Petrobras Financial Performance in 4Q:23

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(Petrobras, 7.Mar.2024) — Brazil’s state energy giant Petrobras released its financial results for the fourth quarter of 2023.

Dear shareholders and investors,

I am very proud to address you today, not only in light of the excellent economic and financial results we are disclosing, but especially because I am convinced that we are building a Petrobras which is more solid, more resilient and able to generate long-term value to its partners and to society at large, facing the countless challenges imposed by a world in transition.

Since present management took the helm, we have been underscoring the need to adapt Petrobras to a new energy context where the decarbonization of operations and energy sources is a must – and a result of society’s legitimate demands – and requires strategic shifts and novel solutions that take into account the inevitable reduction in fossil fuel demand. Aware of this challenge, we have built a new strategic plan, which, besides consistency, was based on realism, responsibility and transparency. We acknowledge that the energy transition will unfold gradually and, therefore, we will continue to invest in oil and gas exploration, the segment where we generate the highest returns, and in the integration with the downstream. We will also generate value with the just and responsible transition, diversifying our operations into profitable low carbon businesses, always prioritizing partnerships. And we shall accomplish all this maintaining the focus on capital discipline, our solid governance and rationality in all decision- making processes. This rationality, I must insist, was part and parcel of the changes implemented in our commercial strategy – through which we increased our competitiveness, with more flexibility to the decision makers and more stability to consumers – and our dividend policy, enhanced to consider both higher investments and the absolute need to keep our financial health.

In this regard, it is worth highlighting the proposal of dividends relative to 2023 – R$ 72.4bn, an amount which mainly benefits the Brazilian society, through its 37% ownership of Petrobras, and, who, as a matter of fact, has also received R$ 240bn in taxes – and the successive records in market capitalization since we took over. Thus, in 2023, our total shareholder return, relative to our preferred shares in NYSE, reached 112%, outpacing the highest return delivered by the majors (20%), an evidence of how correct was the decision to keep dividends at reasonable levels, while increasing investments to deliver profitable growth, which is being reflected in higher market values.

These accomplishments were only possible because we have prioritized our most important asset: people. For them, we have approved our Diversity, Equity and Inclusion Policy and our Racial Equity Program. Because they are the ones who strive to build our future. They were responsible, when we celebrate 15 years of the pre-salt, for the record in oil and gas production: we produced more with less emissions; for the start-up of four new production platforms; for the daily records in refining, with high utilization factors and the best result ever in energy efficiency; for the higher thermoelectric generation, with reliability; for the progress in biorefining, either through capacity expansion, or for the historical landmark of processing 100% of soybean oil in an industrial refining unit; for the records in carbon efficiency, which allowed the reduction of 1.8 million tons of CO2 e in absolute emissions; for the main award of the global offshore industry: the OTC Distinguished Achievement Award 2024, in recognition of the contribution of Campos Basin Revitalization Program for the global industry; for the record in patents filings, among other countless accomplishments which would allow me to write a lengthy book instead of a brief letter.

This is why I always say, my dear shareholders and investors, that Petrobras is back. Back to prosperity, to generate long-term value and to help building a better world. We will face the challenges taking advantage the synergies with our businesses and leveraged in our expertises, and never neglecting economic value generation, as must be the case for a company that wishes to remain competitive and perpetuate value for future generations.

Jean Paul Prates, CEO

Main highlights for 2023:

• Second highest annual EBITDA in history: US$ 52.4bn

• Cash generation: Operating Cash Flow (OCF) of US$ 43.2bn, the second highest in history

• Gross debt under control at US$ 62.6bn, even after the US$ 10bn increase in debt related to leases, including US$ 8.7bn related to the leasing of the four new production platforms that started production in 2023

• Financial debt reduced by US$ 1.2bn

• Return to society with payment of R$ R$ 240.2bn in taxes in 2023

• Annual production records: Total own production in the pre-salt reaches 2.17 MMboed (10% more than in 2022), representing 78% of the total

• Start-up of 4 new production systems: FPSOs Anna Nery and Anita Garibaldi, in Marlim and Voador revitalization projects, FPSO Almirante Barroso, the fifth unit to start up in Búzios field, and FPSO Sepetiba, the second definitive production system in Mero

• A new record in the pre-salt, the Almirante Barroso FPSO’s peak production in less than 5 months

• OTC Distinguished Achievement Award 2024 for technologies for the renovation of Campos Basin

• Sustainable disposal: P-32 and P-33 will go through a recycling process in line with best ESG practices

• Equatorial Margin: Drilling of Pitu Oeste well, in Potiguar Basin, marking the resumption of oil and gas exploration in the region

• Proved Reserves: Maintenance of the trajectory of reserve replenishment (1.5 billion boe), with a focus on profitable assets

• High utilization of the refining facilities with value generation: annual FUT of 92%, 4p.p. higher than 2022, with a strong yield of diesel, gasoline and jetfuel in total production

• Lower environmental impact fuels: Expansion of Diesel R sales, new bunker + bio test and launch of Cap Pro W asphalt

• Record processing of Pre-Salt oils: Pre-Salt oils accounted for 65% of the feedstock processed in Refining, 3 p.p above the volume in 2022

• Record annual production and sales of S-10 diesel: Production of 428 Mbpd and sales of 463 Mbpd


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