Hi. Good afternoon, everyone. Welcome to Petrobras Webcast with Analysts and Investors about the First Quarter 2023 Results. It's great to have you join us today. We'd like to inform you that all participants will follow the transmission by Internet as listeners. After an introduction, a Q&A session will begin.

You can send us questions by e-mail at petroinvest@petrobras.com.br.

Today, we have with us Anna Paula Zettel, Upstream Executive Manager representing the Chief Exploration and Production Officer, Joelson Mendes; Carlos Travassos, Chief Engineering, Technology & Innovation Officer; Clarice Coppetti, Chief Corporate Affairs Officer; Claudio Schlosser, Chief Logistics, Commercialization & Markets Officer; Mario Spinelli, Chief Governance & Compliance Officer; Mauricio Tolmasquim, Chief Energy Transition & Sustainability Officer; Sergio Caetano Leite, Chief Financial Officer & Investor Relations Officer; and William França, Chief Industrial Processes & Product Officer.

To begin, we will watch a message from our CEO, Jean Paul Prates..

Dear investors, as we open this event to discuss our results, I believe it is of the utmost importance to talk about the future of Petrobras and the perspectives opened up by yet another quarter of solid operational and financial performance, the first under this new management team.

In these first 100 days, we focused our efforts on reorganizing the company structure, preparing Petrobras for the future, especially to lead the just energy transition. We continue to reach production records in the pre-salt, and to increase the efficiency of our refineries.

Our operating cash generation remains consistent and our debt reached the lowest level since 2010. We have solid fundamentals, which underpin our plan to diversify our investments to strengthen Petrobras as an integrated, robust and long living energy company.

We will always pursue returns on investments and reductions in the cost of capital, maximizing the company's value and seeking to develop the Brazilian market with sustainability.

Total attention to people is our nonnegotiable priority, because only a skilled and diverse technical staff will allow us to meet the dynamic demands of the market, especially the energy transition.

The investment in profitable exploration and production assets and in adjusting the refining facilities to the Brazilian markets demands our natural movements to ensure the energy supply that society needs.

We will continue our efforts to decarbonize our production processes and to develop greener products, which we understand to be the only way looking forward for the oil and gas industry, reducing its emissions and consolidating clean energy alternatives.

In fact, we are convinced that Brazil and Petrobras have all the conditions to be global leaders in a fair energy transition without ceasing to be an oil power, establishing partnerships with other companies and taking advantage of the different vocations and potentialities of all Brazil's regions. We will build this route alongside our partners.

This is our path going forward. We make decisions always reconciling our social function and respect for our governance, honoring the trust placed in our company by our shareholders. This is my greatest commitment, as well as that of the entire Executive Board, which I represent. Thank you very much to all of you..

Thank you. Now I'd like to pass the floor to Petrobras CFO, Sergio Caetano Leite. That will begin our webcast presentations of the first quarter 2023 results. Please Sergio, go ahead..

Hello, everyone. Good morning. I'm very happy to be here reviewing today my first quarter results webcast, and even happier to talk about the important and solid performance that Petrobras delivered in the first quarter of 2023.

We had very strong quarter from an operational and financial perspective and I will take a moment to highlight several important deliveries. First, from an operational angle, pre-salt production set a new monthly record in February 2023, and a quarterly record, reaching 77% of our total production.

In February, we also had a monthly production record at the FPSO Guanabara in the Mero field whose average oil production reached 179,000 barrels per day. We made the first injection of gas at the P-71 with continuing its ramp up in the Itapu field in Santos Basin pre-salt.

The production of diesel gasoline and jet fuel in the first quarter of 2023 reached 67% of total production, 1 percentage point higher than the first quarter of 2022. We also set production records for 10 PPM diesel at REPAR and REGAP refineries in January and the REPLAN refinery in March.

We advanced in development of more sustainable and efficient products with the certification of Diesel R at the REPAR. The launch of new premier gasoline, the exclusive commercialization of fuel oil with a maximum of 1% sulfur content in the domestic market and with the beginning of trade of Ultra Low Sulfur Marine Gas Oil.

Here it's important point out that we have recently undergone the organization adjustment to prepare the company for the future by creating the energy transition and sustainability executive option.

Any match we carry out the remain procurement to resume the works of the natural gas processing needs of the integrated project Route 3 in the GASLUB cluster in Itaboraí, which is strategic for the new natural gas flow from the Santos Basin.

Move over the financials, I would like to highlight our EBITDA which reached around $14 billion, a very robust amount for fourth highest Petrobras history. We had consistent operating cash generation with cash flow from our operations reaching the solid mark of $10.3 billion. The net debt EBITDA ratio reached its best mark since 2010.

It's also important to highlight that we had the lowest level of gross debt since 2010, reaching $53.3 billion. Return on capital employed reached 15.7%, the same level as in first quarter of 2022. And our net income reached $7.3 billion, and the free cash flow was around $8 billion, which are very significant levels.

We continue with commitment to generate value and financial sustainability by distributing results to society. As can be seen in our fiscal report, in the first quarter of 2023, we paid R$63 billion in tax and government take, we also paid $4.2 billion in dividends, bringing our cash levels to $15.8 billion.

In terms of the external environment, in the quarter, we had 8% drop in Brent prices and the average exchange rate went down 1% when compared to the fourth quarter of 2022. Next slide. As already mentioned, we had very robust EBITDA. Recurring EBITDA in the first quarter of 2023 reached $14.3 billion, in line with the first quarter of 2022.

Despite the 8% devaluation of Brent mainly explained by lower exploration expenses and legal contingencies. Next slide. Delve into the results by business segment.

In Exploration and Production, the impact of the Brent devaluation was partially offset by low expenses and higher productions, causing the segment's EBITDA to decline 1% when compared to first quarter of 2022.

In the downstream segment, EBITDA was 15% lower than the previous quarter due mainly to the effect of inventory turnover with reduction of Brent between the quarters. When look at the replacement cost, the results for the quarter grew 3% reflecting higher margins on oil products, main gasoline, due to the appreciation of the international margins.

In Gas and Power EBITDA rose 16% due to the favorable scenario and the actions taken to build a commercial portfolio resilient to the business risks. Next slide. As mentioned early, the results generated by operating activities and free cash flow reached very significant levels.

The level of cash flow generation, together with the inflow of resources from divestments were used to remunerate the shareholders, make investments, prepaid debt and amortize the principal and interest during the period and amortizing leasing liabilities. Next slide.

And when we look at our debt position, we have a very comfortable debt profile in terms of liquidity and financial strength. At the end of the first quarter of 2023, gross debt reached $53.3 billion as already stated, that's the lowest level since 2010. Net debt was $37.6 billion, a drop of 9.5% compared to year end 2022.

Our cash position remains quite robust, reaching $15.8 billion at the end of the first quarter. In addition, it's worth noting that we have variable revolving credit lines of $9 billion. We closed the quarter with an average funding rate of 6.5% per year in an average maturity of 12 years. Next slide.

In relation to portfolio management, we are reassessing the process in which no contracts were signed. It's important to emphasize that the projects that have already designed which are in current closing stage, shall be honored by the company. Up to April 2023, cash inflows related to these divestments totaled $2.1 billion.

In the first quarter of 2023, net income was $7.3 billion, compared to $8.2 billion in the fourth quarter of 2022. This result is mainly explained by the Brent devaluation and lower financial results, partially offset by the lower operation expenses.

In the addition, there was a higher income tax expense, which was mainly due to the absence of tax credit in the fourth quarter of 2022 because of the dividend distribution for fiscal year 2022 as interest on equity.

In this first quarter of 2023, tax and government take to federal, state and municipal governments amounted to R$63 billion represent the return to society of 54% of the company operating cash generation. I finish here my presentation. Please, we can move forward..

Thank you, Sergio. Now, I'll pass the floor to Chief Energy Transition and Sustainability Officer, Mauricio Tolmasquim. Mauricio Tolmasquim, go ahead..

The first is the opening of the natural gas marketing in the country. And as consequence, the increase in the participation of order agent get used to -- that produce gas and use to sell it to Petrobras that are now selling to the market directly.

Another factor that explain this reduction of the market was the lower thermal consumption given the recovery of reservoir levels. In April, the levels of the reservoir ended at 88% at very high level in the power sector -- Brazilian power sector.

The lower thermoelectric dispatch partially displaying the excellent result of this follow-up in this first quarter. Why that? Because the drop of thermoelectric dispatch need that less LNG was important at the time when the fuel is very expensive in the international market.

So, the lower dispatch of thermal power plant at this moment where the natural gas price is very high in the world, was very good for Petrobras result.

It worth also mentioning regarding the relationship, which in the long-term market of gas distributor, commercial action to solve disputes that arose in the recent past, the signing of a new contract with an extension of sales portfolio. That was I had to say now. Thank you very much..

Thank you, Tolmasquim. Now, we'll continue with Carlos Travassos, Chief Engineering, Technology & Innovation Officer to present the E&P results..

Anna Nery and Anita Garibaldi. Anna Nery, we have started production. Like I said Anita Garibaldi is we added in mooring at this moment, yes. Actually now if you take a look in our strategic plan, '23-'27, yes.

From these 18 units, we have four in final location P-71 that is already in production, that we anticipated, Anna Nery now is in production as well. And Anita Garibaldi, that is in mooring process. And we also have Almirante Barroso, that is ready to start production waiting for authorization.

Coming back to the revitalization, that's a fantastic program. And we intend to increase 20% in our production and reduce 6% of greenhouse gas, yes. And this is a progress -- all the time that we are talking about production systems, are used to show the units.

But it's important to remind that we have a subsea working and a very hard subsea working, especially when talking about revitalization, when we're going to build 14 new wells and relocate six wells.

So -- and in these kinds of projects, we have a especial feature that we also have to remove some lines here and there that's required for us, synchronization and very good planning to do. Now we can go to the next please. Here talking about updating the start-up schedule for '23-'27. I think you all of you are very familiar with this picture, yes.

That's the 18 units that we are going to start operation and this is strategic plan and we have made some shifts with Búzios 7 IPB, just highlighted that we're talking about. Despite all that is changing the year, we're talking about minor shifts is not big and there is impact on our production growth.

In this slide, you can -- also you can see the picture of P-78 for Búzios unit, for Búzios that is in under construction. Now, you can go to the next. Oh, yes, talking about downstream, yes, we have a very important achievement in this quarter that we signed the contracts to restart our process gas units in Itaboraí, GASLUB, yes.

So that was interrupted next year. And we got pulling back again in the fantastic time, in six months' times. Now we have to hold the contract, sign it. And actually the people mobilize on site, yes. So we keep the planning to start operation 2024. And another really important achievement, this is the contract extension of Train 1 of RNEST.

So Train #1, we actually are going to expand from 115,000 barrels a day to 130,000 barrels a day. And the completion of this work is scheduled for 2024. And just another information, probably most of you know, we have already in construction the air emission removal unit as the construction is in progress in RNEST as well.

Well, that's what I have for today. Thank you very much for your attention..

Thank you, Travassos. Now I will pass the floor to William França, Chief Industrial Process & Product Officer. William, go ahead..

utilization factor refineries; and operation availability. In the first quarter, the utilization factor in our refineries was 85%, I think that is an important and excellent result considering that we had three big turnarounds during this period in REFAP, REVAP and RPBC.

We spend almost R$1.2 billion by maintaining more than 800 larger equipments, like you had changes, pipelines, pumps, towers and reactors. And we had more than 10,000 collaborators contributed and performed in this big challenge, helping us. In April, we had our utilization factor of 29%. In that beginning of May, we are performing above 90%.

Regarding the operational availability, in the first quarter of '23 we obtained a result above 96%, which most of our refiners achieved the level of the best refineries including the companies of United States, okay? Thank you for your concentration. Have a nice day..

Thank you, William. Now I'll call Claudio Schlosser, Chief Logistics, Commercialization and Markets Officer. Schlosser, go ahead..

Yes, thank you. Hello, everybody. It's a pleasure to be here with you today to talk about our first quarter '23 results. Next slide please. On this slide, we'll talk about the oil product sales. As you can see, there was a reduction in sales of oil products in the domestic market, dropped 5% compared with the previous similar quarter.

This was already expected, as diesel and gasoline seasonally have a weaker consumption in the first quarter of the year. It is important to see that in this quarterly composition, there is still the impact of divestment of REMAN, REMAN we had to cool in at the end of the last year.

Even so, it is important to highlight that gasoline sales were the highest versus that the first quarter in the last six years, driven by the greater competitiveness of gasoline in relation to ethanol.

Regarding the foreign markets, the drop of fuel oil export was caused by lower production due to the scattered shutdowns of some of our biggest refineries, as mentioned by Director William. Typically the topic of the product sales, I will like to take the opportunity to bring for us our focus on the market.

Retail market has even become part of the name of this world. That's why I want to highlight the startup of the new diesel and gasoline sales center in November in Almirante Barroso, Búzios. This action constraints our presence in the Midwest and enables the practice of specific commercial action in the region.

This is a very important milestone that guarantees Petrobras' presence in the region that should grow the most in the coming years. Next slide, we will talk about oil exports flow. As you can see in this slide, talking about oil exports, our main destination remains China.

However, it is important to enhance that we continue to work constantly to seek global opportunities and to develop new clients, which generate more value for Petrobras in addition of diversifying the client portfolio. Another key action is the market development for oil streams such as Sururu, Mero and Atapu.

The Búzios and Tupi streams are already well known in the international market with the guarantees and better liquidity in the pricing. Next slide. Finally, I present the highlights of the quarter that reinforce Petrobras' commitment to supplying more responsible fuels.

We have our first bunker filling fleet vessel with renewable content with Darcy Ribeiro, this ship that is in the picture and it's part of the Petro strategy.

This fuel was formulated with 10% soy biodiesel, reducing about 7% of greenhouse gas emissions, considering the complete lifecycle of the fuel, a big step towards the goal of reducing carbon emissions. During the 40 days of testing, no anomalies were reported by the fuel or operational differences in relation to the mineral bunker.

Samples of collected fuel and ship monitoring data are in the final stage of analysis. Another action in the same line was that we started offering the domestic market exclusively fuel oil with a maximum sulfur content of 1% discontinuing the sale of fuel oil with a maximum sulfur content of about 2%.

By ensuring that all fuel oil sold by the company in the domestic market has a low sulfur content, we help consumers in the industry segment to reduce their emissions. I also highlight the sales of the new product, the Ultra Low Sulfur Marine Gas Oil, marine fuel with the maximum sulfur content of 0.1%.

The new marine gas oil is produced at the Presidente Bernardes refinery, RPBC in Cubatão, São Paulo. Previously, the products sold at the Port of Santos to long haul and the [coverage] ship haulers was conventional Petrobras marine gas oil containing a maximum super content of 0.5%.

And introducing this Ultra Low Sulfur MGO, we started helping ship haulers to reduce emissions of the problem content sulfur oxide, in addition to avoiding fueling stops and all the way up the vessels passing through the sulfur emission control areas, reducing the cost and the time.

These actions show that we are on the right track in developing cleaner fuels and guaranteeing lower emissions, generating great value for the company, society and the environment. That's the final slide. And going back to Carla..

Thank you, Schlosser. Thank you all, we can move on to our Q&A session. And the first question that we received comes from Bruno Amorim with Goldman Sachs and it's for Sergio.

Sergio, Petrobras CapEx is poised to grow in the next few years under the current and possibly the new strategic plan to be announced, what is the comfortable level of cash position the company should target, more, less or in line with the prior management target of $8 billion?.

Thank you, Bruno, for your question. I believe that the levels set up in the current business are very prudent. I think we must keep solid parameters in terms of liquidity and leverage. We wanted to always keep robust financial health territory, which allow us to face inevitable downcycles in oil prices.

Also, we need to be sure that our investments will be self-funded with our operational cash flow, nonetheless, allowing to emphasize that the execution of the new business plan may result in a revision of the current targets. Than you, Bruno..

Thank you, Sergio. The next question comes from Vicente Falanga with Bradesco BBI. And it's for Travassos. Travassos, the company recently announced the delay in the startup of some platforms.

What was the major cause of that?.

Thank you very much for your question. That's a very good question. Actually, we have in that -- actually it's a minor adjustment on the schedule.

Despite of we see the shift from one year to another year, yes, we are talking about minor change, and then maybe due to some perception of our risk analysis, and these perceptions is regarded for the supply chain markets, both for top sides and also for subsea.

But just for information, if you take a look at into an IPB, that's we're talking about 13 days of shifts, yes, not too much. Of course, when you see a shift probably one year to another year, seems that you have a big change yes. But here we're not talking about a big change.

But Petrobras, all the time that we are having a change, that appears in our business plans, we are very transparent, and it's important to show up and analyze to the market, yes. But this change does not bring any impact on our production curve, okay? Thank you very much for your question..

Thank you, Travassos. The next question comes from Luiz Carvalho with UBS. And it's for Tolmasquim. Tolmasquim, we are seeing a series of comments regarding the company's focus in the future, particularly with diversification of investments focused on energy transition.

Could you list some potential investments options, how fast the investment portfolio could be built? This portfolio could be made through organic investments or potential acquisitions? Will the company pursue assets in petrochemicals, renewable power generation, offshore wind, fertilizers, biofuels, fuel distribution, new refiners, or some other sector? In your view, is there any target on how much this could represent from future investment plans?.

Thank you very much, Luiz. Well, in fact, we are planning to diversify our investment regarding renewables. Let's say, we are talking about the investing in offshore wind, green hydrogen, CCUS and other possibilities. We're still doing our strategic plan for the next cycle.

So this strategic plan that we are being able to understand to know which technology we are going to invest. What costs? The investment can be, let's say, through costs -- organic investments, but it's not just got the possibility to make some acquisition out. So our preference for organic investments.

We want to do this mainly with partnership with other companies, I think is the best way to do new investments, and mainly with big companies.

And in terms of target about future investment plans, we don't have yet the targets, because as I have said, the strategic plan is being doing, but I could say that we are going to do this with derisked financial responsibility. The idea is that it's possible to do some diversification, but maintaining our financial indicators..

The next question also from Luiz Carvalho with UBS is for Schlosser. Schlosser, the company's current fuel price policy considers international price and import costs.

What parameters could be used in a possible new policy? Is exports parity for the domestically produced products an option? Does the company considers holding lower margins on the domestically produced products in order to reduce price pressure for the final consumer?.

Thanks for your question, Luiz. First, I would like to take the opportunity to comment that although the current price policy is using a lot, what is up to Petrobras is to elaborate its commercial strategy. That being said, the import parity is a reference to the cost of our importing competitors.

But it doesn't have to be the only reference for Petrobras. We have other opportunities that we can explore through our installed refinery capacity, logistics integration [with all the shine] and operational efficiency that allows us to compete efficiently, preserving the company's valued innovation. That is there -- that's the answer.

Back to you, Carla..

Thank you, Schlosser. The next question comes from Monique Greco with Itaú BBA. She sent us a message. Thank you for the opportunity for addressing our questions. On behalf of Itaú, I'd like to wish the new Executive Board good luck in this new phase. The first question from Monique is to Spinelli.

Could you comment on the challenge you expect to encounter in your new position? And if possible, share some outlook plans and ideas to be implemented during your term..

Hi, Monique. Thanks for your question. First of all, I consider that's important to point out that we already had a very robust integrity….

Spinelli, you have to turn on the camera. Sorry..

Turn on.

Is it working, Carla? Can you see?.

Now I can see. Thanks..

Okay. And so first of all, I think that we must consider that we have a very robust integrity and governance system. But that doesn't mean that there isn't anything to do. Quite the contrary. What we need to do is now to enhance this system, so that it becomes more sustainable and totally aligned with our business.

And there are important aspects related to improving our performance that can be considered, such as our strategy to prevent and combat harassment, it's just an example. This is an important point for us, and we will include it. Moreover, some technology tools can be incorporated into our compliance actions, making them more efficient and agile.

We will enhance our compliance risk management, also focusing on issues that may represent risks of damage to the company's strategic objectives. And with this, we will be able to identify the most exposed areas and work in a preventive way.

But the point that I consider most important is that we need to ensure that our integrity program is strong and responsive enough to protect our assets, to protect the company, and at the same time, to ensure efficiency, respecting all the rules and focusing on people. I think that's it. Thank you, Monique..

Thank you, Spinelli. The next question from Monique is to William. William, despites the refinery maintenance carry out in the recent quarters, the company has managed to maintain high levels of refinery utilization rates.

In this regard, is there still room to increase the current utilization levels? What would be the desired level of refinery utilization for the refining park as a whole?.

Hi, Monique. Thank you for a good question for us. The answer is, yes. We have got conditions to increase our refinery utilization because of two reasons. Okay? First one, we're performing and operating our refiners and we have an excellent reliability. So important to remain in this kind of this one.

And the second one, the second point is because we won't have got big turnarounds for the next month and through the end of the year.

Then I think that we have who have good rules to increase our utilization for the next month above 90% in order to get to market opportunities, okay? But the goal is to maximize our production and the quality of our operations, by respecting all of the aspects of safety, environment, health, any integrity, okay? Thank you for your question, Monique..

Thank you, William. And the next question is about E&P and I'll call Anna Paula Zettel.

Anna Paula, regarding the equatorial margin, could you comment on the company's expectation regarding the approvals at IBAMA? If the regulatory agency president follows the negative opinion presented by the technical area earlier this month, could you discuss the medium long-term alternatives for the company to continue increase its production figures?.

Thank you, Carla. Thank you, Monique, for your question. Well, Petrobras is awaiting for IBAMA positions on the preoperational assessment. This is an exercise to evaluate the company response capacity in an unlikely accident event. So it's part of the process and we are pursuing that authorization to the next steps of the permitting process.

We are following strictly the requirements of IBAMA. And there are no pending issues from Petrobras. All the resources are in the locations waiting for IBAMA's authorization. So we understand that the activity in the region is very safe. That's the reason we have planned $3 billion to drill 16 wells in the equatorial margin.

But we also have investments plan in exploratory phase, and we are monitoring closely all opportunities abroad. That's part of our strategy to build up our reserves and to manage our portfolio. So thank you very much, Monique, again..

Thank you, Anna Paula. The next question comes from Gabriel Barra with Citi and it's for Mauricio Tolmasquim.

Tolmasquim, could the managers give us more information, return levels, time for construction on offshore wind farms, projects being studied together with ethanol?.

Well, thank you for the question. Until the moment we have only let's say a Memorandum of Understanding and some projects, some areas that we apply to environmental license at the IBAMA. But let's say we are waiting for the establishment of the regulatory framework to start studying specific projects.

So at the moment we don't have any figures about investments, timeframe and so on. I believe that means not sure of time of -- we are going to have this kind of formation. Thank you..

Thank you, Tolmasquim Thank you all. At this time, the Q&A session is over. If you have any further questions, you can send to our Investor Relations team. I'd like to thank you all for your attention. It's very important quarter with a solid result from operation and financial point of view. Thank you all and have a great day..