In 2022, Petrobras implemented changes to its financial
reporting system, according to the metric approved by the Executive Board. These changes did not change the allocation of Petrobras' reportable
operating segments (E&P, RT&M and G&P). However, the measurement of certain components of the operating segments and of Corporate
and other businesses was changed as following:
This information reflects the Company's current
management model and is used by the Board of Executive Officers (Chief Operating Decision Maker - CODM) to make decisions regarding resource
allocation and performance evaluation. In this context, the information by operating segment of the first quarter of 2022 has been reclassified
for comparative purposes, as follows:
The amount of depreciation, depletion and amortization
by segment is set forth as follows:
The segment information reflects the financial
information used in the decision-making process for resource allocation and performance evaluation carried out by the Company’s
Board of Executive Officers (as Chief Operating Decision Makers).
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$ 466 as of March 31, 2023 (US$ 470 as of December
31, 2022).
In the three-month period ended March 31, 2023,
the Company recognized a US$ 8 reversal of cost of sales, adjusting inventories to net realizable value (a US$ 7 reversal of
cost of sales in the three month period ended March 31, 2022), primarily due to changes in international prices of crude oil and oil products.
At March 31, 2023, 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$ 931, after deducting the partial early settlement,
made in February 2022.
The following table provides the reconciliation
of Brazilian statutory tax rate to the Company’s effective rate on income before income taxes:
The composition of deferred tax assets and liabilities
is set out in the following table:
On April 24, 2023, the Company received an additional
charge from the Dutch tax authority, due to a final assessment on the calculation of the Corporate Income Tax (CIT) of subsidiaries in
the Netherlands in 2018, arising from the valuation of platforms and equipment nationalized under the Repetro tax regime, in the amount
of US$ 279, classified as a contingent liability (note 14.3).
Tax treatments related to 2019 to 2022 have not
yet been assessed by this tax authority. Any charges by the Dutch tax authority for these years, on a similar basis to 2018, could reach
the amount of US$ 301. Thus, the total amount of these uncertain tax treatments, from 2018 to 2022, is US$ 580.
The Company will continue to defend its position
that the valuation of platforms and equipment was carried out in compliance with the relevant legislation, through the use of administrative
appeals or by the Dutch judicial courts. Therefore, no provision was recorded in these unaudited condensed consolidated interim financial
statements for the period ended March 31, 2023.
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.
As of March 31, 2023, the Company had paid US$ 136
and, in April 2023, made the final payment of US$ 396, totalizing US$ 532 regarding the PPP for 2022, since the related metrics relating
to the Company’s and individual performance were achieved in 2022.
Regarding the PPP for 2023, the Company is revising
the model for this program. However, due to the expectation of maintaining the program with a similar nature of 2022, in the three-month
period ended March 31, 2023, the Company provisioned US$ 139 referring to this program for 2023 (US$ 118 for the same period of 2022),
recorded in other income and expenses.
The Company made an advance of US$ 44 related
to the PLR 2022, with final payment expected to occur on May 30, 2023, considering the current agreement for the PLR, approved by the
Secretariat of Management and Governance of the State-owned Companies (SEST), which provides that only employees without managerial functions
will be entitled to receive profit sharing with individual limits according to their remuneration.
In the three-month period ended March 31, 2023,
the Company provisioned US$ 35 referring to PLR for 2023 (US$ 31 for the same period of 2022), recorded in other income and
expenses.
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.
For the current programs, there are 11,732 adhesions
accumulated through March 31, 2023 (11,688 through December 31, 2022).
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 March 31, 2023, from the balance of US$ 171,
US$ 34 refers to the second installment of 590 retired employees and US$ 137 refers to 1,319 employees enrolled in voluntary
severance programs with expected termination by September 2025.
The Company maintains a health care plan for its
employees in Brazil (active and retiree) and their dependents (Saúde Petrobras), and five other major types of post-employment
pension benefits (collectively referred to as “pension plans”).
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.
The management of the supplementary pension plans
sponsored by the Company 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 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, 2022 with the net actuarial liability registered by the
Company:
On March 29, 2023, the Deliberative Council of
Petros approved the financial statements of the pension plans sponsored by the Company for the year ended December 31, 2022.
On November 10, 2022, Petros' Foundation Deliberative
Council approved a plan to settle the deficit registered by the PPSP-R in 2021. On April 1, 2023, this plan was implemented, following
a favorable decision held on March 17, 2023 by the SEST.
This deficit, amounting to US$ 1,676 (R$
8,515 million) as of March 31, 2023, must be settled on an equal basis between sponsors and participants, of which US$ 790 (R$ 4,012
million) will be paid by Petrobras, during the lifetime of the plan. The deduction from the payroll of participants, relating to these
extraordinary payments, began in April 2023.
Net actuarial liabilities represent the obligations
of the Company, net of the fair value of plan assets (when applicable), at present value.
Changes in the actuarial liabilities related to
pension and healthcare plans with defined benefit characteristics is presented as follows:
NOTES TO THE UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
| |
|
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) |
(12) |
(2) |
(3) |
(72) |
− |
(89) |
| Related to retirees (other income and expenses) |
(106) |
(38) |
(4) |
(133) |
− |
(281) |
| Net costs for Jan-Mar/2023 |
(118) |
(40) |
(7) |
(205) |
− |
(370) |
| Related to active employees (cost of sales and expenses) |
(8) |
(1) |
(5) |
(55) |
− |
(69) |
| Related to retirees (other income and expenses) |
(105) |
(35) |
(3) |
(95) |
− |
(238) |
| Net costs for Jan-Mar/2022 |
(113) |
(36) |
(8) |
(150) |
− |
(307) |
| (*) It includes the balance of PPSP-R pre-70 and PPSP-NR pre-70. |
In the three-month period ended March 31, 2023,
the Company contributed with US$ 178 (US$ 1,477 in the same period of 2022 , including US$ 1,324 related to Term of financial commitment)
the defined benefit plans (reducing the balance of obligations of these plans, as presented in note 13.3.1), and with US$ 54 and US$ 0.4,
respectively, to the defined contribution portions of PP-2 and PP-3 plans (US$ 46 for PP-2 and US$ 0.4 for PP-3 in the same
period of 2022).
The contribution to the defined benefit portion
of the PP-2, which had been suspended in July 2012, was restored in April 2023, pursuant to a decision by the Petros Foundation's Deliberative
Council. Thus, a portion of the monthly contribution will be destined to risk coverage (payment of sickness allowance, reclusion allowance,
lump sum death benefit and minimum guarantees) to reduce the balance of the actuarial liability.
| 14. |
Provisions for legal proceedings, judicial deposits and contingent
liabilities |
| 14.1. | 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) tax notices for alleged
non-compliance with ancillary obligations; (ii) claims relating to benefits previously taken for Brazilian federal tax credits applied
that were subsequently alleged to be disallowable; 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) penalties applied by ANP, mainly relating to production measurement systems; and (iii) litigation involving corporate
conflicts. |
| · | 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 |
03.31.2023 |
12.31.2022 |
| Labor claims |
765 |
737 |
| Tax claims |
505 |
466 |
| Civil claims |
1,678 |
1,504 |
| Environmental claims |
294 |
303 |
| Total |
3,242 |
3,010 |
NOTES TO THE UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
| |
Jan-Mar/2023 |
Jan-Mar/2022 |
| Opening Balance |
3,010 |
2,018 |
| Additions, net of reversals |
182 |
205 |
| Use of provision |
(102) |
(80) |
| Revaluation of existing proceedings and interest charges |
69 |
48 |
| Others |
(1) |
(12) |
| Translation adjustment |
84 |
376 |
| Closing Balance |
3,242 |
2,555 |
In preparing its unaudited consolidated interim
financial statements for the three-month period ended March 31, 2023, 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.
Judicial deposits are set out in the table below according to the nature
of the corresponding lawsuits:
| Non-current assets |
03.31.2023 |
12.31.2022 |
| Tax |
8,497 |
7,876 |
| Labor |
938 |
907 |
| Civil |
2,410 |
2,089 |
| Environmental |
110 |
109 |
| Others |
71 |
72 |
| Total |
12,026 |
11,053 |
| |
Jan-Mar/2023 |
Jan-Mar/2022 |
| Opening Balance |
11,053 |
8,038 |
| Additions |
402 |
405 |
| Use |
(19) |
(23) |
| Accruals and charges |
278 |
159 |
| Others |
(2) |
(16) |
| Translation adjustment |
314 |
1,484 |
| Closing Balance |
12,026 |
10,047 |
| 14.3. | Contingent liabilities |
The estimates of contingent liabilities 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 |
03.31.2023 |
12.31.2022 |
| Tax |
33,272 |
32,094 |
| Labor |
8,732 |
8,272 |
| Civil |
7,845 |
7,548 |
| Environmental |
1,385 |
1,257 |
| Total |
51,234 |
49,171 |
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) collection of customs taxes and fines related to imports
under the Repetro regime in the Frade consortium; (iv) collection of PIS and COFINS, resulting from the payment of taxes negotiated with
the Brazilian Federal Government, excluding the payment of fines; (v) collection of ICMS involving several states; and (vi) deduction
from the PIS and COFINS tax base, including ship-or-pay agreements and chartering of aircraft and vessels. |
NOTES TO THE UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
| · | 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) lawsuits
related to contracts; (ii) 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; and (iii) regulation
agencies fines. |
| · | Environmental matters comprising indemnities for
damages and fines related to the Company operation. |
| 14.4. | Minimum Compensation Based on
Employee's Position and Work Schedule (Remuneração Mínima por Nível e Regime - RMNR) |
As of March 31, 2023, 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 March 31, 2023, the balance of provisioned
proceedings regarding RMNR amounts to US$ 169, while the contingent liabilities amount to US$ 7,223.
| 14.5. | Class actions and related proceedings |
On January 23, 2017, Stichting Petrobras Compensation
Foundation ("Foundation") filed a class action in the Netherlands, at the District Court of Rotterdam, 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. The Foundation alleges that it represents the interests of an unidentified
group of investors and claims that, based on the facts revealed by Operation Lava-Jato, the defendants acted illegally before investors.
On 26 May 2021, the District Court of Rotterdam decided that the class action 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 and a decision is expected for July 26, 2023, but it may be brought forward
or postponed by the Court.
In relation to the arbitration in Argentina, the
Argentine Supreme Court denied the appeal, but the Consumidores Damnificados Asociación Civil para su Defensa ("Association")
filed a new appeal, which has not yet been judged. 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.
NOTES TO THE UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
At the same time, the Association also filed a
class action before the Civil and Commercial Court of Buenos Aires, Argentina, where Petrobras spontaneously appeared on April 10, 2023.
The Association claims Petrobras' responsibility for an alleged loss of market value of its securities in Argentina, as a result of allegations
made within the scope of the Lava Jato Operation and its effects on the Company's financial statements prior to 2015. Such demand does
not generate immediate financial and economic effects for Petrobras. The Company denies such allegations and will vigorously defend itself
against the accusations made by the author of the collective action.
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
Damnificados Asociación Civil para su Defensa before the Commercial Court, there are no developments during the three-month
period ended March 31, 2023.
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. Considering the filing of the appeal,
Petrobras requested the suspension of the process, which was granted by the lower court judge on October 26, 2022.
On August 26, 2022, the District Court of Amsterdam
granted a precautionary measure to block certain Petrobras assets in the Netherlands, at the request of EIG. This granting was based on
the decision of the District Court of Columbia, on August 8, 2022, and was intended to ensure the satisfaction of EIG's claims contained
in the aforementioned US lawsuit. For the purpose of this injunction, the District Court of Amsterdam limited EIG's claims to a total
of US$ 297.2, although the US Court ruled that any award of damages would depend on evidence of damages by EIG at a trial hearing. There
are some discussions about the scope of the assets blocked by EIG, but there is no related lawsuit pending in the Netherlands. This precautionary
block does not prevent Petrobras and its subsidiaries from complying with their obligations to third parties.
| 14.6. | Arbitrations proposed by non-controlling
Shareholders in Brazil |
In the three-month period ended March 31, 2023,
there were no events that changed the assessment and information on arbitrations in Brazil. For more information, see explanatory note
18.5 to the financial statements for the year ended December 31, 2022.
| 14.7. | Legal proceedings - Compulsory
Loan – Eletrobrás |
In the three-month period ended March 31, 2023,
there were no events that changed the assessment on this proceeding. For more information, see explanatory note 18.6 to the financial
statements for the year ended December 31, 2022.
| 14.8. | Lawsuits brought by natural gas
distributors and others |
In the three-month period ended March 31, 2023,
there were no events that changed the assessment and information on lawsuits and arbitrations. For more information, see explanatory note
18.7 to the financial statements for the year ended December 31, 2022.
NOTES TO THE UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
| 15. | Provision for decommissioning
costs |
The following table details the amount of the provision
for decommissioning costs by producing area:
| |
03.31.2023 |
12.31.2022 |
| Onshore |
430 |
418 |
| Shallow waters |
4,559 |
4,399 |
| Deep and ultra-deep post-salt |
10,156 |
9,988 |
| Pre-salt |
3,939 |
3,795 |
| |
19,084 |
18,600 |
Changes in the provision for decommissioning costs
are presented as follows:
| Non-current liabilities |
2023
Jan-Mar |
2022
Jan-Mar |
| Opening balance |
18,600 |
15,619 |
| Adjustment to provision |
7 |
34 |
| Transfers related to liabilities held for sale (*) |
− |
(598) |
| Use of provisions |
(224) |
(199) |
| Interest accrued |
202 |
121 |
| Others |
(3) |
(13) |
| Translation adjustment |
502 |
2,710 |
| Closing balance |
19,084 |
17,674 |
| (*) In the three-month period ended March 31, 2022, it refers to the Norte Capixaba Group (US$ 32), in Espírito Santo state, and the Potiguar Group (US$ 566), in Rio Grande do Norte state. |
| 16. | Other Assets and Liabilities |
| |
|
|
| Assets |
|
03.31.2023 |
12.31.2022 |
| Escrow account and/ or collateral |
|
1,312 |
1,087 |
| Advances to suppliers |
|
1,909 |
1,561 |
| Prepaid expenses |
|
387 |
363 |
| Derivatives transactions |
|
62 |
54 |
| Assets related to E&P partnerships |
|
181 |
71 |
| Others |
|
213 |
194 |
| |
|
4,064 |
3,330 |
| Current |
|
2,039 |
1,777 |
| Non-Current |
|
2,025 |
1,553 |
| |
|
|
|
| |
|
|
| Liabilities |
|
03.31.2023 |
12.31.2022 |
| Obligations arising from divestments |
|
1,335 |
1,355 |
| Contractual retentions |
|
623 |
601 |
| Advances from customers |
|
619 |
906 |
| Provisions for environmental expenses, research and development and fines |
|
791 |
674 |
| Other taxes |
|
340 |
293 |
| Unclaimed dividends |
|
265 |
241 |
| Derivatives transactions |
|
99 |
147 |
| Various creditors |
|
− |
- |
| Others |
|
730 |
756 |
| |
|
4,802 |
4,973 |
| Current |
|
2,737 |
3,001 |
| Non-Current |
|
2,065 |
1,972 |
| |
|
|
|
NOTES TO THE UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
| 17. | Property, plant and equipment |
| |
Land, buildings
and
improvement |
Equipment and other assets (*) |
Assets under
construction (**) |
Exploration and development costs (***) |
Right-of-use assets |
Total |
| Balance at December 31, 2022 |
2,538 |
55,147 |
14,838 |
38,434 |
19,212 |
130,169 |
| Cost |
4,343 |
105,429 |
23,938 |
67,581 |
29,670 |
230,961 |
| Accumulated depreciation and impairment (****) |
(1,805) |
(50,282) |
(9,100) |
(29,147) |
(10,458) |
(100,792) |
| Additions |
− |
111 |
2,071 |
− |
945 |
3,127 |
| Decommissioning costs - Additions to / review of estimates |
− |
− |
− |
6 |
− |
6 |
| Capitalized borrowing costs |
− |
− |
268 |
− |
− |
268 |
| Write-offs |
− |
(55) |
(10) |
(33) |
(150) |
(248) |
| Transfers (*****) |
40 |
207 |
(122) |
104 |
(8) |
221 |
| Transfers to assets held for sale |
(1) |
(20) |
(4) |
(12) |
− |
(37) |
| Depreciation, amortization and depletion |
(21) |
(1,139) |
− |
(1,091) |
(1,185) |
(3,436) |
| Impairment recognition |
− |
(15) |
(5) |
− |
− |
(20) |
| Impairment reversal |
− |
17 |
− |
− |
− |
17 |
| Translation adjustment |
68 |
1,467 |
453 |
1,010 |
511 |
3,509 |
| Balance at March 31, 2023 |
2,624 |
55,720 |
17,489 |
38,418 |
19,325 |
133,576 |
| Cost |
4,476 |
108,349 |
26,295 |
69,235 |
30,969 |
239,324 |
| Accumulated depreciation and impairment (****) |
(1,852) |
(52,629) |
(8,806) |
(30,817) |
(11,644) |
(105,748) |
| 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 |
− |
194 |
1,543 |
1 |
1,015 |
2,753 |
| Decommissioning costs - Additions to / review of estimates |
− |
− |
− |
11 |
− |
11 |
| Capitalized borrowing costs |
− |
− |
236 |
− |
− |
236 |
| Write-offs |
− |
(27) |
(68) |
(4) |
(35) |
(134) |
| Transfers (*****) |
57 |
1,000 |
(2,242) |
1,212 |
(1) |
26 |
| Transfers to assets held for sale |
(7) |
(553) |
(171) |
(653) |
− |
(1,384) |
| Depreciation, amortization and depletion |
(21) |
(1,163) |
− |
(1,270) |
(1,094) |
(3,548) |
| Impairment reversal |
− |
1 |
− |
− |
− |
1 |
| Translation adjustment |
419 |
9,410 |
2,686 |
6,220 |
2,989 |
21,724 |
| Balance at March 31, 2022 |
2,831 |
61,988 |
18,906 |
41,364 |
19,926 |
145,015 |
| Cost |
4,780 |
114,880 |
29,135 |
71,896 |
31,007 |
251,698 |
| Accumulated depreciation and impairment (****) |
(1,949) |
(52,892) |
(10,229) |
(30,532) |
(11,081) |
(106,683) |
| (*) 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 8 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. |
| (*****) It includes mainly transfers between classes of assets and transfers from advances to suppliers. |
| |
NOTES TO THE UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
| 17.2. | Estimated useful life |
The useful life of assets depreciated are shown
below:
| Asset |
Weighted average useful life in years |
| Buildings and improvement |
40 (between 25 and 50) |
| Equipment and other assets |
20 (3 to 31) - except assets by the units of production method |
| Exploration and development costs |
Units of production method |
| Right-of-use |
8 (between 2 and 47) |
The right-of-use assets comprise the following
underlying assets:
| |
Platforms |
Vessels |
Properties |
Total |
| Balance at March 31, 2023 |
9,132 |
8,401 |
1,792 |
19,325 |
| Cost |
13,040 |
15,540 |
2,389 |
30,969 |
| Accumulated depreciation and impairment |
(3,908) |
(7,139) |
(597) |
(11,644) |
| Balance at December 31, 2022 |
9,211 |
8,254 |
1,747 |
19,212 |
| Cost |
12,604 |
14,788 |
2,278 |
29,670 |
| Accumulated depreciation and impairment |
(3,393) |
(6,534) |
(531) |
(10,458) |
| 17.4. | Unitization agreements |
Petrobras has Production Individualization Agreements
(AIP) signed in Brazil with partner companies in E&P consortia, as well as contracts resulting from divestment operations and strategic
partnerships related to these consortia. These agreements result in reimbursements payable to (or receivable from) partners regarding
expenses and production volumes mainly related to Agulhinha, Albacora Leste, Berbigão, Budião Noroeste, Budião Sudeste,
Caratinga, Sururu and Tartaruga.
The table below presents changes in the reimbursements
payable relating to the execution of the AIP submitted to the approval of the ANP:
| |
|
|
|
|
Jan-Mar/2023 |
Jan-Mar/2022 |
| Opening balance |
|
|
|
|
407 |
364 |
| Additions/(Write-offs) on PP&E |
|
|
|
|
(3) |
(32) |
| Other income and expenses |
|
|
|
|
17 |
(26) |
| Translation adjustments |
|
|
|
|
11 |
58 |
| Closing balance |
|
|
|
|
432 |
364 |
| 17.5. | 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 three-month
period ended March 31, 2023, the capitalization rate was 6.85% p.a. (6.01% p.a. for the three-month period ended March 31, 2022).
NOTES TO THE UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
| |
Rights and Concessions (*) |
Software |
Goodwill |
Total |
| Balance at December 31, 2022 |
2,523 |
439 |
24 |
2,986 |
| Cost |
2,578 |
1,560 |
24 |
4,162 |
| Accumulated amortization and impairment |
(55) |
(1,121) |
− |
(1,176) |
| Addition |
1 |
38 |
− |
39 |
| Capitalized borrowing costs |
− |
3 |
− |
3 |
| Write-offs |
(35) |
− |
− |
(35) |
| Transfers |
− |
1 |
− |
1 |
| Amortization |
(1) |
(22) |
− |
(23) |
| Translation adjustment |
67 |
13 |
− |
80 |
| Balance at March 31, 2023 |
2,555 |
472 |
24 |
3,051 |
| Cost |
2,613 |
1,644 |
24 |
4,281 |
| Accumulated amortization and impairment |
(58) |
(1,172) |
− |
(1,230) |
| Estimated useful life in years |
(**) |
5 |
Indefinite |
|
| |
|
|
|
|
| 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 |
4 |
37 |
− |
41 |
| Capitalized borrowing costs |
− |
2 |
− |
2 |
| Write-offs |
(1) |
(1) |
− |
(2) |
| Transfers |
(3) |
− |
− |
(3) |
| Amortization |
(1) |
(17) |
− |
(18) |
| Impairment reversal |
− |
(1) |
− |
(1) |
| Translation adjustment |
477 |
56 |
4 |
537 |
| Balance at March 31, 2022 |
3,171 |
384 |
26 |
3,581 |
| Cost |
3,229 |
1,579 |
26 |
4,834 |
| Accumulated amortization and impairment |
(58) |
(1,195) |
− |
(1,253) |
| 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. |
| (**) 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. |
| |
| 19. | Exploration and evaluation of
oil and gas reserves |
Changes in the balances of capitalized costs directly
associated with exploratory wells pending determination of proved reserves and the balance of amounts paid for obtaining rights and concessions
for exploration of oil and natural gas (capitalized acquisition costs) are set out in the following table:
| Capitalized Exploratory Well Costs / Capitalized Acquisition Costs (*) |
Jan-Mar/2023 |
Jan-Mar/2022 |
| Property plant and equipment |
|
|
| Opening Balance |
1,876 |
1,994 |
| Additions |
65 |
66 |
| Write-offs |
- |
(13) |
| Transfers |
(43) |
(9) |
| Translation adjustment |
50 |
338 |
| Closing Balance |
1,948 |
2,376 |
| Intangible Assets |
2,436 |
3,034 |
| Capitalized Exploratory Well Costs / Capitalized Acquisition Costs |
4,384 |
5,410 |
| (*) Amounts capitalized and subsequently expensed in the same period have been excluded from this table. |
|
|
NOTES TO THE UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
Exploration costs recognized in the statement of
income and cash used in oil and gas exploration and evaluation activities are set out in the following table:
| |
Jan-Mar/2023 |
Jan-Mar/2022 |
| Exploration costs recognized in the statement of income |
|
|
| Geological and geophysical expenses |
(125) |
(53) |
| Exploration expenditures written off (includes dry wells and signature bonuses) |
(32) |
(23) |
| Contractual penalties on local content requirements |
- |
(2) |
| Other exploration expenses |
- |
(1) |
| Total expenses |
(157) |
(79) |
| Cash used in: |
|
|
| Operating activities |
125 |
54 |
| Investment activities |
65 |
76 |
| Total cash used |
190 |
130 |
| 20. | Collateral for crude oil exploration
concession agreements |
The Company has granted collateral to ANP in connection
with the performance of the Minimum Exploration Programs established in the concession agreements for petroleum exploration areas in the
total amount of US$ 1,820 (US$ 1,748 as of December 31, 2022), which is still in force as of March 31, 2023, net of commitments undertaken.
As of March 31, 2023, the collateral comprises crude oil from previously identified producing fields already in production, pledged as
collateral, in the amount of US$ 1,692 (US$ 1,648 as of December 31, 2022) and bank guarantees of US$ 128 (US$ 100 as of December
31, 2022).
| 21.1. | Investments in associates and
joint ventures |
| 0 |
Joint Ventures |
Associates (*) |
Total |
| Balance at December 31, 2022 |
546 |
1,020 |
1,566 |
| Investments |
5 |
3 |
8 |
| Restructuring, capital decrease and others |
− |
(2) |
(2) |
| Results of equity-accounted investments |
24 |
11 |
35 |
| Translation adjustment |
1 |
(51) |
(50) |
| Other comprehensive income |
− |
89 |
89 |
| Dividends |
(10) |
− |
(10) |
| Balance at March 31, 2023 |
566 |
1,070 |
1,636 |
| (*) It includes other investments. |
| |
Joint Ventures |
Associates (*) |
Total |
| Balance at December 31, 2021 |
509 |
1,001 |
1,510 |
| Investments |
8 |
1 |
9 |
| Transfer to assets held for sale |
(2) |
− |
(2) |
| Restructuring, capital decrease and others |
9 |
(11) |
(2) |
| Results of equity-accounted investments |
69 |
281 |
350 |
| Translation adjustment |
6 |
(46) |
(40) |
| Other comprehensive income |
- |
250 |
250 |
| Dividends |
(49) |
− |
(49) |
| Balance at March 31, 2022 |
550 |
1,476 |
2,026 |
| (*) It includes other investments. |
| 22. | Disposal of assets and other
transactions |
The Company has an active portfolio, which takes
into account opportunities of partnerships and disposal of non-strategic assets in several areas in which it operates, whose development
of transactions also depends on conditions beyond the control of the Company.
NOTES TO THE UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
On February 28, 2023, Petrobras was notified by
the Ministry of Mines and Energy - MME, requesting the suspension of asset sales for 90 days, due to the reassessment of the National
Energy Policy and to the new composition of the National Energy Policy Council, respecting the Company's governance rules, commitments
assumed with government entities and without going against the interests of Petrobras.
On April 3, 2023, the Company’s Board of
Executive Officers informed that the revision of unsigned divestment processes will be carried out within the scope of the adjustments
to be made to the 2023-27 Strategic Plan.
The major classes of assets and related liabilities
classified as held for sale are shown in the following table:
| |
|
|
|
03.31.2023 |
12.31.2022 |
| |
E&P |
RT&M |
Corporate and other businesses |
Total |
Total |
| Assets classified as held for sale |
|
|
|
|
|
| Inventories |
- |
26 |
− |
26 |
21 |
| Investments |
- |
− |
− |
- |
- |
| Property, plant and equipment |
1,892 |
20 |
− |
1,912 |
3,587 |
| Others |
- |
1 |
− |
1 |
- |
| Total |
1,892 |
47 |
− |
1,939 |
3,608 |
| Liabilities on assets classified as held for sale |
|
|
|
|
|
| Finance debt |
- |
- |
133 |
133 |
133 |
| Provision for decommissioning costs |
908 |
- |
- |
908 |
1,332 |
| Total |
908 |
− |
133 |
1,041 |
1,465 |
| 22.1. | Transactions pending closing
at March 31, 2023 |
The assets and liabilities corresponding to the
transactions signed in previous periods which are pending closing are classified as held for sale at March 31, 2023:
| i. | sale
of the Company's entire interest (100%) in a set of 22 production onshore and shallow water
field concessions, together with their associated infrastructure, located in the Potiguar
Basin, in the state of Rio Grande do Norte, jointly called the Potiguar group of fields; |
| ii. | sale
of the Company's entire interest in a set of four onshore production fields, with integrated
facilities, located in the state of Espírito Santo, jointly called Norte Capixaba
group of fields; |
| iii. | sale
of the Lubrificantes e Derivados de Petróleo do Nordeste (LUBNOR) refinery and its
associated logistics assets, located in the state of Ceará; and |
| iv. | sale
of the Company's entire interest in a set of maritime concessions called Golfinho and Camarupim
groups of fields, in deep waters of the post-salt layer, located in the Espírito Santo
Basin. |
For more information on these transactions (which
are subject to certain conditions precedent), see note 30.1 of the Company's consolidated financial statements of 2022.
From January to March 2023, no new contracts were
signed.
| 22.2. | Transactions closed in the first
quarter of 2023 |
| Transaction |
Acquirer |
Signature date (S)
Closing date (C) |
Sale amount (*) |
Gain/ (loss) (**) |
Further infor-mation |
| Sale of its entire interest in Albacora Leste producing field, located in the Campos Basin |
Petro Rio Jaguar Petróleo LTDA (PetroRio), a subsidiary of Petro Rio S.A. |
April 2022 (S)
January 2023 (C) |
1,928 |
568 |
a |
| (*) The amount of "Proceeds from disposal of assets" in the Statement of Cash Flows is composed of amounts received this period, including installments of operations from previous years, and advances referring to operations not completed. |
| (**) Recognized in “Results on disposal/write-offs of assets and on remeasurement of investment retained with loss of control” within other income and expenses (note 6). |
NOTES TO THE UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
| a) | Sale of Albacora Leste concession |
The transaction was closed after the fulfillment
of conditions precedent, with the receipt, in cash, of US$ 1,635, including price adjustments provided for in the contract, in addition
to US$ 293 received at the transaction signing. In addition, Petrobras is expected to receive up to US$ 250 in contingent payments provided
for in the contract, depending on future Brent prices.
| 22.3. | Contingent assets from disposed
investments and other transactions |
Some disposed assets and other agreements provide
for receipts subject to contractual clauses, especially related to the Brent variation in transactions related to E&P assets.
The transactions that may generate revenue recognition,
accounted for within other income and expenses, are presented below:
| Transaction |
Closing date |
Amounts subject to recognition |
Assets recognized in 2023 |
Assets
recognized in previous periods |
|
| |
| |
| Sales in previous years |
|
|
|
|
|
| Riacho da Forquilha group of fields |
December 2019 |
62 |
7 |
28 |
|
| Pampo and Enchova group of fields |
July 2020 |
650 |
− |
180 |
|
| Baúna field |
November 2020 |
285 |
− |
132 |
|
| Frade field |
February 2021 |
20 |
− |
− |
|
| Ventura group of fields |
July 2021 |
43 |
− |
43 |
|
| Miranga group of fields |
December 2021 |
85 |
− |
55 |
|
| Cricare group of fields |
December 2021 |
118 |
− |
22 |
|
| Peroá group of fields |
August 2022 |
43 |
− |
10 |
|
| Papa-Terra field |
December 2022 |
90 |
1 |
15 |
|
| Sales in the period |
|
|
|
|
|
| Albacora Leste field |
January 2023 |
250 |
− |
− |
|
| Surplus volume of the Transfer of Rights Agreement |
|
|
|
|
|
| Sepia and Atapu |
April 2022 |
5,244 |
25 |
693 |
|
| Total |
|
|
33 |
1,178 |
|
| |
|
NOTES TO THE UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
| 23.1. | Balance by type of finance debt |
| In Brazil |
03.31.2023 |
12.31.2022 |
| Banking market |
1,217 |
1,285 |
| Capital market |
2,957 |
2,896 |
| Development banks (*) |
720 |
723 |
| Others |
5 |
4 |
| Total |
4,899 |
4,908 |
| Abroad |
|
|
| Banking market |
8,524 |
8,387 |
| Capital market |
14,054 |
14,061 |
| Export credit agency |
2,201 |
2,443 |
| Others |
158 |
155 |
| Total |
24,937 |
25,046 |
| Total finance debt |
29,836 |
29,954 |
| Current |
4,098 |
3,576 |
| Non-current |
25,738 |
26,378 |
| (*) It includes BNDES, FINAME and FINEP |
Current finance debt is composed of:
| |
03.31.2023 |
12.31.2022 |
| Short-term debt |
6 |
− |
| Current portion of long-term debt |
3,609 |
3,111 |
| Accrued interest on short and long-term debt |
483 |
465 |
| Total |
4,098 |
3,576 |
The capital market balance is mainly composed of
US$ 13,428 in global notes issued abroad by the wholly owned subsidiary PGF, as well as US$ 1,908 in debentures and US$ 900
in commercial notes issued by Petrobras in reais in Brazil.
The balance in global notes has maturities between
2024 to 2115 and does not require collateral. Such financing was carried out in dollars, euros and pounds, 87%, 2% and 11%, of the total
global notes, respectively.
The debentures and the commercial notes, with maturities
between 2024 and 2037, do not require collateral and are not convertible into shares or equity interests.
On March 31, 2023, there were no default, breach
of covenants or adverse changes in clauses that would result in changes to the payment terms of loan and financing agreements. There was
no change in the guarantees required in relation to December 31, 2022.
| 23.2. | Changes in finance debt |
| |
In Brazil |
Abroad |
Total |
| Balance at December 31, 2022 |
4,907 |
25,047 |
29,954 |
| Proceeds from finance debt |
2 |
49 |
51 |
| Repayment of principal (*) |
(182) |
(282) |
(464) |
| Repayment of interest (*) |
(118) |
(372) |
(490) |
| Accrued interest (**) |
106 |
436 |
542 |
| Foreign exchange/ inflation indexation charges |
54 |
(29) |
25 |
| Translation adjustment |
130 |
88 |
218 |
| Balance at March 31, 2023 |
4,899 |
24,937 |
29,836 |
NOTES TO THE UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
| |
In Brazil |
Abroad |
Total |
| Balance at December 31, 2021 |
4,517 |
31,183 |
35,700 |
| Proceeds from finance debt |
- |
150 |
150 |
| Repayment of principal (*) |
(149) |
(1,050) |
(1,199) |
| Repayment of interest (*) |
(92) |
(426) |
(518) |
| Accrued interest (**) |
99 |
416 |
515 |
| Foreign exchange/ inflation indexation charges |
47 |
(754) |
(707) |
| Translation adjustment |
799 |
681 |
1,480 |
| Balance at March 31, 2022 |
5,221 |
30,200 |
35,421 |
| (*) It includes pre-payments. |
| (**) It includes premium and discount over notional amounts, as well as gains and losses by modifications in contractual cash flows. |
In the three-month period ended March 31, 2023,
the Company repaid several finance debts, in the amount of US$ 1,320.
| 23.3. | Reconciliation with cash flows
from financing activities |
| |
|
|
Jan-Mar/2023 |
|
|
Jan-Mar/2022 |
| |
Proceeds from finance debt |
Repayment of principal |
Repayment of interest |
Proceeds from finance debt |
Repayment of principal |
Repayment of interest |
| Changes in finance debt |
51 |
(464) |
(490) |
150 |
(1,199) |
(518) |
| Repurchase of debt securities |
|
− |
− |
|
(26) |
− |
| Deposits linked to finance debt (*) |
|
(286) |
(80) |
|
(266) |
(49) |
| Net cash used in financing activities |
51 |
(750) |
(570) |
150 |
(1,491) |
(567) |
| (*) Deposits linked to finance debt with China Development Bank, with semiannual settlements in June and December. |
| 23.4. | Summarized information on current
and non-current finance debt |
| Maturity in |
2023 |
2024 |
2025 |
2026 |
2027 |
2028 onwards |
Total (*) |
Fair Value |
| |
|
|
|
|
|
|
|
|
| Financing in U.S.Dollars (US$): |
2,734 |
3,239 |
2,569 |
1,528 |
2,465 |
10,013 |
22,548 |
22,342 |
| Floating rate debt (**) |
2,576 |
2,679 |
1,934 |
1,143 |
1,740 |
652 |
10,724 |
|
| Fixed rate debt |
158 |
560 |
635 |
385 |
725 |
9,361 |
11,824 |
|
| Average interest rate p.a. |
6.5% |
6.4% |
6.0% |
6.3% |
5.9% |
6.6% |
6.5% |
|
| Financing in Brazilian Reais (R$): |
471 |
752 |
229 |
456 |
128 |
2,862 |
4,898 |
5,004 |
| Floating rate debt (***) |
300 |
289 |
142 |
142 |
42 |
1,395 |
2,310 |
|
| Fixed rate debt |
171 |
463 |
87 |
314 |
86 |
1,467 |
2,588 |
|
| Average interest rate p.a. |
6.5% |
6.7% |
6.4% |
6.2% |
6.4% |
6.5% |
6.5% |
|
| Financing in Euro (€): |
15 |
18 |
295 |
− |
− |
595 |
923 |
882 |
| Fixed rate debt |
15 |
18 |
295 |
− |
− |
595 |
923 |
|
| Average interest rate p.a. |
4.6% |
4.7% |
4.7% |
- |
- |
4.7% |
4.7% |
|
| Financing in Pound Sterling (£): |
20 |
7 |
− |
571 |
− |
869 |
1,467 |
1,363 |
| Fixed rate debt |
20 |
7 |
− |
571 |
− |
869 |
1,467 |
|
| Average interest rate p.a. |
6.2% |
6.3% |
0.0% |
6.2% |
0.0% |
6.5% |
6.3% |
|
| Total as of March 31, 2023 |
3,240 |
4,016 |
3,093 |
2,555 |
2,593 |
14,339 |
29,836 |
29,591 |
| Average interest rate |
6.4% |
6.4% |
6.0% |
6.2% |
5.9% |
6.6% |
6.5% |
|
| Total as of December 31, 2022 |
3,576 |
3,943 |
3,079 |
2,523 |
2,892 |
13,941 |
29,954 |
29,853 |
| Average interest rate |
6.7% |
6.5% |
6.1% |
6.2% |
6.0% |
6.6% |
6.5% |
|
| (*)The average maturity of outstanding debt as of March 31, 2023 is 12.02 years (12.07 years as of December 31, 2022). |
| (**) Operations with variable index + fixed spread. |
| (***) Operations with variable index + fixed spread, if applicable. |
The fair value of the Company's finance debt is
mainly determined and categorized into a fair value hierarchy as follows:
Level 1- quoted prices in active markets for identical
liabilities, when applicable, amounting to US$ 12,966 of March 31, 2023 (US$ 13,061 of December 31, 2022); and
NOTES TO THE UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
Level 2 – discounted cash flows based on
discount rate determined by interpolating spot rates considering financing debts indexes proxies, taking into account their currencies
and also Petrobras’ credit risk, amounting to US$ 16,625 as of March 31, 2023 (US$ 16,792 as of December 31, 2022).
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, and the Company expects that the replacement
of the LIBOR reference in the current financing agreements will be carried out under market conditions and, therefore, expects that there
will be no material impacts when this process is completed. The Company has debts indexed to Libor (London Interbank Offered Rate), corresponding
to 30.9% of total finance debt.
The sensitivity analysis for financial instruments
subject to foreign exchange variation is set out in note 26.3.
A maturity schedule of the Company’s finance
debt (undiscounted), including face value and interest payments is set out as follows:
| Maturity |
2023 |
2024 |
2025 |
2026 |
2027 |
2028 and thereafter |
03.31.2023 |
12.31.2022 |
| Principal |
2,743 |
4,045 |
3,176 |
2,622 |
2,650 |
15,156 |
30,392 |
31,703 |
| Interest |
1,458 |
1,761 |
1,445 |
1,277 |
1,056 |
17,223 |
24,221 |
24,815 |
| Total |
4,201 |
5,806 |
4,621 |
3,899 |
3,706 |
32,379 |
54,613 |
56,518 |
A maturity schedule of the lease arrangements (nominal
amounts) is set out in note 24.
| |
|
|
|
|
|
03.31.2023 |
| Company |
Financial
institution |
Date |
Maturity |
Available
(Lines of Credit) |
Used |
Balance |
| Abroad |
|
|
|
|
|
|
| PGT BV |
Syndicate of banks |
12/16/2021 |
11/16/2026 |
5,000 |
− |
5,000 |
| PGT BV (*) |
Syndicate of banks |
3/27/2019 |
2/27/2024 |
3,250 |
− |
3,250 |
| Total |
|
|
|
8,250 |
− |
8,250 |
| |
|
|
|
|
|
|
| In Brazil |
|
|
|
|
|
|
| Petrobras |
Banco do Brasil |
3/23/2018 |
9/26/2026 |
394 |
− |
394 |
| Petrobras |
Banco do Brasil |
10/4/2018 |
9/5/2025 |
394 |
− |
394 |
| Transpetro |
Caixa Econômica Federal |
11/23/2010 |
Not defined |
65 |
− |
65 |
| Total |
|
|
|
853 |
− |
853 |
| (*) In April 2021, the subsidiary PGT BV extended part of the Revolving Credit Facility. As such, US$ 2,050 will be available for withdrawal from February 28, 2024 until February 27, 2026. |
Changes in the balance of lease liabilities are
presented below:
| |
In Brazil |
Abroad |
Total |
| Balance at December 31, 2022 |
6,020 |
17,825 |
23,845 |
| Remeasurement / new contracts |
309 |
303 |
612 |
| Payment of principal and interest |
(506) |
(883) |
(1,389) |
| Interest expenses |
112 |
252 |
364 |
| Foreign exchange losses |
(75) |
(456) |
(531) |
| Translation adjustment |
160 |
452 |
612 |
| Balance at March 31, 2023 |
6,020 |
17,493 |
23,513 |
| Current |
|
|
5,642 |
| Non-current |
|
|
17,871 |
NOTES TO THE UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
| |
In Brazil |
Abroad |
Total |
| Balance at December 31, 2021 |
4,604 |
18,439 |
23,043 |
| Remeasurement / new contracts |
426 |
311 |
737 |
| Payment of principal and interest |
(374) |
(947) |
(1,321) |
| Interest expenses |
73 |
231 |
304 |
| Foreign exchange losses |
(401) |
(2,907) |
(3,308) |
| Translation adjustment |
778 |
2,900 |
3,678 |
| Balance at March 31, 2022 |
5,106 |
18,027 |
23,133 |
| Current |
|
|
5,353 |
| Non-current |
|
|
17,780 |
A maturity schedule of the lease arrangements (nominal
amounts) is set out as follows:
| Nominal Future Payments |
2023 |
2024 |
2025 |
2026 |
2027 |
2028 onwards |
Total |
| Balance at March 31, 2023 |
4,431 |
4,954 |
3,615 |
2,519 |
2,143 |
14,400 |
32,062 |
| Balance at December 31, 2022 |
5,710 |
4,621 |
3,380 |
2,394 |
2,122 |
14,498 |
32,725 |
In certain contracts, there are variable payments
and amounts less than 1 year recognized as an expense:
| |
|
03.31.2023 |
03.31.2022 |
| Variable payments |
|
324 |
250 |
| Up to 1 year maturity |
|
18 |
67 |
| |
|
|
|
| Variable payments x fixed payments |
|
23% |
19% |
At March 31, 2023, the nominal amounts of lease
agreements for which the lease term has not commenced, as they relate to assets under construction or not yet available for use, is US$ 81,553
(US$ 79,913 at December 31, 2022).
The sensitivity analysis of financial instruments
subject to exchange variation is presented in note 26.3.
| 25.1. | Share capital (net of share issuance
costs) |
As of March 31, 2023 and December 31, 2022, subscribed
and fully paid share capital, net of issuance costs, was US$ 107,101, represented by 7,442,454,142 common shares and 5,602,042,788
preferred shares, all of which are registered, book-entry shares with no par value.
Preferred shares have priority on returns of capital,
do not grant any voting rights and are non-convertible into common shares.
As of March 31, 2023 and December 31, 2021, the
Company held treasury shares, in the amount of US$ 2, of which 222,760 are common shares and 72,909 are preferred shares.
| 25.2. | Distributions to shareholders |
Dividends relating to 2022
On April 27, 2023, the Annual General Shareholders
Meeting approved dividends relating to 2022, amounting to US$ 43,187 (US$ 3.3106 per outstanding share). This amount includes
US$ 36,323 anticipated during 2022 (updated by SELIC interest rate from the date of each payment to December 31, 2022) and US$ 6,864
of complementary dividends (US$ 0.5262 per outstanding share) which was accounted for as additional dividends proposed as of December
31, 2022.
These complementary dividends were reclassified
from shareholders' equity to liabilities on the date of approval on the Annual General Shareholders Meeting and will be paid in 3 installments
on May 19, June 16 and December 27, 2023, including the update by the SELIC interest rate from December 31, 2022 to the date of each payment.
NOTES TO THE UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
Dividends payable
As of March 31, 2023, there is no balance of dividends
payable within current liabilities, as set out below:
| |
Jan-Mar/2023 |
Jan-Mar/2022 |
| Changes in dividends payable |
|
|
| Opening balance |
4,169 |
− |
| Payments made |
(4,192) |
− |
| Monetary restatement |
30 |
− |
| Transfers to unclaimed dividends |
(17) |
− |
| Withholding income taxes over interest on capital and monetary restatement |
(3) |
− |
| Translation adjustment |
13 |
− |
| Closing balance |
− |
− |
On January 19, 2023, Petrobras paid the second
installment of anticipated dividends approved by the Board of Directors on November 3, 2022, in the amount of US$ 4,169, net of withholding
income taxes over interest on capital. This installment was monetarily restated based on the SELIC interest rate from December 31, 2022
to the payment date.
Unclaimed dividends
As of March 31, 2023, the balance of dividends
not claimed by shareholders of Petrobras is US$ 265 recorded as other current liabilities, as described in note 16 (US$ 241 as of
December 31, 2022). The payment of these dividends was not carried out due to the lack of registration data for which the shareholders
are responsible with the custodian bank for the Company's shares and with Petrobras.
| |
Jan-Mar/2023 |
Jan-Mar/2022 |
| Changes in unclaimed dividends |
|
|
| Opening balance |
241 |
81 |
| Transfers from dividends payable |
17 |
− |
| Translation adjustment |
7 |
5 |
| Closing Balance |
265 |
86 |
| |
|
Jan-Mar/2023 |
|
Jan-Mar/2022 |
| |
Common |
Preferred |
Total |
Common |
Preferred |
Total |
| Net income attributable to shareholders of Petrobras |
4,188 |
3,153 |
7,341 |
4,909 |
3,696 |
8,605 |
| Weighted average number of outstanding shares |
7,442,231,382 |
5,601,969,879 |
13,044,201,261 |
7,442,231,382 |
5,601,969,879 |
13,044,201,261 |
| Basic and diluted earnings per share - in U.S. dollars |
0.56 |
0.56 |
0.56 |
0.66 |
0.66 |
0.66 |
| Basic and diluted earnings (losses) per ADS equivalent - in U.S. dollars (*) |
1.12 |
1.12 |
1.12 |
1.32 |
1.32 |
1.32 |
| (*) Petrobras' ADSs are equivalent to two shares. |
Basic earnings per share are calculated by dividing
the net income attributable to shareholders of Petrobras by the weighted average number of outstanding shares during the period.
Diluted earnings per share are calculated by adjusting
the net income attributable to shareholders of Petrobras and the weighted average number of outstanding shares during the period taking
into account the effects of all dilutive potential shares (equity instrument or contractual arrangements that are convertible into shares).
Basic and diluted earnings are identical as the
Company has no potentially dilutive shares.
NOTES TO THE UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
The Company presents a sensitivity analysis of
factors relating to its corporate risk management process. The possible and remote scenarios are related to events with low and very low
probability of occurrence, respectively. The period of application of the sensitivity analysis is one year, except for operations with
commodity derivatives, for which a three-month period is applied, due to the short-term nature of these transactions.
| 26.1. | Derivative financial instruments |
A summary of the positions of the derivative financial
instruments held by the Company and recognized in other current assets and liabilities as of March 31, 2023 , as well as the amounts recognized
in the statement of income and other comprehensive income and the guarantees given is set out as follows:
| |
|
Statement of Financial Position |
| |
|
|
|
Fair value |
|
| |
Notional value |
Asset Position (Liability) |
Maturity |
| |
03.31.2023 |
12.31.2022 |
03.31.2023 |
12.31.2022 |
|
| Derivatives not designated for hedge accounting |
|
|
|
|
|
| Future contracts - total (*) |
2,514 |
683 |
4 |
(40) |
|
| Long position/Crude oil and oil products |
10,521 |
9,058 |
− |
- |
2023 |
| Short position/Crude oil and oil products |
(8,007) |
(8,375) |
− |
- |
2023 |
| Swap (**) |
|
|
|
|
− |
| Long position/ Soybean oil |
1 |
− |
− |
− |
2023 |
| Short position/ Soybean oil |
(5) |
(3) |
− |
− |
2023 |
| Forward contracts (***) |
|
|
|
|
|
| Long position/Foreign currency forwards (BRL/USD) |
1 |
− |
- |
− |
2023 |
| Short position/Foreign currency forwards (BRL/USD) |
(6) |
− |
− |
- |
2023 |
| Swap (***) |
|
|
|
|
|
| Swap - CDI X IPCA |
R$ 3,008 |
R$ 3,008 |
19 |
(16) |
2029/2034 |
| Foreign currency / Cross-currency Swap |
US$ 729 |
US$ 729 |
(79) |
(64) |
2024/2029 |
| Total recognized in the Statement of Financial Position |
|
|
(56) |
(120) |
|
| (*) Notional value in thousands of bbl. |
|
|
|
|
|
| (**) Notional value in thousands of tons. |
|
(***) Amounts in US$ and R$ are presented in million.
|
|
|
Gains/ (losses) recognized in the statement of income |
| |
Jan-Mar/2023 |
Jan-Mar/2022 |
| Commodity derivatives |
|
|
| Other commodity derivative transactions - Note 26.2 (b) |
79 |
(53) |
| Recognized in Other Income and Expenses |
79 |
(53) |
| Currency derivatives |
|
|
| Swap Pounds Sterling x Dollar - Note 26.3 (b) |
− |
(30) |
| Swap CDI x Dollar - Note 26.3 (b) |
16 |
169 |
| Others |
(1) |
− |
| |
15 |
139 |
| Interest rate derivatives |
|
|
| Swap - CDI X IPCA - Note 26.3 (b) |
7 |
(1) |
| |
7 |
(1) |
| Cash flow hedge on exports -Note 26.3 (a) |
(1,154) |
(1,380) |
| Recognized in Net finance income (expense) |
(1,132) |
(1,242) |
| Total |
(1,053) |
(1,295) |
| |
Gains/ (losses) recognized in other comprehensive income |
| |
Jan-Mar/2023 |
Jan-Mar/2022 |
| Cash flow hedge on exports - Note 26.3 (a) |
2,622 |
12,976 |
| |
|
|
NOTES TO THE UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
| |
Guarantees given as collateral |
| |
03.31.2023 |
12.31.2022 |
| Commodity derivatives |
21 |
96 |
| Total |
21 |
96 |
A sensitivity analysis of the derivative financial
instruments for the different types of market risks as of March 31, 2023 is set out as follows:
| Financial Instruments |
Risk |
Probable Scenario |
Reasonably possible
scenario |
Remote
Scenario |
| Derivatives not designated for hedge accounting |
|
|
|
|
| Future and forward contracts |
Crude oil and oil products - price changes |
- |
(65) |
(130) |
| |
|
− |
(65) |
(130) |
The probable scenario uses market references, used
in pricing models for oil, oil products and natural gas markets, and takes into account the closing price of the asset on March 31, 2023.
Therefore, no variation is considered arising from outstanding operations in this scenario. The reasonably possible and remote scenarios
reflect the potential effects on the statement of income from outstanding transactions, considering a variation in the closing price of
20% and 40%, respectively. To simulate the most unfavorable scenarios, the variation was applied to each asset according to open transactions:
price decrease for long positions and increase for short positions.
| 26.2. | Risk management of products prices |
The Company is usually exposed to commodity price
cycles, although it may use derivative instruments to hedge exposures related to prices of products purchased and sold to fulfill operational
needs and in specific circumstances depending on business environment analysis and assessment of whether the targets of the Strategic
Plan are being met.
| a) | Other commodity derivative transactions |
Petrobras, by use of its assets, positions and
market knowledge from its operations in Brazil and abroad, occasionally seeks to optimize some of its commercial operations in the international
market, with the use of commodity derivatives to manage price risk.
| 26.3. | Foreign exchange risk management |
| a) | Cash Flow Hedge involving the
Company’s future exports |
The carrying amounts, the fair value as of March
31, 2023, and a schedule of expected reclassifications to the statement of income of cumulative losses recognized in other comprehensive
income (shareholders’ equity) based on a US$ 1.00 / R$ 5,084 exchange rate are set out below:
| |
|
|
|
|
|
| |
|
Present value of hedging instrument notional
value at
03.31.2023 |
| Hedging Instrument |
Hedged Transactions |
Nature
of the Risk |
Maturity
Date |
US$ million |
R$ million |
| Foreign exchange gains and losses on proportion of non-derivative financial instruments cash flows |
Foreign exchange gains and losses of highly probable future monthly exports revenues |
Foreign Currency
– Real vs U.S. Dollar
Spot Rate |
April 2023 to March 2033 |
61,711 |
313,516 |
NOTES TO THE UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
| Changes in the present value of hedging instrument notional value |
US$ million |
R$ million |
| Amounts designated as of December 31, 2022 |
62,119 |
324,121 |
| Additional hedging relationships designated, designations revoked and hedging instruments re-designated |
6,035 |
31,083 |
| Exports affecting the statement of income |
(1,792) |
(9,264) |
| Principal repayments / amortization |
(4,651) |
(24,223) |
| Foreign exchange variation |
- |
(8,201) |
| Amounts designated as of March 31, 2023 |
61,711 |
313,516 |
| Nominal value of hedging instrument (finance debt and lease liability) at March 31, 2023 |
71,293 |
362,195 |
In the three-month period ended March 31, 2023
the Company recognized a US$ 98 loss within foreign exchange gains (losses) due to ineffectiveness (a US$ 62 gain in the same period of
2022).
The average ratio of future exports for which cash
flow hedge accounting was designated to the highly probable future exports is 48.13%.
A roll-forward schedule of cumulative foreign exchange
losses recognized in other comprehensive income as of March 31, 2023 is set out below:
| |
Exchange rate variation |
Tax effect |
Total |
| Balance at December 31, 2022 |
(26,527) |
9,020 |
(17,507) |
| Recognized in Other comprehensive income |
1,468 |
(499) |
969 |
| Reclassified to the statement of income - occurred exports |
1,154 |
(393) |
761 |
| Balance at March 31, 2023 |
(23,905) |
8,128 |
(15,777) |
| |
|
|
|
| |
Exchange rate variation |
Tax effect |
Total |
| Balance at December 31, 2021 |
(36,621) |
12,452 |
(24,169) |
| Recognized in Other comprehensive income |
11,596 |
(3,943) |
7,653 |
| Reclassified to the statement of income - occurred exports |
1,380 |
(469) |
911 |
| Balance at March 31, 2022 |
(23,645) |
8,040 |
(15,605) |
Additional hedging relationships may be revoked
or additional reclassification adjustments from equity to the statement of income may occur as a result of changes in forecasted export
prices and export volumes following a revision of the Company’s strategic plan. Based on a sensitivity analysis considering a US$ 10/barrel
decrease in Brent prices stress scenario, when compared to the Brent price projections in the Strategic Plan 2023-2027, would not indicate
a reclassification from equity to the statement of income.
A schedule of expected reclassification of cumulative
foreign exchange losses recognized in other comprehensive income to the statement of income as of March 31, 2023 is set out below:
| |
2023 |
2024 |
2025 |
2026 |
2027 |
2028 |
2029 a 2032 |
Total |
| Expected realization |
(5,807) |
(5,916) |
(3,582) |
(2,929) |
(3,268) |
(2,141) |
(262) |
(23,905) |
| b) | Information on ongoing contracts |
As of March 31, 2023, the Company has outstanding
swap contracts - IPCA x CDI and CDI x Dollar.
Swap contracts – IPCA x
CDI and CDI x Dollar
In September 2019, Petrobras contracted a cross
currency swap aiming to protect against exposure arising from the 7th issuance of debentures, settled on October 9, 2019, for the total
notional amount of US$ 367 for IPCA x CDI operations, maturing in September 2029 and September 2034, and US$ 240 for CDI x U.S. Dollar
operations, maturing in September 2024 and September 2029.
NOTES TO THE UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
In July 2022, the Company approved a repurchase
plan for these debentures, to hold them in treasury or resell them. At March 31, 2023, only an immaterial amount of this debt had been
effectively repurchased. Thus, the position in this swap remains unchanged.
Changes in interest rate forward curves (CDI interest
rate) may affect the Company's results, due to the market value of these swap contracts. In preparing a sensitivity analysis for these
curves, a parallel shock on this curve was estimated based on the average maturity of these swap contracts, in the scope of the Company’s
Risk Management Policy. For possible and remote scenarios, the effects of 40% (500 b.p.) and 80% (1,000 b.p.) variations, respectively,
on the interest rate forward curves were estimated. The effects of this sensitivity analysis, keeping all other variables remaining constant,
are shown in the following table:
| |
Possible Result |
Remote Result |
| SWAP cambial (IPCA x USD) |
(10) |
(19) |
| |
|
|
The methodology used to calculate the fair value
of this swap operation consists of calculating the future value of the operations, using rates agreed in each contract and the projections
of the forward curves, IPCA coupon and foreign exchange coupon, discounting to present value using the risk-free rate. Curves are obtained
from Bloomberg based on forward contracts traded in stock exchanges.
The mark-to-market is adjusted to the credit risk
of the financial institutions, which is not relevant in terms of financial volume, since the Company deals in contracts with highly rated
banks.
| c) | Sensitivity analysis for foreign
exchange risk on financial instruments |
A sensitivity analysis is set out below, showing
the probable scenario for foreign exchange risk on financial instruments, computed based on external data along with reasonably possible
and remote scenarios (20% and 40% changes in the foreign exchange rates prevailing on March 31, 2023, respectively), except for assets
and liabilities of foreign subsidiaries, when transacted in a currency equivalent to their respective functional currencies. This analysis
only covers the exchange rate variation and maintains all other variables constant.
NOTES TO THE UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
| Risk |
Financial Instruments |
Exposure at 03.31.2023 |
Probable Scenario (*) |
Reasonably possible
scenario |
Remote
Scenario |
| Dollar/Real |
Assets |
7,511 |
251 |
1,502 |
3,004 |
| |
Liabilities |
(96,309) |
(3,215) |
(19,262) |
(38,523) |
| |
Exchange rate - Cross currency swap |
(592) |
(20) |
(118) |
(237) |
| |
Cash flow hedge on exports |
61,711 |
2,060 |
12,342 |
24,684 |
| |
Total |
(27,679) |
(924) |
(5,536) |
(11,072) |
| |
|
|
|
|
|
| Euro/Dollar |
Assets |
953 |
30 |
191 |
381 |
| |
Liabilities |
(1,874) |
(58) |
(375) |
(750) |
| |
Total |
(921) |
(28) |
(184) |
(369) |
| |
|
|
|
|
|
| Pound/Dollar |
Assets |
1,509 |
29 |
302 |
603 |
| |
Liabilities |
(2,909) |
(56) |
(582) |
(1,163) |
| |
Total |
(1,400) |
(27) |
(280) |
(560) |
| |
|
|
|
|
|
| Pound/Real |
Assets |
2 |
− |
− |
1 |
| |
Liabilities |
(32) |
(2) |
(6) |
(13) |
| |
Total |
(30) |
(2) |
(6) |
(12) |
| |
|
|
|
|
|
| Euro/Real |
Assets |
4 |
− |
1 |
2 |
| |
Liabilities |
(13) |
(1) |
(3) |
(5) |
| |
Total |
(9) |
(1) |
(2) |
(3) |
| Total at March 31, 2023 |
(30,039) |
(982) |
(6,008) |
(12,016) |
| (*) At , the probable scenario was computed based on the following risks: R$ x U.S. Dollar - a 3,34% depreciation of the Real; Euro x Dollar: a 3% appreciation of the Euro; Pound Sterling x U.S. Dollar: a 1.88% appreciation of the Pound Sterling; Real x Euro: a 6.5% depreciation of the Real; and Real x Pound Sterling - a 5.3% depreciation of the Real. Source: Focus and Thomson Reuters. |
| 26.4. | Interest rate risk management |
The Company considers that interest rate risk does
not create a significant exposure and therefore, preferably does not use derivative financial instruments to manage interest rate risk,
except for specific situations faced by certain subsidiaries of Petrobras.
The sensitivity analysis of interest rate risk
presented in the table below is carried out for a twelve-month term. Amounts referring to reasonably possible and remote scenarios mean
the total floating interest expense if there is a variation of 40% and 80% in these interest rates, respectively, maintaining all other
variables constant.
The following table presents the amounts to be
disbursed by Petrobras with the payment of interest related to debts with floating interest rates at March 31, 2023:
| Risk |
|
Probable Scenario (*) |
Reasonably possible
scenario |
Remote
Scenario |
| LIBOR 3M |
|
12 |
15 |
19 |
| LIBOR 6M |
|
648 |
907 |
1,166 |
| SOFR 3M (**) |
|
69 |
95 |
120 |
| SOFR 6M (**) |
|
10 |
14 |
19 |
| CDI |
|
166 |
232 |
298 |
| TJLP |
|
71 |
100 |
129 |
| IPCA |
|
94 |
132 |
170 |
| |
|
1,070 |
1,495 |
1,921 |
| (*) The probable scenario was calculated considering the quotations of currencies and floating rates to which the debts are indexed. |
| (**) It represents the Secured Overnight Financing Rate. |
|
|
|
|
NOTES TO THE UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
| 26.5. | Liquidity risk management |
The possibility of a shortage of cash or other
financial assets in order to settle the Company’s obligations on the agreed dates is managed by the Company.
Following its liability management strategy, the
Company regularly evaluates market conditions and may enter into transactions to repurchase its own securities or those of its subsidiaries,
through a variety of means, including tender offers, make whole exercises and open market repurchases, in order to improve its debt repayment
profile and cost of debt.
| 26.6. | Fair value of financial assets
and liabilities |
| |
Level I |
Level II |
Level III |
Total fair
value
recorded |
| Assets |
|
|
|
|
| Commodity derivatives |
4 |
- |
- |
4 |
| Foreign currency derivatives |
- |
- |
- |
- |
| Interest rate derivatives |
- |
19 |
- |
19 |
| Balance at March 31, 2023 |
4 |
19 |
- |
23 |
| Balance at December 31, 2022 |
− |
− |
− |
− |
| |
|
|
|
|
| Liabilities |
|
|
|
|
| Foreign currency derivatives |
- |
(79) |
- |
(79) |
| Balance at March 31, 2023 |
− |
(79) |
- |
(79) |
| Balance at December 31, 2022 |
(40) |
(81) |
− |
(121) |
| |
|
|
|
|
The fair value of other financial assets and liabilities
is presented in the respective notes: 3 – Marketable securities; 9 – Trade and other receivables; and 23 – Finance debt
(estimated amount).
The fair values of cash and cash equivalents, current
debt and other financial assets and liabilities are equivalent or do not differ significantly from their carrying amounts.
NOTES TO THE UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
| 27. | Related party transactions |
The Company has a policy for related party transactions, which is annually
revised and approved by the Board of Directors in accordance with the Company’s by-laws.
| 27.1. | Transactions with joint ventures,
associates, government entities and pension plans |
The Company has engaged, and expects to continue
to engage, in the ordinary course of business in numerous transactions with joint ventures, associates, pension plans, as well as with
the Company’s controlling shareholder, the Brazilian Federal Government, which include transactions with banks and other entities
under its control, such as financing and banking, asset management and other transactions.
The balances of significant transactions are set
out in the following table:
| |
|
03.31.2023 |
|
12.31.2022 |
| |
|
|
|
|
| |
Assets |
Liabilities |
Assets |
Liabilities |
| Joint ventures and associates |
|
|
|
|
| Petrochemical companies (associates) |
19 |
7 |
21 |
10 |
| Other associates and joint ventures |
75 |
2 |
72 |
21 |
| Subtotal |
94 |
9 |
93 |
31 |
| Brazilian government – Parent and its controlled entities |
|
|
|
|
| Government bonds |
1,706 |
− |
1,689 |
− |
| Banks controlled by the Brazilian Government |
12,647 |
1,267 |
11,811 |
1,567 |
| Petroleum and alcohol account - receivables from the Brazilian Government |
629 |
− |
602 |
− |
| Brazilian Federal Government (*) |
− |
307 |
− |
1,422 |
| Pré-Sal Petróleo S.A. – PPSA |
− |
54 |
− |
57 |
| Others |
161 |
36 |
58 |
71 |
| Subtotal |
15,143 |
1,664 |
14,160 |
3,117 |
| Petros |
78 |
193 |
56 |
301 |
| Total |
15,315 |
1,866 |
14,309 |
3,449 |
| Current |
2,568 |
521 |
2,603 |
2,119 |
| Non-Current |
12,747 |
1,345 |
11,706 |
1,330 |
| (*) It includes amounts related to lease liabilities. |
The income/expenses of significant transactions
are set out in the following table:
NOTES TO THE UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
| |
|
|
2023 |
2022 |
| |
|
|
Jan-Mar |
Jan-Mar |
| Joint ventures and associates |
|
|
|
|
| State-controlled gas distributors (joint ventures) (*) |
|
|
− |
574 |
| Petrochemical companies (associates) |
|
|
889 |
1,125 |
| Other associates and joint ventures |
|
|
9 |
29 |
| Subtotal |
|
|
898 |
1,728 |
| Brazilian government – Parent and its controlled entities |
|
|
|
|
| Government bonds |
|
|
53 |
42 |
| Banks controlled by the Brazilian Government |
|
|
6 |
21 |
| Petroleum and alcohol account - receivables from the Brazilian Government |
|
|
11 |
19 |
| Brazilian Federal Government |
|
|
(17) |
− |
| Pré-Sal Petróleo S.A. – PPSA |
|
|
(110) |
(39) |
| Others |
|
|
(39) |
11 |
| Subtotal |
|
|
(96) |
54 |
| Petros |
|
|
(4) |
− |
| Total |
|
|
798 |
1,782 |
| Revenues, mainly sales revenues |
|
|
894 |
1,781 |
| Purchases and services |
|
|
2 |
4 |
| Income (expenses) |
|
|
(148) |
(89) |
| Foreign exchange and inflation indexation charges, net |
|
|
(43) |
12 |
| Finance income (expenses), net |
|
|
93 |
74 |
| Total |
|
|
798 |
1,782 |
| (*) In July 2022, the Company disposed its entire interest in Gaspetro. |
The liability related to pension plans of the Company's
employees and managed by the Petros Foundation, including debt instruments, is presented in note 13.
| 27.2. | Compensation of key management
personnel |
The criteria for compensation of members of the
Board of Directors and the Board Executive Officers is based on the guidelines established by the Secretariat of Management and Governance
of the State-owned Companies (SEST) of the Ministry of Management and Innovation in Public Services, and by the MME. The total compensation
is set out as follows:
| |
|
Jan-Mar/2023 |
|
Jan-Mar/2022 |
| |
Executive Officers |
Board of Directors |
Total |
Executive Officers |
Board of Directors |
Total |
| Wages and short-term benefits |
0.7 |
− |
0.7 |
0.7 |
− |
0.7 |
| Social security and other employee-related taxes |
0.2 |
− |
0.2 |
0.2 |
− |
0.2 |
| Post-employment benefits (pension plan) |
0.1 |
− |
0.1 |
0.1 |
− |
0.1 |
| Benefits due to termination of tenure |
0.1 |
− |
0.1 |
− |
− |
− |
| Total compensation recognized in the statement of income |
1.1 |
− |
1.1 |
1.0 |
− |
1.0 |
| Total compensation paid (*) |
1.0 |
− |
1.0 |
1.3 |
− |
1.3 |
| Monthly average number of members in the period |
9.00 |
11.00 |
20.00 |
9.00 |
11.00 |
20.00 |
| Monthly average number of paid members in the period |
9.00 |
5.00 |
14.00 |
9.00 |
3.33 |
12.33 |
| (*) It includes Variable Compensation Program (PPP) for Executive Officers. |
In the three-month period ended March 31, 2023,
expenses related to compensation of the board members and executive officers of Petrobras amounted to US$ 2.4 (US$ 2.9 for the
same period of 2022).
The compensation of the Advisory Committees to
the Board of Directors is separate from the fixed compensation set for the Board Members and, therefore, has not been classified under
compensation of Petrobras’ key management personnel.
In accordance with Brazilian regulations applicable
to companies controlled by the Brazilian Federal Government, Board members who are also members of the Statutory Audit Committees are
only compensated with respect to their Audit Committee duties. The total compensation concerning these members was US$ 119 thousand
for the three-month period ended March 31, 2023 (US$ 143 thousand with tax and social security costs). For the same period of 2022,
the total compensation concerning these members was US$ 153 thousand (US$ 183 thousand with tax and social security costs).
NOTES TO THE UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
On April 27, 2023, the Company’s Annual Shareholders’
Meeting set the threshold for the overall compensation for executive officers and board members at US$ 8.9, R$ 44.99 million,
from April 2023 to March 2024 (US$ 7.6, R$ 39.59 million, from April 2022 to March 2023, approved on April 13, 2022).
| 28. | Supplemental information on statement
of cash flows |
| |
Jan-Mar/2023 |
Jan-Mar/2022 |
| Amounts paid/received during the period: |
|
|
| Withholding income tax paid on behalf of third-parties |
201 |
162 |
| Transactions not involving cash |
|
|
| Lease |
923 |
975 |
| Provision for decommissioning costs |
7 |
10 |
| Use of tax credits and judicial deposit for the payment of contingency |
19 |
720 |
The balance of Cash and cash equivalents in the
Statements of Cash Flows includes amounts related to assets classified as held for sale, as shown in the reconciliation below:
| |
Jan-Mar/2023 |
Jan-Mar/2022 |
| Reconciliation of the balance at the beginning of the period |
|
|
| Cash and cash equivalents in statements of financial position |
7,996 |
10,467 |
| Cash and cash equivalents classified as assets held for sale |
− |
13 |
| Cash and cash equivalents according to Statements of Cash Flows (opening balance) |
7,996 |
10,480 |
| Reconciliation of the balance at the end of the period |
|
|
| Cash and cash equivalents in statements of financial position |
10,290 |
17,223 |
| Cash and cash equivalents classified as assets held for sale |
− |
9 |
| Cash and cash equivalents according to Statements of Cash Flows (closing balance) |
10,290 |
17,232 |
| 28.1. | Reconciliation of Depreciation,
depletion and amortization with Statements of Cash Flows |
| |
Jan-Mar/2023 |
Jan-Mar/2022 |
| Depreciation of Property, plant and equipment |
3,436 |
3,548 |
| Amortization of Intangible assets |
23 |
18 |
| Capitalized depreciation |
(497) |
(367) |
| Depreciation of right of use - recovery of PIS/COFINS |
(38) |
(29) |
| Depreciation, depletion and amortization in the Statements of Cash Flows |
2,924 |
3,170 |
Sale of Norte Capixaba group of fields
On April 12, 2023, after fulfilling all the conditions
precedent, the Company completed the sale of its entire interest (100%) in a set of 4 concessions in onshore production fields, with integrated
facilities, located in the state of Espírito Santo, for the company Seacrest Petróleo SPE Norte Capixaba Ltda (Seacrest).
The operation was completed with the receipt of
US$ 427 in cash, including price adjustments provided for in the contract. This amount is added to US$ 36 received when the
contract was signed. In addition to these amounts, Petrobras expects to receive up to US$ 66 in contingent payments, depending on
future Brent prices.
The result of this operation will be accounted
for in the three-month period ended June 30, 2023.
Distribution of remuneration to shareholders
On May 11, 2023, Petrobras’s Board of Directors
approved the distribution of remuneration to shareholders in the amount of US$ 4,970, or R$ 24,700 million (US$ 0,3810
per outstanding preferred and common shares, or R$ 1.8936), based on the net income for the three-month period ended March 31, 2023,
as presented in the following table:
NOTES TO THE UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PETROBRAS (Expressed in millions of US Dollars, unless otherwise indicated) |
| |
Date of approval |
Date of record |
Amount per Share |
Amount |
| Interim dividends |
05.11.2023 |
06.12.2023 |
0.2465 |
3,215 |
| Interim interest on capital |
05.11.2023 |
06.12.2023 |
0.1345 |
1,755 |
| Total distribution to shareholders |
|
|
0.3810 |
4,970 |
These dividends and interest on capital will be
paid in two equal installments, on August 18, 2023 and September 20, 2023, and will be deducted from the remuneration that will be distributed
to shareholders relating to the fiscal year 2023. The amounts will be adjusted by the SELIC rate from the date of payment of each installment
until the end of the referred fiscal year, on December 31, 2023.
Report
of Independent Registered Public Accounting Firm
KPMG Auditores Independentes Ltda.
Rua do Passeio, 38 - Setor 2 - 17º andar - Centro
20021-290 - Rio de Janeiro/RJ - Brasil
Caixa Postal 2888 - CEP 20001-970 - Rio de Janeiro/RJ - Brasil
Telefone +55 (21) 2207-9400
kpmg.com.br
Report of independent registered public accounting firm
The Shareholders and Board of Directors of
Petróleo Brasileiro S.A. - Petrobras
Results of review of condensed consolidated interim financial statements
We have reviewed the consolidated interim statement of financial position of Petróleo
Brasileiro S.A. - Petrobras and subsidiaries (the “Company”) as of March 31, 2023, the related consolidated statements of
income, comprehensive income, changes in shareholders’ equity and cash flows for the three-month periods ended March 31, 2023 and
2022, and the related notes (collectively, the condensed consolidated interim financial statements). Based on our reviews, we are not
aware of any material modifications that should be made to the condensed consolidated interim financial statements for it to be in accordance
with IAS 34 - Interim Financial Reporting, as issued by the International Accounting Standards Board (IASB).
We have previously audited, in accordance with the standards of the Public Company Accounting
Oversight Board (United States) (PCAOB), the consolidated statement of financial position of the Company as of December 31, 2022, and
the related consolidated statements of income, comprehensive income, changes in shareholders’ equity, and cash flows for the year
then ended (not presented herein); and in our report dated March 29, 2023, we expressed an unqualified opinion on those consolidated financial
statements. In our opinion, the information set forth in the accompanying consolidated statement of financial position as of December
31, 2022, is fairly stated, in all material respects, in relation to the consolidated statement of financial position from which it has
been derived.
Basis for review results
These condensed consolidated interim financial statements are the responsibility of
the Company’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect
to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange
Commission and the PCAOB.
We conducted our reviews in accordance with the standards of the PCAOB. A review of
condensed consolidated interim financial statements consists principally of applying analytical procedures and making inquiries of persons
responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards
of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly,
we do not express such an opinion.
/s/ KPMG Auditores Independentes Ltda.
Rio de Janeiro - RJ
May 11, 2023
| KPMG Auditores Independentes, uma sociedade simples brasileira e firma-membro da rede KPMG de firmas-membro independentes e afiliadas à KPMG International Cooperative (“KPMG International”), uma entidade suíça. |
KPMG Auditores Independentes, a Brazilian entity and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. |