Petróleo Brasileiro S.A. - Petrobras

Petrobras reported oil production of 2.7 million barrels per day, a 15% increase over 12 months, and said this was 200,000 barrels per day above the quarter’s goal of 2.5 million barrels per day. Adjusted EBITDA excluding one-offs was $20 billion, up 70% sequentially and nearly double the level from 12 months ago. Gross profit was $19.5 billion, the highest in company history, and operating cash flow was $12.3 billion, up nearly 50% versus the prior quarter. Capex was $5.3 billion in the second quarter, bringing first-half investment to $10.4 billion, with 82% directed to E&P. Refinery utilization reached 101% for the quarter, including about 102% in April and May; product output rose 6% and imports fell 40% versus the prior quarter. For full-year guidance, management said production is tracking above the top of the range, cash investment is expected to end near the top of the $16.9 billion plan with a 5% margin, and operating expenses are running slightly above plan at $11.7 billion for the first half versus a full-year plan of $20.2 billion.

Magda de Chambriard framed the quarter as proof that Petrobras can keep surpassing goals through operational execution, not asset sales. She emphasized record production, record refining utilization, higher exports, and stronger reservoir management, water injection, and platform ramp-ups as the core drivers. Her tone was very confident and celebratory, but she repeatedly said Petrobras will keep its discipline and will not promise to beat targets in advance.

Fernando Melgarejo said the financial results were anchored in operating performance, highlighting record production, higher sales volumes, and stronger Brent. He cited $5.3 billion of capex in the quarter, $10.4 billion in the first half, $12.3 billion of operating cash flow, $70.8 billion of gross debt, and $60.4 billion of net debt; he also said contract renegotiations should create more than $1 billion of cash-flow savings over 2026-2030 and reduce debt by over $400 million by 2030. On capital allocation, he reiterated priority for debt convergence toward $65 billion and said any extra cash would first support investment and debt reduction, with extraordinary dividends described as very unlikely near term.

Analysts pressed management on whether the production plan is conservative, how sustainable the low decline rate is, diesel import strategy, downstream maintenance, Braskem exposure, gas policy, international expansion, and capital allocation. Management said production guidance includes downtime, inspections, and a roughly 4% leeway, while decline has improved from about 12% to about 4% per year thanks to better reservoir management and water injection. On diesel and refining, they said imports are still driven by competitiveness and seasonal demand, with no current shortage, and that recent downtime decisions were made to protect reliability and support future capacity additions. On Braskem, they said the issue is sensitive, under review under the new shareholders’ agreement, and they would not add more detail while negotiations and the injunction remain pending.