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 October, 2020
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____
TABLE OF CONTENTS
|
Message from the CEO
|
3
|
|
Results Highlights
|
5
|
|
Consolidated Results
|
6
|
|
Net Revenues
|
6
|
|
Cost of Goods Sold
|
7
|
|
Operating Expenses
|
8
|
|
Adjusted EBITDA
|
9
|
|
Financial Results
|
10
|
|
Net Income
|
11
|
|
Special Items
|
12
|
|
|
|
|
CAPEX
|
14
|
|
Portfolio Management
|
16
|
|
Liquidity and Capital Resources
|
18
|
|
Debt
|
20
|
|
Results per Segment
|
21
|
|
Exploration and Production
|
21
|
|
Refining
|
23
|
|
Gas and Power
|
24
|
|
Reconciliation of Adjusted EBITDA
|
25
|
|
Financial Statements
|
26
|
|
Financial Information by Business Area
|
30
|
|
Glossary
|
39
|
Disclaimer
This report may contain
forward-looking statements. Such forward-looking statements only reflect expectations of the Company's managers regarding future
economic conditions, as well as the Company's performance, financial performance and results, among others. The terms "anticipates",
"believes", "expects", "predicts", "intends", "plans", "projects",
"objective", "should", and similar terms, which evidently involve risks and uncertainties that may or may not
be anticipated by the Company and therefore are not guarantees of future results of the Company's operations that may differ from
current expectations. The readers should not rely exclusively on any forward-looking statement contained herein. The Company does
not undertake any responsibility to update the presentations and forecasts in the light of new information or its future developments,
and the figures reported for 3Q20 onwards are estimates or targets. These indicators 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; they should not be considered in isolation or as a substitute for other financial metrics that have been
disclosed in accordance with BR GAAP or IFRS. See definitions of Free Cash Flow, Adjusted EBITDA and Net Indebtedness in the Glossary
and their reconciliations in the Liquidity and Capital Resources sections, Reconciliation of Adjusted EBITDA and Net Indebtedness.
Consolidated accounting information audited by independent auditors in accordance with international accounting standards (IFRS).
MESSAGE FROM THE CEO
The fast response to the global recession
is starting to pay off. It is being underpinned by the acceleration of strategy execution led by stronger integration of corporate
and operational areas and the dedicated efforts of agile teams.
Despite the constraints posed by
the pandemic and the uncertain environment, our operational and financial performance improved significantly as shown by the rise
in oil and natural gas production, capacity utilization of our refineries and the strong cash flow generation.
In the first nine months of the year
(9M20) our free cash flow reached US$16.4 billion and free cash to equity US$6.8 billion. Strong performance allowed us to reduce
gross debt to US$79.6 billion as of Sept. 30, 2020 from US$87.1 billion as of Dec. 30, 2019. This is lower than our previous goal
of keeping the same debt level of last year given the hostile scenario.
Over the last 21 months we were able
to redeem US$31.3 billion of debt - about US$1.5 billion per month - which is key to our company as it contributes to derisk the
balance sheet, to strengthen its resiliency to cashflow volatility and to free resources to be invested in our world-class assets.
Our adjusted cash holdings were reduced
to US$13.4 billion in 3Q20. There is room for additional cutbacks given the availability of more than US$8 billion of revolving
credit lines and the importance of efficient capital allocation.
Pre-salt output increased 32% in
9M20 compared to 9M19, reaching 70% of our oil production in Brazil. The three best performers among Buzios wells produced more
oil than all our E&P onshore and shallow water fields in Brazil in September (164 kbpd against 123 kbpd).
We approved the acquisition of P-71
from Tupi consortium to be used in Itapu field (100% Petrobras). This acquisition will enable us to anticipate first oil of this
field in 1 year, with an important contribution to the increase of the pre-salt production. Yet, Petrobras and its partners at
BMS-11, former owners of P-71, agreed to set up an updated development plan for Tupi that will seek to improve the field’s
recovery factor with greater capital efficiency.
Total lifting costs dropped to US$4.5
per boe from US$7.9 in 3Q19. About 60% of the decline was due to cost cutting, efficiency gains, increase in production and active
portfolio management, while the remainder was caused by the BRL depreciation against the USD. Pre-salt lifting cost was US$2.3
per boe, which suggests its low oil breakeven price.
In addition to its outstanding performance,
the pre-salt exploration – a combination of natural resources, the work of our best-in class engineers, geologists and technicians,
and advanced technology – contributes to reduce greenhouse gas emissions.
In this quarter we celebrated a major
achievement of our oil and gas E&P. The Tupi field, a world-class asset and still our largest oil field, reached the impressive
mark of two billion barrels of oil and gas produced since the first oil.
As previously announced, we have
submitted our project portfolio to a stress test. Given the scarcity of capital and the need to reduce debt to US$60 billion, projects
must compete for funding. Only those resilient to an average price of US$35/boe were approved.
As a consequence, our capex numbers
for the next few years will be lower. Our goal is to maximize value, not to maximize production.
The stronger integration with transportation,
inventory management, marketing and sales has allowed higher levels of capacity utilization of our refineries, above 80%, simultaneously
with lower inventories of oil and fuels.
Optimization of inventory management,
with the help of digital transformation, has been part of our initiatives to reduce costs and improve capital allocation, as we
believe that there is a lot of value to be unlocked.
Production and sales of diesel S-10,
with low-sulphur content, have been booming consistently with our focus on using technology to launch environmental-friendly fuels.
Our renewable diesel, based on hydrotreated
vegetable oil, and our proprietary technology HBIO, is waiting for authorization from Brazilian authorities. It is superior to
the biodiesel currently consumed in Brazil both in terms of GHG emissions and vehicle engine performance.
Together with our partners, Shell,
Galp and Repsol, we signed agreements involving the integrated system for transportation and the integrated system for processing
related to the subsea gas pipelines linking pre-salt fields to gas processing plants in the coast of Rio de Janeiro (Cabiunas and
Itaborai) and São Paulo (Caraguatatuba). The integration will add flexibility and productivity. For sure, it is a true milestone
for the opening of Brazil´s natural gas market to competition.
To support digital transformation
we inaugurated this month a center for excellence of artificial intelligence and analytics.
Operation safety is a key priority
for Petrobras. TRI, the rate of reported injuries per million of man hours, continues on the downward trend, reaching 0.60 in 9M20,
a benchmark for the global oil industry.
The divestment program slowed due
to the covid-19 pandemic, with transactions bringing only US$ 1.0 billion in 9M20. However, it remains alive and very active. There
are 10 signed transactions to be closed, 32 projects on binding phase and 7 projects in the initial phase of the divestment process.
To improve the governance of our
ESG agenda and to narrow our focus we are creating a climate change department. It will report to the executive director of institutional
relations and sustainability, who already has among his responsibilities the departments for social responsibility and health and
safety.
We approved a change in our dividend
policy, aiming to increase flexibility by giving the company the option to distribute dividends even with accounting losses in
a given year, as long as the net debt has reduced over the last twelve months, being such distribution limited to the amount of
such reduction.
We are very proud of our team and
happy with the company´s performance during such difficult times for the oil and gas industry and the global economy. However,
I would like to observe that complacency may be a major enemy of a company.
Sometimes, companies react to recessions,
improve, and then become complacent with costs and efficiency. As an outcome, they end up more vulnerable than in the period prior
to the recession.
We may have won just a battle, but
there are many difficult challenges ahead of us. We must remain on the same path, accelerating strategy execution always aiming
to be the best.
Roberto Castello Branco
Chief Executive Officer
Main Items *
Table 1 – Main items
|
|
|
|
|
|
|
Variation (%)
|
|
US$ million
|
3Q20
|
2Q20
|
3Q19
|
9M20
|
9M19
|
3Q20 /
2Q20
|
3Q20 /
3Q19
|
9M20 /
9M19
|
|
Sales revenues
|
13,148
|
9,481
|
19,416
|
39,772
|
56,721
|
38.7
|
(32.3)
|
(29.9)
|
|
Gross profit
|
6,280
|
3,417
|
7,561
|
16,961
|
21,853
|
83.8
|
(16.9)
|
(22.4)
|
|
Operating expenses
|
(2,751)
|
(1,416)
|
(4,069)
|
(19,858)
|
(4,885)
|
94.3
|
(32.4)
|
306.5
|
|
Consolidated net income (loss) attributable to the shareholders of Petrobras
|
(236)
|
(417)
|
2,289
|
(10,368)
|
8,170
|
(43.4)
|
−
|
−
|
|
Recurring consolidated net income (loss) attributable to the shareholders of Petrobras *
|
633
|
(2,536)
|
2,513
|
(2,635)
|
6,150
|
−
|
(74.8)
|
−
|
|
Net cash provided by operating activities
|
8,584
|
5,457
|
8,270
|
21,818
|
18,206
|
57.3
|
3.8
|
19.8
|
|
Free cash flow
|
7,468
|
3,012
|
6,480
|
16,391
|
12,784
|
147.9
|
15.2
|
28.2
|
|
Adjusted EBITDA
|
6,214
|
4,785
|
8,209
|
19,580
|
23,829
|
29.9
|
(24.3)
|
(17.8)
|
|
Recurring adjusted EBITDA *
|
6,925
|
3,375
|
8,851
|
18,750
|
25,045
|
105.2
|
(21.8)
|
(25.1)
|
|
Gross debt (US$ million)
|
79,588
|
91,227
|
89,901
|
79,588
|
89,901
|
(12.8)
|
(11.5)
|
(11.5)
|
|
Net debt (US$ million)
|
66,218
|
71,222
|
75,419
|
66,218
|
75,419
|
(7.0)
|
(12.2)
|
(12.2)
|
|
Net debt/LTM Adjusted EBITDA ratio
|
2.33
|
2.34
|
2.40
|
2.33
|
2.40
|
(0.4)
|
(2.9)
|
(2.9)
|
|
Average commercial selling rate for U.S. dollar
|
5.38
|
5.39
|
3.97
|
5.08
|
3.89
|
(0.2)
|
35.5
|
30.6
|
|
Brent crude (US$/bbl)
|
43.00
|
29.20
|
61.94
|
40.82
|
64.65
|
47.3
|
(30.6)
|
(36.9)
|
|
Domestic basic oil by-products price (US$/bbl)
|
47.97
|
36.79
|
73.05
|
50.20
|
75.06
|
30.4
|
(34.3)
|
(33.1)
|
|
TRI (total recordable injuries per million men-hour frequency rate)
|
-
|
-
|
-
|
0.60
|
0.75
|
-
|
-
|
(20.0)
|
|
|
|
|
|
|
|
|
|
|
* See reconciliation of Recurring net income
and Adjusted EBITDA in the Special Items section.
Consolidated Results
Net Revenues
Table 2 – Net revenues by products
|
|
|
|
|
|
|
Variation (%)
|
|
US$ million
|
3Q20
|
2Q20
|
3Q19
|
9M20
|
9M19
|
3Q20 /
2Q20
|
3Q20 /
3Q19
|
9M20 /
9M19
|
|
Diesel
|
3,642
|
2,513
|
6,030
|
10,241
|
17,398
|
44.9
|
(39.6)
|
(41.1)
|
|
Gasoline
|
1,705
|
914
|
2,346
|
4,518
|
7,291
|
86.5
|
(27.3)
|
(38.0)
|
|
Liquefied petroleum gas (LPG)
|
854
|
705
|
1,075
|
2,461
|
3,175
|
21.1
|
(20.6)
|
(22.5)
|
|
Jet fuel
|
187
|
76
|
928
|
1,113
|
2,852
|
146.1
|
(79.8)
|
(61.0)
|
|
Naphtha
|
434
|
258
|
352
|
1,364
|
1,247
|
68.2
|
23.3
|
9.4
|
|
Fuel oil (including bunker fuel)
|
152
|
122
|
227
|
540
|
772
|
24.6
|
(33.0)
|
(30.1)
|
|
Other oil by-products
|
722
|
501
|
915
|
1,915
|
2,582
|
44.1
|
(21.1)
|
(25.8)
|
|
Subtotal Oil By-Products
|
7,696
|
5,089
|
11,873
|
22,152
|
35,317
|
51.2
|
(35.2)
|
(37.3)
|
|
Natural gas
|
752
|
729
|
1,501
|
2,692
|
4,434
|
3.2
|
(49.9)
|
(39.3)
|
|
Renewables and nitrogen products
|
13
|
6
|
61
|
45
|
202
|
116.7
|
(78.7)
|
(77.7)
|
|
Revenues from non-exercised rights
|
134
|
143
|
174
|
368
|
508
|
(6.3)
|
(23.0)
|
(27.6)
|
|
Electricity
|
94
|
80
|
275
|
466
|
934
|
17.5
|
(65.8)
|
(50.1)
|
|
Services, agency and others
|
208
|
227
|
199
|
594
|
706
|
(8.4)
|
4.5
|
(15.9)
|
|
Total domestic market
|
8,897
|
6,274
|
14,083
|
26,317
|
42,101
|
41.8
|
(36.8)
|
(37.5)
|
|
Exports
|
3,889
|
2,799
|
4,856
|
12,308
|
12,650
|
38.9
|
(19.9)
|
(2.7)
|
|
Sales abroad
|
362
|
408
|
477
|
1,147
|
1,970
|
(11.3)
|
(24.1)
|
(41.8)
|
|
Total foreign market
|
4,251
|
3,207
|
5,333
|
13,455
|
14,620
|
32.6
|
(20.3)
|
(8.0)
|
|
Total
|
13,148
|
9,481
|
19,416
|
39,772
|
56,721
|
38.7
|
(32.3)
|
(29.9)
|
The 3Q20 results were marked by
the recovery of oil by-products demand in Brazil (18% QoQ growth in sales volumes), which, alongside the increase in our market
share, the continued high level of exports and the 47% growth in Brent oil prices, resulted in a 38.7% increase in net revenues
when compared to 2Q20.
The recovery in diesel and gasoline
sales stand out. These products were heavily affected by COVID-19 in 2Q20 and their quarterly recovery was the strongest across
our portfolio, both in terms of volumes and prices. As for diesel, the crop season in Brazil also contributed to its solid performance
in the quarter. Exports revenues also increased substantially, tracking Brent oil prices.
It is also worth mentioning that
the strong sales revenues were enabled by higher oil production, higher utilization factor of our refineries and crude inventory
drawdown. We ended the quarter with ongoing crude oil exports of 25 MMbbl.
In terms of revenue breakdown
in the domestic market, diesel and gasoline continued to be the main products, accounting, together, for 69% of the domestic oil
by-products sales revenues.
Crude oil exports to China returned
to pre-COVID levels, with the pick-up in demand in other markets. In 3Q20, we had the following distribution of export destinations:
Table 3 – Crude oil exports
|
Country
|
3Q20
|
2Q20
|
9M20
|
|
China
|
62%
|
87%
|
66%
|
|
Spain
|
9%
|
3%
|
6%
|
|
Chile
|
5%
|
4%
|
6%
|
|
Portugal
|
5%
|
1%
|
3%
|
|
United States
|
5%
|
0%
|
3%
|
|
Netherlands
|
3%
|
1%
|
3%
|
|
Índia
|
3%
|
0%
|
4%
|
|
Indonesia
|
3%
|
0%
|
1%
|
|
Others
|
5%
|
4%
|
8%
|
|
|
|
|
|
Table 4 – Oil by-products exports
|
Country
|
3Q20
|
2Q20
|
9M20
|
|
Singapore
|
65%
|
49%
|
56%
|
|
USA
|
23%
|
35%
|
26%
|
|
Aruba
|
5%
|
0%
|
1%
|
|
Netherlands
|
0%
|
7%
|
4%
|
|
Others
|
7%
|
9%
|
13%
|
|
Cost of Goods Sold
Table 5 – Cost of goods sold
|
|
|
|
|
|
|
|
Variation (%)
|
|
US$ million
|
3Q20
|
2Q20
|
3Q19
|
9M20
|
9M19
|
3Q20 /
2Q20
|
3Q20 /
3Q19
|
9M20 /
9M19
|
|
Brazilian operations
|
(6,665)
|
(5,758)
|
(11,494)
|
(22,040)
|
(33,155)
|
15.8
|
(42.0)
|
(33.5)
|
|
Acquisitions
|
(1,175)
|
(1,167)
|
(3,425)
|
(4,507)
|
(9,687)
|
0.7
|
(65.7)
|
(53.5)
|
|
Crude oil imports
|
(656)
|
(693)
|
(1,445)
|
(2,605)
|
(4,139)
|
(5.3)
|
(54.6)
|
(37.1)
|
|
Oil by-product imports
|
(318)
|
(329)
|
(1,144)
|
(1,166)
|
(3,160)
|
(3.3)
|
(72.2)
|
(63.1)
|
|
Natural gas imports
|
(201)
|
(145)
|
(836)
|
(736)
|
(2,388)
|
38.6
|
(76.0)
|
(69.2)
|
|
Production
|
(5,304)
|
(4,494)
|
(7,377)
|
(17,078)
|
(21,717)
|
18.0
|
(28.1)
|
(21.4)
|
|
Crude oil
|
(4,280)
|
(3,478)
|
(5,931)
|
(13,637)
|
(17,146)
|
23.1
|
(27.8)
|
(20.5)
|
|
Production taxes
|
(1,336)
|
(686)
|
(2,023)
|
(4,119)
|
(6,367)
|
94.8
|
(34.0)
|
(35.3)
|
|
Other costs
|
(2,944)
|
(2,792)
|
(3,908)
|
(9,518)
|
(10,779)
|
5.4
|
(24.7)
|
(11.7)
|
|
Oil by-products
|
(529)
|
(434)
|
(861)
|
(1,664)
|
(2,472)
|
21.9
|
(38.6)
|
(32.7)
|
|
Natural gas
|
(495)
|
(582)
|
(585)
|
(1,777)
|
(2,099)
|
(14.9)
|
(15.4)
|
(15.4)
|
|
Production taxes
|
(89)
|
(87)
|
(154)
|
(288)
|
(536)
|
2.3
|
(42.2)
|
(46.3)
|
|
Other costs
|
(406)
|
(495)
|
(431)
|
(1,489)
|
(1,563)
|
(18.0)
|
(5.8)
|
(4.7)
|
|
Services rendered, electricity, renewables, nitrogen products and others
|
(186)
|
(97)
|
(692)
|
(455)
|
(1,751)
|
91.8
|
(73.1)
|
(74.0)
|
|
Operations abroad
|
(203)
|
(306)
|
(361)
|
(771)
|
(1,713)
|
(33.7)
|
(43.8)
|
(55.0)
|
|
Total
|
(6,868)
|
(6,064)
|
(11,855)
|
(22,811)
|
(34,868)
|
13.3
|
(42.1)
|
(34.6)
|
In spite of the 38.7% increase in
quarterly sales revenues, cost of goods sold grew only 13% largely due to stable unit costs (except for production taxes, as explained
below), higher volume of our crude oil in the sales mix and to the sale, in 3Q20, of inventories built at lower Brent oil prices
in 2Q20 with an estimated positive impact of approximately US$ 0.4 billion.
The main variations were the 94.8% growth
in production taxes - and in special participation taxes in particular, as a result of the increase in Brent oil prices along with
the higher share of the more profitable pre-salt production – and the 38.6% increase in natural gas imports, as we had more
Bolivian natural gas in the mix to meet the increased demand.
Operating Expenses
Table 6 – Operating expenses
|
|
|
|
|
|
|
Variation (%)
|
|
US$ million
|
3Q20
|
2Q20
|
3Q19
|
9M20
|
9M19
|
3Q20 /
2Q20
|
3Q20 /
3Q19
|
9M20 /
9M19
|
|
Selling, General and Administrative Expenses
|
(1,484)
|
(1,537)
|
(1,759)
|
(4,767)
|
(4,720)
|
(3.4)
|
(15.6)
|
1.0
|
|
Selling expenses
|
(1,175)
|
(1,246)
|
(1,252)
|
(3,756)
|
(3,090)
|
(5.7)
|
(6.2)
|
21.6
|
|
Materials, third-party services, freight, rent and other related costs
|
(999)
|
(1,057)
|
(1,048)
|
(3,211)
|
(2,474)
|
(5.5)
|
(4.7)
|
29.8
|
|
Depreciation, depletion and amortization
|
(160)
|
(128)
|
(137)
|
(411)
|
(415)
|
25.0
|
16.8
|
(1.0)
|
|
Allowance for expected credit losses
|
27
|
(21)
|
(9)
|
(3)
|
(36)
|
−
|
−
|
(91.7)
|
|
Employee compensation
|
(43)
|
(40)
|
(58)
|
(131)
|
(165)
|
7.5
|
(25.9)
|
(20.6)
|
|
General and administrative expenses
|
(309)
|
(291)
|
(507)
|
(1,011)
|
(1,630)
|
6.2
|
(39.1)
|
(38.0)
|
|
Employee compensation
|
(228)
|
(226)
|
(361)
|
(742)
|
(1,115)
|
0.9
|
(36.8)
|
(33.5)
|
|
Materials, third-party services, freight, rent and other related costs
|
(54)
|
(42)
|
(111)
|
(190)
|
(391)
|
28.6
|
(51.4)
|
(51.4)
|
|
Depreciation, depletion and amortization
|
(27)
|
(23)
|
(35)
|
(79)
|
(124)
|
17.4
|
(22.9)
|
(36.3)
|
|
Exploration costs
|
(268)
|
(65)
|
(70)
|
(437)
|
(344)
|
312.3
|
282.9
|
27.0
|
|
Research and development expenses
|
(92)
|
(68)
|
(146)
|
(255)
|
(430)
|
35.3
|
(37.0)
|
(40.7)
|
|
Other taxes
|
(398)
|
(245)
|
(141)
|
(761)
|
(300)
|
62.4
|
182.3
|
153.7
|
|
Impairment of assets
|
13
|
−
|
(607)
|
(13,358)
|
(627)
|
−
|
−
|
2030.5
|
|
Other income and expenses, net
|
(522)
|
499
|
(1,346)
|
(280)
|
1,536
|
−
|
(61.2)
|
−
|
|
Total
|
(2,751)
|
(1,416)
|
(4,069)
|
(19,858)
|
(4,885)
|
94.3
|
(32.4)
|
306.5
|
Selling expenses were down 5.7% in
3Q20, despite higher sales due to the reduction in international freight costs following the normalization of rates after the market
turmoil in 2Q20, when ships were being used as storage facilities.
G&A expenses were 6.2% higher
mainly due to the centralization of operational functions in corporate departments, which resulted in the internal reallocation
of employees, consequently accounting their remuneration as expenses instead of costs.
Exploration costs increased mainly
due to the write-off of Peroba’s signature bonus in the amount of US$ 148 million.
Other taxes rose due to the approval
for the adhesion to tax amnesty programs in RJ and ES, through which we agreed to pay US$ 358 million to exclude a contingent liability
of US$ 690 million and guarantee the agreed ICMS rate to be used in the future.
There were other expenses of US$
522 million in 3Q20 as opposed to other revenues of US$ 499 million in 2Q20 due to the absence of positive events that helped the
previous quarter such as the exclusion in of VAT tax (ICMS)
from the calculation basis of the
PIS/COFINS and the gain in the equalization related to the individualization agreement of the Tupi area and Sepia and Atapu fields.
On the other hand, in 3Q20 there were higher gains with divestments mainly due to the Pampo and Enchova clusters sale (US$ 0.4
billion) and lower expenses of US$ 418 million (vs. US$ 1.8 billion in 2Q20) with: (i) unscheduled stoppages in refineries, due
to COVID impacts in 2Q20, (ii) voluntary dismissal program as we had less employees enrolling in the program in 3Q20, and (iii)
commodities and crude oil export hedges. Presently, we are no longer hedging our exports as markets have stabilized and the last
cargoes hedged were delivered in August. Nonetheless, we can resume this practice if we deem necessary.
Adjusted EBITDA
In 3Q20, adjusted EBITDA increased
30% when compared to 2Q20, reaching US$ 6.2 billion. This result was mainly due to the increase in Brent oil prices and sales volumes,
partially offset by lower crack spreads in oil by-products, mainly diesel, fuel oil, LPG and gasoline, driven by the high level
of global inventories.
Also contributed to this result lower
expenses with stoppages, lower provisions for the voluntary dismissal plans and lower hedging expenses. On the other hand, there
were higher exploration expenses mainly due to the write-off of the Peroba block and higher taxes due to the approval for the adhesion
to tax amnesty programs.
3Q20 adjusted EBITDA would have been
even better when compared to 2Q20, excluding the positive effects in 2Q20 related to the: (i) exclusion of VAT tax (ICMS) from
the calculation basis of the PIS/COFINS and (ii) equalization related to the individualization agreement of the Tupi area and Sepia
and Atapu fields (please see the explanation for recurring adjusted EBITDA and special items on the pages below).
The E&P Adjusted EBITDA/boe increased
45% in 3Q20 in relation to 2Q20 is mainly due to the hike in Brent oil prices.
Refining Adjusted EBITDA/bbl in 3Q20
increase reflecting the positive turnover effect when compared to 2Q20, as a result of higher Brent oil prices and lower operating
expenses, due to the absence of unscheduled maintenance stoppages at refineries, lower provision for voluntary dismissal plan and
lower legal expenses.
Financial results
Table 7 – Financial results
|
|
|
|
|
|
|
Variation (%)
|
|
US$ million
|
3Q20
|
2Q20
|
3Q19
|
9M20
|
9M19
|
3Q20 /
2Q20
|
3Q20 /
3Q19
|
9M20 /
9M19
|
|
Finance income
|
124
|
108
|
339
|
406
|
928
|
14.8
|
(63.4)
|
(56.3)
|
|
Income from investments and marketable securities (Government Bonds)
|
47
|
52
|
160
|
166
|
399
|
(9.6)
|
(70.6)
|
(58.4)
|
|
Discount and premium on repurchase of debt securities
|
1
|
−
|
2
|
2
|
5
|
−
|
(50.0)
|
(60.0)
|
|
Gains from signed agreements (electric sector)
|
−
|
−
|
(1)
|
−
|
79
|
−
|
−
|
−
|
|
Other income, net
|
76
|
56
|
178
|
238
|
445
|
35.7
|
(57.3)
|
(46.5)
|
|
Finance expenses
|
(1,814)
|
(1,134)
|
(2,425)
|
(4,570)
|
(5,793)
|
60.0
|
(25.2)
|
(21.1)
|
|
Interest on finance debt
|
(971)
|
(846)
|
(1,284)
|
(2,825)
|
(3,831)
|
14.8
|
(24.4)
|
(26.3)
|
|
Unwinding of discount on lease liabilities
|
(342)
|
(310)
|
(369)
|
(994)
|
(1,154)
|
10.3
|
(7.3)
|
(13.9)
|
|
Discount and premium on repurchase of debt securities
|
(521)
|
(2)
|
(665)
|
(783)
|
(850)
|
25950.0
|
(21.7)
|
(7.9)
|
|
Capitalized borrowing costs
|
213
|
215
|
314
|
707
|
1,007
|
(0.9)
|
(32.2)
|
(29.8)
|
|
Unwinding of discount on the provision for decommissioning costs
|
(147)
|
(160)
|
(194)
|
(499)
|
(605)
|
(8.1)
|
(24.2)
|
(17.5)
|
|
Other finance expenses and income, net
|
(46)
|
(31)
|
(227)
|
(176)
|
(360)
|
48.4
|
(79.7)
|
(51.1)
|
|
Foreign exchange gains (losses) and indexation charges
|
(2,496)
|
(1,231)
|
(654)
|
(6,830)
|
(2,297)
|
102.8
|
281.7
|
197.3
|
|
Foreign exchange gains (losses)
|
(1,351)
|
(2,009)
|
6
|
(5,127)
|
(215)
|
(32.8)
|
−
|
2284.7
|
|
Reclassification of hedge accounting to the Statement of Income
|
(1,143)
|
(1,043)
|
(746)
|
(3,586)
|
(2,240)
|
9.6
|
53.2
|
60.1
|
|
Pis and Cofins inflation indexation charges - exclusion of ICMS (VAT tax) from the basis of calculation
|
−
|
1,780
|
−
|
1,780
|
−
|
−
|
−
|
−
|
|
Other foreign exchange gains (losses) and indexation charges, net
|
(2)
|
41
|
86
|
103
|
158
|
−
|
−
|
(34.8)
|
|
Total
|
(4,186)
|
(2,257)
|
(2,740)
|
(10,994)
|
(7,162)
|
85.5
|
52.8
|
53.5
|
The financial results were worse
in 3Q20 mainly due the absence of the positive effect related to the monetary adjustment of US$ 1.8 billion over the exclusion
of the VAT tax from the calculation basis of the PIS/COFINS that occurred in 2Q20. Excluding this factor, financial results would
have been in line with the previous quarter as the higher premium paid on the repurchase of bonds, because of the lower risk perception,
and higher interest expenses, were offset by lower foreign exchange losses. It is worth mentioning that, although lower than 2Q20,
foreign exchange losses are still high due to the level of FX exposure of US$ 42.8 billion and the depreciation of the real against
the dollar of 2.9% in the period.
Net income (loss) attributable to Petrobras’
shareholders
We recorded a net loss of US$ 236
million in 3Q20, as the gains with higher sales volumes of oil and oil by-products and higher Brent oil prices were more than offset
by financial expenses, which were influenced by premiums paid on the repurchase of bonds.
Relative to 2Q20, this quarter result
was slightly better as the operational improvements and income tax gains exceeded the positive effect on 2Q20 of the VAT tax exclusion
from the calculation basis of the PIS/COFINS.
Recurring net income attributable to
Petrobras’ shareholders and recurring adjusted EBITDA
In 3Q20 several non-recurring items
negatively impacted results. We highlight the approval for the adherence to the tax amnesty programs affecting both net income
and adjusted EBITDA and the premium paid on the repurchase of bonds, which affected only net income. Excluding the non-recurring
items we would have had a net income of US$ 633 million and an adjusted EBITDA of US$ 6.9 billion.
Special Items
Table 8 – Special items
|
|
|
|
|
|
|
Variation (%)
|
|
US$ million
|
3Q20
|
2Q20
|
3Q19
|
9M20
|
9M19
|
3Q20 /
2Q20
|
3Q20 /
3Q19
|
9M20 /
9M19
|
|
Net income
|
(257)
|
(437)
|
2,228
|
(10,669)
|
8,288
|
(41.2)
|
−
|
−
|
|
Nonrecurring items
|
(1,182)
|
3,198
|
378
|
(11,629)
|
4,289
|
−
|
−
|
−
|
|
Nonrecurring items that do not affect Adjusted EBITDA
|
(471)
|
1,788
|
1,020
|
(12,459)
|
5,505
|
−
|
−
|
−
|
|
Impairment of assets and investments
|
(113)
|
1
|
(606)
|
(13,535)
|
(629)
|
−
|
(81.4)
|
2051.8
|
|
Reclassification of comprehensive income (loss) due to the disposal of equity-accounted investments
|
(43)
|
−
|
−
|
(43)
|
(34)
|
−
|
−
|
26.5
|
|
Gains and losses on disposal / write-offs of assets
|
218
|
9
|
(163)
|
133
|
5,425
|
2322.2
|
−
|
(97.5)
|
|
Gains on BR Distribuidora follow on
|
−
|
−
|
3,515
|
−
|
3,515
|
−
|
−
|
−
|
|
Foreign exchange gains or losses on provisions for legal proceedings
|
−
|
−
|
(141)
|
−
|
(120)
|
−
|
−
|
−
|
|
Agreements signed for the electricity sector *
|
−
|
−
|
(1)
|
−
|
79
|
−
|
−
|
−
|
|
Discount related to prepayment of receivables from electricity sector
|
−
|
−
|
(128)
|
−
|
(128)
|
−
|
−
|
−
|
|
Write-off of deferred tax assets
|
−
|
−
|
(792)
|
−
|
(1,758)
|
−
|
−
|
−
|
|
Pis and Cofins inflation indexation charges - exclusion of ICMS (VAT tax) from the basis of calculation
|
−
|
1,780
|
−
|
1,780
|
−
|
−
|
−
|
−
|
|
Discount and premium on repurchase of debt securities
|
(520)
|
(2)
|
(664)
|
(781)
|
(845)
|
25900.0
|
(21.7)
|
(7.6)
|
|
Financial updating on state amnesty programs
|
(13)
|
−
|
−
|
(13)
|
−
|
−
|
−
|
−
|
|
Other nonrecurring items
|
(711)
|
1,410
|
(642)
|
830
|
(1,216)
|
−
|
10.7
|
−
|
|
PDV
|
(78)
|
(903)
|
(68)
|
(1,022)
|
(154)
|
(91.4)
|
14.7
|
563.6
|
|
Careers and remuneration plan
|
−
|
−
|
−
|
−
|
(2)
|
−
|
−
|
−
|
|
Amounts recovered from Lava Jato investigation
|
16
|
64
|
112
|
101
|
191
|
(75.0)
|
(85.7)
|
(47.1)
|
|
Gains / (losses) on decommissioning of returned/abandoned areas
|
(16)
|
(2)
|
(1)
|
(18)
|
(1)
|
700.0
|
1500.0
|
1700.0
|
|
State amnesty programs
|
(358)
|
−
|
−
|
(358)
|
−
|
−
|
−
|
−
|
|
Expected credit losses related to the electricity sector
|
−
|
−
|
1
|
−
|
(17)
|
−
|
−
|
−
|
|
Gains / (losses) related to legal proceedings
|
(139)
|
35
|
(719)
|
24
|
(1,257)
|
−
|
(80.7)
|
−
|
|
Equalization of expenses - Production Individualization Agreements
|
(136)
|
822
|
33
|
709
|
24
|
−
|
−
|
2854.2
|
|
PIS and COFINS over inflation indexation charges - exclusion of ICMS (VAT tax) from the basis of calculation
|
−
|
(83)
|
−
|
(83)
|
−
|
−
|
−
|
−
|
|
PIS and COFINS recovered - exclusion of ICMS (VAT tax) from the basis of calculation
|
−
|
1,477
|
−
|
1,477
|
−
|
−
|
−
|
−
|
|
Net effect of nonrecurring items on IR/ CSLL
|
313
|
(1,078)
|
(601)
|
3,899
|
(2,271)
|
−
|
−
|
−
|
|
Recurring net income
|
612
|
(2,557)
|
2,451
|
(2,937)
|
6,267
|
−
|
(75.0)
|
−
|
|
Shareholders of Petrobras
|
633
|
(2,536)
|
2,513
|
(2,635)
|
6,150
|
−
|
(74.8)
|
−
|
|
Non-controlling interests
|
(21)
|
(21)
|
(62)
|
(302)
|
117
|
−
|
(66.1)
|
−
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
6,214
|
4,785
|
8,209
|
19,580
|
23,829
|
29.9
|
(24.3)
|
(17.8)
|
|
Nonrecurring items
|
(711)
|
1,410
|
(642)
|
830
|
(1,216)
|
−
|
10.7
|
−
|
|
Recurring Adjusted EBITDA
|
6,925
|
3,375
|
8,851
|
18,750
|
25,045
|
105.2
|
(21.8)
|
(25.1)
|
In management's opinion, the special items
presented above, although related to the Company's business, were highlighted as complementary information for a better understanding
and evaluation of the result. Such items do not necessarily occur in all periods and are disclosed when relevant. In 4Q19, the
write-off of deferred tax assets and goodwill / negative goodwill on debt securities repurchases were classified as non-recurring
items, resulting in reclassifications in the comparative period results.
Capex
Investment amounts (Capex) encompass
acquisition of property, plant and equipment, including costs with leasing, intangible assets, investments in subsidiaries and
affiliates, costs with geology and geophysics, costs with research and development and pre-operating costs.
Table 9 – Capex
|
|
|
|
|
|
|
Variation %
|
|
Investments (US$ million)
|
3Q20
|
2Q20
|
3Q19
|
9M20
|
9M19
|
3Q20 /
2Q20
|
3Q20 /
3Q19
|
9M20 /
9M19
|
|
Exploration and Production
|
1,290
|
1,609
|
1,912
|
5,038
|
6,003
|
(19.9)
|
(32.6)
|
(16.1)
|
|
Refining
|
183
|
239
|
457
|
593
|
1,013
|
(23.6)
|
(60.1)
|
(41.5)
|
|
Gas and Power
|
131
|
53
|
167
|
269
|
324
|
148.1
|
(21.3)
|
(16.9)
|
|
Others
|
35
|
35
|
76
|
102
|
217
|
(0.6)
|
(54.2)
|
(52.8)
|
|
Total
|
1,638
|
1,937
|
2,612
|
6,003
|
7,556
|
(15.4)
|
(37.3)
|
(20.6)
|
|
|
|
|
|
|
|
|
|
|
In 3Q20, investments amounted US$
1.6 billion, 15% below 2Q20, due to the adjustments made in the wake of the COVID-19 pandemic. Growth investments represented more
than 65% of total investments.
In 3Q20, we revised our E&P portfolio
in light of the new price assumptions disclosed in May. This resulted in a new 5-year capex (2021-2025) range of US$ 40 to
50 billion, as opposed to the US$ 64 billion of the 2020-2024 Strategic Plan, with the main capex reductions in exploratory and
non-pre-salt assets, some of those to be divested. The revision considered the following: (i) focus on deleveraging, reaching the
gross debt target of US$ 60 billion in 2022; (ii) focus on resilience, prioritizing projects with Brent oil price breakeven of
not more than US$ 35/barrel and aligned to the company's strategy and; (iii) revision of the entire investment and divestment portfolios.
Growth investments are those with
the main objective of increasing the capacity of existing assets, implementing new production systems up to the full ramp up, disposal
and storage assets, increasing efficiency or profitability of the asset and implementing essential infrastructure to enable other
growth projects. It includes acquisitions of assets / companies and remaining investments in systems that started in 2018, exploratory
investments, and investments in R&D.
In the last 3 years, 8 owned units
and 1 chartered started production (P67, P-68, P-69, P-70, P-74, P-75, P-76, P-77 and Tartaruga Verde), contributing with 1.2MM
bpd of production capacity. In the coming years we plan to invest in another 12 units as detailed below (8 under construction and
4 under procurement), achieving the impressive mark of 21 systems until 2025.
-4 in Buzios - 2 chartered and 2 owned
-3 in Mero- chartered
-1 in Sepia - chartered
-1 in Integrated Parque das Baleias - chartered
-1 in Itapu - owned
-2 in Marlim – chartered
Investments in maintenance (sustaining),
on the other hand, have the main objective of maintaining the operation of existing assets, they do not aim at increasing the capacity
of the facilities. Sustaining investments encompass investments in safety and reliability of installations, substitute well projects,
complementary development, adding new
wells after the full ramp up of the
systems to keep production levels, remaining investments in systems that entered before 2018, scheduled shutdowns and revitalizations
(without new systems), 4D seismic, health and safety projects, line changes, infrastructure operational and ICT.
In 3Q20, investments in the Exploration
and Production segment totaled US$ 1.3 billion, with approximately 75% related to growth. The investments were mainly concentrated:
(i) in the development of production in ultra-deep waters of the Santos Basin pre-salt (US$ 0.7 billion); (ii) development of new
projects in deep waters (US$ 0.2 billion) and (iii) exploratory investments (US$ 0.1 billion).
In the Refining segment, investments
totaled US$ 0.2 billion in 3Q20, approximately 51% of which were investments in growth. Investments in the Gas and Power segment
totaled US$ 0.1 billion in 3Q20, of which approximately 88% are investments in growth.
The following table presents the
main information on the new oil and gas production systems.
Table 10 – Main projects
|
Unit
|
Start-up
|
FPSO capacity (bbl/day)
|
CAPEX Petrobras spent
US$ bi
|
Total CAPEX Petrobras US$ bi²
|
Petrobras Share
|
Status
|
|
FPSO Carioca (Chartered unit)
Sépia 1
|
2021
|
180,000
|
0.65
|
3.1
|
97.6%
|
Project in phase of execution with production system with more than 90% of progress. 9 wells drilled and 5 completed
|
|
FPSO Guanabara (Chartered unit)
Mero 1
|
2021
|
180,000
|
0.21
|
1.1
|
40.0%
|
Project in phase of execution with production system with more than 90% of progress. 7 wells drilled and 3 completed
|
|
FPSO Alm. Barroso (Chartered unit)
Búzios 5
|
2022
|
150,000
|
0.28
|
3.0
|
100%¹
|
Project in phase of execution with production system with more than 47% of progress. 3 wells drilled and 1 completed.
|
|
FPSO Anita Garibaldi (Chartered unit)
Marlim 1
|
2022
|
80,000
|
0.08
|
2.3
|
100%
|
Project in phase of execution with production system with more than 34% of progress. 1 well drilled and 1 completed
|
|
FPSO Anna Nery (Chartered unit)
Marlim 2
|
2023
|
70,000
|
0.02
|
1.8
|
100%
|
Project in phase of execution with production system with more than 30% of progress.
|
|
FPSO Sepetiba (Chartered unit)
Mero 2
|
2023
|
180,000
|
0.02
|
1.1
|
40%
|
Project in phase of execution with production system with more than 52% of progress. 4 wells drilled and 2 completed
|
|
FPSO Marechal Duque de Caxias (Chartered unit)
Mero 3
|
2024
|
180,000
|
0.02
|
1.1
|
40%
|
Project in phase of execution, letter of intent signed for charter of the platform in August 2020. 3 wells drilled and 1 completed
|
|
* Petrobras signed a term of commitment to buy P-71 to be used in
Itapu field. This unit, which is not in the table, has a production capacity of 150 kbpd
¹ Will change after the co-participation agreement
²Total Capex and schedule under revision due to the COVID-19
and Resilience Plan impacts.
|
Portfolio Management
Improvements in capital allocation
are being implemented through portfolio management, with divestments of assets with lower returns on capital employed.
In 1Q20, we concluded the sale of
PO&G BV and signed the sale of the Tucano Sul cluster (onshore field in Bahia). In 2Q20, we concluded the sale of Macau cluster
(onshore fields in Rio Grande do Norte). In 3Q20, we concluded the sale of the remaining 10% stake in TAG, Pampo and Enchova clusters
(shallow water fields in Rio de Janeiro), Ponta do Mel and Redonda cluster (onshore fields in Rio Grande do Norte), Lagoa Parda
cluster (onshore fields in Espírito Santo) and we also signed the contract for the sale of the Pescada cluster (shallow
water fields in Rio Grande do Norte), Cricaré cluster (onshore fields in Espírito Santo), Rio Ventura and Fazenda
Belém clusters (onshore fields in Bahia). In 4Q20, until October 25h, 2020, we had already signed the contract
for the sale of PUDSA (assets in Uruguay). These transactions resulted in a cash inflow of US$ 1.036 billion in 2020, as shown
in the table below:
Table 11 – Amount received
in 2020 and respective transaction amounts
|
Asset
|
Amounts received in 2020
(US$ million)
|
Transaction amount
(US$ million)
|
|
PO&G BV (Signed in 2018)1
|
301
|
1.530
|
|
Tucano Sul Cluster3
|
0.6
|
3.01
|
|
Macau Cluster2
|
125
|
191
|
|
Pescada Arabaiana Cluster3
|
0.3
|
1.5
|
|
Pampo and Enchova Clusters2
|
365
|
419
|
|
TAG3
|
0.2
|
7.2
|
|
Ponta do Mel e Redonda3
|
205
|
205
|
|
Cricaré Cluster3
|
11
|
155
|
|
Fazenda Belém Cluster3
|
8.8
|
35.2
|
|
Rio Ventura Cluster3
|
3.8
|
94.2
|
|
Lagoa Parda Cluster2
|
9.4
|
10.8
|
|
PUDSA (Assets in Uruguai)3
|
6.17
|
61.7
|
|
Total amount
|
1.036.3
|
2.713.5
|
¹Transaction signed in 2018
² Transaction signed in 2019
³ Transaction signed in 2020
In addition, we have the following
divestments in our portfolio, as well as several other projects, approved in the Strategic Plan 2020-2024, undergoing structuring
phase and some with teasers to be launched soon.
Table 12 - Assets in divestment
process
|
Teaser / Non-binding phase
|
Binding phase
|
|
ANSA
|
Refineries
(RNEST, RLAM, REPAR, REFAP, REGAP, REMAN, LUBNOR e SIX)
|
|
Oil and Gas Thermoelectric Plants
|
Colombia assets
|
|
Albacora and Albacora Leste fields (RJ)
|
Mangue Seco Wind Farms 1, 2, 3 and 4
|
|
Onshore and shallow water fields (RN)
|
Gaspetro
|
|
Onshore fields (ES and SE)
|
NTS (10%)
|
|
|
PBIO
|
|
|
Oil and Gas Thermoelectric Plants
|
|
|
Exploration block (Tayrona) Colombia
|
|
|
Papa Terra field
|
|
|
Onshore and shallow water fields (AL)
|
|
|
Onshore fields (AM, BA, CE and SE)
|
|
|
Shallow water fields (BA, CE, ES, RJ and SP)
|
|
|
Deep water fields (SE and ES)
|
|
|
UFN-III
|
Petrobras reinforces the importance
of portfolio management focusing on core assets, in order to improve our capital allocation, enable debt and capital cost reduction,
and the consequent increase in value generation to the company and to our shareholders.
Liquidity and
Capital Resources[1]
Table 13 – Liquidity and capital
resources
|
US$ million
|
3Q20
|
2Q20
|
3Q19
|
9M20
|
9M19
|
|
Adjusted cash and cash equivalents at the beginning of period
|
20,005
|
16,106
|
17,847
|
8,260
|
14,982
|
|
Government bonds and time deposits with maturities of more than 3 months at the beginning of period *
|
(535)
|
(638)
|
(641)
|
(883)
|
(1,083)
|
|
Cash and cash equivalents at the beginning of period
|
19,470
|
15,468
|
17,206
|
7,377
|
13,899
|
|
Net cash provided by (used in) operating activities
|
8,584
|
5,457
|
8,270
|
21,818
|
18,206
|
|
Net cash provided by operating activities from continuing operations
|
8,584
|
5,457
|
8,203
|
21,818
|
17,883
|
|
Discontinued operations – net cash provided by operating activities
|
−
|
−
|
67
|
−
|
323
|
|
Net cash provided by (used in) investing activities
|
(565)
|
(2,147)
|
(643)
|
(4,193)
|
6,076
|
|
Net cash provided by (used in) investing activities from continuing operations
|
(565)
|
(2,147)
|
(2,506)
|
(4,193)
|
4,264
|
|
Acquisition of PP&E, intangibles assets and investments in investees
|
(1,116)
|
(2,445)
|
(1,790)
|
(5,427)
|
(5,422)
|
|
Proceeds from disposal of assets - Divestment
|
604
|
153
|
(1)
|
1,038
|
9,110
|
|
Dividends received
|
97
|
60
|
20
|
201
|
836
|
|
Divestment (Investment) in marketable securities
|
(150)
|
85
|
(735)
|
(5)
|
(260)
|
|
Discontinued operations – net cash provided by investing activities
|
−
|
−
|
1,863
|
−
|
1,812
|
|
(=) Net cash provided by operating and investing activities
|
8,019
|
3,310
|
7,627
|
17,625
|
24,282
|
|
Net cash provided by (used) in financing activities from continuing operations
|
(14,683)
|
699
|
(12,178)
|
(11,852)
|
(25,182)
|
|
Net financings
|
(13,236)
|
2,175
|
(10,544)
|
(6,359)
|
(20,125)
|
|
Proceeds from financing
|
101
|
5,623
|
4
|
15,897
|
4,729
|
|
Repayments
|
(13,337)
|
(3,448)
|
(10,548)
|
(22,256)
|
(24,854)
|
|
Repayment of lease liability
|
(1,400)
|
(1,448)
|
(1,384)
|
(4,371)
|
(3,622)
|
|
Dividends paid to shareholders of Petrobras
|
−
|
−
|
(298)
|
(1,020)
|
(1,304)
|
|
Dividends paid to non-controlling interest
|
(8)
|
(22)
|
(3)
|
(38)
|
(89)
|
|
Investments by non-controlling interest
|
(39)
|
(6)
|
51
|
(64)
|
(42)
|
|
Discontinued operations – net cash used in financing activities
|
−
|
−
|
(13)
|
−
|
(508)
|
|
Net cash provided by (used) in financing activities
|
(14,683)
|
699
|
(12,191)
|
(11,852)
|
(25,690)
|
|
Effect of exchange rate changes on cash and cash equivalents
|
(102)
|
(7)
|
537
|
(446)
|
688
|
|
Cash and cash equivalents at the end of period
|
12,704
|
19,470
|
13,179
|
12,704
|
13,179
|
|
Government bonds and time deposits with maturities of more than 3 months at the end of period *
|
666
|
535
|
1,303
|
666
|
1,303
|
|
Adjusted cash and cash equivalents at the end of period
|
13,370
|
20,005
|
14,482
|
13,370
|
14,482
|
|
|
|
|
|
|
|
|
Reconciliation of Free Cash Flow
|
|
|
|
|
|
|
Net cash provided by (used in) operating activities
|
8,584
|
5,457
|
8,270
|
21,818
|
18,206
|
|
Acquisition of PP&E, intangibles assets and investments in investees
|
(1,116)
|
(2,445)
|
(1,790)
|
(5,427)
|
(5,422)
|
|
Free cash flow
|
7,468
|
3,012
|
6,480
|
16,391
|
12,784
|
* Includes short-term government bonds and time deposits and cash and cash equivalents of companies
classified as held for sale.
As of September 30th,
2020, cash and cash equivalents were US$ 12.7 billion and adjusted cash and cash equivalents totaled US$ 13.4 billion.
In 3Q20, net cash provided by operating
activities reached US$ 8.6 billion and we had a positive free cash flow of US$ 7.5 billion, reflecting the improvements in operating
income and in working capital, mainly due to the use of tax credit and the increase sales of oil by-product, which have a shorter
payment term than exports. This level of cash generation, alongside cash inflows from divestments of US$ 604 million and cash and
cash equivalents, were used: (i) to prepay debt and amortize principal and interest due in the period (US$ 13.3 billion) and (iii)
to amortize lease liabilities (US$ 1.4 billion), reducing gross debt to US$ 79.6 billion. In addition, capex was US$ 1.1 billion.
In the period from July to September
2020, the company settled several loans and financial debts, amounting to US$ 13.3 billion, notably: (i) prepayment of banking
loans in the domestic and international market totaling US$ 94 million and (ii) US$ 4.0 billion on the repurchase of global bonds
previously issued by the Company, with additional net premium paid to bondholders of US$ 518 million ; (iii) prepayment of its
international revolving credit lines, in the amount of US$ 7.6 billion.
Debt
Our resilience initiatives and solid
cash generation had significant results in 3Q20. Gross debt reduced from US$ 91.2 billion to US$ 79.6 billion, lower than
the level before the adoption of IFRS16, even including the impact of the leases. Thus, amid of a very severe crisis, we have already
exceeded the US$ 87 billion gross debt target goal for year-end 2020. In addition, liability management helped increase the average
maturity from 10.12 years to 11.19 years. In 3Q20, the average cost of debt increased to 5.8% p.a. from 5.6% p.a. in2Q20, reflecting
the prepayment of the revolving credit lines abroad, which have a lower cost with a shorter maturity.
Gross debt fell US$ 11.6 billion,
a reduction of 12.8% compared to June 30th, 2020, mainly due to repurchases in the capital market and prepayments in
the banking market. Therefore, the gross debt/LTM adjusted EBITDA ratio decreased to 2.80x on September 30th, 2020 from 3.00x on
June 30th, 2020.
Net debt reduced 7%, reaching US$
66.2 billion. The net debt/LTM adjusted EBITDA ratio remained stable at 2.33x on June 30th, 2020.
In 3Q20, the company prepaid all
its revolving credit facilities abroad that were withdrawn during the height of the COVID-19 crisis, in the amount of US$ 7.6 billion.
Those resources are once again available for drawdowns, if necessary.
Table 14 – Debt indicators
|
Debt (US$ million)
|
09.30.2020
|
06.30.2020
|
Δ %
|
09.30.2019
|
|
Financial Debt
|
57,573
|
69,312
|
(16.9)
|
66,070
|
|
Capital Markets
|
32,553
|
36,563
|
(11.0)
|
34,815
|
|
Banking Market
|
19,878
|
27,287
|
(27.2)
|
25,249
|
|
Development banks
|
1,483
|
1,552
|
(4.4)
|
1,950
|
|
Export Credit Agencies
|
3,441
|
3,686
|
(6.6)
|
3,812
|
|
Others
|
218
|
224
|
(2.7)
|
244
|
|
Finance leases
|
22,015
|
21,915
|
0.5
|
23,831
|
|
Gross debt
|
79,588
|
91,227
|
(12.8)
|
89,901
|
|
Adjusted cash and cash equivalents
|
13,370
|
20,005
|
(33.2)
|
14,482
|
|
Net debt
|
66,218
|
71,222
|
(7.0)
|
75,419
|
|
Net Debt/(Net Debt + Market Cap) - Leverage
|
59%
|
57%
|
3.5
|
45%
|
|
Average interest rate (% p.a.)
|
5.8
|
5.6
|
3.6
|
5.9
|
|
Weighted average maturity of outstanding debt (years)
|
11.19
|
10.12
|
10.6
|
10.42
|
|
Net debt/LTM Adjusted EBITDA ratio
|
2.33
|
2.34
|
(0.4)
|
2.40
|
|
Gross debt/LTM Adjusted EBITDA ratio
|
2.80
|
3.00
|
(6.6)
|
2.86
|
Results by Segment
Exploration
and Production[2]
Table 15 – E&P results
|
|
|
|
|
|
|
Variation (%)
|
|
US$ million
|
3Q20
|
2Q20
|
3Q19
|
9M20
|
9M19
|
3Q20 /
2Q20
|
3Q20 /
3Q19
|
9M20 /
9M19
|
|
Sales revenues
|
9,358
|
5,165
|
12,551
|
25,400
|
36,595
|
81.2
|
(25.4)
|
(30.6)
|
|
Gross profit
|
4,701
|
1,660
|
5,753
|
11,331
|
16,167
|
183.2
|
(18.3)
|
(29.9)
|
|
Operating expenses
|
(612)
|
149
|
(1,273)
|
(13,991)
|
(2,400)
|
−
|
(51.9)
|
483.0
|
|
Operating income (loss)
|
4,089
|
1,809
|
4,480
|
(2,660)
|
13,767
|
126.0
|
(8.7)
|
−
|
|
Net income (loss) attributable to the shareholders of Petrobras
|
2,707
|
1,187
|
2,979
|
(1,910)
|
9,184
|
128.1
|
(9.1)
|
−
|
|
Adjusted EBITDA of the segment
|
6,013
|
3,924
|
8,100
|
17,404
|
22,898
|
53.2
|
(25.8)
|
(24.0)
|
|
EBITDA margin of the segment (%)
|
64
|
75
|
65
|
68
|
63
|
(11.2)
|
(0.4)
|
5.5
|
|
Average Brent crude (US$/bbl)
|
43.00
|
29.20
|
61.94
|
40.82
|
64.65
|
47.3
|
(30.6)
|
(36.9)
|
|
Sales price - Brazil
|
|
|
|
|
|
|
|
|
|
Crude oil (US$/bbl)
|
42.30
|
23.98
|
58.10
|
38.90
|
60.58
|
76.4
|
(27.2)
|
(35.8)
|
|
Lifting cost - Brazil (US$/boe)*
|
|
|
|
|
|
|
|
|
|
excluding production taxes and leases
|
4.54
|
4.94
|
7.90
|
5.12
|
8.24
|
(8.1)
|
(42.5)
|
(37.9)
|
|
excluding production taxes
|
6.09
|
6.59
|
9.67
|
6.72
|
10.16
|
(7.6)
|
(37.1)
|
(33.8)
|
|
Onshore
|
|
|
|
|
|
|
|
|
|
with leases
|
11.87
|
13.41
|
18.19
|
14.02
|
19.36
|
(11.5)
|
(34.8)
|
(27.6)
|
|
excluding leases
|
11.87
|
13.41
|
18.19
|
14.02
|
19.36
|
(11.5)
|
(34.8)
|
(27.6)
|
|
Shallow waters
|
|
|
|
|
|
|
|
|
|
with leases
|
18.53
|
20.28
|
30.56
|
23.84
|
30.98
|
(8.6)
|
(39.3)
|
(23.0)
|
|
excluding leases
|
13.74
|
15.86
|
28.58
|
19.96
|
29.00
|
(13.3)
|
(51.9)
|
(31.2)
|
|
Deep and ultra-deep post-salt
|
|
|
|
|
|
|
|
|
|
with leases
|
10.26
|
10.23
|
14.21
|
10.41
|
12.96
|
0.3
|
(27.8)
|
(19.7)
|
|
excluding leases
|
8.70
|
8.74
|
12.48
|
8.86
|
11.14
|
(0.5)
|
(30.3)
|
(20.5)
|
|
Pre-salt
|
|
|
|
|
|
|
|
|
|
with leases
|
3.86
|
4.17
|
5.03
|
4.17
|
5.87
|
(7.4)
|
(23.2)
|
(28.9)
|
|
excluding leases
|
2.27
|
2.39
|
3.07
|
2.48
|
3.65
|
(4.9)
|
(25.9)
|
(32.2)
|
|
including production taxes and excluding leases
|
11.21
|
8.91
|
17.73
|
11.01
|
19.79
|
25.8
|
(36.8)
|
(44.3)
|
|
including production taxes and leases
|
12.75
|
10.56
|
19.50
|
12.62
|
21.71
|
20.8
|
(34.6)
|
(41.9)
|
|
Production taxes - Brazil
|
1,582
|
933
|
2,298
|
4,396
|
8,194
|
69.6
|
(31.2)
|
(46.4)
|
|
Royalties
|
907
|
569
|
1,175
|
2,448
|
3,466
|
59.4
|
(22.8)
|
(29.4)
|
|
Special Participation
|
666
|
355
|
1,111
|
1,919
|
4,692
|
87.6
|
(40.1)
|
(59.1)
|
|
Retention of areas
|
9
|
9
|
12
|
29
|
36
|
−
|
(25.0)
|
(20.4)
|
In 3Q20 gross profit in E&P was
US$ 4.7 billion, an increase of 183% when compared to 2Q20 due to higher Brent oil prices, lower spreads and higher volumes, partially
offset by higher production taxes.
Operating profit was US$ 4.1
billion in 3Q20, 126% higher than 2Q20, reflecting the increase in gross profit and divestment gains, especially in the Pampo
and Enchova clusters, partially offset by higher exploratory expenses, mainly as a result of the write-off of the Peroba
block signature bonus and higher tax expenses due to the approval for the adhesion to tax amnesty programs in RJ and ES,
through which we agreed to pay US$ 358 million to exclude a contingent liability of US$ 690 million.
In 3Q20, lifting cost without production
taxes and without leases decreased by 8%, mainly due to the increase in production, as a result of the improvement in operational
efficiency in pre-salt fields, and the start-up of P-70 at the end of June, along with the effect of the divestment in the Pampo
and Enchova clusters.
In the pre-salt layer, we continued
to observe a consistent path of falling unit costs, anchored by the stabilization of the new production systems, where we highlight
the production platforms in Búzios, which have high productivity at competitive costs. In 3Q20, lifting cost decreased 5%,
mainly due to the increase in production.
In the post-salt, lifting cost remained
stable when compared to the previous quarter. In shallow water, there was a 13% decrease, mainly due to the impact of the divestment
of the Pampo and Enchova clusters. Onshore lifting cost decreased by 11%, due to optimization measures in operating costs and lower
well intervention activities.
Higher production taxes in 3Q20 are
explained by the increase in Brent oil prices. This increase had a pronounced effect on special participation taxes, as a result
of the higher share of the more profitable pre-salt (70% in 3Q20), with higher oil production.
* Leases refers to platform leasing
Refining
Table 16 – Refining
results **
|
|
|
|
|
|
|
Variation (%)
|
|
US$ million
|
3Q20
|
2Q20
|
3Q19
|
9M20
|
9M19
|
3Q20 /
2Q20
|
3Q20 /
3Q19
|
9M20 /
9M19
|
|
Sales revenues
|
11,955
|
8,261
|
17,124
|
35,696
|
49,932
|
44.7
|
(30.2)
|
(28.5)
|
|
Gross profit
|
1,612
|
832
|
1,236
|
2,527
|
4,014
|
93.8
|
30.4
|
(37.0)
|
|
Operating expenses
|
(856)
|
(1,304)
|
(973)
|
(3,074)
|
(2,772)
|
(34.4)
|
(12.0)
|
10.9
|
|
Operating Income (Loss)
|
756
|
(472)
|
263
|
(547)
|
1,242
|
−
|
187.5
|
−
|
|
Net income (loss) attributable to the shareholders of Petrobras
|
403
|
(566)
|
121
|
(865)
|
913
|
−
|
233.1
|
−
|
|
Adjusted EBITDA of the segment
|
1,291
|
27
|
938
|
1,111
|
3,412
|
4681.5
|
37.6
|
(67.4)
|
|
EBITDA margin of the segment (%)
|
11
|
−
|
5
|
3
|
7
|
10.6
|
5.3
|
(3.6)
|
|
Refining cost (US$ / barrel) - Brazil
|
1.41
|
1.67
|
2.40
|
1.78
|
2.52
|
(15.6)
|
(41.3)
|
(29.4)
|
|
Domestic basic oil by-products price (US$/bbl)
|
47.97
|
36.79
|
73.05
|
50.20
|
75.06
|
30.4
|
(34.3)
|
(33.1)
|
In 3Q20, gross profit in Refining
was US$ 780 million higher than 2Q20 because of the increase in Brent oil prices, causing a positive inventory turnover effect,
between quarters, of approximately US$ 1.58 billion (negative inventory turnover effect of US$ 0.46 billion in 2Q20 versus positive
effect of US$ 1.12 billion in 3Q20).
Excluding the inventory turnover
effect, gross profit would have been US$ 0.49 billion in the 3Q20 and US$ 1.3 billion in the 2Q20.
In 3Q20, there were lower margins
for oil by-products in the domestic market, especially diesel and LPG, reflecting the reduction in international crack spreads.
These were partially offset by the increase in sales volumes, mainly of diesel and gasoline, reflecting the recovery in demand
and the increase in its market share to 78% and 79%, respectively (from 76% and 77% in 2Q20). There were also lower gains in crude
oil and oil by-products exports, mainly fuel oil, the latter being a consequence of international margins trends.
On the other hand, there were lower
operating expenses and lower spending on the consumption of natural gas in our refineries.
The increase in operating profit
in 3Q20 reflects the higher gross profit and lower operating expenses due to the absence of unscheduled maintenance stoppages at
our refineries, as well as lower provisions for the voluntary dismissal plans.
Gas and Power
Table 17 – G&P results
|
|
|
|
|
|
|
Variation (%)
|
|
US$ million
|
3Q20
|
2Q20
|
3Q19
|
9M20
|
9M19
|
3Q20 /
2Q20
|
3Q20 /
3Q19
|
9M20 /
9M19
|
|
Sales revenues
|
1,582
|
1,517
|
2,961
|
5,469
|
8,744
|
4.3
|
(46.6)
|
(37.5)
|
|
Gross profit
|
821
|
907
|
926
|
2,753
|
2,806
|
(9.5)
|
(11.3)
|
(1.9)
|
|
Operating expenses
|
(513)
|
(654)
|
(631)
|
(1,840)
|
3,779
|
(21.6)
|
(18.7)
|
−
|
|
Operating income (loss)
|
308
|
253
|
295
|
913
|
6,585
|
21.7
|
4.4
|
(86.1)
|
|
Net income (loss) attributable to the shareholders of Petrobras
|
244
|
169
|
198
|
627
|
4,336
|
44.4
|
23.2
|
(85.5)
|
|
Adjusted EBITDA of the segment
|
413
|
369
|
500
|
1,280
|
1,675
|
11.9
|
(17.4)
|
(23.6)
|
|
EBITDA margin of the segment (%)
|
26
|
24
|
17
|
23
|
19
|
2
|
9
|
4
|
|
Natural gas sales price - Brazil (US$/bbl)
|
28.79
|
33.70
|
45.57
|
34.96
|
47.66
|
(14.6)
|
(36.8)
|
(26.6)
|
In 3Q20, gross profit in the Gas
and Power segment was US$ 821 million, a reduction of 9.5% when compared to 2Q20, as a result of lower margins in the non-thermoelectric
segment due to the reduction in sales prices, partially offset by higher sales volumes of gas reflecting the industrial recovery
and higher consumption of compressed natural gas following the relaxation of social distancing measures. There were also higher
margins in the energy generation business due to the increase in spot prices.
In 3Q20, operating profit was US$
55 million higher than in 2Q20, due to: (i) lower selling expenses in 3Q20, (ii) the reversal of the provision for losses (US$
34 million) after an agreement to end disputes related to thermoelectric plants, (iii) the reversal of impairments in Fafen-BA,
Fafen-SE (US$ 32 million) and in the power segment, and (iv) the provision, in 2Q20, for expenses (US$ 29 million) related to the
voluntary dismissal programs.
1.
Reconciliation of Adjusted EBITDA
EBITDA is an indicator calculated
as the net income for the period plus taxes on profit, net financial result, depreciation and amortization. Petrobras announces
EBITDA, as authorized by CVM Instruction 527 of October 2012.
In order to reflect the management
view regarding the formation of the company's current business results, EBITDA is also presented adjusted (Adjusted EBITDA) as
a result of: investments, impairment, results with divestments and write-off of assets, and reclassification of comprehensive income
(loss) due to the disposal of equity-accounted investments.
Adjusted EBITDA, reflecting the sum
of the last twelve months (Last Twelve Months), also represents an alternative to the company's operating cash generation. This
measure is used to calculate the Gross Debt to Adjusted EBITDA metric, helping to evaluate the company's leverage and liquidity.
EBITDA and adjusted EBITDA are not
provided for in International Financial Reporting Standards (IFRS) and should not serve as a basis for comparison with those disclosed
by other companies and should not be considered as a substitute for any other measure calculated in accordance with IFRS. These
measures should be considered in conjunction with other measures and indicators for a better understanding of the company's performance
and financial condition.
Table 18 - Reconciliation of Adjusted EBITDA
|
|
|
|
|
|
|
Variation (%)
|
|
US$ million
|
3Q20
|
2Q20
|
3Q19
|
9M20
|
9M19
|
3Q20 /
2Q20
|
3Q20 /
3Q19
|
9M20 /
9M19
|
|
Net income (loss) from continuing operations
|
(257)
|
(436)
|
(128)
|
(10,669)
|
5,728
|
(41.1)
|
100.8
|
−
|
|
Net finance income (expense)
|
4,186
|
2,257
|
2,740
|
10,994
|
7,162
|
85.5
|
52.8
|
53.5
|
|
Income taxes
|
(568)
|
(31)
|
992
|
(3,899)
|
4,441
|
1732.3
|
−
|
−
|
|
Depreciation, depletion and amortization
|
2,873
|
2,793
|
3,776
|
9,209
|
11,205
|
2.9
|
(23.9)
|
(17.8)
|
|
EBITDA
|
6,234
|
4,583
|
7,380
|
5,635
|
28,536
|
36.0
|
(15.5)
|
(80.3)
|
|
Results in equity-accounted investments
|
168
|
211
|
(112)
|
677
|
(363)
|
(20.4)
|
−
|
−
|
|
Impairment
|
(13)
|
−
|
607
|
13,358
|
627
|
−
|
−
|
2030.5
|
|
Reclassification of comprehensive income (loss) due to the disposal of equity-accounted investments
|
43
|
−
|
−
|
43
|
34
|
−
|
−
|
26.5
|
|
Results on disposal/write-offs of assets and on remeasurement of investment retained with loss of control *
|
(218)
|
(9)
|
162
|
(133)
|
(5,426)
|
2322.2
|
−
|
(97.5)
|
|
Foreign exchange gains or losses on provisions for legal proceedings
|
−
|
−
|
141
|
−
|
120
|
−
|
−
|
−
|
|
Adjusted EBITDA from continuing operations
|
6,214
|
4,785
|
8,178
|
19,580
|
23,528
|
29.9
|
(24.0)
|
(16.8)
|
|
Adjusted EBITDA from discontinued operations
|
−
|
−
|
31
|
−
|
301
|
−
|
−
|
−
|
|
Adjusted EBITDA
|
6,214
|
4,785
|
8,209
|
19,580
|
23,829
|
29.9
|
(24.3)
|
(17.8)
|
|
Adjusted EBITDA margin (%)
|
47
|
50
|
42
|
49
|
41
|
(3.0)
|
5.0
|
8.0
|
FINANCIAL STATEMENTS
Table
19 - Income Statement - Consolidated
|
US$ million
|
3Q20
|
2Q20
|
3Q19
|
9M20
|
9M19
|
|
Sales revenues
|
13,148
|
9,481
|
19,416
|
39,772
|
56,721
|
|
Cost of sales
|
(6,868)
|
(6,064)
|
(11,855)
|
(22,811)
|
(34,868)
|
|
Gross profit
|
6,280
|
3,417
|
7,561
|
16,961
|
21,853
|
|
Selling expenses
|
(1,175)
|
(1,246)
|
(1,252)
|
(3,756)
|
(3,090)
|
|
General and administrative expenses
|
(309)
|
(291)
|
(507)
|
(1,011)
|
(1,630)
|
|
Exploration costs
|
(268)
|
(65)
|
(70)
|
(437)
|
(344)
|
|
Research and development expenses
|
(92)
|
(68)
|
(146)
|
(255)
|
(430)
|
|
Other taxes
|
(398)
|
(245)
|
(141)
|
(761)
|
(300)
|
|
Impairment of assets
|
13
|
−
|
(607)
|
(13,358)
|
(627)
|
|
Other income and expenses
|
(522)
|
499
|
(1,346)
|
(280)
|
1,536
|
|
|
(2,751)
|
(1,416)
|
(4,069)
|
(19,858)
|
(4,885)
|
|
Operating income (loss)
|
3,529
|
2,001
|
3,492
|
(2,897)
|
16,968
|
|
Finance income
|
124
|
108
|
339
|
406
|
928
|
|
Finance expenses
|
(1,814)
|
(1,134)
|
(2,425)
|
(4,570)
|
(5,793)
|
|
Foreign exchange gains (losses) and inflation indexation charges
|
(2,496)
|
(1,231)
|
(654)
|
(6,830)
|
(2,297)
|
|
Net finance income (expense)
|
(4,186)
|
(2,257)
|
(2,740)
|
(10,994)
|
(7,162)
|
|
Results in equity-accounted investments
|
(168)
|
(211)
|
112
|
(677)
|
363
|
|
Income (loss) before income taxes
|
(825)
|
(467)
|
864
|
(14,568)
|
10,169
|
|
Income taxes
|
568
|
31
|
(992)
|
3,899
|
(4,441)
|
|
Net income (loss) from continuing operations
|
(257)
|
(436)
|
(128)
|
(10,669)
|
5,728
|
|
Net income (loss) from discontinued operations
|
−
|
−
|
2,356
|
−
|
2,560
|
|
Net Income (Loss)
|
(257)
|
(436)
|
2,228
|
(10,669)
|
8,288
|
|
Net income (loss) attributable to:
|
|
|
|
|
|
|
Shareholders of Petrobras
|
(236)
|
(417)
|
2,289
|
(10,368)
|
8,170
|
|
Net income (loss) from continuing operations
|
(236)
|
(417)
|
(56)
|
(10,368)
|
5,679
|
|
Net income (loss) from discontinued operations
|
−
|
−
|
2,345
|
−
|
2,491
|
|
Non-controlling interests
|
(21)
|
(19)
|
(61)
|
(301)
|
118
|
|
Net income (loss) from continuing operations
|
(21)
|
(19)
|
(72)
|
(301)
|
49
|
|
Net income (loss) from discontinued operations
|
−
|
−
|
11
|
−
|
69
|
|
|
|
|
|
|
|
Table 20 - Statement of Financial
Position – Consolidated
|
ASSETS - US$ million
|
09.30.2020
|
12.31.2019
|
|
Current assets
|
26,885
|
27,812
|
|
Cash and cash equivalents
|
12,700
|
7,372
|
|
Marketable securities
|
670
|
888
|
|
Trade and other receivables, net
|
2,288
|
3,762
|
|
Inventories
|
5,281
|
8,189
|
|
Recoverable taxes
|
4,229
|
3,544
|
|
Assets classified as held for sale
|
732
|
2,564
|
|
Other current assets
|
985
|
1,493
|
|
|
|
|
|
Non-current assets
|
144,270
|
201,928
|
|
Long-term receivables
|
22,729
|
17,691
|
|
Trade and other receivables, net
|
2,283
|
2,567
|
|
Marketable securities
|
39
|
58
|
|
Judicial deposits
|
6,681
|
8,236
|
|
Deferred taxes
|
9,902
|
1,388
|
|
Other tax assets
|
3,050
|
3,939
|
|
Advances to suppliers
|
142
|
326
|
|
Other non-current assets
|
632
|
1,177
|
|
Investments
|
3,035
|
5,499
|
|
Property, plant and equipment
|
104,748
|
159,265
|
|
Intangible assets
|
13,758
|
19,473
|
|
|
|
|
|
Total assets
|
171,155
|
229,740
|
|
|
|
|
|
|
|
|
|
LIABILITIES - US$ million
|
09.30.2020
|
12.31.2019
|
|
Current liabilities
|
24,945
|
28,816
|
|
Trade payables
|
4,333
|
5,601
|
|
Finance debt
|
6,698
|
4,469
|
|
Lease liability
|
5,423
|
5,737
|
|
Taxes payable
|
3,401
|
3,700
|
|
Dividends payable
|
356
|
1,558
|
|
Short-term benefits
|
1,881
|
1,645
|
|
Pension and medical benefits
|
680
|
887
|
|
Liabilities related to assets classified as held for sale
|
680
|
3,246
|
|
Other current liabilities
|
1,493
|
1,973
|
|
Non-current liabilities
|
101,825
|
126,709
|
|
Finance debt
|
50,875
|
58,791
|
|
Lease liability
|
16,592
|
18,124
|
|
Income taxes payable
|
337
|
504
|
|
Deferred taxes
|
139
|
1,760
|
|
Long-term benefits
|
323
|
38
|
|
Pension and medical benefits
|
16,978
|
25,607
|
|
Provision for legal and administrative proceedings
|
2,022
|
3,113
|
|
Provision for decommisioning costs
|
12,484
|
17,460
|
|
Other non-current liabilities
|
2,075
|
1,312
|
|
Shareholders’ equity
|
44,385
|
74,215
|
|
Share capital (net of share issuance costs)
|
107,101
|
107,101
|
|
Profit reserves and others
|
(63,181)
|
(33,778)
|
|
Non-controlling interests
|
465
|
892
|
|
Total liabilities and shareholders´ equity
|
171,155
|
229,740
|
Table 21 - Statement of Cash Flows
– Consolidated
|
US$ million
|
3Q20
|
2Q20
|
3Q19
|
9M20
|
9M19
|
|
Cash flows from Operating activities
|
|
|
|
|
|
|
Net income for the period
|
(257)
|
(436)
|
2,228
|
(10,669)
|
8,288
|
|
Adjustments for:
|
|
|
|
|
|
|
Net income from discontinued operations
|
−
|
−
|
(2,356)
|
−
|
(2,560)
|
|
Pension and medical benefits (actuarial expense)
|
358
|
373
|
517
|
1,175
|
1,587
|
|
Results of equity-accounted investments
|
168
|
211
|
(112)
|
677
|
(363)
|
|
Depreciation, depletion and amortization
|
2,873
|
2,793
|
3,776
|
9,209
|
11,205
|
|
Impairment of assets (reversal)
|
(13)
|
−
|
607
|
13,358
|
627
|
|
Allowance (reversals) for credit loss on trade and others receivables
|
(8)
|
35
|
31
|
124
|
69
|
|
Exploratory expenditure write-offs
|
185
|
12
|
1
|
223
|
65
|
|
Disposal/write-offs of assets and remeasurement of investment retained with loss of control
|
(177)
|
(9)
|
162
|
(92)
|
(5,392)
|
|
Foreign exchange, indexation and finance charges
|
4,253
|
4,236
|
2,604
|
12,458
|
6,864
|
|
Deferred income taxes, net
|
(572)
|
(144)
|
1,183
|
(4,186)
|
2,867
|
|
Revision and unwinding of discount on the provision for decommissioning costs
|
164
|
161
|
201
|
518
|
612
|
|
PIS and COFINS recovery - exclusion of ICMS (VAT tax) from the basis of calculation
|
(5)
|
(3,257)
|
−
|
(3,262)
|
−
|
|
Inventory write-down (write-back) to net realizable value
|
3
|
30
|
16
|
375
|
6
|
|
Decrease (Increase) in assets
|
|
|
|
|
|
|
Trade and other receivables, net
|
435
|
(1,477)
|
1,720
|
(69)
|
2,775
|
|
Inventories
|
(364)
|
660
|
751
|
742
|
134
|
|
Judicial deposits
|
(186)
|
(279)
|
(571)
|
(914)
|
(1,656)
|
|
Escrow account - Class action agreement
|
−
|
−
|
2,801
|
−
|
1,819
|
|
Other assets
|
872
|
(120)
|
47
|
451
|
(871)
|
|
Increase (Decrease) in liabilities
|
|
|
|
|
|
|
Trade payables
|
463
|
538
|
58
|
171
|
(785)
|
|
Other taxes payable
|
1,527
|
1,027
|
(769)
|
1,978
|
250
|
|
Pension and medical benefits
|
(162)
|
(325)
|
(910)
|
(821)
|
(1,405)
|
|
Provisions for legal proceedings
|
(5)
|
(111)
|
(2,487)
|
(274)
|
(3,677)
|
|
Short-term benefits
|
(50)
|
1,201
|
223
|
1,060
|
350
|
|
Provision for decommissioning costs
|
(141)
|
(45)
|
(75)
|
(313)
|
(331)
|
|
Other liabilities
|
(743)
|
419
|
222
|
200
|
(321)
|
|
Income taxes paid
|
(34)
|
(36)
|
(1,665)
|
(301)
|
(2,274)
|
|
Net cash provided by operating activities from continuing operations
|
8,584
|
5,457
|
8,203
|
21,818
|
17,883
|
|
Operating discontinued activities
|
−
|
−
|
67
|
−
|
323
|
|
Net cash provided by operating activities
|
8,584
|
5,457
|
8,270
|
21,818
|
18,206
|
|
Cash flows from Investing activities
|
|
|
|
|
|
|
Acquisition of PP&E and intangibles assets
|
(1,115)
|
(1,502)
|
(1,778)
|
(4,486)
|
(5,400)
|
|
Investments in investees
|
(1)
|
(943)
|
(12)
|
(941)
|
(22)
|
|
Proceeds from disposal of assets - Divestment
|
604
|
153
|
(1)
|
1,038
|
9,110
|
|
Divestment (Investment) in marketable securities
|
(150)
|
85
|
(735)
|
(5)
|
(260)
|
|
Dividends received
|
97
|
60
|
20
|
201
|
836
|
|
Net cash provided (used) by investing activities from continuing operations
|
(565)
|
(2,147)
|
(2,506)
|
(4,193)
|
4,264
|
|
Investing discontinued activities
|
−
|
−
|
1,863
|
−
|
1,812
|
|
Net cash provided (used) by investing activities
|
(565)
|
(2,147)
|
(643)
|
(4,193)
|
6,076
|
|
Cash flows from Financing activities
|
|
|
|
|
|
|
Investments by non-controlling interest
|
(39)
|
(6)
|
51
|
(64)
|
(42)
|
|
Financing and loans, net:
|
|
|
|
|
|
|
Proceeds from financing
|
101
|
5,623
|
4
|
15,897
|
4,729
|
|
Repayment of finance debt - principal
|
(12,376)
|
(2,879)
|
(9,129)
|
(19,598)
|
(21,086)
|
|
Repayment of finance debt - interest
|
(961)
|
(569)
|
(1,419)
|
(2,658)
|
(3,768)
|
|
Repayment of lease liability
|
(1,400)
|
(1,448)
|
(1,384)
|
(4,371)
|
(3,622)
|
|
Dividends paid to Shareholders of Petrobras
|
−
|
−
|
(298)
|
(1,020)
|
(1,304)
|
|
Dividends paid to non-controlling interests
|
(8)
|
(22)
|
(3)
|
(38)
|
(89)
|
|
Net cash provided (used) in financing activities from continuing operations
|
(14,683)
|
699
|
(12,178)
|
(11,852)
|
(25,182)
|
|
Financing discontinued activities
|
−
|
−
|
(13)
|
−
|
(508)
|
|
Net cash provided (used) in financing activities
|
(14,683)
|
699
|
(12,191)
|
(11,852)
|
(25,690)
|
|
Effect of exchange rate changes on cash and cash equivalents
|
(102)
|
(7)
|
537
|
(446)
|
688
|
|
Net increase (decrease) in cash and cash equivalents
|
(6,766)
|
4,002
|
(4,027)
|
5,327
|
(720)
|
|
Cash and cash equivalents at the beginning of the period
|
19,470
|
15,468
|
17,206
|
7,377
|
13,899
|
|
Cash and cash equivalents at the end of the period
|
12,704
|
19,470
|
13,179
|
12,704
|
13,179
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL INFORMATION BY BUSINESS
AREAS
Table 22 - Consolidated Income by
Segment – 9M20
|
US$ million
|
E&P
|
RTM
|
GAS & POWER
|
CORP. AND OTHERS
|
ELIMIN.
|
TOTAL
|
|
Sales revenues
|
25,400
|
35,696
|
5,469
|
627
|
(27,420)
|
39,772
|
|
Intersegments
|
24,752
|
623
|
1,881
|
164
|
(27,420)
|
−
|
|
Third parties
|
648
|
35,073
|
3,588
|
463
|
−
|
39,772
|
|
Cost of sales
|
(14,069)
|
(33,169)
|
(2,716)
|
(601)
|
27,744
|
(22,811)
|
|
Gross profit
|
11,331
|
2,527
|
2,753
|
26
|
324
|
16,961
|
|
Expenses
|
(13,991)
|
(3,074)
|
(1,840)
|
(934)
|
(19)
|
(19,858)
|
|
Selling expenses
|
−
|
(2,016)
|
(1,706)
|
(16)
|
(18)
|
(3,756)
|
|
General and administrative expenses
|
(131)
|
(159)
|
(67)
|
(654)
|
−
|
(1,011)
|
|
Exploration costs
|
(437)
|
−
|
−
|
−
|
−
|
(437)
|
|
Research and development expenses
|
(166)
|
(8)
|
(4)
|
(77)
|
−
|
(255)
|
|
Other taxes
|
(460)
|
(87)
|
(19)
|
(195)
|
−
|
(761)
|
|
Impairment of assets
|
(13,180)
|
(43)
|
32
|
(167)
|
−
|
(13,358)
|
|
Other income and expenses
|
383
|
(761)
|
(76)
|
175
|
(1)
|
(280)
|
|
Operating income (loss)
|
(2,660)
|
(547)
|
913
|
(908)
|
305
|
(2,897)
|
|
Net finance income (expense)
|
−
|
−
|
−
|
(10,994)
|
−
|
(10,994)
|
|
Results in equity-accounted investments
|
(157)
|
(549)
|
82
|
(53)
|
−
|
(677)
|
|
Income (loss) before income taxes
|
(2,817)
|
(1,096)
|
995
|
(11,955)
|
305
|
(14,568)
|
|
Income taxes
|
904
|
186
|
(310)
|
3,222
|
(103)
|
3,899
|
|
Net income (loss) from continuing operations
|
(1,913)
|
(910)
|
685
|
(8,733)
|
202
|
(10,669)
|
|
Net income (loss) from discontinued operations
|
−
|
−
|
−
|
−
|
−
|
−
|
|
Net Income (Loss)
|
(1,913)
|
(910)
|
685
|
(8,733)
|
202
|
(10,669)
|
|
Net income (loss) attributable to:
|
|
|
|
|
|
|
|
Shareholders of Petrobras
|
(1,910)
|
(865)
|
627
|
(8,422)
|
202
|
(10,368)
|
|
Net income (loss) from continuing operations
|
(1,910)
|
(865)
|
627
|
(8,422)
|
202
|
(10,368)
|
|
Net income (loss) from discontinued operations
|
−
|
−
|
−
|
−
|
−
|
−
|
|
Non-controlling interests
|
(3)
|
(45)
|
58
|
(311)
|
−
|
(301)
|
|
Net income (loss) from continuing operations
|
(3)
|
(45)
|
58
|
(311)
|
−
|
(301)
|
|
Net income (loss) from discontinued operations
|
−
|
−
|
−
|
−
|
−
|
−
|
|
|
(1,913)
|
(910)
|
685
|
(8,733)
|
202
|
(10,669)
|
Table
23 - Consolidated Income by Segment – 9M19
|
US$ million
|
E&P
|
RTM
|
GAS & POWER
|
CORP. AND OTHERS
|
ELIMIN.
|
TOTAL
|
|
Sales revenues
|
36,594
|
49,932
|
8,744
|
923
|
(39,472)
|
56,721
|
|
Intersegments
|
35,853
|
9,063
|
2,639
|
158
|
(39,472)
|
8,241
|
|
Third parties
|
741
|
40,869
|
6,105
|
765
|
−
|
48,480
|
|
Cost of sales
|
(20,427)
|
(45,918)
|
(5,938)
|
(886)
|
38,301
|
(34,868)
|
|
Gross profit
|
16,167
|
4,014
|
2,806
|
37
|
(1,171)
|
21,853
|
|
Expenses
|
(2,400)
|
(2,772)
|
3,779
|
(3,470)
|
(22)
|
(4,885)
|
|
Selling expenses
|
−
|
(1,486)
|
(1,563)
|
(24)
|
(17)
|
(3,090)
|
|
General and administrative expenses
|
(238)
|
(262)
|
(106)
|
(1,025)
|
1
|
(1,630)
|
|
Exploration costs
|
(344)
|
−
|
−
|
−
|
−
|
(344)
|
|
Research and development expenses
|
(298)
|
(9)
|
(10)
|
(113)
|
−
|
(430)
|
|
Other taxes
|
(48)
|
(71)
|
(33)
|
(148)
|
−
|
(300)
|
|
Impairment of assets
|
(307)
|
(316)
|
(4)
|
−
|
−
|
(627)
|
|
Other income and expenses
|
(1,165)
|
(628)
|
5,495
|
(2,160)
|
(6)
|
1,536
|
|
Operating income (loss)
|
13,767
|
1,242
|
6,585
|
(3,433)
|
(1,193)
|
16,968
|
|
Net finance income (expense)
|
−
|
−
|
−
|
(7,162)
|
−
|
(7,162)
|
|
Results in equity-accounted investments
|
94
|
72
|
86
|
111
|
−
|
363
|
|
Income (loss) before income taxes
|
13,861
|
1,314
|
6,671
|
(10,484)
|
(1,193)
|
10,169
|
|
Income taxes
|
(4,680)
|
(422)
|
(2,238)
|
2,494
|
405
|
(4,441)
|
|
Net income (loss) from continuing operations
|
9,181
|
892
|
4,433
|
(7,990)
|
(788)
|
5,728
|
|
Net income (loss) from discontinued operations
|
−
|
−
|
3
|
2,557
|
−
|
2,560
|
|
Net Income (Loss)
|
9,181
|
892
|
4,436
|
(5,433)
|
(788)
|
8,288
|
|
Net income (loss) attributable to:
|
|
|
|
|
|
|
|
Shareholders of Petrobras
|
9,184
|
913
|
4,336
|
(5,475)
|
(788)
|
8,170
|
|
Net income (loss) from continuing operations
|
9,184
|
913
|
4,335
|
(7,965)
|
(788)
|
5,679
|
|
Net income (loss) from discontinued operations
|
−
|
−
|
1
|
2,490
|
−
|
2,491
|
|
Non-controlling interests
|
(3)
|
(21)
|
100
|
42
|
−
|
118
|
|
Net income (loss) from continuing operations
|
(3)
|
(21)
|
97
|
(24)
|
−
|
49
|
|
Net income (loss) from discontinued operations
|
−
|
−
|
3
|
66
|
−
|
69
|
|
|
9,181
|
892
|
4,436
|
(5,433)
|
(788)
|
8,288
|
Table
24 - Quarterly Consolidated Income by Segment – 3Q20
|
US$ million
|
E&P
|
RTM
|
GAS & POWER
|
CORP. AND OTHERS
|
ELIMIN.
|
TOTAL
|
|
Sales revenues
|
9,358
|
11,955
|
1,582
|
226
|
(9,973)
|
13,148
|
|
Intersegments
|
9,141
|
171
|
593
|
68
|
(9,973)
|
−
|
|
Third parties
|
217
|
11,784
|
989
|
158
|
−
|
13,148
|
|
Cost of sales
|
(4,657)
|
(10,343)
|
(761)
|
(203)
|
9,096
|
(6,868)
|
|
Gross profit
|
4,701
|
1,612
|
821
|
23
|
(877)
|
6,280
|
|
Expenses
|
(612)
|
(856)
|
(513)
|
(765)
|
(5)
|
(2,751)
|
|
Selling expenses
|
−
|
(671)
|
(493)
|
(6)
|
(5)
|
(1,175)
|
|
General and administrative expenses
|
(28)
|
(48)
|
(21)
|
(212)
|
−
|
(309)
|
|
Exploration costs
|
(268)
|
−
|
−
|
−
|
−
|
(268)
|
|
Research and development expenses
|
(63)
|
(2)
|
(1)
|
(26)
|
−
|
(92)
|
|
Other taxes
|
(370)
|
2
|
(7)
|
(23)
|
−
|
(398)
|
|
Impairment of assets
|
(13)
|
−
|
32
|
(6)
|
−
|
13
|
|
Other income and expenses
|
130
|
(137)
|
(23)
|
(492)
|
−
|
(522)
|
|
Operating income (loss)
|
4,089
|
756
|
308
|
(742)
|
(882)
|
3,529
|
|
Net finance income (expense)
|
−
|
−
|
−
|
(4,186)
|
−
|
(4,186)
|
|
Results in equity-accounted investments
|
7
|
(105)
|
59
|
(129)
|
−
|
(168)
|
|
Income (loss) before income taxes
|
4,096
|
651
|
367
|
(5,057)
|
(882)
|
(825)
|
|
Income taxes
|
(1,390)
|
(257)
|
(104)
|
2,019
|
300
|
568
|
|
Net income (loss) from continuing operations
|
2,706
|
394
|
263
|
(3,038)
|
(582)
|
(257)
|
|
Net income (loss) from discontinued operations
|
−
|
−
|
−
|
−
|
−
|
−
|
|
Net Income (Loss)
|
2,706
|
394
|
263
|
(3,038)
|
(582)
|
(257)
|
|
Net income (loss) attributable to:
|
|
|
|
|
|
|
|
Shareholders of Petrobras
|
2,707
|
403
|
244
|
(3,008)
|
(582)
|
(236)
|
|
Net income (loss) from continuing operations
|
2,707
|
403
|
244
|
(3,008)
|
(582)
|
(236)
|
|
Net income (loss) from discontinued operations
|
−
|
−
|
−
|
−
|
−
|
−
|
|
Non-controlling interests
|
(1)
|
(9)
|
19
|
(30)
|
−
|
(21)
|
|
Net income (loss) from continuing operations
|
(1)
|
(9)
|
19
|
(30)
|
−
|
(21)
|
|
Net income (loss) from discontinued operations
|
−
|
−
|
−
|
−
|
−
|
−
|
|
|
2,706
|
394
|
263
|
(3,038)
|
(582)
|
(257)
|
Table
25 - Quarterly Consolidated Income by Segment – 2Q20
|
US$ million
|
E&P
|
RTM
|
GAS & POWER
|
CORP. AND OTHERS
|
ELIMIN.
|
TOTAL
|
|
Sales revenues
|
5,165
|
8,261
|
1,517
|
203
|
(5,665)
|
9,481
|
|
Intersegments
|
4,944
|
150
|
535
|
36
|
(5,665)
|
−
|
|
Third parties
|
221
|
8,111
|
982
|
167
|
−
|
9,481
|
|
Cost of sales
|
(3,505)
|
(7,429)
|
(610)
|
(205)
|
5,685
|
(6,064)
|
|
Gross profit
|
1,660
|
832
|
907
|
(2)
|
20
|
3,417
|
|
Expenses
|
149
|
(1,304)
|
(654)
|
399
|
(6)
|
(1,416)
|
|
Selling expenses
|
−
|
(695)
|
(539)
|
(6)
|
(6)
|
(1,246)
|
|
General and administrative expenses
|
(56)
|
(50)
|
(19)
|
(166)
|
−
|
(291)
|
|
Exploration costs
|
(65)
|
−
|
−
|
−
|
−
|
(65)
|
|
Research and development expenses
|
(41)
|
(3)
|
−
|
(24)
|
−
|
(68)
|
|
Other taxes
|
(74)
|
(47)
|
(3)
|
(121)
|
−
|
(245)
|
|
Impairment of assets
|
−
|
−
|
−
|
−
|
−
|
−
|
|
Other income and expenses
|
385
|
(509)
|
(93)
|
716
|
−
|
499
|
|
Operating income (loss)
|
1,809
|
(472)
|
253
|
397
|
14
|
2,001
|
|
Net finance income (expense)
|
−
|
−
|
−
|
(2,257)
|
−
|
(2,257)
|
|
Results in equity-accounted investments
|
(9)
|
(259)
|
25
|
32
|
−
|
(211)
|
|
Income (loss) before income taxes
|
1,800
|
(731)
|
278
|
(1,828)
|
14
|
(467)
|
|
Income taxes
|
(615)
|
160
|
(86)
|
577
|
(5)
|
31
|
|
Net income (loss) from continuing operations
|
1,185
|
(571)
|
192
|
(1,251)
|
9
|
(436)
|
|
Net income (loss) from discontinued operations
|
−
|
−
|
−
|
−
|
−
|
−
|
|
Net Income (Loss)
|
1,185
|
(571)
|
192
|
(1,251)
|
9
|
(436)
|
|
Net income (loss) attributable to:
|
|
|
|
|
|
|
|
Shareholders of Petrobras
|
1,187
|
(566)
|
169
|
(1,216)
|
9
|
(417)
|
|
Net income (loss) from continuing operations
|
1,187
|
(566)
|
169
|
(1,216)
|
9
|
(417)
|
|
Net income (loss) from discontinued operations
|
−
|
−
|
−
|
−
|
−
|
−
|
|
Non-controlling interests
|
(2)
|
(5)
|
23
|
(35)
|
−
|
(19)
|
|
Net income (loss) from continuing operations
|
(2)
|
(5)
|
23
|
(35)
|
−
|
(19)
|
|
Net income (loss) from discontinued operations
|
−
|
−
|
−
|
−
|
−
|
−
|
|
|
1,185
|
(571)
|
192
|
(1,251)
|
9
|
(436)
|
Table 26 - Other Income and Expenses by Segment
– 9M20
|
US$ million
|
E&P
|
RTM
|
GAS & POWER
|
CORP. AND OTHERS
|
ELIMIN.
|
TOTAL
|
|
Unscheduled stoppages and pre-operating expenses
|
(937)
|
(94)
|
(71)
|
(5)
|
−
|
(1,107)
|
|
Voluntary Separation Plan - PDV
|
(362)
|
(305)
|
(26)
|
(329)
|
−
|
(1,022)
|
|
Pension and medical benefits - retirees
|
−
|
−
|
−
|
(699)
|
−
|
(699)
|
|
Gains / (losses) related to legal, administrative and arbitration proceedings
|
(211)
|
(265)
|
66
|
20
|
−
|
(390)
|
|
Gains/(losses) with Commodities Derivatives
|
−
|
−
|
−
|
(301)
|
−
|
(301)
|
|
Reclassification of comprehensive income (loss) due to the disposal of equity-accounted investments
|
−
|
−
|
(43)
|
−
|
−
|
(43)
|
|
Variable compensation program
|
13
|
(4)
|
1
|
5
|
−
|
15
|
|
Fines imposed on suppliers
|
75
|
4
|
1
|
4
|
−
|
84
|
|
Amounts recovered from Lava Jato investigation
|
8
|
−
|
−
|
93
|
−
|
101
|
|
Results on disposal/write-offs of assets and on remeasurement of investment retained with loss of control
|
238
|
(50)
|
11
|
(66)
|
−
|
133
|
|
Early termination and changes on payments of lease agreements
|
161
|
−
|
6
|
6
|
−
|
173
|
|
Expenses/Reimbursements from E&P partnership operations
|
429
|
−
|
−
|
−
|
−
|
429
|
|
Equalization of expenses - Production Individualization Agreements
|
709
|
−
|
−
|
−
|
−
|
709
|
|
PIS and Cofins recovered - VAT tax exclusion from PIS and Cofins tax basis
|
−
|
−
|
−
|
1,478
|
−
|
1,478
|
|
Others
|
260
|
(47)
|
(21)
|
(31)
|
(1)
|
160
|
|
|
383
|
(761)
|
(76)
|
175
|
(1)
|
(280)
|
Table 27 - Other Income and Expenses by Segment
– 9M19
|
US$ million
|
E&P
|
RTM
|
GAS & POWER
|
CORP. AND OTHERS
|
ELIMIN.
|
TOTAL
|
|
Unscheduled stoppages and pre-operating expenses
|
(888)
|
(13)
|
(96)
|
(2)
|
−
|
(999)
|
|
Voluntary Separation Plan - PDV
|
(59)
|
(55)
|
(3)
|
(36)
|
−
|
(153)
|
|
Pension and medical benefits - retirees
|
−
|
−
|
−
|
(1,042)
|
−
|
(1,042)
|
|
Gains / (losses) related to legal, administrative and arbitration proceedings
|
(55)
|
(433)
|
86
|
(1,086)
|
−
|
(1,488)
|
|
Gains/(losses) with Commodities Derivatives
|
−
|
−
|
−
|
(314)
|
−
|
(314)
|
|
Reclassification of comprehensive income (loss) due to the disposal of equity-accounted investments
|
−
|
−
|
−
|
(34)
|
−
|
(34)
|
|
Variable compensation program
|
(206)
|
(100)
|
(18)
|
(169)
|
−
|
(493)
|
|
Fines imposed on suppliers
|
85
|
22
|
114
|
4
|
−
|
225
|
|
Amounts recovered from Lava Jato investigation
|
7
|
−
|
−
|
184
|
−
|
191
|
|
Results on disposal/write-offs of assets and on remeasurement of investment retained with loss of control
|
(165)
|
13
|
5,430
|
147
|
−
|
5,425
|
|
Early termination and changes on payments of lease agreements
|
−
|
−
|
(2)
|
−
|
−
|
(2)
|
|
Expenses/Reimbursements from E&P partnership operations
|
230
|
−
|
−
|
−
|
−
|
230
|
|
Equalization of expenses - Production Individualization Agreements
|
25
|
−
|
−
|
−
|
−
|
25
|
|
PIS and Cofins recovered - VAT tax exclusion from PIS and Cofins tax basis
|
−
|
−
|
−
|
−
|
−
|
−
|
|
Others
|
(139)
|
(62)
|
(16)
|
188
|
(6)
|
(35)
|
|
|
(1,165)
|
(628)
|
5,495
|
(2,160)
|
(6)
|
1,536
|
Table 28 - Other Income and Expenses by Segment
– 3Q20
|
US$ million
|
E&P
|
RTM
|
GAS & POWER
|
CORP. AND OTHERS
|
ELIMIN.
|
TOTAL
|
|
Unscheduled stoppages and pre-operating expenses
|
(278)
|
−
|
(10)
|
(4)
|
−
|
(292)
|
|
Gains / (losses) related to legal, administrative and arbitration proceedings
|
(107)
|
(71)
|
(1)
|
(46)
|
−
|
(225)
|
|
Pension and medical benefits - retirees
|
−
|
−
|
−
|
(211)
|
−
|
(211)
|
|
Equalization of expenses - Production Individualization Agreements
|
(136)
|
−
|
−
|
−
|
−
|
(136)
|
|
Voluntary Separation Plan - PDV
|
14
|
(22)
|
3
|
(73)
|
−
|
(78)
|
|
Gains/(losses) with Commodities Derivatives
|
−
|
−
|
−
|
(48)
|
−
|
(48)
|
|
Reclassification of comprehensive income (loss) due to the disposal of equity-accounted investments
|
−
|
−
|
(43)
|
−
|
−
|
(43)
|
|
Variable compensation program
|
−
|
(9)
|
−
|
(5)
|
−
|
(14)
|
|
Amounts recovered from Lava Jato investigation
|
−
|
−
|
−
|
16
|
−
|
16
|
|
Fines imposed on suppliers
|
18
|
1
|
−
|
2
|
−
|
21
|
|
Early termination and changes on payments of lease agreements
|
65
|
(2)
|
(4)
|
(33)
|
−
|
26
|
|
Expenses/Reimbursements from E&P partnership operations
|
170
|
−
|
−
|
−
|
−
|
170
|
|
Results on disposal/write-offs of assets and on remeasurement of investment retained with loss of control
|
289
|
(26)
|
21
|
(66)
|
−
|
218
|
|
PIS and Cofins recovered - VAT tax exclusion from PIS and Cofins tax basis
|
−
|
−
|
−
|
−
|
−
|
−
|
|
Others
|
95
|
(8)
|
11
|
(24)
|
−
|
74
|
|
|
130
|
(137)
|
(23)
|
(492)
|
−
|
(522)
|
Table 29 - Other Income and Expenses by Segment
– 2Q20
|
US$ million
|
E&P
|
RTM
|
GAS & POWER
|
CORP. AND OTHERS
|
ELIMIN.
|
TOTAL
|
|
Unscheduled stoppages and pre-operating expenses
|
(352)
|
(91)
|
(19)
|
−
|
−
|
(462)
|
|
Gains / (losses) related to legal, administrative and arbitration proceedings
|
29
|
(139)
|
(14)
|
9
|
−
|
(115)
|
|
Pension and medical benefits - retirees
|
−
|
−
|
−
|
(189)
|
−
|
(189)
|
|
Equalization of expenses - Production Individualization Agreements
|
822
|
−
|
−
|
−
|
−
|
822
|
|
Voluntary Separation Incentive Plan - PDV
|
(356)
|
(269)
|
(29)
|
(249)
|
−
|
(903)
|
|
Gains/(losses) with Commodities Derivatives
|
−
|
−
|
−
|
(476)
|
−
|
(476)
|
|
Reclassification of comprehensive income (loss) due to the disposal of equity-accounted investments
|
−
|
−
|
−
|
−
|
−
|
−
|
|
Variable compensation program
|
−
|
−
|
−
|
−
|
−
|
−
|
|
Amounts recovered from Lava Jato investigation
|
8
|
−
|
−
|
56
|
−
|
64
|
|
Fines imposed on suppliers
|
10
|
2
|
−
|
2
|
−
|
14
|
|
Early termination and changes on payments of lease agreements
|
20
|
2
|
(3)
|
34
|
−
|
53
|
|
Expenses/Reimbursements from E&P partnership operations
|
117
|
−
|
−
|
−
|
−
|
117
|
|
Results on disposal/write-offs of assets and on remeasurement of investment retained with loss of control
|
19
|
(4)
|
(2)
|
(4)
|
−
|
9
|
|
PIS and Cofins recovered - VAT tax exclusion from PIS and Cofins tax basis
|
−
|
−
|
−
|
1,478
|
−
|
1,478
|
|
Others
|
68
|
(10)
|
(26)
|
55
|
−
|
87
|
|
|
385
|
(509)
|
(93)
|
716
|
−
|
499
|
Table 30 - Consolidated Assets by
Segment – 09.30.2020
|
US$ million
|
E&P
|
RTM
|
GAS & POWER
|
CORP. AND OTHERS
|
ELIMIN.
|
TOTAL
|
|
Total assets
|
100,351
|
30,341
|
8,876
|
35,280
|
(3,693)
|
171,155
|
|
|
|
|
|
|
|
|
|
Current assets
|
3,336
|
8,355
|
1,380
|
17,490
|
(3,676)
|
26,885
|
|
Non-current assets
|
97,015
|
21,986
|
7,496
|
17,790
|
(17)
|
144,270
|
|
Long-term receivables
|
4,655
|
2,558
|
977
|
14,538
|
1
|
22,729
|
|
Investments
|
413
|
176
|
565
|
1,881
|
−
|
3,035
|
|
Property, plant and equipment
|
78,528
|
19,161
|
5,841
|
1,236
|
(18)
|
104,748
|
|
Operating assets
|
68,570
|
16,764
|
3,774
|
1,101
|
(18)
|
90,191
|
|
Assets under construction
|
9,958
|
2,396
|
2,067
|
136
|
−
|
14,557
|
|
Intangible assets
|
13,419
|
91
|
113
|
135
|
−
|
13,758
|
Table 31 - Consolidated Assets by
Segment – 12.31.2019
|
US$ million
|
E&P
|
RTM
|
GAS & POWER
|
CORP. AND OTHERS
|
ELIMIN.
|
TOTAL
|
|
Total assets
|
154,280
|
43,521
|
12,713
|
24,090
|
(4,864)
|
229,740
|
|
|
|
|
|
|
|
|
|
Current assets
|
5,734
|
12,273
|
1,932
|
12,700
|
(4,827)
|
27,812
|
|
Non-current assets
|
148,546
|
31,248
|
10,781
|
11,390
|
(37)
|
201,928
|
|
Long-term receivables
|
6,456
|
3,299
|
1,369
|
6,567
|
−
|
17,691
|
|
Investments
|
592
|
1,109
|
1,067
|
2,731
|
−
|
5,499
|
|
Property, plant and equipment
|
122,496
|
26,710
|
8,181
|
1,915
|
(37)
|
159,265
|
|
Operating assets
|
106,331
|
23,630
|
5,605
|
1,784
|
(37)
|
137,313
|
|
Assets under construction
|
16,165
|
3,080
|
2,576
|
131
|
−
|
21,952
|
|
Intangible assets
|
19,002
|
130
|
164
|
177
|
−
|
19,473
|
Table
32 - Reconciliation of Adjusted EBITDA by Segment – 9M20[3]
|
US$ million
|
E&P
|
RTM
|
GAS & POWER
|
CORP. AND OTHERS
|
ELIMIN.
|
TOTAL
|
|
Net income (loss) from continuing operations
|
(1,913)
|
(910)
|
685
|
(8,733)
|
202
|
(10,669)
|
|
Net finance income (expense)
|
−
|
−
|
−
|
10,994
|
−
|
10,994
|
|
Income taxes
|
(904)
|
(186)
|
310
|
(3,222)
|
103
|
(3,899)
|
|
Depreciation, depletion and amortization
|
7,122
|
1,565
|
367
|
155
|
−
|
9,209
|
|
EBITDA
|
4,305
|
469
|
1,362
|
(806)
|
305
|
5,635
|
|
Results in equity-accounted investments
|
157
|
549
|
(82)
|
53
|
−
|
677
|
|
Impairment
|
13,180
|
43
|
(32)
|
167
|
−
|
13,358
|
|
Reclassification of comprehensive income (loss) due to the disposal of equity-accounted investments
|
−
|
−
|
43
|
−
|
−
|
43
|
|
Results on disposal/write-offs of assets and on remeasurement of investment retained with loss of control **
|
(238)
|
50
|
(11)
|
66
|
−
|
(133)
|
|
Foreign exchange gains or losses on provisions for legal proceedings
|
−
|
−
|
−
|
−
|
−
|
−
|
|
Adjusted EBITDA* from continuing operations
|
17,404
|
1,111
|
1,280
|
(520)
|
305
|
19,580
|
|
Adjusted EBITDA* from discontinued operations
|
−
|
−
|
−
|
−
|
−
|
−
|
|
Adjusted EBITDA*
|
17,404
|
1,111
|
1,280
|
(520)
|
305
|
19,580
|
Table 33 - Reconciliation of Adjusted
EBITDA by Segment – 9M19
|
US$ million
|
E&P
|
RTM
|
GAS & POWER
|
CORP. AND OTHERS
|
ELIMIN.
|
TOTAL
|
|
Net income (loss) from continuing operations
|
9,181
|
892
|
4,433
|
(7,990)
|
(788)
|
5,728
|
|
Net finance income (expense)
|
−
|
−
|
−
|
7,162
|
−
|
7,162
|
|
Income taxes
|
4,680
|
422
|
2,238
|
(2,494)
|
(405)
|
4,441
|
|
Depreciation, depletion and amortization
|
8,657
|
1,867
|
502
|
179
|
−
|
11,205
|
|
EBITDA
|
22,518
|
3,181
|
7,173
|
(3,143)
|
(1,193)
|
28,536
|
|
Results in equity-accounted investments
|
(94)
|
(72)
|
(86)
|
(111)
|
−
|
(363)
|
|
Impairment
|
307
|
316
|
4
|
−
|
−
|
627
|
|
Reclassification of comprehensive income (loss) due to the disposal of equity-accounted investments
|
−
|
−
|
−
|
34
|
−
|
34
|
|
Results on disposal/write-offs of assets and on remeasurement of investment retained with loss of control **
|
165
|
(13)
|
(5,430)
|
(148)
|
−
|
(5,426)
|
|
Foreign exchange gains or losses on provisions for legal proceedings
|
−
|
−
|
−
|
120
|
−
|
120
|
|
Adjusted EBITDA* from continuing operations
|
22,896
|
3,412
|
1,661
|
(3,248)
|
(1,193)
|
23,528
|
|
Adjusted EBITDA* from discontinued operations
|
−
|
−
|
14
|
287
|
−
|
301
|
|
Adjusted EBITDA*
|
22,896
|
3,412
|
1,675
|
(2,961)
|
(1,193)
|
23,829
|
* See
definition of Adjusted EBITDA in glossary.
Table 34 - Reconciliation of Adjusted
EBITDA by Segment – 3Q20
|
US$ million
|
E&P
|
RTM
|
GAS & POWER
|
CORP. AND OTHERS
|
ELIMIN.
|
TOTAL
|
|
Net income (loss) from continuing operations
|
2,706
|
394
|
263
|
(3,038)
|
(582)
|
(257)
|
|
Net finance income (expense)
|
−
|
−
|
−
|
4,186
|
−
|
4,186
|
|
Income taxes
|
1,390
|
257
|
104
|
(2,019)
|
(300)
|
(568)
|
|
Depreciation, depletion and amortization
|
2,200
|
509
|
115
|
49
|
−
|
2,873
|
|
EBITDA
|
6,296
|
1,160
|
482
|
(822)
|
(882)
|
6,234
|
|
Results in equity-accounted investments
|
(7)
|
105
|
(59)
|
129
|
−
|
168
|
|
Impairment
|
13
|
−
|
(32)
|
6
|
−
|
(13)
|
|
Reclassification of comprehensive income (loss) due to the disposal of equity-accounted investments
|
−
|
−
|
43
|
−
|
−
|
43
|
|
Results on disposal/write-offs of assets and on remeasurement of investment retained with loss of control **
|
(289)
|
26
|
(21)
|
66
|
−
|
(218)
|
|
Foreign exchange gains or losses on provisions for legal proceedings
|
−
|
−
|
−
|
−
|
−
|
−
|
|
Adjusted EBITDA* from continuing operations
|
6,013
|
1,291
|
413
|
(621)
|
(882)
|
6,214
|
|
Adjusted EBITDA* from discontinued operations
|
−
|
−
|
−
|
−
|
−
|
−
|
|
Adjusted EBITDA*
|
6,013
|
1,291
|
413
|
(621)
|
(882)
|
6,214
|
Table 35 - Reconciliation of Adjusted
EBITDA by Segment – 2Q20
|
*US$ million
|
E&P
|
RTM
|
GAS & POWER
|
CORP. AND OTHERS
|
ELIMIN.
|
TOTAL
|
|
Net income (loss) from continuing operations
|
1,185
|
(571)
|
192
|
(1,251)
|
9
|
(436)
|
|
Net finance income (expense)
|
−
|
−
|
−
|
2,257
|
−
|
2,257
|
|
Income taxes
|
615
|
(160)
|
86
|
(577)
|
5
|
(31)
|
|
Depreciation, depletion and amortization
|
2,134
|
495
|
114
|
50
|
−
|
2,793
|
|
EBITDA
|
3,934
|
(236)
|
392
|
479
|
14
|
4,583
|
|
Results in equity-accounted investments
|
9
|
259
|
(25)
|
(32)
|
−
|
211
|
|
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 **
|
(19)
|
4
|
2
|
4
|
−
|
(9)
|
|
Foreign exchange gains or losses on provisions for legal proceedings
|
−
|
−
|
−
|
−
|
−
|
−
|
|
Adjusted EBITDA* from continuing operations
|
3,924
|
27
|
369
|
451
|
14
|
4,785
|
|
Adjusted EBITDA* from discontinued operations
|
−
|
−
|
−
|
−
|
−
|
−
|
|
Adjusted EBITDA*
|
3,924
|
27
|
369
|
451
|
14
|
4,785
|
* See
definition of Adjusted EBITDA in glossary.
|
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 and gains/losses
on disposal/write-offs of assets. 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 profitability. Adjusted EBITDA shall be considered in conjunction with other metrics for a better understanding on our
performance.
Adjusted EBITDA margin - Adjusted EBITDA divided
by sales revenues.
Basic and diluted earnings (losses) per share - Calculated
based on the weighted average number of shares.
Consolidated Structured Entities
– Entities that have been designated so that voting rights or the like are not the determining factor in deciding who controls
the entity. Petrobras has no equity interest in certain structured entities that are consolidated in the Company's financial statements,
but control is determined by the power it has over its relevant operating activities. As there is no equity interest, the income
from certain consolidated structured entities is attributable to non-controlling shareholders in the income statement, and disregarding
the profit or loss attributable to Petrobras shareholders.
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 and intangibles assets, investments in investees and dividends received.. 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.
Investments – 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.
|
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 - Sum of the last 12 months
(Last Twelve Months) of Adjusted EBITDA. This metric is not foreseen in the international accounting standards - IFRS and it is
possible that it is not comparable with similar indexes reported by other companies, however Management believes that it is supplementary
information to assess liquidity and helps manage leverage. Adjusted EBITDA should be considered in conjunction with other metrics
to better understand the Company's liquidity.
OCF - Net Cash provided by (used in) operating
activities (operating cash flow)
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, however our management believes that net debt is an appropriate supplemental measure that helps
investors assess our liquidity and supports leverage management.
Net Income 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. company. As a result of the divestments in 2019, the strategy of repositioning
its portfolio foreseen in the Strategic Plan 2020-2024, approved on November 27, 2019, as well as the materiality of the remaining
businesses, the company reassessed the presentation of the Distribution and Biofuels, which are now included in the Corporate and
other businesses.
PLD (differences settlement price) - Electricity
price in the spot market. Weekly weighed prices per output level (light, medium and heavy), number of hours and related market
capacity.
Refining - includes crude oil refining, logistics,
transportation, acquisition and export activities, as well as the purchase and sale of petroleum and ethanol products in Brazil
and abroad. Additionally, this segment includes the petrochemical area, which includes investments in companies in the petrochemical
sector, shale exploration and processing.
Sales Price of Petroleum in Brazil - Average internal
transfer prices from the E&P segment to the Refining segment.
Total net liabilities - Total liability less adjusted
cash and cash equivalents.
|
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: October 29, 2020
PETRÓLEO BRASILEIRO
S.A–PETROBRAS
By: /s/ Andrea Marques de Almeida
______________________________
Andrea
Marques de Almeida
Chief Financial Officer and
Investor Relations Officer
Petroleo Brasileiro ADR (NYSE:PBR)
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