Petrobras (PBR) Q3 2026 Earnings Call Transcript

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DATE

Wednesday, Nov. 11, 2026

CALL PARTICIPANTS

• Investor Relations - Eduardo de Nardi Ros
• President - Magda Chambriard
• Executive Director of Exploration and Production - Sylvia Anjos
• Executive Director and Financial Director for Investor Relations - Fernando Melgarejo
• Executive Director of Corporate Affairs - Clarice Coppetti
• Executive Director of Engineering, Technology and Innovation - Renata Baruzzi
• Executive Director of Governance and Compliance - Ricardo Wagner
• Executive Director of Logistics, Commercialization and Markets - Angélica Laureano
• Executive Director of Industrial Processes and Products - William França da Silva
• Executive Director of Energy Transition and Sustainability - William França da Silva

TAKEAWAYS

• Oil and Gas Production -- 2.8 million barrels per day, representing a 12% increase versus the third quarter of 2025.
• Monthly Production Record -- 2.9 million barrels per day in September 2026, driven by operational records across multiple fields.
• Production Growth Rate -- 30% over the last two years, exceeding the 10% growth achieved between 2014 and 2024.
• Production Decline Management -- 3%, reduced from historical levels of 10% per year through integrated reservoir management and water injection.
• Platform Capacity Expansion -- 280,000 barrels per day of additional capacity, achieved by operating 11 platforms above original design capacity without requiring new capital expenditures.
• Future Capacity Target -- 500,000 barrels per day in excess of nominal capacity, involving expansion projects on six additional platforms over the medium-term.
• Operating Cash Flow Guidance -- $45 billion to $50 billion for 2026, revised upward from previous guidance of $35 billion due to higher Brent prices and production volumes.
• Cash CapEx Guidance -- $21 billion to $22 billion for 2026, increased from an initial range of $16 billion to $17.4 billion following accelerated project execution and foreign exchange impacts.
• Manageable Operating Expenses (GOG) Guidance -- $24.2 billion for 2026, reflecting a 2% reduction relative to 2025 actual figures despite higher production volumes.
• Oil Production Guidance -- 2.7 million to 2.8 million barrels per day for 2026, increased from the initial 2.5 million barrel target.
• Refinery Utilization Factor (FUT) -- 99% in the third quarter, with some individual refineries operating as high as 102%.
• Diesel Production -- 769,000 barrels per day, a record-breaking volume achieved without the construction of new refineries.
• Domestic Refined Product Sales -- 1.85 million barrels per day, the highest volume since the third quarter of 2021.
• Export Volume -- 1.25 million barrels per day, including 987,000 barrels per day of crude oil and 189,000 barrels per day of fuel oil.
• Operating Cash Flow -- $12 billion for the third quarter, an increase of more than 20% compared to the prior year.
• Gross Debt -- $70 billion at the end of September, with debt duration reduced to 11.8 years.
• Net Debt -- $57.8 billion, a decrease from $60.4 billion in the second quarter and ahead of the 2027 target timeline.
• Taxes Paid -- BRL 251 billion over nine months, representing a BRL 50 billion increase versus the same period last year.
• P-78 Platform Performance -- 200,000 barrels per day, which is 20,000 barrels per day in excess of its original 180,000-barrel rated capacity.
• Subsea Well Interconnections -- 49 wells completed through the third quarter, exceeding the initial annual plan of 44 wells.
• Búzios Cost Recovery Impact -- 85,000 barrels per day to be shared with the federal government starting in the fourth quarter of 2026 as the field reaches the cost recovery ceiling.

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RISKS

• Chambriard stated, "unless we face it in time, its cost might become substantially relevant, and there is a significant possibility for losses for the company," regarding the 14x higher cost of maintenance when thresholds for corrosion and equipment checks are crossed in aggressive maritime environments.
• Melgarejo noted that operating cash flow was "adversely affected by changes in working capital, mainly due to outstanding receivables under the fuel subsidy program and inventories related to exports in progress."
• Chambriard warned of "high hydrological risk," which necessitates the early operation of thermal power plants to ensure the reliability of Brazil's electricity system.
• Laureano noted that while the company believes it can meet its policy for diesel, there are "questions about gasoline prices" due to the current geopolitical volatility and its impact on price policy limits.

SUMMARY

Petróleo Brasileiro S.A. - Petrobras (NYSE:PBR) reported record operational performance in the third quarter of 2026, leading management to increase guidance for annual production, capital expenditures, and operating cash flow. The company emphasized a strategy of accelerating production by expanding the capacity of existing platforms without additional capital investment, while simultaneously reducing the annual production decline rate from 10% to 3%. Management indicated that higher-than-expected Brent prices, which reached levels between $90 and $100 per barrel, provided the liquidity to pull forward drilling and platform construction milestones originally planned for later years. The company remains focused on its 2027 to 2031 strategic plan, scheduled for release on Nov. 24, 2026, which will detail future investment cycles and the integration of refining with petrochemical operations.

• Exploration in the Equatorial Margin yielded three distinct oil discoveries at the Morpho well, which management noted significantly increases the value of its contracted area near French Guiana.
• The company moved forward the start of operations for three thermal power plants, Termomacaé, Trés Lagoas, and Termoceará, to September 2026 to support Brazil's power security during a period of high hydrological risk.
• Executive Director Baruzzi reported that five upcoming major platforms, including P-80, P-82, and P-83, are more than 90% physically complete and incorporate digital solutions for improved operational efficiency.
• Management confirmed its intention to maintain a vertically integrated presence in the petrochemical sector, specifically citing interest in synergy with Braskem and the Boaventura natural gas plants.
• Chambriard stated, "Our maritime environment is 4x more aggressive than in the North Sea," highlighting the technical necessity of rigorous platform maintenance schedules.
• Regarding price policy, Laureano stated, "We might extend the deadline to be able to meet the policy-established limits," referring to situational alternatives for managing gasoline price volatility amid geopolitical shifts.

INDUSTRY GLOSSARY

• ANP: Agéncia Nacional do Petróleo, the Brazilian federal regulatory agency for the oil and gas industry.
• boed: Barrels of oil equivalent per day, a unit used to combine oil and natural gas production into a single measure.
• Brent: A major global price benchmark for Atlantic basin crude oils.
• CAC: Client Alternative Cost, a proprietary Petrobras metric used in its fuel pricing policy.
• Crack spread: The pricing difference between a barrel of crude oil and the petroleum products refined from it, representing refining margins.
• Equatorial Margin: A deepwater and ultra-deepwater exploration frontier along the northern coast of Brazil.
• FPSO: Floating Production Storage and Offloading unit, a ship-shaped vessel used for processing and storing oil and gas at sea.
• FUT: Fator de Utilização do Parque de Refino, the utilization rate of the company's refining capacity.
• GOG: Gastos Operacionais Gerenciáveis, referring to manageable operating expenses that exclude non-recurring items and specific royalties.
• Pre-salt: Deep-sea oil reservoirs located under thick layers of salt, primarily found off the coast of Brazil.
• VM: Valor Marginal (Best Alternative Cost), a metric used to assess the company's optimal market value for product pricing.

Full Conference Call Transcript

Eduardo de Nardi Ros: Good afternoon, and welcome to Petrobras' webcast about our results for the third quarter of 2026. It's a pleasure to be with you all today. This event's going to be delivered in Portuguese with simultaneous translation available into English. The links to both languages are available on our RI website. All participants will listen to the broadcast online as listeners, and that will be followed by a Q&A session.

We have Magda Chambriard today with us, the President of Petrobras; Sylvia Anjos, the Executive Director of Exploration and Production; Fernando Melgarejo, the Executive Director and Financial Director for Investor Relations; Clarice Coppetti, the Executive Director of Corporate Affairs; Renata Baruzzi, Executive Director of Engineering, Technology and Innovation; Ricardo Wagner, Executive Director of Governance and Compliance; Angélica Laureano, Executive Director of Logistics, Commercialization and Markets; William França, Executive Director of Industrial Processes and Products; and William França, the Executive Director of Energy Transition and Sustainability. To get us started, I'll give the floor to our President, Magda Chambriard, for her initial remarks. Please, you may proceed, Madam President.

Magda Chambriard: Good afternoon, everybody. It's a pleasure to be with you to render accounts and give you the details of our results for the third quarter of Petrobras. You asked Petrobras to talk about our results, and we understand that this event is absolutely fruitful for all of us because it makes it absolutely clear and transparent that we've been generating countless benefits for the company. I'll start by talking about the record-breaking oil and gas production levels. As a reminder, in 2025, we celebrated a production record that was surpassed 3x during this year alone. Therefore, I'd like to take the opportunity that we're gathered here to explain to you how we're managing to increase our production.

We're often approached, and people say, "Well, what a surprise. How did you manage to increase production? And was it higher than expected or lower than expected?" So we believe we must render accounts as to why we were able to increase our production levels. It may sound simple talking about production increase to 3.51 million barrels per day, but behind these numbers that we've been presenting since 2024, there's a lot of hard work, a lot of dedication from a multidisciplinary team, an entire team that's working in integration towards creating these results.

As a reminder, when we came to Petrobras in May 2024, the first results that we presented were the earnings call of the first quarter of 2024. Back then, the production was 2.7 million boed. When we compare through the monthly production records, if you compare the production of boed by Petrobras, and if you compare September 2026 to May 2024, you see that there's been an increase of 37%. In the last two years alone, our production went up by 30%. It is a significantly higher number than what was happening in the previous 10 years.

Just as a reminder, between 2014 and 2024, Petrobras' production grew by 10%. in the last two years alone, the production went up 3x as much as it did during 10 years. The big question we are left with to clarify is, when did that happen? What did you do during this period? I am pleased to tell you that what we did was we strengthened our activities around process management and project management, and around the management of our pre-salt and post-salt beds, and also the production of our refineries, as well as enhancing new sites and expanding to new geographies to sell our products.

As I said, this was a joint work that required the integrated efforts of several departments working in synchronicity. We delivered greater operational efficiency of exploration and production assets. We invested in the maintenance and integrity of our platforms, and we also saw expressive gains in efficiency in our reservoirs of both oil and gas. We did the same thing, as I said, to the refineries, and we also did the same thing with capacity exploration. We also did the same thing with the development of new markets.

We are also managing, like I said, we are doing a better job of managing our reservoirs, historically speaking, and that is something you are informed of because you have been seeing Petrobras' growth for many years. Petrobras was seeing its production drop by around 10% per year due to the production of an inherently non-renewable energy. But during the last two years, we were able to better manage them. What had been happening in terms of a 10% decline through an integrated effort, we were able to break this decline down to the levels of 3% a year. It may sound little if you look at the numbers alone, but that results in a huge production.

That is the reason why over the last two years, we were able to add more than 800 barrels of oil equivalent per day to our production. As I said, in terms of production, the end growth was of around 30% in two years, and this production allowed us to mitigate the decline and to add growth. Another very successful initiative which we are extremely proud of, and we have been discussing that with some of you in forums, whether it is in New York, in Houston, London, or Singapore, we have been telling you about our efforts around expanding installed capacity.

I want to stress, I want to highlight to you that yes, we are increasing the capacity of our existing platforms. Today, we have 11 platforms operating above the original design capacity without the need for any construction work, just streamlining and using project capabilities, which represent a current capacity of 280,000 barrels per day without investment, with no CapEx for the platforms. We have to connect more wells and invest in subsurface equipment. To give you an idea, that is equivalent to 200, to an additional These additional 280,000 barrels of oil are equivalent to two FPSOs of 50,000 barrels of oil per day.

Again, without investing in any of these platforms, and even better, without waiting for at least four years, which is the time it takes us between signing the contract for procuring a platform and fully receiving the platform. In addition to investing, investments related to the acquisition of new platforms, we are also focusing on this initiative. We are moving production forward with expressly, with extremely important value for the company. With that, we are accelerating the ramp-up of these platforms, and we are also moving forward the ramp-up of incoming platforms that arrived over the course of 2026.

One such example is that we sped up the project and ramp-up for P-79, which was the last platform to go into production in Brazil operated by Petrobras. In this platform, we are already producing 100,000 barrels of oil a day with only two wells. As a reminder, the capacity of this platform is 180,000 barrels of oil per day, and it is likely going to produce 200,000, thereby adding to the installed capacity of platforms whose rated capacity is inferior to what we know they can effectively produce. Likewise, P-78 already produces 20,000 barrels per day in excess of its rated capacity.

Again, it is a platform rated for 180,000 barrels of oil a day, and it is already producing 200,000 barrels per day. These numbers we are going over today are not simple numbers disclosed to you with no responsibility. They are the result of very hard work and competent work to take Petrobras' production levels to a milestone that has never been reached before by the company. You can certainly believe me when I say that it is record-breaking numbers in terms of expansion of reservoirs and expansion of the installed capacity of the company. With that, we are changing the trajectory of production growth for Petrobras, and by that, I mean production of oil.

The same thing applies to our refineries. As I said, it is not only E&P that promoted this change in production. The use of our refineries was at 91% in terms of usage level in the second quarter of 2024. In the third quarter of 2026, the utilization factor of refineries reached 99%. Some refineries, I can tell you that most of them actually operated at more than 100%. We actually came to the point of having refineries operating at 101% or 102%. In order for these 99% to happen, it means that we had scheduled downtimes, for instance. We are increasing, we are leveraging the utilization factors of refineries with profitability and security.

The profitability of diesel and aviation fuel and gasoline is almost 70% of our total installed capacity. Not only are we expanding the capacity of our refineries and improving the utilization factor of these refineries, but we are also transforming products of lower added value into products of higher added value. The way we see it is absolutely essential for the profitability of the company and also to guarantee energy security for Brazil during this geopolitical crisis that is unprecedented, that stemmed from the war between U.S. and Iran. More diesel, more gasoline, more aviation fuel at lower prices.

It is extremely important for investors and extremely important for society as a whole, and also important for us as administrators of the company. Our commitment, you can be certain, is to create value for our shareholders. By shareholders, I am referring to both governmental and private shareholders. All of this is important to maintain Petrobras' relevance for Brazil's future. Our exploration and production activities are doing extremely well. Our exploration this year had a big contribution from the drilling of the Morpho well in the Equatorial Margin in ultra-deep waters in the state of Amapá, right next to the French Guiana. In that well, where we drilled for a year, three discoveries occurred.

Three discoveries of oil in three different time frames, which significantly increases the value of our contracted area for concession contracts for the state of Amapá. Those are extremely positive results that will allow us to dive deeper into the assessment of the full potentiality of that region. I can tell you, ladies and gentlemen, that all of our expectations about that area have so far been met. Exploration is a tricky activity. It is an activity that may bring about surprises, therefore, I can tell you that our assessments, so far, all of them were confirmed. Since that is the case, we have huge expectations that they will keep on remaining confirmed in the future.

In addition to that, during ANP auctions, we procured 21 exploration blocks. Some of them are in the production sharing regime for the pre-salt and others in the concession regime to produce in the pre and post-salt. There is a lot of work ahead for the exploration teams, but I would like to draw your attention to the Campos Basin. In the last ANP auction, we acquired a few blocks in ultra-deep waters in the north of Campos Basin, outside of the pre-salt polygon, which, according to our beliefs, will be extremely valuable for the company's future.

We keep on assessing profitable opportunities, both for oil and gas and low carbon, that are able to create value for our portfolio and contribute to a just energy transition. As we used to say, a just energy transition is one that generates value for the company and that is affordable for Brazilian society. That is a big challenge, but we are already facing that challenge with a lot of reassurance and care, also with a lot in investment in research and development. It is also important to highlight that the contracts of three thermal power plants in the Petrobras system were moved forwards to September 2026. There is Termomacaé, Três Lagoas, and Termoceará.

The initial operations of these plants were forecast to occur in August 2027. That was a decision made by the Monitoring Committee of the Electricity Sector of Brazil, with the intention of moving forward the start of operations of these thermal power plants that were hired in the last auction of capacity reserve. By moving these time frames forward, that reinforces our company's capacity to provide electricity to Brazil, and it is absolutely relevant for Brazil's electricity supply. By primary energy, we are talking about fuels and electricity. In this case, we are talking about electricity. Our thermoelectric generation is critical to the country.

The decision to move up the schedule contributes to the system's reliability throughout the nation, particularly in a scenario of higher hydrological risk. I would like to reinstate that Petrobras' strategic role in ensuring Brazil's power safety is unchangeable. It also reaffirms the profitability of our thermoelectric plants for the system. This is an emblematic system in terms of how we think the company, because at the same time, we are being able to ensure adequate profitability for Petrobras while preventing excessive impacts for society, ensuring the power supply at a time when several countries around the world face uncertainties about energy shortages.

I would like to remind you of meetings we have had with you, where many of you came out to mention how important it is for us to remain calm, serene, and predictable as to what actions the company plans to take, and to not be subject to any bumps that geopolitical uncertainty, such as the one we are faced with right now, could bring, as it has in the past. We are now happy to say that the company is absolutely steady and respecting our investors, whether they are on the government side or on the private side, or as part of Brazil society at large.

I have no question that a more expensive power for society is the power society has no access to, power that no one supplies, regardless of the price being charged for it. That is not a concern in Brazil, because Brazil relies on Petrobras, which is something we take pride in. It takes pride in us to supply the country with serenity, predictability, and steadfastness with which we have produced energy.

Even more importantly, and I believe that this concerns your worry, at least in the last few years, about the need and opportunity to do all of this while maintaining a capital discipline and continued cost reduction, which is how we have worked, with capital discipline and continued cost reduction, while also seizing the opportunities of higher prices for our end product, meaning oil. to expand our plant systems capacity. We are facing technical difficulties. We will be back in a few minutes. Thank you for your cooperation. We are back after a short problem with our infrastructure. We are ready to continue, so I will give the floor back to President Magda.

I am going to repeat part of what I was saying, since I am not sure where exactly the broadcast stopped. I just wanted to highlight that 2026 is an extremely significant year for Petrobras in terms of how we see the company, because we have been able to guarantee adequate profitability for the company at the same time that we have been able to avoid excessive impacts on society and to guarantee an electricity supply that drives Brazil at a time when several countries all over the world are facing energy insecurity. Some of you have been mentioning concerns about the continuity of Petrobras.

More often than not, I was asked about how many times you can replace a President with another at Petrobras, also about the internal instability of Brazil. What I have been telling most of you is that we have been managing the company with reassurance, with continuity, in a calm and collected manner. These results stem from this internal pacification that we are experiencing at Petrobras, with departments helping each other and working jointly to deliver the best results that the Petrobras system is able to deliver to its shareholders, again, be they governmental or private shareholders and Brazilian society as a whole.

All this is being done with capital discipline and with a continued cost reduction, a capital discipline that is of the utmost importance for investments to create value for the company and to allow it to maintain its growth capabilities, allowing us to face different pricing scenarios responsibly. This year, you probably remember. We started the year back in February, and the oil price was $59 per barrel. It was a time of extreme tension and attention for Petrobras.

Right after that, it was mitigated by a totally different situation when oil reached $120 per barrel. on that occasion, obviously, we took the opportunity to expand capacities that we would not have expanded as fast if oil was being charged at $59. What we did during this quarter, and I am sure this is the result of your comments, was to guarantee more production in a faster manner for you, making good use of these special times when the oil prices went up significantly.

Once again, we understand our responsibility, and we keep concerned about growing and expanding in a way that allows us to face different scenarios with different pricing levels, and we do so with the utmost responsibility. Debt control is essential, as well as capital discipline. Increasing the production levels and the returns generated by the company is equally essential. I must say that the excellent results produced by Petrobras will translate increasingly into benefits for shareholders and for society in general. We will keep on delivering the electricity that Brazil needs, generating dividends to those that believe in our company, in job positions, and in wealth for our society.

Now I will give the floor to our Director, Fernando Melgarejo, who will go over the details of our results for the third quarter of 2026.

Fernando Melgarejo: Thank you very much for your presence, and please count on us for any questions you may want to ask about the performance of Petrobras. Thank you. Thank you, Madam President. Thank you. Thanks, everybody. Thank you for your presence, and thank you for your viewership. We will go over the performance for the third quarter of 2026. We had another quarter of operational records, boosting the company's cash generation and supporting excellent financial results. Let us begin with our oil and gas production. We ended the quarter producing more than 2.8 million barrels of oil per day, 2,823, whereas in September, we reached a monthly record of 2.9 million barrels per day.

The chart shows this series of successive records. Over 12 months, we added more than 300,000 barrels per day to our production, a 12% increase compared to the third quarter of last year. Since the beginning of 2025, that amounts to an additional 600,000 barrels per day, as President Magda already told us. That is an extraordinary feat, which is the result of a very strong management effort by our teams. To paraphrase the President, it is a demonstration of the strength of our operational management in the company that we have been adopting ever since we arrived. I want to highlight a few examples of our management and what we have been doing to increase production.

We achieved our best operational efficiency rate since 2018. Eleven platforms operated above their nominal production capacity this year. The best example is Almirante Tamandaré, the highest-producing platform in Brazil. The unit was designed for 225,000 barrels per day, but reached a peak of 270,000 barrels per day. in July, Almirante Tamandaré averaged more than 260,000 barrels per day on average during that month. We also sped up the ramp-up of platforms, and we have many ongoing initiatives to safely capture increasing value from our assets. The initiative to expand platform capacity without additional CapEx has been a major success for our management.

If we had adopted an equivalent CapEx, we would be talking of around $10 billion-$12 billion additional with new production systems, which was achieved without this additional CapEx, and it was done by simply increasing the nominal capacity. That is why we brought this overview of what we have already accomplished and what we plan to do next. Eleven platforms are now able to operate above their original capacity. This represents approximately 280,000 barrels per day of additional capacity already approved. Based on figures through October this year, the average production gain from these platforms was approximately 90,000 barrels per day, and we are working to increase those gains even further.

I should highlight P-78 on the slide, which has just reached full capacity and has already produced above its 180,000 barrel per day capacity. Over the medium-term, we have identified another six platforms where we expect to increase capacity, with a goal to achieve more than 260,000 barrels in excess of the nominal capacity. In other words, when we consider the total capacity across all these expansion projects, we will have more than 500,000 barrels per day of additional capacity without new investments. We are talking about 15% of our total production right now.

The significant growth in production naturally led us to revise our 2026 production guidance, mainly due to efficiency gains, better reservoir management, lower losses from shutdowns, increases in the platform's nominal capacity, as we just said, and the earlier first oil from P-79 in Búzios. To put this in perspective, our initial guidance was for average annual production of 2.5 million barrels per day. Through September, we have averaged 2.7 million, and our new forecast is to end 2026 with an average oil production between 2.7 million and 2.8 million barrels per day. In the fourth quarter, we will still have some scheduled downtimes for maintenance, and we will also discount the WI in Búzios.

Petrobras reached the cost recovery ceiling for the field, and under the contractual arrangements, starting in the fourth quarter of 2026, we will start to share with the federal government approximately 85,000 barrels per day. Búzios produces more than 1 million barrels per day and is the largest deepwater field in the world. Balancing these production gains and reductions, we estimate an average oil production between 2.7 million and 2.8 million barrels per day for 2026, a substantial increase over our previous projections. We are talking about 200,000 additional barrels per day. Now, we will talk about CapEx, always focusing on production and efficiency.

Over the first nine months, we invested $16.8 billion, where $6.4 billion were invested in the third quarter. More than 80% of our CapEx is concentrated in E&P projects, or 84% to be more precise, as you can see in the graph. Our strategy has been to bring these projects forward whenever possible, because doing so also brings forward cash flow for the company. By bringing forward oil, we immediately increase our cash flow. With this in mind, we are focusing on platform construction, especially the new Búzios units, P-80, P-82, and P-83, which are more than 90% physically complete.

I would also like to highlight the Sépia and Atapu platforms, which more than doubled their physical progress in one year. Those five platforms are huge units with 225 barrels of capacity per day. We also continue to maintain a high level of drilling and well tie-in activity. I would like to highlight the 21 additional wells, an initiative we have stepped up to increase recovery from our reservoirs while making more efficient use of the installed capacity of the units that are already operating. In the near-term, we have important milestones scheduled for 2027. P-80 and P-82 are already on their way to Brazil.

P-80 is expected to begin operations in the first quarter of 2027, and P-82 in the second quarter. P-83 is being completed and should arrive in Brazil early next year. We expect the first oil to occur in the second half of 2027, with the possibility of being brought forward. The series of platforms, P-80, 82, 83, 84, and 85, has the highest production capacity among Petrobras-owned platforms. These units incorporate lessons learned from previous construction projects, as well as technologies and digital solutions that ensure greater operational and energy efficiency. It is a new generation of giant platforms. During the period, we will also see the ramp-up of new units.

P-78 reached full capacity at the end of October, and P-79 is producing close to 100 barrels per day, with only two production wells tied in. I would like to emphasize the quality of our portfolio. Búzios, Sépia, and Atapu are the platforms that we sped up. Maintenance increases the efficiency of production in pre-salt, and asset management with technology contribute to a decline of around 3%. So, I have no doubts that investments are completely lucrative. Now, we are going to talk about CapEx. When it comes to CapEx, we must highlight two facts.

We are becoming more and more efficient in executing investments, and in 2026, we are seeing a Brent price environment that is different from the one that we planned for. Our 2026-2030 business planning assumed Brent prices of around $60 in 2026, and market forecasters had a similar view of oil prices. All of the forecasters analyzed by Petrobras indicated that amount, and we used in our strategic planning the level of $63. We prepared for a Brent of $60, and our business plan factored in a degree of project execution risk that was appropriate for such a challenging price environment when we designed the plans for 2026-2030.

As we all know, reality turned out to be different from what the forecasters had expected. in February, the world was taken by surprise by the conflict in the Middle East, which has caused sharp fluctuations in Brent and refined product prices. Against this international geopolitical backdrop, Brent prices and diesel crack spreads rose to much higher levels. The resulting increase in cash generation enabled us to step up investment execution because we went from an expected Brent of $63 to something of around $90-$100 on average per year. We did that by accelerating projects and improving the company's operational efficiency through investments in maintenance and asset integrity.

If we look backwards to when we designed our strategic plan, back then, we set three levels: the basic investment level, high investment level, and assessment level. The target level is something new that we added to our plan to try to mitigate risks with flexibility, and that's what we did. We are carrying out more complementary projects, accelerating ramp-ups, and mitigating production decline through well tie-ins. These investments contribute to higher production, as you could see, around 200,000-300,000 additional barrels per day. In short, the risk is built into our plan's CapEx, and it not materialized, partly because market conditions were more favorable than expected, but also because we're continually improving our processes.

The result is more investment execution and more production. I must emphasize, our project costs are fully in line with our plans. This environment led us to revise our 2026 investment projections, as you can see on the next slide. Yesterday, we released a material fact announcement with updated operational and financial guidance for 2026. In addition to production, we updated our estimates for CapEx, cash CapEx, operating cash flow, lease cash flows, and manageable operating expenses, or GOG. We've highlighted some of these figures on this slide. We expect to end 2026 with CapEx of between $21 billion and $22 billion, as compared to $16 billion and $17.4 billion before.

This new level of investments primarily reflect foreign exchange effects and greater progress on construction of our own FPSOs for the Búzios, Atapu, and Sépia fields. We've executed more than originally planned. I must also highlight that the field had an impact of more than $1 billion in this increase, since we'd initially assumed that it was a field of 180, but there was a significant appreciation of the field. This revision also reflects greater availability of drilling rigs in Búzios and an increase in the number of well tie-ins. We must accelerate the drilling of wells in Búzios, and that's what we did according to our recent performance. We did it.

These are the results to be celebrated because they'll generate effects on the platforms that will go into operation in the upcoming months. These are resources that are contributing to the growth of production. The updated cash CapEx guidance also takes into account the payment of signature bonuses from the ANP auctions held in October, with payment expected in December. In addition, the fourth quarter typically sees a greater concentration of payment milestones for platforms and downstream contracts, as well as material deliveries in general. On the right-hand side, as you can see, we show our new guidance for manageable operating expenses, which is now between $24.2 billion, and before, we had $20.2 billion.

Even with this revision, we forecast a 2% reduction relative to the actual figure for 2025. That is to say that we have more gains with more production and fewer expenses. What I want to emphasize is that the company's production growth is delivering economies of scale. Our unit manageable operating expenses are declining in 2026. In absolute terms, the GOG is higher because of FX effects, increased oil and gas production, and higher logistic costs. Freight rates have been exceptionally high in 2026, as we can all see, as an effect of the geopolitical conflicts underway. Before going to the next slide, I'd like to draw your attention to some important facts.

We have a very attractive portfolio which we're investing in. Our projects are the world's most profitable. Deepwater projects. Maintenance generates efficiency. 10% more efficiency represents thousands of barrels per day. Likewise, a 7% decline in production of 3 million barrels is more than 200,000 barrels per day. The results of these investments are not only a promise for the future, rather, they are a result in the present, and this has already happened when we deliver an additional 200,000 to 300,000 additional barrels for this year in our guidance. The next slide shows our operating cash flow guidance for 2026, which has also been updated, increasing from $35 billion to a range of $45 billion to $50 billion.

That represents up to $15 billion in additional cash generation in 2026 alone after manageable operating expenses. This reflects growth in oil and refined product output, as well as a new level of Brent prices. Now, let's talk about refining. We've been able to increase diesel production to 769,000 barrels per day, record-breaking numbers without building new refineries. This is a major achievement by our refining teams, which have been operating our refineries at high utilization rates with operational efficiency and optimized logistics, working with an FUT of 99%. In the third quarter, we had an important downtime at our RPBC, but even so, we achieved a record diesel production, 769,000, as I said, barrels per day.

Domestic sales of refined products reached 1.85 million barrels per day, the highest volume since the third quarter of 2021, and the best result given our current refining capacity. The positive performance also extends to international markets, where we recorded oil and refined product exports of 1.25 million barrels per day, a record high. To give you an idea, we had 987,000 barrels per day of oil, 189,000 of fuel oil in 1996, among other products, including coke. The operational records we presented so far were reflected in our financial results. We generated $12 billion in operating cash flow in the third quarter, an increase of more than 20% compared with the same period of last year.

Compared with the second quarter, there was a slight decline of 2% as Brent prices were 7% lower. Operating cash flow was adversely affected by changes in working capital, mainly due to outstanding receivables under the fuel subsidy program and inventories related to exports in progress. However, I must remind you that last September was the month with the highest Brent and that the prices of our exports are out of sync, which happened in March and which was reversed in the following quarter, and that will happen probably between the third and fourth quarters. You can see that these are temporary impacts.

It is not a structural issue, and therefore, the level of conversion and cash flow tend to go back to historical levels. Our adjusted EBITDA, excluding one-off events, reached BRL 18.4 billion for the quarter, more than 50% higher year-on-year and slightly below the second quarter due to lower Brent prices, as I said, 7%. Net income, excluding one-off events, was BRL 9.3 billion, an increase of almost 80% compared with the third quarter of 2025 and 16% below the second quarter of 2026, brought down by the Brent prices. In the next slide, I am going to talk about debts.

We reduced gross debt to $70 billion at the end of September and net debt to $57.8 billion, which is an important highlight. Our debt was around $60.4, our net debt in the second quarter, and we were able to bring it down by $13 billion. In the 2026-2030 business plan, we estimate a gross debt of $65 billion. If we deduct the $6 billion from our minimum cash balance, that would imply a net debt of $59 billion, which is lower than $59 billion. It is in the range of $57.8, a condition that we were only expecting to reach in 2027.

During the quarter, we carried out an early redemption of notes maturing in 2028 with a principal amount of approximately $1 billion. In terms of the terms of our debt, we reduced its duration from 11.9-11.8 years, and that, along with the reduction in the interest rates of this debt from 6.8 to 6.7, it is a very efficient debt that the company has. In the next slide, I will conclude my presentation with this slide on taxes. It shows that when Petrobras grows, society benefits as well. A stronger Petrobras equates to a stronger Brazil. We achieved record production levels this year, and we also paid record amounts in taxes.

It was BRL 251 billion in taxes in nine months, an increase of BRL 50 billion compared with the same period last year. We are creating more value for our shareholders and for the entire Brazilian society. We will now start the Q&A session, and I will give the floor to Eduardo.

Eduardo de Nardi Ros: Thank you, Fernando. Let us move on to our Q&A session. I would like to ask that every participant asks only one question so that we can have time for everyone to participate during the event. Our first question comes from Gabriel Barra with Citigroup. Gabriel, please feel free to open your mic.

Gabriel Barra: Can you hear us? Hi. Thank you so much for taking my questions. Hi, President Magda, Fernando, and other directors. I will stick to one question as requested, and I believe mine is a very simple question. The President mentioned this. We have seen a significantly more challenging geopolitical environment in the last few years, which has had several impacts, and as a consequence, the oil price, fuel prices in general have been impacted. Now, if you were looking at the current timeframe and thinking of politics, understanding that the company will remain adherent to its policy throughout the fiscal year, I'd like you to tell me how would you assess Petrobras' price policy, especially thinking of diesel and gasoline.

I wonder if you believe any sort of adjustment to prices would be required throughout the rest of the year, and especially in early 2026, considering that recent times have been quite troubling. I just wonder if there could be any carryover to next year, a potential waiver, or any increase in fuel prices if you decide not to adhere to today's current accounting policy.

Eduardo de Nardi Ros: Thank you so much for your question. I will turn it over to Director Angélica Laureano to address it. Good afternoon, Gabriel. It's a pleasure to speak to you.

Angélica Laureano: Well, first of all, I'd like to remind all of you how our policy has been conceived. It was conceived so as to enable Petrobras to work and operate in any market conditions while reconciling aspects such as competitiveness, value generation, and production, not passing through to the rest of the market any volatility that there might be in the market. I'd also like to remind you that over the last 10 days, we saw a $25 variation in oil prices. If that type of volatility were to be transferred to the market, that would generate great uncertainty.

Petrobras, according to its policy, and I'd like to restate that its commercial strategy remains in place, and it is steady, and we'll continue to work in that sense. What we're discussing is how to operate in quite a troubling geopolitical environment such as the one we're faced with. But at this time, we do not think of any structural change to our policy.

Eduardo de Nardi Ros: Thank you, Angélica. Once again, thank you, Gabriel, for your question. Let's move on to the next question that's coming from Regis Cardoso with XP. Regis, can you hear us?

Regis Cardoso: Good afternoon, Eduardo and all Petrobras directors. Thank you so much for taking my question. I'll also stick to this one-question policy. Still on the issue of price, I know we'll be discussing investments as well, which is another topic of interest. But with regards to the price policy, could you please remind me how you will be measuring your adherence to your policy? I ask that because to us, the average for the fiscal year seems to be consistent with your policy, especially if you consider the diesel export price parity. But that's not the case for gasoline. It seems far from the VM bands.

I don't know if I'm being too technical about the specifics of the policy, but if you could maybe detail it a little bit more. I don't know if this is a year where there's a force majeure in place, or if we should think of it in any other way. Thank you. Again, this is Angélica, Regis. As a reminder, our policy is or consists of the CAC, which is the client alternative cost, and VM, which is our best alternative cost, Petrobras' alternative cost. It is within those ranges that we've been working with our policy.

Angélica Laureano: Evidently, we are not making specific assessments, but rather within a larger context. I think it is important to highlight that ours is a very consistent strategy, and it is not determined by today's snapshot, but rather by the context at large. As I said in my previous answer, we are currently in internal discussions to understand whether there is a need for any change, any non-structural, but rather situational change to that policy, considering our current scenario.

Eduardo de Nardi Ros: Thank you, Angélica, and thank you, Regis, for your question. Let's move on to our next question that comes from Bruno Amorim with Goldman Sachs. Bruno, do you hear us?

Bruno Amorim: Good afternoon. Hi, good afternoon. I can hear you well. Thank you for taking my question. Congratulations to the company in general for the solid operational results. I have a question about your investment plan for the next few years. The company has been able to deliver a higher CapEx than it had planned for initially this year. I just wanted to understand for next year if there is any room for flexibility or for investments planned for future years could be moved forward to 2027, or maybe projects in your portfolio could be moved forward, seeing as you have capacity to deliver.

I just wanted to understand whether that investment that we saw this year entails a lower CapEx next year. Thank you.

Eduardo de Nardi Ros: Thank you, Bruno. Again, I will move that to Director Renata.

Renata Baruzzi: Hi, Bruno. Good afternoon. Our CapEx deployment this year led us to this. When we assess things for our plan, we run a risk analysis to check how confident we are in our CapEx deployment. What happened was our risk analysis was based on past events, and in fact, we have been able to deploy as planned. We have been able to mitigate execution risks and deliver a larger volume of oil, as you saw, whether you look at it via interconnection or by well. Part, or the most part of that CapEx surplus took place within the E&P. Within that, most of that came from the platforms, most of which are performing at an outstanding level.

P-84, just to give you an idea, has had most of its structure completed. P-83 will start navigating next year, and we are gearing up for the delivery of this platform. We are preparing for the lines, for perforation, because the Búzios field is really clogged up because of the number of platforms, and all of which are several boats offering supply and removing material that is not necessary. To mitigate the risk of simultaneous operations, we are moving a lot of those activities forward for this year. Next year, we plan to keep up the same pace. We are already doing that with regards to several projects, many of which had already been secured.

As was said earlier, we are always looking to move forward on our timetables for our projects. I will give you a few examples. This year, we had planned to conclude 44 wells, and to this day, we have already concluded 19. That entails higher production. When we talk about increasing the capacity of our platforms, we need a higher number of wells to connect to those platforms, and that is where our output is coming from. It is about having a more effective CapEx that will lead to earlier production. That's what we see for next year and for our investments with regards to what's already in our plans.

What we've been doing with our supply department is to stay resilient or to keep our suppliers resilient, many of which are in Brazil and have increased their production capacity to serve us. As you all know, data centers are a huge competitor of the oil industry because of the gas turbines. That's a bottleneck that we're facing. With regards to that, we've already increased our vendor base to deal with that. With a number of steps, with all departments in tandem, we've been able to keep our CapEx and our projects within budget.

Fernando Melgarejo: I just wanted to add something here, Bruno. Our strategic plan for 2031 will be delivered on November 23rd, and that should give you an updated overview of all the investments we plan to have in our next cycle. I'd also like to add that this CapEx increase was planned in a well-managed way, part and parcel of our cash generation, at which pace we increased our investments and understood that would bring more benefits, which is why we're predicting an increase of about 103,000 additional barrels per day in 2026.

Magda Chambriard: Thank you. I just wanted to add two things to what Renata and Fernando mentioned, which I think should be stressed. First of all, as you all have seen, we've been working in expanding the capacity of our installed facilities, and I mean specifically our platforms, which is where most of our cost comes from. We have one asset that delivers significantly, which is our pre-salt prospecting. Platforms ultimately limit the capacity for oil delivery from these deep oil wells. What we're doing is to deliver results, and you're seeing the results that come from that increase in production.

I had already mentioned a decline of about 10%, seeing as we work with a non-renewable source of energy, so there's a decline to the tune of 10%. We've improved the management of our deposits with higher water injection and more systematic monitoring, and that decline has now turned into a 3% decline. What do I do with that? We need to produce or to bring outcome to make up for that. We need more oil from our deposits. That's how we approach the expansion of our installed capacity. So in 11 platforms, but as I've mentioned earlier, there are also 182,000 barrels a day. There's something that we do in the near-term, which is to interconnect our wells.

If you monitor Petrobras' outlays in subsea installment, as Renata mentioned, we plan to interconnect 44 wells throughout the entire year, and by the end of Q3, we had connected 49, meaning we have another quarter to interconnect a number of other wells. Obviously, we're talking about investments that had not been accounted for in our business plan, but it's still a short-term investment, which we call non-recurring investment. On top of that, there's another issue. Whenever we talk about increasing capacity, we're saying we've added, with no extra CapEx, 282,000 barrels to our capacity per day. That's about 250,000 platforms.

If you think that each one of these could cost from $3 billion-$5 billion, we are talking about a non-investment to the tune of $7 billion. We are saying even more than that. We are saying that when we increase capacity as quickly as we have had with the existing platforms, we no longer need to hire new units, so we also save CapEx there. There is also an absolutely priceless value, which is the time for a new platform. When we sign a contract for a new platform, whether that is our own platform or a chartered one, we could count at least four years until it is delivered.

Think about what four years of anticipating 280,000 barrels a day. Those of you who are analysts can run the numbers, but anticipating that amount of production has an absolutely unquestionable value anywhere in the world for any oil company in the world. Even more than that gives you a comparison basis against all P-80 platforms, and I mean by that P-82, P-83, P-84, and P-85, each of which predict an increase in production to the same tune of what we see with Almirante Tamandaré. That, as you may remember, was the first of 225,000 barrels a day capacity. Capacity for 225,000 barrels a day that has been exceeded substantially.

That platform is now licensed to operate with 270,000 barrels a day, so 45,000 barrels a day more than expected. This June, I kindly invite you to check out my LinkedIn post, as well as the Petrobras website, where we reported that it produced 262,000 barrels a day. When we add these 282,000 with the production of these five new platforms that are coming into production, we are talking about an increase in capacity of about 500,000 barrels a day in total, meaning a CapEx savings to the tune of between $10 billion and $12 billion. Again, as I said, at least four years earlier than expected. So it is absolutely invaluable that which we have achieved.

Definitely, when you purchase a platform, you will have to account for its expenses throughout its lifetime. This CapEx effect is absolutely specific, which, when you think about the company's management, makes all the difference. Over and above that, when we came to this company's management, we had construction work that was delayed beyond their expected timetable. By early 2024, Petrobras' actual investment was to the tune of 70% and not 100%.

Now, we are performing 100% of what had been planned, and even more than that, when we look at P-84 and P-85, we expect a potential early delivery of about eight months in advance, and for P-85, of over one year, another record, another feat that had never before been seen in this company. All this which you are seeing is what has led to the balance that we are delivering today, and we are deeply proud of presenting it today.

Eduardo de Nardi Ros: Thank you, Madam President, Fernando, Renata. Thank you, Bruno, for your question. Let us now move on to Bruno Montanari's question. He is with Morgan Stanley. Bruno, can you hear us?

Bruno Montanari: Good afternoon, and thank you for taking my question. Also, congratulations on your execution, your effort, and your strategy to expand production capacity, which derives great value. Now, I would like to go back to fuel prices in a more objective way. On average for the year, can you confirm whether the company is meeting the established price range? If you are falling outside of that range, what would be the process within the board to ultimately propose an extension to be able to move the price back to that established range? Thank you.

Eduardo de Nardi Ros: Thank you, Bruno. I will move over to Angélica.

Angélica Laureano: Hi, Bruno. This is Angélica again. Today, it cannot be stated that we are falling short of our price policy. After all, the year has not ended yet, and we continue to pursue the same price policy. That policy is monitored by the DLCM management on a day-by-day basis, and by Petrobras' board on a weekly basis, and by Petrobras' management board on a quarterly basis. They are all aware of what is going on. As I said before, given the geopolitical scenario and given that this war is not coming to an end in the near-term, we are analyzing how we can live with that issue, but this is still under discussion.

There is no forecast of a structural change to our current price policy.

Eduardo de Nardi Ros: Thank you, Angélica, and thank you, Bruno, for your question. Our next question comes from Lilyanna Yang with HSBC. Lilyanna, do you hear us?

Lilyanna Yang: I hear you. Thank you. Thank you for the opportunity, and congratulations on your results and for being so proactive in actually discussing with your vendors and moving your production curve forward. I have a slightly different question. I wanted to ask about the verticalization downstream in your petrochemical productions. As an excellent oil and gas producer, how important is it to you for Petrobras to have verticalized integration in your petrochemical business in Mexico and outside of Latin America? Along the same lines, who do you believe is a significant player in the petrochemical market around the world, given the immense supply of product coming from Asia?

What type of guarantees would you like to have from Braskem to feel comfortable putting your money in the company? Thank you.

Eduardo de Nardi Ros: Thank you, Lilyanna. I will turn it over to William.

William França da Silva: Thank you, Lilyanna, for your question. The board thanks you for your question. Yes, the company's direction, represented by this board, and reinforcing President Magda's suggestion, I would recommend that you watch Madam President's interview with Renato Lo Prete yesterday. It was fantastic, especially with regards to our self-sufficient production of diesel. I would say it was really something to be seen. She says that we are interested in integrating not only refining with our eye to self-sufficient, but also seeking synergies in refining with petrochemical and fertilizer industry. I think that is very interesting to us when it comes to energy transition. It truly is the company's strategy, and by 2030, we plan to obtain self-sufficiency in diesel.

We have projects along those lines in six of our 10 brownfield refineries, which by 2030 will add another 13,000 barrels a day for diesel, where unfortunately the curve goes from zero to 30 by 2030. By next year, we will add 100,000 barrels for diesel, which accounts for the same as Revap, which distills 240,000 barrels a day. We are putting on the market another refinery by next year. With regards to Braskem, the answer is yes. Not only Braskem, but we are also looking into other alternatives because we have a lot of ethane in the Rota 3 of our UPGNs in Boaventura, our natural gas plants.

We are also looking into solutions for Boaventura, with regards to its petrochemical operations, and you already know at the acetic acid plant, which we import, and also monoethylene glycol, which is a raw material. We will be in Braskem. We, as of June, have increased our stake with the Shine Fund, represented by IG4, and we are interested in closing an RE with Braskem. We are working towards that. We have until the 22nd to close ranks on that issue. Braskem, as President Magda Chambriard has always said, this is the sixth-largest petrochemical company in the world. It is the largest polypropylene producer in the world. It is a major player in the resin global marketplace.

Yes, the board is within the strategic plan effort to increase Petrobras' synergies with Braskem when it comes to refinery. That is actually a trend worldwide in refining to integrate with its petrochemical operations, and Petrobras is following that trend, considering the possibility and its interest in valuing Braskem.

Eduardo de Nardi Ros: Thank you, William, and thank you, Lilyanna, for your question. Our next question comes from Monique Natal with Itaú BBA. Monique, do you hear us?

Monique Greco Natal: I do hear you, Eduardo. Thank you so much, everyone, and thank you for the opportunity to ask a question. I would like to ask about your leasing guidance for this year, which has also been reviewed, in addition to your CapEx guidance. Considering this new leasing guidance for the year and your deployment so far until Q3, there is an implicit deployment for Q4 that is much higher than average, and including higher than what we saw in Q3. I just wanted to understand a little bit better what the drivers were. Why was the guidance revised so intensely, and what could make those leasing figures to go up so significantly on a quarter-to-quarter basis?

Eduardo de Nardi Ros: Thank you so much for your question, Monique. We will hand it over to Fernando, who will take your question.

Fernando Melgarejo: Thank you for your question, Monique. We did see some leasing additions during this time, a result of the increased investment that we have made. We expect to see adjustments in our next strategic plan, but this is very much a result of our investments. We saw an increase in our drills. We have also negotiated some leasing contracts where maturity was extended. At present value, the cost is lower, but there could be potential increase.

Eduardo de Nardi Ros: Thank you, Fernando, and thank you, Monique, for your question. Our next question comes from Milene Carvalho with JPMorgan. Milene?

Milene Carvalho: Hello, everyone. Good afternoon. Thank you for taking my question. I wanted to go back to your revised production guidance. You explained that the risk mitigation you were able to secure in 2026 was highly productive, so much so you were able to move forward some factors to later this year. Now, when we look at 2027, and I will not mention the curve for the entire year, but specifically for the rest of the year. There are three systems that you plan to add.

Sylvia Anjos: So if possible, I'd like you to discuss how the decline in the Búzios field has performed versus what you initially expected, and how these new systems combined with this decline rate could bring in terms of potential for next year. Thank you.

Eduardo de Nardi Ros: Thank you, Milene. I will be turning over to our director, Sylvia, to take your question.

Sylvia Anjos: Thank you, Milene. Just to clarify, with regards to the decline, we only count it as decline when we reach the top. So Búzios is a field that's still going up, so there's no decline yet. Its production is still growing. Now, for 2027, obviously, the details of our plan will be fully available by next week, by the 24th. I just wanted to highlight that, as we heard earlier, the role of our increased productivity and operational efficiency are better reservoir management and water injection. We recorded an unprecedented water injection with over 2 million m³, which is a record-breaking number, and also increased capacity, all of which contribute to that.

So the use of intelligent alternated use of water and gas, intelligent computing when it comes to seismic analysis, all of that allowed us to optimize our operation. On the 24th, you will hear more details about our 27/31 plan. Thank you, Sylvia, and thank you for your question, Milene. Our next question comes from Tasso Vasconcellos with UBS. Tasso, feel free to go ahead.

Tasso Vasconcellos: Thank you, Eduardo, Magda, Fernando, and all directors who are joining us. I'd like to go back to your price policy issue and perhaps highlight a different perspective of the discussion. Within the possibility of what you can share, the company's current cracking level with regards to the current prices and also the subsidies, what would be the timing for your decision in this sense, and could we maybe think of an update strategy?

I wanted to understand where the company would be more comfortable with those prices or maybe make a decision about them, considering that we're approaching the end of the year, and every day that passes, any need of a price increase would have a more limited on the average for the year, which would maybe reinforce the decision for an alternative path. Thank you.

Eduardo de Nardi Ros: Thank you for your question, Tasso. Again, I will turn it over to Director Angélica.

Angélica Laureano: Hi, Tasso. We do not have a break-even Brent price for our policy. Our policy presupposes that we should be constantly seeking the VM level moving toward our CAC. That is our policy. Remembering once again that VM is our marginal value, which accounts for production, imports, and our best market condition, and CAC, which is the alternative client cost. What we seek is to stay within that range between the CAC and the VM. That is essentially our policy. So there's no such thing as a break-even Brent price for us.

What we seek is to constantly reach the CAC, which is the client alternative cost, which, as I said a few times here, the landscape is very complex this year, which is why we are looking into perhaps a situational alternative to better address these market shifts that we are facing this year.

Eduardo de Nardi Ros: Thank you, Angélica, and thank you for your question, Tasso. Our next question comes from Leonardo Marcondes with Bank of America. Leo, go ahead.

Leonardo Marcondes: Good morning, everyone. Good morning, dear Directors. Thank you for taking my question. With regards to this year's CapEx and yesterday's announcement, I wonder if you could maybe quantify and add a little bit more color to your cash increase for 2021 or 2022 years this year. You mentioned a significant foreign exchange impact and a better execution performance. So if you could maybe add some color as to the real exchange impact and how much of the CapEx because of your operations in Búzios, TEP, or in CPR, and also the impact of nationalization in Búzios 9 and 10.

Fernando Melgarejo: Thank you. Let me start with the foreign exchange impact, which is by over $1 billion to normalize our overall CapEx. Renata has the details, and she'll be adding to my answer.

Renata Baruzzi: As I'd mentioned earlier, 40% of our CapEx increase derived from the better performance and construction of new platforms. As you saw, we were able to move forward P-79 by three months. With P-79 in operation, P-80 and P-82, which are already poised to go into operation, and also with P-85, we've doubled the physical progress versus last year. So these are projects that are very much ahead of schedule, and as our President has mentioned earlier, we are working intensely on making progress on these platforms. As for nationalization, we've had about $600 million in nationalizing them. In addition to that, we've had an increased number of underwater interconnections with about $500 million being invested in that.

We've also moved forward the completion of our interconnections in Búzios 8. Every Búzios 8 well are already interconnected, which makes us a lot more confident in our production. We're also moving forward the third and fourth producers in Búzios with P-79. So we're also seeking to move forward the P-79 production for next year. We're working diligently to have that production come earlier as well. As I mentioned earlier, there were also increased investments in wells. The wells we had planned for completion for the year at large, we completed in September.

Now, after September, we are working on other wells, as I said, most significantly in Búzios, to reduce the risk of our operations and also to move forward first oil coming from both P-18 and P-82.

Eduardo de Nardi Ros: Thank you so much. Our next question from Jorge Gabrich from Scotiabank. Do you hear us, Jorge? I do, yes. Good afternoon. Thank you for taking my question.

Jorge Gabrich: In fact, I just wanted to shift gears a little bit and think more of the prospecting part of things with the latest results. If you could maybe compare how you expect the progress in the Equatorial Margin prospecting versus what we had during the pre-salt area. I assume we might see other wells come up after delimitation, and I just wanted to understand how that would change your CapEx versus what you have on the plan. I also would like to understand how do you see that versus what you had on the pre-salt program? Thank you.

Eduardo de Nardi Ros: Thank you for your question, Jorge. I'll turn it over to our Director, Sylvia.

Sylvia Anjos: Hi, Jorge. Yeah, that's right. With the Equatorial Margin, Submarine Amapá, and also deep waters results, just to compare with other wells, it took us nine wells to discover the entire basin of Campos, a few wells for the Santos Basin, and fortunately, in well number one, we found not only one, but three different deposits with a huge potential. These three wells allow us to perform a very optimistic assessment of those three blocks that we have in the area. In terms of action, we are now concluding the Morpho well with these results. Samples are being assessed.

All of that based on these results on the fluid and the rock will allow us to recalibrate our predictions and models so that we can choose the best of these three wells for which we already have a license to drill. We have licenses to drill three more wells, and we see great potential with these three wells. Outside of that, we have six blocks where we have a 100% stake, and our obligation as a minimum prospecting program, we have to drill at least seven new wells. Other five are already expected within those, but we do not have the environmental license for them.

Our prospecting efforts will now be focused on the Morpho well, where we've already mapped out three different wells. We already have the license to operate on them, and that will be our next activity. Following that, we'll have the NS-43 drill that will be coming up to that area. Before that, the drill that's operating in Rio Grande will be drilling Mãe de Ouro. In that area, we might see a new front of positive discoveries opening up. We're very confident about that.

In summary, we had 15 wells predicted in our plan, and I believe there's much that we can do over the next five years with these 15 wells, and we are fully on schedule in that sense. That new front should open up in the state of Amapá, potentially, and also in Rio Grande do Norte.

Eduardo de Nardi Ros: Thank you, Sylvia, and thank you, Jorge, for your question. Our next question is coming from Vicente Falanga with Bradesco BBI. Vicente, please move ahead.

Vicente Falanga: Thank you, President Magda and Fernando, and the entire Petrobras team. If you'll allow me, I'd like to take the opportunity to use this forum to go back to your price policy again, because I think the market, Ecopetrol, a state-run oil company from Colombia, they have the numbers which are published to the market every quarter, and this is widely accepted, and it generates an accommodation for risks, so to speak, that's very interesting. That was my question.

Eduardo de Nardi Ros: Thank you so much for your question, Vicente. I will turn it over to Director Angélica Laureano again, who will be answering your question.

Angélica Laureano: Vicente was his name, right?

Eduardo de Nardi Ros: Yes, correct.

Angélica Laureano: Hi, Vicente. Well, right now, we do not consider having a separate account to accommodate the issue. We should remember that, as I said time and time again, our policy attempts not to pass on any volatility to the market. I think we failed to mention that the subsidies we've received from the federal government have also helped to accommodate those prices for the market in general. What we're now looking into is, we believe that by the end of this fiscal year, we will be able to meet our policy, at least, when it comes to diesel.

There are still questions about gasoline prices, but those questions come from the fact that there's no confirmation of whether the policy will account for the year through December 2026. We might extend the deadline to be able to meet the policy-established limits, and we're looking into that.

Magda Chambriard: I just wanted to add to Angélica's answer by remembering that last year, Petrobras sought to pursue the established CAC essentially every day, and this was something that the market saw in a positive light. Say Brent prices went up today, tomorrow I'll be taking gasoline prices up and diesel prices up, and if two days later prices go down, we do nothing, and in the minute, prices go up again, and we try to keep up again. Obviously, we can balance things out by saying this. The result of this analysis was Petrobras lost money and lost market share.

Market share is something that once we lose, we cannot get it back, because we allow the competition to build a logistic structure which becomes unequivocal in terms of their competition with us. Right now, when we look ahead and see all this fluctuation and volatility, we are very conscious of the lesson that we've learned in the past. That's the first thing we're looking at, and that's perhaps why we're so cautious when it comes to this topic. Another issue involving gasoline, you see that with diesel, the issue is a lot more subdued. In the case of gasoline, there's another competitor, which is ethanol. Ethanol falls within the realm of fuels of the future.

Ethanol already accounts for 32% of our gasoline mix, so it's eaten up much of the gasoline market, and the rate of 35% of ethanol in the gasoline mix is already being talked about. All of that has to be assessed in light of Petrobras' market, because when we talk about diesel, well, we do not work only on diesel. When we need to work on diesel, we also work in gasoline and also on QAV and so on and so forth. All of that is part of Petrobras' strategy. While it may look like a simple arithmetic equation, it really isn't, because ultimately what we want is not just to sell gasoline or sell diesel.

What we want is to improve the Petrobras system's revenues.

Eduardo de Nardi Ros: Thank you, Madam President, and thank you, Angélica, for your question. Thank you, Vicente, for your question. Now let's move on to our last question. It comes from Rodrigo Almeida with BTG Pactual. Rodrigo, please go ahead.

Rodrigo Almeida: Thank you, Eduardo, and good afternoon, everyone. I wanted to very quickly go back to the lease liability issue. You talked about the implicit increase for Q4 when you revised your guidance. I just wanted to understand a little bit better how you are looking at, first of all, the need for additional drills next year, or additional rigs next year, and support vessels, as well as your availability for chartering. Do you already work with any assumption for renewal over the course of this second half of the year at higher prices? Ultimately here, what we want is to understand whether what we will see in Q4 is what we should be looking at.

In a way, with a more heated market, with higher prices, should we expect something similar to what we have been seeing so far being carried over to the future? Thank you. Well, in my last answer, I tried to give an overview of what the year should look like. Now let us look at Q4 more specifically.

Fernando Melgarejo: There was an increase in gas prices because this is a critical resource to perform activities that would allow us to produce more. Our efficiency process and decline, all of that will depend on leasing for us. In Q4, more specifically, there is a unit where there should be a maintenance shutdown, which should have, or is it two maybe, which I understand have an impact on Q3 and Q4, and our guidance review already reflects that. Just to add to the number of rigs, we do not plan to increase that number. Quite the contrary, we are starting to look into reducing that number, even because we have moved forward earlier in so many of our units.

Magda Chambriard: Well, I just wanted to add with the issue of the units by saying that when you have platforms producing 225,000 barrels a day, and we expand their capacity to 270,000, and they become not one, but six platforms of that capacity, we should pay attention to something else, which is the threat of interruption in the production of Tamandaré. Just to give you an idea, speaking in figures, our maritime environment is 4x more aggressive than in the North Sea. Our expectation, for example, for maintenance, because that leads to maintenance requirements of our platforms and anti-corrosion work and et cetera, that is 4x higher than what it would be in North Sea.

But going even beyond that, if we cross the manageable threshold, so to speak, for maintenance, for corrosion resistance, and for checking our equipment installed in the platforms, the cost of maintenance is about 14x higher. We are talking about an issue that unless we face it in time, its cost might become substantially relevant, and there is a significant possibility for losses for the company. We are looking at that with great caution. This is part of our management activities and our efforts, and we are seeking to reduce the necessary number of maintenance interventions in our platforms. This is on behalf of safety of the distribution insurance and the shelf life of any possibility.

You can say that this tackling is burdened by the mitigation of said risk by hiring this new tool, two units, as was mentioned.

Fernando Melgarejo: Yeah, just adding to the numbers, about 75% of the increase come from the hiring of the OSVs and the maintenance of about 15 transportation vessels for oil, as well as a lower percentage coming from the addition of FPSO Tartaruga Verde. We changed the guidance because we understand we should be at the lower band of that range for the sake of forecasts.

Eduardo de Nardi Ros: Well, thank you. Thank you, everyone. We are now concluding this conference. If you have any additional questions, please send them to our investor relations team. With that, I will turn over the conference to Fernando Melgarejo and Magda, who will conclude our event.

Fernando Melgarejo: Well, I would like to give you a takeaway message about what we understand to be the focus and of what we discussed here. First of all, I wanted to say that the specific lags in our results do not change our investment theory. We are improving the execution of our investments as for risk, as it pertains to our deployment, and it's important to remember that we have some of the best assets in the world, especially when you think of deepwater oil prospecting. It already shows when we present to 300,000 barrels a day of capacity over the course of the year.

We also maintain our capital discipline in an entrepreneurial vision with adequate compensation to everyone, whether they're shareholders on the public space or the private space. When we thought of a 2030 plan back in 2025, we were looking at assumptions that allowed us to walk at a specific pace.

Magda Chambriard: Over time, we saw a window of opportunity to speed up the company's pace by employing more CapEx and increasing production and tapping into all other operational issues that came up. We believe that we are in the right path and at the right pace to move forward, including within our strategic plan for 2027 through 2030, which will be delivered on November 23rd. Thanks, everyone.

Eduardo de Nardi Ros: Thank you, Fernando. Madam President. Well, to conclude our conference, I'd like to say that we will always be available to all of you who might need any clarification. What we want is for you to have a full comprehension and confidence in what Petrobras' results and management have been by and large. We believe that this is a company of invaluable assets which has delivered unique results to the market. Our wish is for all of you to be absolutely confident to reach the very same conclusion we have, which is Petrobras has an unquestionable value, which it generates not only to its shareholders, but also to Brazil and the world. Thank you to everyone. Thank you, Madam President.

A recording of this conference is available for replay at the RI website, and I would like to say that it will be shared later with everyone. Thank you so much for a great afternoon.

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