Negative Points

• Operating expenses are running above plan due to higher freight, logistics, and exchange rate effects, potentially exceeding full-year projections.

• Gross debt increased to $70.8 billion due to recognition of lease liabilities from contract renegotiations, though partially offset by debt repayments.

• Diesel imports remain necessary despite increased refining output, exposing the company to import parity price volatility.

• Uncertainty regarding regulatory changes in the gas market could impact project economics and require reassessment of investments.

• Potential for extraordinary dividends is considered unlikely in the near term, as surplus cash is prioritized for debt reduction and project acceleration.

• Braskem's financial difficulties and potential legal reorganization pose a risk, with Petrobras still assessing its options and potential capital implications.

• Exploration results in the equatorial margin are pending, with drilling still in progress and no guarantee of commercial discoveries.

Q & A Highlights

Q: With record production and strong cash generation, how will Petrobras allocate the incremental capital, and is there room for extraordinary dividends? A: Fernando Melgarejo, CFO, stated that the priority is to bring forward high-return investments, such as the P80 platform, and to accelerate the convergence of net debt to the $65 billion target ahead of the 2030 plan. While extraordinary dividends are considered unlikely in the current scenario, the company maintains its commitment to the 14% ordinary dividend formula, and any surplus would naturally flow to shareholders if no value-accretive investments are available.

Q: Can you provide an update on the production outlook and the ramp-up of new platforms like P80, P82, and P83? A: Magda Chambriard, CEO, and Renata Baruzzi, Chief Engineering Officer, confirmed that production surpassed 2.7 million barrels per day, exceeding guidance. The company is working to bring the P80 platform's production start forward to Q1 2027, with P82 and P83 scheduled for 2027. Sylvia Anjos, E&P Chief, added that the production guidance remains at the top of the range, with a 4% leeway, and highlighted efforts to reduce platform downtime to maximize output.

Q: How sustainable is the low production decline rate of 4% in the pre-salt fields? A: Sylvia Anjos, Chief Exploration and Production Officer, explained that the low decline is driven by a multi-pronged strategy: advanced seismic imaging for better reservoir understanding, intelligent well completions to manage water and gas zones, record-breaking water injection for reservoir pressurization, and strategically positioned supplemental wells. This approach, combined with the management of giant fields like Buzios, ensures production sustainability and contributes significantly to partner results.

Q: What is Petrobras's stance on the potential judicial reorganization of Braskem, and what is the company's role in the negotiations? A: Magda Chambriard, CEO, noted that Petrobras has gained more political influence under the new shareholders' agreement and is now closely examining Braskem's situation. Fernando Melgarejo, CFO, added that Petrobras is evaluating all options within the shareholder agreement and is in contact with Braskem's board. He highlighted that an injunction is in place until October 24, and Braskem's earnings release on August 13 will be a key moment, limiting further public comment at this time.

Q: How does Petrobras plan to contribute to the government's goal of lowering gas prices, and what is the company's position on the proposed gas release? A: William Nozaki, Energy Transition Officer, stated that Petrobras's assessment is that simply transferring gas molecule ownership will not increase supply. He pointed out that the market is already open, with over 30 companies competing and private terminals surpassing Petrobras's capacity. Magda Chambriard, CEO, emphasized that any regulatory change would require a reassessment of project economics, as Petrobras must remain profitable. The company will participate in the 45-day public hearing on the draft proposal.

Q: What are the main priorities for international expansion, particularly in Africa and Latin America? A: Magda Chambriard, CEO, highlighted South America as a key area of expertise, with over 30 years of operations in Bolivia and new gas imports from Argentina. Sylvia Anjos, E&P Chief, added that Africa, especially the Atlantic margin, is a target due to geological similarities with Brazil's deep-water basins. The company is also exploring opportunities in Mexico through a non-binding MOU with Pemex, focusing on deep and ultra-deep waters where Petrobras has significant expertise.

Q: Given the high refinery utilization, what is the maintenance and downtime strategy for the second half of the year? A: William France, Chief Industrial Processing Officer, clarified that no major downtimes were postponed from H1 to H2. The only significant scheduled downtime is at Cubatao in August, with minor ones elsewhere. He highlighted that postponing Replan and Regap downtimes to 2027 allowed for record production, including a historical diesel production record in July. The company aims to maintain refinery utilization above 95%, focusing on reliability and safety.

Q: Can you provide updates on the Pira (Buzios) concession renewal, the equatorial margin drilling, and the potential for rare metals investments? A: Magda Chambriard, CEO, stated that Buzios concession negotiations are ongoing with government institutions, with no premature announcements. On the equatorial margin, drilling at the FZA-M-49 block is in its final phase, with results expected by the end of the month, and permits are being sought for three contingent wells. Regarding rare metals, the CEO clarified that no investment commitments have been made; these are only opportunities under assessment, subject to strict governance and economic viability.

Q: What is the company's strategy for M&A, particularly regarding fuel distribution, ethanol, and the Mataripe refinery? A: Magda Chambriard, CEO, reaffirmed that the strategic plan is the primary driver for M&A decisions. The non-compete agreement with Vibra will be honored, but the company has ambitions in B2B fuel distribution. Due diligence on the Mataripe refinery is ongoing with no new developments. William Nozaki added that ethanol remains a priority segment, with negotiations progressing, and any developments will be communicated in due time, respecting confidentiality.

Q: How is Petrobras managing its diesel import strategy given the current price scenario and local prices below import parity? A: Angelica Laureano, Chief Logistics and Commercialization Officer, explained that import decisions are based on competitiveness and profitability criteria, considering customer commitments, seasonal demand, refining margins, and logistics. The company maintains its commercial strategy, supported by public policy, to keep customer-perceived prices lower. Imports are occurring naturally to meet demand, with no shortage in the market.

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