PBR

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 6-K

 

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

Securities Exchange Act of 1934

 

For the month of November, 2022

 

Commission File Number 1-15106

 

 

PETRÓLEO BRASILEIRO S.A. – PETROBRAS

(Exact name of registrant as specified in its charter)

 

Brazilian Petroleum Corporation – PETROBRAS

(Translation of Registrant's name into English)

 

Avenida Henrique Valadares, 28 – 19th floor 
20231-030 – Rio de Janeiro, RJ
Federative Republic of Brazil

(Address of principal executive office)

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. 

Form 20-F ___X___ Form 40-F _______

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes _______ No___X____

 

 

 

 

Unaudited Condensed

Consolidated Interim

Financial Statements

 

PETRÓLEO BRASILEIRO S.A. - PETROBRAS

 

As of September 30, 2022, with the report of independent registered public accounting firm

 

 

 

 

INDEX

Petróleo Brasileiro S.A. – Petrobras

 

 

Unaudited Consolidated Statements of Financial Position		3
Unaudited Consolidated Statements of Income		4
Unaudited Consolidated Statements of Comprehensive Income		5
Unaudited Consolidated Statements of Cash Flows		6
Unaudited Consolidated Statements of Changes In Shareholders’ Equity		7
1	Basis of preparation	8
2	Summary of significant accounting policies	8
3	Cash and cash equivalents and Marketable securities	8
4	Sales revenues	9
5	Costs and expenses by nature	10
6	Other income and expenses	11
7	Net finance income (expense)	11
8	Net income by operating segment	12
9	Trade and other receivables	16
10	Inventories	17
11	Taxes	18
12	Employee benefits	20
13	Provisions for legal proceedings, judicial deposits and contingent liabilities	25
14	Provision for decommissioning costs	29
15	Property, plant and equipment	30
16	Intangible assets	32
17	Impairment	34
18	Exploration and evaluation of oil and gas reserves	35
19	Collateral for crude oil exploration concession agreements	36
20	Investments	36
21	Assets by operating segment	36
22	Disposal of assets and other changes in organizational structure	37
23	Finance debt	41
24	Lease liabilities	44
25	Equity	45
26	Fair value of financial assets and liabilities	47
27	Risk management	47
28	Related-party transactions	52
29	Supplemental information on statement of cash flows	54
30	Subsequent events	54
Report of Independent Registered Public Accounting Firm		56

 

 

Unaudited Consolidated Statements of Financial Position

PETROBRAS

As of September 30, 2022 and December 31, 2021 (Expressed in millions of US Dollars, unless otherwise indicated)

 

Assets	Note	09.30.2022	12.31.2021		Liabilities	Note	09.30.2022	12.31.2021
Current assets					Current liabilities
Cash and cash equivalents	3.1	4,374	10,467		Trade payables		5,209	5,483
Marketable securities	3.2	2,411	650		Finance debt	23.1	3,306	3,641
Trade and other receivables	9.1	4,074	6,368		Lease liability	24	5,337	5,432
Inventories	10	9,770	7,255		Income taxes payable	11.1	1,585	733
Recoverable income taxes	11.1	178	163		Other taxes payable	11.2	2,866	4,001
Other recoverable taxes	11.2	1,258	1,183		Employee benefits	12	2,205	2,144
Others		2,099	1,573		Others		2,953	1,875
		24,164	27,659				23,461	23,309
					Liabilities related to assets classified as held for sale	22	1,658	867
Assets classified as held for sale	22	5,305	2,490				25,119	24,176
		29,469	30,149
					Non-current liabilities
Non-current assets					Finance debt	23.1	27,549	32,059
Long-term receivables					Lease liability	24	18,076	17,611
Trade and other receivables	9.1	1,945	1,900		Income taxes payable	11.1	297	300
Marketable securities	3.2	49	44		Deferred income taxes	11.1	6,561	1,229
Judicial deposits	13.2	10,046	8,038		Employee benefits	12	8,741	9,374
Deferred income taxes	11.1	494	604		Provisions for legal proceedings	13.1	2,519	2,018
Other recoverable taxes	11.2	3,675	3,261		Provision for decommissioning costs	14	14,890	15,619
Others		940	487		Others		2,315	2,150
		17,149	14,334				80,948	80,360
					Total liabilities		106,067	104,536
					Equity
					Share capital (net of share issuance costs)	25.1	107,101	107,101
Investments	20	1,672	1,510		Capital reserve and capital transactions		1,144	1,143
Property, plant and equipment	15	124,120	125,330		Profit reserves		67,562	72,811
Intangible assets	16	2,852	3,025		Accumulated other comprehensive (deficit)		(106,909)	(111,648)
		145,793	144,199		Attributable to the shareholders of Petrobras		68,898	69,407
					Non-controlling interests		297	405
							69,195	69,812
Total assets		175,262	174,348		Total liabilities and equity		175,262	174,348
The notes form an integral part of these unaudited consolidated interim financial statements.

Unaudited Consolidated Statements of Income

PETROBRAS

Three and nine-month periods ended September 30, 2022 and 2021 (Expressed in millions of US Dollars, unless otherwise indicated)

 

 

	Note	Jan-Sep/2022	Jan-Sep/2021	Jul-Sep/2022	Jul-Sep/2021
Sales revenues	4	94,303	59,935	32,411	23,255
Cost of sales	5.1	(43,894)	(29,712)	(15,875)	(11,863)
Gross profit		50,409	30,223	16,536	11,392
Income (expenses)
Selling expenses	5.2	(3,638)	(3,137)	(1,213)	(1,103)
General and administrative expenses	5.3	(956)	(870)	(334)	(337)
Exploration costs	18	(230)	(538)	(107)	(133)
Research and development expenses		(613)	(415)	(187)	(151)
Other taxes		(245)	(369)	(93)	(217)
Impairment of assets	17	(422)	2,918	(255)	3,098
Other income and expenses	6	1,690	(550)	(177)	(157)
		(4,414)	(2,961)	(2,366)	1,000
Income before net finance expense, results of equity-accounted investments and income taxes		45,995	27,262	14,170	12,392
Finance income		1,396	555	515	227
Finance expenses		(2,506)	(4,270)	(790)	(1,191)
Foreign exchange gains (losses) and inflation indexation charges		(3,016)	(4,767)	(1,249)	(3,898)
Net finance expense	7	(4,126)	(8,482)	(1,524)	(4,862)
Results of equity-accounted investments	20	373	1,500	32	291
Net income before income taxes		42,242	20,280	12,678	7,821
Income taxes	11.1	(13,763)	(5,970)	(3,888)	(1,867)
Net income for the period		28,479	14,310	8,790	5,954
Net income attributable to shareholders of Petrobras		28,378	14,239	8,763	5,938
Net income attributable to non-controlling interests		101	71	27	16
Basic and diluted earnings per common and preferred share - in U.S. dollars	25.3	2.18	1.09	0.67	0.46
The notes form an integral part of these unaudited consolidated interim financial statements.

Unaudited Consolidated Statements of Comprehensive Income

PETROBRAS

Three and nine-month periods ended September 30, 2022 and 2021 (Expressed in millions of US Dollars, unless otherwise indicated)

 

	Jan-Sep/2022	Jan-Sep/2021	Jul-Sep/2022	Jul-Sep/2021
Net income for the period	28,479	14,310	8,790	5,954
Items that will not be reclassified to the statement of income:
Actuarial losses on post-employment defined benefit plans
Recognized in equity	−	2,862	−	1,143
Deferred income tax	−	(585)	−	−
	−	2,277	−	1,143
Items that may be reclassified subsequently to the statement of income:
Unrealized gains (losses) on cash flow hedge - highly probable future exports
Recognized in equity	3,067	(2,456)	(2,006)	(4,907)
Reclassified to the statement of income	3,597	3,339	1,109	1,032
Deferred income tax	(2,266)	(299)	305	1,318
	4,398	584	(592)	(2,557)
Translation adjustments (*)
Recognized in equity	234	(835)	(380)	(1,704)
Reclassified to the statement of income	−	41	−	7
	234	(794)	(380)	(1,697)
Share of other comprehensive income in equity-accounted investments
Recognized in equity	120	32	(25)	(109)
Other comprehensive income (loss)	4,752	2,099	(997)	(3,220)
Total comprehensive income	33,231	16,409	7,793	2,734
Comprehensive income attributable to shareholders of Petrobras	33,117	16,406	7,776	2,755
Comprehensive income (loss) attributable to non-controlling interests	114	3	17	(21)
(*) It includes cumulative translation adjustments in associates and joint ventures.
The notes form an integral part of these unaudited consolidated interim financial statements.

 

 

Unaudited Consolidated Statements of Cash Flows

PETROBRAS

Nine-month periods ended September 30, 2022 and 2021 (Expressed in millions of US Dollars, unless otherwise indicated)

	Note	Jan-Sep/2022	Jan-Sep/2021
Cash flows from operating activities
Net income for the period		28,479	14,310
Adjustments for:
Pension and medical benefits (actuarial expense)	12	939	1,806
Results of equity-accounted investments	20.2	(373)	(1,500)
Depreciation, depletion and amortization	8	9,897	8,786
Impairment of assets (reversals)	17	422	(2,918)
Inventory write-down (write-back) to net realizable value	10	7	(3)
Allowance (reversals) for credit loss on trade and other receivables		42	(14)
Exploratory expenditure write-offs	18	128	214
Results on disposal/write-offs of assets, remeasurement of investment retained with loss of control and reclassification of CTA		(1,138)	(182)
Foreign exchange, indexation and finance charges		4,735	8,232
Deferred income taxes, net	11.1	2,239	3,998
Revision and unwinding of discount on the provision for decommissioning costs	14	424	587
PIS and COFINS recovery - exclusion of ICMS (VAT tax) from the basis of calculation		(1)	(983)
Results from co-participation agreements in bid areas	16	(2,862)	(667)
Assumption of interest in concessions		−	(98)
Early termination and cash outflows revision of lease agreements		(558)	(348)
(Gains) losses with legal, administrative and arbitration proceedings	6	821	545
Decrease (Increase) in assets
Trade and other receivables		729	(1,487)
Inventories		(2,595)	(2,164)
Judicial deposits		(1,312)	(835)
Other assets		(756)	(125)
Increase (Decrease) in liabilities
Trade payables		(341)	850
Other taxes		9,129	4,451
Pension and medical benefits		(1,869)	(2,055)
Provisions for legal proceedings		(254)	(355)
Short-term benefits		(63)	(139)
Provision for decommissioning costs		(442)	(526)
Other liabilities		243	161
Income taxes paid		(8,801)	(946)
Net cash provided by operating activities		36,869	28,595
Cash flows from investing activities
Acquisition of PP&E and intangible assets		(6,020)	(4,640)
Investments in investees		(20)	(15)
Proceeds from disposal of assets - Divestment		3,915	2,906
Financial compensation from co-participation agreements	16	5,334	2,938
Divestment (Investment) in marketable securities		(1,615)	117
Dividends received		319	294
Net cash provided by investing activities		1,913	1,600
Cash flows from financing activities
Changes in non-controlling interest		43	(11)
Proceeds from financing	23.3	2,530	1,754
Repayment of principal - finance debt	23.3	(7,796)	(20,490)
Repayment of interest - finance debt	23.3	(1,438)	(1,870)
Repayment of lease liability	24	(4,006)	(4,381)
Dividends paid to Shareholders of Petrobras		(33,671)	(5,828)
Dividends paid to non-controlling interests		(68)	(75)
Net cash used in financing activities		(44,406)	(30,901)
Effect of exchange rate changes on cash and cash equivalents		(482)	(94)
Net change in cash and cash equivalents		(6,106)	(800)
Cash and cash equivalents at the beginning of the period		10,480	11,725
Cash and cash equivalents at the end of the period		4,374	10,925
The notes form an integral part of these unaudited consolidated interim financial statements.

 

Unaudited Consolidated Statements of Changes In Shareholders’ Equity

PETROBRAS

Nine-month periods ended September 30, 2022 and 2021 (Expressed in millions of US Dollars, unless otherwise indicated)

	Share capital (net of share issuance costs)			Accumulated other comprehensive income (deficit) and deemed cost				Profit Reserves
	Share Capital	Share issuance costs	Capital reserve, Capital Transactions and Treasury shares	Cumulative translation adjustments	Cash flow hedge - highly probable future exports	Actuarial gains (losses) on defined benefit pension plans	Other comprehensive income (loss) and deemed cost	Legal	Statutory	Tax incentives	Profit retention	Additional dividends proposed	Retained earnings (losses)	Equity attributable to shareholders of Petrobras	Non-controlling interests	Total consolidated equity
Balance at December 31, 2020	107,380	(279)	1,064	(73,936)	(24,590)	(15,034)	(1,174)	8,813	2,900	1,102	51,974	1,128	−	59,348	528	59,876
		107,101	1,064				(114,734)					65,917	−	59,348	528	59,876
Capital increase with reserves	−	−	−	−	−	−	−	−	−	−	−	−	−	−	2	2
Capital transactions	−	−	(691)	−	−	−	−	−	−	−	−	−	−	(691)	753	62
Net income	−	−	−	−	−	−	−	−	−	−	−	−	14,239	14,239	71	14,310
Other comprehensive income (loss)	−	−	−	(726)	584	2,277	32	−	−	−	−	−	−	2,167	(68)	2,099
Appropriations:
Dividends	−	−	−	−	−	−	−	−	−	−	−	(1,128)	(6,086)	(7,214)	(69)	(7,283)
Balance at September 30, 2021	107,380	(279)	373	(74,662)	(24,006)	(12,757)	(1,142)	8,813	2,900	1,102	51,974	−	8,153	67,849	1,217	69,066
		107,101	373				(112,567)					64,789	8,153	67,849	1,217	69,066
Balance at December 31, 2021	107,380	(279)	1,143	(75,122)	(24,169)	(11,205)	(1,152)	9,769	3,084	1,220	52,050	6,688	−	69,407	405	69,812
		107,101	1,143				(111,648)					72,811	−	69,407	405	69,812
Capital transactions	−	−	1	−	−	−	−	−	−	−	−	−	−	1	(166)	(165)
Net income	−	−	−	−	−	−	−	−	−	−	−	−	28,378	28,378	101	28,479
Other comprehensive income	−	−	−	221	4,398	−	120	−	−	−	−	−	−	4,739	13	4,752
Appropriations:
Dividends	−	−	−	−	−	−	−	−	−	−	(8,564)	(6,688)	(18,375)	(33,627)	(56)	(33,683)
Balance at September 30, 2022	107,380	(279)	1,144	(74,901)	(19,771)	(11,205)	(1,032)	9,769	3,084	1,220	43,486	−	10,003	68,898	297	69,195
		107,101	1,144				(106,909)					57,559	10,003	68,898	297	69,195
The notes form an integral part of these unaudited consolidated interim financial statements.

1.

Basis of preparation

1.1.

Statement of compliance and authorization of unaudited condensed consolidated interim financial statements

These unaudited condensed consolidated interim financial statements of Petróleo Brasileiro S.A. (“Petrobras” or “Company”) have been prepared and presented in accordance with IAS 34 – “Interim Financial Reporting” as issued by the International Accounting Standards Board (IASB). They present the significant changes in the period, avoiding repetition of certain notes to the annual consolidated financial statements previously reported. Hence, they should be read together with the Company’s audited annual consolidated financial statements for the year ended December 31, 2021, which include the full set of notes (2021 Financial Statements).

These unaudited condensed consolidated interim financial statements were approved and authorized for issue by the Company’s Board of Directors in a meeting held on November 3, 2022.

2.

Summary of significant accounting policies

The accounting policies and methods of computation followed in these unaudited condensed consolidated interim financial statements are the same as those followed in the preparation of the annual financial statements of the Company for the year ended December 31, 2021.

The IFRS standards that became effective on January 1, 2022 resulted in no material effects on these unaudited condensed consolidated interim financial statements.

Regarding the Interest Rate Benchmark Reform (IBOR Reform), in order to prepare for the transition to alternative reference rates, the Company continues to monitor the pronouncements of regulatory authorities, aimed at adapting its financial instruments to the new benchmark. The Company has debts indexed to Libor (London Interbank Offered Rate), corresponding to 33.5% of total finance debt.

3.

Cash and cash equivalents and Marketable securities

3.1.

Cash and cash equivalents

They include cash, available bank deposits and short-term financial investments with high liquidity, which meet the definition of cash equivalents.

	09.30.2022	12.31.2021
Cash at bank and in hand	159	299
Short-term financial investments
- In Brazil
Brazilian interbank deposit rate investment funds and other short-term deposits	671	1,951
Other investment funds	207	163
	878	2,114
- Abroad
Time deposits	1,638	4,310
Automatic investing accounts and interest checking accounts	1,671	3,732
Other financial investments	28	12
	3,337	8,054
Total short-term financial investments	4,215	10,168
Total cash and cash equivalents	4,374	10,467

 

 

Short-term financial investments in Brazil primarily consist of investments in funds holding Brazilian Federal Government Bonds that can be redeemed immediately, as well as reverse repurchase agreements that mature within three months as of the date of their acquisition. Short-term financial investments abroad comprise time deposits that mature in three months or less from the date of their acquisition, highly-liquid automatic investment accounts, interest checking accounts and other short-term fixed income instruments.

3.2.

Marketable securities

	09.30.2022	12.31.2021
Fair value through profit or loss	655	650
Amortized cost	1,805	44
Total	2,460	694
Current	2,411	650
Non-current	49	44

 

 

Marketable securities classified as fair value through profit or loss refer mainly to investments in Brazilian Federal Government Bonds. These financial investments have maturities of more than three months and are generally classified as current assets due to their maturity or the expectation of their realization in the short term. Securities classified as amortized cost refer to investments abroad in time deposits with maturities exceeding three months from the contracting date and investments in floating-rate Bank Deposit Certificates with daily liquidity, with maturity of one year.

4.

Sales revenues

	Jan-Sep/2022	Jan-Sep/2021	Jul-Sep/2022	Jul-Sep/2021
Diesel	29,849	17,480	11,685	6,833
Gasoline	12,143	8,148	4,109	3,383
Liquefied petroleum gas	3,978	3,327	1,355	1,291
Jet fuel	3,925	1,456	1,534	629
Naphtha	1,964	1,219	629	526
Fuel oil (including bunker fuel)	1,099	1,268	381	545
Other oil products	4,373	3,080	1,484	1,197
Subtotal oil products	57,331	35,978	21,177	14,404
Natural gas	5,691	4,086	2,007	1,716
Oil	6,418	80	1,975	26
Renewables and nitrogen products	230	34	69	12
Breakage	462	200	188	39
Electricity	543	2,172	141	1,038
Services, agency and others	799	568	254	238
Domestic market	71,474	43,118	25,811	17,473
Exports	20,620	16,103	5,696	5,607
Oil	14,042	11,642	3,638	4,130
Fuel oil (including bunker fuel)	5,904	3,624	1,743	1,169
Other oil products	674	837	315	308
Sales abroad (*)	2,209	714	904	175
Foreign market	22,829	16,817	6,600	5,782
Sales revenues	94,303	59,935	32,411	23,255
(*) Sales revenues from operations outside of Brazil, including trading and excluding exports.

 

 

In the the nine-month period ended September 30, 2022, sales to two clients of the refining, transportation and marketing segment represented individually 15% and 11% of the Company’s sales revenues. In the same period of 2021, one client of the same segment represented 15% of the Company’s sales revenues.

5.

Costs and expenses by nature

5.1.

Cost of sales

	Jan-Sep/2022	Jan-Sep/2021	Jul-Sep/2022	Jul-Sep/2021
Raw material, products for resale, materials and third-party services (*)	(22,868)	(13,505)	(9,099)	(5,895)
Depreciation, depletion and amortization	(7,993)	(6,770)	(2,649)	(2,366)
Production taxes	(11,794)	(7,962)	(3,701)	(2,978)
Employee compensation	(1,239)	(1,475)	(426)	(624)
Total	(43,894)	(29,712)	(15,875)	(11,863)
(*) It Includes short-term leases and inventory turnover.

 

 

5.2.

Selling expenses

	Jan-Sep/2022	Jan-Sep/2021	Jul-Sep/2022	Jul-Sep/2021
Materials, third-party services, freight, rent and other related costs	(2,921)	(2,633)	(973)	(924)
Depreciation, depletion and amortization	(611)	(448)	(194)	(159)
Allowance for expected credit losses	(34)	13	(20)	7
Employee compensation	(72)	(69)	(26)	(27)
Total	(3,638)	(3,137)	(1,213)	(1,103)

 

 

5.3.

General and administrative expenses

	Jan-Sep/2022	Jan-Sep/2021	Jul-Sep/2022	Jul-Sep/2021
Employee compensation	(637)	(637)	(223)	(261)
Materials, third-party services, rent and other related costs	(246)	(168)	(85)	(56)
Depreciation, depletion and amortization	(73)	(65)	(26)	(20)
Total	(956)	(870)	(334)	(337)

 

 

6.

Other income and expenses

	Jan-Sep/2022	Jan-Sep/2021	Jul-Sep/2022	Jul-Sep/2021
Unscheduled stoppages and pre-operating expenses	(1,344)	(993)	(455)	(342)
Gains (losses) with legal, administrative and arbitration proceedings	(821)	(545)	(264)	(270)
Pension and medical benefits - retirees (*)	(795)	(1,255)	(304)	(816)
Performance award program	(400)	(347)	(153)	(152)
Losses with commodities derivatives	(135)	(56)	87	(14)
Operating expenses with thermoelectric power plants	(108)	(63)	(37)	(16)
Profit sharing	(103)	(93)	(38)	(35)
Transfer of rights on concession agreements	-	298	-	288
Results from co-participation agreements in bid areas (**)	2,862	667	(10)	667
Results on disposal/write-offs of assets and on remeasurement of investment retained with loss of control	1,138	222	292	118
Early termination and changes to cash flow estimates of leases	558	347	157	121
Reimbursements from E&P partnership operations	448	425	294	134
Government grants	330	30	124	26
Fines imposed on suppliers	175	124	59	47
Recovery of taxes (***)	53	543	12	37
Amounts recovered from Lava Jato investigation (****)	34	222	22	26
Others	(202)	(76)	37	24
Total	1,690	(550)	(177)	(157)
(*) In 2022, it includes US$ 67 referring to the payment of a contribution as provided for in the Pre-70 Term of Financial Commitment (TFC) for the administrative funding of the PPSP-R pre-70 and PPSP-NR pre-70 plans.
(**) It mainly refers to the gain related to the Co-participation Agreement of Atapu and Sépia (see note 16.2).
(***) In the nine-month period ended September 30, 2021, it includes the effects of the exclusion of ICMS (VAT tax) from the basis of calculation of sales taxes PIS and COFINS, except for the effects of inflation indexation.
(****) The total amount recovered from Lava Jato Investigation through December 31, 2021 was US$ 1,522, recognized through collaboration and leniency agreements entered into with individuals and legal entities.

 

 

7.

Net finance income (expense)

	Jan-Sep/2022	Jan-Sep/2021	Jul-Sep/2022	Jul-Sep/2021
Finance income	1,396	555	515	227
Income from investments and marketable securities (Government Bonds)	872	174	340	100
Other income, net	524	381	175	127
Finance expenses	(2,506)	(4,270)	(790)	(1,191)
Interest on finance debt	(1,786)	(2,325)	(563)	(669)
Unwinding of discount on lease liabilities	(961)	(895)	(337)	(303)
Discount and premium on repurchase of debt securities	(120)	(1,098)	(10)	(249)
Capitalized borrowing costs	795	747	260	269
Unwinding of discount on the provision for decommissioning costs	(394)	(579)	(127)	(195)
Other finance expenses , net	(40)	(120)	(13)	(44)
Foreign exchange gains (losses) and indexation charges	(3,016)	(4,767)	(1,249)	(3,898)
Foreign exchange gains (losses) (*)	(1)	(1,956)	(782)	(2,957)
Reclassification of hedge accounting to the Statement of Income (*)	(3,597)	(3,339)	(1,109)	(1,032)
Monetary restatement of dividends and dividends payable (**)	118	7	398	20
Recoverable taxes inflation indexation income  (***)	74	489	29	15
Other foreign exchange gains (losses) and indexation charges, net	390	32	215	56
Total	(4,126)	(8,482)	(1,524)	(4,862)
(*) For more information, see notes 27.3a and 27.3c.
(**) In 2022, it refers to the income on the monetary restatement of paid anticipated dividends, in the amount of US$ 417 (US$ 20 in 2021), and to the expense on the indexation charges on dividends payable, in the amount of US$ 299 (US$ 13 in 2021).
(***) In 2021, includes PIS and Cofins inflation indexation income - exclusion of ICMS (VAT tax) from the basis of calculation.

 

 

8.

Net income by operating segment

Consolidated Statement of Income by operating segment
Jul-Sep/2022
	Exploration and Production (E&P)	Refining, Transportation & Marketing (RT&M)	Gas & Power (G&P)	Corporate and other business	Eliminations	Total
Sales revenues	19,293	29,348	4,148	126	(20,504)	32,411
Intersegments	18,972	529	1,002	1	(20,504)	−
Third parties	321	28,819	3,146	125	-	32,411
Cost of sales	(7,427)	(26,607)	(2,646)	(137)	20,942	(15,875)
Gross profit (loss)	11,866	2,741	1,502	(11)	438	16,536
Income (expenses)	(437)	(675)	(590)	(661)	(3)	(2,366)
Selling	(7)	(440)	(760)	(3)	(3)	(1,213)
General and administrative	(6)	(48)	(15)	(265)	-	(334)
Exploration costs	(107)	-	-	-	-	(107)
Research and development	(159)	(1)	(1)	(26)	-	(187)
Other taxes	(8)	10	(16)	(79)	-	(93)
Impairment of assets	(4)	(251)	-	-	-	(255)
Other income and expenses	(146)	55	202	(288)	-	(177)
Income (loss) before net finance income (expense), results of equity-accounted investments and income taxes	11,429	2,066	912	(672)	435	14,170
Net finance expense	-	-	-	(1,524)	-	(1,524)
Results in equity-accounted investments	46	(23)	12	(3)	-	32
Net income / (loss) before income taxes	11,475	2,043	924	(2,199)	435	12,678
Income taxes	(3,885)	(703)	(310)	1,158	(148)	(3,888)
Net income (loss) for the period	7,590	1,340	614	(1,041)	287	8,790
Attributable to:
Shareholders of Petrobras	7,591	1,340	595	(1,050)	287	8,763
Non-controlling interests	(1)	−	19	9	−	27

 

 

 

 

Consolidated Statement of Income by operating segment
Jan-Sep/2022
	Exploration and Production (E&P)	Refining, Transportation & Marketing (RT&M)	Gas & Power (G&P)	Corporate and other business	Eliminations	Total
Sales revenues	60,917	85,989	11,247	402	(64,252)	94,303
Intersegments	59,918	1,460	2,872	2	(64,252)	−
Third parties	999	84,529	8,375	400	-	94,303
Cost of sales	(23,279)	(74,941)	(7,897)	(409)	62,632	(43,894)
Gross profit (loss)	37,638	11,048	3,350	(7)	(1,620)	50,409
Income (expenses)	2,049	(2,055)	(2,295)	(2,103)	(10)	(4,414)
Selling	(12)	(1,309)	(2,297)	(10)	(10)	(3,638)
General and administrative	(30)	(127)	(49)	(750)	-	(956)
Exploration costs	(230)	-	-	-	-	(230)
Research and development	(524)	(7)	(4)	(78)	-	(613)
Other taxes	(47)	(15)	(35)	(148)	-	(245)
Impairment of assets	(127)	(295)	1	(1)	-	(422)
Other income and expenses	3,019	(302)	89	(1,116)	-	1,690
Income (loss) before net finance income (expense), results of equity-accounted investments and income taxes	39,687	8,993	1,055	(2,110)	(1,630)	45,995
Net finance expense	-	-	-	(4,126)	-	(4,126)
Results in equity-accounted investments	154	153	71	(5)	-	373
Net income / (loss) before income taxes	39,841	9,146	1,126	(6,241)	(1,630)	42,242
Income taxes	(13,495)	(3,058)	(359)	2,593	556	(13,763)
Net income (loss) for the period	26,346	6,088	767	(3,648)	(1,074)	28,479
Attributable to:
Shareholders of Petrobras	26,349	6,088	696	(3,681)	(1,074)	28,378
Non-controlling interests	(3)	-	71	33	-	101

 

 

 

Consolidated Statement of Income by operating segment
Jul-Sep/2021
	Exploration and Production (E&P)	Refining, Transportation & Marketing (RT&M)	Gas & Power (G&P)	Corporate and other business	Eliminations	Total
Sales revenues	14,628	20,500	3,444	89	(15,406)	23,255
Intersegments	14,289	438	647	32	(15,406)	−
Third parties	339	20,062	2,797	57	-	23,255
Cost of sales	(6,302)	(18,274)	(2,666)	(91)	15,470	(11,863)
Gross profit (loss)	8,326	2,226	778	(2)	64	11,392
Income (expenses)	3,706	(1,029)	(772)	(899)	(6)	1,000
Selling	5	(416)	(683)	(3)	(6)	(1,103)
General and administrative	(51)	(37)	(19)	(230)	-	(337)
Exploration costs	(133)	-	-	-	-	(133)
Research and development	(113)	(2)	(2)	(34)	-	(151)
Other taxes	(78)	(36)	(52)	(51)	-	(217)
Impairment of assets	3,201	(13)	(90)	-	-	3,098
Other income and expenses	875	(525)	74	(581)	-	(157)
Income (loss) before net finance income (expense), results of equity-accounted investments and income taxes	12,032	1,197	6	(901)	58	12,392
Net finance expense	-	-	-	(4,862)	-	(4,862)
Results in equity-accounted investments	29	257	12	(7)	-	291
Net income / (loss) before income taxes	12,061	1,454	18	(5,770)	58	7,821
Income taxes	(4,090)	(408)	(2)	2,652	(19)	(1,867)
Net income (loss) for the period	7,971	1,046	16	(3,118)	39	5,954
Attributable to:
Shareholders of Petrobras	7,971	1,046	3	(3,121)	39	5,938
Non-controlling interests	-	-	13	3	-	16

 

 

 

 

Jan-Sep/2021
	Exploration and Production (E&P)	Refining, Transportation & Marketing (RT&M)	Gas & Power (G&P)	Corporate and other business	Eliminations	Total
Sales revenues	39,803	53,480	8,306	360	(42,014)	59,935
Intersegments	39,013	1,011	1,832	158	(42,014)	−
Third parties	790	52,469	6,474	202	-	59,935
Cost of sales	(17,142)	(46,848)	(5,658)	(355)	40,291	(29,712)
Gross profit (loss)	22,661	6,632	2,648	5	(1,723)	30,223
Income (expenses)	2,728	(1,951)	(2,183)	(1,537)	(18)	(2,961)
Selling	-	(1,154)	(1,955)	(10)	(18)	(3,137)
General and administrative	(111)	(108)	(52)	(599)	-	(870)
Exploration costs	(538)	-	-	-	-	(538)
Research and development	(304)	(8)	(19)	(84)	-	(415)
Other taxes	(118)	(100)	(99)	(52)	-	(369)
Impairment of assets	3,099	(13)	(169)	1	-	2,918
Other income and expenses	700	(568)	111	(793)	-	(550)
Income (loss) before net finance income (expense), results of equity-accounted investments and income taxes	25,389	4,681	465	(1,532)	(1,741)	27,262
Net finance expense	-	-	-	(8,482)	-	(8,482)
Results in equity-accounted investments	85	885	85	445	-	1,500
Net income / (loss) before income taxes	25,474	5,566	550	(9,569)	(1,741)	20,280
Income taxes	(8,630)	(1,593)	(158)	3,819	592	(5,970)
Net income (loss) for the period	16,844	3,973	392	(5,750)	(1,149)	14,310
Attributable to:
Shareholders of Petrobras	16,847	3,972	333	(5,764)	(1,149)	14,239
Non-controlling interests	(3)	1	59	14	-	71

 

 

 

The amount of depreciation, depletion and amortization by segment is set forth as follows:

	Exploration and Production (E&P)	Refining, Transportation & Marketing (RT&M)	Gas & Power (G&P)	Corporate and other business	Total
Jan-Sep/2022	7,819	1,692	334	52	9,897
Jan-Sep/2021	6,690	1,640	326	130	8,786
	Exploration and Production (E&P)	Refining, Transportation & Marketing (RT&M)	Gas & Power (G&P)	Corporate and other business	Total
Jul-Sep/2022	2,561	578	127	1	3,267
Jul-Sep/2021	2,383	568	113	44	3,108

 

 

9.

Trade and other receivables

9.1.

Trade and other receivables

	09.30.2022	12.31.2021
Receivables from contracts with customers
Third parties	4,760	4,839
Related parties
Investees (note 28.1)	89	385
Subtotal	4,849	5,224
Other trade  receivables
Third parties
Receivables from divestments (*)	946	2,679
Lease receivables	404	435
Other receivables	732	872
Related parties
Petroleum and alcohol accounts - receivables from Brazilian Federal Government	572	506
Subtotal	2,654	4,492
Total trade and other receivables, before ECL	7,503	9,716
Expected credit losses (ECL) - Third parties	(1,477)	(1,428)
Expected credit losses (ECL) - Related parties	(7)	(20)
Total trade and other receivables	6,019	8,268
Current	4,074	6,368
Non-current	1,945	1,900
(*) At September 30, 2022, it mainly refers to the receivables from the divestments  of the company Breitener, and of the following fields: Rio Ventura, Roncador, Baúna, Miranga, Maromba, Pampo and Enchova, and Cricaré.

 

 

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, amounting to US$ 434 as of September 30, 2022 (US$ 1,155 as of December 31, 2021).

The change in Receivable from divestments was mainly due to the receipt of US$ 950 related to the final installment for the sale of block BM-S-8, and to the receipt of US$ 1,000, related to the final installment for the sale of the Company’s 90% interest in Nova Transportadora do Sudeste (NTS).

9.2.

Aging of trade and other receivables – third parties

	09.30.2022		12.31.2021
	Trade and other receivables	Expected credit losses	Trade and other receivables	Expected credit losses
Current	5,124	(39)	7,059	(77)
Overdue:
1-90 days	127	(36)	218	(26)
91-180 days	41	(27)	40	(6)
181-365 days	38	(37)	51	(29)
More than 365 days	1,512	(1,338)	1,457	(1,290)
Total	6,842	(1,477)	8,825	(1,428)

 

 

9.3.

Changes in provision for expected credit losses

	2022 Jan-Set	2021 Jan-Set
Opening balance	1,448	1,596
Additions	98	50
Write-offs	(21)	(40)
Reversals	(64)	(64)
Transfer of assets held for sale	-	(8)
Translation adjustment	23	(38)
Closing balance	1,484	1,496
Current	215	155
Non-current	1,269	1,341

 

 

10.

Inventories

	09.30.2022	12.31.2021
Crude oil	3,810	3,048
Oil products	3,712	2,495
Intermediate products	645	532
Natural gas and Liquefied Natural Gas (LNG)	590	349
Biofuels	27	19
Fertilizers	1	8
Total products	8,785	6,451
Materials, supplies and others (*)	985	804
Total	9,770	7,255
(*) It mainly comprises production supplies and operating materials used in the operations of the Company, stated at the average purchase cost, not exceeding replacement cost.

 

 

In the nine-month period ended September 30, 2022, the Company recognized a US$ 7 loss within cost of sales, adjusting inventories to net realizable value (a US$ 3 reversal of cost of sales in the nine-month period ended September 30, 2021) primarily due to changes in international prices of crude oil and oil products.

At September 30, 2022, the Company had pledged crude oil and oil products volumes as collateral for the Term of Financial Commitment (TFC) related to plans PPSP-R, PPSP-R Pre-70 and PPSP-NR Pre-70 signed by Petrobras and Petros Foundation in 2008, in the estimated amount of US$ 1,031, after deducting the partial early settlement of the TFC relating to the Pension Difference and TFC Pre-70, made in February 2022, meeting the contractual conditions of the debt coverage as stated in the TCF.

11.

Taxes

11.1.

Income taxes

	Current assets		Current liabilities		Non-current liabilities
	09.30.2022	12.31.2021	09.30.2022	12.31.2021	09.30.2022	12.31.2021
Taxes in Brazil
Income taxes	174	133	1,181	682	-	-
Income taxes - Tax settlement programs	-	-	47	43	297	300
	174	133	1,228	725	297	300
Taxes abroad	4	30	357	8	-	-
Total	178	163	1,585	733	297	300

 

 

Reconciliation between statutory income tax rate and effective income tax rate

The following table provides the reconciliation of Brazilian statutory tax rate to the Company’s effective rate on income before income taxes:

	Jan-Sep/2022	Jan-Sep/2021	Jul-Sep/2022	Jul-Sep/2021
Net income before income taxes	42,242	20,280	12,678	7,821
Nominal income taxes computed based on Brazilian statutory corporate tax rates (34%)	(14,361)	(6,896)	(4,310)	(2,660)
Adjustments to arrive at the effective tax rate:
Tax benefits from the deduction of interest on capital distribution	736	-	353	-
Different jurisdictional tax rates for companies abroad	595	57	201	127
Brazilian income taxes on income of companies incorporated outside Brazil (*)	(725)	(353)	(97)	(154)
Tax loss carryforwards (unrecognized tax losses)	(11)	82	(10)	103
Non-taxable income (non-deductible expenses), net (**)	92	265	24	22
Post-employment benefits	(262)	(427)	(76)	(337)
Results of equity-accounted investments in Brazil and abroad	130	381	10	102
Non-incidence of income taxes on indexation (SELIC interest rate) of undue paid taxes	25	903	10	903
Others	18	18	7	27
Income taxes	(13,763)	(5,970)	(3,888)	(1,867)
Deferred income taxes	(2,239)	(3,998)	(250)	(115)
Current income taxes	(11,524)	(1,972)	(3,638)	(1,752)
Effective tax rate of income taxes	32.6%	29.4%	30.7%	23.9%
(*) It relates to Brazilian income taxes on earnings of offshore investees, as established by Law No. 12,973/2014.
(**) It includes provisions for legal proceedings and payment of an administrative contribution over the TFC Pre-70 for the administrative funding of the PPSP-R pre-70 and PPSP-NE pre-70 plans.

 

 

Deferred income taxes - non-current

The composition of deferred tax assets and liabilities is set out in the following table:

 

Nature	Realization basis	09.30.2022	12.31.2021
PP&E - Exploration and decommissioning costs	Depreciation, amortization and write-offs of assets	(584)	(1,362)
PP&E - Impairment	Amortization, impairment reversals and write-offs of assets	4,554	4,382
PP&E - depreciation methods and capitalized borrowing costs	Depreciation, amortization and write-offs of assets	(15,726)	(12,924)
Loans, trade and other receivables / payables and financing	Payments, receipts and considerations	1,909	3,490
Lease liabilities	Appropriation of the considerations	697	1,244
Provision for legal proceedings	Payments and use of provisions	724	605
Tax loss carryforwards	30% of taxable income compensation	647	1,827
Inventories	Sales, write-downs and losses	267	228
Employee Benefits	Payments and use of provisions	1,273	1,250
Others		172	635
Total		(6,067)	(625)
Deferred tax assets		494	604
Deferred tax liabilities (*)		(6,561)	(1,229)
(*) Changes in deferred tax liabilities are mainly due to the offsetting of the tax losses carryforwards and negative basis of CSLL, and to the use of the benefit of accelerated tax depreciation.

 

 

The changes in the deferred income taxes are presented as follows:

	Jan-Sep/2022	Jan-Sep/2021
Opening Balance	(625)	6,256
Recognized in the statement of income for the period	(2,239)	(3,998)
Recognized in shareholders’ equity	(2,266)	(884)
Translation adjustment	178	(88)
Use of tax loss carryforwards	(1,119)	(540)
Others	4	(9)
Closing balance	(6,067)	737

 

 

11.2.

Other taxes

	Current assets		Non-current assets		Current liabilities		Non-current liabilities (*)
	09.30.2022	12.31.2021	09.30.2022	12.31.2021	09.30.2022	12.31.2021	09.30.2022	12.31.2021
Taxes in Brazil
Current / Non-current ICMS (VAT)	925	665	402	379	425	995	-	-
Current / Non-current PIS and COFINS (**)	235	418	2,370	2,030	38	499	76	45
Claim to recover PIS and COFINS	-	-	628	594	-	-	-	-
CIDE	1	6	-	-	2	42	-	-
Production taxes	-	-	-	-	2,181	2,147	68	21
Withholding income taxes	-	-	-	-	61	86	-	-
Tax Settlement Program	-	-	-	-	24	67	7	6
Others	37	48	264	249	114	142	78	70
Total in Brazil	1,198	1,137	3,664	3,252	2,845	3,978	229	142
Taxes abroad	60	46	11	9	21	23	-	-
Total	1,258	1,183	3,675	3,261	2,866	4,001	229	142
(*) Other non-current taxes are classified as other non-current liabilities.
(**) It includes US$ 55 (US$ 104 as of December 31, 2021) related to exclusion of ICMS (VAT tax) in the basis of calculation of sales taxes PIS and COFINS (contributions for the social security).

 

 

Claim to recover PIS and COFINS

The Company filed four civil lawsuits, in the Regional Federal Court of the Second Region, against the Brazilian Federal Government, claiming to recover PIS and COFINS paid over finance income and foreign exchange variation gains, from February 1999 to January 2004.

The court granted to the Company, in all the lawsuits, the definitive right to recover those taxes. Two lawsuits have resulted in judicialized debts (precatórios) in the amounts claimed by the Company.

Regarding the two remaining cases, both had rulings by the court favorable to the Company and, in one of them, the Brazilian Federal Government has already expressed its agreement.

As of September 30, 2022, the Company had non-current receivables of US$ 628 (US$ 594 as of December 31, 2021) related to PIS and COFINS, which are indexed to inflation.

12.

Employee benefits

Employee benefits are all forms of consideration given by an entity in exchange for service rendered by employees or for the termination of employment. It also includes expenses with directors and management. Such benefits include salaries, post-employment benefits, termination benefits and other benefits.

	09.30.2022	12.31.2021
Liabilities
Short-term employee benefits	1,460	1,289
Termination benefits	197	349
Post-employment benefits	9,289	9,880
Total	10,946	11,518
Current	2,205	2,144
Non-current	8,741	9,374

 

 

12.1.

Short-term employee benefits

Short-term benefits are expected to be settled wholly before twelve months after the end of the period in which the employees render the related service.

	09.30.2022	12.31.2021
Variable compensation program - PPP	412	461
Accrued vacation and 13th salary	703	440
Salaries and related charges and other provisions	245	270
Profit sharing	100	118
Total	1,460	1,289
Current	1,433	1,286
Non-current (*)	27	3
(*) Remaining balance relating to the four-year deferral of 40% of the PPP portion of executive officers and the upper management

 

In the three and nine-month periods ended September 30, 2022 and 2021, the Company recognized the following amounts in the statement of income:

	Jan-Sep/2022	Jan-Sep/2021	Jul-Sep/2022	Jul-Sep/2021
Salaries, accrued vacations and related charges	(2,265)	(2,052)	(807)	(741)
Variable compensation program - PPP (*)	(400)	(347)	(153)	(152)
Profit sharing (*)	(103)	(93)	(38)	(35)
Management fees and charges	−	(3)	5	3
Total	(2,768)	(2,495)	(993)	(925)
(*) In 2022, it includes reversals of provisions related to previous year.

 

 

12.1.1.

Variable compensation programs

Performance award program (PPP)

On September 17, 2021, the Company’s Board of Directors approved the pay-out criteria for granting PPP 2021 to employees.

The PPP 2021 model establishes that, in order to trigger this payment, it is necessary to have net income for the year and a declaration and payment of distribution to shareholders.

On December 15, 2021, the Company’s Board of Directors approved the pay-out criteria for the program for 2022, maintaining the criteria of the PPP 2021.

In the nine-month period ended September 30, 2022, the main changes related to the PPP were:

·

payment of US$ 507 relating to the PPP provisioned in 2021;

·

provision of US$ 400 for the PPP related to 2022, accounted for within other income and expenses.

Profit Sharing (PLR)

At December 29, 2020, the 17 unions representing onshore employees of Petrobras had signed the agreement for the PLR for 2021 and 2022, before the deadline determined by the Collective Labor Agreement (ACT). Among the offshore employees, only one union had signed the agreement within the period defined by the ACT.

The current agreement for the PLR provides that only employees without managerial functions will be entitled to receive profit sharing with individual limits according to their remuneration. In order for the PLR to be paid for 2021 and 2022, the following requirements must be met: (i) dividend distribution to shareholders approved at the Annual General Shareholders Meeting, (ii) net income for the year, and iii) achievement of the weighted average percentage of at least 80% of a set of indicators.

The maximum amount of PLR to be distributed is limited to 5% of Adjusted EBITDA (a non-GAAP measure defined as net income plus net finance income (expense); income taxes; depreciation, depletion and amortization; results in equity-accounted investments; impairment of assets; results on disposal/write-offs of assets, remeasurement of investment retained with loss of control and reclassification of CTA; and results from co-participation agreements in bid areas), to 6.25% of net income and to 25% of dividends distributed to shareholders, in each year, whichever is lower.

In the nine-month period ended September 30, 2022, the main changes related to the PLR were:

·

payment of US$ 129 relating to the PLR provisioned in 2021;

·

provision of US$ 103 for the PLR related to 2022, accounted for within other income and expenses.

12.2.

Termination benefits

Termination benefits are employee benefits provided in exchange for the termination of labor contract as a result of either: i) the Company’s decision to terminate the labor contract before the employee’s normal retirement date; or ii) an employee’s decision to accept an offer of benefits in exchange for the termination of their employment.

The Company has voluntary severance programs (PDV), specific for employees of the corporate segment and of divestment assets, which provide for the same legal and indemnity advantages.

During the second quarter of 2022, the wholly-owned subsidiary Transpetro launched a new voluntary severance program for its offshore employees, whose enrollment occurred between May 4, 2022 and July 14, 2022, and the deadline for the termination of employees will be December 3, 2022.

Thus, for the current programs, there are 11,565 adhesions accumulated through September 30, 2022 (11,418 through December 31, 2021).

	Jan-Sep/2022	Jan-Sep/2021
Opening Balance	349	900
Effects in the statement of income	5	(8)
Enrollments	6	30
Revision of provisions	(1)	(38)
Effects in cash and cash equivalents	(177)	(375)
Terminations in the period	(177)	(375)
Translation adjustment	20	(30)
Closing Balance	197	487
Current	82	315
Non-current	115	172

 

 

Recognition of the provision for expenses occur as employees enroll to the programs.

The Company disburse the severance payments in two installments, one at the time of termination and the remainder one year after the termination.

As of September 30, 2022, from the balance of US$ 82, US$ 30 refers to the second installment of 565 retired employees and US$ 167 refers to 1,666 employees enrolled in voluntary severance programs with expected termination by September 2025.

12.3.

Post-employment benefits

The Company maintains a health care plan for its employees in Brazil (active and retiree) and their dependents (Saúde Petrobras), and five other major plans of post-employment benefits (collectively referred to as “pension plans”).

The following table presents the balance of post-employment benefits:

	09.30.2022	12.31.2021
Liabilities
Health Care Plan - Saúde Petrobras	4,809	4,485
Petros Pension Plan - Renegotiated (PPSP-R)	3,038	3,233
Petros Pension Plan - Non-renegotiated (PPSP-NR)	685	658
Petros Pension Plan - Renegotiated - Pre-70 (PPSP-R Pré 70)	310	817
Petros Pension Plan - Non-renegotiated - Pre-70 (PPSP-NR Pré 70)	253	511
Petros 2 Pension Plan (PP-2)	194	165
Other plans	−	11
Total	9,289	9,880
Current	691	651
Non-current	8,598	9,229

 

 

Health Care Plan

The health care plan Saúde Petrobras is managed by Petrobras Health Association (Associação Petrobras de Saúde – APS), a nonprofit civil association, and includes prevention and health care programs. The plan covers all employees and retirees, and is open to future employees.

Benefits are paid by the Company based on the costs incurred by the participants. The financial participation of the Company and the beneficiaries on the expenses are provided for in the Collective Bargaining Agreement (ACT), being 60% by the Company and 40% by the participants.

Pension plans

The management of the Company's supplementary pension plans is under the responsibility of Fundação Petrobras de Seguridade Social – Petros, which was established by Petrobras as a non-profit, private legal entity with administrative and financial autonomy.

The net obligation with pension plans recorded by the Company is measured in accordance with the requirements of IFRS which has a different measurement methodology to that applicable to pension funds, regulated by the Post-Retirement Benefit Federal Council (Conselho Nacional de Previdência Complementar – CNPC).

The table below presents the reconciliation of the deficit of Petros Plan registered by Petros Foundation as of December 31, 2021 with the net actuarial liability registered by the Company at the same date:

	PPSP-R (*)	PPSP-NR (*)
Deficit registered by Petros	1,388	139
Financial assumptions	(1,120)	(364)
Ordinary and extraordinary sponsor contributions	2,190	652
Changes in fair value of plan assets (**)	1,447	543
Others (including Actuarial valuation method)	145	200
Net actuarial liability recorded by the Company	4,050	1,169
(*) It includes the balance of PPSP-R pre-70 and PPSP-NR pre-70.
(**) It includes balance of accounts receivable arising from the Term of Financial Commitment - TFC signed with Petrobras, which Petros recognizes as equity.

 

 

On March 28, 2022, the Deliberative Council of Petros approved the financial statements of the pension plans for the year ended December 31, 2021, sponsored by the Company.

12.3.1.

Amounts related to net actuarial liabilities (defined benefit plans)

Net actuarial liabilities represent the obligations of the Company related to defined benefit plans, net of the fair value of plan assets (when applicable), at present value, based on actuarial calculations which are revised annually by an independent qualified actuary.

Changes in the actuarial liabilities is presented as follows:

	Pension Plans			Health Care Plan	Other plans	Total
	PPSP-R (*)	PPSP-NR (*)	Petros 2	Saúde Petrobras
Balance at December 31, 2021	4,050	1,169	165	4,485	11	9,880
Recognized in the Statement of Income	346	109	25	459	−	939
Current service cost	7	1	10	79	−	97
Net interest	339	108	15	380	−	842
Cash effects	(1,212)	(389)	−	(268)	−	(1,869)
Contributions paid	(200)	(65)	−	(268)	−	(533)
Payments related to Term of financial commitment (TFC) (**)	(1,012)	(324)	−	−	−	(1,336)
Other changes	164	49	4	133	(11)	339
Others	−	−	1	1	(11)	(9)
Translation Adjustment	164	49	3	132	−	348
Balance at September 30, 2022	3,348	938	194	4,809	−	9,289
(*) It includes the balance of PPSP-R pre-70 and PPSP-NR pre-70.
(**) It includes the payment of a portion of the TCF made on February 25, 2022.

 

 

 

	Pension Plans			Health Care Plan	Other plans	Total
	PPSP-R (*)	PPSP-NR (*)	Petros 2	Saúde Petrobras
Balance at December 31, 2020	7,524	2,696	477	5,356	16	16,069
Recognized in the Statement of Income	361	133	56	1,255	1	1,806
Past service cost	(1)	−	−	852	−	851
Present value of obligation	(730)	(33)	−	852	−	89
Plan assets transferred to PP-3	496	22	−	−	−	518
Sponsor contribution for PP-3	233	11	−	−	−	244
Current service cost	10	1	30	126	−	167
Net interest	334	127	26	277	1	765
Interest on the obligations with contribution for the revision of the lump sum death benefit	18	5	−	−	−	23
Recognized in Equity - other comprehensive income	(1,343)	(345)	−	(1,176)	2	(2,862)
Remeasurement effects recognized in other comprehensive income	(1,343)	(345)	−	(1,176)	2	(2,862)
Cash effects	(1,253)	(566)	−	(236)	−	(2,055)
Contributions paid (***)	(422)	(68)	−	(236)	−	(726)
Payments of obligations with contribution for the revision of the lump sum death benefit (**)	(341)	(102)	−	−	−	(443)
Payments related to Term of financial commitment (TFC)	(490)	(396)	−	−	−	(886)
Other changes	(226)	(85)	(23)	(195)	(5)	(534)
Others	−	−	−	−	(1)	(1)
Translation Adjustment	(226)	(85)	(23)	(195)	(4)	(533)
Balance at September 30, 2021	5,063	1,833	510	5,004	14	12,424
(*) It includes the balance of PPSP-R pre-70 and PPSP-NR pre-70.
(**) On June 30, 2021, the Company prepaid the remaining balance of US$ 447.
(***) On September 30, 2021, the Company made a contribution to the PP-3 plan relating to the participants who migrated from the PPSP-R and PPSP-NR plans.

 

The net expense with pension and health plans is presented below:

 

		Pension Plans		Health Care Plan	Other Plans	Total
	PPSP-R (*)	PPSP-NR (*)	Petros 2	Saúde Petrobras
Related to active employees (cost of sales and expenses)	(25)	(4)	(15)	(167)	−	(211)
Related to retirees (other income and expenses)	(321)	(105)	(10)	(292)	−	(728)
Net costs for Jan-Sep/2022	(346)	(109)	(25)	(459)	−	(939)
Related to active employees (cost of sales and expenses)	(40)	(7)	(45)	(458)	(1)	(551)
Related to retirees (other income and expenses)	(303)	(121)	(11)	(797)	−	(1,232)
Obligations with contribution for the revision of the lump sum death benefit	(18)	(5)	−	−	−	(23)
Net costs for Jan-Sep/2021	(361)	(133)	(56)	(1,255)	(1)	(1,806)
(*) It includes the balance of PPSP-R pre-70 and PPSP-NR pre-70.
		Pension Plans		Health Care Plan	Other Plans	Total
	PPSP-R (*)	PPSP-NR (*)	Petros 2	Saúde Petrobras
Related to active employees (cost of sales and expenses)	(8)	(1)	(5)	(55)	−	(69)
Related to retirees (other income and expenses)	(105)	(34)	(3)	(95)	−	(237)
Net costs for Jul-Sep/2022	(113)	(35)	(8)	(150)	−	(306)
Related to active employees (cost of sales and expenses)	(13)	(3)	(15)	(320)	(1)	(352)
Related to retirees (other income and expenses)	(100)	(43)	(4)	(670)	1	(816)
Obligations with contribution for the revision of the lump sum death benefit	−	−	−	−	−	−
Net costs for Jul-Sep/2021	(113)	(46)	(19)	(990)	−	(1,168)
(*) It includes the balance of PPSP-R pre-70 and PPSP-NR pre-70.

 

 

12.3.2.

Contributions

In the nine-month period ended September 30, 2022, the Company contributed with US$ 1,869 to the defined benefit plans (reducing the balance of obligations of these plans, as presented in note 12.13.1), which includes the payment of the Term of Financial Commitment, in the amount of US$ 1,336.

In addition, the Company contributed with US$ 135 and US$ 1, respectively, to the defined contribution portions of PP-2 and PP-3 plans (US$ 77 for PP-2 in 2021), whose amounts were expensed in the nine-month period ended September 30, 2022.

The collection of contributions for PP-3 started August 31, 2021.

13.	Provisions for legal proceedings, judicial deposits and contingent liabilities

13.1.

Provisions for legal proceedings

The Company recognizes provisions for legal, administrative and arbitral proceedings based on the best estimate of the costs 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) several individual and collective labor claims; (ii) 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 benefits previously taken for Brazilian federal tax credits applied that were subsequently alleged to be disallowable; (ii) tax notices for alleged non-compliance with ancillary obligations; and (iii) claims for alleged non-payment of CIDE on imports of propane and butane.

·

Civil claims, in particular: (i) lawsuits related to contracts; (ii) royalties and special participation charges; and (iii) penalties applied by ANP, mainly relating to production measurement systems.

·

Environmental claims, specially: (i) fines relating to an environmental accident in the State of Paraná in 2000; (ii) fines relating to the Company’s offshore operation; and (iii) public civil action for oil spill in 2004 in Serra do Mar-São Paulo State Park.

Provisions for legal proceedings are set out as follows:

Non-current liabilities	09.30.2022	12.31.2021
Labor claims	744	716
Tax claims	389	306
Civil claims	1,135	820
Environmental claims	251	176
Total	2,519	2,018

 

 

	Jan-Sep/2022	Jan-Sep/2021
Opening Balance	2,018	2,199
Additions, net of reversals	552	416
Use of provision	(356)	(383)
Revaluation of existing proceedings and interest charges	264	74
Others	-	9
Translation adjustment	41	(111)
Closing Balance	2,519	2,204

 

 

In preparing its unaudited consolidated interim financial statements for the nine-month period ended September 30, 2022, 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 nine-month period ended September 30, 2022, the increase in liabilities arises mainly from changes in the following cases: (i) US$ 376 in the provision for civil claims involving contractual matters; (ii) US$ 77 in the provision for tax claims for alleged non-compliance with ancillary obligations; partially offset by: (iii) US$ 91 decrease related to an agreement in arbitration for the collection of royalties on shale extraction.

13.2.

Judicial deposits

Non-current assets	09.30.2022	12.31.2021
Tax	7,158	5,790
Labor	863	796
Civil	1,847	1,275
Environmental	106	101
Others	72	76
Total	10,046	8,038

 

 

	Jan-Sep/2022	Jan-Sep/2021
Opening Balance	8,038	7,281
Additions	1,314	827
Use	(98)	(67)
Accruals and charges	635	153
Others	(6)	2
Translation adjustment	163	(348)
Closing Balance	10,046	7,848

 

 

In the nine-month period ended September 30, 2022, the Company made judicial deposits in the amount of US$ 1,314, mainly: (i) US$ 429 relating to the unification of Fields (Cernambi, Tupi, Tartaruga Verde and Tartaruga Mestiça); (ii) US$ 196 referring to IRPJ and CSLL for not adding profits of subsidiaries and affiliates domiciled abroad to the IRPJ and CSLL calculation basis; (iii) US$ 219 related to CIDE and PIS/COFINS on the chartering of platforms; and (iv) US$ 102 referring to IRPJ and CSLL in the deduction of expenses with Petros.

13.3.

Contingent liabilities

The estimates of contingent liabilities for legal proceedings are indexed to inflation and updated by applicable interest rates. Estimated contingent liabilities for which the possibility of loss is classified as possible are set out in the following table:

 

Nature	09.30.2022	12.31.2021
Tax	28,799	24,785
Labor	7,719	7,172
Civil - General	6,579	5,720
Civil - Environmental	1,329	1,192
Total	44,426	38,869

 

 

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 ICMS by several states; (v) collection of social security contributions over payments of bonuses; and (vi) collection of customs taxes and fines related to imports under the Repetro regime in the Frade consortium.

·

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 mainly: (i) administrative and legal proceedings challenging an ANP order requiring Petrobras to pay additional special participation fees and royalties (production taxes) with respect to several fields; (ii) regulation agencies fines; and (iii) lawsuits related to contracts.

·

Environmental matters comprising indemnities for damages and fines related to the Company operation.

In the nine-month period ended September 30, 2022, the increase in the balance of contingent liabilities is mainly due to: (i) US$ 2,316 relating to the notice of infraction for the collection, by joint liability, of customs taxes and fines arising from imports under the Repetro regime, for use in the Frade consortium; (ii) US$ 734 in lawsuits in administrative and judicial stages discussing the difference in special interest and royalties in different fields, including unitization; (iii) US$ 437 referring to CIDE and PIS/COFINS on the chartering of platforms; (iv) US$ 331 in proceedings related to federal tax deductions taken that were subsequently challenged; and (v) US$ 295 referring to lawsuits involving ICMS collection on imports in operations with liquified petroleum gas derived from natural gas.; (vi) US$ 276 lawsuits requesting 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 (vii) US$ 292 in civil matters involving contractual issues.

These effects were partially offset by: (i) US$ 1,206 transferred to remote loss relating to tax on services provided offshore; and (ii) US$ 292 for the write-off due to the conclusion of an agreement and review of amounts in lawsuits in which the state monopoly of piped gas services was discussed.

13.4.

Minimum Compensation Based on Employee's Position and Work Schedule (Remuneração Mínima por Nível e Regime - RMNR)

As of September 30, 2022, there are lawsuits related to the Minimum Compensation Based on Employee's Position and Work Schedule (RMNR), with the objective of reviewing its calculation criteria.

The RMNR consists of a minimum remuneration guaranteed to employees, based on salary level, work schedule and geographic location. This policy was created and implemented by Petrobras in 2007 through collective bargaining with union representatives, and was approved at employee meetings, and started being the subject of lawsuits three years after its implementation.

In 2018, the Brazilian Superior Labor Court (TST) ruled against the Company, which filed extraordinary appeals against its decision. Therefore, the Brazilian Supreme Federal Court (STF) suspended the effects of the decision issued by the TST and determined the national suspension of the ongoing proceedings related to the RMNR.

On July 29, 2021, a monocratic decision was published in which the STF’s Judge-Rapporteur granted an extraordinary appeal filed, accepting the Company's thesis and recognizing the validity of the collective bargaining agreement freely signed between Petrobras and the unions, reversing the decision of the TST.

In February 2022, the judgment of the appeals filed by the plaintiff and several amicus curiae was started. The judgment is currently underway in the First Panel of the Supreme Federal Court, with 3 votes in favor of the Company, confirming that there is an understanding of recognizing the merit of the collective bargaining agreement signed between Petrobras and the unions. Considering that the last minister to vote requested additional time for analysis, the trial was suspended, and is pending the presentation of the vote by this last minister.

As of September 30, 2022, the balance of provisioned proceedings regarding RMNR amounts to US$ 150, while the contingent liabilities amount to US$ 6,389. During the period from July to September 2022, one of these actions became final in the Company’s favor and therefore there was a decrease in contingent liabilities related to this claim.

13.5.

Class action and related proceedings

On May 26, 2021, the District Court of Rotterdam decided that the class action against Petróleo Brasileiro S.A. – Petrobras, Petrobras International Braspetro B.V. (PIB BV), Petrobras Global Finance B.V. (PGF), Petrobras Oil & Gas B.V. (PO&G) and some former Petrobras managers must proceed and that the arbitration clause of Petrobras' bylaws does not prevent the Company's shareholders from having access to the Dutch Judiciary and being represented by the Stichting Petrobras Compensation Foundation (“Foundation”). However, investors who have already started arbitration against Petrobras or who are parties to legal proceedings in which the applicability of the arbitration clause has been definitively recognized are excluded from the action. The class action is in the merit discussion stage.

In relation to the arbitration in Argentina, the Argentine Supreme Court has not yet judged the appeal filed by the Consumidores Financieros Asociación Civil para su Defensa ("Association"). This arbitration discusses Petrobras' liability for an alleged loss of market value of Petrobras' shares in Argentina, as a result of the Lava Jato Operation.

Regarding criminal proceeding in Argentina related to an alleged fraudulent offer of securities, aggravated by the fact that Petrobras allegedly declared false data in its financial statements prior to 2015, the Court of Appeals revoked on October 21, 2021, the lower court decision that had recognized Petrobras' immunity from jurisdiction and recommended that the lower court judge take steps to certify whether the Company could be considered criminally immune in Argentina for further reassessment of the issue. Petrobras appealed against this decision, but the higher courts upheld the decision of the Court of Appeals, thus the immunity will have to be reassessed by the lower court. The Court of Appeals recognized that the Association could not act as a representative of financial consumers, due to the loss of its registration with the competent Argentine bodies, which was also the subject of an appeal upheld by the Court of Appeals on September 15, 2022, recognizing the Association the right to represent financial consumers. Petrobras presented other procedural defenses, still subject to assessment by the Argentine Court of Appeals. This criminal action is being processed before the Economic Criminal Court No. 2 of the City of Buenos Aires.

As for the other criminal action for alleged non-compliance with the obligation to publish “press release” in the Argentine market about the existence of a class action filed by Consumidores Financieros Asociación Civil para su Defensa before the Commercial Court, there are no developments during the nine-month period ended September 30, 2022.

The EIG Energy Fund XIV, L.P. and affiliates (“EIG”) filed a lawsuit against Petrobras, before the District Court of Columbia, United States, to recover alleged losses related to its investment in Sete Brasil Participações S.A. On August 8, 2022, the judge upheld EIG's claim as to Petrobras' responsibility for the alleged losses, which are recorded as provisions for legal proceedings, but denied the motion for summary judgment with respect to damages, whereby the award of compensation will be subject to the proof of damages by EIG at a hearing and to the consideration of the defenses by the Company. In the same decision, the judge denied the request to dismiss the case based on Petrobras' immunity from jurisdiction, which is why an appeal was filed with the Federal Court of Appeals for the District of Columbia.

13.6.

Arbitrations in Brazil

In the nine-month period ended September 30, 2022, there were no events that changed the assessment and information on arbitrations in Brazil.

13.7.

Legal proceedings - Compulsory Loan – Eletrobrás

In the nine-month period ended September 30, 2022, there were no events that changed the assessment on this proceeding.

13.8.

Lawsuits brought by natural gas distributors and others

In the nine-month period ended September 30, 2022, the Company obtained a favorable decision from the Superior Court of Justice (Superior Tribunal de Justiça - STJ) suspending the interim decision in favor of CEGÁS, which granted the extension of its gas supply contract for 6 months. With the loss of effectiveness of the preliminary decision due to the passage of time, the suspension previously granted became unnecessary, being extinguished. In another decision, the injunction that had been obtained by SC GÁS and that had extended, until April 2022, the price of the gas supply contract that was terminated on December 31, 2021, was revoked in a lower court judgement handed down on June 29, 2022. In relation to the lawsuit filed by the State of Minas Gerais, a request was granted to grant a suspensive effect to the appeal filed by Petrobras in view of the preliminary decision.

In October, 2022, agreements were signed between Petrobras, CEGÁS and SCGÁS, with the objective of ceasing the litigation and controversial issues in relation to the price of natural gas supplied, following the current economic conditions of this market.

The commercialization of gas by Petrobras, in the states of Espírito Santo, Rio de Janeiro and Sergipe, has been taking place under the terms of the injunctions granted.

14.

Provision for decommissioning costs

The following table details the amount of the decommissioning provision by producing area:

	09.30.2022	12.31.2021
Onshore	483	873
Shallow waters	3,689	3,732
Deep and ultra-deep post-salt	8,086	8,420
Pre-salt	2,632	2,594
	14,890	15,619

 

 

Non-current liabilities	2022 Jan-Sep	2021 Jan-Sep
Opening balance	15,619	18,780
Adjustment to provision	38	7
Transfers related to liabilities held for sale (*)	(1,075)	(536)
Payments and use of provisions	(629)	(526)
Interest accrued	362	551
Others	(1)	3
Translation adjustment	576	(827)
Closing balance	14,890	17,452
(*) In the nine-month period ended September 30, 2022, it refers to the Golfinho and Camarupim Group (US$ 103), in Espírito Santo;  the Albacora Leste Field (US$ 374), in Rio de Janeiro; the Norte Capixaba Group (US$ 32), in Espírito Santo state; and the Potiguar Group (US$ 566), in Rio Grande do Norte state, as set out in note 22.  In the nine-month period ended September 30, 2021, it includes transfers to held for sale mainly related to: Alagoas Group (US$ 153), Papa-Terra Field (US$ 148), Peroá Group (US$ 109), Miranga Group (US$ 97) and Búzios Field (US$ 31).

 

 

15.

Property, plant and equipment

15.1.

By class of assets

	Land, buildings and improvement	Equipment and other assets (*)	Assets under construction (**)	Exploration and development costs (***)	Right-of-use assets	Total
Balance at December 31, 2021	2,383	53,126	16,922	35,847	17,052	125,330
Cost	4,080	98,085	25,954	61,906	26,382	216,407
Accumulated depreciation and impairment (****)	(1,697)	(44,959)	(9,032)	(26,059)	(9,330)	(91,077)
Additions	-	656	4,943	47	5,580	11,226
Decommissioning costs - Additions to / review of estimates	-	-	-	11	-	11
Capitalized borrowing costs	-	-	787	-	-	787
Signature Bonuses Transfers (*****)	-	-	-	1,177	-	1,177
Write-offs	(2)	(758)	(990)	(614)	(1,464)	(3,828)
Transfers (******)	83	3,713	(6,682)	3,016	-	130
Transfers to assets held for sale	(11)	(1,977)	(342)	(1,418)	(27)	(3,775)
Depreciation, amortization and depletion	(65)	(3,561)	-	(3,938)	(3,344)	(10,908)
Impairment recognition (note 17)	-	(53)	(269)	(42)	-	(364)
Impairment reversal (note 17)	-	12	2	11	-	25
Translation adjustment	71	1,933	595	1,240	470	4,309
Balance at September 30, 2022	2,459	53,091	14,966	35,337	18,267	124,120
Cost	4,187	100,792	24,267	63,236	27,953	220,435
Accumulated depreciation and impairment (****)	(1,728)	(47,701)	(9,301)	(27,899)	(9,686)	(96,315)

 

 

 

Balance at December 31, 2020	3,043	58,680	15,443	31,166	15,869	124,201
Cost	5,450	107,199	27,544	60,902	23,780	224,875
Accumulated depreciation and impairment (****)	(2,407)	(48,519)	(12,101)	(29,736)	(7,911)	(100,674)
Additions	-	997	4,307	2	5,304	10,610
Decommissioning costs - Additions to / review of estimates	-	-	-	1	-	1
Capitalized borrowing costs	-	-	744	-	-	744
Signature Bonuses Transfers (****)	-	-	-	11,625	-	11,625
Write-offs	-	(638)	(372)	(1,641)	(128)	(2,779)
Transfers (******)	(44)	557	(2,981)	2,521	3	56
Transfers to assets held for sale	(2)	(1,521)	(569)	(623)	2	(2,713)
Depreciation, amortization and depletion	(76)	(3,131)	-	(3,136)	(3,163)	(9,506)
Impairment recognition	-	(186)	-	(8)	-	(194)
Impairment reversal	-	1,374	100	1,784	32	3,290
Translation adjustment	(101)	(2,679)	(686)	(1,665)	(802)	(5,933)
Balance at September 30, 2021	2,820	53,453	15,986	40,026	17,117	129,402
Cost	4,294	99,757	27,030	68,191	26,244	225,516
Accumulated depreciation and impairment (****)	(1,474)	(46,304)	(11,044)	(28,165)	(9,127)	(96,114)
(*) It is composed of production platforms, refineries, thermoelectric power plants, natural gas processing plants, pipelines, and other operating, storage and production plants, including subsea equipment for the production and flow of oil and gas, depreciated based on the units of production method.
(**) See note 21 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 with proved reserves and other costs directly associated with the exploration and production of oil and gas (oil and gas production properties).
(****) In the case of land and assets under construction, it refers only to impairment losses.
(*****) Transfer from intangible assets related to Atapu, Sepia and Itapu fields in 2022 (related to Búzios in 2021).
(*****) It includes mainly transfers between classes of assets and transfers from advances to suppliers.

 

 

 

The useful life of assets depreciated by the linear method are shown below:

Asset	Weighted average useful life in years
Buildings and improvement	40 (25 to 50) (except land)
Equipment and other assets	20 (3 to 31) (except assets by the units of production method)
Right-of-use	8 (2 to 47)

 

 

The right-of-use assets comprise the following underlying assets:

	Platforms	Vessels	Properties	Total
Balance at September 30, 2022	9,071	7,976	1,220	18,267
Cost	12,410	13,809	1,734	27,953
Accumulated depreciation and impairment	(3,339)	(5,833)	(514)	(9,686)
Balance at December 31, 2021	9,840	5,997	1,215	17,052
Cost	13,362	11,267	1,753	26,382
Accumulated depreciation and impairment	(3,522)	(5,270)	(538)	(9,330)

 

 

15.2.

Unitization agreements

Petrobras has Production Individualization Agreements (AIP) signed in Brazil with partner companies in E&P consortia. These agreements result in reimbursements payable to (or receivable from) partners regarding expenses and production volumes related to Atapu, Berbigão, Sururu, Albacora Leste, Tartaruga Verde and other fields.

The table below presents changes on the reimbursements payable by Petrobras relating to AIPs submitted for approval by the ANP, presented within trade payables. This estimate reflects the best available estimate of the assumptions used in calculating the calculation base and the sharing of relevant assets in areas to be equalized.

					Jan-Sep/2022	Jan-Sep/2021
Opening balance					364	370
Additions/(Write-offs) on PP&E					(26)	(80)
Other income and expenses					12	36
Translation adjustments					10	(14)
Closing balance					360	312

 

 

15.3.

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, 2022, the capitalization rate was 6.62% p.a. (6.24% p.a. for the nine-month period ended September 30, 2021).

16.

Intangible assets

16.1.

By class of assets

	Rights and Concessions (*)	Software	Goodwill	Total
Balance at December 31, 2021	2,695	308	22	3,025
Cost	2,744	1,321	22	4,087
Accumulated amortization and impairment	(49)	(1,013)	−	(1,062)
Addition	895	129	−	1,024
Capitalized borrowing costs	−	8	−	8
Write-offs	(12)	(1)	−	(13)
Transfers	(9)	(1)	−	(10)
Signature Bonuses Transfers (**)	(1,177)	−	−	(1,177)
Amortization	(3)	(53)	−	(56)
Impairment recognition	−	(1)	−	(1)
Translation adjustment	46	5	1	52
Balance at September 30, 2022	2,435	394	23	2,852
Cost	2,488	1,488	23	3,999
Accumulated amortization and impairment	(53)	(1,094)	−	(1,147)
Estimated useful life in years	(***)	5	Indefinite
Balance at December 31, 2020	14,714	210	24	14,948
Cost	14,803	1,245	24	16,072
Accumulated amortization and impairment	(89)	(1,035)	−	(1,124)
Addition	3	98	−	101
Addition - Signature Bonuses	98	−	−	98
Capitalized borrowing costs	−	3	−	3
Write-offs	(10)	−	−	(10)
Transfers	(92)	3	−	(89)
Signature Bonuses Transfers (**)	(11,625)	−	−	(11,625)
Amortization	(5)	(41)	−	(46)
Translation adjustment	(314)	(13)	(1)	(328)
Balance at September 30, 2021	2,769	260	23	3,052
Cost	2,819	1,290	23	4,132
Accumulated amortization and impairment	(50)	(1,030)	−	(1,080)
Estimated useful life in years	(***)	5	Indefinite
(*) It comprises mainly signature bonuses (amounts paid in concession contracts for oil or natural gas exploration and production sharing), in addition to public service concessions, trademarks and patents and others.
(**) Transfer to PP&E relating to Sépia, Atapu and Itapu in 2022 (Búzios in 2021).
(***) 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.

 

 

16.2.

Surplus volumes of Transfer of Rights Agreement

Búzios

Expenses incurred by Petrobras in the ordinary operations of the bidding area for the benefit of the consortium, in the amount of US$ 61, made prior to the start of the Co-Participation Agreement and not included in the total compensation amount, were reimbursed to Petrobras by the partners CNODC Brasil Petróleo e Gás Ltda. (CNODC) and CNOOC Petroleum Brasil Ltda. (CPBL) in February 2022.

In addition, on March 4, 2022, Petrobras signed an agreement with its partner CPBL for the transfer of 5% of its interest in the Production Sharing Contract for the Surplus Volume of the Transfer of Rights Agreement of the Búzios field, in the pre-salt layer of the Santos basin, to this company. The agreement results from the call option exercised by CNOOC on September 29, 2021.

The amount to be received by Petrobras at the closing of the operation is US$ 2,120, referring to the compensation and reimbursement of the signature bonus of CNOOC's additional interest, subject to price adjustments and to the fulfillment of conditions precedent, such as CADE, ANP and Ministry of Mines and Energy (MME) approval.

After the transaction becomes effective, Petrobras will hold an 85% interest in the Production Sharing Contract of the Surplus Volume of the Transfer of Rights Agreement of the Búzios field, CNOOC will hold a 10% interest and CNODC a 5% interest. The total participation in this Búzios Co-participation Agreement, including the portions of the Transfer of Rights Agreement and of the BS-500 Concession Agreement (100% of Petrobras) will be 88.99% of Petrobras, 7.34% of CNOOC and 3.67% of CNODC.

At September 30, 2022, the assets and liabilities related to the transfer of 5% of its interest in the Production Sharing Contract to the Transfer of Rights Agreement are classified as held for sale.

Atapu and Sépia

On April 27, 2022, Petrobras signed the Production Sharing Contract for the surplus volume of the Transfer of Rights Agreement related to the Atapu field, in partnership with Shell Brasil Petróleo Ltda (Shell, 25%) and TotalEnergies EP Brasil Ltda. (TotalEnergies, 22.5%), and related to the Sépia field in consortium with TotalEnergies (28%), Petronas Petróleo Brasil Ltda. (Petronas, 21%) and QP Brasil Ltda. (QP, 21%), according to the results of the Second Bidding Round for the Surplus Volume of the Transfer of Rights Agreement in the Production Sharing regime, which was held on December 17, 2021.

Also on April 27, 2022, the Company signed the Co-participation Agreements and the Amendments to the Agreement for the Individualization of Atapu and Sépia Production (AIPs), which are necessary to manage the coexisting deposits of the Transfer of Rights Agreement and the Production Sharing Contract (related to the surplus volume) of these areas.

The compensation to Petrobras for Atapu and Sépia, including an estimate of the gross-up of the taxes levied, pursuant to Ordinance No. 8 of April 19, 2021 of the MME, were paid by the partners in April 2022, totaling US$ 2,093 for Atapu and US$ 3,059 for Sépia.

The agreements became effective on May 2, 2022, when Pré-Sal Petróleo S.A. (PPSA) confirmed there was no settlement pending for this transaction, in accordance with the provisions of Ordinance No. 519 of May 21, 2021.

On the same date, a partial write-off of the assets associated with these fields was carried out, in exchange for the financial compensation, resulting in a transaction similar to a sale.

Furthermore, the Company accounted for an additional US$ 129 gain corresponding to the difference between the estimate and the final calculation of the gross-up of taxes levied on the gain on the transfer of assets to the Production Sharing regime, as provided for in the mentioned ordinance (US$ 60 for Atapu and US$ 69 for Sépia). These amounts were paid to Petrobras in July 2022.

The total gain in this operation was US$ 2,861 (US$ 1,018 for Atapu and US$ 1,843 for Sépia), accounted for within other income and expenses.

The signature bonus corresponding to the Company's participation in the Production Sharing Contract was US$ 416 for Atapu and US$ 424 for Sépia.

Since these agreements relate to the surplus volume of fields with technical and commercial feasibility already identified, the signature bonuses paid by the Company in the first quarter of 2022, totaling US$ 840, were transferred from intangible assets to property, plant and equipment after the Co-participation Agreements came into effect.

17.

Impairment