UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

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

Securities Exchange Act of 1934

For the month of August, 2023

Commission File Number 1-15106

PETRÓLEO BRASILEIRO S.A. – PETROBRAS

(Exact name of registrant as specified in its charter)

Brazilian Petroleum Corporation – PETROBRAS

(Translation of Registrant's name into English)

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

(Address of principal executive office)

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

Form 20-F ___X___ Form 40-F _______

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

Yes _______ No___X____

Petrobras financial performance in 2Q23

Rio de Janeiro, August 03, 2023

Main achievements:

• Robust recurring EBITDA of US$ 11.7 billion, a 19% decrease compared to 1Q23, mainly influenced by international diesel crack spreads, which declined more than 40% QoQ
• Gross debt under control at US$ 58 billion, even after the increase in leases due to the startup of chartered FPSOs Anna Nery and Almirante Barroso
• Cash generation resilience: Operating Cash Flow of US$ 9.6 billion
• Return to society with payment of R$ 56.1 billion in taxes
• New pre-salt production record with 2.06 MMboed in 2Q23, representing 78% of Petrobras total production in the quarter
• New units: start-up in May 2023 of FPSO Anna Nery, in Marlim, and FPSO Almirante Barroso, in Búzios field. FPSO Anita Garibaldi in Marlim, with mooring activities completed and expected to start operations in 3Q23
• Refining utilization factor: 93% in 2Q23, the highest level since 3Q15, with diesel, gasoline, and jet fuel production representing 67% of the total
• Sales records: diesel S10 accounting for 62.2% of total diesel sales. Highest gasoline sales in the year’s first half in 6 years
• Maritime sustainability: beginning of testing of maritime fuel with 24% renewable content and the first contract for a hybrid support vessel
• First sustainable decomissioning auction for P-32 platform

Disclaimer

This report may contain forward-looking statements. Such forward-looking statements only reflect expectations of the Company's managers regarding future economic conditions, as well as the Company's performance, financial performance and results, among others. The terms "anticipates", "believes", "expects", "predicts", "intends", "plans", "projects", "objective", "should", and similar terms, which evidently involve risks and uncertainties that may or may not be anticipated by the Company and therefore are not guarantees of future results of the Company's operations that may differ from current expectations. The readers should not rely exclusively on any forward-looking statement contained herein. The Company does not undertake any responsibility to update the presentations and forecasts in the light of new information or its future developments, and the figures reported for 2Q23 onwards are estimates or targets. These indicators do not have standardized meanings and may not be comparable to indicators with a similar description used by others. We provide these indicators because we use them as measures of company performance; they should not be considered in isolation or as a substitute for other financial metrics that have been disclosed in accordance with BR GAAP or IFRS. See definitions of Free Cash Flow, Adjusted EBITDA and Net Indebtedness in the Glossary and their reconciliations in the Liquidity and Capital Resources sections, Reconciliation of Adjusted EBITDA and Net Indebtedness. Consolidated accounting information revised by independent auditors in accordance with international accounting standard IAS 34 – Interim Financial Reporting, issued by International Accounting Standards Board (IASB).

 

Main items

Table 1 - Main items^*

* See reconciliation of Recurring net income and Adjusted EBITDA in the Special Items section.

* *Ratio calculated in USD

 

Consolidated results

Net revenues

Table 2 – Net revenues by products

In 2Q23, net revenues fell 18% compared to 1Q23, largely due to the 4% depreciation of Brent prices, declines in international diesel crack spreads above 40%, in addition to lower export revenues.

Revenues from oil products in the domestic market fell 13% in 2Q23 as a result of the average 17% reduction in oil product prices, reflecting the fall in international prices. This effect was partially offset by higher volumes, especially due to the increased competitiveness of gasoline against our customers' main supply alternatives. The decrease in natural gas revenues was mainly due to lower prices, as a consequence of contractual readjustments with distributors as of May 2023.

There was a 37% decrease in export revenues compared to 1Q23, mainly explained by the 50% fall in oil export revenues. This was largely due to the decrease in exports volumes in 2Q23, caused by the increase in refinery processing and the realization in 1Q23 of exports from previous periods. In addition, the depreciation of Brent between the periods contributed to the drop in revenues. This effect was partially offset by higher revenues from fuel oil exports, for which demand was higher in 2Q23.

During 2Q23, the principal traded products remained diesel and gasoline, which accounted for approximately 74% of the revenue generated from the sale of oil products.

 

Graph 1 – Oil products sales revenues 2Q23 – domestic market

Noteworthy in exports is Petrobras first oil sale to Greece, totaling 1 million barrels. The sale results from the continuous development of markets for pre-salt oils in Europe, which was boosted with the change in oil flows as a result of the war in Ukraine.

In 2Q23, export volumes were diversified among different destinations, as presented below:

Cost of goods sold ^*

Table 5 – Cost of goods sold

In 2Q23, cost of goods sold decreased 15% compared to 1Q23, reflecting the decrease in costs of oil and oil products imports, due to lower prices and lower volumes of oil imports. This impact was partially offset by higher LNG (liquefied natural gas) import costs, which were necessary to balance the reduction in Bolivian gas supply.

^* Managerial information (non-audited).

 

In addition, the decrease in oil production and the fall in government take, due to the devaluation of Brent, also contributed to the reduction in costs of goods sold in 2Q23.

The increase in the volume of sales of oil products in the domestic market was met by higher production at the refineries, which was the main driver for the increase in the production costs of oil products in 2Q23.

Operating expenses

Table 6 – Operating expenses

In 2Q23, operating expenses increased 17% vs. 1Q23, mainly reflecting higher impairment expenses (-R$ 1.9 billion), mainly related to the 2^nd train of RNEST (due to increased project scope, increased discount rate and appreciation of the BRL, but with the project still resilient and presenting positive NPV), and higher tax expenses (-R$ 0.6 billion), as a result of the tax on oil exports, which was in force for 4 months from March 2023.

In 2Q23, selling expenses decreased by 6%, because of lower logistics expenses due to the decrease in oil export volumes. However, this was partially offset by higher fuel oil exports.

In other operating revenues, the highlight in 2Q23 was the higher capital gains from asset sales (+R$ 0.8 billion), mainly related to the closing of the Potiguar and Norte Capixaba clusters.

 

Adjusted EBITDA

In 2Q23, Adjusted EBITDA was R$ 56.7 billion, a decrease of 22% compared to 1Q23. This drop was mainly attributed to the Brent depreciation, declines in international diesel crack spreads above 40%, lower oil exports and higher LNG imports (from 0 in 1Q23 to 3 MMm³/d in 2Q23).

Financial results

Table 7 – Financial results

In 2Q23, the financial result was negative by R$ 0.3 billion, compared to a negative result of R$ 3.2 billion in 1Q23. The improvement in the result can be explained mainly by higher gains from the FX variation of the BRL against the USD (+R$ 3.2 billion), which appreciated 5.1% in 2Q23 (from R$ 5.08/US$ on 03/31/2023 to R$ 4.82/US$ on 06/30/2023) versus an appreciation of 2.6% in 1Q23 (from R$5.22/US$ on 12/31/2022 to R$ 5.08/US$ on 03/31/2023). This effect was partially offset, basically, by the monetary restatement by the Selic rate of the complementary dividends for the year 2022 (-R$ 1.8 billion).

Net profit (loss) attributable to Petrobras shareholders

In 2Q23, net income was R$ 28.8 billion, compared to R$ 38,2 billion in 1Q23. This result is mainly explained by the depreciation of Brent, declines in international diesel crack spreads above 40% and higher operating expenses, especially impairment charges (-R$ 1,9 billion) and tax expenses (-R$ 0.6 billion). These effects were partially offset by higher capital gains from the sale of assets (+R$ 0.8 billion), lower financial expenses (+R$ 2.9 billion), as a result of foreign exchange gains due to the appreciation of the BRL against the USD, and lower income tax expenses (+R$ 5.9 billion), due to lower income before taxes and tax credits in 2Q23 resulting from the anticipation of the distribution of dividends for the 2023 financial year in the form of interest on equity.

 

Recurring net income attributable to Petrobras shareholders and recurring Adjusted EBITDA

Excluding non-recurring items, net income would have remained stable at R$ 28.8 billion. Among the items that comprise the positive impact the highlights were the gains from the sale of the Potiguar and Norte Capixaba clusters (+R$ 3.4 billion), mainly offset by impairment expenses (-R$ 1.9 billion), legal contingencies (-R$ 0.5 billion) and the tax on oil exports (-R$ 1.0 billion), which was in force for 4 months from March 2023.

Adjusted EBITDA had a negative impact of R$ 1.5 billion, influenced by legal contingencies (-R$ 0.5 billion) and the tax on oil exports (-R$ 1.0 billion). Excluding the effects of non-recurring items, Adjusted EBITDA would have reached R$ 58,2 billion in 2Q23.

 

Special items

Table 8 – Special items

In management's opinion, the special items presented above, although related to the Company's business, were highlighted as complementary information for a better understanding and evaluation of the result. Such items do not necessarily occur in all periods and are disclosed when relevant.

 

Capex

Table 9 - Capex

In 2Q23, capex totaled US$ 3.2 billion, 31% above 1Q23, mainly due to the large pre-salt projects and the impact of the signature bonus related to the Southwest Sagittarius, Água Marinha and North Brava fields.

In the Exploration and & Production segment, capex totaled US$ 2.6 billion, 27% above 1Q23, due to the development of large projects, especially the progress in the construction and integration of FPSOs in Búzios, in addition to higher exploratory expenses in the pre-salt. Investments in 2Q23 were mainly focused on: (i) the development of production in the Santos Basin pre-salt (US$ 1.4 billion); (ii) deepwater production development (US$0.4 billion); (iii) exploratory investments (US$ 0.2 billion).

In the Refining, Transport and Commercialization segment, capex totaled US$ 0.37 billion, with a focus on the progress in the works of the SNOx (emission abatement unit) of RNEST and higher number of dockages for TRANSPETRO ships. In the Gas and Power segment, capex totaled US$ 0.04 billion in 2Q23, with emphasis on investments in the Route 3 Natural Gas processing unit.

Additionally, it is worth highlighting the entry into operation of the leased FPSOs units Anna Nery (Marlim 2) and Almirante Barroso (Búzios 5), whose lease amounts totaled US$ 5.2 billion. Just like owned units, leased FPSOs are recognized in the Company's assets and constitute an investment effort to expand production capacity with new units, but are not considered under Capex figures.

 

The following table presents the main information about the new oil and gas production systems, already contracted.

Table 10 – Main projects

 

Liquidity and capital resources^[1]

Table 11 - Liquidity and capital resources

As of June 30, 2023, cash and cash equivalents totaled R$ 49.9 billion and adjusted cash and cash equivalents totaled R$ 76.1 billion.

In 2Q23, cash generated from operating activities reached R$ 47.8 billion and positive free cash flow totaled R$ 33.3 billion. This level of cash generation, along with the inflow of funds from the divestments of R$ 7.9 billion, especially the conclusion of the sales of the Potiguar (R$ 5.4 billion) and the Norte Capixaba (R$ 2.2 billion) clusters were used to: (a) pay remuneration to shareholders (R$ 30.6 billion), (b) make investments (R$ 14.4 billion), (c) amortize lease liabilities (R$ 7.3 billion), and (d) amortize principal and interest due in the period (R$ 5.8 billion).

* Includes government bonds, bank deposit certificates and time deposits of companies classified as held for sale.

** Free cash flow (FCF) is in accordance with the new Shareholder Remuneration Policy (“Policy”) approved on 07/28/2023 and corresponds to operating cash flow minus acquisitions of property, plant and equipment, intangible assets and equity interests. For comparative purposes, figures prior to 2Q23 have been adjusted in accordance with the new Policy.

 

Debt indicators

As of 06/30/2023, gross debt reached US$ 58.0 billion, an increase of 8.7% compared to 03/31/2023, mainly due to the increase in leases in the period with the entry into operation of the leased FPSOs Anna Nery and Almirante Barroso, which added US$ 5.2 billion to the company's lease liabilities. On the other hand, financial debt fell by US$ 608 million, compared to 03/31/2023, reaching US$ 29.2 billion on 06/30/2023.

Average maturity increased from 12 to 12.1 years and average cost varied from 6.5% p.a. to 6.6% p.a. over the same period.

The gross debt/EBITDA ratio reached 1.02x on 06/30/2023, compared to 0.82x on 03/31/2023.

On 06/30/2023, net debt reached US$ 42.2 billion, an increase of 12.2% compared to 03/31/2023, mainly due to the increase in leases in the period.

Table 12 – Debt indicators

 

Results by segment

Exploration and Production

Table 13 – E&P results

In 2Q23, E&P gross profit was R$ 42.6 billion, a reduction of 12% when compared to 1Q23. This reduction was mainly due to lower Brent prices and lower production in the period.

Operating income in 2Q23 was 17% lower than 1Q23, as a reflection of lower gross profit and higher tax expenses related to oil export operations.

Lifting costs in 2Q23, excluding production taxes and leases, was US$ 5.96/boe, an 8% increase when compared to 1Q23, due to higher integrity expenses, mainly subsea inspections and well interventions, and the appreciation of the Brazilian real against the US dollar.

Lifting costs in the pre-salt remained stable compared to 1Q23. The effect of the exchange rate appreciation was offset by the reduction in costs, mainly due to the reduction in well interventions and the increase in production in Búzios, due to the FPSO Almirante Barroso start-up, and Itapu, due to the ramp-up of P-71.

In the post-salt, the increase in lifting costs is explained by the higher volume of intervention activities in wells in the Campos Basin and by subsea inspection and maintenance activities. The lower production and the effect of Brazilian real appreciation also contributed to this result.

 

In onshore and shallow water assets, there was a 7% increase in lifting costs, also due to the effect of the exchange rate appreciation in 2Q23 and the resumption of production in onshore fields in Bahia.

The decrease with government take in dollars is explained by the lower Brent prices in 2Q23.

 

Refining, Transportation and Marketing

Table 14 - RTM results

In 2Q23, the international diesel crack spreads dropped more than 40% leading to a gross profit of R$ 8.6 billion, R$ 6.8 billion lower than 1Q23. The inventory turnover was less pronounced in 2Q23 due to the lower changes in Brent prices, - R$ 2.2 billion vs. - R$ 5.9 billion in 1Q23. Excluding this effect, gross profit would have been R$ 10.9 billion in 2Q23 and R$ 21.4 billion in 1Q23.

The aforementioned lower margins in 2Q23, mainly those of diesel and jet fuel, were partially offset by higher domestic volumes of sales of gasoline, because of its greater competitiveness relative to ethanol, of diesel, due to the typical seasonality and by higher export volumes of fuel oil.

In 2Q23, operating income was lower, reflecting the lower gross profit.

In 2Q23, the refining cost per barrel in BRL was 0.2% lower than 1Q23. The higher expenses with materials and maintenance services and with catalysts, an input mainly used in the conversion units to produce gasoline, were offset by the higher feedstock in the period.

 

Gas and Power

Table 15 – G&P results

In 2Q23, gross profit was R$ 5.7 billion, a 21.5% decrease when compared to 1Q23, while operating income was R$ 1.9 billion, 41.1% lower than 1Q23. This result was due to the reduction in Bolivian gas purchases, as per the contractual curve agreed, partially offset by the regasification of LNG in the period, besides lower sales revenues due to Brent depreciation impact on gas prices. The higher use of LNG, of approximately 3MM m³/d in 2Q23, had a negative impact on the segment's result, given its higher acquisition cost.

 

Reconciliation of Adjusted EBITDA

EBITDA is an indicator calculated as the net income for the period plus taxes on profit, net financial result, depreciation and amortization. Petrobras announces EBITDA, as authorized by CVM Resolution 156 of June 2022.

In order to reflect the management view regarding the formation of the company's current business results, EBITDA is also presented adjusted (Adjusted EBITDA) as a result of: results in equity-accounted investments; impairment, reclassification of comprehensive income (loss) due to the disposal of equity-accounted investments, results with co-participation agreement in production fields and gains/losses on disposal/write-offs of assets.

Adjusted EBITDA, reflecting the sum of the last twelve months (Last Twelve Months), also represents an alternative to the company's operating cash generation. This measure is used to calculate the Gross Debt and Net Debt to Adjusted EBITDA metric, helping to evaluate the company's leverage and liquidity.

EBITDA and adjusted EBITDA are not provided for in International Financial Reporting Standards (IFRS) and should not serve as a basis for comparison with those disclosed by other companies and should not be considered as a substitute for any other measure calculated in accordance with IFRS. These measures should be considered in conjunction with other measures and indicators for a better understanding of the company's performance and financial condition.

Table 16 - Reconciliation of Adjusted EBITDA

 

Financial statements

Table 17 - Income statement - Consolidated

 

Table 18 - Statement of financial position – Consolidated

 

Table 19 - Statement of cash flow – Consolidated

 

Financial information by business areas

Table 20 - Consolidated income by segment – 1H23

Table 21 - Consolidated income by segment – 1H22

 

Table 22 - Quarterly consolidated income by segment – 2Q23