65.9
Sales price – Brazil      
Average Crude oil (US$/bbl) 64.19 38.90 65.0
Production taxes – Brazil 7,973 4,396 81.4
   Royalties 4,080 2,448 66.7
   Special Participation 3,864 1,919 101.4
   Retention of areas 29 29 -

[1]

In the period Jan-Sep/2021, the gross profit of E&P segment was US$ 22,661 million, an increase of 100.0% in relation to the period Jan-Sep/2020, due to higher sales revenues, which reflect higher Brent prices.

 

The operating income of US$25,389 million in the period Jan-Sep/2021 was mainly due to the increase in Brent prices and the lower expenses, reflecting the reversal of impairment losses as a result of the revision of average short-term Brent price projections.

 

In the period Jan-Sep/2021, the increase in production taxes was caused by the rise in Brent prices, in relation to the Jan-Sep/2020 period.

 

 

Operational information

 

Production in thousand barrels of oil equivalent per day (mboed) Jan-Sep/2021 Jan-Sep/2020 Change (%)
Crude oil, NGL and natural gas – Brazil 2,755 2,839

(3.0) 

Crude oil and NGL (mbbl/d) 2,231 2,310

(3.4) 

Natural gas (mboed) 524 529

(0.9) 

Crude oil, NGL and natural gas – Abroad 43 49

(12.2) 

Total (mboed) 2,798 2,888

(3.1)  

 

 

Production of crude oil, NGL and natural gas was 2,798 mboed in the period Jan-Sep/2021, representing a 3.1% reduction compared to Jan-Sep/2020, due to platform hibernation in shallow water, divestments of fields concluded over 2020 and early 2021, in addition to the natural decline in production, partially compensated by the start-up of the FPSO Carioca (Sépia field) and ramp up of platforms P-67 (Tupi field), P-68 (Berbigão and Sururu field) and P-70 (Atapu field).

13 
 

 

Refining, Transportation and Marketing

 

Financial information

 

US$ million Jan-Sep/2021 Jan-Sep/2020 Change (%)
Sales revenues 53,480 35,696 49.8
Gross profit 6,632 2,527 162.4
Income (Expenses) (1,951) (3,074) (36.5)
Operating income (loss) 4,681 (547)             -   
Net income attributable to the shareholders of Petrobras 3,972 (865)             -   
Average refining cost (US$ / barrel) – Brazil 1.64 1.78 (7.9)
Average domestic basic oil products price (US$/bbl) 75.21 50.20 49.8

 

For the period Jan-Sep/2021, Refining, Transportation and Marketing gross profit was US$ 4,105 million higher than in the period Jan-Sep/2020. In Jan-Sep/2021 Brent prices appreciated which resulted in a higher gross profit margin as inventory was purchased at earlier, lower prices. This effect was negative in Jan-Sep/2020 because of the strong reduction in Brent prices following the impact of the covid pandemic on global demand.

 

The operating income for the period Jan-Sep/2021 reflects higher gross profit and lower selling expenses, due to reduced international freight prices and to reduced personnel expenses, due to the indemnity expenses related to the voluntary severance program recorded in 2020.

 

The refining cost in the period Jan-Sep/2021 was US$ 1.64/bbl, 7.9% lower than in the period Jan-Sep/2020, due to the exchange rate variation and to a reduction of personnel costs due to the indemnity expenses related to the voluntary severance program recorded in 2020.

 

 

 

Operational information

 

Thousand barrels per day (mbbl/d) Jan-Sep/2021 Jan-Sep/2020 Change (%)
Total production volume 1,832 1,805 1.5
Domestic sales volume 1,792 1,630 9.9
Reference feedstock 2,176 2,176 -
Refining plants utilization factor (%) 81% 79% 2.5
Processed feedstock (excluding NGL) 1,720 1,684 2.1
Processed feedstock 1,758 1,730 1.6
Domestic crude oil as % of total 92% 94% (2.1)

 

Domestic sales in the period Jan-Sep/2021 were 1,792 mbbl/d, an increase of 9.9% compared to Jan-Sep/2020, mainly due to the 21.2% growth in diesel sales between periods due to the increase in demand for diesel following the economic recovery. Gasoline sales increased 18.7% between the periods due to greater mobility in the period Jan-Sep/21 compared to the period Jan-Sep/2020, which included the start of the COVID-19 pandemic. Fuel oil sales increased by 67.6% driven by the increase in the thermoelectric demand.

 

Naphtha had a 45.6 % reduction in sales volume in Jan-Sep/2021 compared to Jan-Sep/2020, due to the new contracts in force with Braskem, with smaller committed amounts compared to the previous contract.

 

Total production of oil products for the period Jan-Sep/2021 was 1,832 mbbl/d, 1.5% above Jan-Sep/2020. The main increases in volumes were in diesel and gasoline production.

 

Processed feedstock for the period Jan-Sep/2021 was 1,758 mbbl/d, with a utilization factor of 81%, 2.0% above Jan-Sep/2020.

 

 

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Gas and Power

Financial information

 

US$ million Jan-Sep/2021 Jan-Sep/2020 Change (%)
Sales revenues 8,306 5,469 51.9
Gross profit 2,648 2,753 (3.8)
Income (expenses) (2,183) (1,840) 18.6
Operating income (loss) 465 913 (49.1)
Net income attributable to the shareholders of Petrobras 333 627 (46.9)
Average natural gas sales price – Brazil (US$/bbl) 41.43 34.96 18.5

 

For the period Jan-Sep/2021, the gross profit of the Gas and Power segment was US$ 2,648 million, a decrease of 3.8% when compared to the period Jan-Sep/2020, mainly due to the increase in the gas acquisition costs, partially offset by higher power generation. 

 

For the period Jan-Sep/2021, the operating income was US$ 465 million, 49.1% lower than for the period Jan-Sep/2020, mainly due to lower gross profit, higher sales expenses, despite the divestment made (remaining portion of NTS and sale of wind farms). 

 

 

Operational information

 

  Jan-Sep/2021 Jan-Sep/2020 Change (%)
Sale of Thermal Availability at Auction (ACR)- Average MW 2,458 2,404 2.2
Electricity generation - average MW 3,383 1,192 183.8
National gas delivered - million m³/day 43 45 (4.4)
Regasification of liquefied natural gas - million m³/day 22 3 633.3
Import of natural gas from Bolivia - million m³/day 20 17 17.6
Natural gas sales - million m³/day 85 64 32.8

 

For the period Jan-Sep/2021, the ACR sales increased by 2.2% when compared to the period Jan-Sep/2020, mainly due to the start of the new contract for Ibirité Thermoelectric Power Plant (UTE Ibirité) in January 2021, whose sale took place in the 2019 A-2 auction.

 

The volume of electricity generation increased by 183.8% due to the decrease in the levels of hydroelectric plants reservoirs, which increases the market demand for electricity from other sources, such as thermoelectric. 

 

Higher volume of natural gas sold to the thermoelectric sector, due to the increase in demand from our thermoelectric plants and other players, resulted in higher need for supply through LNG regasification. 

 

 

15 
 

 

 

GLOSSARY

ACL - Ambiente de Contratação Livre (Free contracting market) in the electricity system.

ACR - Ambiente de Contratação Regulada (Regulated contracting market) in the electricity system.

Adjusted Cash and Cash equivalents - Sum of cash and cash equivalents, government bonds and time deposits from highly rated financial institutions abroad with maturities of more than 3 months from the date of acquisition, considering the expected realization of those financial investments in the short-term. This measure is not defined under the International Financial Reporting Standards – IFRS and should not be considered in isolation or as a substitute for cash and cash equivalents computed in accordance with IFRS. It may not be comparable to adjusted cash and cash equivalents of other companies, however management believes that it is an appropriate supplemental measure to assess our liquidity and supports leverage management.

Adjusted EBITDA Net income plus net finance income (expense); income taxes; depreciation, depletion and amortization; results in equity-accounted investments; impairment; reclassification of comprehensive income (loss) due to the disposal of equity-accounted investments; results on disposal/write-offs of assets and on remeasurement of investment retained with loss of control; and results from co-participation agreements in bid areas. Adjusted EBITDA is not a measure defined by IFRS and it is possible that it may not be comparable to similar measures reported by other companies. However, management believes that it is an appropriate supplemental measure to assess our liquidity and supports leverage management.

Adjusted EBITDA Margin Adjusted EBITDA divided by Sales revenues.

ANP - Brazilian National Petroleum, Natural Gas and Biofuels Agency.

Capital Expenditures – Capital expenditures based on the cost assumptions and financial methodology adopted in our Business and Management Plan, which include acquisition of PP&E, including expenses with leasing, intangibles assets, investment in investees and other items that do not necessarily qualify as cash flows used in investing activities, primarily geological and geophysical expenses, research and development expenses, pre-operating charges, purchase of property, plant and equipment on credit and borrowing costs directly attributable to works in progress.

CTA – Cumulative translation adjustment – The cumulative amount of exchange variation arising on translation of foreign operations that is recognized in Shareholders’ Equity and will be transferred to profit or loss on the disposal of the investment.

EBITDA - net income before net finance income (expense), income taxes, depreciation, depletion and amortization. EBITDA is not a measure defined by IFRS and it is possible that it may not be comparable to similar measures reported by other companies. However, management believes that it is an appropriate supplemental measure to assess our liquidity and supports leverage management.

Effect of average cost in the Cost of Sales – In view of the average inventory term of 60 days, the crude oil and oil products international prices movement, as well as foreign exchange effect over imports, production taxes and other factors that impact costs, do not entirely influence the cost of sales in the current period, having their total effects only in the following period.

Free Cash Flow - Net cash provided by operating activities less acquisition of PP&E, intangibles assets (except for signature bonus, including the bidding for oil surplus of the Transfer of Rights Agreement, paid for obtaining concessions for exploration of crude oil and natural gas) and investments in investees. Free cash flow is not defined under the IFRS and should not be considered in isolation or as a substitute for cash and cash equivalents calculated in accordance with IFRS. It may not be comparable to free cash flow of other companies. However, management believes that it is an appropriate supplemental measure to assess our liquidity and supports leverage management.

Gross Debt – Sum of current and non-current finance debt and lease liability, this measure is not defined under the IFRS. The global adverse scenario encouraged the Company to revise its top metric relating to indebtedness, contained in the Strategic Plan 2020-2024, replacing the Net debt / Adjusted EBITDA ratio with the Gross debt.

The target approved for the Gross debt, in the scope of the Strategic Plan 2021-2025, is US$ 67 billion for 2021 and is US$ 60 billion for 2022.

Leverage – Ratio between the Net Debt and the sum of Net Debt and Shareholders’ Equity. Leverage is not a measure defined in the IFRS and it is possible that it may not be comparable to similar measures reported by other companies, however management believes that it is an appropriate supplemental measure to assess our liquidity.

Lifting Cost - Crude oil and natural gas lifting cost indicator, which considers expenditures occurred in the period.

LTM Adjusted EBITDA – Adjusted EBITDA for the last twelve months.

OCF - Net Cash provided by (used in) operating activities (operating cash flow)

Operating income (loss) - Net income (loss) before finance income (expense), results in equity-accounted investments and income taxes.

Net Debt – Gross Debt less Adjusted Cash and Cash Equivalents. Net debt is not a measure defined in the IFRS and should not be considered in isolation or as a substitute for total long-term debt calculated in accordance with IFRS. Our calculation of net debt may not be comparable to the calculation of net debt by other companies. Management believes that net debt is an appropriate supplemental measure that helps investors assess our liquidity and supports leverage management.

Results by Business Segment – The information by the company's business segment is prepared based on available financial information that is directly attributable to the segment or that can be allocated on a reasonable basis, being presented by business activities used by the Executive Board to make resource allocation decisions and performance evaluation.

When calculating segmented results, transactions with third parties, including jointly controlled and associated companies, and transfers between business segments are considered. Transactions between business segments are valued at internal transfer prices calculated based on methodologies that take into account market parameters, and these transactions are eliminated, outside the business segments, for the purpose of reconciling the segmented information with the consolidated financial statements of the company.

 

 

 

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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: November 26, 2021

 

PETRÓLEO BRASILEIRO S.A–PETROBRAS

By: /s/ Rodrigo Araujo Alves

______________________________

Rodrigo Araujo Alves

Chief Financial Officer and Investor Relations Officer