The increase in selling expenses mainly reflects the increase
in tariffs for greater use of TAG gas pipelines since the sale in June 2019, for higher export volumes, mainly oil, and for higher
freight price.
The consolidated amounts of intersegment sales (remaining
after eliminations) relates to sales from the RT&M to BR Distribuidora, which is presented as discontinued operation within
Corporate and other business, after Petrobras ceased to be the parent company of BR Distribuidora.
10.1
Trade and other receivables, net
|
Consolidated
|
|
09.30.2020
|
12.31.2019
|
Receivables from contracts with customers
|
|
|
Third parties
|
18,112
|
18,057
|
Related parties
|
|
|
Investees (note 31.6)
|
2,378
|
3,201
|
Receivables from the electricity sector
|
1,035
|
1,347
|
Subtotal
|
21,525
|
22,605
|
Other trade receivables
|
|
|
Third parties
|
|
|
Receivables from divestments (*)
|
8,327
|
5,781
|
Lease receivables
|
2,690
|
1,941
|
Other receivables
|
4,044
|
3,348
|
Related parties
|
|
|
Petroleum and alcohol accounts - receivables from Brazilian Government (note 31.7)
|
1,239
|
1,226
|
Subtotal
|
16,300
|
12,296
|
Total trade receivables
|
37,825
|
34,901
|
Expected credit losses (ECL) - Third parties
|
(11,839)
|
(9,214)
|
Expected credit losses (ECL) - Related parties
|
(202)
|
(178)
|
Total trade receivables, net
|
25,784
|
25,509
|
Current
|
12,905
|
15,164
|
Non-current
|
12,879
|
10,345
|
(*)It comprises receivable from the divestment of NTS and contingent payments from the sale of interest in Roncador field
|
Trade and other receivables are generally classified
as measured at amortized cost, except for receivables with final prices linked to changes in commodity price after their transfer
of control, which are classified as measured at fair value through profit or loss. Changes in such prices on September 30, 2020
amounted to R$ 2,481.
|
10.2
|
Aging of trade and other receivables – third parties
|
|
|
Consolidated
|
|
09.30.2020
|
12.31.2019
|
|
Trade receivables
|
Expected credit losses (ECL)
|
Trade receivables
|
Expected credit losses (ECL)
|
Current
|
20,053
|
(641)
|
18,776
|
(567)
|
Overdue:
|
|
|
|
|
1- 3 months
|
983
|
(59)
|
1,011
|
(154)
|
3 - 6 months
|
210
|
(110)
|
98
|
(33)
|
6 - 12 months
|
329
|
(123)
|
197
|
(51)
|
More than 12 months
|
11,598
|
(10,906)
|
9,045
|
(8,409)
|
Total
|
33,173
|
(11,839)
|
29,127
|
(9,214)
|
|
10.3
|
Changes in provision for expected credit losses
|
|
Consolidated
|
|
09.30.2020
|
12.31.2019
|
Opening balance
|
9,392
|
16,682
|
Additions
|
877
|
867
|
Write-offs
|
(327)
|
(4,964)
|
Transfer of assets held for sale
|
−
|
(3,412)
|
Cumulative translation adjustment
|
2,099
|
219
|
Closing balance
|
12,041
|
9,392
|
Current
|
5,068
|
4,443
|
Non-current
|
6,973
|
4,949
|
As of September 30, 2020, the additions include a provision
of R$ 312 on receivables in foreign currency, basically due to the 40% exchange rate devaluation in the period of January to September
of 2020, as well as the recording of a supplementary provision in face of the impacts of COVID-19 (R$ 65).
|
In the year ended December 31, 2019, the write-offs
of R$ 4,964 primarily relate to the termination of a lawsuit relating to the electricity sector, according to note 13.4
|
Consolidated
|
|
09.30.2020
|
12.31.2019
|
Crude oil
|
11,965
|
15,738
|
Oil products
|
9,620
|
9,165
|
Intermediate products
|
2,197
|
2,362
|
Natural gas and LNG (*)
|
426
|
699
|
Biofuels
|
89
|
114
|
Fertilizers
|
57
|
112
|
Total products
|
24,354
|
28,190
|
Materials, supplies and others
|
5,436
|
4,819
|
Total
|
29,790
|
33,009
|
(*) Liquefied Natural Gas
|
|
Consolidated inventories are presented net of losses
to adjust to their net realizable value, these adjustments arising mainly from fluctuations in the international quotations of
oil and its oil products and when constituted are recognized in the income for the year as costs of products and services sold.
In the period from January to September 2020, a provision of R$ 1,518 was recorded (provision of R$ 32 in the period from January
to September 2019). Adjustments to net realizable value mainly impacted the first and second quarters of 2020 due to the significant
reduction in the prices of oil and its oil products in the market, due to COVID-19 and the shock of oil prices.
As of September 30, 2020, the company had an inventory
volume of oil and / or derivatives given as a guarantee of the Terms of Financial Commitment - TCF, signed in 2008 with Petros,
with no relevant changes in relation to the values ​​disclosed
on December 31 2019.
|
12.1
|
Income taxes and other taxes
|
Income tax and social contribution
|
Consolidated
|
|
Current assets
|
Current liabilities
|
Non-current liabilities
|
|
09.30.2020
|
12.31.2019
|
09.30.2020
|
12.31.2019
|
09.30.2020
|
12.31.2019
|
Taxes in Brazil
|
|
|
|
|
|
|
Income taxes
|
1,877
|
10,018
|
400
|
288
|
-
|
−
|
Income taxes - Tax settlement programs
|
−
|
−
|
270
|
228
|
1,903
|
2,031
|
|
1,877
|
10,018
|
670
|
516
|
1,903
|
2,031
|
Taxes abroad
|
801
|
32
|
70
|
598
|
0
|
−
|
Total
|
2,678
|
10,050
|
740
|
1,114
|
1,903
|
2,031
|
|
Consolidated
|
Other taxes
|
Current assets
|
Non-current assets
|
Current liabilities
|
Non-current liabilities (*)
|
|
09.30.2020
|
12.31.2019
|
09.30.2020
|
12.31.2019
|
09.30.2020
|
12.31.2019
|
09.30.2020
|
12.31.2019
|
Taxes in Brazil:
|
|
|
|
|
|
Current / Deferred VAT Rate (VAT) (a)
|
2,226
|
2,237
|
1,943
|
1,469
|
4,955
|
3,058
|
−
|
−
|
Current / Deferred PIS and COFINS (b)
|
1,761
|
1,681
|
10,974
|
10,442
|
6,425
|
1,014
|
209
|
176
|
PIS and COFINS – Exclusion of VAT tax rate from PIS and COFINS tax bases ( c )
|
16,950
|
−
|
−
|
−
|
−
|
−
|
−
|
−
|
PIS and COFINS - Law 9,718/98 (d)
|
|
|
3,532
|
3,304
|
|
|
|
|
CIDE
|
17
|
123
|
−
|
−
|
193
|
182
|
−
|
−
|
Production taxes
|
−
|
−
|
−
|
−
|
5,892
|
7,775
|
633
|
1,071
|
Withholding income taxes
|
−
|
−
|
−
|
−
|
344
|
937
|
−
|
−
|
Others
|
165
|
129
|
702
|
617
|
559
|
761
|
1,135
|
905
|
Total in Brazil
|
21,119
|
4,170
|
17,151
|
15,832
|
18,368
|
13,727
|
1,977
|
2,152
|
Taxes abroad
|
55
|
67
|
53
|
45
|
77
|
73
|
−
|
−
|
Total
|
21,174
|
4,237
|
17,204
|
15,877
|
18,445
|
13,800
|
1,977
|
2,152
|
(*) Other non-current taxes are
classified as other non-current liabilities.
|
Exclusion of VAT tax from PIS and
COFINS tax basis
In June 2020, the company obtained a favorable and
definitive court decision on the exclusion of VAT Tax from the calculation basis of PIS and Cofins contributions and recognized
the amount of R$ 16,925, recorded in current assets as taxes and contributions. The credits refer to amounts unduly paid in competencies
between the months of October 2001 and August 2020, which included dates that preceded the validity and mandatory of the electronic
invoice and digital fiscal bookkeeping (SPED), causing greater complexity in the calculation of values. In this context, the amount
of R $ 16,925 represents Management's best estimate based on prevailing calculation assumptions and available documents.
The net gain in the result, registered in the second
quarter of 2020, was R$ 10,887, of which R$ 7,675 was recovered from taxes on other operating income, R$ 9,250 from monetary restatement
in the financial result, partially offset by R$ 430 of tax expenses and R$ 5,608 of expenses with income tax and social contribution.
As of September 30, 2020, the amount monetarily restated
by the Brazilian basic interest rate (Selic) is R$ 16,950, whose use of the credit will be made by offsetting it with federal taxes.
The company enabled part of these credits related to PIS, of which R$ 2,371 were used in October 2020, while the portion of Cofins
is pending for qualification, which is expected to be used in up to 12 months.
12.2
Tax amnesty programs – State Tax (Programas de Anistias Estaduais)
State of Rio de Janeiro
Petrobras, based on the management of risks associated
with litigation and in line with the strategy of generating value through contingency management, decided to seek an agreement
aiming at the payment of infraction notices and the carrying out of spontaneous denunciation with the state of Rio de Janeiro.
The agreement, signed on the basis of VAT Tax Agreement 51/2020 and Law RJ 9,041/2020, allows a reduction of 90% of the amounts
due as a fine and interest, resulting in a disbursement of approximately R$ 1,803.
The aforementioned agreement will allow the closing
of contingencies related to the collection of VAT Tax and fines in the internal consumption operations of diesel oil used by the
maritime units chartered by the company, considering the approval, in the same legal provision, of a reduction of the VAT Tax calculation
base for 4.5% in internal supplies of marine diesel oil, instead of the previously required rate of 12%, thus reaching a definitive
solution to the cause of these contingencies. The disbursement will occur in installments, 50% in cash and the remainder in installments
until December 2020.
State of Espírito Santo
In the case of adhesion to the remission and amnesty
program with the State of Espírito Santo, entered into under the terms of the VAT Tax Agreement 146/2019 and Decree 4.709-R
/ 2020, upon payment of R$ 197 in October 2020, tax debts will be terminated arising from differences in the appropriation of VAT
Tax credits on property, plant and equipment and from differences in VAT Tax in oil and oil products operations. Additionally,
the presumed VAT Tax credit system will be implemented, based on VAT Tax Agreement 146/2019, providing a definitive solution to
the origin of this contingency.
The summary of the agreements signed with the states
is presented below:
State
|
State Law/Decree
|
Benefits received
|
Outstanding debt (*)
|
Reduction Benefit
|
Amount considering benefit
|
RJ
|
Law 9,041/2020
|
90% reduction in interest and 90% in fines related to tax credits
|
3,110
|
(1,307)
|
1,803
|
ES
|
VAT Tax Decree 4,709-R/2020
|
Remission of 50% of the Tax due, 90% of the fine and interest due
|
783
|
(586)
|
197
|
|
|
|
3,893
|
(1,893)
|
2,000
|
(*) R$ 3,188 billion of debts were classified
as possible loss, and R$ 705 refers to spontaneous reporting.
Accordingly, on September 30, 2020, a provision of
R$ 2,000 was recognized in current liabilities, as a counterpart to tax expense (R$ 1,931) and net finance income (expense) (R$
69).
|
12.3
|
Deferred income taxes - non-current
|
The changes in the deferred income taxes are presented
as follows:
|
Consolidated
|
Balance at January 1, 2019
|
7,848
|
Recognized in the statement of income for the year
|
(11,036)
|
Recognized in the statement of income of discontinued operation (*)
|
(2,520)
|
Recognized in shareholders’ equity
|
6,486
|
Cumulative translation adjustment
|
253
|
Use of tax credits
|
(1,224)
|
Transfers to held for sale
|
(1,138)
|
Others
|
(171)
|
Balance at December 31, 2019
|
(1,502)
|
Recognized in the statement of income for the year
|
21,811
|
Recognized in shareholders’ equity
|
34,331
|
Cumulative translation adjustment
|
708
|
Use of tax credits
|
(333)
|
Transfers to held for sale
|
30
|
Others
|
26
|
Balance at September 30, 2020
|
55,071
|
Deferred tax assets
|
5,593
|
Deferred tax liabilities
|
(7,095)
|
Balance at December 31, 2019
|
(1,502)
|
Deferred tax assets
|
55,853
|
Deferred tax liabilities
|
(782)
|
Balance at September 30, 2020
|
55,071
|
(*) Deferred income taxes on the remeasurement
of the remaining interest in BR Distribuidora, as set out in note 30 to the audited consolidated financial statements as of December
31, 2019.
The company conducts annual studies to determine the
recognition of deferred tax credits in the financial statements. Exceptionally, due to COVID-19 and the impacts observed on the
company's operations, this study was reviewed quarterly in 2020, based on the main assumptions such as the price of brent oil and
the exchange rate approved by the Board of Directors. These quarterly reviews of the study confirmed the existence of future taxable
income to support the maintenance of the balances of tax losses and deferred income and social contribution taxes recorded in assets,
with realization expected to occur in the period from 2021 to 2027.
The increase in deferred tax credits in the period
from January to September 2020 is mainly due to the exchange rate variation on the debt recorded for the most part in other comprehensive
income in the amount of R$ 35,257, loss adjustments in the amount of recovery of assets of R$ 18,877 and constitution of tax losses
in the amount of R$ 7,908, offset by R$ 4,493 of deferred income tax / social contribution referring to fixed assets.
|
12.4
|
Reconciliation between statutory tax rate and effective tax expense rate
|
The following table provides the reconciliation of
Brazilian statutory tax rate to the Company’s effective rate on income before income taxes:
|
|
Consolidated
|
|
2020
|
2019
|
|
Jul-Sep
|
Jan-Sep
|
Jul-Sep
|
Jan-Sep
|
Net income (loss) before income taxes
|
(4,878)
|
(74,784)
|
3,429
|
39,697
|
Nominal income taxes computed based on Brazilian statutory corporate tax rates (34%)
|
1,659
|
25,427
|
(1,166)
|
(13,497)
|
Adjustments to arrive at the effective tax rate:
|
|
|
|
|
Interest on Shareholders’ Equity, net
|
(2)
|
(5)
|
884
|
1,325
|
Different jurisdictional tax rates for companies abroad (*)
|
3,793
|
2,560
|
(323)
|
2,404
|
Income from companies abroad taxed in Brazil (**)
|
(1,089)
|
(3,471)
|
(102)
|
(420)
|
Tax incentives
|
4
|
12
|
266
|
1,352
|
Tax loss carryforwards (unrecognized tax losses)
|
(52)
|
(1,098)
|
(2,141)
|
(2,497)
|
Non-taxable income (non-deductible expenses), net (***)
|
(929)
|
(2,648)
|
(1,405)
|
(6,275)
|
Others
|
(175)
|
(199)
|
49
|
215
|
Income taxes expense
|
3,209
|
20,578
|
(3,938)
|
(17,393)
|
Deferred income taxes
|
3,235
|
21,811
|
(4,696)
|
(11,321)
|
Current income taxes
|
(26)
|
(1,233)
|
758
|
(6,072)
|
Total
|
3,209
|
20,578
|
(3,938)
|
(17,393)
|
Effective tax rate of income taxes
|
65.8%
|
27.5%
|
114.8%
|
43.8%
|
(*) Review of estimate of companies abroad
in 3Q20, reflecting tax adjustments in the Netherlands.
(**) Income tax and social contribution in
the country referring to income earned in the years by investees abroad, in accordance with the provisions of Law 12.973 / 2014.
(***) Includes results of equity-accounted
investments, actuarial expense and effect on judicial agreements.
|
13
|
Short-term and other benefits
|
The balance of the main short-term benefits for employees,
current and non-current, is presented as follows:
|
Consolidated
|
|
09.30.2020
|
12.31.2019
|
Accrued vacation pay
|
3,626
|
2,659
|
Profit sharing
|
125
|
65
|
Employees variable compensation program
|
1,863
|
2,640
|
Voluntary seveerance program (PDV)
|
5,247
|
565
|
Salaries and related charges
|
1,570
|
856
|
Total
|
12,431
|
6,785
|
Current
|
10,609
|
6,632
|
Non current
|
1,822
|
153
|
|
13.1
|
Variable compensation
|
Performance Award Program
In the first quarter of 2020, the company paid, in
advance, the amount of R$ 655 referring to the variable remuneration program obtained on the goals achieved for the year 2019,
whose final payment is expected to occur until December 2020.
On April 28, 2020, the Board of Directors approved
the program for 2020 that will be effective if the company presents a net income in the year 2020, associated with the fulfillment
of the company's performance metrics and the individual performance of employees and results of the areas.
In the current scenario, where the company does not
present net income from the period of January to September 2020, there was no provision for variable remuneration for the year
2020.
|
13.2
|
Voluntary Severance Programs
|
As of September 30, 2020, the company has four voluntary
severance programs (PDV) and incentive retirement programs (PAI) that provide for the same legal and indemnity benefits whose registration
deadlines ended between June and September 2020, totaling an average of 11,005 adhesions, including 505 from Transpetro:
i. PDV 2019 for retirees by the Social Security until
promulgation of the Pension Reform;
ii. Specific PDV for employees working in assets/units
in the process of divestment;
iii. Exclusive PDV for employees working in the company's
corporate segment;
iv. PAI for employees entitled to retirement valid
after promulgation of the Pension Reform; and
v. PDV for employees of Transpetro's sea and land staff.
The changes in the provision as of September 30, 2020
are shown below:
|
Consolidated
|
|
09.30.2020
|
12.31.2019
|
Opening Balance
|
565
|
141
|
Discontinued operations
|
−
|
(83)
|
Enrollments
|
5,674
|
798
|
Revision of provisions
|
(237)
|
(8)
|
Separations in the period
|
(755)
|
(283)
|
Closing Balance
|
5,247
|
565
|
Current
|
3,425
|
394
|
Non-current
|
1,822
|
171
|
|
On April 7, 2020, the Board of Directors approved adjustments
to the current severance programs that generated an additional provision of R$ 1,290 in the second quarter of 2020, referring to
the enrolled and already dismissed public, as well as approving the creation of the Incentive Retirement Program (PAI), a severance
program with an enrollment period between May 6, 2020 and July 31, 2020, aimed at employees entitled to retirement who, after the
promulgation of the Pension Reform, were unable to participate in the 2019 PDV.
The recognition of the provision for expenses on retirement
programs occurred as employees joined them.
The expected impact of the indemnities on the company's
cash will be diluted over the next three years, according to the expected dismissal date. In addition, the company chose to defer
the payment of severance payments in two installments, one at the time of dismissal and the other in July 2021 or one year after
the dismissal, whichever is greater.
|
14
|
Employee benefits (Post-Employment)
|
|
Consolidated
|
Parent Company
|
|
09.30.2020
|
12.31.2019
|
09.30.2020
|
12.31.2019
|
Liability
|
|
|
|
|
Pension plan Petros Renegotiated
|
30,655
|
41,239
|
30,690
|
41,239
|
Pension plan Petros Non-Renegotiated
|
8,848
|
13,154
|
8,813
|
13,154
|
Pension plan Petros Renegotiated Pre-70
|
7,332
|
−
|
7,332
|
−
|
Pension plan Petros Non-Renegotiated Pre-70
|
5,242
|
−
|
5,242
|
−
|
Pension plan Petros 2
|
2,548
|
3,987
|
2,155
|
3,455
|
Health Care (AMS)
|
44,875
|
48,312
|
43,516
|
46,921
|
Other plans
|
105
|
98
|
−
|
−
|
Total
|
99,605
|
106,790
|
97,748
|
104,769
|
Current
|
3,837
|
3,577
|
3,837
|
3,577
|
Non current
|
95,768
|
103,213
|
93,911
|
101,192
|
Total
|
99,605
|
106,790
|
97,748
|
104,769
|
|
|
14.1
|
Pension and medical benefits
|
On December 27, 2019, the Previc authorized the split
of PPSP-R and PPSP-NR plans, aiming to gather participants of “Pre-70 group” in “PPSP-R Pre-70” and “PPSP-NR
Pre-70”.
On March 18, 2020, the Petros Foundation's Deliberative
Council approved the financial statements for 2019 with accumulated deficits of R$ 2,309 and R$ 1,093 for the Petrobras System
Renegotiated (PPSP –R) and Petrobras System Non-Renegotiated (PPSP-NR) plans, respectively, in accordance with accounting
practices adopted in Brazil applicable to entities regulated by the Conselho Nacional de Previdência Complementar
(CNPC).
The deficits determined by Petros have been calculated
annually by an independent actuary and are already recognized in Petrobras' financial statements for 2019, in accordance with the
technical pronouncements issued by the Comitê de Pronunciamentos Contábeis (CPC), approved by the Comissão
de Valores Mobiliários (Brazilian Securities Commission) (CVM).
The main differences in accounting practices adopted
in Brazil (CNPC and CVM) between Pension Fund and Sponsor to calculate the actuarial commitment, are shown below:
|
|
|
|
2019
|
|
PPSP-R
|
PPSP-NR
|
Deficit registered by Petros
|
2,309
|
1,093
|
Financial assumptions
|
13,407
|
3,653
|
Ordinary and extraordinary sponsor contributions
|
13,319
|
3,269
|
Changes in fair value of plan assets (*)
|
8,938
|
4,810
|
Others (including Actuarial valuation method)
|
3,266
|
330
|
Net actuarial liability registered by the Company
|
41,239
|
13,154
|
(*) Balance of accounts receivable arising from the Term of Financial Commitment - TFC signed with Petrobras, which Petros recognizes as equity.
|
New deficit settlement plan (New
PED)
On April 28, 2020, the new Deficit Equation Plan (New
PED) of the Petros plans of the Petrobras Renegotiated and Non-Renegotiated System (PPSP-R and PPSP-NR), as well as the changes
in the regulation referring to the reduction of the lump sum death benefit and others were approved by the Secretariat for Coordination
and Governance of State-owned Companies (Secretaria de Coordenação e Governança das Empresas Estatais)
(Sest) and, on May 5, 2020, by the National Superintendence of Supplementary Pension Plans (Superintendência Nacional
de Previdência Complementar) (Previc).
The New PED, which covers deficits from 2015 to 2018
and incorporates 2019 results, was valued at R$ 33,700 on December 31, 2019. Of the total amount, the amount of R$ 15,620 will
be borne by Petrobras in compliance with the principle of the contributory parity provided for in Constitutional Amendment No.
20/1998, of which R$ 13,566 through extraordinary contributions throughout the existence of the plans and R$ 2,054 from contributory
contributions in 20 years as a counterpart of the company for the reduction of the lump sum death benefit.
The remaining deficit will be borne by the other sponsors
and participants in the PPSP-R and PPSP-NR plans.
The current model differs from that applied in PED-2015
and aimed to reduce the extraordinary contributions to the monthly budget of most of the participants by: (i) extending the collection
time to a lifetime, replacing 18 years; (ii) adoption of a single rate for assets and another for assisted; (iii) institution of
an annual contribution of 30% on the 13th benefit; and (iv) reduction in the amount of the lump sum death benefit.
The New PED includes changes to some rights and changes
in the regulations of the PPSP-R and PPSP-NR in accordance with Resolution 25 of CGPAR (Interministerial Commission for Corporate
Governance and Administration of Corporate Participation of the Union), of December 6, 2018, which establishes guidelines and parameters
for federal state companies regarding the sponsorship of pension plans.
The main changes in the regulation were: (i) establishment
of a new criterion for calculating the amount of lump sum death benefit; (ii) disconnection from the Social Security, (iii) calculation
of the benefit and (iv) readjustment by the IPCA. Since, except for item (i), these changes are only applicable to active participants
without acquired rights (assets that did not retire by the Social Security before the regulation was amended).
Mid-term review of PPSP-R and PPSP-NR
plans
In May 2020, with the approval of the New PED that included
the amendment of the regulations, in addition to the contributory contribution obligation, the liability of the PPSP-R and PPSP-NR
pension benefit plans decreased by R$ 1,479, with recognition of:
(i) R$ 51 of net gain in net income (loss), referring
to the cost of the past service, of which R$ 2,430 of gain due to the reduction of the lump sum death benefit, R$ 325 of expenses
due to other changes in regulations and R$ 2,054 of expenses due to the assumption the contributory contribution obligation; and
(ii) R$ 1,428 of net gain in other comprehensive income
in shareholders’ equity, referring mainly to the increase in the discount rate, partially offset by the loss in guarantee
assets and by the recalculation of extraordinary contributions.
The value of the cost of past service calculated is
the result of changes in the plan's regulations, mainly due to the reduction of the lump sum death benefit and the disconnection
of the Social Security and the establishment of a reference unit of the plan (UR), which sets a single value, of R$ 4 thousand,
adjusted annually by the IPCA, necessary to determine the value of Petros supplementation, replacing the value of the Social Security
estimated, the active participants not granted.
The disconnection from the Social Security provides
that the Petros benefit is granted to the participant regardless of retirement by Social Security.
The average duration of the actuarial liabilities of
the PPSP-R and PPSP-NR plans, on May 31, 2020, is 13.14 years and 12.34 years, respectively (13.78 years and 11.05 years on December
31, 2019, respectively).
a) Debt instrument
The company entered into an obligation with Petros under
the New PED in the amount of R$ 2,054, calculated based on the Previc rules, referring to the contributory contribution, equivalent
to the revision of the lump sum death benefit for solving the deficit, provided for in the rules of the New PED. This contribution
differs from the R$ 2,430 reduction in actuarial liabilities, calculated in accordance with CVM rules, basically due to the difference
in the discount rate.
The debt instrument will be paid in 40 semiannual installments
for a period of up to 20 years and updated based on the fixed actuarial goal of the plans, which is reviewed annually. In December
2019, the rate was 4.43% + IPCA for PPSP-R and 4.37% + IPCA for PPSP-NR.
As of September 30, 2020, the balance of the updated Debt
Instrument totaled R$ 2,115.
b) Pension plan assets - PPSP-R and
PPSP-NR plans
The balance of guaranteeing assets, considered in the
mid-term review, positioned on May 31, 2020, of the PPSP-R and PPSP-NR plans, in the amount of R$ 38,431 and R$ 9,945, respectively
(R$ 43,081 and R$ 10,847 in 2019), had a reduction in relation to the year of 2019 due to the devaluation of investments linked
to the index of the Brazilian stock exchange (Ibovespa) and those linked to the index of federal government bonds indexed to inflation
(IMAB5 +).
The assets are basically represented by investments
in fixed income and variable income, according to the allocation limit provided for in the current regulation.
c) Update of liabilities of other
plans - Petros 2, AMS and others
In view of the mid-term review of the PPSP-R and PPSP-NR
plans, the company assessed the need to update the liabilities, net of guarantee assets, positioned in May 2020, of the other pension
and health plans with the new discount rate calculated, given its representativeness in the value of the obligation, in order to
obtain uniformity between the plans, using the sensitivity analysis of the year of 2019 (effect of the rate variation on the obligation)
as a parameter for registration, as well as the guaranteeing assets positioned in May 2020. This update resulted in a reduction
in liabilities and gains in other comprehensive income in shareholders' equity of R$ 7,647 mainly due to the increase in the discount
rate.
d) Actuarial assumptions
The actuarial assumptions used to carry out the interim
actuarial valuation of May 2020, compared with those adopted in the actuarial valuation of December 2019 were revisited and have
not changed, except for the discount rate assumption presented below:
|
|
|
|
09.30.2020
|
|
|
|
12.31.2019
|
|
PPSP-R
|
PPSP-NR
|
PP2
|
AMS
|
PPSP-R
|
PPSP-NR
|
PP2
|
AMS
|
Real discount rate
|
4.18%
|
4.12%
|
4.56%
|
4.34%
|
3.40%
|
3.37%
|
3.56%
|
3.46%
|
|
Changes in obligations
with pension and health plans recognized in the Statement of Financial Position and in the Statement of Income
The movement of these events occurred with pension
and health plans with defined benefit characteristics is shown below:
|
Consolidated
|
|
Pension Plans
|
|
Health Care
|
|
|
PPSP Renegotiated (*)
|
PPSP Non-Renegotiated(*)
|
Petros 2
|
AMS
|
Other Plans
|
Total
|
Balance at January 1, 2019
|
27,711
|
11,161
|
1,591
|
47,411
|
275
|
88,149
|
Discontinued operations
|
(1,574)
|
(694)
|
(68)
|
(2,569)
|
(3)
|
(4,908)
|
Remeasurement effects recognized in other comprehensive income
|
17,101
|
3,357
|
2,170
|
365
|
18
|
23,011
|
Current service cost
|
200
|
24
|
154
|
813
|
8
|
1,199
|
Net interest over net liability (asset)
|
2,013
|
810
|
140
|
4,037
|
18
|
7,018
|
Contributions paid
|
(1,350)
|
(428)
|
−
|
(1,745)
|
(28)
|
(3,551)
|
Payments related to Term of financial commitment
|
(2,862)
|
(1,076)
|
−
|
−
|
−
|
(3,938)
|
Others
|
−
|
−
|
−
|
−
|
(190)
|
(190)
|
Balance at December 31, 2019
|
41,239
|
13,154
|
3,987
|
48,312
|
98
|
106,790
|
Current
|
1,404
|
656
|
−
|
1,516
|
−
|
3,576
|
Non-current
|
39,835
|
12,498
|
3,987
|
46,796
|
98
|
103,214
|
Balance at December 31, 2019
|
41,239
|
13,154
|
3,987
|
48,312
|
98
|
106,790
|
Remeasurement effects recognized in other comprehensive income
|
|
|
|
|
|
|
(Gains) / Losses - financial assumptions
|
(984)
|
(611)
|
(1,878)
|
(5,749)
|
(20)
|
(9,242)
|
(Gains) / Losses - experience - extraordinary contributions
|
292
|
471
|
−
|
−
|
−
|
763
|
Experience (gains) / losses
|
(2,266)
|
1,670
|
−
|
−
|
−
|
(596)
|
Debt instrument - contribution for the equalization of the deficit
|
1,629
|
486
|
−
|
−
|
−
|
2,115
|
Cost of past service - regulation change
|
−
|
−
|
−
|
−
|
−
|
−
|
Reduction in the lump sum death benefit
|
(1,877)
|
(553)
|
−
|
−
|
−
|
(2,430)
|
Other changes
|
252
|
73
|
−
|
−
|
−
|
325
|
Current service cost
|
20
|
4
|
217
|
883
|
6
|
1,130
|
Net interest over net liability (asset)
|
1,593
|
570
|
218
|
2,566
|
12
|
4,959
|
Contributions paid
|
(1,035)
|
(324)
|
−
|
(1,136)
|
(6)
|
(2,501)
|
Payments related to Term of financial commitment
|
(880)
|
(847)
|
−
|
−
|
−
|
(1,727)
|
Others
|
4
|
(3)
|
4
|
(1)
|
15
|
19
|
Balance at September 30, 2020
|
37,987
|
14,090
|
2,548
|
44,875
|
105
|
99,605
|
Current
|
1,576
|
744
|
−
|
1,517
|
−
|
3,837
|
Non-current
|
36,411
|
13,346
|
2,548
|
43,358
|
105
|
95,768
|
Balance at September 30, 2020
|
37,987
|
14,090
|
2,548
|
44,875
|
105
|
99,605
|
(*) Includes the balances of the Plans PPSP-R Pre70 and PPSP-NR Pre-70
|
|
The net actuarial gain of R$ 9,242 in the financial
hypothesis is due to the increase in the discount rate on the actuarial liability in the amount of R$ 16,900, partially offset
by the loss in the return on guarantee assets of R$ 7,658, mainly in the PPSP-R plans and PPSP-NR.
The net expense for pension and health plans is shown
below:
|
Consolidated
|
|
Pension Plans
|
|
Health Care
|
|
|
Petros Renegotiated (*)
|
Petros Non-Renegotiated(*)
|
Petros 2
|
AMS
|
Other Plans
|
Total
|
Related to active employees
|
392
|
148
|
366
|
1,686
|
18
|
2,610
|
Related to retired employees
|
1,225
|
432
|
69
|
1,763
|
−
|
3,489
|
Net costs for Jan-Sep/2020
|
1,617
|
580
|
435
|
3,449
|
18
|
6,099
|
Net costs for Jan-Sep/2019
|
1,660
|
626
|
222
|
3,637
|
22
|
6,167
|
Related to active employees
|
86
|
13
|
122
|
562
|
6
|
789
|
Related to retired employees
|
374
|
152
|
22
|
587
|
−
|
1,135
|
Net costs for Jul-Sep/2020
|
460
|
165
|
144
|
1,149
|
6
|
1,924
|
Net costs for Jul-Sep/2019
|
553
|
209
|
74
|
1,213
|
4
|
2,053
|
(*) Includes the balances of the Plans PPSP-R Pre70 and PPSP-NR Pre-70
|
The Petros 2 Plan has a defined contribution portion
whose payments are recognized in the income statement. In the period from January to September 2020, the company's contribution
to the defined contribution portion of the Petros 2 Plan was R$ 640 (R$ 678, for the period from January to September 2019). In
the period from July to September 2020, the contribution was R$ 230 (R$ 230 in the same period of 2019).
|
15
|
Provisions for legal proceedings
|
|
15.1
|
Provisions for legal proceedings, judicial deposits and contingent liabilities
|
The Company recognizes provisions based on the best
estimate of the costs of proceedings for which it is probable that an outflow of resources embodying economic benefits will be
required and that can be reliably estimated. These proceedings mainly include:
|
·
|
Labor claims, in particular: (i) opt-out claims related to a review of the methodology by which
the minimum compensation based on an employee's position and work schedule (Remuneração Mínima por Nível
e Regime - RMNR) is calculated; and (iii) actions of outsourced employees;
|
|
·
|
Tax claims including: (i) claims relating to Brazilian federal tax credits applied that were disallowed;
and (ii) alleged misappropriation of VAT tax credits; and (iii) fines for non-compliance with accessory tax obligation;
|
|
·
|
Civil claims relating to: (i) litigations involving the company Sete Brasil; (ii) claims involving
contracts; (iii) royalties and special participation charges, including royalties over the shale extraction; and (iv) penalties
applied by ANP relating to measurement systems.
|
|
·
|
Environmental claims related to: (i) indemnity and fines related to the environmental accident
that occurred in 2000 in the State of Paraná; and (ii) fines related to the company's offshore operation..
|
Provisions for legal proceedings
are set out as follows:
|
Consolidated
|
Current and Non-current liabilities
|
09.30.2020
|
12.31.2019
|
Labor claims
|
3,697
|
3,608
|
Tax claims
|
2,434
|
1,865
|
Civil claims
|
3,818
|
6,138
|
Environmental claims
|
1,460
|
935
|
Total
|
11,409
|
12,546
|
Current liabilities (*)
|
5
|
−
|
Non-current liabilities
|
11,404
|
12,546
|
|
(*) Amounts classified in other accounts payable in
current liability.
|
Consolidated
|
|
09.30.2020
|
12.31.2019
|
Opening Balance
|
12,546
|
28,695
|
Additions, net of reversals
|
1,294
|
4,449
|
Use of provision
|
(3,347)
|
(21,050)
|
Accruals and charges
|
776
|
1,492
|
Transfer to assets held for sale
|
−
|
(1,136)
|
Others
|
140
|
96
|
Closing balance
|
11,409
|
12,546
|
|
In preparing its consolidated financial statements
for the period ended on September 30, 2020, the Company considered all available information concerning legal proceedings in which
the Company is a defendant, in order to estimate the amounts of obligations and probability that outflows of resources will be
required.
In the period from
January to September 2020, the reduction in liabilities arises mainly from changes in the following cases: (i) a reduction of R$
2,801 due to civil litigation involving contractual issues; and (ii) a reduction of R$ 331 referring to the agreement approved
by the STF in claim for compensation of loss of profit in a lawsuit filed by Sergás and the State of Sergipe; mainly offset
by: (iii) R$ 509 in the provision for civil litigation involving contractual matters; (iv) R$ 359 in the provision for lawsuits
involving a refinery engineering contract; (v) R$ 397 for the transfer to probable loss in actions of environmental fines related
to the company's operation; (vi) R$ 168 for the transfer to probable loss in an VAT Tax collection action in Refining domestic
consumption operations; (vii) R$ 471 in fines at the Brazilian state level related to accessory obligations.
Judicial deposits made in connection with legal proceedings
are set out in the table below according to the nature of the corresponding lawsuits:
|
Consolidated
|
Non-current assets
|
09.30.2020
|
12.31.2019
|
Tax
|
26,729
|
23,885
|
Labor
|
4,448
|
4,258
|
Civil
|
5,409
|
4,361
|
Environmental
|
608
|
645
|
Others
|
494
|
49
|
Total
|
37,688
|
33,198
|
|
|
Consolidated
|
|
09.30.2020
|
12.31.2019
|
Opening Balance
|
33,198
|
26,003
|
Additions
|
4,100
|
7,942
|
Use
|
(320)
|
(739)
|
Accruals and charges
|
697
|
1,300
|
Transfer to assets held for sale
|
−
|
(1,305)
|
Others
|
13
|
(3)
|
Closing balance
|
37,688
|
33,198
|
In the period of January to September 2020, the Company
made judicial deposits in the amount of R$ 4,100, including: (i) R$ 1,279 related to the chartering of platforms due to the legal
dispute related to the withholding income tax (IRRF); (ii) R$ 1,024 referring to IRPJ and CSLL for not adding the income of subsidiaries
and affiliates domiciled abroad to the IRPJ and CSLL calculation basis; (iii) R$ 848 referring to the Unification of Fields (Cernambi,
Tupi, Tartaruga Verde and Tartaruga Mestiça); and (iv) R$ 421 of deposit in guarantee abroad for the foreclosure of a ship.
|
15.3
|
Contingent liabilities
|
As of September 30, 2020, the contingent liabilities
indexed to inflation and updated by applicable interest rates, estimated for legal proceedings, whose likelihood of loss is considered
possible, are shown in the table below:
|
Consolidated
|
Nature
|
09.30.2020
|
12.31.2019
|
Tax
|
126,951
|
130,499
|
Labor
|
41,836
|
39,235
|
Civil – General
|
21,214
|
24,097
|
Civil – Environmental
|
6,966
|
6,352
|
Total
|
196,967
|
200,183
|
|
The main contingent liabilities are:
|
·
|
Tax matters comprising: i) withholding income tax (IRRF), Contribution of Intervention in the Economic
Domain (CIDE), Social Integration Program (PIS) and Contribution to Social Security Financing (COFINS) on remittances for payments
of vessel charters; (ii) income from foreign subsidiaries and associates located outside Brazil not included in the computation
of taxable income (IRPJ and CSLL); (iii) requests to compensate federal taxes disallowed by the Brazilian Federal Tax Authority;
(iv) collection and crediting of VAT tax by several states; and (v) collection of social security contributions on payments of
bonuses.
|
|
·
|
Labor matters comprising mainly actions requiring a review of the methodology by which the minimum
compensation based on an employee's position and work schedule (Remuneração Mínima por Nível e Regime
- RMNR) is calculated;
|
|
·
|
Civil matters comprising: (i) litigations regarding Sete Brasil; (ii) administrative proceedings
challenging an ANP order requiring Petrobras to pay additional special participation fees and royalties (production taxes) with
respect to several fields; (iii) a public civil action that discusses the alleged illegality of the
gas supply made by the Company to its Nitrogen Fertilizer Production Unit; and (iv) fines from regulatory agencies.
|
|
·
|
Environmental lawsuits, with emphasis on indemnities for collective material and moral damages
to the environment and environmental fines related to the company's operation.
|
In the period from January to September 2020, in addition
to the increase resulting from the monetary restatement of the amounts, there were reductions related to the following events:
i) R$ 3,645 in civil litigation involving contractual issues; ii) R$ 2,447 reclassified to remote loss, related to differences
in VAT tax rates on jet fuel sales made based on State Law 4,181 / 2003, of Rio de Janeiro, which was declared unconstitutional
by the Federal Supreme Court, but later remitted by state legislation, in accordance with VAT tax Agreement 190/2017; (iii) R$
2,381 reclassified to remote loss of assessment notices on VAT tax payment on natural gas imports from Bolivia; and (iv) R$ 3,188
of tax assessment notices on VAT Tax payment to the states of Rio de Janeiro and Espírito Santo for adhering to the amnesty
program according to Note 12.2.
|
15.4
|
Legal proceedings arising from divestments
|
As of September 30, 2020, Petrobras is responsible
for certain legal proceedings classified as possible loss in the amount of R$ 4,049 (R$ 2,470 on December 31, 2019) arising from
the sale of 90% of the interest in Transportadora Associada de Gás ( TAG) in April 2019 and in the amount of R$ 296 (R$
9 on December 31, 2019) arising from the sale of shares of Companhia Petroquímica de Pernambuco (PetroquímicaSuape)
and Companhia Integrada Têxtil de Pernambuco (Citepe). The increase in the period is mainly due to the receipt of administrative
procedures, pending by the Federal Revenue of Brazil, which question the partial approval of federal tax offset declarations.
|
15.5
|
Class action and related proceedings
|
With regard to collective action in the Netherlands,
on January 29, 2020, the Court determined that shareholders who understand Portuguese and / or who bought shares through intermediaries
or other agents who understand that language, among other shareholders, are subject to the clause of arbitration provided for in
the company's Bylaws, remaining out of the collective action proposed by the Foundation. The Court also considered the binding
effect of the agreement signed to close the United States' class action. In this way, the Foundation needs to demonstrate that
it represents a sufficient number of investors to justify pursuing collective action in the Netherlands. The Foundation answered
some of the questions raised by the Court on May 6, 2020 and Petrobras submitted its statement in relation to such responses on
August 11, 2020.
In Argentina's arbitration, described in item 19.4.4
of the financial statements for the year ended December 31, 2019, the appeal filed by the Association has not yet been judged by
the Argentine Supreme Court.
Regarding the criminal actions in Argentina, detailed
in item 19.5 of the financial statements for the year ended December 31, 2019, it should be noted that, in the context of the action
related to the alleged fraudulent offer of securities, the judge accepted the company's defense on September 14, 2020 and decided
that Petrobras cannot be sued in a criminal action before the Argentine Justice. The Association appealed against this decision,
and the appeal is pending judgment.
|
15.6
|
Arbitrations in Brazil
|
Petrobras responds to six arbitrations instituted before
the Market Arbitration Chamber (CAM), linked to B3 - Brasil, Bolsa, Balcão. Five of these arbitrations were initiated
by multiple national and foreign investors. The other, established by an association that is not a shareholder of the company,
intends to be collective, through representation of all minority shareholders of Petrobras that acquired shares in B3 between January
22, 2010 and July 28, 2015. Investors intend that the company indemnify them for the alleged financial losses caused by the decrease
in the price of Petrobras shares listed on the stock exchange in Brazil, resulting from the acts revealed by Operation Lava Jato.
These arbitrations involve very complex issues, which
are subject to substantial uncertainties and which depend on factors such as: unprecedented legal theses, schedules yet to be defined
by the Arbitral Courts, the obtaining of evidence in the hands of third parties or opponents and expert analysis.
Furthermore, the claims made are broad and span several
years. The uncertainties inherent in all of these issues affect the amount and timing of the final decision on these arbitrations.
As a result, the company is unable to produce a reliable estimate of the potential loss in these arbitrations.
Depending on the outcome of all these cases, the company
may have to pay substantial amounts, which could have a material adverse effect on its financial condition, consolidated results
or consolidated cash flow in a given period. However, Petrobras does not acknowledge responsibility for the supposed losses alleged
by investors in these arbitrations, nor is it appropriate for collective arbitration.
Most of these arbitrations are still far from an outcome,
either in preliminary stages or beginning the evidence production phase, so that there is no provision for the judgment of the
respective arbitral courts. However, in one of the arbitrations, proposed by two institutional investors, on May 26, 2020, a partial
arbitral award was issued that indicates the company's responsibility, but does not determine the payment of amounts by Petrobras,
nor does it end the procedure. This arbitration is confidential, as well as the others in progress, and the partial award - which
does not represent a CAM position, but only the three arbitrators that make up this arbitration panel - does not extend to the
other existing arbitrations.
On July 20, 2020, Petrobras filed a lawsuit for the
annulment of this partial arbitration award, as it understands that it contains serious flaws and improprieties. This lawsuit is
still pending and has not yet been judged. In compliance with CAM rules, the lawsuit is pending in secret. Petrobras reiterates
that it will continue to defend itself vigorously, out of respect for its current shareholders, in all arbitrations to which it
is a party.
|
16
|
Provision for decommissioning costs
|
|
Consolidated
|
|
09.30.2020
|
12.31.2019
|
Opening balance
|
70,377
|
58,637
|
Adjustment to provision
|
64
|
23,228
|
Transfers related to liabilities held for sale (*)
|
(874)
|
(12,261)
|
Payments made
|
(1,451)
|
(1,986)
|
Interest accrued
|
2,198
|
2,749
|
Others
|
104
|
10
|
Total
|
70,418
|
70,377
|
(*) In 2019, includes transfers related
to the Campos basin (R$ 10,404); concessions in Rio Grande do Norte (R$ 149); Bahia concessions (R$ 60); Frade field (R$ 471) and
Baúna field (R$ 1,177), according to note 24.
The review of the key assumptions in the company's
planning, when preparing the financial statements of March 31, 2020, impacted by the effects of COVID-19 and the supply and demand
crisis in the oil and gas industry, did not result in material changes in the provision for decommissioning costs, given its formation,
for the most part, long term, and composition of its cost structure, basically in dollars. This position has not been changed for
the preparation of the financial statements of September 30, 2020.
|
17
|
The “Lava Jato (Car Wash) Operation” and its effects on the Company
|
The Company has monitored the progress of investigations
under the “Lava Jato” Operation and, in the preparation of these unaudited interim financial statements for the period
ended September 30, 2020, did not identify any additional information that would affect the adopted calculation methodology to
write off, in the third quarter of 2014, amounts overpaid for the acquisition of property, plant and equipment. The Company will
continue to monitor these investigations for additional information in order to assess their potential impact on the adjustment
made.
During the period from January to September 2020, it
was recognized, as a result of leniency agreements and collaboration and repatriation agreements, the reimbursement of R$ 515.
These funds are presented as other operating income and add up to the amount of R$ 4,151 recognized in previous periods, aiming
at the accumulated position.
|
17.1
|
U.S. Commodity Futures Trading Commission – CFTC
|
On May 30, 2019, Petrobras was contacted by the U.S.
Commodity Futures Trading Commission - CFTC with requests for information on the trading activities that are the subject of investigation
in Operation Lava Jato. Petrobras will continue to cooperate with the authorities, including the CFTC, with respect to any investigation.
|
17.2
|
Order of civil inquiry - Brazilian Public Prosecutor’s Office
|
On December 15, 2015, the State
of São Paulo Public Prosecutor’s Office issued the Order of Civil Inquiry 01/2015, establishing a civil proceeding
to investigate the existence of potential damages caused by Petrobras to investors in the Brazilian stock market. The Brazilian
Attorney General’s Office (Procuradoria Geral da República) assessed this civil proceeding and determined
that the São Paulo Public Prosecutor’s Office has no authority over this matter, which must be presided over by the
Brazilian Public Prosecutor’s Office. The Company has provided all relevant information.
|
18
|
Property, plant and equipment
|
|
Consolidated
|
Parent Company
|
|
Land, buildings
and
improvement
|
Equipment and other assets (*)
|
Assets under
construction (**)
|
Exploration and development costs (oil and gas producing properties) (***)
|
Right-of-use assets
|
Total
|
Total
|
Balance at January 1,2019
|
20,189
|
294,592
|
112,085
|
182,963
|
−
|
609,829
|
483,375
|
Adoption of IFRS 16
|
−
|
−
|
−
|
−
|
102,970
|
102,970
|
194,523
|
Additions
|
3
|
11,268
|
20,510
|
593
|
9,220
|
41,594
|
77,082
|
Additions to / review of estimates of decommissioning costs
|
−
|
−
|
−
|
22,633
|
−
|
22,633
|
22,699
|
Capitalized borrowing costs
|
−
|
−
|
5,254
|
−
|
−
|
5,254
|
5,175
|
Reimbursement under the Transfer of Rights Agreement
|
−
|
−
|
−
|
(34,238)
|
|
(34,238)
|
(34,238)
|
Write-offs
|
(15)
|
(374)
|
(1,168)
|
(1,674)
|
(86)
|
(3,317)
|
(3,314)
|
Transfers
|
1,818
|
22,950
|
(40,251)
|
19,242
|
470
|
4,229
|
8,668
|
Transfers to assets held for sale
|
(3,159)
|
(19,461)
|
(2,436)
|
(4,716)
|
(5,265)
|
(35,037)
|
(12,892)
|
Depreciation, amortization and depletion
|
(910)
|
(24,044)
|
−
|
(18,772)
|
(19,792)
|
(63,518)
|
(69,657)
|
Impairment recognition
|
(5)
|
(5,231)
|
(5,903)
|
(3,041)
|
(662)
|
(14,842)
|
(10,963)
|
Impairment reversal
|
−
|
971
|
325
|
1,801
|
−
|
3,097
|
2,358
|
Cumulative translation adjustment
|
17
|
3,002
|
64
|
54
|
158
|
3,295
|
−
|
Balance at December 31, 2019
|
17,938
|
283,673
|
88,480
|
164,845
|
87,013
|
641,949
|
662,816
|
Cost
|
27,839
|
501,808
|
135,599
|
292,930
|
107,233
|
1,065,409
|
1,022,399
|
Accumulated depreciation, amortization, depletion and impairment
|
(9,901)
|
(218,135)
|
(47,119)
|
(128,085)
|
(20,220)
|
(423,460)
|
(359,583)
|
Balance at December 31, 2019
|
17,938
|
283,673
|
88,480
|
164,845
|
87,013
|
641,949
|
662,816
|
Additions
|
−
|
20,514
|
8,144
|
48
|
12,418
|
41,124
|
82,907
|
Constitution / revision of the provision for decommisioning costs (note 16)
|
−
|
−
|
−
|
64
|
−
|
64
|
−
|
Capitalized borrowing costs
|
−
|
−
|
3,538
|
−
|
−
|
3,538
|
3,487
|
Write-offs
|
(25)
|
(123)
|
(489)
|
(31)
|
(32)
|
(700)
|
(18,843)
|
Transfers
|
(1,533)
|
4,788
|
(4,582)
|
2,857
|
(243)
|
1,287
|
609
|
Transfers to assets held for sale
|
−
|
(109)
|
(212)
|
(2,300)
|
(1)
|
(2,622)
|
(2,617)
|
Depreciation, amortization and depletion
|
(560)
|
(19,049)
|
−
|
(15,002)
|
(15,061)
|
(49,672)
|
(55,820)
|
Impairment recognition (note 20)
|
(24)
|
(33,533)
|
(14,339)
|
(16,075)
|
(1,616)
|
(65,587)
|
(55,893)
|
Impairment reversal (note 20)
|
−
|
192
|
−
|
−
|
−
|
192
|
117
|
Cumulative translation adjustment
|
222
|
17,405
|
1,577
|
409
|
1,668
|
21,281
|
−
|
Balance at September 30, 2020
|
16,018
|
273,758
|
82,117
|
134,815
|
84,146
|
590,854
|
616,763
|
Cost
|
28,386
|
546,650
|
135,369
|
299,433
|
119,842
|
1,129,680
|
1,077,032
|
Accumulated depreciation, amortization, depletion and impairment
|
(12,368)
|
(272,892)
|
(53,252)
|
(164,618)
|
(35,696)
|
(538,826)
|
(460,269)
|
Balance at September 30, 2020
|
16,018
|
273,758
|
82,117
|
134,815
|
84,146
|
590,854
|
616,763
|
Weighted average useful life in years
|
40
(25 to 50) (except lands)
|
20
(3 to 31)
|
|
Units of production method
|
8
(2 to 47)
|
|
|
(*) It is composed of platforms, refineries, thermoelectric power plants, natural gas processing plants, pipelines and other operating, storage and production plants, including subsea production equipment and oil and gas depreciated by the units produced method.
|
(**) See note 25 for assets under construction by operating segment.
|
(***) It is composed of exploration and production
assets related to wells, abandonment and dismantling of areas, signature bonuses associated to proved reserves and other costs
directly associated with the exploration and production.
|
|
The rights-of-use comprise the following underlying
assets:
|
Consolidated
|
Parent Company
|
|
Platforms
|
Vessels
|
Buildings and others
|
Total
|
Total
|
Balance at September 30, 2020
|
42,921
|
37,721
|
3,504
|
84,146
|
142,206
|
Cost
|
57,689
|
55,482
|
6,671
|
119,842
|
193,581
|
Accumulated depreciation, amortization, depletion and impairment
|
(14,768)
|
(17,761)
|
(3,167)
|
(35,696)
|
(51,375)
|
Balance at December 31, 2019
|
49,162
|
33,594
|
4,257
|
87,013
|
172,111
|
Cost
|
58,618
|
43,119
|
5,496
|
107,233
|
206,743
|
Accumulated depreciation, amortization, depletion and impairment
|
(9,456)
|
(9,525)
|
(1,239)
|
(20,220)
|
(34,632)
|
|
Expenses and Volumes Equalization
Agreements
Petrobras has Production Individualization Agreements
(AIP) signed in Brazil with partner companies (Shell, Petrogal, Repsol and Total) in E&P consortia. These agreements will result
in equalizations payable or receivable for expenses and production volumes related to the Tupi, Sépia, Atapu, Berbigão,
Sururu, Albacora Leste and others fieldands.
Tupi, Sépia and Atapu
On April 30, 2020, Petrobras and partner companies
in the shared deposits of Tupi, Sépia and Atapu signed the Expenses and Volumes Equalization Agreements (AEGV) from which
Petrobras received R$ 2,347 on May 29 2020, due to the equalization as a result of the increase in participation in the three deposits,
of which R$ 3,860 is recorded in other operating income and R$ 1,513 is recorded in property, plant and equipment.
On May 1, 2020, as a result of these Agreements, PNBV,
a Petrobras subsidiary, signed Share Purchase Agreements for the additional 2.589% interest in Tupi BV (Tupi), for the amount of
R$ 509 (US$ 84 million), and an additional 47.613% interest in Iara BV (Atapu) for R$ 4,525 (US$ 805 million), subject to price
adjustments. The allocation of the acquisition price of the participations was based on the relative fair values ​​of
the assets acquired and liabilities assumed, generating an increase in the amount of R$ 5,034 (US$ 889 million), mainly in property,
plant and equipment.
On September 15, 2020, a price adjustment occurred,
resulting in additional payments on the acquisition of interest in Tupi BV and Iara BV, in the amount of R$ 73 (US$ 13 million),
impacting property, plant and equipment.
Equalization provisions: Berbigão,
Sururu, Albacora Leste and others
As of September 30, 2020, Petrobras has an estimated
amount to pay for the execution of the AIPs submitted to the ANP for approval of R$ 281 (R$ 456 on December 31, 2019). In the period
from January to September 2020, these agreements resulted in payments and recognition of additions and write-offs in fixed assets,
in addition to other net expenses of R$ 119, reflecting the best available estimate of the assumptions used in calculating the
calculation base. In the third quarter of 2020, the revision of estimates of amounts payable of deposits, mainly Berbigão,
resulted in R$ 733 in other operating expenses.
|
18.2
|
Capitalization rate used to determine the amount of borrowing costs eligible for capitalization
|
The capitalization rate used to determine the amount
of borrowing costs eligible for capitalization was the weighted average of the borrowing costs applicable to the borrowings that
were outstanding during the period, other than borrowings made specifically for the purpose of obtaining a qualifying asset. For
the nine-month period ended September 30, 2020, the capitalization rate was 6.05% p.a. (6.30% p.a. for the same period of 2019).
|
Consolidated
|
Parent Company
|
|
Rights and Concessions
|
Softwares
|
Goodwill
|
Total
|
Total
|
Balance at January 1, 2019
|
9,024
|
1,060
|
786
|
10,870
|
9,268
|
Additions
|
5,505
|
423
|
−
|
5,928
|
5,823
|
Concession for exploration of oil and natural gas - Oil Surplus on the Transfer of Rights Agreement
|
63,141
|
−
|
−
|
63,141
|
63,141
|
Capitalized borrowing costs
|
−
|
19
|
−
|
19
|
19
|
Write-offs
|
(38)
|
(22)
|
−
|
(60)
|
(49)
|
Transfers
|
(324)
|
(190)
|
(539)
|
(1,053)
|
5
|
Amortization
|
(42)
|
(315)
|
−
|
(357)
|
(303)
|
Impairment recognition
|
(5)
|
−
|
−
|
(5)
|
−
|
Cumulative translation adjustment
|
−
|
1
|
5
|
6
|
−
|
Balance at December 31, 2019
|
77,261
|
976
|
252
|
78,489
|
77,904
|
Cost
|
77,755
|
5,929
|
252
|
83,936
|
82,449
|
Accumulated amortization and impairment
|
(494)
|
(4,953)
|
−
|
(5,447)
|
(4,545)
|
Balance at December 31, 2019
|
77,261
|
976
|
252
|
78,489
|
77,904
|
Additions
|
18
|
254
|
−
|
272
|
246
|
Capitalized borrowing costs
|
−
|
6
|
−
|
6
|
6
|
Write-offs
|
(911)
|
(16)
|
−
|
(927)
|
(902)
|
Transfers
|
(12)
|
(21)
|
−
|
(33)
|
(26)
|
Amortization
|
(28)
|
(222)
|
−
|
(250)
|
(224)
|
Impairment recognition
|
−
|
−
|
(32)
|
(32)
|
−
|
Cumulative translation adjustment
|
25
|
3
|
51
|
79
|
−
|
Balance at September 30, 2020
|
76,353
|
980
|
271
|
77,604
|
77,004
|
Cost
|
76,805
|
6,309
|
304
|
83,418
|
81,791
|
Accumulated amortization and impairment
|
(452)
|
(5,329)
|
(33)
|
(5,814)
|
(4,787)
|
Balance at September 30, 2020
|
76,353
|
980
|
271
|
77,604
|
77,004
|
Estimated useful life in years
|
(*)
|
5
|
Undefined
|
|
|
|
(*) Mainly composed of assets with
indefinite useful lives, which are reviewed annually to determine whether events and circumstances continue to support an indefinite
useful life assessment.
All agreements whose signature bonuses were paid in
the last quarter of 2019, were signed with the regulatory authorities in the first quarter of 2020.
In the third quarter of 2020, a write-off of R$ 800
was recognized related to the Peroba exploratory block.
The Company annually tests its assets for impairment
or when there is an indication that their carrying amount may not be recoverable.
In the period from January to September 2020, two events
occurred, concentrated in the first quarter, with significant and adverse effects on the oil and oil products market: (i) the outbreak
of the COVID-19 pandemic, with an abrupt reduction in the circulation of people, causing a double supply and demand shock with
retraction in world activity and (ii) failure in negotiations between members of the Organization of Petroleum Exporting Countries
and other producers, led by Russia, to define production quotas, which contributed to the increase global oil supply and price
reduction in early March.
These events led the company to adopt a series of measures
aimed at preserving cash generation, in order to reinforce its financial strength and resilience of its businesses, as well as
to review, and approve in the Board of Directors, some of its key premises planning, such as Brent price, exchange rate, derivative
spreads, among others. It should be noted that this set of assumptions remains the same, with no changes until the third quarter.
Additionally, in order to monitor relevant fluctuations between its planning cycles, the company controls the projection of its
short-term reference price assumptions, compared to realized prices, without identifying effects that would result in the modification
of the assumptions used in previous quarters.
Reserve volume estimates are prepared reflecting, in
an integrated manner, the projects in the company's Strategic Planning portfolio, technical uncertainties and assumptions such
as prices and costs. As of September 30, 2020, there was no change in the company's portfolio of projects, except the one mentioned
in Note 3.3, or in the reserve volumes that impacted the quarterly financial statements.
In this scenario, the company assessed the economic
recoverability of its assets and in the period from January to September 2020, impairment losses of R$ 65,229 were recognized,
fully concentrated in the first quarter of 2020, with emphasis on:
i) the effect of a new set of planning assumptions
on the recoverable amount of several E&P fields, mainly in the CGUs Roncador, Marlim Sul; Polo Norte, Albacora Leste, Polo
Berbigão-Sururu, Polo CVIT, and Mexilhão;
ii) hibernation of fields and platforms in shallow
waters, affecting the CGUs Polo Norte, Polo Ceará-Mar, Polo Ubarana and the Caioba, Guaricema and Camorim fields.
The indicative assessments conducted by the company
during the third quarter of 2020 pointed to the need for additional registrations of losses for devaluation in the Camarupim oil
and gas production field in the amount of R$ 258, due to the cancellation of the project highlighted in the note 3.3. This loss
was offset by reversals of impairment that occurred in shallow water fields and onshore fields, reclassified to the group of assets
held for sale, in the amount of R$ 188 and in FAFEN SE and BA, reflecting the lease agreements started in the third quarter of
2020, in the amount of R$ 117.
In the period from January to September 2019, property,
plant and equipment, intangible and assets held for sale recorded net losses in their recoverable amounts in the amount of R$ 2,491,
as highlighted in note 20.1.3.
The following is the total impairment loss on assets,
net of reversal, by nature of assets or CGUs, recognized in the income for the year:
|
Consolidated
|
Asset or CGU by nature (*)
|
Carrying
amount
|
Recoverable amount (**)
|
Impairment
|
Business
segment
|
Comments
|
|
09.30.2020
|
Property, plant and equipment and intangible assets
|
|
|
|
|
|
|
|
Producing properties relating to oil and gas activities in Brazil (several CGUs)
|
182,717
|
117,294
|
(64,502)
|
E&P - Brazil
|
item (a)
|
Others
|
1,085
|
163
|
(925)
|
Several
|
item (b)
|
|
|
|
(65.427)
|
|
|
|
|
Assets classified as held for sale
|
|
|
|
|
|
|
|
Producing property relating to oil and gas activities – several projects
|
82
|
306
|
198
|
E&P – Brazil
|
item 20.3
|
Others
|
|
|
|
Several
|
|
Total
|
|
|
(65,229)
|
|
|
|
|
|
Carrying
amount
|
Recoverable amount (**)
|
Impairment
(***)
|
Business
Segment
|
Comments
|
|
09.30.2019
|
Property, plant and equipment and intangible assets
|
|
|
|
|
|
|
|
Producing properties relating to oil and gas activities in Brazil (several CGUs)
|
8,001
|
1,936
|
872
|
E&P - Brazil
|
item (a1)
|
Equipment and facilities linked to the production activity
|
1,264
|
−
|
(1,264)
|
E&P - Brazil
|
item (c)
|
NS-30 Drill Ship
|
1,388
|
261
|
(1,127)
|
E&P, abroad
|
item (d)
|
Comperj
|
1,064
|
−
|
(1,064)
|
RTM, Brazil
|
item (e)
|
Others
|
11
|
−
|
(11)
|
Others
|
|
|
|
|
(2,594)
|
|
|
|
|
Assets held for sale
|
|
|
|
|
|
|
|
Others
|
|
|
103
|
Others
|
|
Total
|
|
|
(2,491)
|
|
|
|
|
(*) The net book values ​​and
recoverable values ​​presented refer only to assets
or CGUs that have suffered losses due to impairment or reversals.
(**) The recoverable amount used to evaluate
the test is the value in use, except for the assets of equipment and facilities linked to the activity of oil and gas production
and drilling of wells and assets held for sale, for which the recoverable value used for testing is the fair value.
(***) Amounts in parenthesis refer to reversals
of impairment losses.
|
|
20.1
|
Impairment of property, plant and equipment and intangible assets
|
20.1.1. Review of Cash Generating
Units:
From January to September 2020, the company identified
and assessed changes in CGU Polo Norte (E&P Segment):
i) Polo Norte: exclusion of the PCH-1, PCH-2 and PNA-2
platforms and of the fields of Anequim, Bagre, Cherne, Congro, Garoupa, Malhado, Namorado, Parati and Viola, which had their productions
hibernated and without forecast of resumed. The CGU Polo Norte starts to be formed by the Marlim, Albacora and Voador fields and
remaining platforms;
ii) Polo Fazenda Alegre: exclusion of Campo Grande,
Córrego Cedro Norte, Córrego Cedro Norte Sul, Córrego Dourado, Fazenda São Jorge, Inhambu, Jacutinga,
Lagoa Bonita, Seriema and Tabuiaiá fields. The CGU Polo Fazenda Alegre is now formed by the Cancã and Fazenda Alegre
fields.
20.1.2. Planning assumptions used
in Impairment tests:
On March 31, 2020, the company's Board of Directors
approved a new set of planning assumptions. The estimates of the key assumptions used in the cash flow projections to determine
the value in use of the CGUs, for the tests carried out on March 31, 2020, were:
|
2020
|
2021
|
2022
|
2023
|
2024
|
Long term Average
|
Average Brent (US$/bbl)
|
25
|
30
|
35
|
40
|
45
|
50
|
Average Brazilian Real (excluding inflation) - Real /U.S. dollar exchange rate (2019 prices)
|
5.09
|
5.04
|
4.69
|
4.46
|
4.28
|
3.78
|
|
At December 31, 2019, average Brent prices and Brazilian
real/U.S. dollar average exchange rates used were:
|
2020
|
2021
|
2022
|
2023
|
2024
|
Long term Average
|
Average Brent (US$/bbl)
|
65
|
65
|
65
|
65
|
65
|
65
|
Average Brazilian Real (excluding inflation) - Real /U.S. dollar exchange rate (2018 prices)
|
3.85
|
3.79
|
3.75
|
3.72
|
3.70
|
3.60
|
The company changed its set of macroeconomic planning
assumptions, presented in the table above, as it considers, among other factors, that there will be a slow recovery in demand,
with a moderate change in habits in developed economies, in which it is believed that long-term equilibrium occurs at a lower level
of demand. This assessment considers that:
|
·
|
structural change in the world economy, with permanent effects arising from this economic shock,
including changes observed in consumer habits, which tend to be permanent;
|
|
·
|
increased world oil inventories, slowing down the rebalancing of supply and demand; and
|
|
·
|
oil consuming industries, given the new scenario, will not keep their previously projected demands
in the long-term, reducing consumption levels.
|
20.1.3. Main results of the tests
for impairment of assets:
From January to September 2020, information on the main
impairment losses on property, plant and equipment or on intangible assets, concentrated in the first quarter of 2020, is presented
below:
a) Producing properties in Brazil
– Jan-Sep/2020
Our valuations of assets linked to
oil and gas production fields in Brazil resulted in the recognition of net losses in the amount of R$ 64,502 (losses of R$ 258
in the period from July to September 2020). The post-tax discount rate in constant currency, applied in the recoverability tests
of March 31, 2020, to the exploration and production sector in Brazil, was 7.3% p.a (6.7% p.a. on December 31, 2019). This amount
was mainly due to:
|
·
|
Losses in the amount of R$ 57,877 (loss of R$ 258 in the period from July to September 2020), mainly
related to the CGUs and corporate assets that provide services in the fields below, reflecting the new set of key planning assumptions
for the medium and long term vision, in particular, a drop in Brent price, devaluation of the Real against the Dollar and retractions
in GDP and demand. The main losses were:
|
CGU
|
Basin
|
Area
|
Impairment
|
Roncador
|
Campos Basin
|
Post-Salt
|
(16,650)
|
Marlim Sul
|
Campos Basin
|
Post-Salt
|
(11,717)
|
Polo Norte
|
Campos Basin
|
Post-Salt
|
(9,952)
|
Albacora Leste
|
Campos Basin
|
Post-Salt
|
(3,033)
|
Polo Berbigão-Sururu
|
Santos Basin
|
Pre-Salt
|
(2,195)
|
Polo CVIT
|
Espírito Santo Basin
|
Post-Salt
|
(1,556)
|
Mexilhão
|
Santos Basin
|
Post-Salt
|
(1,009)
|
Polo Parque das Baleias
|
Campos Basin
|
Post-Salt
|
(913)
|
Polo Sapinhoá
|
Santos Basin
|
Pre-Salt
|
(704)
|
Papa-Terra
|
Campos Basin
|
Post-Salt
|
(687)
|
Araçás
|
Reconcavo Basin
|
Land and Shallow Waters
|
(599)
|
Carmópolis
|
Sergipe Basin
|
Land and Shallow Waters
|
(586)
|
Polo Uruguá
|
Santos Basin
|
Post-Salt
|
(506)
|
Others
|
|
|
(7,770)
|
Total
|
|
|
(57,877)
|
|
|
|
|
For these CGUs, the impairment assessment carried out
on December 31, 2019 for Polo CVIT, Papa-Terra and Polo Uruguá resulted in the recognition of losses, while Roncador, Mexilhão
and Araçás presented recoverable values ​​close
to the respective book values.
|
·
|
Losses in the amount of R$ 6,625 (fully recognized in the first quarter of 2020), resulting from
hibernation in the production of fields in shallow waters, mainly affecting the Ubarana oil and gas production fields (R$ 2,114);
Namorado (R$ 1,140), Cherne (R$ 563), Malhado (R$ 507), Congro (R$ 461) and Viola (R$ 281).
|
a1) Producing properties relating
to oil and gas activities in Brazil (several CGUs) – Jan-Sep/2019
From January to September
2019, in our recoverability assessments, the company recognized reversals of impairment losses of R$ 872 (losses of R$ 636 in the
period from July to September 2019) due to:
|
·
|
approval of the sale of 10 concessions located in shallow waters
in the Campos Basin (Rio de Janeiro). As a result of this operation, the company assessed the recoverability of the book value
of the assets of these concessions, considering the net fair value of selling expenses, which resulted in a reversal of an impairment
loss in the amount of R$ 1,936;
|
|
·
|
revision of the composition of the Parque das Baleias pole, excluding
the Cachalote and Pirambu fields, which started to be tested individually, resulting in the recognition in the second quarter of
2019 of losses due to devaluation in the amount of R$ 428; and
|
|
·
|
on September 30, 2019, the Corvina field, which produced exclusively
through the P-09 platform, was excluded from the CGU Polo Norte, as the company decided not to reuse that platform in this CGU,
resulting in the recognition of losses due to devaluation in the amount of R$ 636.
|
b) Others – Jan-Sep/2020
Corporate asset
The company decided to hibernate an administrative
building, in the state of Bahia, as a result of the vacancy of the facilities, resulting in the recognition of loss of the right
to use asset in the amount of R$ 788.
SIX – shale
plant
The Company recognized a R$ 208 impairment
loss on this asset, due to the drop in the estimates for fuel oil prices, which are linked to the Brent prices, whose projections
were revised by the Company. The post-tax discount rate in constant currency applied to the refining sector in Brazil is 6.2% p.a.
c) Equipment and
facilities linked to the production activity - Brazil - Jan-Sep / 2019
From January to September 2019, the company decided
not to reuse the P-37 platform in the Marlim field, which resulted in its exclusion from CGU Polo Norte and in its classification
as an isolated asset, with the recognition of losses due to devaluation in the amount of R$ 1,264 (fully registered from July to
September 2019).
d) NS-30 drill
ship - Jan-Sep/2019
After approval of the sale of the asset by the company's
management, Drill Ship International BV (DSI), a subsidiary of PIB BV, recognized impairment losses of R$ 1,127 (R$ 444 in the
period from July to September 2019), due to the difference between the expected sale value and the book value of the asset.
e) Comperj –
Jan-Sep/2019
From January to September 2019, in addition to the
investments made in the utilities of Comperj Train 1, which are part of the joint infrastructure necessary for the flow and processing
of natural gas from the Santos Basin pre-salt pole, investments in environmental licensing were recognized , resulting from a conduct
adjustment term to end a public civil action that questioned the environmental licensing of Comperj, in the amount of R$ 814. Since
in the last business plan approved by the Management, the decision on the resumption of works related to Train 1 remains conditioned
to the identification of partners for its continuity, such amounts resulted in additional losses recognized in the period from
January to September 2019, totaling R$ 1,064 (R$ 68 in the period from July to September 2019), considering that there is no expectation
of future cash flows that return the respective investments.
|
20.2
|
Book values ​​of assets
close to their recoverable values
|
The amount of impairment loss is based on the difference
between the carrying amount of the asset or CGU and its respective recoverable amount. The following table contains information
about the assets or CGUs that presented estimated recoverable values ​​close
to their book values ​​and, therefore, would be more
susceptible to the recognition of impairment losses in the future, considering the assessments made in the first quarter of 2020,
period impacted by the effects of the COVID-19 and the oil and gas industry supply and demand crisis. The sensitivity presented
below considers the estimated impairment loss if there was a 10% reduction in the recoverable value of the aforementioned CGUs:
|
|
Consolidated
|
|
|
Assets close to their recoverable values
|
Business
segment
|
Carrying
amount
|
Recoverable amount
|
Sensitivity
|
Producing properties relating to oil and gas activities in Brazil (2 CGUs)
|
E&P
|
89,466
|
91,622
|
(7,006)
|
|
|
20.3
|
Assets classified as held for sale
|
In the period from January to September 2020, as a
result of the approval of the Company's Management for the sale of fields associated with projects in the E&P segment, the
company recognized reversals of losses in the amount of R$ 198 (R$ 188 in the period from July to September 2020), considering
the net fair value of the sales expenses.
In the period from January to September 2019, the company
recognized reversals related to assets held for sale of R$ 103 (R$ 12 in the period from July to September 2019), mainly the production
field of Maromba and Pasadena Refinery.
|
20.4
|
Investments in associates and joint ventures (including goodwill)
|
Value in use is generally used for impairment test
of investments in associates and joint ventures (including goodwill). The basis for estimates of cash flow projections includes:
(i) projections covering a period of 5 to 12 years, zero-growth rate perpetuity, budgets; (ii) forecasts and assumptions approved
by management; and (iii) a post-tax discount rate derived from the WACC or the CAPM models, when applicable.
20.4.1
Investment in publicly traded associate (Petrobras Distribuidora S.A. - BR)
In July 2019, with the follow-on of BR Distribuidora's
shares, the company started to be considered as an associated company. Considering the shares traded on the stock exchange (active
market), on December 31, 2019, the recoverable amount of BR Distribuidora was evaluated based on the fair value, without showing
any indication of loss.
On August 26, 2020, the Board of Directors of Petrobras
(CA) approved the process of divesting all of its interest in the company. In this context, the company assessed the recoverability
of the investment based on the value in use, which includes the sale value, considering the intention to sell the shares. As the
value in use obtained was lower than the registered investment value, the recoverability assessments indicated the existence of
impairment losses in the amount of R$ 778.
The post-tax discount rate applied was 11.1%, in nominal
terms, taking into account the cost of equity, given the methodology adopted in the value in use.
20.4.2
Impairment losses on equity-method investments
The company recognized, in results of equity-accounted
investments, net losses due to devaluation, concentrated in the first quarter of 2020, in the total of R$ 160 (R$ 7 in 2019). This
loss was mainly due to the recognition of a loss due to devaluation on investment in a jointly controlled venture abroad, MP Gulf
of Mexico, in the amount of R$ 287, due to the revision of the price assumptions resulting from the drop in market prices. International.
The real post-tax discount rate, applied to the exploration and production sector in the USA, was 6.0% p.a.
|
21
|
Exploration and evaluation of oil and gas reserves
|
The exploration and evaluation activities include the
search for oil and gas reserves from obtaining the legal rights to explore a specific area to the declaration of the technical
and commercial viability of the reserves.
Changes in the balances of capitalized costs directly
associated with exploratory wells pending determination of proved reserves and the balance of amounts paid for obtaining rights
and concessions for exploration of oil and natural gas (capitalized acquisition costs) are set out in the following table:
|
Consolidated
|
Capitalized Exploratory Well Costs / Capitalized Acquisition Costs (*)
|
09.30.2020
|
12.31.2019
|
Property plant and equipment
|
|
|
Opening Balance
|
17,175
|
16,010
|
Additions
|
1,802
|
2,024
|
Write-offs
|
(154)
|
(877)
|
Transfers
|
(481)
|
−
|
Cumulative translation adjustment
|
188
|
18
|
Closing Balance
|
18,530
|
17,175
|
Intangible Assets (**)
|
75,363
|
76,256
|
Capitalized Exploratory Well Costs / Capitalized Acquisition Costs
|
93,893
|
93,431
|
(*) Amounts capitalized and subsequently expensed in the same period have been excluded from this table.
|
(**) The bonuses referring to the results
of the 16th ANP bidding round and Bidding for oil surplus of Transfer of rights agreement, in the amount of R$ 63,141, are described
in note 24.1 to the financial statements of December 31, 2019. In the third quarter of 2020, the write-off of R$ 800 of Peroba
exploration block was recognized.
|
Exploration costs recognized in the statement of income
and cash used in oil and gas exploration and evaluation activities are set out in the following table:
|
|
Consolidated
|
|
2020
|
2019
|
Exploration costs recognized in the statement of income
|
Jul-Sep
|
Jan-Sep
|
Jul-Sep
|
Jan-Sep
|
Geological and geophysical expenses
|
337
|
911
|
318
|
1,050
|
Exploration expenditures written off (includes dry wells and signature bonuses)
|
998
|
1,180
|
5
|
248
|
Contractual penalties
|
64
|
116
|
(43)
|
11
|
Other exploration expenses
|
48
|
58
|
(4)
|
15
|
|
1,447
|
2,265
|
276
|
1,324
|
Cash used in:
|
|
|
|
|
Operating activities
|
385
|
969
|
325
|
1,076
|
Investment activities
|
585
|
1,932
|
654
|
1,418
|
|
970
|
2,901
|
979
|
2,494
|
|
|
22
|
Collateral for crude oil exploration concession agreements
|
The Company has granted collateral
to ANP in connection with the performance of the Minimum Exploration Programs established in the concession agreements for petroleum
exploration areas in the total amount of R$ 8,308 of which R$ 7,850 were still in force as of September 30, 2020, net of
commitments undertaken. The collateral comprises crude oil from previously identified producing fields, pledged as collateral,
amounting to R$ 6,529 and bank guarantees of R$ 1,321.
|
23.1
|
Investments in associates and joint ventures (Parent Company)
|
|
Balance at 12.31.2019
|
Investments
|
Transfer to held for sale
|
Restructuring, capital decrease and others
|
Results of equity-accounted investments
|
CTA
|
OCI
|
Dividends
|
Balance at 09.30.2020
|
Subsidiaries
|
164,831
|
630
|
−
|
(2,715)
|
17,058
|
66,106
|
779
|
(1,424)
|
245,265
|
Joint operations
|
186
|
−
|
−
|
−
|
51
|
−
|
−
|
(59)
|
178
|
Joint ventures
|
337
|
19
|
(60)
|
(23)
|
52
|
−
|
−
|
(36)
|
289
|
Associates (*)
|
17,293
|
−
|
−
|
(1,084)
|
(2,930)
|
1,814
|
(2,403)
|
(525)
|
12,165
|
Total
|
182,647
|
649
|
(60)
|
(3,822)
|
14,231
|
67,920
|
(1,624)
|
(2,044)
|
257,897
|
Other investments
|
19
|
−
|
|
−
|
−
|
−
|
−
|
−
|
19
|
Total of Investments
|
182,666
|
649
|
(60)
|
(3,822)
|
14,231
|
67,920
|
(1,624)
|
(2,044)
|
257,916
|
Results of companies classified as held for sale
|
|
|
|
|
195
|
|
7
|
|
|
|
|
|
|
|
14,426
|
|
(1,617)
|
|
|
(*) Includes Petrobras Distribuidora
and Braskem S / A, highlighting the result with hedge for future exports and sales and provisions for closing the rock salt wells
of Braskem S/A.
|
23.2
|
Changes in investment (Consolidated)
|
|
Balance at 12.31.2019
|
Capital
increase
|
Transfer to assets held for sale
|
Restructuring, capital decrease and others
|
Results of equity-accounted investments
|
CTA
|
OCI
|
Dividends
|
Balance at 09.30.2020
|
Joint ventures
|
4,813
|
20
|
(60)
|
(8)
|
(424)
|
947
|
−
|
(436)
|
4,852
|
Associates (*)
|
17,333
|
39
|
−
|
(1,004)
|
(3,021)
|
1,832
|
(2,403)
|
(529)
|
12,247
|
Other investments
|
20
|
−
|
−
|
−
|
−
|
−
|
−
|
−
|
20
|
Total
|
22,166
|
59
|
(60)
|
(1,012)
|
(3,445)
|
2,779
|
(2,403)
|
(965)
|
17,119
|
(*)Includes Petrobras Distribuidora and Braskem, highlighting the result with hedge for future exports and sales and provisions for the closure of Braskem S / A's rock salt wells.
|
|
24
|
Disposal of assets and other changes in organizational structure
|
At September 30, 2020, assets and related liabilities
are classified as held for sale whenever the closing of the transactions are highly probable, still subject to some conditions
precedent as provided for in the agreements.
To date, buyers have not indicated any intention to
breach or review the signed contractual terms and conditions.
The major classes of assets and related liabilities
classified as held for sale are shown in the following table:
|
Consolidated
|
|
|
|
|
|
09.30.2020
|
12.31.2019
|
|
E&P
|
RTM
|
Gas and Energy
|
Corporate and other businesses
|
Total
|
Total
|
Assets classified as held for sale
|
|
|
|
|
|
|
Cash and Cash Equivalents
|
7
|
19
|
−
|
−
|
26
|
18
|
Trade receivables
|
−
|
294
|
−
|
−
|
294
|
277
|
Inventories
|
−
|
42
|
−
|
−
|
42
|
52
|
Investments
|
1
|
14
|
60
|
−
|
75
|
1,429
|
Property, plant and equipment
|
2,153
|
1,214
|
−
|
−
|
3,367
|
8,248
|
Others
|
−
|
326
|
−
|
−
|
326
|
309
|
Total
|
2,161
|
1,909
|
60
|
−
|
4,130
|
10,333
|
Liabilities on assets classified as held for sale
|
|
|
|
|
|
|
Trade Payables
|
3
|
100
|
−
|
−
|
103
|
108
|
Finance debt
|
−
|
151
|
−
|
554
|
705
|
572
|
Provision for decommissioning costs
|
2,638
|
−
|
−
|
−
|
2,638
|
11,934
|
Others
|
−
|
387
|
−
|
−
|
387
|
470
|
Total
|
2,641
|
638
|
−
|
554
|
3,833
|
13,084
|
|
|
|
|
|
|
|
|
As of September 30, 2020, the main assets and liabilities
transferred after approval of sale include: (i) Liquigás Distribuidora S.A.; (ii) the Baúna field (concession area
BM-S-40); (iii) 30% of the Frade field; (iv) the onshore fields in Ceará, Bahia and Espírito Santo; and (v) assignment
of the remaining rights in the concession area called Lapa (referring to the exercise of the put option for the remaining 10% of
its interest).
The description of these operations, which are classified
as assets held for sale, was presented in note 30 to the financial statements of December 31, 2019, except for the assets described
below in item Uncompleted operations.
24.1. Uncompleted operations
a) Sale of the Baúna field
On July 24, 2019, Petrobras signed an agreement to
sell 100% of its interest in the Baúna field (BM-S-40 concession area), located in shallow waters in the Santos Basin, to
Karoon Petróleo & Gás Ltda, subsidiary of Karoon Energy Ltd. in the amount of US$ 665 million. Due to the impact
caused by the COVID-19 and the consequent difficulty in meeting the precedent conditions initially defined, the parties defined
adjustments to the terms of the agreement and the division of the transaction value as follows: (i) a portion of US$ 380 million,
comprising: US$ 49.9 million already paid by Karoon on July 24, 2019 and another US$ 150 million to be paid on the closing date
with the price adjustments due. The remaining amount will be paid in 18 months after the completion of the transaction in addition
to a contingent installment of US$ 285 million to be paid by 2026.
The conclusion of the transaction is subject to the
fulfillment of the preceding conditions, such as the ANP approval.
b) Sale of onshore fields in Ceará
On August 14, 2020, Petrobras signed with SPE Fazenda
Belém SA, a wholly owned subsidiary of 3R Petroleum e Participações S.A., an agreement for the sale of its
entire interest in the onshore Fazenda Belém and Icapuí fields, called Polo Fazenda Belém, located in the
Potiguar Basin, in the state of Ceará.
The sale value is US$ 35.2 million, of which (i) US$
8.8 million was paid upon signing the agreement; (ii) US$ 16.4 million at the close of the transaction and; (iii) US$ 10 million
to be paid in twelve months after the closing of the transaction.
The amounts do not consider the adjustments due and
are subject to the fulfillment of precedent conditions, such as the ANP approval.
c) Sale of land fields in Bahia
On August 21, 2020, Petrobras signed with SPE Rio Ventura
S.A., a wholly owned subsidiary of 3R Petroleum e Participações S.A., an agreement for the sale of its entire interest
in eight onshore exploration and production fields, called Polo Rio Ventura, located in the state of Bahia.
The sale value is US$ 94.2 million, of which (i) US$
3.8 million was paid on the date the agreement was signed; (ii) US$ 31.2 million at the close of the transaction; (iii) US$ 16
million to be paid in thirty months after the closing of the transaction; and (iv) US$ 43.2 million in contingent payments provided
for in the agreement.
The amounts do not consider the adjustments due and
the closing of the transaction is subject to the fulfillment of precedent conditions, such as CADE and ANP approval and that the
buyer has obtained the Environmental Licenses from the inspection agencies and / or IEMA.
d) Sale of Espírito Santo
onshore fields
On August 27, 2020, Petrobras signed with Karavan SPE
Cricaré S.A., (SPE), a contract for the sale of its entire interest in 27 onshore exploration and production concessions,
located in Espírito Santo, jointly called Polo Cricaré. Karavan O&G Participações e Consultoria
Ltda. will hold 51% of the SPE, while Seacrest Capital Group Limited, which is an equity provider, will hold the remaining 49%.
The sale value is US$ 155 million, of which (a) US$
11 million was paid on the date the agreement was signed; (b) US$ 26 million, to be paid at the closing of the transaction and
(c) US$ 118 million to be paid under contingent conditions set forth in the agreement.
The amounts do not consider the adjustments due and
the closing of the transaction is subject to the fulfillment of precedent conditions, such as ANP approval and that the buyer has
obtained the Environmental License from IEMA.
24.2 Completed operations
|
a)
|
Sale of Petrobras’s interest in Petrobras Oil & Gas B.V. (PO&GBV)
|
On October 31, 2018, Petrobras International Braspetro
BV (“PIBBV”) signed a contract for the full sale of its 50% equity interest in Petrobras Oil & Gas BV (“PO
& GBV”), with the company Petrovida Holding BV (PETROVIDA ). PO & GBV is a joint venture in the Netherlands, with
assets located in Nigeria.
On December 31, 2019, the company recognized impairment
of R$ 366 (in 2018, reversal of R$ 181 recognized as equity-accounted investments).
On January 14, 2020, the transaction was completed
and involved a total amount of US$ 1.530 billion, adjusted to US$ 1.454 billion, reflecting the incidence of interest on the acquisition
price and the deduction of the portion that fell to Petrobras from the payment of fees for approval of the transaction by the Nigerian
Government. Of the total of US$ 1.454 billion, Petrobras received US$ 1.030 billion in the form of dividends paid by PO & GBV
since the base date of the transaction (January 1, 2018). At the closing date, it received US$ 276 million, and US$ 25 million
in June 2020, leaving US$ 123 million (face value) that will be received after the completion of the Abgami field redetermination
process and in up to 5 years from the closing of the transaction. The gain from the operation was R$ 7, recognized in other operating
income.
|
b)
|
Sale of fields in the Potiguar Basin
|
On August 9, 2019, Petrobras signed an agreement to
sell all of its interest in a set of production fields, land and sea, called Polo Macau, in the Potiguar Basin, located in the
State of Rio Grande do Norte, with SPE 3R Petroleum S.A., wholly owned subsidiary of 3R Petroleum e Participações
S.A.
Polo Macau includes the fields of Aratum, Macau, Serra,
Salina Cristal, Lagoa Aroeira, Porto Carão and Sanhaçu. Petrobras holds a 100% interest in all concessions, with
the exception of the Sanhaçu concession, in which it is the operator with a 50% interest, while the remaining 50% is held
by Petrogal.
On May 29, 2020, the transaction was concluded after
the fulfillment of all precedent conditions, for the amount of R$ 862, including the adjustments provided for in the contract and
the amount received on August 9, 2019, upon signing the contract, referring to the first installment. The gain from the operation
was R$ 421, recognized in other operating income.
|
c)
|
Sale of the 10% interest in Transportadora Associada de Gás
|
On July 20, 2020, Petrobras entered into a share purchase
and sale agreement, referring to its remaining 10% stake in Transportadora Associada de Gás S.A. (TAG), with the group formed
by ENGIE and the Canadian fund Caisse de Dépôt et Placement du Québec (CDPQ).
The transaction was concluded at the amount of R$ 1,006,
fully paid on the date of the signing of the contract, after the deduction of R$ 110 of dividends paid to Petrobras in June 2020
and other price adjustments. The gain from the operation was R$ 147, recognized in other operating income.
In addition, as a result of this operation, the loss
of R$ 225 with accumulated cash flow hedge since the sale of TAG's control in June 2019 was reclassified to income statement, as
other net expenses, recognized as other comprehensive income in shareholders’ equity of Petrobras in a way that reflects
the values ​​registered with TAG.
|
d)
|
Sale of the Pampo and Enchova Poles
|
On July 24, 2019, Petrobras signed an agreement for
the total sale of its stake (100%) in exploration and production assets in shallow waters in the Campos Basin, on the coast of
Rio de Janeiro, referring to the Pampo and Enchova Poles, which encompass the fields of Enchova, Enchova Oeste, Marimbá,
Piraúna, Bicudo, Bonito, Pampo, Trilha, Linguado and Badejo, to Trident Energy do Brasil LTDA, a subsidiary of Trident Energy
L.P.
On July 15, 2020, Petrobras completed the sale of its
entire stake in the ten fields that comprise the Polos Pampo and Enchova to Trident Energy do Brasil LTDA, after the fulfillment
of all the preceding conditions.
The transaction was concluded with the payment of US$
365.4 million to Petrobras, considering the adjustments provided for in the contract and other conditions subsequently agreed between
the parties, which provide for the payment of conditioned amounts of up to US$ 650 million classified as contingent assets and
will only be recognized when the agreed conditions are met.
The amount received at the closing
of the transaction adds up to the amount of US$ 53.2 million paid to Petrobras upon signing the sales contracts, totaling US$
418.6 million. The gain from the operation was R$ 1,610, recognized in other operating income.
|
e)
|
Sale of fields in Espirito Santo
|
On September 30, 2020, Petrobras concluded the sale
of its entire stake in a set of onshore production fields, called Polo Lagoa Parda, located in the state of Espírito Santo,
to the affiliated company Imetame Energia Lagoa Parda Ltda. of Imetame Energia Ltda.
The Lagoa Parda Polo comprises three onshore concessions
in production: Lagoa Parda, Lagoa Parda Norte and Lagoa Piabanha.
The operation was concluded after the fulfillment of
all precedent conditions for the amount of R$ 58, including the adjustments provided for and the amount received on October 11,
2019 on signing the contract, referring to the first installment. The gain from the operation was R$ 69, recognized in other operating
income.
|
f)
|
Merger of Petrobras Negócios Eletrônicos S.A. (E-Petro)
|
On March 4, 2020, the Petrobras Board of Directors
approved the merger of E-Petro, with its consequent extinction, without increasing Petrobras' share capital.
|
24.3
|
Cash flows from sales of interest with loss of control
|
The sales of equity interest that resulted in loss
of control and the cash flows arising from these transactions are shown below:
|
Cash received
|
Cash and cash equivalents of subsidiaries with loss of control
|
Net Proceeds
|
Jan-Mar/2020
|
|
Petrobras Oil & Gas B.V.(PO&GBV) (*)
|
1,144
|
−
|
1,144
|
Jan-Mar/2019
|
|
Petrobras Paraguay
|
1,474
|
303
|
1,171
|
(*) Amount of US$ 276 received on the closing date
of the transaction.
|
25
|
Assets by operating segment
|
The segmented information reflects the evaluation structure
of senior management in relation to performance and the allocation of resources to the business.
Consolidated assets by operating segment - 09.30.2020
|
|
|
Exploration and Production
|
Refining, Transportation & Marketing
|
Gas
&
Power
|
Corporate
|
Eliminations
|
Total
|
Current assets
|
18,818
|
47,120
|
7,786
|
98,657
|
(20,737)
|
151,644
|
Non-current assets
|
547,232
|
124,013
|
42,282
|
100,359
|
(100)
|
813,786
|
Long-term receivables
|
26,256
|
14,431
|
5,510
|
82,008
|
4
|
128,209
|
Investments
|
2,332
|
991
|
3,184
|
10,612
|
−
|
17,119
|
Property, plant and equipment
|
442,953
|
108,079
|
32,949
|
6,977
|
(104)
|
590,854
|
Operating assets
|
386,782
|
94,563
|
21,288
|
6,208
|
(104)
|
508,737
|
Under construction
|
56,171
|
13,516
|
11,661
|
769
|
−
|
82,117
|
Intangible assets
|
75,691
|
512
|
639
|
762
|
−
|
77,604
|
Total Assets
|
566,050
|
171,133
|
50,068
|
199,016
|
(20,837)
|
965,430
|
|
|
|
|
|
|
|
Consolidated assets by operating segment - 12.31.2019
|
|
|
Exploration and Production
|
Refining, Transportation & Marketing
|
Gas
&
Power
|
Corporate
|
Eliminations
|
Total
|
Current assets
|
23,114
|
49,467
|
7,789
|
51,186
|
(19,455)
|
112,101
|
Non-current assets
|
598,746
|
125,951
|
43,451
|
45,911
|
(149)
|
813,910
|
Long-term receivables
|
26,022
|
13,296
|
5,517
|
26,471
|
−
|
71,306
|
Investments
|
2,387
|
4,472
|
4,299
|
11,008
|
−
|
22,166
|
Property, plant and equipment
|
493,746
|
107,659
|
32,975
|
7,718
|
(149)
|
641,949
|
Operating assets
|
428,589
|
95,245
|
22,593
|
7,191
|
(149)
|
553,469
|
Under construction
|
65,157
|
12,414
|
10,382
|
527
|
−
|
88,480
|
Intangible assets
|
76,591
|
524
|
660
|
714
|
−
|
78,489
|
Total Assets
|
621,860
|
175,418
|
51,240
|
97,097
|
(19,604)
|
926,011
|
|
26.1
|
Balance by type of finance debt
|
|
Consolidated
|
|
09.30.2020
|
12.31.2019
|
Banking Market
|
27,044
|
21,452
|
Capital Market
|
12,964
|
13,980
|
Development banks
|
7,236
|
7,766
|
Others
|
49
|
53
|
Total
|
47,293
|
43,251
|
Banking Market
|
85,086
|
66,727
|
Capital Market
|
170,658
|
130,899
|
Development banks
|
1,128
|
163
|
Export Credit Agency
|
19,409
|
13,033
|
Others
|
1,176
|
909
|
Total
|
277,457
|
211,731
|
Total finance debt
|
324,750
|
254,982
|
Current
|
37,779
|
18,013
|
Non current
|
286,971
|
236,969
|
The amount classified in current liabilities comprises:
|
Consolidated
|
|
09.30.2020
|
12.31.2019
|
Short-term financing
|
13,723
|
8,891
|
Portion of long-term financing
|
20,047
|
5,550
|
Accrued interest (current and long-term)
|
4,009
|
3,572
|
Current
|
37,779
|
18,013
|
As of September 30, 2020, there were no defaults, breaches
of covenants or adverse changes in clauses that resulted in changes in the payment terms of loans and financing contracts. There
was no change in the guarantees required in relation to December 31, 2019.
|
26.2
|
Changes in finance debt and reconciliation with cash flows from financing activities
|
|
Balance at 12.31.2018
|
Additions
|
Principal amorti zation (*)
|
Interest amorti zation (*)
|
Accrued interest (**)
|
Foreign exchange/ inflation indexation charges
|
CTA
|
Modification of contractual cash flows
|
Transfer to liabilities classified as held for sale
|
Balance at 12.31.2019
|
In Brazil
|
62,971
|
8,565
|
(21,665)
|
(2,925)
|
3,246
|
439
|
−
|
−
|
(7,380)
|
43,251
|
Abroad
|
263,190
|
20,894
|
(82,197)
|
(15,138)
|
15,261
|
2,129
|
7,474
|
118
|
−
|
211,731
|
Total
|
326,161
|
29,459
|
(103,862)
|
(18,063)
|
18,507
|
2,568
|
7,474
|
118
|
(7,380)
|
254,982
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at
12.31.2019
|
Additions
|
Principal amortization (*)
|
Interest amorti zation (*)
|
Accrued interest (**)
|
Foreign exchange/ inflation indexation charges
|
Cumulative translation adjustment (CTA)
|
Modification of contractual cash flows
|
Transfer to liabilities classified as held for sale
|
Balance at 09.30.2020
|
In Brazil
|
43,251
|
7,294
|
(4,198)
|
(1,444)
|
1,572
|
818
|
−
|
−
|
−
|
47,293
|
Abroad
|
211,731
|
71,910
|
(93,093)
|
(11,419)
|
12,589
|
9,700
|
76,443
|
(404)
|
−
|
277,457
|
Total
|
254,982
|
79,204
|
(97,291)
|
(12,863)
|
14,161
|
10,518
|
76,443
|
(404)
|
−
|
324,750
|
Debt restructuring
|
|
−
|
(4,071)
|
−
|
|
|
|
|
|
|
Deposits linked to financing
|
|
−
|
−
|
(288)
|
|
|
|
|
|
|
Cash flow from financing activities
|
|
79,204
|
(101,362)
|
(13,151)
|
|
|
|
|
|
|
(*)It includes pre-payments.
|
(**)It includes premium and discount over notional amounts, as well as gains and losses by modifications in contractual cash flows.
|
In the period from January to September 2020, loans
and financing were mainly used to settle old debts and manage liabilities, aiming at improving the debt profile and better adapting
to the maturity terms of long-term investments and the cash reserve, aimed at maintaining the company's liquidity.
In the same period of 2020, the company raised R$ 79,204,
notably: (i) funding in the national and international banking market, in the amount of R$ 15,885, (ii) draw down of R$ 38,628
in committed lines (Revolving Credit Facilities) with national and international banks; and (iii) proceeds
from financing through the offering of bonds in the international capital market (Global Notes) in the amount of R$ 16,666, of
which R$ 7,771 with the issuance of a new bond maturing in 2031 and R$ 8,895 with the issuance of a new bond maturing in 2050.
The company settled several loans and financing, in
the amount of R$ 114,513, notably: (i) the prepayment of R$ 13,533 of loans in the national and international banking market; (ii)
the repurchase and redemption of R$ 28,357 of securities in the international capital market, with the payment of a net premium
to the security holders who delivered their papers in the transactions in the amount of R$ 4,059; and (iii) total prepayment of
its committed credit lines (Revolving Credit Lines) abroad, in the amount of R$ 40,748 (US$ 7.6 billion).
Additionally, the company carried out debt swap operations
that did not involve financial settlements in the international banking market, in the total amount of R$ 10,719.
|
26.3
|
Summarized information on current and non-current finance debt
|
|
|
Consolidated
|
|
Maturity in
|
2020
|
2021
|
2022
|
2023
|
2024
|
2025 onwards
|
Total (**)
|
Fair value
|
|
|
|
|
|
|
|
|
|
|
|
Financing in U.S.Dollars (US$)(*):
|
5,337
|
30,198
|
13,231
|
22,039
|
25,152
|
163,879
|
259,836
|
280,646
|
|
Floating rate debt
|
2,497
|
18,229
|
11,993
|
16,161
|
20,299
|
36,416
|
105,595
|
|
|
Fixed rate debt
|
2,840
|
11,969
|
1,238
|
5,878
|
4,853
|
127,463
|
154,241
|
|
|
Average interest rate
|
4.9%
|
4.7%
|
4.9%
|
4.9%
|
5.2%
|
6.5%
|
6.0%
|
|
|
Financing in Brazilian Reais (R$):
|
965
|
3,605
|
6,068
|
9,098
|
8,034
|
14,819
|
42,589
|
43,746
|
|
Floating rate debt
|
252
|
2,470
|
4,834
|
8,273
|
6,221
|
6,164
|
28,214
|
|
|
Fixed rate debt
|
713
|
1,135
|
1,234
|
825
|
1,813
|
8,655
|
14,375
|
|
|
Average interest rate
|
3.5%
|
3.2%
|
3.9%
|
5.1%
|
4.8%
|
4.4%
|
4.1%
|
|
|
Financing in Euro (€):
|
386
|
1,188
|
1,005
|
2,139
|
79
|
7,482
|
12,279
|
13,391
|
|
Fixed rate debt
|
386
|
1,188
|
1,005
|
2,139
|
79
|
7,482
|
12,279
|
|
|
Average interest rate
|
4.6%
|
4.5%
|
4.7%
|
4.6%
|
4.7%
|
4.7%
|
4.7%
|
|
|
Financing in Pound Sterling (£):
|
352
|
−
|
−
|
−
|
−
|
9,692
|
10,044
|
11,079
|
|
Fixed rate debt
|
352
|
−
|
−
|
−
|
−
|
9,692
|
10,044
|
|
|
Average interest rate
|
6.1%
|
−
|
−
|
−
|
−
|
6.3%
|
6.3%
|
|
|
Financing in other currencies:
|
2
|
−
|
−
|
−
|
−
|
−
|
2
|
2
|
|
Fixed rate debt
|
2
|
−
|
−
|
−
|
−
|
−
|
2
|
|
|
Average interest rate
|
8.5%
|
−
|
−
|
−
|
−
|
−
|
8.5%
|
|
|
Total on September 30, 2020
|
7,042
|
34,991
|
20,304
|
33,276
|
33,265
|
195,872
|
324,750
|
348,864
|
|
Average interest rate
|
4.7%
|
4.5%
|
4.8%
|
5.0%
|
5.2%
|
6.4%
|
5.8%
|
|
|
Total on December 31, 2019
|
18,013
|
16,002
|
18,904
|
32,392
|
34,410
|
135,261
|
254,982
|
305,044
|
|
Average interest rate
|
5.1%
|
5.2%
|
5.3%
|
5.3%
|
5.3%
|
6.3%
|
5.9%
|
|
|
|
(*) Includes debt raised in Brazil (in Brazilian reais) indexed to the U.S. dollar.
|
|
(**)The average maturity of outstanding debt as of September 30, 2020 is 11.19 years (10.80 years as of December 31, 2019).
|
|
|
|
|
|
|
|
|
|
|
|
|
As of September 30, 2020, the fair values ​​of
financing are mainly determined by using:
Level 1 - prices quoted in active markets, when applicable,
in the amount of R$ 189,362 (R$ 152,397, on December 31, 2019); and
Level 2 - cash flow method discounted by the spot rates
interpolated from the indexes (or proxies) of the respective financing, observed to the pegged currencies, and by the credit risk
of Petrobras, in the amount of R$ 159,502 (R$ 152,647, on December 31, 2019).
The sensitivity analysis for financial instruments
subject to foreign exchange variation is set out in note 30.2.
The nominal (undiscounted) flow of principal and interest
on financing, by maturity, is shown below:
|
Consolidated
|
Maturity
|
2020
|
2021
|
2022
|
2023
|
2024
|
2025 onwards
|
09.30.2020
|
12.31.2019
|
Principal
|
2,697
|
35,358
|
20,945
|
32,776
|
34,765
|
205,868
|
332,409
|
263,147
|
Interest
|
3,625
|
14,488
|
13,579
|
12,736
|
11,723
|
169,004
|
225,155
|
176,783
|
Total (*)
|
6,322
|
49,846
|
34,524
|
45,512
|
46,488
|
374,872
|
557,564
|
439,930
|
(*)The nominal flow of leases is found in note 27.
.
|
26.4
Lines of credit
|
|
Amount
|
Company
|
Financial institution
|
Date
|
Maturity
|
Available
(Lines of Credit)
|
Used
|
Balance
|
Abroad (in US$ million)
|
|
|
|
|
|
|
|
PGT BV
|
Syndicate of banks
|
3/7/2018
|
2/7/2023
|
4,350
|
-
|
4,350
|
PGT BV
|
Syndicate of banks
|
3/27/2019
|
2/27/2024
|
3,250
|
-
|
3,250
|
PGT BV
|
BNP Paribas
|
12/22/2016
|
1/9/2021
|
350
|
336
|
14
|
PGT BV
|
The Export - Import Bank of China
|
12/23/2019
|
12/27/2021
|
750
|
714
|
36
|
Total
|
|
|
|
|
8,700
|
1,050
|
7,650
|
In Brazil
|
|
|
|
|
|
|
|
Petrobras
|
Banco do Brasil
|
3/23/2018
|
1/26/2023
|
2,000
|
−
|
2,000
|
Petrobras
|
Bradesco
|
6/1/2018
|
5/31/2023
|
2,000
|
2,000
|
−
|
Petrobras
|
Banco do Brasil
|
10/4/2018
|
9/5/2025
|
2,000
|
−
|
2,000
|
Transpetro
|
Caixa Econômica Federal
|
11/23/2010
|
Undefined
|
329
|
−
|
329
|
Total
|
|
|
|
|
6,329
|
2,000
|
4,329
|
|
|
|
|
|
|
|
|
|
|
|
On March 20, 2020, Petrobras made withdrawal of committed
credit lines (Revolving Credit Lines), in the amount of US$ 7.6 billion and R$ 2.0 billion, to reinforce its liquidity and protect
itself within the context of the COVID-19 crisis and the oil price shock.
In the third quarter of 2020, Petrobras totally prepaid
its committed credit lines abroad (Revolving Credit Lines), in the amount of US$ 7.6 billion. These funds are available for new
withdrawals, if necessary.
The leases mainly include oil and natural gas production
units, drilling rigs and other exploration and production equipment, ships, support vessels, helicopters, land and buildings. The
movement of lease contracts recognized as liabilities is shown below:
|
Consolidated
|
|
Balance at 12,31,2019
|
|
Remeasurement / new contracts
|
Payment of principal and interest
|
Interest expenses
|
Foreign exchange gains and losses
|
Cumulative translation adjustment
|
Transfers
|
Balance at 09,30,2020
|
Brazil
|
22,183
|
|
2,769
|
(5,786)
|
1,067
|
4,883
|
−
|
(48)
|
25,068
|
Abroad
|
73,996
|
|
8,737
|
(16,098)
|
3,959
|
15,658
|
12,859
|
−
|
99,111
|
Total
|
96,179
|
|
11,506
|
(21,884)
|
5,026
|
20,541
|
12,859
|
(48)
|
124,179
|
Payments relating to liabilities held for sale
|
|
|
|
(281)
|
|
|
|
|
|
Cash Flow
|
|
|
|
(22,165)
|
|
|
|
|
|
As of September 30, 2020, the value of the lease liability
of Petrobras Parent Company is R$ 212,196 (R$ 188,204 on December 31, 2019), including leases and sub-leases with investees, mainly
platforms with PNBV and vessels with Transpetro.
As of September 30, 2020, the nominal flow (not discounted)
without considering future inflation projected in the lease contract flows, by maturity, is shown below:
|
Consolidated
|
Maturity
|
2020
|
2021
|
2022
|
2023
|
2024
|
2025 onwards
|
Total
|
Balance at September 30, 2020
|
7,423
|
32,859
|
22,889
|
15,492
|
12,297
|
75,490
|
166,450
|
Balance at December 31, 2019
|
23,785
|
20,086
|
14,155
|
10,628
|
8,723
|
52,631
|
130,008
|
Payments in certain lease agreements vary due to changes
in facts or circumstances occurring after their inception other than the passage of time. Such payments are not included in the
measurement of the lease obligations. Variable lease payments in the period from January to September of 2020 amounted to R$ 2,792,
representing 13% in relation to fixed payments (R$ 2,426 and 17% related to fixed payments in the same period of 2019).
Extension options were considered when measuring lease
obligations.
The sensitivity analysis of financial instruments subject
to exchange rate variation is presented in note 30.2.
In the period from January to September of 2020, the
company recognized lease expenses in the amount of R$ 491 (R$ 2,614 in the same period of 2019), referring to contracts with a
term of less than one year.
As of September 30, 2020, the balances
of lease agreements that had not yet been initiated due to the related assets being under construction or not being made available
for use, represent the amount of R$ 344,830 (R$ 200,788 on December 31, 2019).
|
28.1
|
Share capital (net of share issuance costs)
|
As of September 30, 2020, subscribed and fully paid
share capital, net of issuance costs, was R$ 205,432, represented by 7,442,454,142 common shares and 5,602,042,788 preferred shares,
all of which are registered, book-entry shares with no par value.
Preferred shares have priority on returns of capital,
do not grant any voting rights and are non-convertible into common shares.
There are treasury shares, constituted since 2018,
with 222,760 common shares and 72,909 preferred shares.
28.2
Distributions to shareholders
As a result of the COVID-19 and the restrictions imposed
or recommended by the World Health Organization (WHO) and the Brazilian authorities in relation to travel and meetings, the General
Shareholders’ Meeting took place on 22 July 2020, as extended by the Securities and Exchange Commission.
The company will pay the remaining balance of dividends
and interest on equity of the Parent Company for the year 2019, updated by SELIC, at the parent company, in the amount of R$ 1,799,
on December 15, 2020.
The postponement of the payment of dividends was one
of the measures adopted by the company to preserve its cash, due to COVID-19 and the shock of oil prices.
28.3
Earnings per share
|
|
Consolidated and Parent Company
|
|
2020
|
2019
|
|
Jul-Sep
|
Jan-Sep
|
Jul-Sep
|
Jan-Sep
|
Basic and diluted numerator
|
|
|
|
|
Net income from continuing operations
|
|
|
|
|
Common
|
(882)
|
(30,114)
|
(127)
|
12,620
|
Preferred
|
(664)
|
(22,668)
|
(96)
|
9,499
|
|
(1,546)
|
(52,782)
|
(223)
|
22,119
|
Net income from discontinued operations
|
|
|
|
|
Common
|
−
|
−
|
5,312
|
5,628
|
Preferred
|
−
|
−
|
3,998
|
4,237
|
|
−
|
−
|
9,310
|
9,865
|
Net income of the period
|
|
|
|
|
Common
|
(882)
|
(30,114)
|
5,185
|
18,248
|
Preferred
|
(664)
|
(22,668)
|
3,902
|
13,736
|
|
(1,546)
|
(52,782)
|
9,087
|
31,984
|
|
|
|
|
|
Basic and diluted denominator - Weighted average number of common and preferred shares outstanding
|
|
|
|
|
Common
|
7,442,231,382
|
7,442,231,382
|
7,442,231,382
|
7,442,231,382
|
Preferred
|
5,601,969,879
|
5,601,969,879
|
5,601,969,879
|
5,601,969,879
|
|
13,044,201,261
|
13,044,201,261
|
13,044,201,261
|
13,044,201,261
|
|
|
|
|
|
Basic and diluted income per share (R$ per share) from continuing operations
|
|
|
|
|
Common
|
(0.12)
|
(4.05)
|
(0.02)
|
1.70
|
Preferred
|
(0.12)
|
(4.05)
|
(0.02)
|
1.70
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted income per share (R$ per share) from discontinued operations
|
|
|
|
|
Common
|
−
|
−
|
0.72
|
0.75
|
Preferred
|
−
|
−
|
0.72
|
0.75
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted income per share (R$ per share)
|
|
|
|
|
Common
|
(0.12)
|
(4.05)
|
0.70
|
2.45
|
Preferred
|
(0.12)
|
(4.05)
|
0.70
|
2.45
|
Basic earnings per share are calculated by dividing
the net income (loss) attributable to shareholders of Petrobras by the weighted average number of outstanding shares during the
period.
Diluted earnings (losses) per share are calculated
by adjusting the net income (loss) attributable to shareholders of Petrobras and the weighted average number of outstanding shares
during the period taking into account the effects of all dilutive potential shares (equity instrument or contractual arrangements
that are convertible into shares).
Basic and diluted earnings (losses) are identical as
the Company has no potential share in issue.
|
29
|
Fair value of financial assets and liabilities
|
|
Fair value measured based on
|
|
Level I
|
Level II
|
Level III
|
Total fair
value
recorded
|
Assets
|
|
|
|
|
Marketable securities
|
3,181
|
−
|
−
|
3,181
|
Balance at September 30, 2020
|
3,181
|
−
|
−
|
3,181
|
Balance at December 31, 2019
|
3,556
|
235
|
−
|
3,791
|
|
|
|
|
|
Liabilities
|
|
|
|
|
Foreign currency derivatives
|
|
(2,385)
|
−
|
(2,385)
|
Commodity derivatives
|
(3)
|
−
|
−
|
(3)
|
Interest rate derivatives
|
−
|
(43)
|
−
|
(43)
|
Balance at September 30, 2020
|
(3)
|
(2,428)
|
−
|
(2,431)
|
Balance at December 31, 2019
|
(112)
|
(445)
|
−
|
(557)
|
The estimated fair value for the Company’s long-term
debt, computed based on the prevailing market rates, is set out in note 26.
Certain receivables are classified as fair value through
profit or loss, according to note 10.
The fair values of cash and cash equivalents, short-term
debt and other financial assets and liabilities are equivalent or do not differ significantly from their carrying amounts.
A summary of the positions of the derivative financial
instruments held by the Company and recognized in other current assets and liabilities as of September 30, 2020 , as well as the
amounts recognized in the statement of income and other comprehensive income and the guarantees given is set out as follows:
|
Statement of Financial Position
|
|
Notional value
|
Fair value
Asset Position (Liability)
|
Maturity
|
|
09.30.2020
|
12.31.2019
|
09.30.2020
|
12.31.2019
|
|
Derivatives not designated for hedge accounting
|
|
|
|
|
|
Future contracts - total (*)
|
(1,806)
|
(10,383)
|
(3)
|
(112)
|
|
Long position/Crude oil and oil products
|
5,307
|
9,865
|
−
|
−
|
2020
|
Short position/Crude oil and oil products
|
(7,113)
|
(20,248)
|
−
|
−
|
2020
|
|
|
|
|
|
|
Forward contracts
|
|
|
|
|
|
Long position/Foreign currency forwards (BRL/USD) (**)
|
-
|
US$ 273
|
−
|
(1)
|
2020
|
Long position/Foreign currency forwards (EUR/USD) (**)
|
-
|
EUR 2,245
|
−
|
(183)
|
2020
|
Long position/Foreign currency forwards (GPB/USD) (**)
|
GPB 388
|
GPB 388
|
(24)
|
40
|
2020
|
Short position/Foreign currency forwards (GPB/USD) (**)
|
GPB 34
|
GPB 224
|
-
|
(58)
|
2020
|
Swap
|
|
|
|
|
|
Foreign currency / Cross-currency Swap (**)
|
GPB 615
|
GPB 700
|
(40)
|
126
|
2026
|
Foreign currency / Cross-currency Swap (**)
|
GPB 600
|
GPB 600
|
(787)
|
(203)
|
2034
|
Swap – IPCA
|
3,008
|
3,008
|
(43)
|
24
|
2029/2034
|
Foreign currency / Cross-currency Swap (**)
|
US$ 729
|
US$ 729
|
(1,534)
|
45
|
2024/2029
|
Total recognized in the Statement of Financial Position
|
|
|
(2,431)
|
(322)
|
|
(*)Notional value in thousands of bbl.
|
(**) Amounts in US$, GBP and EUR are presented in million.
|
|
Gains/ (losses) recognized in the statement of income
|
|
|
2020
|
|
2019
|
|
Jul-Sep
|
Jan-Sep
|
Jul-Sep
|
Jan-Sep
|
Commodity derivatives
|
|
|
|
|
Oil - 30,1 (a) (b)
|
(259)
|
(2,847)
|
75
|
(831)
|
Gasoline - 30,1 (b)
|
−
|
−
|
29
|
44
|
Diesel - 30,1 (b)
|
−
|
−
|
(86)
|
(48)
|
Other operations - 30,1 (c)
|
2
|
907
|
234
|
(362)
|
Recognized in other operating expense
|
(257)
|
(1,940)
|
252
|
(1,197)
|
Currency derivatives
|
|
|
|
|
Swap GPB x Dollar - 30,2 (b)
|
591
|
(701)
|
(301)
|
(677)
|
NDF – Euro x Dollar - 30,2 (b)
|
−
|
(48)
|
(518)
|
(799)
|
NDF – GPB x Dollar - 30,2 (b)
|
72
|
(23)
|
(53)
|
(86)
|
Swap CDI x Dollar - 30,2 (b)
|
(140)
|
(1,567)
|
(26)
|
(26)
|
Others
|
(1)
|
(8)
|
2
|
27
|
|
522
|
(2,347)
|
(896)
|
(1,561)
|
Interest derivatives
|
|
|
|
|
Swap - CDI X IPCA
|
(45)
|
(90)
|
41
|
41
|
Total
|
(45)
|
(90)
|
41
|
41
|
Cash flow hedge on exports (*)
|
(6,147)
|
(18,174)
|
(18,174)
|
(8,709)
|
Recognized in finance income (expense)
|
(5,670)
|
(20,611)
|
(3,817)
|
(10,229)
|
Total
|
(5,927)
|
(22,551)
|
(3,565)
|
(11,426)
|
(*) According to note 30,2,
|
|
Gains/ (losses) recognized in other comprehensive income in the period
|
|
|
2020
|
|
2019
|
|
Jul-Sep
|
Jan-Sep
|
Jul-Sep
|
Jan-Sep
|
Cash flow hedge on exports (*)
|
(1,513)
|
(103,926)
|
(25,486)
|
(16,201)
|
|
|
|
|
|
(*) According to note 30.2.
|
|
Guarantees given as colateral
|
|
09.30.2020
|
12.31.2019
|
Commodity derivatives
|
47
|
244
|
Currency derivatives
|
724
|
637
|
|
771
|
881
|
A sensitivity analysis of the derivative financial
instruments for the different types of market risks as of September 30, 2020 is set out as follows:
|
|
Consolidated
|
Financial Instruments
|
Risk
|
Probable Scenario (*)
|
Reasonably possible
scenario
|
Remote
Scenario
|
Derivatives not designated for hedge accounting
|
|
|
|
|
|
|
|
Future contracts and forward contracts (swap)
|
Crude oil and oil products - price changes
|
−
|
(119)
|
(237)
|
|
|
|
|
|
−
|
(119)
|
(237)
|
⁽*⁾
The probable scenarios were calculated considering the following variations
for risks: Oil and Derivatives Prices: fair value as of September 30, 2020 / Real x Dollar - 6% appreciation of the real. Source:
Focus. Reasonably possible and remote scenarios consider 25% and 50% deterioration in the associated risk variables, respectively.
|
30.1
|
Risk management of crude oil and oil products prices
|
Petrobras has a preference for exposure to the price
cycle to the systematic protection of transactions for the purchase or sale of goods, whose objective is to meet its operational
needs, using derivative financial instruments. However, subject to the analysis of the business environment and the prospects for
carrying out the Strategic Plan, the execution of an occasional hedging strategy with derivatives may be applicable.
a)Crude oil
In March 2020, in order to preserve the Company's liquidity,
Petrobras approved a protection strategy for systemic oil operations in order to protect the revenue flows arising from these transactions
against uncertainties in the prices of exports of oil feedstock already loaded, but not priced, due to the high volatility of the
current context, generated both by the effects of falling oil prices and by the effects of COVID-19 on world consumption of oil
and oil products.
As a result of this strategy, forward and swap transactions
were carried out between April and May 2020, with effects on the result between April and August this year. Swap transactions do
not require an initial disbursement, whereas future transactions require margin deposits, depending on the volume contracted.
b)Protection Strategy adopted in
2019
For more information on these operations, see note
36.1 of Petrobras financial statements of December 31, 2019.
c)Other commodity derivative transactions
Petrobras, using its assets, positions
and proprietary and market knowledge from its operations in Brazil and abroad, seeks to capture market opportunities through the
purchase and sale of oil and oil products, which can occasionally be optimized with the use of commodity derivative instruments
to manage price risk in a safe and controlled manner.
30.2
Foreign exchange risk management
a)Cash Flow Hedge involving the
Company’s future exports
The carrying amounts, the fair value as of September
30, 2020, and a schedule of expected reclassifications to the statement of income of cumulative losses recognized in other comprehensive
income (shareholders’ equity) based on a US$ 1.00 / R$ 5.6407 exchange rate are set out below:
|
|
|
|
Present value of hedging instrument notional value at September 30, 2020
|
Hedging Instrument
|
|
Hedged Transactions
|
|
Nature
of the Risk
|
|
Maturity
Date
|
US$
million
|
R$
|
Foreign exchange gains and losses on proportion of non-derivative financial instruments cash flows
|
|
Foreign exchange gains and losses on a portion of highly probable future monthly exports revenues
|
|
Foreign Currency
– Real vs U.S. Dollar
Spot Rate
|
|
From out/2020 to sep/2030
|
|
51,824
|
292,323
|
|
|
|
|
|
|
|
|
|
|
.
Changes in the present value of hedging instrument notional value
|
US$ millon
|
R$
|
Amounts designated as of December 31, 2019
|
87,651
|
353,295
|
Additional hedging relationships designated, designations revoked and hedging instruments re-designated
|
(5,102)
|
(31,670)
|
Exports affecting the statement of income
|
(10,564)
|
(51,282)
|
Principal repayments / amortization
|
(20,161)
|
(100,119)
|
Foreign exchange variation
|
−
|
122,099
|
Amount on September 30, 2020
|
51,824
|
292,323
|
Nominal value of hedging instrument (finance debt and lease liability) on September 30, 2020
|
57,246
|
322,907
|
|
.
From January to September of 2020, the expected export
values ​​and consequently the highly probable export
values ​​were impacted by the effects of the oil price
war and the COVID-19.
Thus, the value of exports designated for hedge relationships
are no longer considered highly probable, but are still expected to occur, and as a consequence the hedge relationships were revoked
at March 31, 2020, in the amount of US$ 35,774 (R$ 185,982). The foreign exchange variation accounted for these operations
within other comprehensive income up to the end of the quarter remains in shareholders' equity, and will be reclassified to the
statement of income when exports occur. These revocations were responsible for the relevant increase in Dollar/Real exposure, which
on September 30, 2020 was negative by R$ 229,960, according to the table 30.2 c - “Sensitivity analysis for foreign exchange
risk on financial instruments”.
In addition to the impacts reported above, exports
whose exchange variations were designated in hedge relationships for the months of April to December / 2020 and August to December
/ 2021 are no longer foreseen, and were reclassified from shareholders’ equity to the statement of income for the period
from January to September 2020, in the amount of R$ 2,570, mainly in March 2020.
In the period from January to September 2020, the Company
also recognized a R$ 5 loss within foreign exchange gains (losses) due to ineffectiveness (a R$ 18 loss in the first half of 2019).
The ratio of future exports for which cash flow hedge
accounting was designated to the highly probable future exports is 100% (91.2% on December 31, 2019).
A roll-forward schedule of cumulative foreign exchange
losses recognized in other comprehensive income as of September 30, 2020 is set out below:
|
Exchange rate
|
Tax effect
|
Total
|
Balance at January 1,2019
|
(50,414)
|
17,141
|
(33,273)
|
Recognized in shareholders' equity
|
(13,469)
|
4,580
|
(8,889)
|
Reclassified to the statement of income - occurred exports
|
12,397
|
(4,215)
|
8,182
|
Balance at December 31, 2019
|
(51,486)
|
17,506
|
(33,980)
|
Recognized in shareholders' equity
|
(122,100)
|
41,514
|
(80,586)
|
Reclassified to the statement of income - occurred exports
|
15,604
|
(5,305)
|
10,299
|
Reclassified to the statement of income - exports no longer expected to occur
|
2,570
|
(874)
|
1,696
|
Balance at September 30, 2020
|
(155,412)
|
52,841
|
(102,571)
|
Changes in expectations regarding the realization of
export prices and volumes in future revisions of the business plans may determine the need for additional reclassifications of
the exchange variation accumulated in shareholders' equity to results. A sensitivity analysis with an average Brent oil price of
US$ 10/barrel lower than in the last review of the 2020-2024 Strategic Plan, it would indicate the need to reclassify the deferred
exchange variation and registered in shareholders' equity for exports from October 2020 to December 2023, in the amount of R$ 4.3
billion.
A schedule of expected reclassification of cumulative
foreign exchange losses recognized in other comprehensive income to the statement of income as of September 30, 2020 is set out
below:
|
Consolidated
|
|
2020
|
2021
|
2022
|
2023
|
2024
|
2025
|
2026
|
2027 to 2030
|
Total
|
Expected realization
|
(6,430)
|
(25,720)
|
(27,253)
|
(23,583)
|
(18,852)
|
(13,774)
|
(12,102)
|
(27,698)
|
(155,412)
|
|
b) Information about open contracts
As of September 30, 2020, the company has outstanding
swap contracts - IPCA x CDI and CDI x Dollar, swap - Pound sterling x Dollar and Non Deliverable Forward (NDF) - Pound sterling
x Dollar.
Cross currency swap –IPCA
x CDI and CDI x dollar
Changes in future interest
rate curves (CDI) may have an impact on the company's results, due to the market value of these swap contracts. A sensitivity analysis
on future interest rate curves (CDI) with a constant increase (parallel shock) of 100 basis points, keeping all other variables
constant, would result in a positive impact on the result of approximately R$ 21, while a constant reduction (parallel shock) of
100 basis points, keeping all other variables constant, would result in a negative impact of approximately R$ 15.
For more information
on such contracts, see note 36.2 to Petrobras' financial statements of December 31, 2019.
c)Sensitivity analysis for foreign
exchange risk on financial instruments
A sensitivity analysis is set out below, showing the
probable scenario for foreign exchange risk on financial instruments, computed based on external data along with stressed scenarios
(a 25% and a 50% change in the foreign exchange rates), except for assets and liabilities of foreign subsidiaries, when transacted
in a currency equivalent to their respective functional currencies.
|
|
|
|
Financial Instruments
|
Exposure at 09.30.2020
|
Risk
|
Probable Scenario (*)
|
Possible Scenario
(∆ of 25%)
|
Remote Scenario
(∆ of 50%)
|
Assets
|
23,410
|
Dollar / Real
|
(1,414)
|
5,853
|
11,705
|
Liabilities
|
(542,685)
|
|
32,778
|
(135,671)
|
(271,342)
|
Exchange rate - Cross currency swap
|
(3,008)
|
|
182
|
(752)
|
(1,504)
|
Cash flow hedge on exports
|
292,323
|
|
(17,656)
|
73,081
|
146,162
|
|
(229,960)
|
|
13,890
|
(57,489)
|
(114,979)
|
Assets
|
23
|
Euro / Real
|
(1)
|
6
|
12
|
Liabilities
|
(133)
|
|
6
|
(33)
|
(67)
|
|
(110)
|
|
5
|
(27)
|
(55)
|
Assets
|
12,130
|
Euro / Dollar
|
206
|
3,033
|
6,065
|
Liabilities
|
(24,975)
|
|
(424)
|
(6,244)
|
(12,488)
|
|
(12,845)
|
|
(218)
|
(3,211)
|
(6,423)
|
Assets
|
18
|
Pound Sterling / Real
|
(1)
|
5
|
9
|
Liabilities
|
(126)
|
|
6
|
(32)
|
(63)
|
|
(108)
|
|
5
|
(27)
|
(54)
|
Assets
|
9,993
|
Pound Sterling / Dollar
|
110
|
2,498
|
4,997
|
Liabilities
|
(20,119)
|
|
(221)
|
(5,030)
|
(10,060)
|
Exchange rate - Cross currency swap
|
8,858
|
|
97
|
2,215
|
4,429
|
Non Deliverable Forward (NDF)
|
2,577
|
|
28
|
644
|
1,289
|
|
1,309
|
|
14
|
327
|
655
|
Total
|
(241,714)
|
|
13,696
|
(60,427)
|
(120,856)
|
(*) On September 30, 2020,
the probable scenario was computed based on the following risks: R$ x U.S. Dollar - a 6% appreciation of the Real; Euro x U.S.
Dollar: a 1.8% appreciation of the Euro; Pound Sterling x U.S. Dollar: a 1.17% appreciation of the Pound Sterling; Real x Euro:
a 4.3% appreciation of the Real; and Real x Pound Sterling - a 4.9% appreciation of the Real . Source: Focus and Thomson Reuters.
30.3
Interest rate risk management
The table below informs, in the probable scenario,
the amount to be disbursed by Petrobras with the payment of interest related to the debts with floating interest rate on September
30, 2020. The possible and remote scenarios express a sensitivity analysis in which there is an increase of 25% and 50%, respectively,
in the interest rates of these debts (Libor, TJLP, CDI, TR and IPCA). The results presented for the probable scenario and the sensitivity
scenarios are associated with a period of 12 months.
|
|
Consolidated
|
Operations
|
Risk
|
Probable Scenario (*)
|
Possible Scenario
(∆ of 25%)
|
Remote Scenario
(∆ of 50%)
|
Financing
|
Floating Rates
|
|
|
|
4,228
|
4,913
|
5,598
|
(*) The probable scenario was calculated considering the quotations of currencies and floating rates to which the debts are indexed.
|
|
|
|
|
|
|
|
|
The company regularly evaluates market conditions and
can carry out repurchase transactions for its securities or its subsidiaries in the international capital market, by various means,
including tender offers, securities redemptions and / or open market operations, provided they are in line with the company's liabilities
management strategy, which aims to improve the amortization profile and the cost of debt.
Measures to protect the Company's
liquidity
As a result of the abrupt reduction on the demand and
prices of oil and fuel, caused by the impact of the escalation of the COVID-19 all over the world, in the same time of an increase
in oil supply, the Company adopted a set of measures to reduce cash outflows and cash preservation in a scenario of uncertainty,
in order to ensure its financial strength and the resilience of its businesses.
The measures adopted by the Company to protect liquidity
are described in note 3.
|
31
|
Related-party transactions
|
The Company has a related-party transactions policy,
which is annually revised and approved by the Board of Directors, in accordance with the Company’s by-laws.
|
31.1
|
Transactions with entities of Petrobras group (Parent Company)
|
|
09.30.2020
|
12.31.2019
|
|
Current
|
Non-current
|
Total
|
Current
|
Non-current
|
Total
|
Assets
|
|
|
|
|
|
|
Trade and other receivables
|
|
|
|
|
|
|
Trade and other receivables, mainly from sales
|
14,066
|
−
|
14,066
|
17,774
|
−
|
17,774
|
Dividends receivable
|
259
|
−
|
259
|
397
|
−
|
397
|
Intercompany loans
|
−
|
−
|
−
|
−
|
10
|
10
|
Advance for capital increase
|
−
|
3
|
3
|
−
|
−
|
−
|
Amounts related to construction of natural gas pipeline
|
−
|
734
|
734
|
−
|
750
|
750
|
Leases
|
−
|
−
|
−
|
163
|
−
|
163
|
Other operations
|
883
|
608
|
1,491
|
871
|
421
|
1,292
|
Advances to suppliers
|
116
|
1,539
|
1,655
|
108
|
572
|
680
|
Total
|
15,324
|
2,884
|
18,208
|
19,313
|
1,753
|
21,066
|
Liabilities
|
|
|
|
|
|
|
Lease liabilities (*)
|
(99,421)
|
(34,135)
|
(133,556)
|
(21,188)
|
(104,585)
|
(125,773)
|
Intercompany loans
|
(2,886)
|
−
|
(2,886)
|
(28,555)
|
−
|
(28,555)
|
Prepayment of exports
|
(54,083)
|
(297,373)
|
(351,456)
|
(56,066)
|
(159,769)
|
(215,835)
|
Accounts payable to suppliers
|
(29,158)
|
−
|
(29,158)
|
(22,936)
|
−
|
(22,936)
|
Purchases of crude oil, oil products and others
|
(26,957)
|
−
|
(26,957)
|
(19,125)
|
−
|
(19,125)
|
Affreightment of platforms
|
(993)
|
−
|
(993)
|
(2,022)
|
−
|
(2,022)
|
Advances from clientes
|
(1,208)
|
−
|
(1,208)
|
(1,789)
|
−
|
(1,789)
|
Other operations
|
(46)
|
−
|
(46)
|
(263)
|
(470)
|
(733)
|
Total
|
(185,594)
|
(331,508)
|
(517,102)
|
(129,008)
|
(264,824)
|
(393,832)
|
(*) Includes amounts referring to lease and sub-lease
transactions between investees required by IFRS 16.
|
2020
|
2019
|
|
Jul-Sep
|
Jan-Sep
|
Jul-Sep
|
Jan-Sep
|
Profit or Loss
|
|
|
|
|
Revenues, mainly sales revenues
|
41,336
|
114,632
|
43,631
|
124,307
|
Foreign exchange and inflation indexation charges (**)
|
(13,179)
|
(67,525)
|
(10,002)
|
(13,737)
|
Financial income (expenses), net (**)
|
(7,853)
|
(22,933)
|
(6,476)
|
(18,454)
|
Total
|
20,304
|
24,174
|
27,153
|
92,116
|
(**) Includes the amounts of R$ 45,454 of passive exchange
variation and R$ 7,205 of financial expenses related to leasing and sub-leasing operations required by IFRS 16.
|
31.2
|
Annual rates for intercompany loans
|
|
|
Parent Company
|
|
Asset
|
Liability
|
|
09.30.2020
|
12.31.2019
|
09.30.2020
|
12.31.2019
|
From 3.01 to 4%
|
−
|
−
|
−
|
(17,075)
|
From 4.01 to 5%
|
−
|
−
|
(2,886)
|
(11,480)
|
More than 9.01%
|
−
|
10
|
−
|
−
|
Total
|
−
|
10
|
(2,886)
|
(28,555)
|
|
31.3
|
Non standardized receivables investment fund (FIDC-NP)
|
The parent company maintains funds invested in the
FIDC-NP that are mainly used for the acquisition of performing and / or non-performing credit rights for operations carried out
by affiliates. The amounts invested are recorded in accounts receivable.
Assigned and non-performed credit rights assignments
are recorded as financing in current liabilities.
|
Parent Company
|
|
09.30.2020
|
12.31.2019
|
Accounts receivable, net
|
33,660
|
52,550
|
Credit rights assignments
|
(25,914)
|
(61,142)
|
|
2020
|
2019
|
|
Jul-Sep
|
Jan-Sep
|
Jul-Sep
|
Jan-Sep
|
Financial Income FIDC-NP
|
397
|
1,625
|
967
|
1,766
|
Financial Expenses FIDC-NP
|
(367)
|
(1,680)
|
(924)
|
(1,980)
|
Net finance income (expense)
|
30
|
(55)
|
43
|
(214)
|
Petrobras has the procedure of granting guarantees
to subsidiaries and controlled companies for some financial operations carried out in Brazil and abroad, with no significant variations
in guarantees compared to December 31, 2019.
The guarantees offered by Petrobras, mainly personal,
are made based on contractual clauses that support the financial transactions between the subsidiaries / controlled companies and
third parties, ensuring assumption of compliance with the third party's obligation, in case the original debtor does not do so.
The financial transactions carried out by the subsidiaries
and guaranteed by Petrobras are presented in note 37.6 to Petrobras' financial statements as of December 31, 2019.
|
31.5
|
Investment fund of subsidiaries abroad
|
As of September 30, 2020, a subsidiary of PIB BV maintained
resources invested directly or through an investment fund abroad that held, among others, debt securities of PGF and a consolidated
structured entity related to the CDMPI project, equivalent to R$ 5,788 (R$ 3,967, as of December 31, 2019).
|
31.6
|
Transactions with joint ventures, associates, government entities and pension plans
|
The company does, and expects to continue to do, business
in the normal course of various transactions with its joint ventures, affiliates, pension funds, as well as with its controlling
shareholder, the Brazilian federal government, which includes transactions with banks and other entities under its control, such
as financing and banking services, asset management and others.
Significant transactions resulted in the following balances:
|
|
Consolidated
|
|
09.30.2020
|
12.31.2019
|
|
Asset
|
Liabilty
|
Asset
|
Liabilty
|
Joint ventures and associates
|
|
|
|
|
Petrobras Distribuidora (BR)
|
591
|
234
|
904
|
191
|
Natural Gas Transportation Companies
|
472
|
952
|
605
|
2,889
|
State-controlled gas distributors (joint ventures)
|
1,045
|
449
|
1,361
|
421
|
Petrochemical companies (associates)
|
29
|
19
|
188
|
116
|
Other associates and joint ventures
|
241
|
545
|
143
|
818
|
Subtotal
|
2,378
|
2,199
|
3,201
|
4,435
|
Brazilian government – Parent and its controlled entities
|
|
|
|
|
Government bonds
|
6,549
|
−
|
6,367
|
−
|
Banks controlled by the Brazilian Government
|
40,123
|
18,730
|
34,600
|
19,765
|
Receivables from the Electricity sector
|
1,035
|
−
|
1,347
|
−
|
Petroleum and alcohol account - receivables from the Brazilian Government (note 31.7)
|
1,239
|
−
|
1,226
|
−
|
Brazilian Federal Government – dividends
|
8
|
517
|
−
|
1,679
|
Empresa Brasileira de Administração de Petróleo e Gás Natural – Pré-Sal Petróleo S.A. – PPSA
|
−
|
−
|
−
|
80
|
Others
|
94
|
209
|
185
|
176
|
Subtotal
|
49,048
|
19,456
|
43,725
|
21,700
|
Pension plans
|
241
|
218
|
240
|
443
|
Total
|
51,667
|
21,873
|
47,166
|
26,578
|
Current assets
|
11,637
|
5,895
|
11,485
|
7,676
|
Non-current assets
|
40,030
|
15,978
|
35,681
|
18,902
|
The income/expenses of significant transactions are
set out in the following table:
|
|
Consolidated
|
|
2020
|
2019
|
|
Jul-Sep
|
Jan-Sep
|
Jul-Sep
|
Jan-Sep
|
Joint ventures and associates
|
|
|
|
|
Petrobras Distribuidora (BR)
|
15,415
|
40,004
|
11,371
|
11,371
|
Natural Gas Transportation Companies (*)
|
(1,474)
|
(6,232)
|
(2,753)
|
(4,958)
|
State-controlled gas distributors (joint ventures)
|
1,907
|
6,441
|
2,873
|
8,134
|
Petrochemical companies (associates)
|
3,898
|
10,667
|
2,803
|
8,650
|
Other associates and joint ventures
|
697
|
659
|
723
|
1,748
|
Subtotal
|
20,443
|
51,539
|
15,017
|
24,945
|
Brazilian government – Parent and its controlled entities
|
|
|
|
|
Government bonds
|
29
|
137
|
98
|
300
|
Banks controlled by the Brazilian Government
|
263
|
(1,348)
|
(445)
|
(2,063)
|
Receivables from the Electricity sector
|
64
|
178
|
272
|
1,078
|
Petroleum and alcohol account - receivables from the Brazilian Government
|
3
|
13
|
(4)
|
5
|
Brazilian Federal Government – dividends
|
(2)
|
(17)
|
−
|
(33)
|
Empresa Brasileira de Administração de Petróleo e Gás Natural – Pré-Sal Petróleo S.A. – PPSA
|
(334)
|
(540)
|
43
|
(229)
|
Others
|
43
|
(5)
|
(196)
|
(301)
|
Subtotal
|
66
|
(1,582)
|
(232)
|
(1,243)
|
Pension plans
|
(950)
|
(950)
|
-
|
-
|
Total
|
19,559
|
49,007
|
14,785
|
23,702
|
|
|
|
|
|
Revenues, mainly sales revenues
|
21,882
|
59,649
|
18,452
|
30,614
|
Purchases and services
|
(1,657)
|
(8,522)
|
(3,486)
|
(6,001)
|
Operating income and expenses
|
(950)
|
(950)
|
−
|
−
|
Foreign exchange and inflation indexation charges, net
|
198
|
(1,109)
|
(327)
|
(1,151)
|
Finance income (expenses), net
|
86
|
(61)
|
146
|
240
|
Total
|
19,559
|
49,007
|
14,785
|
23,702
|
(*) Includes results of TAG up to
July 2020, the date on which the company entered into a purchase and sale agreement for its remaining stake (note 24.2)
The liability with pension plans of the company's employees
and managed by the Petros Foundation, which include debt instruments, is presented in note 14.1. - Pension and health plans.
|
31.7
|
Petroleum and alcohol account - receivables from the Brazilian Government
|
On March 11, 2020, the Federal Union filed a Challenge
to the Compliance with the Judgment and was determined to Petrobras to express its opinion on this challenge.
After the company's statement, through which Petrobras
recognized the excess of execution, the judge partially accepted the Union's challenge, only with regard to the update (interest
and monetary correction) of the principal amount, since June 30, 2004. Other federal claims, such as compensation and prescription,
were rejected.
On June 23, 2020, the judge approved the calculations
presented by the Federal Union on the base date of February 2020 and with which Petrobras agreed. However, the Union filed an appeal
for a declaration embargo, which was largely dismissed on August 31, 2020.
On September 14, 2020, the Union petitioned agreeing
with the content of the decision rendered and, at the same time, requested that the National Treasury manifest itself in order
to comply with the Legal Process Business signed between Petrobras and the National Treasury.
On September 22, 2020, Petrobras indicated the tax
foreclosures for which the amounts relating to the precatory to be issued will be allocated. Petrobras is awaiting final settlement
by the Federal Court and the final decision of the process.
As of September 30, 2020, the amount to be reimbursed
by the Federal Government, plus interest and adjusted by the TR rate, is R$ 1,239 (R$ 1,226 on December 31, 2019), and is classified
in long-term accounts receivable. The update regarding the IPCA-E claimed by the company remains classified as a contingent asset
and totals R$ 1,203 on September 30, 2020.
|
31.8
|
Compensation of key management personnel
|
The compensations of Executive Officers and Board Members
of Petrobras parent company are governed by the Secretariat of Management and Governance for the State-owned Companies (Secretaria
de Coordenação e Governança das Empresas Estatais – SEST), Ministry of Economy and Ministry of Mines
and Energy of Brazil, and are set out as follows:
|
Jan-Sep/2020
|
Jan-Sep/2019
|
|
Officers
|
Board Members
|
Total
|
Officers
|
Board Members
|
Total
|
Wages and short-term benefits
|
9.7
|
0.5
|
10.2
|
8.0
|
0.6
|
8.6
|
Social Security and other employee-related taxes
|
2.4
|
0.1
|
2.5
|
2.8
|
0.1
|
2.9
|
Post-employment benefits (pension plan)
|
0.7
|
−
|
0.7
|
0.7
|
−
|
0.7
|
Variable compensation
|
−
|
−
|
−
|
7.7
|
−
|
7.7
|
Benefits due to termination of tenure
|
0.5
|
−
|
0.5
|
1.3
|
−
|
1.3
|
Total compensation recognized in the statement of income
|
13.3
|
0.6
|
13.9
|
20.5
|
0.7
|
21.2
|
Total compensation paid
|
13.3
|
0.6
|
13.9
|
17.0
|
0.7
|
17.7
|
Average number of members in the period (*)
|
9.00
|
9.44
|
18.44
|
7.33
|
9.67
|
17.00
|
Average number of paid members in the period (**)
|
9.00
|
4.33
|
13.33
|
7.22
|
5.33
|
12.55
|
|
(*) Monthly average number of members.
|
(**) Monthly average number of paid members.
|
In the period from January to September 2020, the consolidated
expense with the total compensation of the company's officers and directors totaled R$ 43.7 (R$ 58.2 in the period from January
to September 2019, excluding discontinued operations).
The remuneration of the members of the Advisory Committees
to the Board of Directors must be considered in addition to the global remuneration limit set for the managers, that is, the perceived
values ​​are not classified as management remuneration.
The members of the Board of Directors who participate
in the Statutory Audit Committee waive the remuneration of the Board Member, as established in art. 38, § 8 of Decree No.
8,945, of December 27, 2016 and they were entitled to a total remuneration of R$ 1,641 thousand in the period from January to September
2020 (R$ 1,969 thousand, considering social charges). On September 30, 2019, the accumulated remuneration in the period was R$
1,323 thousand (R$ 1,587 thousand, considering social charges).
On July 22, 2020, the Annual Shareholders' Meeting
set the remuneration of the administrators (Executive Board and Board of Directors) at up to R$ 43.3 as the global compensation
limit to be paid in the period between April 2020 and March 2021. In relation to what was approved by the Extraordinary General
Meeting (AGE) 2019, no adjustment in monthly fees was proposed.
|
32
|
Supplemental information on statement of cash flows
|
|
Consolidated
|
|
2020
|
2019
|
|
Jan-Sep
|
Jan-Sep
|
Amounts paid/received during the period:
|
|
|
Withholding income tax paid on behalf of third-parties
|
5,825
|
3,667
|
Capital expenditures and financing activities not involving cash
|
|
|
Purchase of property, plant and equipment on credit
|
−
|
290
|
Lease
|
12,354
|
4,181
|
Provision/(reversals) for decommissioning costs
|
64
|
(70)
|
Use of deferred tax and judicial deposit for the payment of contingency
|
3
|
8
|
|
Petros 3 Plan (PP-3)
On October 1, 2020, the Board of Directors approved
the submission of the PP-3 for analysis by the Secretariat for Coordination and Governance of State-owned Companies (Secretaria
de Coordenação e Governança das Empresas Estatais - SEST) and to the National Superintendence of Private
Pension Plans (Superintendência Nacional de Previdência Complementar - PREVIC), after adjustments to the Plan's
regulations.
PP-3 will be an exclusive pension plan option for voluntary
and punctual migration of participants and assisted by the PPSP-R and PPSP-NR plans, both post-70.
Before being effectively created, the new plan will
also undergo a technical and administrative feasibility study, which can only be completed after defining the mass of participants
who have opted for PP-3. If the viability is not confirmed, the participants who have opted for the migration will continue on
the plan of origin.
Sale of Petrobras Uruguay Distribución
S.A. (PUDSA)
On October 2, 2020, Petrobras Uruguay Sociedad Anónima
de Inversiones (PUSAI) signed with DISA Corporación Petrolífera S.A. (Disa), a contract for the sale of its entire
stake in Petrobras Uruguay Distribución S.A. (PUDSA), in Uruguay.
The transaction amounted to US$ 61.70 million, to be
paid in two installments: (a) US$ 6.17 million paid upon signing the contract; and (b) US$ 55.53 million at the close of the transaction.
The final amount of the transaction is subject to adjustments until the closing date of the transaction.
The conclusion of the transaction is subject to the
fulfillment of precedent conditions.
Global bond pricing and repurchase
offer
On October 13, 2020, Petrobras announced the pricing
of the new bond issue through the reopening of the PGF 5.60% Global Notes maturing in January 2031, in the total volume of US$
1 billion, through its wholly owned subsidiary Petrobras Global Finance BV (PGF). On the same date, Petrobras announced an offer
to repurchase securities in the international capital market, by PGF, in the limit of US$ 2 billion.
The global bond repurchase offer made by PGF was completed
on October 22, 2020 and the principal volume delivered by investors was US$ 1,666 million equivalent, with a total payment of US$
1,943 million according to the conditions proposed in the offer, excluding capitalized and unpaid interest.
Acquisition of FPSO P-71
On October 27, 2020, after discussions with its partners
in the BM-S-11 Consortium (Tupi field), the company signed a commitment to purchase the FPSO P-71 (Floating Production Storage
and Off-Take), under construction, through its subsidiary Petrobras Netherlands BV - PNBV, subject to the fulfillment of precedent
conditions. Then, the estimated disbursement of Petrobras will be US$ 353 million, equivalent to the share of the partners' participation
in the Consortium. The P-71 will have a production capacity of 150 mbpd and will be allocated in the Itapu field.
Review of the Shareholder Remuneration
Policy
On October 27, 2020, the Board of Directors approved
the revision of the Shareholder Remuneration Policy, in order to allow Management to propose the payment of dividends compatible
with the company's cash generation, even in years when it is not determined accounting income.
With the changes approved, in the scenario in which
the company's gross indebtedness is above US$ 60 billion, the proposal for the distribution of dividends may be presented, without
accounting income, when there is a reduction of net debt in the previous twelve-month period, in case Management believes that
the company's financial sustainability will be preserved. The distribution proposal should be limited to reducing net debt.
The company may also, in exceptional cases, propose
the payment of extraordinary dividends, exceeding the mandatory minimum legal dividend or the annual amount determined from the
formula (Remuneration = 60% x (Operating cash flow - capital expenditure (CAPEX)) , when its gross indebtedness is less than US$
60 billion, even in the event of non-verification of accounting income.
In all cases, the distribution of dividends must comply
with the provisions of the applicable legislation, including article 201 of the Brazilian Corporation Law (Law No. 6,404/1976).
|
34
|
Correlation between the notes disclosed in the complete annual financial statements as of December
31, 2019 and the interim statements as of September 30, 2020
|
|
Number of notes
|
Notes to the Financial Statements
|
Annual
for 2019
|
Quarterly information for 3Q-20
|
Basis of preparation and presentation of financial statements
|
2
|
1
|
Summary of significant accounting policies
|
3
|
2
|
Cash and cash equivalents and Marketable securities
|
7
|
4
|
Sales revenues
|
8
|
5
|
Costs and Expenses by nature
|
9
|
6
|
Other income and expenses
|
10
|
7
|
Net finance income (expense)
|
11
|
8
|
Segment information – Statement of Income
|
12
|
9
|
Trade and other receivables
|
13
|
10
|
Inventories
|
14
|
11
|
Taxes
|
16
|
12
|
Short-term benefits
|
17
|
13
|
Employee benefits (Post-Employment)
|
18
|
14
|
Provisions for legal proceedings
|
19
|
15
|
Provision for decommissioning costs
|
20
|
16
|
The “Lava Jato (Car Wash) investigation” and its effects on the Company
|
21
|
17
|
Property, plant and equipment
|
23
|
18
|
Intangible assets
|
24
|
19
|
Impairment
|
25
|
20
|
Exploration and evaluation of oil and gas reserves
|
26
|
21
|
Collateral for crude oil exploration concession agreements
|
27
|
22
|
Investments
|
29
|
23
|
Disposal of Assets and other changes in organizational structure
|
30
|
24
|
Segment information – Asset
|
31
|
25
|
Finance debt
|
32
|
26
|
Leases
|
33
|
27
|
Equity
|
34
|
28
|
Fair value of financial assets and liabilities
|
35
|
29
|
Risk management
|
36
|
30
|
Related-party transactions
|
37
|
31
|
Supplemental information on statement of cash flows
|
38
|
32
|
The notes to the annual report 2019 that were suppressed
in the Quarterly Financial Statements of September 30, 2020 because they do not have significant changes and / or may not be applicable
to interim financial information are:
Notes to the Financial Statements
|
Number of notes
|
The Company and its operations
|
1
|
Accounting estimates
|
4
|
New standards and interpretations
|
5
|
Trade payables
|
15
|
Commitment to purchase natural gas
|
22
|
Legal proceedings – tax recoverables
|
31.5
|
Insurance
|
36.6
|
STATEMENT OF DIRECTORS ON INTERIM ACCOUNTING INFORMATION AND
REPORT ON THE REVIEW OF QUARTERLY INFORMATION
PETROBRAS
In compliance with the provisions of items V and VI
of article 25 of CVM Instruction No. 480, of December 7, 2009, the Chief Executive Officer and directors of Petróleo Brasileiro
S.A. - Petrobras, a publicly-held company, headquartered at Avenida República do Chile, 65, Rio de Janeiro, RJ, registered
with CNPJ under number 33.000.167/0001-01, declare that the financial statements were prepared in accordance with the law or the
bylaws and that:
(i) reviewed, discussed and agreed with Petrobras'
interim financial information for the period ended September 30, 2020;
(ii) reviewed, discussed and agreed with the opinions
expressed in the KPMG Auditores Independentes report, regarding Petrobras' interim financial information for the period ended September
30, 2020.
Rio de Janeiro, October 28, 2020.
Roberto Castello Branco
|
|
Andrea Marques de Almeida
|
Chief Executive Officer
|
|
Chief Financial Investor Relations Officer
|
|
|
|
|
|
|
Anelise Quintão Lara
|
|
Carlos Alberto Pereira de Oliveira
|
|
|
|
Chief Refining and Natural Gas Executive Officer
|
|
Chief Exploration and Production Executive Officer
|
|
|
|
|
|
|
André Barreto Chiarini
|
|
Roberto Furian Ardenghy
|
Chief Logistics Executive Officer
|
|
Chief Institutional Relations Executive Officer
|
Rudimar Andreis Lorenzatto
|
|
Marcelo Barbosa de Castro Zenkner
|
Chief Production Development Executive Officer
|
|
Chief Governance and Compliance Executive Officer
|
|
|
|
|
|
|
Nicolás Simone
|
|
|
|
|
|
Chief Digital Transformation and Innovation Officer
|
|
|
|
|
|
KPMG Auditores Independentes
Rua do Passeio, 38 - Setor 2 - 17º
andar - Centro
20021-290 - Rio de Janeiro/RJ - Brasil
Caixa Postal 2888 - CEP 20001-970 - Rio
de Janeiro/RJ - Brasil
Telefone +55 (21) 2207-9400, Fax +55 (21)
2207-9000
www.kpmg.com.br
Report on the review of quarterly information - ITR
(A free translation of the original report in Portuguese, as
filed with the Brazilian Securities and Exchange Commission (CVM), prepared in accordance with the accounting practices adopted
in Brazil, rules of the CVM and of the International Financial Reporting Standards - IFRS)
To the Board of Directors and Shareholders of
Petróleo Brasileiro S.A. - Petrobras
Rio de Janeiro - RJ
Introduction
We have reviewed the interim accounting information,
individual and consolidated, of Petróleo Brasileiro S.A. - Petrobras (“the Company”), identified as Parent Company
and Consolidated, respectively, included in the quarterly information form - ITR for the quarter ended September 30, 2020, which
comprises the balance sheet as of September 30, 2020 and the respective statements of income and comprehensive income for the three-months
and six-months period then, and statements of changes in shareholders' equity and of cash flows for the nine-months period then
ended, including the explanatory notes.
The Company`s Management is responsible for
the preparation of these interim accounting information in accordance with the CPC 21(R1) and the IAS 34 - Interim Financial Reporting,
issued by the International Accounting Standards Board - IASB, as well as the presentation of these information in accordance
with the standards issued by the Brazilian Securities and Exchange Commission, applicable to the preparation of quarterly information
- ITR. Our responsibility is to express our conclusion on this interim accounting information based on our review.
Scope of the review
We conducted our review in accordance with
Brazilian and International Interim Information Review Standards (NBC TR 2410 - Revisão de Informações
Intermediárias Executada pelo Auditor da Entidade and ISRE 2410 - Review of Interim Financial Information Performed
by the Independent Auditor of the Entity, respectively). A review of interim information consists of making inquiries primarily
of the management responsible for financial and accounting matters and applying analytical procedures and other review procedures.
The scope of a review is significantly less than an audit conducted in accordance with auditing standards and, accordingly, it
did not enable us to obtain assurance that we were aware of all the material matters that would have been identified in an audit.
Therefore, we do not express an audit opinion.
KPMG Auditores Independentes, uma sociedade simples brasileira e firma-membro da rede KPMG de firmas-membro independentes e afiliadas à KPMG International Cooperative (“KPMG International”), uma entidade suíça.
|
KPMG Auditores Independentes, a Brazilian entity and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.
|
Conclusion on the individual and consolidated interim accounting
information
Based on our review, we are not aware of any
fact that might lead us to believe that the individual and consolidated interim accounting information included in the aforementioned
quarterly information was not prepared, in all material respects, in accordance with CPC 21(R1) and IAS 34, issued by the IASB,
applicable to the preparation of the quarterly review - ITR, and presented in accordance with the standards issued by the Brazilian
Securities and Exchange Commission.
Other matters - Statements of added value
The individual and consolidated statements
of value added for the nine-months period ended September 30, 2020, prepared under the responsibility of the Company's management,
and presented as supplementary information for the purposes of IAS 34, were submitted to the same review procedures followed together
with the review of the Company's interim financial information. In order to form our conclusion, we evaluated whether these statements
were reconciliated to the interim financial information and to the accounting records, as applicable, and whether their form and
content are in accordance with the criteria set on Technical Pronouncement CPC 09 - Statement of Value Added. Based on our review,
nothing has come to our attention that causes us to believe that the accompanying statements of value added were not prepared,
in all material respects, in accordance with the individual and consolidated interim financial information taken as a whole.
Rio de Janeiro, October 28, 2020
KPMG Auditores Independentes
CRC SP-014428/O-6 F-RJ
Original report in Portuguese signed by
Marcelo Gavioli
Accountant CRC 1SP201409/O-1
KPMG Auditores Independentes, uma sociedade simples brasileira e firma-membro da rede KPMG de firmas-membro independentes e afiliadas à KPMG International Cooperative (“KPMG International”), uma entidade suíça.
|
KPMG Auditores Independentes, a Brazilian entity and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.
|