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    PETR4   BRPETRACNPR6

PETRÓLEO BRASILEIRO S.A. - PETROBRAS

(PETR4)
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Petróleo Brasileiro S A Petrobras : Production & Sales Report 3Q21

10/20/2021 | 05:54pm EST

Highlights on production and sales in 3Q21

Rio de Janeiro, October, 20th, 2021 - In 3Q21, we continued to operate safely and with a solid performance, still with a differentiated regime and special protocols due to the pandemic scenario, but with a gradual increase in the number of people on board. The average production of oil, LGN and natural gas reached 2.83 MMboed, 1.2% above 2Q21, mainly due to the start-up, in August, of the FPSO Carioca (Sepia field), in the Santos Basin pre-salt, and the higher average production in the quarter in the FPSO P-70 (Atapu field), which reached full capacity in early July, confirming the good performance of the wells and the platform.

Production in the pre-salt area totaled 2.01 MMboed in the quarter, representing 71% of Petrobras' total production, against 67% in 3Q20.

Main highlights of 3Q21:

Start-upof FPSO Carioca: with 1st oil from the Sépia field, in the Santos Basin pre-salt. The new unit, which has the capacity to process up to 180 kbpd of oil and 6 million m3 of natural gas, will contribute to production growth in the pre-salt. This will be the largest platform operating in Brazil in terms of complexity.

"FPSO Carioca is an example of our strategy of concentrating investments in world-class exploration and production assets, such as the pre- salt, in which we have acreage with large reserves, low risk and competitive costs. This results in higher returns to the company and to society, creating a virtuous cycle of value generation", says the Director of Production Development, João Henrique Rittershaussen.

Processing of the 1st load of the FPSO Carioca: the oil extracted by the FPSO Carioca, with a light profile and density of 27.5° API, was transported by the Rio Grande vessel, which unloaded 44,650 m³ of the product at the São Sebastião terminal and was carried through pipelines to produce oil products at the Henrique Lage Refinery (Revap) and the Paulínia Refinery (Replan), both in São Paulo.

Signature of a Letter of Intent for the Mero 4 FPSO: with SBM Offshore for chartering and providing services for the FPSO Alexandre de Gusmão, which will be allocated to the Mero 4 Project, in the Santos Basin pre-salt, where we plan to interconnect 15 wells, 8 of which oil producers, 6 water and gas injectors and 1 well capable of operating either as a producer or a gas injector.

Start of gas export from P-69: located in the Tupi field, in Santos Basin. P-69 is the 8th unit in Tupi to export gas, enabling a better economic management of the reservoir and the consequent increase in value creation.

On August 12th, the National Agency for Petroleum, Natural Gas and Biofuels (ANP) approved the Búzios Co-participation Agreement, which regulates the coexistence of the Transfer of Rights and Production Sharing Agreements in the Transfer of Rights Surplus for the Búzios field in the Santos Basin pre-salt. Following this approval, along with the receipt, by Petrobras, of the payment related to the obligations of our partners CNOOC Petroleum Brasil Ltda. (CNOOC) and CNODC Brasil Petróleo e Gás Ltda. (CNODC), the agreement became effective on September 1st. As a result, we now hold the exploration and production rights of 90% of the surplus volumes and of 92.666% of the shared reservoir.

It is worth mentioning that, on September 29th, CNOOC expressed its interest in exercising the option to purchase an additional 5% of the Transfer of Rights Surplus Production Agreement, in the Búzios field. The impact on Petrobras' production curve will only start after the closing of the transaction, with no expected impact on the 2021 production target.

In terms of our portfolio management, on July 14th, we concluded the assignment to 3R Rio Ventura SA of our 100% stake in Polo Rio Ventura, comprising 8 onshore exploration and production fields located in the state of Bahia, whose average production was 780 bpd in 1H21. On September 1st, we concluded the assignment to Total Energies of our 10% stake in the Lapa field, whose production averaged 50.7 kboed in

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1H21 (5.07 kboed being Petrobras' share). On October 8th, we completed the transfer of our 50% interest in the Rabo Branco onshore field, located in the Sergipe-Alagoas Basin, to the company Petrom Produção de Petróleo e Gás Ltda, whose production averaged 131 bpd in 2020 (65.5 bpd being the portion corresponding to Petrobras). These operations are in line with Petrobras' portfolio optimization and capital allocation improvement strategy, with a view to maximizing value.

In 3Q21, the sale of oil products in the domestic market grew again, reaching volumes of 1,946 kbpd. The highlights were the increase in sales of diesel, gasoline and jet fuel. Oil processing and oil product output increased in 3Q21, following the sales growth in the domestic market.

Diesel sales were 867 kbpd in 3Q21, the highest mark since 2015, and gasoline sales were 441 kbpd in 3Q21, reaching 449 kbpd in September, the highest volumes since 2017. We set a new record for S-10 diesel sales in September, with the sale of 498 kbpd, 2.7% up on the previous record, reached in July 2021.

We continue to increase the share of pre-salt oil processed in our refineries, in line with the production profile and with the demands and opportunities in the national and international markets. Pre-salt oil processing remained high in 3Q21, representing 63% of processed feedstock and setting a new record of 1,125 kbpd, a 65% share, in September. The adequacy of the refining park to enable greater processing of pre-salt oil is directly associated with the increased flexibility, as well as with guaranteeing the reliability and availability of the refining park. This is in line with Petrobras' economic and sustainability guidelines, as pre-salt oil presents a high yield of medium distillates with higher value added and low sulfur content.

RPBC implemented projects for the energy use of the fuel gas produced at the refinery, bringing forward by three years the expected results for the reduction in natural gas consumption, increase of energy efficiency and reduction in the emission of greenhouse gases. This action is in line with the initiatives of the RefTOP (World Class Refining) program to increase energy performance, with a view to making better use of inputs such as natural gas, electricity and steam in the operations and preparing refining activities for the transition to a low carbon economy.

In 3Q21, we increased the share of Búzios oil in our mix of exports in order to take advantage of the arbitrage opportunity that has favored the sale of this stream in markets such as Europe and the Americas. Therefore, we improved the profitability of our exports and expanded our client portfolio with a new refiner for the Búzios stream and two for Atapu.

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1 - Exploration & Production

Variation (%)

Thousand barrels of oil equivalent per day

3Q21

2Q21

3Q20

9M21

9M20

3Q21 X

3Q21 X

9M21 X

(kboed)

2Q21

3Q20

9M20

Crude oil, NGL and natural gas - Brazil

2,790

2,754

2,904

2,755

2,839

1.3

(3.9)

(3.0)

Crude oil and NGLs (Kbpd)

2,269

2,226

2,364

2,231

2,310

1.9

(4.0)

(3.4)

Onshore and Shallow water

95

99

132

101

144

(4.0)

(28.0)

(29.9)

Post-salt - deep and ultra deep

501

506

581

509

591

(1.0)

(13.8)

(13.9)

Pre-salt

1,673

1,620

1,651

1,620

1,574

3.3

1.3

2.9

Natural gas (Kboed)

520

528

540

524

529

(1.5)

(3.7)

(0.9)

Crude oil, NGL and natural gas -Abroad

41

43

48

43

49

(4.7)

(14.6)

(12.2)

Total (Kboed)

2,830

2,796

2,952

2,798

2,888

1.2

(4.1)

(3.1)

Total - comercial (Kboed)

2,501

2,484

2,632

2,479

2,571

0.7

(5.0)

(3.6)

The average production of oil, LGN and natural gas in 3Q21 was 2,830 kboed, an increase of 1.2% compared to 2Q21, mainly due to the startup of the FPSO Carioca (Sepia field) in the pre-salt Santos Basin and the highest average production in 3Q21 for the FPSO P-70 (Atapu field), which reached production capacity in early July.

These factors also explained the increase in production in the pre-salt fields, which reached 1,673 kbpd in the quarter, 3.3% higher than in 2Q21.

Post-salt production in 3Q21 was 501 kbpd, 1.0% lower than the previous quarter, due to higher losses from maintenance stoppages and the natural decline in production, effects partially offset by gains from complementary projects in the Marlim Leste field, in the Campos Basin.

Onshore and shallow water production was 95 kbpd in the quarter, 4 kbpd lower than the previous quarter, due to the sale of onshore fields at Polo Rio Ventura (closing on July 14th) and the natural decline in production.

Production abroad was 41 kbpd, relative to fields in Bolivia, Argentina and the United States, and 2 kbpd lower than in 2Q21.

2 - Refining, Transportation and Marketing*

Variation (%)

Operational (kbpd)

3Q21

2Q21

3Q20

9M21

9M21

3Q21 X

3Q21 X

9M21 X

2Q21

3Q20

9M21

Total production volume

1,932

1,741

1,935

1,832

1,805

11.0

(0.2)

1.5

Total sales volume in the domestic market

1,946

1,759

1,761

1,792

1,630

10.6

10.5

9.9

Reference feedstock

2,176

2,176

2,176

2,176

2,176

Processed feedstock (excluding LNG)

1,819

1,601

1,807

1,720

1,684

13.6

0.7

2.1

Processed feedstock utilization factor (%)*

84%

74%

83%

79%

77%

10.0

1.0

2.0

Total distillation feedstock

1,850

1,637

1,841

1,759

1,718

13.0

0.5

2.4

Total refining plants utilization factor (%)*

85%

75%

85%

81%

79%

10.0

2.0

Processed feedstock

1,851

1,638

1,851

1,758

1,730

13.0

1.6

Domestic crude oil as % of total processed feedstock

93%

89%

96%

92%

94%

4.0

(3.0)

(2.0)

Sales of oil products in 3Q21 were 10.6 % higher than in 2Q21, with higher sales for all products. The highlights were the growth in gasoline, diesel and jet fuel sales. In the case of gasoline, there was again an increase in consumption relative to hydrated ethanol in the Otto cycle, a gradual increase in demand and a reduction in imports from third parties, resulting in an increase in market share. In regards to diesel, the main reason for the increase was the seasonality of demand, with higher consumption in 3Q due to the grain crop season and industrial

  • Processed feedstock utilization factor is calculated only with oil and C5 +. Total refining plants utilization factor considers the entire load in the distillation units, consisting of oil, C5 +, waste, reprocessing, including terminals. Processed feedstock consists of oil and NGL.

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activity, besides the reduction in average biodiesel content between the quarters. In the case of jet fuel, growth is associated with the recovery of the aviation market.

Oil product output rose 11.0% in 3Q21 compared to 2Q21 due to higher demand from the domestic market and higher refinery availability, since in 2Q21 there was a concentration of scheduled stoppages at the REDUC, RPBC, REGAP, RLAM, REPAR and REVAP refineries. In 3Q21, with the increase in oil processing, we reached a utilization factor of 85% against 75% in 2Q21.

2.1 - Diesel

Variation (%)

thousand barrels per day (kbpd)

3Q21

2Q21

3Q20

9M21

9M20

3Q21 X

3Q21 X

9M21 X

2Q21

3Q20

9M20

Production volume

740

716

795

725

704

3.3

(6.9)

2.9

Sales volume for the Brazilian market

867

815

749

805

664

6.4

15.7

21.2

Diesel sales increased 6.4% in 3Q21 compared to 2Q21 mainly due to seasonality of consumption. Additionally, the reduction in the average biodiesel content in diesel, from 11.0% in 2Q21 to 10.7% in 3Q21, also impacted sales positively. These effects were partially mitigated by the increase in third party imports.

It is important to point out that diesel sales in July 2021 (879 kbpd) were the highest since November 2015.

S-10 diesel sales continued to grow, up 9.6% in 3Q21 over the previous quarter and reaching a new record in September 2021, with sales of 498 kbpd, a volume 2.7% higher than the previous record set in July 2021. In 3Q21, the share of S-10 diesel in total sales reached 56.1%.

In 3Q21, diesel production was 3.3% higher than in 2Q21, but 6.9% lower than in 3Q20 due to the scheduled stoppage of RNEST in 3Q21.

The highlights were the monthly production records of S-10 diesel at REGAP in August, REFAP, REVAP and RPBC in September and the record diesel production at REGAP in August.

2.2 - Gasoline

Variation (%)

thousand barrels per day (kbpd)

3Q21

2Q21

3Q20

9M21

9M20

3Q21 X

3Q21 X

9M21 X

2Q21

3Q20

9M20

Production volume

440

385

386

401

346

14.3

14.0

16.1

Sales volume for the Brazilian market

441

386

374

390

329

14.3

17.9

18.7

Gasoline sales in 3Q21 grew 14.3% relative to 2Q21, with September 2021 sales standing out with the highest volumes since December 2017.

There was a gain in the share of gasoline over hydrated ethanol in flex-fuel vehicles in the comparison between the quarters, mainly due to higher ethanol prices, favoring gasoline consumption. In addition, there has been a gradual increase in demand in the Otto cycle over the months with the reduction of restrictive measures related to the pandemic, considering that in 2Q21 restrictions were tighter in some cities.

Gasoline production followed sales trends, with an increase of 14.3% in 3Q21 compared to 2Q21, with the resumption of production capacity after the scheduled stoppages.

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This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

PETROBRAS - Petróleo Brasileiro SA published this content on 20 October 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 20 October 2021 21:53:01 UTC.


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