PBR - Petróleo Brasileiro S.A. - Petrobras (PBR) Q4 2023 Earnings Call Transcript

2024-03-08 22:35:19 ET

Petróleo Brasileiro S.A. - Petrobras (PBR)

Q4 2023 Earnings Conference Call

March 08, 2024, 09:30 AM ET

Company Participants

Jean Paul Prates - President

Clarice Coppetti - Corporate Affairs

Sergio Caetano Leite - Financial and IR Director

Mario Spinelli - Governance and Compliance Director

Mauricio Tolmasquim - Energy Transition and Sustainability Director

Joelson Mendes - Exploration and Production Director

William Franca - Industrial Processes and Products

Claudio Schlosser - Logistics, Trade and Markets

Carlos Travassos - Engineering, Technology and Innovation

Maiza Goulart - CENPES

Conference Call Participants

Rodolfo Angele - JPMorgan

Bruno Montanari - Morgan Staley

Monique Greco - Itau BBA

Luiz Carvalho - UBS Bank

Caio Ribeiro - Bank of America Merrill Lynch

Pedro Soares - BTG Pactual

Gabriel Barra - Citi

Vicente Falanga - Bradesco

Presentation

Operator

Good morning, and welcome to Petrobras's Earnings Call for the Fourth Quarter of 2023. It's a pleasure to have you with us today. This event will be in Portuguese, and we have simultaneous translation into English. You can find the links to both on our Investor Relations page. All participants will be in listen-only mode during the company's presentation, and then we will have a Q&A session. And you may send us your questions to, petroinvest@petrobras.com.br.

We have Jean Paul Prates, President of Petrobras; Clarice Coppetti, Corporate Affairs; Sergio Caetano Leite, Financial and Investor Relations Director; Mario Spinelli, Governance and Compliance Director; Tolmasquim, Energy Transition and Sustainability Director; Joelson Mendes, Exploration and Production Director; William Franca, Industrial Processes and Products; Claudio Schlosser, Logistics, Trade and Markets; Carlos Travassos, Engineering, Technology and Innovation; and Maiza Goulart, CENPES.

We'll start with a word from our CEO. Go ahead, sir.

Jean Paul Prates

Thank you. Good morning, everyone.

Dear shareholders, investors, I'm very happy to talk to you today, not only because of the excellent economic and financial results we're going to present today, but especially because I am convinced we're building a more robust Petrobras that is more resilient and is better able to generate value on the long-term to its shareholders and for society facing the numerous challenges that we know and don't know created by this world in transition.

From the beginning of our administration, we have emphasized this need to adapt the company to a new energy context in which the main driver is decarbonizing operations and energy sources. This is due to a legitimate request from society, and it requires new solutions to reduce the use of fossil fuels. We're aware of the challenge, and so we built a strategic plan that was based on realism and being coherent.

We aim to be responsible and transparent in our plan. We understand that we will have to go through a gradual transition. And so, we will continue investing in producing and exploring oil and gas, an industry that generates the biggest returns, and also in integrating our downstream logistics, supplies and refinement. We're also going to generate value through a fair and responsible transition process.

We wanted to -- again, we wanted to be fair and responsible, diversifying our operations into profitable low carbon businesses by prioritizing partnerships. And as I've emphasized, we want to do what we know how to do. In each industry, we have synergy between what we used to do and what we will start doing as well.

And all of it will be done by focusing on capital discipline and on a solid governance, remaining rational across all decision processes. And this rationality has guided the commercial strategy that we've implemented. We're aiming to increase the company's competitiveness to achieve new markets and to create more stability for our decision-making process and for our consumers, as well as our payout policy because we want to consider higher investments and we have a need of maintaining our financial health.

So I'd like to highlight the proposed dividends for 2023, BRL72.4 billion that will be paid to Brazilian society, which owns 37% of Petrobras shares. And they've benefited from over BRL240 billion in taxes. We've also had market value records since our administration started. In 2023, the total returns from our preferential shares in the New York Stock Exchange in U.S. dollars reached 112%, which is far above the highest returns of the majors, 20%. 20% versus 112%.

This was all possible because we put people first. And to give them value, we created a diversity, equity and inclusion policy and a racial equality program. People are definitely our highest asset due to their effort, due to the love for what they do and we're building a solid and promising future for our company. Actually, people were the driver behind our biggest results this year, especially now that we're celebrating 15 years of exploring the pre-salt layer. We're reaching record oil and gas production levels with fewer emissions.

We've also inaugurated four new platforms. We've reached record refinement levels. And we had the highest energy efficiency in our history. We expanded our bio refinement capacity and we were able to process 100% of soybean oil in an industrial refinement unit with a Petrobras patent. We also improved our carbon efficiency, cutting 1.8 million tons of CO2 from our emissions. And that's not all. We won the main global offshore award, OTC Distinguished Achievement Award in 2024. So we are being recognized for our efforts in renewing the Campos Basin, which has become a benchmark for the global industry.

We were also record holders in patents. This is only a part of what we've achieved. We had so many victories that it could be an entire book. So that's why I always say to our dear shareholders that Petrobras is back. It's back to prosperity, generating long-term value and building a better world. We're going to face the challenges we have and make use of the synergies in our business based on our expertise, which is well known by all. We've never neglected and we never will neglect generating economic value, which is a requirement for any company that wants to be competitive and perpetuate its value for future generations....

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