Petróleo Brasileiro S.A. - Petrobras (PETR4) Earnings Call Transcript & Summary

Good afternoon, and welcome to Petrobras' webcast with analysts and investors about our second quarter 2026 results. It's a pleasure to have you with us today. This event will be presented in Portuguese with simultaneous interpretation into English. Links for both languages are available on our Investor Relations website.[Operator Instructions] Joining us today are Magda de Chambriard, the President of Petrobras; Angelica Laureano, Executive Officer for Logistics, Commercialization and Market; Clarice Coppetti, Executive Officer for Corporate Affairs; Fernando Melgarejo, Chief Financial and Investor Relations Officer; Renata Baruzzi, Executive Officer for Engineering, Technology and Innovation; Ricardo Wagner, Chief Governance and Compliance Officer; Sylvia Anjos, Chief Exploration and Production Officer; William Franca, Chief Industrial Processes and Products Officer; and William Nozaki, Acting Executive Officer for Energy Transition and Sustainability. To begin with, I will hand it over to our President, Magda de Chambriard, for her remarks. President, please go ahead.

Good morning, everyone. It's a pleasure to be with you today to demonstrate once again Petrobras' capacity to surpass its goals and deliver impressive results to our investors, be they from the public or private sectors. We have the full Board of Petrobras with us, and I'd like to take the opportunity to greet all investors, all of the representatives of our investors, all of the executives that are in this session with us and our partners and everybody that joined us remotely for the disclosure of our second quarter 2026 results. Also, I'd like to greet everybody from the press joining us. We become increasingly prouder of our results. It's a pleasure to be here once again joined by you to once again present another result that surpassed the previous ones, a result of our intensive work with our diverse teams working in a partnership to deliver an increasing amount of oil, gas and byproducts with security, quality, efficiency and capital discipline. In the first quarter of 2026, we reached several records. And in the second quarter, we surpassed them with important milestones once again. We reached -- and I must highlight this, we reached the highest net profit on a recurring basis for the quarter in dollars in the history of Petrobras. This recurring profit excludes exclusive events. And it's also the highest gross profit in the history of Petrobras. And we're proud to say that we achieved those results with no sales of assets. Of course, Brent above USD 100 per barrel strengthened our results, but the highest results achieved are the ones that we will go over now. The recurring only events was not with history's highest Brent. We had over 10 quarters with oil prices above that one in the past. And nonetheless, we achieved the highest recurring results in terms of net profits in the history of Petrobras. Our key differentiator, which we're proud of is operational administration, which is shared with the company's several different departments. Operational records in terms of the production of oil, gas, refining and selling of products. That's been our commitment. In the quarter, we produced 2.7 million barrels of oil per day in addition to gas. If we consider in equivalent barrels of oil, it was more than 3 million barrels per day. We can't promise that we will surpass our goal, but I guarantee that we've always worked towards that, surpassing our goals. In the second quarter of 2026, our goal was to produce 2.5 million barrels per day. We surpassed the goal of the second quarter by 200,000 barrels of oil per day. That's due, among other factors, to increased efficiency in the production of platforms and also by pushing forward the delivery of projects. You probably remember that we pushed forward the delivery and the ramp-up of P-78 as well as the delivery and the ramp-up of P-79. Other platforms will come. Some of them are already arriving this year. And once again, I'm going to repeat that. We will move forward the delivery of big projects. With greater volumes, we also increased our oil export levels with an additional 12% in this quarter. And these sales become greater revenue and cash generation. And here, I must make a side note, the highlight in addition to the work involved in production and the engineering work involved in these projects, the participation of refining by refining and teaching our buyers to further and further refine our oil and to further value our product and also with the participation of logistics at Petrobras with the intent of broadening the market for our end product, which is oil was impressive. And once again, it was these events and the joint work of all departments of Petrobras dedicated to the same purpose and the same goal that allowed us to achieve these great results. Our bigger generation of revenue and cash flow will be used to fund our investments and safely prepare us for the future of the company. The cash flow that's being generated today will be used to fund Petrobras' growth. And I'd like to say that just like the company was successful in its first 72 years, we are preparing the company to successfully take on the following 72 years. The refining teams, in addition to production and engineering did a great job. The utilization factor of our refineries surpassed 100% in the second quarter of 2026. And here at the company, we got into the habit of saying that goals are for the weak of heart. Petrobras is proud to always surpass its goals. We've increased the processing, maintaining the same diesel yield and gasoline, which is equivalent to greater revenue for Petrobras and a greater value to our shareholders, be they public or private without losing sight of capital discipline. The production of byproducts grew 6% vis-a-vis the previous quarter. And with that, we were able to reduce imports by 40%, especially those of diesel. We do what we have to do. We are doing it. We've elevated operating efficiency, and we've produced way beyond the original capacity in 7 platforms. We've also increased the utilization factor of refineries as a whole, of course, with safety first. The Brent price and the exchange rate is not something we can control. We don't know where they'll go. And that's why we invest with capital discipline, prioritizing projects of high returns. All of our investments involve rigorous governance for approval to verify the attractiveness and the return for our shareholders, be they from the public or private sector and at the same time, to deliver value to society. Once again, be they comprised by our public or private shareholders and respect the governance, and we need to reiterate that every day is a pillar of our administration. We will continue focusing on our business plan, which is well known to all of you, with the commitment to deliver to society a Petrobras that's profitable and absolutely relevant to our country. I will now give the floor to our CFO, Fernando Melgarejo, who will dive into the details of the second quarter of 2026. And I want to thank you for listening to us. Thank you all for your presence.

Thank you, President. Good morning, everyone. Thank you for joining us for this webcast for the results of the second quarter of 2026. I also want to greet everybody that's here at the headquarters of the company. As we said, we had a quarter of record operating performance, which drove Petrobras to one of its best financial results in history, which are deeply anchored in the good operating performance. And once again, I have to highlight that, that was a major step forward where we were able to manage and also at the same time, we are able to evolve in the best possible manner, which is one of the highlights of this administration, the search for increased oil production, production efficiency, accelerated ramp-ups that are also part of the records that we've been bringing to the company. If it were not for that, we wouldn't have achieved the financial records. Financial records are firmly anchored in the operating records of the company. Now let's move forward to Slide 3. Our oil production, as the President already said, was 2.7 million barrels per day, a 15% increase over 12 months, which is equivalent to 350,000 additional barrels. If we compare this period to the same previous period, approximately three platforms producing additionals in only 1 year. And as a reminder, last year, we also had records in the third quarter, it was an additional 4%. And that's quite relevant. And we were always wondering where we would get to, and now we can demonstrate with our production we are reaching our goals, surpassing some indicators as well. Alexandre de Gusmao, for instance, at the Mero field is producing 100,000 barrels and P-78 at Buzios, 120,000 and both have the capacity to produce 180,000 barrels per day. That is to say that we have a greater capacity to achieve in addition to the record-breaking capacity, we still have some room to cover. When they're at the nominal capacity, we'll add another 90,000 barrels per day. And we also have the ramp-up of P-79, as I said, which started operations in May this year and has a capacity of 180,000 barrels. In summary, even with the record production of 2.7 million barrels of oil per day, we still have 270,000 barrels per day of capacity to ramp up in the second half. Another highlight has been the increase in production of certain platforms beyond their nameplate capacities. The Almirante Tamandare FPSO in Buzios has an original capacity of 225,000 barrels, which makes it a large-scale platform. And the unit has reached a peak production of 270,000 barrels per day and is currently the highest producing platform in Brazil. It's a huge platform in a huge field with a very positive potential for the next years. In addition to Almirante Tamandare, we have another 6 platforms adapted to operate above their original capacity. Today, this additional capacity already totals more than 100,000 barrels per day, practically a new platform, a midsized or a large-sized platform, and we're working to continue to expand this potential. The important thing is that we are increasing production safely, and we're doing that without the need for additional construction work, which allows us to increase revenue and cash flow immediately without the need for any additional investment. So it's only revenue without any investment, which is quite positive. Now before moving over to the next slide, I'd like to highlight important news from this week. We announced a new gas discovery of gas in Colombia, which confirms the region's gas potential. Now this is a project which is aligned with our long-term strategy, which seeks to replenish reserves through exploration across new frontiers. So this doesn't mean that the Brazilian land is not our priority. Brazil still is our focus, but we are an international company, so we need to look across our borders as well. So let's finally move on to Slide 4, talking about CapEx. In the second quarter of this year, as we can see on the slide, we invested $5.3 billion, up 4% over the first quarter when we had invested $5.1 billion. So overall, we have $10.4 billion over 2 quarters here at Petrobras. More than 80% of that investment, in fact, 82% is focused on E&P projects, focusing on increasing production with high returns for the company. We have a few examples here on the slide versus the previous quarter. We increased well drilling by 40% and 45% in well completions. Interconnections also increased by 43%, driven by the ramp-up of Buzios 6 and Buzios 8 as well as complementary wells, which helped to maximize the production for each production unit. Part of the investment was also allocated to advancing the construction of new platforms in Buzios, such as P-78, P-82 and P-83. These are all huge platforms, each with nameplate capacity of 225,000 barrels. These are projects which offer high returns and rapid cash generation. And with P-78, we also expect -- rather P-80, we expect to hear positive news with regards to moving ahead of schedule, much like what happened to P-79. So now over to Slide 5, talking a little about our products. In refining, we hit a record refinery utilization with a 101% FUT, increasing production by 68% of the yield mix and higher value-added products. In April and May, we came to about 102% FUT, a record for the company. We've been working with very low FUT rates. And another important point, usually when FUT increases, that's because we're focusing on lower value-added products. But in this case, we continue to see the same shares for higher value-added products with diesel, jet fuel and gasoline, which makes these even more effective refineries. As a result, we expanded the supply of our own products and reduced the need for imports, especially diesel, which we still need to import. We're essentially self-sufficient in terms of gasoline, and that's all because we have produced more. We also increased oil product output by 6% and reduced our imports by 40% versus the previous quarter. Again, this increases even more the company's efficiency and cash flow. Another factor with a positive impact for us were our imports. Even though we were processing more oil, production was so much higher that refining has increased and our exports of Brazilian products also increased. We were already seeing high exports in the first or in the second quarter, but increased even more in Q3. -- My apologies. We just heard something from our civil defense, so we had to interrupt. But just jumping in now. We saw an increase by 12% in exports for the company. and reached very significant increase in our exports of oil, which improved our cash flow even more. Moving over to the following slide, Slide 6, a little bit about our financial results. We can see our EBITDA and net profit. All of these operating records led us to one of the best results in Petrobras' history in terms of finances in terms of recurring net income and gross profit. As our President has already said, these were record-breaking figures. Brent prices were some of the highest, excluding, obviously, all the one-off events, Brent prices were above $104. But as the President has already said, was not the highest Brent price we've ever seen, not even among the 10 highest, which also shows that our operating efficiency was very positive. Even so, we achieved adjusted EBITDA, excluding one-off events of $20 billion this quarter, which was 70% higher than in the previous quarter and nearly double the figure from 12 months ago. Gross profit is not shown on this slide, but it was $19.5 billion for the quarter, the highest in the company's history. So another record-breaking figure. All of that, as we keep repeating, anchored in our stupendous operating performance, which is what making the difference. The higher volume of oil and oil product production and sales combined with higher Brent prices has strengthened our cash generation with operating cash flow of $12.3 billion for the quarter, growth of nearly 50% when compared with the previous quarter. So these are very strong results. And I therefore, emphasize we did not have record Brent prices, but we did have record production, which drove our financial results this quarter. Now moving over to Slide 7, a little bit about our debt. This year, we carried out a very important initiative to renegotiate contracts for recharters and well services. constantly monitoring the market to identify opportunities such as this one. The result is expected to generate an estimated cash flow savings of over $1 billion over 2026-2030, 5-year period, reducing our debt by over $400 million by 2030. This will lead to a significantly lower cash flow for the company, which will allow us to reach our goals. Now because the amendments extending the contract terms were signed in the second quarter, we had to reorganize the value of these contracts and lease liabilities immediately. So these increase in the short term, but we reduced our future disbursements and cash flow creating value, and that's the key benefit. And that's how it has to work. Now on this slide, we can also see the increase in lease liabilities, but the reduction in financial debt offset the increase, as you can see in the third column. So this was possible due to our prepayments during the quarter. We repaid loans and financing totaling $2.9 billion, close to $3 billion, notably the prepayment of $1.4 billion in bank market transactions and the repurchase and redemption of $700 million in bonds issued in the international capital markets. Also during this quarter, we opportunistically raised about $600 million. We, therefore, ended the quarter with gross debt of $70.8 billion and a net debt of $60.4 billion. Without the recognition of the lease contract amendments, our debt would have been at the same level as in 2025, which is what you see in the first column on the slide. Even so the trend is still downward. We maintain our expectation of converging to $65 billion over the horizon of this plan, a level that optimizes our capital structure. Moving over to the following slide. Now looking at our forecast for the year. Here, we have a snapshot of how we're progressing this semester versus our projections, which were laid out in 2025 and presented in our strategic plan. Production has remained above the top of the range, and we're working hard to exceed the target. We'll deliver as much as possible, but obviously, there are challenges. Production is already at a very high level, but we're still committed to delivering as much as we can, especially this year when we have a very interesting price window. With regard to cash investments, we expect to end the year at the top of the range. The projection is $16.9 billion with a 5% margin, give or take. And if we have to bring any investment forward, that will be because it will create more added value. And bring more value ahead of schedule for the company. Of course, we pursued bringing projects forward, but not bringing cost forward. We pursue delivery, but we do not want higher project costs. We are making the most to accelerate delivery without increasing them. Operating expenses are slightly above plan for this half of the year, pressured by higher freight and logistics, which lead to increased production as well as exchange rate effects. So we totaled $11.7 billion in this half of the year versus a full year plan of $20.2 billion. We're monitoring the situation and expenses may exceed the projection if global market logistics costs and exchange rates remain at the same levels in the next few 6 months period. We believe that there will be less uncertainty in the next quarter. And if need be, we will revise the figures, obviously, with full transparency to all our stakeholders. So moving over to the next slide about our collections. Here, we see an example of the positive effects that our improved operating results have on society at large. When we produce more, we pay more taxes. So we paid BRL 88.6 billion in taxes and government take in the second quarter alone, BRL 500 million to municipalities, BRL 31.5 billion to state governments, BRL 34.2 billion to the federal government and BRL 22.4 billion in government participation. Petrobras paid about BRL 22 billion more in taxes and government take versus the second quarter of last year. On an annualized basis, we're talking about an increase in government take in taxes of close to BRL 90 billion, additional BRL 90 billion for the government per year. So now I conclude my presentation with the message that we're reaffirming our commitment to growing the company with profitability and responsibility when it comes to capital. Petrobras' success does not remain within the company. It is shared with society as a whole. Once again, thank you all for your attention. And alongside all our other executive officers and the President, we're available to answer all of your questions. I will now hand it back to Eduardo, who will begin our question-and-answer session.

Thank you, Magda and Fernando. We'll now start our Q&A session. I kindly ask the participants to only ask one question, so that we are able to make better use of our time. The first question comes from Bruno Montanari from Morgan Stanley.

Congratulations on the results, especially for the execution and production growth. And focusing on production, the President and Fernando already gave us an idea of by how much of the production could grow this year. But I'd like to see if it's fair to say that the plan curve in the medium and long term does not look very conservative, especially if you look at the highest peak of the curve, and it's at 2.6 million or 2.7 million barrels that you surpassed already. And in terms of CapEx and in terms of bringing Buzios' deliveries forward and the sequence of P-80 for the quarters and if there will be a ramp-up for the P-80 this year or not? I'd like to know that.

Thank you for your question, Bruno. We have to remember that we work with nonrenewable resources, producing 2.7 million barrels every day per day is a challenge. Especially because we have to face production declines. Nevertheless, these declines have been reduced. Just to give you an idea, when we took office, we were looking at a decline of 12% a year. Currently, this decline is in the range of 4% per year due to the better administration of reservoirs and the better water injection, adequate production methods, better deposit management and so on and so forth. And of course, with the new platforms arriving and the platforms that went into production recently and with the ramp-up achieving its peak, we will achieve the planned results and likely surpass them. However, surpassing results is something that we like delivering without promising anything previously. With that, I'll give the floor to Sylvia and Renata. Renata will talk about the new platforms that will go into production. They're arriving soon in Brazil, they're leaving Asia and coming to Brazil. But I'd like to mention an important aspect. The first huge platform that's different from the previous ones that we had at Petrobras was Almirante Tamandare with a capacity of 225,000 barrels per day. That platform, as Fernando mentioned, produced 270,000 barrels per day. Its capacity has been expanded to 270,000 barrels per day, and it has produced that many barrels, which is to say that with the pre-salt production capacity with the production capacity of Petrobras by interconnecting wells and doing a better job of managing the deposits and drilling high productivity wells and connecting the platforms with all of that, all of these efforts led us to transform a platform and move it from a capacity of 225,000 barrels per day to a production capacity of 270,000 barrels per day, but that alone is not enough. I should also say that in addition to those platforms, we have another three that will be arriving between this year and the next year. All of them of 225,000 barrels per day and all of them seeking to achieve 270,000 barrels per day in terms of capacity. So at the end of the day, that means 45,000 barrels per day times 4 or 180,000 barrels per day that are on top of the original ones as a result of Petrobras' efforts around surpassing its goals. So that's what we do. We do a better management of deposits. We do a better job of managing platforms with better efficiency, better platform design, leading to debottlenecking in giant platforms, and that's what we've been delivering and which combined leads to this increased production. Well, we're talking about production, but we're doing the same thing in the refineries. I mentioned this and Fernando did it, too. The utilization factor of our refineries, which in the past would achieve 65% or 70% currently surpasses 100% with Petrobras' capacity or purpose to every day surpass its best results and deliver them to its shareholders from the public or private market. Renato will talk about the stage delivery of the new platforms, and Sylvia will talk about the ramp-up of P-78 and P-79. Over to you, Renata.

Hi, Bruno. Good afternoon. So we'll talk about P-80, P-82 and P-83. P-80 and P-82, the sailaway is scheduled for the third quarter of 2026 and production will start in the second quarter of 2027. What we're doing now is we're working strongly towards bringing forward the production of P-80 to the first quarter of 2027. For P-83, the sailaway is scheduled to occur in the beginning of the first quarter of 2027 with production starting on the second half of 2027. As the President said, we are constantly working towards bringing production forward. We've been doing pre-lays, prelaunching of lines and anchoring. But the thing is the second quarter -- the second half, historically speaking, has worse sea conditions than the first half. So we cannot safely say that we will be able to bring it forward due to weather issues. So we're working on bringing it forward, P-80 for the first quarter and the other ones are already scheduled to start operations.

Thank you, Bruno, for your questions. I'm sorry.

Thank you, Bruno, for your questions. Just picking up on what the President said and also what Renata said, the forecast for production is based on a risk analysis of everything that's scheduled. We have scheduled the ramp-up for P-78 for P-79. All of that's been included in our risk analysis, and we always like to work with a leeway of more or less 4%, and we'll certainly reach the top of guidance, always seeking to surpass the past results as the President likes to say. But right now, we are considering it reasonable to maintain the maximum at 4%, reaching 2.6%. We know that there is the downtimes. And one thing that we always like to highlight is that we're receiving these super huge platforms, 220,000 barrels per day. And our concern is how are we going to work with the downtimes of a super huge platform like this one. We've been strongly investing in 3 things, which is to do a better job of planning downtimes, also working on the time lines and the headcount capacity like we do in F1. And that's what we want to do with the platforms and with these scheduled downtimes. You can imagine that with the downtime of 1 month, if you reduce it by a week or even 3 days, that's a lot of additional oil. So we've been focusing heavily on scheduled downtimes. And another thing is to guarantee production, we're working on the integrity of platforms. We're reaching a record number of reducing the technical inspection recommendations. And we do that because by doing proper maintenance and by taking care of integrity so that we can have less downtime and make sure that with the scheduled downtimes, we can maintain our stability. Just to give an idea of the scheduled downtimes for the year, we expect 290,000 barrels per day during the downtime. Also, about production, we'll try to reach maximum production, but the guidance includes all possible variations, equipment inspections and any other occurrences.

The next question comes from Monique Greco from Itau BBA.

I'd like to approach the subject of the diesel import strategy. How is the company assessing the decision to import diesel given the current price scenario vis-a-vis its pricing strategy and its commercial strategy, especially now that with the -- there is a huge volatility? But with the recent increase, we saw, again, local prices below the import parity. So I'd like to hear from you. How does that all fit in to the commercial strategy?

Hi, Monique. This is Angelica. Let's go over our production planning process again. It takes into account the commitments we enter into with our customers and the seasonal variations in demand. Also our refining activities and how much of it is available, the refining margins and the logistics structures. We consider all of that. Given that context, our policy is maintained. Our commercial strategy is maintained. Our importing decisions are still based on the criteria of competitiveness and profitability. And we have to say that we have a public policy in force that gives us support for the internal market and that leads the customer perceived prices to be lower.

Next question comes from Jorge Gabrich from Scotiabank.

Congratulations on the results, especially in terms of the volumes. I'd like to go back to one issue that was already approached before from the perspective of decline, the Petrobras' decline is quite low at 4% more or less in the pre-salt. And I'd like to understand how sustainable that is moving forward. If you think about the forecast for the next few years, how do you see this decline behaving in the next few years?

Well, George, thank you for your question. This decline, as I said, is the result of a strategy that is followed strictly along with the monitoring of the deposits. We should not forget that we have huge deposits. Just to give you an idea, the Tupi field is a field that has a contractual limit of 1,200 square kilometers. If we compare that to a giant post-salt field, which was the reality that was preceded the pre-salt, you take a line of more than 200 square kilometers in areas. So these huge fields produce a lot with high productivity, but it's huge deposits. And if we compare Tupi to Marlim, you see that it's a field that's 6x larger in area. So that is the type of administration that we're working on. We're managing the deposits as a whole, but also relying on assets that surpass by far the world-class, the so-called world-class assets. I'll give the floor to Sylvia.

There is a natural decline, Jorge, and we attempt to fight against it, we work more strongly on four areas. First, 4D seismics, which better understands us -- which better allows us to better understand the reservoirs. We also do intelligent completion. Our biggest production comes from pre-salt and it's huge reservoirs at the height of the Sugarloaf. And the intelligent completion allows us to separate zones that produce water or gas, and we do an intelligent management of these areas. Another important thing is water injection. On my day one at Petrobras, the President said, we have to inject water. So Magda kept demanding that. And the biggest water injection happened. We're reaching record-breaking numbers in terms of water injection, guaranteeing a better pressurization of reservoirs. And that's another factor that reduces decline. And obviously, the supplemental projects, once we know the deposit, the seismic data allows us to better drill the wells. We have the supplemental wells well positioned, thus guaranteeing this replacement. In Tupi, we've been able to maintain a very significant production level. And not only for us, for our results, but it's been significantly contributing to the results of our partners as well. And we've been considering the Petrobras results something positive for the results achieved. And Brazil is one of the most important production areas for our partners as well.

Our next question comes from Yuri Pereira with Santander.

With the very favorable cash generation environment, both because of market circumstances and the company itself. I wanted to understand how that works versus your plan for 2026-2030, for example, thinking about the allocation of this incremental capital that's coming over throughout this year with regards to refining or maybe another ambition Petrobras has in mind?

Well, this is an ongoing discussion for us. wherever we go, any meeting we have, the question always comes up, what will we do with the additional cash flow that's coming up purely with production, unlike our usual strategic planning. So we do have a slightly larger cash flow. But it's important to remember the dividend formula where any additional cash that comes in will be distributed over the ordinary cash distribution, which is 14%. And with regards to debt, that's the priority we've been discussing. So we have also the projects we're bringing forward such as P-80 and so on and so forth. So any investment that generates returns to our stakeholders, we are bringing forward. So that's our priority #1. Priority #2 is to converge the debt as quickly as possible to $16.5 billion. That's the ambition we had in our strategic planning, which was supposed to take place in the end of this 5-year period ending in 2030. So the idea is to bring that slightly forward. We're already in August, and we're already looking into the new strategic planning for the company. And we'll be discussing questions that escape the current strategic planning. So it is within that realm that those discussions will take place. With regards to extraordinary dividend sharing, we find it very unlikely to look into that possibility even though that is something we would love to do. If we have no investment in sight and our debt is well adjusted, we see no problem with that. The same logic remains since we arrived here, according to which any surplus should be allocated somewhere. If we have no investment to make and our debt is well adjusted, the natural path is to share more dividends. That's very unlikely now because first Brent is expected to stay at the same level for quite a while. And that's also a challenge for next year because it is expected to move back to the levels we expected it to be when we built and designed our 2025 to 2030 strategic plan.

Our next question comes from Gabriel Barra with Citi.

I wanted to touch on something we haven't talked about yet, which is Braskem. We have been getting a lot of questions. We're seeing the company is at a very tricky time. We're seeing news about a potential legal reorganization. And Petrobras has some active input in these conversations. My question is, how do you see that from Petrobras' side? I understand there's a number of rules with governance and there's great concern about capital allocation. So maybe more discussions about a potential capital injection into Braskem. So I wanted to hear from you what is your stance on Braskem's future? It seems the company is moving toward court order reorganization. And what we're hearing now is that's where they're headed. So what I'd like to hear from you to help our discussion is how have you been approaching that issue? What's the conversation with bondholders like? And what should be the outcome in your opinion?

Well, I'll start with my five cents, but then I'll turn it over to Fernando. As you know, we had very little input in terms of Braskem's bylaws. This latest change gave Petrobras more political power. So we're now -- only now moving closer to the company to look into what's going on with Braskem with a new set of eyes and to understand what the future of Braskem might be. I would like to not say a lot more about Braskem right now because they will be sharing their earnings next week. But I'd like to turn over to our Director, Fernando, to talk about this within the realm of possibility at this point.

Yes. I think we have to take a step back when it comes to Braskem to remember that we have a new shareholders' agreement as the President mentioned, where our economic capital within the company is compared to the political power and influences in the company's decisions. Now that's happened over 2 months ago. And since then, we are looking into all our options within the agreement we have with shareholders. We are in touch with their Board of Directors. So there is an injunction in place, which is in the public domain, as you mentioned. It ends on October 24. And as the President mentioned as well, on August 13, that company will be sharing their earnings with the market. So this is a very sensitive time. We have a lot of decisions to make. So obviously, we can't say a lot more in terms of any other information we have, which may affect the negotiations.

So let's move forward with the next question, Lilyanna Yang with HSBC.

Congratulations on your results. I have a more generic question in terms of energy policy. One has to do with gas. The Brazilian government would like to lower gas prices for Brazilian consumers. And I'd like to hear from you about the role of Petrobras. Will Petrobras be able to be a part or to contribute with this process? Where, for example, will you sell the gas coming from Sergipe? And another question is in terms of new frontiers, we have the Equatorial Margin, also initiatives in Africa. Could you give us an update about your investments in Namibia, Sao Tome and Principe and other areas outside of Brazil?

Let me start and then maybe Angelica, William and Sylvia may add to my few words. Starting with gas, we have a few oil and gas projects. Our projects are usually focused on oil with an associated part touching on gas and any regulatory changes will affect our projects. Sometimes they'll be beneficial. Other times, they'll be negative. Other times, they'll be neutral. But regulatory changes everywhere in the world will have consequences when it comes to the way we structure our projects. With regards to the discussion around gas, we don't know yet how things will end up. The fact is regardless of what happens, we'll have to look at our projects in light of any regulatory change. That's true everywhere in the world. It would not be different for Petrobras. So any project has to be lucrative for the company as our Director, Fernando has already said. We're not an NGO. We are a company, and we have to be profitable. That being the case, any change that takes place in the realm of regulations or taxes or anything of that sort will have to require a reassessment of the premises underlying those projects, whether we're talking about oil and gas, refining, petrochemical, the logic is the same. Regulatory changes will require us to look back at those projects and reassess them. We have to make sure that wherever we invest brings the necessary returns. That's the logic.

Thank you so much. Just adding to President Magda's comments, Petrobras' assessment of these regulatory changes have been outlined over the past few weeks. This is the Board's position, which is the mere transference of the gas molecules ownership is not going to ensure any increase in supply, which is what the market needs. And the Brazilian market is already seeing a significant opening and pulverization. And the Board members themselves have already spoken out in the last few weeks, pointing out that there are over 30 companies competing with Petrobras and over 100 free consumers. And if we add all 5 terminals privately operated, they're already bigger than Petrobras. So our assessment is that regulatory stability and legal certainty are critical to maintain price stability discipline when it comes to capital investments. As the President said, everyone in Petrobras has robust governance within our discipline in investments and capital. Every project assessment will consider the regulatory scenario. So any change will inevitably require a reassessment. But a draft has been made available today. Petrobras will speak up in the next 45 days via a public hearing, and that's our position.