6-K 1 pbraitr1q21rs_6k.htm 6-K

 

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 May, 2021

 

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 República do Chile, 65 
20031-912 – 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____

 
 

 

 

 

 

Quarterly Information- ITR

 

At March 31, 2021 and report on review of Quarterly Information

 

 

 

 

 

 

  

 

 

 
 

INDEX

PETROBRAS

 

 

Parent Company Interim Accounting Information / Statement of Financial Position - Assets 3
Parent Company Interim Accounting Information / Statement of Financial Position - Liabilities 4
Parent Company Interim Accounting Information / Statement of Income 5
Parent Company Interim Accounting Information / Statement of Comprehensive Income 6
Parent Company Interim Accounting Information / Statement of Changes in Shareholders’ Equity - 01/01/2021 to 03/31/2021 7
Parent Company Interim Accounting Information / Statement of Changes in Shareholders’ Equity - 01/01/2020 to 03/31/2020 8
Parent Company Interim Accounting Information / Statement of Cash Flows – Indirect Method 9
Parent Company Interim Accounting Information / Statement of Added Value 10
Consolidated Interim Accounting Information / Statement of Financial Position - Assets 11
Consolidated Interim Accounting Information / Statement of Financial Position - Liabilities 12
Consolidated Interim Accounting Information / Statement of Income 13
Consolidated Interim Accounting Information / Statement of Comprehensive Income 14
Consolidated Interim Accounting Information / Statement of Changes in Shareholders’ Equity - 01/01/2021 to 03/31/2021 15
Consolidated Interim Accounting Information / Statement of Changes in Shareholders’ Equity - 01/01/2020 to 03/31/2020 16
Consolidated Interim Accounting Information / Statement of Cash Flows – Indirect Method 17
Consolidated Interim Accounting Information / Statement of Added Value 18
1.   Basis of preparation 19
2.   Summary of significant accounting policies 19
3.   Cash and cash equivalents and Marketable securities 19
4.   Sales revenues 20
5.   Costs and expenses by nature 21
6.   Other income and expenses 21
7.   Net finance income (expense) 22
8.   Net  income by operating segment 22
9.   Trade and other receivables 23
10.    Inventories 24
11.    Taxes 25
12   Short-term and other benefits 28
13   Employee benefits (Post-Employment) 29
14   Provisions for legal proceedings 32
15   Provision for decommissioning costs 35
16   The “Lava Jato (Car Wash) Operation” and its effects on the Company 35
17   Property, plant and equipment 37
18   Intangible assets 38
19   Impairment 39
20   Exploration and evaluation of oil and gas reserves 39
21   Collateral for crude oil exploration concession agreements 40
22   Investments 40
23   Disposal of assets and other changes in organizational structure 41
24   Assets by operating segment 44
25   Finance debt 45
26   Lease liabilities 47
27   Equity 48
28   Fair value of financial assets and liabilities 49
29   Risk management 49
30   Related-party transactions 54
31   Supplemental information on statement of cash flows 57
32   Subsequent events 57
33   Correlation between the explanatory notes of December 31, 2020 and the ones of March 31, 2021 60
STATEMENT OF DIRECTORS ON INTERIM ACCOUNTING INFORMATION AND REPORT ON THE REVIEW OF QUARTERLY INFORMATION 61
Independent Auditors' Report

62

2 

Petróleo Brasileiro S.A. – Petrobras

Parent Company Interim Accounting Information / Statement of Financial Position - Assets

(R$ Thousand)

   

 

Account Code Account Description 03.31.2021 12.31.2020
1 Total Assets 1,219,867,000 1,178,600,000
1.01 Current Assets 121,557,000 100,863,000
1.01.01 Cash and Cash Equivalents 4,321,000 5,180,000
1.01.02 Marketable Securities 3,197,000 2,963,000
1.01.03 Trade and Other Receivables 52,846,000 44,321,000
1.01.04 Inventories 31,721,000 25,452,000
1.01.06 Recoverable Taxes 7,105,000 11,792,000
1.01.06.01 Current Recoverable Taxes 7,105,000 11,792,000
1.01.06.01.01 Current Income Tax and Social Contribution 1,604,000 1,566,000
1.01.06.01.02 Other Recoverable Taxes 5,501,000 10,226,000
1.01.08 Other Current Assets 22,367,000 11,155,000
1.01.08.01 Non-Current Assets Held for Sale 11,733,000 3,582,000
1.01.08.03 Others 10,634,000 7,573,000
1.01.08.03.03 Others 10,634,000 7,573,000
1.02 Non-Current Assets 1,098,310,000 1,077,737,000
1.02.01 Long-Term Receivables 97,518,000 88,516,000
1.02.01.03 Marketable Securities Measured at Amortized Cost 230,000 226,000
1.02.01.04 Trade and Other Receivables 12,322,000 11,369,000
1.02.01.07 Deferred Taxes 43,654,000 36,351,000
1.02.01.07.01 Deferred Income Tax and Social Contribution 27,598,000 20,518,000
1.02.01.07.02 Deferred Taxes and Contributions 16,056,000 15,833,000
1.02.01.10 Other Non-Current Assets 41,312,000 40,570,000
1.02.01.10.04 Judicial Deposits 38,515,000 37,487,000
1.02.01.10.05 Other Long-Term Assets 2,797,000 3,083,000
1.02.02 Investments 268,669,000 241,875,000
1.02.03 Property, Plant and Equipment 654,942,000 670,088,000
1.02.04 Intangible Assets 77,181,000 77,258,000

 

 

3 

Petróleo Brasileiro S.A. – Petrobras

Parent Company Interim Accounting Information / Statement of Financial Position - Liabilities

(R$ Thousand)

   

 

Account Code Account Description 03.31.2021 12.31.2020
2 Total Liabilities 1,219,867,000 1,178,600,000
2.01 Current Liabilities 232,164,000 227,895,000
2.01.01 Payroll, Profit Sharing and Related Charges 8,922,000 9,418,000
2.01.02 Trade Payables 34,686,000 75,543,000
2.01.03 Taxes Obligations 226,000 225,000
2.01.03.01 Federal Taxes Obligations 226,000 225,000
2.01.03.01.01 Income Tax and Social Contribution Payable 226,000 225,000
2.01.04 Current Debt and Finance Lease Obligations 155,852,000 107,666,000
2.01.04.01 Current Debt 124,301,000 76,783,000
2.01.04.03 Lease Obligations 31,551,000 30,883,000
2.01.05 Other Liabilities 24,835,000 23,625,000
2.01.05.02 Others 24,835,000 23,625,000
2.01.05.02.01 Dividends and Interest on Capital Payable 4,433,000 4,411,000
2.01.05.02.04 Taxes and Contributions 14,252,000 13,270,000
2.01.05.02.06 Other liabilities 6,150,000 5,944,000
2.01.06 Provisions 3,679,000 8,049,000
2.01.06.02 Other Provisions 3,679,000 8,049,000
2.01.06.02.04 Pension and Medical Benefits 3,679,000 8,049,000
2.01.07 Liabilities Associated with Non-Current Assets Held for Sale and Discontinued 3,964,000 3,369,000
2.01.07.01 Liabilities Associated with Non-Current Assets Held for Sale 3,964,000 3,369,000
2.02 Non-Current Liabilities 674,308,000 642,295,000
2.02.01 Non-Current Debt and Finance Lease Obligations 476,130,000 447,895,000
2.02.01.01 Non-Current Debt 381,118,000 357,491,000
2.02.01.03 Lease Obligations 95,012,000 90,404,000
2.02.02 Other Liabilities 1,761,000 1,810,000
2.02.02.02 Others 1,761,000 1,810,000
2.02.02.02.03 Income Tax and Social Contribution 1,761,000 1,810,000
2.02.04 Provisions 196,417,000 192,590,000
2.02.04.01 Provisions for Tax Social Security, Labor and Civil Lawsuits 9,559,000 10,301,000
2.02.04.02 Other Provisions 186,858,000 182,289,000
2.02.04.02.04 Pension and Medical Benefits 74,989,000 74,209,000
2.02.04.02.05 Provision for Decommissioning Costs 96,199,000 97,194,000
2.02.04.02.07 Other Provisions 15,670,000 10,886,000
2.03 Shareholders' Equity 313,395,000 308,410,000
2.03.01 Share Capital 205,432,000 205,432,000
2.03.02 Capital Reserves (1,051,000) 2,665,000
2.03.04 Profit Reserves 128,463,000 127,296,000
2.03.08 Other Comprehensive Income (19,449,000) (26,983,000)

 

 

4 

Petróleo Brasileiro S.A. – Petrobras

Parent Company Interim Accounting Information / Statement of Income

(R$ thousand)

   

 

Account Code Account Description Accumulated of the Current Year 01/01/2021 to 03/31/2021 Accumulated of the Previous Year 01/01/2020 to 03/31/2020
3.01 Sales Revenues 88,816,000 68,109,000
3.02 Cost of Sales (46,030,000) (42,082,000)
3.03 Gross Profit 42,786,000 26,027,000
3.04 Operating Expenses / Income (7,852,000) (56,805,000)
3.04.01 Selling Expenses (5,415,000) (5,137,000)
3.04.02 General and Administrative Expenses (1,220,000) (1,430,000)
3.04.05 Other Operating Expenses (4,112,000) (56,945,000)
3.04.05.01 Other Taxes (468,000) (358,000)
3.04.05.02 Research and Development Expenses (639,000) (422,000)
3.04.05.03 Exploration Costs (1,193,000) (465,000)
3.04.05.05 Other Operating Expenses, Net (1,123,000) (74,000)
3.04.05.07 Impairment of Assets Charges / Reversals (689,000) (55,626,000)
3.04.06 Share of Profit / Gains on Interest in Equity-Accounted Investments 2,895,000 6,707,000
3.05 Net Income Before Financial Results and Income Taxes 34,934,000 (30,778,000)
3.06 Finance Income (Expenses), Net (32,476,000) (44,082,000)
3.06.01 Finance Income 467,000 1,014,000
3.06.01.01 Finance Income 467,000 1,014,000
3.06.02 Finance Expenses (32,943,000) (45,096,000)
3.06.02.01 Finance Expenses (7,655,000) (8,678,000)
3.06.02.02 Foreign Exchange and Inflation Indexation Charges, Net (25,288,000) (36,418,000)
3.07 Net Income Before Income Taxes 2,458,000 (74,860,000)
3.08 Income Tax and Social Contribution (1,291,000) 26,337,000
3.08.01 Current 120,000
3.08.02 Deferred (1,291,000) 26,217,000
3.09 Net Income from Continuing Operations 1,167,000 (48,523,000)
3.11 Income / (Loss) for the Period 1,167,000 (48,523,000)
3.99.01.01 Ordinary Shares (4)
3.99.01.02 Preferred Shares (4)
3.99.01 Income per Share      
3.99.02.01 Ordinary Shares  0.09  (3.72)
3.99.02.02 Preferred Shares  0.09  (3.72)
3.99.02 Diluted Income per Share    

 

 

5 

Petróleo Brasileiro S.A. – Petrobras

Parent Company Interim Accounting Information / Statement of Comprehensive Income

(R$ thousand)

   

 

Account Code Account Description Accumulated of the Current Year 01/01/2021 to 03/31/2021 Accumulated of the Previous Year 01/01/2020 to 03/31/2020
4.01 Net Income for the Period 1,167,000 (48,523,000)
4.02 Other Comprehensive Income 7,534,000 (15,189,000)
4.02.03 Cumulative Translation Adjustments 24,285,000 49,419,000
4.02.04 Unrealized Gains/(Losses) on securities measured at fair value through other comprehensive income (10,000)
4.02.07 Unrealized Gains / (Losses) on Cash Flow Hedge  - Recognized in Shareholders' Equity (30,521,000) (100,044,000)
4.02.08 Unrealized Gains / (Losses) on Cash Flow Hedge  - Reclassified to Profit and Loss 5,903,000 6,096,000
4.02.09 Deferred Income Tax and Social Contribution on Cash Flow Hedge 8,370,000 31,942,000
4.02.10 Share of Other Comprehensive Income of Equity-Accounted Investments (503,000) (2,592,000)
4.03 Total Comprehensive Income for the Period 8,701,000 (63,712,000)
6 

Petróleo Brasileiro S.A. – Petrobras

Parent Company Interim Accounting Information / Statement of Changes in Shareholders’ Equity - 01/01/2021 to 03/31/2021

(R$ thousand)

   

 

Account Code Account Description Share Capital Capital Reserves, Granted Options and Treasury Shares Profit Reserves Retained Earnings / Accumulated Losses Other Comprehensive Income Shareholders' Equity
5.01 Balance at the Beginning of the Period 205,432,000 2,665,000 127,296,000 (26,983,000) 308,410,000
5.04 Capital Transactions with Owners (3,716,000) (3,716,000)
5.04.08 Change in Interest in Subsidiaries (3,716,000) (3,716,000)
5.05 Total of Comprehensive Income 1,167,000 7,534,000 8,701,000
5.05.01 Net Income for the Period 1,167,000 1,167,000
5.05.02 Other Comprehensive Income 7,534,000 7,534,000
5.07 Balance at the End of the Period 205,432,000 (1,051,000) 127,296,000 1,167,000 (19,449,000) 313,395,000
7 

Petróleo Brasileiro S.A. – Petrobras

Parent Company Interim Accounting Information / Statement of Changes in Shareholders’ Equity - 01/01/2020 to 03/31/2020

(R$ thousand)

   

 

Account Code Account Description Share Capital Capital Reserves, Granted Options and Treasury Shares Profit Reserves Retained Earnings / Accumulated Losses Other Comprehensive Income Shareholders' Equity
5.01 Balance at the Beginning of the Period 205,432,000 2,665,000 124,613,000 (37,169,000) 295,541,000
5.04 Capital Transactions with Owners (2,000) 2,000
5.04.09 Realization of the Deemed Cost (2,000) 2,000
5.05 Total of Comprehensive Income (48,523,000) (15,189,000) (63,712,000)
5.05.01 Net Income for the Period (48,523,000) (48,523,000)
5.05.02 Other Comprehensive Income (15,189,000) (15,189,000)
5.07 Balance at the End of the Period 205,432,000 2,665,000 124,613,000 (48,525,000) (52,356,000) 231,829,000

b

8 

Petróleo Brasileiro S.A. – Petrobras

Parent Company Interim Accounting Information / Statement of Cash Flows – Indirect Method

(R$ Thousand)

   

 

Account Code Account Description Accumulated of the Current Year 01/01/2021 to 03/31/2021 Accumulated of the Previous Year 01/01/2020 to 03/31/2020
6.01 Net cash provided by operating activities 28,067,000 11,024,000
6.01.01 Cash provided by operating activities 50,986,000 37,215,000
6.01.01.01 Net Income (loss) for the period 1,167,000 (48,523,000)
6.01.01.02 Pension and medical benefits (actuarial expense) 1,661,000 2,060,000
6.01.01.03 Results in equity-accounted investments (2,895,000) (6,707,000)
6.01.01.04 Depreciation, depletion and amortization 16,905,000 17,895,000
6.01.01.05 Impairment of assets (reversal) 689,000 55,626,000
6.01.01.06 Exploratory expenditures write-offs 740,000 117,000
6.01.01.08 Foreign exchange, indexation and finance charges 31,680,000 43,502,000
6.01.01.09 Deferred income taxes, net 1,291,000 (26,217,000)
6.01.01.10 Allowance for expected credit losses (52,000) 420,000
6.01.01.11 Write-Off - Overpayments Incorrectly Capitalized 388,000
6.01.01.13 Revision and unwinding of discount on the provision for decommissioning costs 1,055,000 856,000
6.01.01.17 Disposal/write-offs of assets, remeasurement of investment retained with loss of control and reclassification of CTA (856,000) 383,000
6.01.01.19 Early termination and cash outflows revision of lease agreements (399,000) (2,585,000)
6.01.02 Decrease / (increase) in assets / increase/ (decrease) in liabilities (22,919,000) (26,191,000)
6.01.02.01 Trade and other receivables, net (3,112,000) (18,387,000)
6.01.02.02 Inventories (7,824,000) (89,000)
6.01.02.03 Judicial deposits (825,000) (1,959,000)
6.01.02.05 Other assets (801,000) 960,000
6.01.02.06 Trade payables (8,683,000) (757,000)
6.01.02.07 Other taxes payable 5,465,000 (2,202,000)
6.01.02.08 Pension and medical benefits (5,252,000) (1,612,000)
6.01.02.09 Provisions for legal proceedings (742,000) (688,000)
6.01.02.10 Short-term benefits (455,000) (504,000)
6.01.02.11 Income tax and social contribution paid (34,000) (832,000)
6.01.02.12 Provision for Decommissioning Costs (885,000) (546,000)
6.01.02.14 Other liabilities 229,000 425,000
6.02 Net cash used in investing activities (54,511,000) (11,024,000)
6.02.01 Acquisition of PP&E and intangibles assets (41,328,000) (16,276,000)
6.02.02 Decrease (increase) in investments in investees (605,000)
6.02.03 Proceeds from disposal of assets - Divestment 1,365,000 3,000
6.02.04 Divestment (investment) in marketable securities (15,539,000) 5,711,000
6.02.05 Dividends received 991,000 143,000
6.03 Net cash used in financing activities 25,585,000 (491,000)
6.03.02 Proceeds from financing 63,976,000 49,199,000
6.03.03 Repayment of principal - finance debt (22,151,000) (28,570,000)
6.03.04 Repayment of interest - finance debt (7,774,000) (4,697,000)
6.03.05 Dividends paid to shareholders of Petrobras (4,427,000)
6.03.08 Settlement of lease liabilities (8,466,000) (11,996,000)
6.05 Net increase/ (decrease) in cash and cash equivalents (859,000) (491,000)
6.05.01 Cash and cash equivalents at the beginning of the year 5,180,000 4,322,000
6.05.02 Cash and cash equivalents at the end of the period 4,321,000 3,831,000
9 

Petróleo Brasileiro S.A. – Petrobras

Parent Company Interim Accounting Information / Statement of Added Value

(R$ Thousand)

   

 

Account Code Account Description Accumulated of the Current Year 01/01/2021 to 03/31/2021 Accumulated of the Previous Year 01/01/2020 to 03/31/2020
7.01 Sales Revenues 120,559,000 95,614,000
7.01.01 Sales of Goods and Services 110,642,000 87,471,000
7.01.02 Other Revenues 2,740,000 1,011,000
7.01.03 Revenues Related to the Construction of Assets to be Used in Own Operations 7,125,000 7,552,000
7.01.04 Allowance for expected credit losses 52,000 (420,000)
7.02 Inputs Acquired from Third Parties (34,815,000) (83,689,000)
7.02.01 Cost of Sales (20,466,000) (10,262,000)
7.02.02 Materials, Power, Third-Party Services and Other Operating Expenses (5,305,000) (10,074,000)
7.02.03 Impairment Charges / Reversals of Assets (689,000) (55,626,000)
7.02.04 Others (8,355,000) (7,727,000)
7.02.04.01 Tax Credits on Inputs Acquired from Third Parties (8,355,000) (7,339,000)
7.02.04.02 Inventory Write-Down to Net Realizable Value (388,000)
7.03 Gross Added Value 85,744,000 11,925,000
7.04 Retentions (18,081,000) (19,205,000)
7.04.01 Depreciation, Amortization and Depletion (18,081,000) (19,205,000)
7.05 Net Added Value Produced 67,663,000 (7,280,000)
7.06 Transferred Added Value 3,783,000 8,090,000
7.06.01 Share of Profit of Equity-Accounted Investments 2,895,000 6,707,000
7.06.02 Finance Income 467,000 1,014,000
7.06.03 Others 421,000 369,000
7.06.03.01 Rentals, royalties and others 421,000 369,000
7.07 Total Added Value to be Distributed 71,446,000 810,000
7.08 Distribution of Added Value 71,446,000 810,000
7.08.01 Employee Compensation 6,092,000 6,238,000
7.08.01.01 Salaries 3,776,000 3,278,000
7.08.01.02 Fringe Benefits 2,090,000 2,707,000
7.08.01.03 Unemployment Benefits (FGTS) 226,000 253,000
7.08.02 Taxes and Contributions 28,795,000 (4,667,000)
7.08.02.01 Federal 21,731,000 (10,017,000)
7.08.02.02 State 7,025,000 5,236,000
7.08.02.03 Municipal 39,000 114,000
7.08.03 Return on Third-Party Capital 35,392,000 47,762,000
7.08.03.01 Interest 34,086,000 46,318,000
7.08.03.02 Rental Expenses 1,306,000 1,444,000
7.08.04 Return on Shareholders' Equity 1,167,000 (48,523,000)
7.08.04.03 Retained Earnings / (Losses) for the Period 1,167,000 (48,523,000)

 

 

10 

Petróleo Brasileiro S.A. – Petrobras

Consolidated Interim Accounting Information / Statement of Financial Position - Assets

(R$ Thousand)

   

 

Account Code Account Description 03.31.2021 12.31.2020
1 Total Assets 998,283,000 987,419,000
1.01 Current Assets 153,972,000 142,323,000
1.01.01 Cash and Cash Equivalents 68,155,000 60,856,000
1.01.02 Marketable Securities 3,299,000 3,424,000
1.01.03 Trade and Other Receivables 13,432,000 24,584,000
1.01.04 Inventories 39,730,000 29,500,000
1.01.06 Recoverable Taxes 8,552,000 13,483,000
1.01.06.01 Current Recoverable Taxes 8,552,000 13,483,000
1.01.06.01.01 Current Income Tax and Social Contribution 2,237,000 2,170,000
1.01.06.01.02 Other Recoverable Taxes 6,315,000 11,313,000
1.01.08 Other Current Assets 20,804,000 10,476,000
1.01.08.01 Non-Current Assets Held for Sale 11,650,000 4,081,000
1.01.08.03 Others 9,154,000 6,395,000
1.01.08.03.03 Others 9,154,000 6,395,000
1.02 Non-Current Assets 844,311,000 845,096,000
1.02.01 Long-Term Receivables 113,969,000 104,974,000
1.02.01.03 Marketable Securities measured at amortized cost 231,000 227,000
1.02.01.04 Trade and Other Receivables 14,666,000 13,675,000
1.02.01.07 Deferred Taxes 57,437,000 49,935,000
1.02.01.07.01 Deferred Income Tax and Social Contribution 40,807,000 33,524,000
1.02.01.07.02 Deferred Taxes and Contributions 16,630,000 16,411,000
1.02.01.10 Other Non-Current Assets 41,635,000 41,137,000
1.02.01.10.04 Judicial Deposits 38,881,000 37,838,000
1.02.01.10.05 Other Long-Term Assets 2,754,000 3,299,000
1.02.02 Investments 18,044,000 17,010,000
1.02.03 Property, Plant and Equipment 634,712,000 645,434,000
1.02.04 Intangible Assets 77,586,000 77,678,000

 

 

11 

Petróleo Brasileiro S.A. – Petrobras

Consolidated Interim Accounting Information / Statement of Financial Position - Liabilities

(R$ Thousand)

   

 

Account Code Account Description 03.31.2021 12.31.2020
2 Total Liabilities 998,283,000 987,419,000
2.01 Current Liabilities 124,469,000 136,287,000
2.01.01 Payroll, Profit Sharing and Related Charges 9,655,000 10,150,000
2.01.02 Trade Payables 29,057,000 35,645,000
2.01.03 Taxes Obligations 832,000 1,029,000
2.01.03.01 Federal Taxes Obligations 832,000 1,029,000
2.01.03.01.01 Income Tax and Social Contribution Payable 832,000 1,029,000
2.01.04 Current Debt and Lease Obligations 49,349,000 51,364,000
2.01.04.01 Current Debt 18,755,000 21,751,000
2.01.04.03 Lease Obligations 30,594,000 29,613,000
2.01.05 Other Liabilities 27,931,000 26,491,000
2.01.05.02 Others 27,931,000 26,491,000
2.01.05.02.01 Dividends and Interest on Capital Payable 4,482,000 4,457,000
2.01.05.02.04 Taxes and Contributions 14,549,000 13,696,000
2.01.05.02.06 Other liabilities 8,900,000 8,338,000
2.01.06 Provisions 3,679,000 8,049,000
2.01.06.02 Other Provisions 3,679,000 8,049,000
2.01.06.02.04 Pension and Medical Benefits 3,679,000 8,049,000
2.01.07 Liabilities Associated with Non-Current Assets Held for Sale and Discontinued 3,966,000 3,559,000
2.01.07.01 Liabilities Associated with Non-Current Assets Held for Sale 3,966,000 3,559,000
2.02 Non-Current Liabilities 553,569,000 539,982,000
2.02.01 Non-Current Debt and Finance Lease Obligations 354,967,000 341,184,000
2.02.01.01 Non-Current Debt 267,917,000 258,287,000
2.02.01.03 Lease Obligations 87,050,000 82,897,000
2.02.02 Other Liabilities 1,802,000 1,853,000
2.02.02.02 Others 1,802,000 1,853,000
2.02.02.02.03 Income Tax and Social Contribution 1,802,000 1,853,000
2.02.03 Deferred Taxes 1,205,000 1,015,000
2.02.03.01 Deferred Taxes 1,205,000 1,015,000
2.02.04 Provisions 195,595,000 195,930,000
2.02.04.01 Provisions for Tax Social Security, Labor and Civil Lawsuits 10,334,000 11,427,000
2.02.04.02 Other Provisions 185,261,000 184,503,000
2.02.04.02.04 Pension and Medical Benefits 76,306,000 75,454,000
2.02.04.02.05 Provision for Decommissioning Costs 96,637,000 97,595,000
2.02.04.02.07 Other Provisions 12,318,000 11,454,000
2.03 Shareholders' Equity 320,245,000 311,150,000
2.03.01 Share Capital 205,432,000 205,432,000
2.03.02 Capital Reserves (1,267,000) 2,449,000
2.03.04 Profit Reserves 128,679,000 127,512,000
2.03.08 Other Comprehensive Income (19,449,000) (26,983,000)
2.03.09 Non-controlling interests 6,850,000 2,740,000

 

 

12 

Petróleo Brasileiro S.A. – Petrobras

Consolidated Interim Accounting Information / Statement of Income

(R$ Thousand)

   

 

Account Code Account Description Accumulated of the Current Year 01/01/2021 to 03/31/2021 Accumulated of the Previous Year 01/01/2020 to 03/31/2020
3.01 Sales Revenues 86,174,000 75,469,000
3.02 Cost of Sales (42,141,000) (43,854,000)
3.03 Gross Profit 44,033,000 31,615,000
3.04 Operating Expenses / Income (10,129,000) (77,055,000)
3.04.01 Selling Expenses (5,198,000) (5,914,000)
3.04.02 General and Administrative Expenses (1,496,000) (1,820,000)
3.04.05 Other Operating Expenses (4,454,000) (67,882,000)
3.04.05.01 Other Taxes (581,000) (517,000)
3.04.05.02 Research and Development Expenses (639,000) (422,000)
3.04.05.03 Exploration Costs (1,196,000) (468,000)
3.04.05.05 Other Operating Expenses, Net (1,530,000) (1,174,000)
3.04.05.07 Impairment of Assets Charges / Reversals (508,000) (65,301,000)
3.04.06 Share of Profit / Gains on Interest in Equity-Accounted Investments 1,019,000 (1,439,000)
3.05 Net Income Before Financial Results and Income Taxes 33,904,000 (45,440,000)
3.06 Finance Income (Expenses), Net (30,748,000) (21,178,000)
3.06.01 Finance Income 676,000 798,000
3.06.01.01 Finance Income 676,000 798,000
3.06.02 Finance Expenses (31,424,000) (21,976,000)
3.06.02.01 Finance Expenses (6,613,000) (7,416,000)
3.06.02.02 Foreign Exchange and Inflation Indexation Charges, Net (24,811,000) (14,560,000)
3.07 Net Income Before Income Taxes 3,156,000 (66,618,000)
3.08 Income Tax and Social Contribution (1,880,000) 16,894,000
3.08.01 Current (649,000) (597,000)
3.08.02 Deferred (1,231,000) 17,491,000
3.09 Net Income from Continuing Operations 1,276,000 (49,724,000)
3.11 Income / (Loss) for the Period 1,276,000 (49,724,000)
3.11.01 Attributable to Shareholders of Petrobras 1,167,000 (48,523,000)
3.11.02 Attributable to Non-Controlling Interests 109,000 (1,201,000)
3.99.01.01 Ordinary Shares (4)
3.99.01.02 Preferred Shares (4)
3.99.01 Income per Share      
3.99.02.01 Ordinary Shares  0.09  (3.72)
3.99.02.02 Preferred Shares  0.09  (3.72)
3.99.02 Diluted Income per Share    

 

13 

Petróleo Brasileiro S.A. – Petrobras

Consolidated Interim Accounting Information / Statement of Comprehensive Income

(R$ Thousand)

   

 

Account Code Account Description Accumulated of the Current Year 01/01/2021 to 03/31/2021 Accumulated of the Previous Year 01/01/2020 to 03/31/2020
4.01 Net Income for the Period 1,276,000 (49,724,000)
4.02 Other Comprehensive Income 7,925,000 (14,295,000)
4.02.01 Actuarial Gains / (Losses) on Defined Benefits Plans (15,000) 2,000
4.02.02 Deferred Income Tax and Social Contribution on Actuarial Gains / (Losses) on Defined Benefits Plans (1,000)
4.02.03 Cumulative Translation Adjustments 24,676,000 50,312,000
4.02.04 Unrealized Gains/(Losses) on securities measured at fair value through other comprehensive income (10,000)
4.02.07 Unrealized Gains / (Losses) on Cash Flow Hedge  - Recognized in Shareholders' Equity (30,521,000) (100,044,000)
4.02.08 Unrealized Gains / (Losses) on Cash Flow Hedge  - Reclassified to Profit and Loss 6,094,000 6,449,000
4.02.09 Deferred Income Tax and Social Contribution on Cash Flow Hedge 8,305,000 31,822,000
4.02.10 Share of Other Comprehensive Income of Equity-Accounted Investments (614,000) (2,825,000)
4.03 Total Comprehensive Income for the Period 9,201,000 (64,019,000)
4.03.01 Attributable to Shareholders of Petrobras 8,701,000 (63,712,000)
4.03.02 Attributable to Non-controlling Interests 500,000 (307,000)

 

 

14 

Petróleo Brasileiro S.A. – Petrobras

Consolidated Interim Accounting Information / Statement of Changes in Shareholders’ Equity - 01/01/2021 to 03/31/2021

(R$ Thousand)

   

 

Account Code Account Description Share Capital

Capital Reserves,

Granted Options

and Treasury Shares

Profit Reserves

Retained Earnings /

Accumulated Losses

Other

Comprehensive

Income

Shareholders' Equity

Non-controlling

interest

Shareholders' Equity

Consolidated

5.01 Balance at the Beginning of the Period 205,432,000 2,665,000 127,296,000 (26,983,000) 308,410,000 2,740,000 311,150,000
5.04 Capital Transactions with Owners (3,716,000) (3,716,000) 3,610,000 (106,000)
5.04.01 Capital Increases 11,000 11,000
5.04.06 Dividends (14,000) (14,000)
5.04.08 Capital Transactions (3,716,000) (3,716,000) 3,613,000 (103,000)
5.05 Total of Comprehensive Income 1,167,000 7,534,000 8,701,000 500,000 9,201,000
5.05.01 Net Income for the Period 1,167,000 1,167,000 109,000 1,276,000
5.05.02 Other Comprehensive Income 7,534,000 7,534,000 391,000 7,925,000
5.07 Balance at the End of the Period 205,432,000 (1,051,000) 127,296,000 1,167,000 (19,449,000) 313,395,000 6,850,000 320,245,000
15 

Petróleo Brasileiro S.A. – Petrobras

Consolidated Interim Accounting Information / Statement of Changes in Shareholders’ Equity - 01/01/2020 to 03/31/2020

(R$ Thousand)

   

 

Account Code Account Description Share Capital

Capital Reserves,

Granted Options

and Treasury Shares

Profit Reserves

Retained Earnings /

Accumulated Losses

Other

Comprehensive

Income

Shareholders' Equity

Non-controlling

interest

Shareholders' Equity

Consolidated

5.01 Balance at the Beginning of the Period 205,432,000 2,665,000 124,613,000 (37,169,000) 295,541,000 3,596,000 299,137,000
5.04 Capital Transactions with Owners (2,000) 2,000 (193,000) (193,000)
5.04.08 Capital Transactions (193,000) (193,000)
5.04.09 Realization of the Deemed Cost (2,000) 2,000
5.05 Total of Comprehensive Income (48,523,000) (15,189,000) (63,712,000) (307,000) (64,019,000)
5.05.01 Net Income for the Period (48,523,000) (48,523,000) (1,201,000) (49,724,000)
5.05.02 Other Comprehensive Income (15,189,000) (15,189,000) 894,000 (14,295,000)
5.07 Balance at the End of the Period 205,432,000 2,665,000 124,613,000 (48,525,000) (52,356,000) 231,829,000 3,096,000 234,925,000
16 

Petróleo Brasileiro S.A. – Petrobras

Consolidated Interim Accounting Information / Statement of Cash Flows – Indirect Method

(R$ Thousand)

   

 

Account Code Account Description Accumulated of the Current Year 01/01/2021 to 03/31/2021 Accumulated of the Previous Year 01/01/2020 to 03/31/2020
6.01 Net cash provided by operating activities 40,070,000 34,991,000
6.01.01 Cash provided by operating activities 50,837,000 38,708,000
6.01.01.01 Net Income (loss) for the period 1,276,000 (49,724,000)
6.01.01.02 Pension and medical benefits (actuarial expense) 1,726,000 2,157,000
6.01.01.03 Results of equity-accounted investments (1,019,000) 1,439,000
6.01.01.04 Depreciation, depletion and amortization 15,630,000 15,758,000
6.01.01.05 Impairment of assets (reversal) 508,000 65,301,000
6.01.01.06 Exploratory expenditures write-offs 740,000 117,000
6.01.01.08 Foreign exchange, indexation and finance charges 30,244,000 18,440,000
6.01.01.09 Deferred income taxes, net 1,231,000 (17,491,000)
6.01.01.10 Allowance for expected credit losses (86,000) 474,000
6.01.01.11 Inventory write-down (write-back) to net realizable value (6,000) 1,389,000
6.01.01.13 Revision and unwinding of discount on the provision for decommissioning costs 1,062,000 858,000
6.01.01.17 Disposal/write-offs of assets, remeasurement of investment retained with loss of control and reclassification of CTA (74,000) 446,000
6.01.01.19 Early termination and cash outflows revision of lease agreements (395,000) (456,000)
6.01.02 Decrease / (increase) in assets / increase/ (decrease) in liabilities (10,767,000) (3,717,000)
6.01.02.01 Trade and other receivables, net (479,000) 4,090,000
6.01.02.02 Inventories (10,793,000) 2,558,000
6.01.02.03 Judicial deposits (839,000) (1,961,000)
6.01.02.05 Other assets 137,000 (1,523,000)
6.01.02.06 Trade payables 3,375,000 (3,242,000)
6.01.02.07 Other taxes payable 6,106,000 (2,143,000)
6.01.02.08 Pension and medical benefits (5,253,000) (1,614,000)
6.01.02.09 Provisions for legal proceedings (1,159,000) (645,000)
6.01.02.10 Short-term benefits (468,000) (493,000)
6.01.02.11 Income tax and social contribution paid (710,000) (1,120,000)
6.01.02.12 Provision for Decommissioning Costs (887,000) (546,000)
6.01.02.14 Other liabilities 203,000 2,922,000
6.02 Net cash used in investing activities (7,427,000) (6,664,000)
6.02.01 Acquisition of PP&E and intangibles assets (8,981,000) (8,342,000)
6.02.02 Decrease (increase) in investments in assets (4,000) 15,000
6.02.03 Proceeds from disposal of assets - Divestment 1,054,000 1,168,000
6.02.04 Divestment (investment) in marketable securities 138,000 295,000
6.02.05 Dividends received 366,000 200,000
6.03 Net cash used in financing activities (30,822,000) 12,799,000
6.03.01 Investments by non-controlling interest (102,000) (186,000)
6.03.02 Proceeds from financing 299,000 48,777,000
6.03.03 Repayment of principal - finance debt (17,080,000) (19,570,000)
6.03.04 Repayment of interest - finance debt (5,898,000) (4,938,000)
6.03.05 Dividends paid to shareholders of Petrobras (4,427,000)
6.03.06 Dividends paid to non-controlling interests (1,000) (35,000)
6.03.08 Settlement of lease liabilities (8,040,000) (6,822,000)
6.04 Effect of exchange rate changes on cash and cash equivalents 5,408,000 9,556,000
6.05 Net increase/ (decrease) in cash and cash equivalents 7,229,000 50,682,000
6.05.01 Cash and cash equivalents at the beginning of the year 60,930,000 29,729,000
6.05.02 Cash and cash equivalents at the end of the period 68,159,000 80,411,000

 

 

17 

Petróleo Brasileiro S.A. – Petrobras

Consolidated Interim Accounting Information / Statement of Added Value

(R$ Thousand)

   

 

Account Code Account Description Accumulated of the Current Year 01/01/2021 to 03/31/2021 Accumulated of the Previous Year 01/01/2020 to 03/31/2020
7.01 Sales Revenues 121,529,000 102,743,000
7.01.01 Sales of Goods and Services 108,137,000 94,944,000
7.01.02 Other Revenues 4,225,000 331,000
7.01.03 Revenues Related to the Construction of Assets to be Used in Own Operations 9,081,000 7,942,000
7.01.04 Allowance for expected credit losses 86,000 (474,000)
7.02 Inputs Acquired from Third Parties (34,614,000) (97,597,000)
7.02.01 Cost of Sales (20,262,000) (11,876,000)
7.02.02 Materials, Power, Third-Party Services and Other Operating Expenses (5,988,000) (12,256,000)
7.02.03 Impairment Charges / Reversals of Assets (508,000) (65,301,000)
7.02.04 Others (7,856,000) (8,164,000)
7.02.04.01 Tax Credits on Inputs Acquired from Third Parties (7,862,000) (6,775,000)
7.02.04.02 Inventory Write-Down to Net Realizable Value 6,000 (1,389,000)
7.03 Gross Added Value 86,915,000 5,146,000
7.04 Retentions (16,805,000) (17,068,000)
7.04.01 Depreciation, Amortization and Depletion (16,805,000) (17,068,000)
7.05 Net Added Value Produced 70,110,000 (11,922,000)
7.06 Transferred Added Value 1,877,000 (479,000)
7.06.01 Share of Profit of Equity-Accounted Investments 1,019,000 (1,439,000)
7.06.02 Finance Income 676,000 798,000
7.06.03 Others 182,000 162,000
7.06.03.01 Rentals, royalties and others 182,000 162,000
7.07 Total Added Value to be Distributed 71,987,000 (12,401,000)
7.08 Distribution of Added Value 71,987,000 (12,401,000)
7.08.01 Employee Compensation 6,763,000 7,190,000
7.08.01.01 Salaries 4,283,000 3,945,000
7.08.01.02 Fringe Benefits 2,227,000 2,941,000
7.08.01.03 Unemployment Benefits (FGTS) 253,000 304,000
7.08.02 Taxes and Contributions 30,229,000 5,728,000
7.08.02.01 Federal 22,910,000 71,000
7.08.02.02 State 7,171,000 5,437,000
7.08.02.03 Municipal 148,000 220,000
7.08.03 Return on Third-Party Capital 33,719,000 24,405,000
7.08.03.01 Interest 32,582,000 23,209,000
7.08.03.02 Rental Expenses 1,137,000 1,196,000
7.08.04 Return on Shareholders' Equity 1,276,000 (49,724,000)
7.08.04.03 Retained Earnings / (Losses) for the Period 1,167,000 (48,523,000)
7.08.04.04 Non-controlling Interests on Retained Earnings / (Losses) 109,000 (1,201,000)

 

18 

NOTES TO THE FINANCIAL STATEMENTS

PETROBRAS

This interim financial information should be read together with the Company’s audited annual financial statements

(Expressed in millions of reais, unless otherwise indicated)

 

 

 

1.Basis of preparation

These interim financial statements present the significant changes in the period, avoiding repetition of certain notes to the financial statements previously reported, and present the consolidated information, considering Management’s understanding that it provides a comprehensive view of the Company’s financial position and operational performance, complemented by certain information of the Parent Company. Hence, this interim financial information should be read together with the Company’s audited annual financial statements for the year ended December 31, 2020, which include the full set of notes.

The interim consolidated and separate financial statements (Parent Company) have been prepared and are presented in accordance with IAS 34 – “Interim Financial Reporting” as issued by the International Accounting Standards Board (IASB), and with the pronouncement CPC 21 (R1) – Demonstrações Intermediárias as issued by the Brazilian Accounting Pronouncements Committee (Comitê de Pronunciamentos Contábeis - CPC) and released by the Brazilian Securities and Exchange Commission (Comissão de Valores Mobiliários – CVM). All financial statements relevant information is being evidenced and corresponds to the ones used by the Company’s Management.

These interim financial statements were approved and authorized for issue by the Company’s Board of Directors in a meeting held on May 13, 2021.

 

 

2.Summary of significant accounting policies

The same accounting policies and methods of computation were followed in these consolidated interim financial statements as those followed in the preparation of the annual financial statements of the Company for the year ended December 31, 2020.

3.Cash and cash equivalents and Marketable securities
3.1.Cash and cash equivalents

Cash and cash equivalents comprise cash in hand, term deposits with banks and short-term highly liquid financial investments that are readily convertible to known amounts of cash, are subject to insignificant risk of changes in value and have a maturity of three months or less from the date of acquisition.

  Consolidated
  03.31.2021 12.31.2020
Cash at bank and in hand 3,770 2,868
Short-term financial investments    
   - In Brazil    
         Brazilian interbank deposit rate investment funds and other short-term deposits 17,830 13,469
         Other investment funds 627 143
  18,457 13,612
   - Abroad    
 Time deposits 11,947 13,376
Automatic investing accounts and interest checking accounts 32,095 29,274
 Other financial investments 1,886 1,726
  45,928 44,376
Total short-term financial investments 64,385 57,988
Total cash and cash equivalents 68,155 60,856

 

 

Short-term financial investments in Brazil primarily consist of investments in funds holding Brazilian Federal Government Bonds that can be redeemed immediately, as well as reverse repurchase agreements that mature within three months as of the date of their acquisition. Short-term financial investments abroad comprise time deposits that mature in three months or less from the date of their acquisition, highly-liquid automatic investment accounts, interest checking accounts and other short-term fixed income instruments.

The main funds generated were substantially provided by operating cash generation of R$ 40,070, proceeds from divestments of R$ 1,054 and by the exchange rate effect on the balances of cash and cash equivalents from financial investments abroad of R$ 5,408.

 

The main uses of funds in the period ended March 31, 2021 were for debt service obligations, including pre-payments of debt in the international banking market, repurchase of securities in the international capital market, and amortization of leases, in the total of R$ 31,018 and investments in the amount of R$ 8,981.

19 

NOTES TO THE FINANCIAL STATEMENTS

PETROBRAS

This interim financial information should be read together with the Company’s audited annual financial statements

(Expressed in millions of reais, unless otherwise indicated)

 

 

3.2.Marketable securities
    Consolidated
  03.31.2021 12.31.2020
Fair value through profit or loss 3,279 3,388
Amortized cost 251 263
Total 3,530 3,651
Current 3,299 3,424
Non-current 231 227
 

Marketable securities classified as fair value through profit or loss refer mainly to investments in Brazilian Federal Government Bonds. These financial investments have maturities of more than three months and are generally classified as current assets due to their maturity or the expectation of their realization in the short term.

4.Sales revenues
  Consolidated
 

2021

Jan-Mar

2020

Jan-Mar

Gross sales 108,137 94,944
Sales taxes (*) (21,963) (19,475)
Sales revenues 86,174 75,469
Diesel 25,161 18,023
Automotive gasoline 11,068 8,327
Liquefied petroleum gas 5,018 4,010
Jet fuel 2,328 3,721
Naphtha 1,812 2,976
Fuel oil (including bunker fuel) 1,829 1,165
Other oil products 4,815 3,069
Subtotal oil products 52,031 41,291
Natural gas 5,678 5,372
Nitrogen products and renewables 74 117
Breakage 365 407
Electricity 2,970 1,250
Services, agency and others 1,166 703
Domestic market 62,284 49,140
Exports 22,800 24,711
Crude oil 15,462 19,006
Fuel oil (including bunker fuel) 6,598 4,652
Other oil products and other products 740 1,053
Sales abroad (**) 1,090 1,618
Foreign Market 23,890 26,329
Sales revenues 86,174 75,469

 

 (*) Includes, mainly, CIDE, PIS, COFINS and ICMS (VAT).
(**) Sales revenues from operations outside of Brazil, including trading and excluding exports.

 

 

In the three-month periods ended March 31, 2021 and 2020, sales to BR Distribuidora represent more than 10% of the Company sales revenues, mainly associated with the refining, transportation and marketing segment.

 

20 

NOTES TO THE FINANCIAL STATEMENTS

PETROBRAS

This interim financial information should be read together with the Company’s audited annual financial statements

(Expressed in millions of reais, unless otherwise indicated)

 

 

 

5.Costs and expenses by nature
5.1.Cost of sales
  Consolidated
  2021 2020
  Jan-Mar Jan-Mar
Raw material, products for resale, materials and third-party services (*) (14,593) (19,912)
Depreciation, depletion and amortization (12,242) (12,793)
Production taxes (12,911) (8,031)
Employee compensation (2,395) (3,118)
Total (42,141) (43,854)
(*) It Includes short-term leases and inventory turnover.

 

5.2.Selling expenses
  Consolidated
  2021 2020
  Jan-Mar Jan-Mar
Materials, third-party services, freight, rent and other related costs (4,299) (5,105)
Depreciation, depletion and amortization (814) (549)
Allowance for expected credit losses 31 (46)
Employee compensation (116) (214)
Total (5,198) (5,914)

 

 

5.3.General and administrative expenses
  Consolidated
  2021 2020
  Jan-Mar Jan-Mar
Employee compensation (1,013) (1,277)
Materials, third-party services, rent and other related costs (351) (416)
Depreciation, depletion and amortization (132) (127)
Total (1,496) (1,820)

 

 

6.Other income and expenses
  Consolidated
  2021 2020
  Jan-Mar Jan-Mar
Unscheduled stoppages and pre-operating expenses (1,641) (1,584)
Pension and medical benefits – retirees (1,189) (1,327)
Variable compensation program (528) 171
Equalization of expenses - Production Individualization Agreements (244) 111
Reclassification of comprehensive income (loss) due to the disposal of equity-accounted investments (183)
Profit Sharing (157) (25)
Gains/(losses) with Commodities Derivatives (126) 1,037
Gains / (losses) on decommissioning of returned/abandoned areas (35) (6)
Voluntary Separation Incentive Plan – PDV 21 (187)
Fines imposed on suppliers 160 225
Results on disposal/write-offs of assets and on remeasurement of investment retained with loss of control 257 (446)
Gains / (losses) related to legal, administrative and arbitration proceedings 294 (281)
Early termination and cash outflows revision of lease agreements 395 457
Expenses/Reimbursements from E&P partnership operations 552 856
Amounts recovered from Lava Jato investigation 790 96
Others 104 (271)
Total (1,530) (1,174)
 
21 

NOTES TO THE FINANCIAL STATEMENTS

PETROBRAS

This interim financial information should be read together with the Company’s audited annual financial statements

(Expressed in millions of reais, unless otherwise indicated)

 

 

7.Net finance income (expense)
  Consolidated
  2021 2020
  Jan-Mar Jan-Mar
Finance income 676 798
Income from investments  and marketable securities (Government Bonds) 160 298
Others 516 500
Finance expenses (6,613) (7,416)
Interest on finance debt (4,119) (4,545)
Unwinding of discount on lease liabilities (1,607) (1,517)
Discount and premium on repurchase of debt securities (1,013) (1,245)
Capitalized borrowing costs 1,154 1,234
Unwinding of discount on the provision for decommissioning costs (1,027) (853)
Other finance expenses and income, net (1) (490)
Foreign exchange gains (losses) and indexation charges (24,811) (14,560)
Foreign Exchange (*) (18,727) (8,382)
Reclassification of hedge accounting to the Statement of Income (*) (6,094) (6,449)
Others 10 271
Total (30,748) (21,178)
(*) For more information, see notes 29.3.c and 29.3.a.
 

 

8.Net income by operating segment

Consolidated Statement of Income by operating segment – Jan-Mar/2021

  Exploration and Production Refining, Transportation & Marketing

Gas

&

Power

Corporate and other business Eliminations Total
Sales revenues 63,952 76,741 12,087 836 (67,442) 86,174
     Intersegments 62,783 1,282 3,026 351 (67,442)
     Third parties 1,169 75,459 9,061 485 86,174
Cost of sales (28,636) (64,975) (7,271) (823) 59,564 (42,141)
Gross profit 35,316 11,766 4,816 13 (7,878) 44,033
Expenses (2,888) (2,186) (4,103) (1,943) (28) (11,148)
    Selling (1) (1,839) (3,301) (29) (28) (5,198)
    General and administrative (178) (180) (94) (1,044) (1,496)
    Exploration costs (1,196) (1,196)
    Research and development (467) (11) (27) (134) (639)
    Other taxes (91) (220) (127) (143) (581)
    Impairment (538) 30 (508)
    Other income and expenses (417) 64 (554) (623) (1,530)
Net income (loss) before financial results and income taxes 32,428 9,580 713 (1,930) (7,906) 32,885
    Net finance income (expenses) (30,748) (30,748)
    Results in equity-accounted investments 126 616 215 62 1,019
Net Income (loss) before income taxes 32,554 10,196 928 (32,616) (7,906) 3,156
    Income taxes (11,025) (3,257) (242) 9,956 2,688 (1,880)
Net income (loss) of the period 21,529 6,939 686 (22,660) (5,218) 1,276
Attributable to:            
Shareholders of Petrobras 21,533 6,939 558 (22,645) (5,218) 1,167
Non-controlling interests (4) 128 (15) 109
  21,529 6,939 686 (22,660) (5,218) 1,276

 

 

22 

NOTES TO THE FINANCIAL STATEMENTS

PETROBRAS

This interim financial information should be read together with the Company’s audited annual financial statements

(Expressed in millions of reais, unless otherwise indicated)

 

 

 

Consolidated Statement of Income by operating segment – Jan-Mar/2020
  Exploration and Production Refining, Transportation & Marketing

Gas

&

Power

Corporate and other business Eliminations Total
Sales revenues 47,575 68,160 10,467 857 (51,590) 75,469
     Intersegments 46,658 1,328 3,336 268 (51,590)
     Third parties 917 66,832 7,131 589 75,469
Cost of sales (26,224) (68,162) (5,905) (830) 57,267 (43,854)
Gross profit 21,351 (2) 4,562 27 5,677 31,615
Expenses (65,967) (4,080) (3,016) (2,521) (32) (75,616)
    Selling (1) (2,860) (3,006) (18) (29) (5,914)
    General and administrative (206) (272) (117) (1,225) (1,820)
    Exploration costs (468) (468)
    Research and development (274) (12) (13) (123) (422)
    Other taxes (71) (193) (37) (216) (517)
    Impairment (64,304) (208) (789) (65,301)
    Other income and expenses (643) (535) 157 (150) (3) (1,174)
Net income (loss) before financial results and income taxes (44,616) (4,082) 1,546 (2,494) 5,645 (44,001)
    Net finance income (expenses) (21,178) (21,178)
    Results in equity-accounted investments (758) (848) (12) 179 (1,439)
Net Income (loss) before income taxes (45,374) (4,930) 1,534 (23,493) 5,645 (66,618)
    Income taxes 15,169 1,388 (526) 2,782 (1,919) 16,894
Net income (loss) of the period (30,205) (3,542) 1,008 (20,711) 3,726 (49,724)
Attributable to:            
   Shareholders of Petrobras (30,205) (3,397) 937 (19,584) 3,726 (48,523)
   Non-controlling interests (145) 71 (1,127) (1,201)
  (30,205) (3,542) 1,008 (20,711) 3,726 (49,724)

 

The balance of depreciation, depletion and amortization by business segment is set forth as follows:

  Exploration and Production Refining, Transportation & Marketing

Gas

&

Power

Corporate and other business Total
Jan-Mar/2021 11,872 2,950 582 226 15,630
Jan-Mar/2020 12,410 2,483 612 253 15,758

 

9.Trade and other receivables
9.1.Trade and other receivables, net
  Consolidated
  03.31.2021 12.31.2020
Receivables from contracts with customers
Third parties 16,709 16,013
Related parties    
Investees (note 30.5) 2,975 3,450
Receivables from the electricity sector 949 1,064
Subtotal 20,633 20,527
Other trade  receivables    
 Third parties    
Receivables from divestments (*) 8,499 7,916
Lease receivables 2,638 2,427
Other receivables (**) 2,346 13,179
Related parties    
Petroleum and alcohol accounts - receivables from Brazilian Government (note 30.5) 2,566 2,503
Subtotal 16,049 26,025
Total trade receivables 36,682 46,552
Expected credit losses (ECL) - Third parties (8,293) (7,939)
Expected credit losses (ECL) - Related parties (291) (354)
Total trade receivables, net 28,098 38,259
Current 13,432 24,584
Non-current 14,666 13,675

(*) Refers mainly to amounts receivable (including interest and monetary and foreign exchange restatement) from the divestment in Nova Transportadora do Sudeste (NTS) and Roncador's contingent portion

(**) In 2020, it mainly includes amounts related to the purchase and sale of production platforms and equipment from our partners in E&P consortia, with financial settlement in the first quarter of 2021.

 

 

Trade and other receivables are generally classified as measured at amortized cost, except for receivables with final prices linked to changes in commodity price after their transfer of control, which are classified as measured at fair value through profit or loss. Changes in such prices as of March 31, 2021 amounted to R$ 4,425.

In the first quarter of 2021, the average term for receiving receivables from contracts with third parties, referring to the sale of oil products on the domestic market is approximately 1.6 days. Exports of fuel oil and crude oil have an average collection period of approximately 15 days and 6.5 days, respectively.

23 

NOTES TO THE FINANCIAL STATEMENTS

PETROBRAS

This interim financial information should be read together with the Company’s audited annual financial statements

(Expressed in millions of reais, unless otherwise indicated)

 

 

9.2.Aging of trade and other receivables – third parties
    Consolidated
  03.31.2021 12.31.2020
  Trade receivables Expected credit losses (ECL) Trade receivables Expected credit losses (ECL)
Current 21,602 (697) 30,402 (677)
Overdue:        
1- 3 months 135 (31) 1,066 (42)
3 - 6 months 46 (21) 77 (46)
6 - 12 months 116 (50) 219 (147)
More than 12 months 8,293 (7,494) 7,771 (7,027)
Total 30,192 (8,293) 39,535 (7,939)

 

9.3.Changes in provision for expected credit losses
  Consolidated
  03.31.2021 12.31.2020
Opening balance 8,293 9,392
Additions 111 1,024
Reversals (187) (166)
Write-offs (2) (3,596)
Transfer of assets held for sale (15)
Cumulative translation adjustment 369 1,654
Closing balance 8,584 8,293
Current 1,014 1,135
Non-current 7,570 7,158

In 2020, write-offs of R$ 3,596 basically reflect receivables from suppliers, related to the construction and renovation of platforms, which were already fully provisioned.

 

10.Inventories
  Consolidated
  03.31.2021 12.31.2020
Crude oil 17,483 11,653
Oil products 12,988 10,001
Intermediate products 2,671 2,060
Natural gas and LNG (*) 1,503 631
Biofuels 64 157
Fertilizers 86 43
Total products 34,795 24,545
Materials, supplies and others 4,935 4,955
Total 39,730 29,500
(*) Liquefied Natural Gas

 

Consolidated inventories are presented less a provision for adjustment to their net realizable value. These adjustments are mainly due to fluctuations in the international quotations of crude oil and oil products and, when constituted, are recognized in the income statement for the period as costs of sales. In the period from January to March 2021, reversal of provision was recorded in the amount of R$ 6 (provision of R$ 1,389, in the period from January to March 2020).

As of March 31, 2021, the Company had a volume of oil and / or oil products given as a guarantee of the Terms of Financial Commitment - TCF, signed in 2008 with Petros, in the amount of R$ 9,788, after deducting the equivalent volumes of early partial liquidation of the Pre-70 TCF carried out in January 2021, the procedures for which to update the public records are in progress.

24 

NOTES TO THE FINANCIAL STATEMENTS

PETROBRAS

This interim financial information should be read together with the Company’s audited annual financial statements

(Expressed in millions of reais, unless otherwise indicated)

 

 

11.Taxes
11.1Income taxes and other taxes

 

 

Income tax and social contribution           Consolidated
  Current assets Current liabilities Non-current liabilities 
  03.31.2021 12.31.2020 03.31.2021 12.31.2020 03.31.2021 12.31.2020
Taxes in Brazil             
Income taxes 2,065 2,032 95 576
Income taxes - Tax settlement programs 235 234 1,802 1,853
  2,065 2,032 330 810 1,802 1,853
Taxes abroad 172 138 502 219 -
Total 2,237 2,170 832 1,029 1,802 1,853

 

 
Other taxes Current assets Non-current assets Current liabilities Non-current liabilities (*)
  03.31.2021 12.31.2020 03.31.2021 12.31.2020 03.31.2021 12.31.2020 03.31.2021 12.31.2020
Taxes in Brazil:  
Current / Deferred VAT Rate (VAT) 3,582 2,635 1,531 1,522 2,869 3,334
Current / Deferred PIS and COFINS 2,083 1,768 10,862 10,680 1,161 2,829 195 191
PIS and COFINS – Exclusion of VAT tax rate from PIS and COFINS tax bases 369 6,392
PIS and COFINS - Law 9,718/98     3,542 3,537        
CIDE 12 19 154 214
Production taxes/Royalties 9,429 6,094 341 487
Withholding income taxes 272 551
Others 222 453 643 621 584 608 1,261 1,430
Total in Brazil 6,268 11,267 16,578 16,360 14,469 13,630 1,797 2,108
Taxes abroad 47 46 52 51 80 66
Total 6,315 11,313 16,630 16,411 14,549 13,696 1,797 2,108

(*) Other non-current taxes are classified as other liabilities.

 

25 

NOTES TO THE FINANCIAL STATEMENTS

PETROBRAS

This interim financial information should be read together with the Company’s audited annual financial statements

(Expressed in millions of reais, unless otherwise indicated)

 

 

 

 

Exclusion of VAT tax from PIS and COFINS tax basis

In 2020, Petrobras and subsidiaries obtained a favorable and definitive court decision regarding the exclusion of VAT Tax from the calculation basis of PIS and COFINS contributions and recognized the amount of R$ 16,764, recorded in current assets as taxes and contributions. The credits recognized in the assets refer to the exclusion of the VAT Tax effectively collected from the calculation base of the PIS and COFINS contributions, the amounts of which were paid improperly in competencies between the months of October 2001 and August 2020.

The company enabled these credits, of which it offset in 2020 with the payment of other federal taxes, totaling R$ 16,395 (R$ 10,372 in 2020).

As of March 31, 2021, the amount monetarily restated by the Brazilian basic interest rate (Selic) is R$ 369.

11.2          Tax amnesty programs – State Tax (Programas de Anistias Estaduais)

Petrobras, based on the management of risks associated with litigation and in line with the value generation strategy, adhered to the state amnesty programs in Rio de Janeiro and Bahia, generating a positive effect on the result of the 1st quarter of 2021 in the amount of R$ 867, due to the reversal of part of the related provisions, against tax expenses and other operating income and expenses of R$ 659 and financial result of R$ 208.

State of Rio de Janeiro

The State of Rio de Janeiro instituted a special installment program called PEP-ICMS VAT Tax, authorized by CONFAZ Agreement No. 87/2020, created by State Supplementary Law No. 189/2020 and regulated by Decree 47,488 of February 12, 2021, which allowed the reduction of 90% of the late payment charges due as a fine and interest.

The adhesion to the program creates conditions for the settlement of ICMS disputes involving tax credits provisioned in the total amount of R$ 1,513, through estimated disbursement of R$ 533 which includes spontaneous termination due to the cancellation of part of the scope of Comperj (current Gaslub). As a result, on March 31, 2021, the Company reassessed expected disbursements as probable and reversed R$ 980 in the respective provisions for lawsuits and taxes.

In April 2021, the company joined the program and the full payment of the remaining obligations will occur by the end of June 2021.

State of Bahia

The adhesion to the remission and amnesty program with the State of Bahia was celebrated under the terms of VAT Tax Agreements 48/2020 and 49/2020, ratified by Law 14.286 / 2020, which allowed the remission of 50% of the tax and 90% of the fine and interest due. Tax debts resulting from disallowance of tax credits were closed in January 2021 with the payment of R$ 113, providing a definitive solution for this type of contingency.

11.3Reconciliation between statutory tax rate and effective tax expense rate

The following table provides the reconciliation of Brazilian statutory tax rate to the Company’s effective rate on income before income taxes:

26 

NOTES TO THE FINANCIAL STATEMENTS

PETROBRAS

This interim financial information should be read together with the Company’s audited annual financial statements

(Expressed in millions of reais, unless otherwise indicated)

 

 

       

  Consolidated
  2021 2020
  Jan-Mar Jan-Mar
Net income (loss) before income taxes 3,156 (66,618)
Nominal income taxes computed based on Brazilian statutory corporate tax rates (34%) (1,073) 22,650
Adjustments to arrive at the effective tax rate:    
Different jurisdictional tax rates for companies abroad 115 (3,669)
Brazilian income taxes on income of companies incorporated outside Brazil (*) (1,156) (1,124)
Tax incentives 3
Tax loss carryforwards (unrecognized tax losses) (166) 173
Non-taxable income (non-deductible expenses), net (**) 229 438
Expenses with post-employment medical benefits (242) (391)
Results of equity-accounted investments in Brazil and abroad 413 (499)
Others 1 (687)
Income taxes expense (1,880) 16,894
Deferred income taxes (1,231) 17,491
Current income taxes (649) (597)
Total (1,880) 16,894
Effective tax rate of income taxes 59.6% 25.4%
(*) It relates to Brazilian income taxes on earnings of offshore investees, as established by Law No. 12,973/2014.
(**) It includes provisions for legal proceedings.
11.4Deferred income taxes - non-current

Changes of deferred income tax and social contribution

    Consolidated
      2021 2020
Balance at January 1st     32,509 (1,502)
Recognized in the statement of income for the year     (1,231) 8,940
Recognized in shareholders’ equity     8,305 24,858
Cumulative translation adjustment     5 559
Use of tax credits     (332)
Others     14 (14)
Total     39,602 32,509
Deferred tax assets     40,807 33,524
Deferred tax liabilities     (1,205) (1,015)
Total     39,602 32,509
         

 

The table below shows the composition and the basis for realization of deferred tax assets and liabilities:

Nature Foundation for realization         03.31.2021 12.31.2020

 

Property, plant and equipment - Cost of prospecting and dismantling areas

 

Depreciation, Amortization and Write-off of Assets

(15,074) (16,655)
Property, plant and equipment - Impairment Amortization, Write-off of Assets and Impairment Reversal 34,703 34,435
Property, plant and equipment – Others (*) Depreciation, Amortization and Write-off of Assets (56,241) (45,157)
Loans, accounts receivable / payable and financing Payments, Receipts and Consideration 31,418 20,335
Leases Appropriation of leases 9,088 6,186
Provision for lawsuits Payment and reversal of the provision 3,371 3,453
Tax losses Compensation of 30% of taxable income 15,347 12,995
Inventories Sale, Write-Off and Loss 1,813 822
Employee benefits, mainly pension plan Payment and reversal of the provision 14,907 14,972
Others       270 1,123
Total           39,602 32,509
(*) includes accelerated incentive depreciation, difference in depreciation per unit produced x straight-line method, as well as capitalized financial charges
               

 

27 

NOTES TO THE FINANCIAL STATEMENTS

PETROBRAS

This interim financial information should be read together with the Company’s audited annual financial statements

(Expressed in millions of reais, unless otherwise indicated)

 

 

12Short-term and other benefits

The balance of the main benefits for employees, current and non-current, is presented as follows:

  Consolidated
  03.31.2021 12.31.2020
Voluntary Severance Program (PDV) 4,094 4,678
Employees variable compensation program 2,592 2,715
Accrued vacation pay and Christmas Bonus 2,596 2,443
Salaries and related charges 1,007 1,059
Profit sharing 172 20
Total 10,461 10,915
Current 9,655 10,150
Non-current (*) 806 765

(*) Amount classified in other liabilities

12.1 Voluntary Severance Programs

As of March 31, 2021, changes in the provision for expenses relating to separation plans implemented by the Company are set out as follows:

  Consolidated
  03.31.2021 12.31.2020
Opening Balance 4,678 565
Enrollments 122 5,723
Revision of provisions (143) (315)
Separations in the period (563) (1,295)
Closing Balance 4,094 4,678
Current 3,296 3,921
Non-current 798 757
 

 

 

The recognition of the provision for expenditures on retirement programs occurred as employees joined.

The company opted to defer the payment of indemnities in two installments, the first at the time of termination, together with the legal severance payments and the second, when applicable, 12 months after the payment of the first installment, with an estimated disbursement of R$ 4,094, being R$ 3,296 in 2021, R$ 569 in 2022 and R$ 229 in 2023.

The voluntary termination program (PDV 2019), for retired employees under the Brazilian Social Security Institute (INSS), until the enactment of the Pension Reform, had enrollments reopened during January 2021 for employees not yet enrolled or who have given up membership for any reason until December 29, 2020. During the reopening period, 195 employees signed up for the program.

On March 29, 2021, the Company opened the sixth opportunity for the separation of corporate employees, with application deadline on April 19, 2021 and had the adhesion of 35 employees.

12.2Variable compensation program

Performance award program (PPP)

On January 26, 2021, the Board of Directors approved an adjustment in the criteria for granting PPP 2020 to employees (previously approved on April 28, 2020), changing the PPP regulation, in which, for the activation of the Program, it is necessary to have net income for the year, disregarding the impact of impairment values ​​and exchange variation recorded in Petrobras' net financial result, associated with compliance with company performance metrics and the individual performance of employees and results of the areas in their calculation.

In February 2021, the Company advanced part of the amount of the PPP 2020 to employees, with discharge on April 14, 2021, in the amount of R$ 651.

On March 31, 2021, the company provisioned R$ 528 (R$ 489 in the parent company) related to the variable remuneration for the 2021 fiscal year of employees, recorded in other operating expenses.

12.3Profit sharing (PLR)

At December 29, 2020, the 17 unions representing onshore employees had signed the agreement for the PLR for the next two years (2021/2022) before the deadline determined by the Collective Labor Agreement (ACT). Among the offshore employees, only Sindmestre (Sindicato Nacional dos Mestres de Cabotagem e dos Contra Mestres em Transportes Marítimos) had signed the agreement within the period defined by the ACT.

28 

NOTES TO THE FINANCIAL STATEMENTS

PETROBRAS

This interim financial information should be read together with the Company’s audited annual financial statements

(Expressed in millions of reais, unless otherwise indicated)

 

 

The PLR ​​regulation 2021/2022 covers employees without managerial functions and provides for the establishment of a minimum floor / ceiling of up to two remunerations, limited to R$ 10 thousand, for employees who earn up to R$ 5 thousand and will be cumulative to the payment of the Performance Award Program - PPP .

In order for PLR to be triggered in the years 2021 and 2022, in addition to the PLR ​​agreement being signed, the following triggers / requirements must be met: i) approval of dividend distribution by the Annual General Meeting (AGO); ii) calculation of net income in the reference year; and iii) reaching the average percentage, weighted by weight, of the set of indicator targets of at least 80%.

The maximum amount of PLR to be distributed is limited to 6.25% of net income and 25% of dividends distributed to shareholders, in each year.

On March 31, 2021, the company provisioned R$ 157 (R$ 139 at the parent company) related to the employees' participation in the company's income, recorded in other operating expenses.

13Employee benefits (Post-Employment)

The balances related to post-employment benefits granted to employees are shown below:

 

  Consolidated
  03.31.2021 12.31.2020
Liabilities    
AMS Health Care Plan 28,237 27,836
Petros Pension Plan - Renegotiated (PPSP-R) (*) 31,497 31,265
Petros Pension Plan - Non-renegotiated (PPSP-NR) (*) 8,477 8,424
Petros Pension Plan - Renegotiated Pre-70 (PPSP-R Pre-70) 5,503 7,837
Petros Pension Plan - Non-renegotiated Pre-70 (PPSP-NR Pre-70) 3,608 5,588
Petros 2 Pension Plan (PP2) 2,576 2,477
Other plans 87 76
Total 79,985 83,503
Current 3,679 8,049
Non-current 76,306 75,454
Total 79,985 83,503

(*) Includes obligation with contribution related to the revision of the lump sum death benefit.

 

 

29 

NOTES TO THE FINANCIAL STATEMENTS

PETROBRAS

This interim financial information should be read together with the Company’s audited annual financial statements

(Expressed in millions of reais, unless otherwise indicated)

 

 

The movement of obligations with pension and health plans with defined benefit characteristics is shown below:

  Pension plans Health Care

Other

plans

 
  PPSP-R (*) PPSP-NR (*) PP2  AMS   Total
Changes in the net actuarial liability            
Balance as of January 1, 39,102 14,012 2,477 27,836 76 83,503
Recognized in the Statement of Income 675 239 99 712 1 1,726
Costs incurred in the period 12 53 224 289
Service cost 611 223 46 488 1 1,369
Interest on the obligations with contribution for the revision of the lump sum death benefit 52 16 68
Recognized in Equity - other comprehensive income
Cash effects (2,777) (2,166) (310) (5,253)
Contributions paid (282) (86) (310) (678)
Payments of obligations with contribution for the revision of the lump sum death benefit (63) (19) (82)
Payments related to Term of financial commitment (TFC) (2,432) (2,061) (4,493)
Other changes (1) 10 9
Others (1) 10 9
Balance of actuarial liability as of March 31, 2021 37,000 12,085 2,576 28,237 87 79,985
Balance of actuarial liability 35,312 11,581 2,576 28,237 87 77,793
Obligations with contribution for the revision of the lump sum death benefit 1,688 504 2,192
Total obligation with pension and medical benefits as of March 31,2021 37,000 12,085 2,576 28,237 87 79,985
(*) It includes the balance of PPSP-R pre-70 and PPSP-NR pre-70.

 

 

  Pension plans Health Care

Other

plans

 
  PPSP-R (*) PPSP-NR (*) PP2  AMS   Total
Changes in the net actuarial liability            
Balance as of January 1, 41,239 13,154 3,987 48,312 98 106,790
Recognized in the Statement of Income 454 206 571 (8,461) 14 (7,216)
Costs incurred in the period (1,606) (477) 280 (11,882) 1 (13,684)
Service cost 2,060 683 291 3,421 13 6,468
Recognized in Equity - other comprehensive income (1,833) 1,519 (2,081) (10,417) (41) (12,853)
Remeasurement effects recognized in other comprehensive income (1,833) 1,519 (2,081) (10,417) (41) (12,853)
Cash effects (2,457) (1,374) (1,598) (4) (5,433)
Contributions paid (1,324) (416) (1,598) (4) (3,342)
Payments related to Term of financial commitment (TFC) (1,133) (958) (2,091)
Other changes 9 9
Others 9 9
Total obligation with pension and medical benefits as of December 31 2020 37,403 13,505 2,477 27,836 76 81,297
Obligations with contribution for the revision of the lump sum death benefit 1,699 507 2,206
Total obligation with pension and medical benefits as of December 31 2020 39,102 14,012 2,477 27,836 76 83,503
(*) It includes the balance of PPSP-R pre-70 and PPSP-NR pre-70.

 

 

The net expense for pension and health plans is as follows:

  Pension plans     Health care Plans      
  PPSP-R (*) PPSP-NR (*) PP2 AMS Other plans Jan-Mar/2021 Jan-Mar/2020
Present value of obligations (VPO) 623 223 99 712 1 1,658 2,159
Obligations with contribution for the revision of the lump sum death benefit 52 16 68
Net costs for Jan-Mar/2021 675 239 99 712 1 1,726 2,159
Related to active employees 72 13 80 371 1 537 832
Related to retired employees 603 226 19 341 1,189 1,327
Net costs for Jan-Mar/2021 675 239 99 712 1 1,726 2,159
(*) It includes the balance of PPSP-R pre-70 and PPSP-NR pre-70.
 

 

13.1 Pension plans

Net liabilities with Pension Plans have been calculated annually by an independent actuary and are already recognized in Petrobras' financial statements for 2020, in accordance with the technical pronouncements issued by the Accounting Pronouncements Committee (Comitê de Pronunciamentos Contábeis - CPC), approved by the Brazilian Securities and Exchange Commission (Comissão de Valores Mobiliários - CVM), whose scope has its own recognition methodology different from those applicable to pension funds.

On March 29, 2021, the Deliberative Council of Petros approved the financial statements of the PPSP-R and PPSP-NR plans, ending the fiscal year 2020 with a surplus, reversing the scenario of successive deficits in the two largest defined benefit plans managed by the Foundation.

The main differences in accounting practices adopted in Brazil (CNPC and CVM), between the Pension Fund and the Sponsor to calculate the actuarial commitment, are shown below:

30 

NOTES TO THE FINANCIAL STATEMENTS

PETROBRAS

This interim financial information should be read together with the Company’s audited annual financial statements

(Expressed in millions of reais, unless otherwise indicated)

 

 

 

   
    2020
  PPSP-R PPSP-NR
Accumulated surplus registered by Petros (968) (536)
Financial assumptions 19,090 5,830
Ordinary and extraordinary sponsor contributions 13,798 3,981
Changes in fair value of plan assets (*) 10,744 4,778
Others (including Actuarial valuation method) (5,261) (548)
Net actuarial liability registered by the Company 37,403 13,505
(*) Includes balance of accounts receivable resulting from the Financial Commitment Term - TCF signed with Petrobras, and which Petros recognizes as equity.
 
13.1.1 Petros Plan 2 (PP2)

The Petros 2 Plan has a defined contribution portion whose payments are recognized in the income statement. In the period from January to March 2021, the Company's contribution to the defined contribution portion of the Petros 2 Plan was R$ 217 (R$ 224, for the period from January to March 2020).

13.1.2 Petros Plan 3 (PP3)

On October 1, 2020, the Board of Directors approved the submission of the PP3 for analysis by the Secretaria de Coordenação e Governança das Empresas Estatais (SEST) and to the Superintendência Nacional de Previdência Complementar (PREVIC), after adjustments to the Plan's regulations.

PP3 will be a social security option, in the defined contribution modality (CD), for voluntary and exclusive migration to participants and beneficiaries of the PPSP-R and PPSP-NR plans, both post-70.

On January 27, 2021, PREVIC and SEST approved the creation of PP3. The deadline for enrolling in the plan ended on April 30, 2021 and after the registration validation process and success in completing the technical and administrative feasibility study, the company will carry out an actuarial review of the original plans. PP3 is expected to start operating in the second half of 2021.

13.2Health Care Plan (AMS)

In 2020, Petrobras' Board of Directors approved a new management model for Multidisciplinary Health Care (AMS). As from April 1st, 2021, the health care plan management started to be carried out by a non-profit civil association, named as Petrobras Health Association (APS), maintaining the self-management modality. The new model is in accordance with the requirements of the Agência Nacional de Saúde Suplementar (ANS).

With the transfer to the new management model, there was no change in benefit, coverage or scope, as well as accounting effects.

14Provisions for legal proceedings
14.1 Provisions for legal proceedings, judicial deposits and contingent liabilities

The Company recognizes provisions based on the best estimate of the costs of proceedings for which it is probable that an outflow of resources embodying economic benefits will be required and that can be reliably estimated. These proceedings mainly include:

·Labor claims, in particular: (i) opt-out claims related to a review of the methodology by which the minimum compensation based on an employee's position and work schedule (Remuneração Mínima por Nível e Regime - RMNR) is calculated; and (ii) actions of outsourced employees;
·Tax claims including: (i) claims relating to Brazilian federal tax credits applied that were disallowed; (ii) alleged misappropriation of VAT (ICMS) tax credits; and (iii) fines for non-compliance with accessory tax obligations;
·Civil claims, in particular: (i) lawsuits related to contracts; (ii) royalties and special participation charges, including royalties over shale extraction; and (iii) penalties applied by ANP relating to measurement systems.
·Environmental claims, specially: (i) compensation and fines relating to an environmental accident in the State of Paraná in 2000; and (ii) fines relating to the Company’s offshore operation.

Provisions for legal proceedings are set out as follows:

31 

NOTES TO THE FINANCIAL STATEMENTS

PETROBRAS

This interim financial information should be read together with the Company’s audited annual financial statements

(Expressed in millions of reais, unless otherwise indicated)

 

 

 

  Consolidated
Current and Non-current liabilities 03.31.2021 12.31.2020
Labor claims 3,670 3,667
Tax claims 1,768 2,538
Civil claims 3,413 3,706
Environmental claims 1,483 1,516
Total 10,334 11,427

 

  Consolidated
  03.31.2021 12.31.2020
Opening Balance 11,427 12,546
Additions, net of reversals (454) 2,494
Use of provision (636) (3,814)
Accruals and charges (67) 104
Others 64 97
Closing balance 10,334 11,427
 

 

 

In preparing its consolidated financial statements for the three-month period ended March 31, 2021, the Company considered all available information concerning legal proceedings in which the Company is a defendant, in order to estimate the amounts of obligations and probability that outflows of resources will be required.

In the period from January to March 2021, the reduction in liabilities is mainly due to changes in the following cases: (i) a reduction of R$ 729 due to the revision of tax contingencies in the scope of the amnesty program in the state of Rio de Janeiro (see note 11.2); and (ii) a reduction of R$ 371 due to an agreement made in engineering contract arbitration on platforms resulting from subsidiaries abroad.

14.2Judicial deposits

Judicial deposits made in connection with legal proceedings are set out in the table below according to the nature of the corresponding lawsuits:

  Consolidated
Non-current assets 03.31.2021 12.31.2020
Tax 28,153 26,785
Labor 4,391 4,317
Civil 5,254 5,688
Environmental 584 588
Others 499 460
Total 38,881 37,838
 

 

 

  Consolidated
  03.31.2021 12.31.2020
Opening Balance 37,838 33,198
Additions 904 4,672
Use (66) (441)
Accruals and charges 166 431
Others 39 (22)
Closing balance 38,881 37,838

In the period from January to March 2021, the company made judicial deposits in the amount of R$ 904, including: (i) R$ 474 referring to corporate income taxes for not adding the income of subsidiaries and affiliates domiciled abroad to the tax calculation base of the Parent Company; (ii) R$ 290 referring to the unification of fields (Cernambi, Tupi, Tartaruga Verde and Tartaruga Mestiça); (iii) R$ 280 referring to the chartering of platforms due to the legal dispute related to the incidence of withholding income tax; (iv) R$ 263 referring to corporate income taxes in the deduction of Petros' expenses; and (v) R$ 172 referring to several tax deposits in court, mainly offset by: (vi) R$ 722 referring to the redemption of the deposit of IPI credits used to offset debts with the Federal Revenue of Brazil.

14.3Contingent liabilities

The estimates of contingent liabilities for legal proceedings are indexed to inflation and updated by applicable interest rates. As of March 31, 2021, estimated contingent liabilities for which the possibility of loss is not considered remote are set out in the following table:

  Consolidated
Nature 03.31.2021 12.31.2020
Tax 128,637 127,375
Labor 37,859 42,505
Civil – General 26,850 24,012
Civil – Environmental 7,900 7,613
Total 201,246 201,505
 

 

 

The main contingent liabilities are:

32 

NOTES TO THE FINANCIAL STATEMENTS

PETROBRAS

This interim financial information should be read together with the Company’s audited annual financial statements

(Expressed in millions of reais, unless otherwise indicated)

 

 

·Tax matters comprising: i) withholding income tax (IRRF), Contribution of Intervention in the Economic Domain (CIDE), Social Integration Program (PIS) and Contribution to Social Security Financing (COFINS) on remittances for payments of vessel charters; (ii) income from foreign subsidiaries and associates located outside Brazil not included in the computation of taxable income (IRPJ and CSLL); (iii) tax on services provided offshore (ISS); (iv) requests to compensate federal taxes disallowed by the Brazilian Federal Tax Authority; (v) collection and crediting of ICMS VAT tax by several states; and (vi) collection of social security contributions over payments of bonuses.
·Labor matters comprising mainly actions requiring a review of the methodology by which the minimum compensation based on an employee's position and work schedule (Remuneração Mínima por Nível e Regime - RMNR) is calculated;
·Civil matters comprising mainly: (i) litigations regarding Sete Brasil Participações S.A.; (ii) administrative proceedings challenging an ANP order requiring Petrobras to pay additional special participation fees and royalties (production taxes) with respect to several fields; (iii) a public civil action that discusses the alleged illegality of the gas supply made by the Company to its Nitrogen Fertilizer Production Unit; (iv) regulation agencies fines; and (v) lawsuits related to contracts.
·Environmental matters comprising indemnities for material and collective moral damages to the environment and environmental fines related to the Company operation.

In the period from January to March 2021, the reduction in liabilities arises mainly from the following events: (i) a R$ 4,644 reduction in collective labor lawsuits in which unions question the formula for calculating the RMNR Complement, based on the published minutes on the decision of the Supreme Federal Court in relation to the financial update indexes applied to labor debts. These effects were partially offset by: (ii) R$ 2,248 related to civil matters involving contractual issues; (iii) R$ 781 referring to actions involving collection of ICMS VAT Tax on inventory differences and on added value; (iv) R$ 476 of requests for offsetting federal taxes not approved by the Brazilian Tax Federal Revenue; and (v) R$ 290 referring to the collection of Service Municipal Tax (ISS) on services in maritime waters.

14.4Class action and related proceedings

Regarding the class action in the Netherlands, on January 29, 2020, the Rotterdam District Court (“Court”) determined that shareholders who understand Portuguese and / or who bought shares through intermediaries or other agents who understand that language, among other shareholders, are subject to the arbitration clause provided for in the Company's Bylaws, remaining out of the collective action proposed by the Stichting Petrobras Compensation Foundation (“Foundation”). The Court also considered the binding effect of the agreement signed to close the United States' Class action. In this way, the Foundation needs to demonstrate that it represents a sufficient number of investors to justify pursuing collective action in the Netherlands. The Foundation and the Company presented the oral arguments at a hearing held on January 26, 2021, which is pending judgment. For more information, see note 20.4.1 to the financial statements for the year ended December 31, 2020.

In relation to the arbitration in Argentina, described in item 20.4.3 of the financial statements for the year ended December 31, 2020, the Argentine Supreme Court has not yet judged the appeal filed by the Association.

As for the criminal actions in Argentina, described in item 20.5 of the financial statements for the year ended December 31, 2020, it should be noted that, in the context of the action related to the alleged fraudulent offer of securities, on September 14, 2020, the judge responsible accepted the company's defense of immunity from jurisdiction and decided that Petrobras cannot be sued in a criminal action before the Argentine Justice. The Association appealed against this decision, and the appeal is pending judgment. Regarding the action related to the alleged breach of the obligation to disclose “material fact”, on March 4, 2021, the Court decided that the competence to judge this criminal action should be transferred from the Criminal Economic Court No. 3 in the city of Buenos Aires for the Criminal Economic Court No. 2 in the same city.

14.5 Arbitrations in Brazil

In the period from January to March 2021, there were no events that changed the assessment and judgment of arbitration in Brazil.

For more information, see note 20.4.2 to the financial statements for the year ended December 31, 2020.

33 

NOTES TO THE FINANCIAL STATEMENTS

PETROBRAS

This interim financial information should be read together with the Company’s audited annual financial statements

(Expressed in millions of reais, unless otherwise indicated)

 

 

14.6Tax recoveries under dispute
14.6.1Deduction of VAT tax (ICMS) from the basis of calculation of PIS and COFINS

The Company filed complaints against Brazilian Federal Government challenging the constitutionality of the inclusion, from 2001 to 2020, of ICMS within the calculation basis of PIS and COFINS. The Company obtained a favorable and definitive court decision on this claim, recognizing that Petrobras had the right to offset the amounts unduly paid under PIS and COFINS, with this decision being final and the respective asset recognized in the year 2020, according to note 17 of Taxes of December 31, 2020.

The tax credit relates to the exclusion of the ICMS VAT Tax effectively collected when included in the basis of calculation of PIS and COFINS, as deliberated by the Federal Revenue of Brazil (COSIT Consultation Solution 13), as set out in note 11.1. In relation to the amounts corresponding to the difference between the criterion established in the regulation and the ICMS VAT Tax amount reported in the invoices, these were not recognized as tax credit, since it is still pending final decision of the STF.

15Provision for decommissioning costs
  Consolidated
  03.31.2021 12.31.2020
Opening balance 97,595 70,377
Adjustment to provision 26 29,309
Transfers related to liabilities held for sale (*) (1,125) (2,793)
Payments made (887) (2,293)
Interest accrued 989 2,925
Others 39 70
Total 96,637 97,595

 

 

(*) In the period from January to March 2021, it refers to transfers of R$ 595 related to Polo Peroá, in Espírito Santo, and R$ 530 related to Polo Miranga, in Bahia. In 2020, it mainly includes transfers of R$ 1,550 related to concessions in Bahia and R$ 1,054 related to concessions in Rio Grande do Norte, according to note 24 of December 31, 2020.

16The “Lava Jato (Car Wash) Operation” and its effects on the Company

The Company has monitored the progress of investigations under the “Lava Jato” Operation and, in the preparation of these unaudited interim consolidated financial statements for the period ended March 31, 2021, did not identify any additional information that would affect the adopted calculation methodology to write off, in the third quarter of 2014, amounts overpaid for the acquisition of property, plant and equipment. The Company will continue to monitor these investigations for additional information in order to assess their potential impact on the adjustment made.

In addition, the Company has fully cooperated with the Brazilian Federal Police (Polícia Federal), the Brazilian Public Prosecutor’s Office (Ministério Público Federal), the Federal Auditor’s Office (Tribunal de Contas da União – TCU) and the General Federal Inspector’s Office (Controladoria Geral da União) in the investigation of all crimes and irregularities.

In the period from January to March 2021, as a result of leniency agreements and collaboration and repatriation agreements, the reimbursement of R$ 790 was recognized. Considering the amount recognized in previous years, Petrobras has already recovered R$ 5,738 as a result of Lava Jato Operation. These funds were presented as other operating income.

16.1U.S. Commodity Futures Trading Commission - CFTC

On May 30, 2019, the U.S. Commodity Futures Trading Commission (“CFTC”) contacted Petrobras with an inquiry regarding trading activities related to the Lava Jato Operation. Petrobras reiterates that it continues to cooperate with the regulatory authorities, including the CFTC, regarding any inquiry.

16.2 Order of civil inquiry - Brazilian Public Prosecutor’s Office

On December 15, 2015, the State of São Paulo Public Prosecutor’s Office issued the Order of Civil Inquiry 01/2015, establishing a civil proceeding to investigate the existence of potential damages caused by Petrobras to investors in the Brazilian stock market. The Brazilian Attorney General’s Office (Procuradoria Geral da República) assessed this civil proceeding and determined that the São Paulo Public Prosecutor’s Office has no authority over this matter, which must be presided over by the Brazilian Public Prosecutor’s Office. The Company has provided all relevant information requested by the authorities.

34 

NOTES TO THE FINANCIAL STATEMENTS

PETROBRAS

This interim financial information should be read together with the Company’s audited annual financial statements

(Expressed in millions of reais, unless otherwise indicated)

 

 

17Property, plant and equipment
17.1By class of assets
  Consolidated Parent
 

Land, buildings

and

improvement

Equipment and other assets (*)

Assets under

construction (**)

Exploration and development costs (oil and gas producing properties) (***) Right-of-use assets Total Total
Balance at January 1,2020 17,938 283,673 88,480 164,845 87,013 641,949 662,816
Additions 1 23,819 14,825 1,883 22,671 63,199 174,429
Additions to / review of estimates of decommissioning costs 27,899 27,899 27,829
Capitalized borrowing costs 4,797 4,797 4,745
Write-offs               (26) (2,269) (2,266) (1,055) (6,588) (12,204) (81,011)
Transfers (1,485) 13,724 (15,342) 6,079 (119) 2,857 1,955
Transfers to assets held for sale (47) (1,055) 14 (3,956) (73) (5,117) (4,995)
Depreciation, amortization and depletion (719) (21,882) (19,650) (20,627) (62,878) (71,925)
Impairment recognition (68) (35,813) (13,997) (22,691) (1,645) (74,214) (66,603)
Impairment reversal 28,522 2,479 8,296 638 39,935 22,848
Cumulative  translation adjustment 218 16,221 1,265 308 1,199 19,211
Balance at December 31, 2020 15,812 304,940 80,255 161,958 82,469 645,434 670,088
Accumulated cost 28,322 557,080 143,142 316,486 123,578 1,168,608 1,120,987
Accumulated depreciation, amortization, depletion and impairment (12,510) (252,140) (62,887) (154,528) (41,109) (523,174) (450,899)
Balance at December 31, 2020 15,812 304,940 80,255 161,958 82,469 645,434 670,088
Additions 1 1,949 8,005 1 2,152 12,108 10,014
Additions to / review of estimates of decommissioning costs (7) (7)
Capitalized borrowing costs 1,151 1,151 1,141
Write-offs               (17) (511) (78) (21) (627) (623)
Transfers 1,498 (1,345) (6,397) 6,524 (5) 275 236
Transfers to assets held for sale (6,050) (606) (556) 14 (7,198) (7,216)
Depreciation, amortization and depletion (183) (5,405) (5,681) (5,410) (16,679) (18,009)
Impairment recognition (note 19) (643) (46) (689) (689)
Impairment reversal (note 19) 151 151
Cumulative  translation adjustment (3) 96 585 114 1 793
Balance at March 31, 2021 17,125 293,525 82,633 162,229 79,200 634,712 654,942
Accumulated cost 28,352 546,519 143,370 315,375 124,626 1,158,242 1,105,800
Accumulated depreciation, amortization, depletion and impairment (***) (11,227) (252,994) (60,737) (153,146) (45,426) (523,530) (450,858)
Balance at March 31, 2021 17,125 293,525 82,633 162,229 79,200 634,712 654,942
Weighted average useful life in years

40

(25 to 50)

(except land)

20

(3 to 31)

 

  Units of production method

8

(2 to 47)

 

(*) Composed of production platforms, refineries, thermoelectric plants, gas treatment units, pipelines and other operating, storage and production facilities, including subsea production equipment and flow of oil and gas depreciated by the method of the units produced.

(**) Balances by business segment are presented in note 24.

(***) Composed of exploration and production assets related to wells, abandonment of areas, signature bonuses associated with proven reserves and other expenses directly linked to exploration and production, except production platforms.

(****) In the case of assets under construction, it refers only to impairment losses.

 

 

 

The rights-of-use comprise the following underlying assets:

  Consolidated Parent Company
  Platforms Vessels Buildings and others Total Total
2020          
Accumulated cost 57,913 58,498 7,167 123,578 139,784
Accumulated depreciation, amortization, depletion and impairment (16,447) (21,251) (3,411) (41,109) (45,198)
Balance at December 31, 2020 41,466 37,247 3,756 82,469 94,586
2021          
Accumulated cost 59,315 57,734 7,577 124,626 140,840
Accumulated depreciation, amortization, depletion and impairment (17,920) (24,020) (3,486) (45,426) (49,989)
Balance at March 31, 2021 41,395 33,714 4,091 79,200 90,851
           
 
             

 

35 

NOTES TO THE FINANCIAL STATEMENTS

PETROBRAS

This interim financial information should be read together with the Company’s audited annual financial statements

(Expressed in millions of reais, unless otherwise indicated)

 

 

17.2Capitalization rate used to determine the amount of borrowing costs eligible for capitalization

The capitalization rate used to determine the amount of borrowing costs eligible for capitalization was the weighted average of the borrowing costs applicable to the borrowings that were outstanding during the period, other than borrowings made specifically for the purpose of obtaining a qualifying asset. For the three-month period ended March 31, 2021, the capitalization rate was 5.55% p.a. (6.36% p.a. for the same period of 2020).

18Intangible assets
18.1By class of assets
  Consolidated Parent Company
  Rights and Concessions Software Goodwill Total Total
Balance at December 31, 2019 77,261 976 252 78,489 77,904
Addition 157 448 605 562
Capitalized borrowing costs 9 9 9
Write-offs (922) (16) (938) (902)
Transfers (13) (5) (148) (166) (17)
Amortization (37) (295) (332) (298)
Impairment recognition (30) (31) (61)
Cumulative  translation adjustment 18 2 52 72
Balance at December 31, 2020 76,464 1,089 125 77,678 77,258
Accumulated Cost 76,925 6,467 125 83,517 82,110
Accumulated amortization and impairment (461) (5,378) (5,839) (4,852)
Balance at December 31, 2020 76,464 1,089 125 77,678 77,258
Addition 59 142 201 188
Capitalized borrowing costs 3 3 3
Write-offs (3) (2) (5) (2)
Transfers (227) 12 (215) (193)
Amortization (9) (73) (82) (73)
Cumulative  translation adjustment 6 6
Balance at March 31, 2021 76,290 1,171 125 77,586 77,181
Accumulated Cost 76,749 6,660 125 83,534 82,083
Accumulated amortization and impairment (459) (5,489) (5,948) (4,902)
Balance at March 31, 2021 76,290 1,171 125 77,586 77,181
Estimated useful life in years (*) 5 Indefinite

 

 

(*) Mainly composed of assets with indefinite useful lives, which are reviewed annually to determine whether events and circumstances continue to support an indefinite useful life assessment.

36 

NOTES TO THE FINANCIAL STATEMENTS

PETROBRAS

This interim financial information should be read together with the Company’s audited annual financial statements

(Expressed in millions of reais, unless otherwise indicated)

 

 

19Impairment
19.1Property, plant and equipment and intangible

The Company annually tests its assets for impairment or when there is an indication that their carrying amount may not be recoverable. During the first quarter of 2021, impairment losses were recognized, in the amount of R$ 508, mainly due to:

·Equipment and facilities linked to the production activity - Brazil: the company decided to permanently stop the P-33 platform in the Marlim field, which resulted in its exclusion from CGU North Pole and being classified as an isolated asset, with the recognition of losses for devaluation in the amount of R$ 689; and
·Equipment and facilities linked to the production activity - Abroad: the company decided to relocate equipment from the P-72 and P-73 platforms to producing fields in the Santos Basin. Thus, considering the expectation of future cash generation, it recognized a reversal of losses due to devaluation in the amount of R$ 151.

In the first quarter of 2020, impairment losses were recognized due to the significant and adverse effects on the oil and oil products market arising from: (i) the outbreak of the COVID-19 pandemic and its effects on the economic activity, and (ii) failure in negotiations between members of Organization of the Petroleum Exporting Countries (OPEC) and its allies to define production levels, which contributed to an increase in the global oil supply with a significant reduction in price in early March 2020.

These events led the company to adopt a series of measures aimed at preserving cash generation and to revise some of its key assumptions, such as the Brent price, exchange rate, spreads of oil products, among others, with repercussions on the tests of recoverability in the period from January to March 2020, leading to the recognition of impairment losses in the amount of R$ 65,301, with emphasis on:

·R$ 57,619 relating to the effect of updated assumptions in the estimation of the recoverable amount of several E&P fields, notably in the following Cash Generating Units (CGU): Roncador, Marlim Sul, North group, Albacora Leste, Berbigão-Sururu group, CVIT group and Mexilhão; and
·R$ 6,625 relating to the hibernation of fields and platforms in shallow waters, affecting CGUs North group, Ceará-Mar group and Ubarana group, as well as Caioba, Guaricema and Camorim fields.

On November 25, 2020, Management concluded and approved its Strategic Plan 2021-2025, contemplating the complete updating of economic assumptions, as well as its project portfolio and estimates of reserve volumes, which were the basis for the recoverability tests of the assets of the fourth quarter of 2020 and the partial reversal of losses for devaluation recorded in the first quarter of 2020, related to several fields of oil and gas production in Brazil, according to note 27 of the financial statements of December 31, 2020.

19.2Investment in affiliate with shares traded on stock exchanges (Petrobras Distribuidora S.A. - BR)

On August 26, 2020, the Board of Directors of Petrobras (CA) approved the process of divesting all of its interest in Petrobras Distribuidora. The company evaluates the recoverability of the investment based on the value in use, but considering the scenario that contemplates the intention to sell the shares. The recoverability assessments in the first quarter of 2021 led to the additional recognition of impairment losses in the amount of R$ 148.

The post-tax discount rate applied was 11% p.a., in nominal terms, taking into account the cost of equity, given the methodology adopted in the value in use.

20Exploration and evaluation of oil and gas reserves

The exploration and evaluation activities include the search for oil and gas reserves from obtaining the legal rights to explore a specific area to the declaration of the technical and commercial viability of the reserves.

Changes in the balances of capitalized costs directly associated with exploratory wells pending determination of proved reserves and the balance of amounts paid for obtaining rights and concessions for exploration of oil and natural gas (capitalized acquisition costs) are set out in the following table:

37 

NOTES TO THE FINANCIAL STATEMENTS

PETROBRAS

This interim financial information should be read together with the Company’s audited annual financial statements

(Expressed in millions of reais, unless otherwise indicated)

 

 

 

  Consolidated
Capitalized Exploratory Well Costs / Capitalized Acquisition Costs (*) 03.31.2021 12.31.2020
Property plant and equipment
Opening Balance 15,716 17,175
    Additions 485 2,168
Write-offs (652) (1,066)
Transfers (396) (2,667)
Cumulative translation adjustment 57 106
Closing Balance 15,210 15,716
Intangible Assets 75,325 75,489
Capitalized Exploratory Well Costs / Capitalized Acquisition Costs 90,535 91,205
(*) Amounts capitalized and subsequently expensed in the same period have been excluded from this table.
 

 

 

Exploration costs recognized in the statement of income and cash used in oil and gas exploration and evaluation activities are set out in the following table:

  Consolidated
  2021 2020
Exploration costs recognized in the statement of income Jan-Mar Jan-Mar
Geological and geophysical expenses 369 320
Exploration expenditures written off (includes dry wells and signature bonuses) 740 117
Contractual penalties 84 28
Other exploration expenses 3 3
  1,196 468
 
Cash used in:
Operating activities 372 323
Investment activities 628 662
Total cash used 1,000 985
 

 

21Collateral for crude oil exploration concession agreements

The Company has granted collateral to ANP in connection with the performance of the Minimum Exploration Programs established in the concession agreements for petroleum exploration areas in the total amount of R$ 8,796 of which R$ 8,338 were still in force, net of commitments undertaken. The collateral comprises crude oil from previously identified producing fields, pledged as collateral, amounting to R$ 6,529 and bank guarantees of R$ 1,809.

22Investments
22.1Investments in associates and joint ventures (Parent Company)
  Balance at 12.31.2020  Investments Transfers to held for sale Restructuring, capital decrease and others Results in equity-accounted investments Cumulative translation adjustments (CTA) Other comprehensive income Dividends Balance at 03.31.2021
Subsidiaries 228,777 405 2,098 23,608 111 (8) 254,991
Joint operations 164 9 (2) 171
Joint ventures 237 8 (11) 12 3 (4) 245
Associates (*) 12,678 776 677 (617) (271) 13,243
Total 241,856 8 (11) 405 2,895 24,285 (503) (285) 268,650
Other investments 19   19
Total 241,875 8 (11) 405 2,895 24,285 (503) (285) 268,669
(*) Includes Petrobras Distribuidora and Braskem S / A.

 

 

38 

NOTES TO THE FINANCIAL STATEMENTS

PETROBRAS

This interim financial information should be read together with the Company’s audited annual financial statements

(Expressed in millions of reais, unless otherwise indicated)

 

 

22.2Changes in investment (Consolidated)
  Balance at 12.31.2020  Investments Transfers to held for sale Restructuring, capital decrease and others Results in equity-accounted investments Cumulative translation adjustments (CTA) Other comprehensive income Dividends Balance at 03.31.2021
Joint ventures 4,232 8 (11) 255 240 3 (27) 4,700
Associates (*) 12,758 4 5 764 684 (617) (274) 13,324
Other investments 20 20
Total 17,010 12 (11) 5 1,019 924 (614) (301) 18,044
(*) Includes Petrobras Distribuidora and Braskem S / A.
23Disposal of assets and other changes in organizational structure

The Company has an active partnership and divestment portfolio, which takes into account opportunities for disposal of non-strategic assets in several areas in which it operates, whose development of transactions also depends on conditions beyond the control of the Company.

The divestment projects and strategic partnerships follow the procedures aligned with the guidelines of the Brazilian Federal Auditor’s Office (Tribunal de Contas da União – TCU) and the current legislation.

The major classes of assets and related liabilities classified as held for sale are shown in the following table:

    Consolidated
            03.31.2021 12.31.2020
   E&P RT&M  

 

 

Gas & Power

Corporate Total Total
Assets classified as held for sale    
Cash and Cash Equivalents 4   4 74
Trade receivables   126
Inventories 1,696   1,696 23
Investments 1   109 110 355
Property, plant and equipment 3,627 6,212   9,839 3,318
Others 1   1 185
Total 3,633 7,908   109 11,650 4,081
Liabilities on assets classified as held for sale              
Trade Payables 2   2 110
Finance debt   6 6 70
Provision for decommissioning costs 3,958   3,958 3,326
Others   53
Total 3,960   6 3,966 3,559

 

 

23.1 Transactions pending closing at March 31, 2021

As of March 31, 2021, the main assets and liabilities classified as held for sale include: (i) assignment of remaining rights in the concession area called Lapa (referring to the exercise of the put option of the remaining 10% of its interest); (ii) the sale of its entire interest in Polo Peroá; (iii) onshore fields in Ceará, Bahia and Espírito Santo; (iv) Mangue Seco wind farms 1, 2, 3 and 4; and (v) RLAM refinery.

The description of these operations was presented in note 32 of the financial statements of December 31, 2020, except for the assets described below:

Transaction Acquirer Signature date Transaction amount (*) Further information

Sale of E&P assets in the state of Espírito Santo (Polo Peroá)

 

OP Energy e DBO Energy

 

January

2021

US$ 12.5 million a
Sale of the Company’s entire interest in nine onshore fields, called Miranda group, in the in the state of Bahia

Miranga S.A. (structured entity), subsidiary of

PetroRecôncavo S.A.

February

2021

US$ 135.1 million b
Sale of the Company’s 51% interest in the company Eólica Mangue Seco 2 - Geradora e Comercializadora de Energia Elétrica S.A. (“Eólica Mangue Seco 2), wind power generation plant. Fundo de Investimento em Participações Multiestratégia Pirineus (FIP Pirineus)

February

2021

                       33 c
Sale of the Company's shares that will hold the Landulpho Alves Refinery (RLAM) and its associated logistics assets, in the state of Bahia MC Brazil Downstream Participações, a company of the Mubadala Capital group

March

2021

US$ 1.65 billion d
(*) Only amounts considered at the signing of the transaction.

 

 

39 

NOTES TO THE FINANCIAL STATEMENTS

PETROBRAS

This interim financial information should be read together with the Company’s audited annual financial statements

(Expressed in millions of reais, unless otherwise indicated)

 

 

a) Sale of E&P assets in Espírito Santo (Polo Peroá)

Amounts due to Petrobras are composed of: (i) US$ 5 million was paid at the contract signing; (ii) US$ 7.5 million to be paid at the transaction closing; (iii) US$ 42.5 million as contingent payments provided for in the contract, related to factors such as Malombe's declaration of commerciality, future oil prices and extension of the concession terms. The amounts do not consider the adjustments due until the closing of the transaction, which is subject to the fulfillment of precedent conditions, such as approval by the ANP.

b) Sale of onshore fields in Bahia

Amounts due to Petrobras are composed of: (i) US$ 11 million paid upon the contract signing; (ii) US$ 44 million to be paid at the transaction closing; and (iii) US$ 80.1 million deferred in three installments over three years from the transaction closing.

The contract provides for the payment of conditional amounts of up to US$ 85 million, classified as contingent assets, which will only be recognized when the agreed conditions are met.

The amounts do not consider the adjustments due until the closing of the transaction, which is subject to the fulfillment of precedent conditions, such as approval by the ANP.

c) Sale of Eólica Mangue Seco 2

Amount to be paid to Petrobras in a single installment at the transaction closing, subject to price adjustments provided for in the contract. The transaction results from the exercise of the preemptive right by FIP Pirineus, in accordance with the shareholders' agreement of Eólica Mangue Seco 2.

The closing of the transaction is subject to the fulfillment of conditions precedent, such as approval by Banco do Nordeste do Brasil, resource provider of the wind farm development, and by the Administrative Council for Economic Defense (CADE).

d) Sale of the RLAM refinery

The agreement provides for price adjustment due to changes in working capital, net debt and investments until the transaction closing, and is subject to the fulfillment of conditions precedent, such as approval by the Administrative Council for Economic Defense (CADE).

23.2 Closed transactions at March 31, 2021
Transaction Acquirer

Signature date (S)

Closing date (C)

 Sale amount   Contractual amount (*) (**)

Gain/(loss)

(***)

Further information
Sale of 30% of the Frade field concession. The transaction also includes the sale of the entire stake held by the subsidiary Petrobras Frade Inversiones S.A. (PFISA), in the company Frade BV. PetroRio

November 2019 (S)

February 2021 (C)

206 US$ 43.5 million 474 a
             

Petrobras Uruguay Sociedad Anónima de Inversiones (PUSAI) signed a contract for the sale of its entire stake in Petrobras Uruguay Distribución S.A. (PUDSA).

 

DISA Corporación Petrolífera S.A.

August 2020 (S)

February 2021 (C)

369 US$ 68.17 million (14) b
             
Petrobras Biocombustível S.A. (PBio) has signed contract for the sale of all of its shares (50% of the company's capital) issued by BSBios Indústria e Comércio de Biodiesel Sul Brasil S / A (BSBios). RP Participações em Biocombustíveis S.A

December 2020 (S)

February 2021 (C)

322 322 2 c
             
      897   462  
(*) Considering amounts agreed upon signing the transaction and converted into reais, when traded in another currency.
(**) The amount of “Receipts for the sale of assets (Divestments) in the Cash Flow Statement” is mainly composed of amounts from the Divestment Program: partial receipt of operations for this year, installments for operations from previous years and advances referring to unfinished operations.
(***) Recognized in "Income from disposals, write-off of assets and result from remeasurement of equity interests" - Note 6 - Other net operating income (expenses).
(****) Deadlines, precedent conditions and other information

 

These conclusions came after the fulfillment of possible precedent conditions.

a) Sale of the Frade field

The transaction was concluded with the receipt of US$ 36 million, which includes the revenue from the sale of Petrobras' residual oil inventory, on the closing date of the transaction, after the fulfillment of all precedent conditions and adjustments provided for in contracts. In signing the contract, an additional US$ 7.5 million was received.

40 

NOTES TO THE FINANCIAL STATEMENTS

PETROBRAS

This interim financial information should be read together with the Company’s audited annual financial statements

(Expressed in millions of reais, unless otherwise indicated)

 

 

The total transaction amount of US$ 100 million was adjusted based on the income earned by Petrobras in the period from July 1, 2019, base date of the transaction, to February 5, 2021, the closing date of the transaction. In addition, there is an amount of US$ 20 million contingent on a potential new commercial discovery in the field.

b) Sale of Petrobras Uruguay Distribución S.A. (PUDSA)

The transaction was concluded with the payment of US$ 62 million. The amount received at closing is added to the amount of US$ 6.17 million paid to PUSAI on the date of the sales agreement signature. As a result of this operation, the amount of R$ 183 was reclassified to income statement as other operating expenses, resulting from the foreign exchange variation against the U.S. dollar, previously recognized in PUDSA's shareholders' equity as cumulative translation adjustment.

c) Sale of BSBios

The operation was concluded with the receipt of R$ 253, already with the adjustments provided for in the contract. In addition to this amount, R$ 67 are held in an escrow account for indemnification of eventual contingencies and will be released according to terms and conditions set forth in the contract and R$ 2 were received in advance in the form of interest on capital in December 2020.

23.3 Other operations

On January 5, 2021, Petrobras acquired 100% of the shares of the structured entity Company for the Development and Modernization of Industrial Plants (CDMPI) for R$ 50 thousand. The difference between the amount paid and CDMPI's negative shareholders' equity, in the amount of R$ 3,716, was classified as a capital transaction and reduced the shareholders' equity attributable to shareholders of Petrobras, in return for the increase in the shareholders' equity of non-controlling interests, since Petrobras already controlled its operations before the acquisition. On April 14, 2021, Petrobras' Extraordinary General Meeting resolved and approved the merger of CDMPI.

23.4 Cash flows from sales of interest with loss of control

The sales of equity interest that resulted in loss of control and the cash flows arising from these transactions are shown below::

  Cash received Cash in subsidiary before losing control Net Proceeds
Jan-Mar/2021  
PUDSA 334 81 253
Total 334 81 253
Jan-Mar/2020  
Petrobras Oil & Gas B.V.(PO&GBV) (*) 1,144 1,144
Total 1,144 1,144
(*) Amount of US $ 276 received on the closing date of the transaction.

 

24Assets by operating segment

The segmented information reflects the evaluation structure of senior management in relation to performance and the allocation of resources to the business.

41 

NOTES TO THE FINANCIAL STATEMENTS

PETROBRAS

This interim financial information should be read together with the Company’s audited annual financial statements

(Expressed in millions of reais, unless otherwise indicated)

 

 

 

Consolidated assets by operating segment - 03.31.2021  
  Exploration and Production Refining, Transportation & Marketing

Gas

&

Power

Corporate Eliminations Total
Current assets 19,705 73,782 12,283 78,948 (30,746) 153,972
Non-current assets 594,410 114,198 42,239 93,464 844,311
Long-term receivables 25,241 10,117 4,250 74,361 113,969
Investments 2,308 2,783 3,310 9,643 18,044
Property, plant and equipment 491,180 100,790 34,037 8,705 634,712
Operating assets 435,760 87,478 21,632 7,209 552,079
Under construction 55,420 13,312 12,405 1,496 82,633
Intangible assets 75,681 508 642 755 77,586
Total Assets 614,115 187,980 54,522 172,412 (30,746) 998,283
 
Consolidated assets by operating segment - 12.31.2020  
  Exploration and Production Refining, Transportation & Marketing

Gas

&

Power

Corporate Eliminations Total
Current assets 27,713 42,455 10,264 79,700 (17,809) 142,323
Non-current assets 597,341 124,092 43,241 80,413 9 845,096
Long-term receivables 24,657 13,196 5,070 62,042 9 104,974
Investments 2,026 2,081 3,152 9,751 17,010
Property, plant and equipment 494,838 108,308 34,373 7,915 645,434
Operating assets 441,285 95,122 22,345 6,427 565,179
Under construction 53,553 13,186 12,028 1,488 80,255
Intangible assets 75,820 507 646 705 77,678
Total Assets 625,054 166,547 53,505 160,113 (17,800) 987,419

 

25Finance debt
25.1Balance by type of finance debt
  Consolidated
  03.31.2021 12.31.2020
Banking Market 21,364 26,069
Capital Market 13,233 13,053
Development banks 6,549 6,836
Others 51 51
Total 41,197 46,009
Banking Market 77,536 70,576
Capital Market 148,528 143,557
Development banks 1,047
Export Credit Agency 18,286 17,793
Others 1,125 1,056
Total 245,475 234,029
Total finance debt 286,672 280,038
Current 18,755 21,751
Noncurrent 267,917 258,287

 

 

Current finance debt is composed of:

  Consolidated
  03.31.2021 12.31.2020
Short-term debt 1,924 5,926
Current portion of long-term debt 13,723 12,382
Accrued interest on short and long-term debt 3,108 3,443
Total 18,755 21,751

 

At March 31, 2021, there was no default, breach of covenants or change in collateral provided or clauses that would result in change in payment terms compared December 31, 2020.

25.2Changes in finance debt and reconciliation with cash flows from financing activities
  Balance at 12.31.2019 Additions Principal amorti zation (*) Interest amorti zation (*) Accrued interest (**) Foreign exchange/ inflation indexation charges CTA    Modification of contractual cash flows Transfer to liabilities classified as held for sale Balance at 12.31.2020
In Brazil 43,251 7,294 (5,543) (1,720) 2,034 693 46,009
Abroad 211,731 78,229 (122,397) (14,958) 16,427 7,830 57,593 (398) (28) 234,029
Total 254,982 85,523 (127,940) (16,678) 18,461 8,523 57,593 (398) (28) 280,038
                     

 

 

42 

NOTES TO THE FINANCIAL STATEMENTS

PETROBRAS

This interim financial information should be read together with the Company’s audited annual financial statements

(Expressed in millions of reais, unless otherwise indicated)

 

 

 

 

Balance

at

12.31.2020

Additions Principal amortization (*) Interest amorti zation (*) Accrued interest (**) Foreign exchange/ inflation indexation charges Cumulative translation adjustment (CTA) Modification of contractual cash flows Transfer to liabilities classified as held for sale Balance at 03.31.2021
In Brazil 46,009 (5,284) (456) 443 485 41,197
Abroad 234,029 299 (10,783) (3,456) 3,431 2,303 19,661 (9) 245,475
Total 280,038 299 (16,067) (3,912) 3,874 2,788 19,661 (9) 286,672
Debt restructuring   (1,013)            
Deposits linked to financing   (1,986)            
Net cash used in financing activities   299 (17,080) (5,898)            
(*)It includes pre-payments.
(**)It includes premium and discount over notional amounts, as well as gains and losses by modifications in contractual cash flows.

 

From January to March 2021, the Company used its cash to settle older debts and manage liabilities, aiming at improving the debt repayment profile taking into account its alignment with investments returns over the long run, and also to have cash reserve to maintain the Company’s liquidity.

The Company repaid several finance debts, in the amount of R$ 22,978, notably: (i) prepayment of banking loans in the international market totaling R$ 536; (ii) R$ 7,950 to repurchase of global bonds previously issued by the Company in the capital market, with net premium paid to bond holders amounting to R$ 1,013; and (iii) total prepayment of R$ 1,265 for loans with development agencies.

25.3Summarized information on current and non-current finance debt
    Consolidated
  Maturity in 2021 2022 2023 2024 2025 2026 onwards Total (**) Fair value
   
  Financing in U.S. Dollars (US$)(*): 12,985 12,493 20,846 24,809 29,971 124,598 225,702 243,525
  Floating rate debt 10,827 12,493 15,632 20,373 24,421 11,627 95,373  
  Fixed rate debt 2,158 5,214 4,436 5,550 112,971 130,329  
  Average interest rate 4.8% 4.8% 4.8% 5.2% 5.3% 6.6% 6.1%  
  Financing in Brazilian Reais (R$): 2,815 6,178 9,037 8,064 2,097 13,004 41,195 42,527
  Floating rate debt 2,017 4,840 8,267 6,214 1,673 4,509 27,520  
  Fixed rate debt 798 1,338 770 1,850 424 8,495 13,675  
  Average interest rate 3.4% 4.7% 6.0% 5.2% 4.4% 4.3% 4.5%  
  Financing in Euro (€): 190 1,919 80 2,903 4,013 9,105 10,289
  Fixed rate debt 190 1,919 80 2,903 4,013 9,105  
  Average interest rate 4.6% - 4.6% 4.7% 4.7% 4.7% 4.7%  
  Financing in Pound Sterling (£): 201 10,469 10,670 11,975
  Fixed rate debt 201 10,469 10,670  
  Average interest rate 6.2% - - 6.4% 6.3%  
  Total on March 31, 2021 16,191 18,671 31,802 32,953 34,971 152,084 286,672 308,316
  Average interest rate 4.6% 4.9% 5.0% 5.2% 5.3% 6.5% 6.0%  
  Total on December 31, 2020 21,751 17,055 30,620 30,977 32,373 147,262 280,038 319,689
  Average interest rate 4.6% 4.8% 4.8% 5.1% 5.2% 6.4% 5.9%  
   
 (*) Includes debt raised in Brazil (in Brazilian reais) indexed to the U.S. dollar.  
(**)The average maturity of outstanding debt as of March 31, 2021 is 11.84 years (11.71 years as of December 31, 2020).  
                     

 

As of March 31, 2021, the fair values ​​of financing are mainly determined by using:

Level 1 - prices quoted in active markets, when applicable, in the amount of R$ 163,316 (R$ 172,717, on December 31, 2020); and

Level 2 - cash flow method discounted by the spot rates interpolated from the indexes (or proxies) of the respective financing, observed to the pegged currencies, and by the credit risk of Petrobras, in the amount of R$ 145,000 (R$ 146,972, on December 31, 2020).

The sensitivity analysis for financial instruments subject to foreign exchange variation is set out in note 29.3.

 

The nominal (undiscounted) flow of principal and interest on financing, by maturity, is shown below:

  Consolidated
Maturity 2021 2022 2023 2024 2025 2026 onwards 03.31.2021 12.31.2020
Principal 13,453 18,593 31,305 34,484 35620 160,170 293,625 286,503
Interest 9,459 12,801 11,943 11,040 9842 154,844 209,929 202,425
Total (*) 22,912 31,394 43,248 45,524 45,462 315,014 503,554 488,928

(*)The nominal flow of leases is found in note 26.

.

43 

NOTES TO THE FINANCIAL STATEMENTS

PETROBRAS

This interim financial information should be read together with the Company’s audited annual financial statements

(Expressed in millions of reais, unless otherwise indicated)

 

 

 

25.4Lines of credit
    Amount
Company Financial institution Date Maturity

Available

(Lines of Credit)

Used Balance
Abroad (in US$ million)              
PGT BV Syndicate of banks 3/7/2018 2/7/2023 4,350 4,350
PGT BV Syndicate of banks 3/27/2019 2/27/2024 3,250 3,250
PGT BV The Export - Import Bank of China 12/23/2019 12/27/2021 750 714 36
               
Total         8,350 714 7,636
In Brazil              
Petrobras Banco do Brasil 3/23/2018 1/26/2023 2,000 2,000
Petrobras Bradesco 6/1/2018 5/31/2023 2,000 2,000
Petrobras Banco do Brasil 10/4/2018 9/5/2025 2,000 2,000
Transpetro Caixa Econômica Federal 11/23/2010 Not defined 329 329
Total         6,329 2,000 4,329
     
                   

 

 

26Lease liabilities

The leases mainly include oil and natural gas production units, drilling rigs and other exploration and production equipment, ships, support vessels, helicopters, land and buildings. The movement of lease contracts recognized as liabilities is shown below:

  Consolidated
  Balance at   12.31.2020   Remeasurement / new contracts Payment of principal and interest Interest expenses Foreign exchange gains and losses Cumulative translation adjustment Transfers Balance at   03.31.2021
Brazil 22,556   341 (2,046) 244 1,292 (5) 22,382
Abroad 89,954   1,450 (5,994) 1,387 8,239 284 (58) 95,262
Total 112,510   1,791 (8,040) 1,631 9,531 284 (63) 117,644

 

 

As of March 31, 2021, the value of the lease liability of Petrobras Parent Company is R$ 126,563 (R$ 121,288 on December 31, 2020), including leases and sub-leases with investees, mainly vessels with PNBV and Transpetro.

The nominal flow (not discounted) without considering future inflation projected in the lease contract flows, by maturity, is shown below:

  Consolidated
Nominal Future Payments 2021 2022 2023 2024 2025 2026 onwards Total
Balance at March 31, 2021 23,906 25,734 16,925 12,810 10,359 68,015 157,749
Balance at December 31, 2020 29,915 22,400 15,054 11,697 9,481 62,276 150,823

 

Payments in certain lease agreements vary due to changes in facts or circumstances occurring after their inception other than the passage of time. Such payments are not included in the measurement of the lease obligations. Variable lease payments in the first quarter of 2021 amounted to R$ 1,013, representing 13% in relation to fixed payments (R$ 933 and 14% in relation to fixed payments, in the period from January to March 2020).

In the period from January to March 2021, the company recognized lease expenses in the amount of R$ 124 (R$ 262 in the period from January to March 2020), related to contracts with a term of less than one year.

As of March 31, 2021, the nominal value of lease agreements that had not yet been initiated, due to the related assets being under construction or not being made available for use, represents the amount of R$ 457,456 (R$ 350,299 on December 31, 2020). The increase in the quarter basically corresponds to the devaluation of the real against the U.S. dollars in the period, as well as the inclusion of a new contractual commitment to lease a floating production unit.

The sensitivity analysis of financial instruments subject to exchange rate variation is presented in note 29.3.

27Equity
27.1Share capital (net of share issuance costs)

As of March 31, 2021, subscribed and fully paid share capital, net of issuance costs, was R$ 205,432, represented by 7,442,454,142 common shares and 5,602,042,788 preferred shares, all of which are registered, book-entry shares with no par value.

44 

NOTES TO THE FINANCIAL STATEMENTS

PETROBRAS

This interim financial information should be read together with the Company’s audited annual financial statements

(Expressed in millions of reais, unless otherwise indicated)

 

 

Preferred shares have priority on returns of capital, do not grant any voting rights and are non-convertible into common shares.

There are treasury shares, constituted since 2018, with 222,760 common shares and 72,909 preferred shares.

27.2Distributions to shareholders

As of March 31, 2021, the balance includes the mandatory dividend for 2020 equivalent to the priority of preferred shareholders, updated by SELIC, in the amount of R$ 4,433 (R$ 4,411 on December 31, 2020), the criterion that prevailed was 5% on the share of capital represented by this type of shares.

On April 14, 2021, the Annual General Shareholders Meeting approved the dividends for the year 2020, in the amount of R$ 10,272, corresponding to R$ 0.787446 per common and preferred share in circulation. Therefore, the additional dividends proposed to ordinary shareholders in the amount of R$ 5,861 were reclassified from Shareholders’ Equity to liabilities on the date of approval.

On April 29, 2021, dividends were paid in the amount of R$ 10,342 (R$ 0.792834 per common and preferred share outstanding) with the restatement by the variation of the Selic rate from December 31, 2020 until the payment date.

27.3Earnings per share
  Consolidated and Parent Company
  2021 2020
  Jan-Mar Jan-Mar
Basic and diluted numerator - Net income (loss) attributable to shareholders of Petrobras attributed equally between share classes    
Net income (loss) from discontinued operations    
Net income (loss) of the period    
Common 666 (27,684)
Preferred 501 (20,839)
  1,167 (48,523)
     
Basic and diluted denominator - Weighted average number of shares outstanding    
Common 7,442,231,382 7,442,231,382
Preferred 5,601,969,879 5,601,969,879
  13,044,201,261 13,044,201,261
     
Basic and diluted net income (loss) per share (R$ per share)    
Common 0.09 (3.72)
Preferred 0.09 (3.72)
 
 

 

 

Basic earnings per share are calculated by dividing the net income (loss) attributable to shareholders of Petrobras by the weighted average number of outstanding shares during the period.

Diluted earnings (losses) per share are calculated by adjusting the net income (loss) and the weighted average number of outstanding shares during the period taking into account the effects of all dilutive potential shares (equity instrument or contractual arrangements that are convertible into shares).

Basic and diluted earnings (losses) are identical as the Company has no potential shares in issue.

28Fair value of financial assets and liabilities
  Fair value measured based on
  Level I Level II Level III

Total fair

value

recorded

Assets
Marketable securities 3,279 3,279
Foreign currency derivatives 393 393
Interest rate derivatives 60 60
Balance at March 31, 2021 3,279 453 3,732
Balance at December 31, 2020 3,388 591 3,979
         
Liabilities        
Foreign currency derivatives (1,471) (1,471)
Commodity derivatives (3) (3)
Balance at March 31, 2021 (3) (1,471) (1,474)
Balance at December 31, 2020 (51) (1,402) (1,453)
 

 

45 

NOTES TO THE FINANCIAL STATEMENTS

PETROBRAS

This interim financial information should be read together with the Company’s audited annual financial statements

(Expressed in millions of reais, unless otherwise indicated)

 

 

The estimated fair value for the company's financing, calculated at current market rates, is set out in note 25.

Certain receivables are classified as fair value through profit or loss, as presented in note 9.

The fair values ​​of cash and cash equivalents, short-term debt and other financial assets and liabilities are equivalent or do not differ significantly from their carrying amounts.

29Risk management
29.1Derivative financial instruments

A summary of the positions of the derivative financial instruments held by the Company and recognized in other current assets and liabilities as of March 31, 2021 , as well as the amounts recognized in the statement of income and other comprehensive income and the guarantees given is set out as follows:

  Statement of Financial Position
  Notional value

Fair value

Asset Position (Liability)

Maturity
  03.31.2021 12.31.2020 03.31.2021 12.31.2020  
Derivatives not designated for hedge accounting
Future contracts - total (*) (122) (240) (3) (51)  
Long position/Crude oil and oil products 2,435 3,927 2021
Short position/Crude oil and oil products (2,557) (4,167) 2021
Forward contracts          
Long position/Foreign currency forwards (BRL/USD)  (**) 20 - (2) 2021
Long position/Foreign currency forwards (GPB/USD)  (**) GPB 354 GPB 354 155 121 2021
Swap          
Foreign currency / Cross-currency Swap (**) GPB 615 GPB 615 238 227 2026
Foreign currency / Cross-currency Swap (**) GPB 600 GPB 600 (86) (134) 2034
Swap – IPCA 3,008 3,008 60 243 2029/2034
Foreign currency / Cross-currency Swap (**) US$ 729 US$ 729 (1,383) (1,268) 2024/2029
Total recognized in  the Statement of Financial Position     (1,021) (862)  
(*)Notional value in thousands of bbl.
(**) Amounts in US$, GBP and EUR are presented in million.

 

 

46 

NOTES TO THE FINANCIAL STATEMENTS

PETROBRAS

This interim financial information should be read together with the Company’s audited annual financial statements

(Expressed in millions of reais, unless otherwise indicated)

 

 

 

   Gains/ (losses) recognized in the statement of income
  2021 2020
  Jan-Mar Jan-Mar
Commodity derivatives    
Other operations - 29.2 (a) (126) 1,037
Recognized in Other Income and Expenses (126) 1,037
Currency derivatives    
Swap Pounds Sterling x Dollar  - 29.3 (b) 157 (1,494)
NDF – Euro x Dollar - 29.3 (b) (328)
NDF – Pounds Sterling x Dollar - 29.3 (b) 20 (103)
Swap CDI x Dollar  - 29.3 (b) (154) (1,100)
Others 4 (8)
  27 (3,033)
Interest rate derivatives    
Swap - CDI X IPCA (154) (247)
  (154) (247)
Cash flow hedge on exports (*) (6,094) (6,449)
Recognized in Net finance income (expense) (6,221) (9,729)
Total (6,347) (8,692)
(*)As presented in note 29.3.

 

   Gains/ (losses) recognized in other comprehensive income
  2021 2020
  Jan-Mar Jan-Mar
Cash flow hedge on exports (*) (24,426) (93,596)
     
(*)As presented in note 29.3.
 

 

 

 

  Guarantees given as collateral
  03.31.2021 12.31.2020
Commodity derivatives 178 69
Currency derivatives 127 403
  305 472

 

 

 

 

 

A sensitivity analysis of the derivative financial instruments for the different types of market risks as of March 31, 2021 is set out as follows:

    Consolidated
Financial Instruments Risk Probable Scenario (*)

Reasonably possible

scenario

Remote

Scenario

Derivatives not designated for hedge accounting
Future and forward contracts Crude oil and oil products - price changes (57) (113)
Forward contracts Foreign currency - depreciation  BRL x USD 4 (28) (57)
        4 (85) (170)

* The probable scenarios were calculated considering the following variations for risks: Oil and Derivatives Prices: fair value as of March 31, 2021 / Real x Dollar – 3.5% appreciation of the real. Source: Focus. Reasonably possible and remote scenarios consider 25% and 50% deterioration in the associated risk variables, respectively.

29.2Risk management of crude oil and oil products prices

The Company is usually exposed to commodity price cycles, although it may use derivative instruments to hedge exposures related to prices of products purchased and sold to fulfill operational needs and in specific circumstances depending on business environment analysis and assessment of whether the targets of the Strategic Plan are being met.

a) Other commodity derivative transactions

Petrobras, by use of its assets, positions and market knowledge from its operations in Brazil and abroad, occasionally seeks to optimize some of its commercial operations in the international market, with the use of commodity derivatives to manage price risk.

29.3Foreign exchange risk management

a) Cash Flow Hedge involving the Company’s future exports

The carrying amounts, the fair value as of March 31, 2021, and a schedule of expected reclassifications to the statement of income of cumulative losses recognized in other comprehensive income (shareholders’ equity) based on a US$ 1.00 / R$ 5.6973 exchange rate are set out below:

47 

NOTES TO THE FINANCIAL STATEMENTS

PETROBRAS

This interim financial information should be read together with the Company’s audited annual financial statements

(Expressed in millions of reais, unless otherwise indicated)

 

 

 

       

Present value of hedging instrument at

03.31.2021

Hedging Instrument   Hedged Transactions  

Nature

of the Risk

 

Maturity

Date

 

US$

million

R$
Foreign exchange gains and losses on proportion of non-derivative financial instruments cash flows   Foreign exchange gains and losses of highly probable future monthly exports  revenues  

Foreign Currency

– Real vs U.S. Dollar

Spot Rate

  From apr/2021 to mar/2031   63,644 362,596
                   
                         

 

 

Changes in the present value of hedging instrument US$ million R$
Amounts designated as of December 31, 2020 61,502 319,608
Additional hedging relationships designated, designations revoked and hedging instruments re-designated 8,281 46,155
Exports affecting the statement of income (3,285) (17,775)
Principal repayments / amortization (2,854) (15,913)
Foreign exchange variation   30,521
Amount on March 31, 2021 63,644 362,596
Nominal value of hedging instrument (finance debt and lease liability) on March 31, 2021 68,981 393,005

 

.

According to the 2021-2025 Strategic Plan, there was an increase in expected exports and consequently in highly probable future exports, but not in an amount equal to or greater than the finance debt and lease liabilities subject to designation as hedge instruments. As a result, the relevant increase in Dollar/Real exposure observed during 2020 remains at March 31, 2021, ending the period as a passive foreign exchange exposure, as shown in table 29.3 c - Sensitivity analysis of financial instruments subject to exchange variation.

In the first quarter of 2021, the Company recognized a R$ 2 loss within foreign exchange gains (losses) due to ineffectiveness (a R$ 5 loss in the same period of 2020).

The average ratio of future exports for which cash flow hedge accounting was designated to the highly probable future exports is 100%.

A roll-forward schedule of cumulative foreign exchange losses recognized in other comprehensive income as of March 31, 2021 is set out below:

  Exchange rate Tax effect Total
Balance at January 1,2020 (51,486) 17,506 (33,980)
Recognized in shareholders' equity (99,467) 33,819 (65,648)
Reclassified to the statement of income - occurred exports 21,754 (7,395) 14,359
Reclassified to the statement of income - exports no longer expected or not occurred 2,554 (868) 1,686
Balance at December 31, 2020 (126,645) 43,062 (83,583)
Recognized in shareholders' equity (30,521) 10,377 (20,144)
Reclassified to the statement of income - occurred exports 6,094 (2,072) 4,022
Balance at March 31, 2021 (151,072) 51,367 (99,705)

 

 

 

Changes in expectations regarding the realization of export prices and volumes in future revisions of the business plans may determine the need for additional reclassifications of the exchange variation accumulated in shareholders' equity to results. A sensitivity analysis with an average Brent oil price of US$ 10/barrel lower, when compared to the Brent price projections in our Strategic Plan 2021-2025, would not indicate a reclassification adjustment from equity to the statement of income.

A schedule of expected reclassification of cumulative foreign exchange losses recognized in other comprehensive income to the statement of income as of March 31, 2021 is set out below:

  Consolidated
  2021 2022 2023 2024 2025 2026 2027 2028 to 2030 Total
Expected realization (22,129) (28,898) (24,113) (18,945) (13,555) (12,176) (12,502) (18,754) (151,072)
 

 

 

b) Information on ongoing contracts

As of March 31, 2021, the company has outstanding swap contracts - IPCA x CDI and CDI x Dollar, swap - Pound sterling x Dollar and Non Deliverable Forward (NDF) - Pound x Dollar.

48 

NOTES TO THE FINANCIAL STATEMENTS

PETROBRAS

This interim financial information should be read together with the Company’s audited annual financial statements

(Expressed in millions of reais, unless otherwise indicated)

 

 

Swap contracts – IPCA x CDI and CDI x Dollar

Changes in future interest rate curves (CDI) may have an impact on the Company's results, due to the market value of these swap contracts. A sensitivity analysis on CDI with a constant increase (parallel shock) of 100 basis points, all other variables remaining constant, would result in a R$ 32 gain, while a constant reduction (parallel shock) of 100 basis points, would result in a R$ 63 gain.

For more information about such agreements, please see the note Para 38.3 of Petrobras financial statements of December 31, 2020.

c) Sensitivity analysis for foreign exchange risk on financial instruments

A sensitivity analysis is set out below, showing the probable scenario for foreign exchange risk on financial instruments, computed based on external data along with stressed scenarios (a 25% and a 50% change in the foreign exchange rates), except for assets and liabilities of foreign subsidiaries, when transacted in a currency equivalent to their respective functional currencies.

       
Financial Instruments Exposure at   03.31.2021 Risk Probable Scenario (*)

Reasonably possible

scenario

Remote

Scenario

Assets 33,062 Dollar / Real (1,145) 8,266 16,531
Liabilities (583,666) 20,213 (145,917) (291,833)
Exchange rate - Cross currency swap (3,008) 104 (752) (1,504)
Cash flow hedge on exports 362,596 (12,557) 90,649 181,298
  (191,016) 6,615 (47,754) (95,508)
Assets 19 Euro / Real 5 10
Liabilities (155) 3 (39) (78)
  (136) 3 (34) (68)
Assets 9,212 Euro / Dollar 119 2,303 4,606
Liabilities (18,392) (237) (4,598) (9,196)
  (9,180) (118) (2,295) (4,590)
Assets 20 Pound Sterling / Real 5 10
Liabilities (133) 3 (33) (67)
  (113) 3 (28) (57)
Assets 10,916 Pound Sterling / Dollar 157 2,729 5,458
Liabilities (21,441) (309) (5,360) (10,721)
Exchange rate - Cross currency swap 9,551 138 2,388 4,776
Non Deliverable Forward (NDF) 2,779 40 695 1,390
  1,805 26 452 903
Total (198,640) 6,529 (49,659) (99,320)

 

(*) At March 31, 2021, the probable scenario was computed based on the following risks: R$ x U.S. Dollar - a 3.5% appreciation of the Real; Yen x Dollar - a 2.4% appreciation of the Yen; Euro x U.S. Dollar: a 1.3% appreciation of the Euro; Pound Sterling x U.S. Dollar: a 1.49% appreciation of the Pound Sterling; Real x Euro: a 2.2% appreciation of the Real; and Real x Pound Sterling - a 2% appreciation of the Real. Source: Focus and Thomson Reuters.

29.4Interest rate risk management

The company preferably does not use derivative financial instruments to manage exposure to fluctuations in interest rates, as they do not have significant impacts, except in specific situations presented by Petrobras subsidiaries. The table below informs, in the probable scenario, the amount to be disbursed by Petrobras with the payment of interest related to the floating interest rate debts on March 31, 2021. The interest rate risk sensitivity analysis is performed for a 12-month horizon. The values ​​referring to the possible and remote scenarios mean the total floating interest expense if there is a variation of 25% and 50%, respectively, in the interest rates of these debts (Libor, TJLP, CDI, TR and IPCA).

  Consolidated
Risk Probable Scenario (*)

Reasonably possible

scenario (∆ of 25%)

Remote

Scenario (∆ of 50%)

LIBOR 1M 56 69 82
LIBOR 3M 60 69 78
LIBOR 6M 2,285 2,560 2,835
CDI 702 878 1,054
TJLP 432 540 648
IPCA 417 521 625
  3,952 4,637 5,322
(*) The probable scenario was calculated considering the quotations of currencies and floating rates to which the debts are indexed.

 

49 

NOTES TO THE FINANCIAL STATEMENTS

PETROBRAS

This interim financial information should be read together with the Company’s audited annual financial statements

(Expressed in millions of reais, unless otherwise indicated)

 

 

29.5Liquidity risk

The Company regularly evaluates market conditions and may enter into transactions to repurchase its own securities or those of its affiliates, through a variety of means, including tender offers, make whole exercises and open market repurchases, in order to improve its debt repayment profile and cost of debt.

30Related-party transactions

The Company has a related-party transactions policy, which is annually revised and approved by the Board of Directors, and is applicable to all the Petrobras Group, in accordance with the Company’s by-laws.

30.1Transactions with entities of Petrobras group (Parent)

 

  03.31.2021 12.31.2020
  Current Non-current Total Current Non-current Total
Assets
Trade and other receivables
 Trade and other receivables, mainly from sales 19,476 19,476 14,992 14,992
 Dividends receivable 430 430 1,134 1,134
 Amounts related to construction of natural gas pipeline 686 686 564 564
 Other operations  889 672 1,561 430 632 1,062
Advances to suppliers 12 1,221 1,233 12 1,275 1,287
Total 20,807 2,579 23,386 16,568 2,471 19,039
Liabilities            
Lease liabilities (*) (2,184) (3,111) (5,295) (2,517) (3,097) (5,614)
Prepayment of exports (95,309) (325,706) (421,015) (54,871) (302,601) (357,472)
Accounts payable to suppliers (14,160) (14,160) (55,931) (55,931)
 Purchases of crude oil, oil products and others (11,954) (11,954) (53,526) (53,526)
 Affreightment of platforms (458) (458) (624) (624)
 Advances from clients (1,718) (1,718) (1,745) (1,745)
       Other operations (30) (30) (36) (36)
Total (111,653) (328,817) (440,470) (113,319) (305,698) (419,017)

(*) Includes amounts referring to lease and sub-lease transactions between investees required by IFRS 16.

 

  2021 2020
  Jan-Mar Jan-Mar
Profit or Loss
Gross revenues, mainly sales revenues 51,396 41,133
Foreign exchange and inflation indexation charges, net (**) (18,065) (34,712)
Financial income (expenses), net (**) (5,749) (7,036)
Total 27,582 (615)

 

(**) Includes the amount of R$ 294 of passive exchange variation and R$ 93 of financial expense related to leasing and sub-lease operations required by IFRS 16.

30.2Non-standardized credit rights investment fund (FIDC-NP)

The parent company maintains funds invested in the FIDC-NP that are mainly used for the acquisition of performing and / or non-performing credit rights for operations carried out by affiliates. The amounts invested are recorded in accounts receivable.

Assignments of credit rights, performed and not performed, are recorded as financing in current liabilities.

 

 

  Parent Company
  03.31.2021 12.31.2020
Accounts receivable, net 25,537 10,121
Credit rights assignments (21,237) (10,580)

 

 

  2021 2020
  Jan-Mar Jan-Mar
Financial Income FIDC-NP 100 699
Financial Expenses FIDC-NP (98) (764)
Net finance income (expense) 2 (65)

 

 

30.3Guarantees

Petrobras has the procedure of granting guarantees to subsidiaries and controlled companies for some financial operations carried out in Brazil and abroad, with no significant variations in guarantees compared to December 31, 2020.

50 

NOTES TO THE FINANCIAL STATEMENTS

PETROBRAS

This interim financial information should be read together with the Company’s audited annual financial statements

(Expressed in millions of reais, unless otherwise indicated)

 

 

The guarantees offered by Petrobras, mainly personal, are made based on contractual clauses that support the financial transactions between the subsidiaries / controlled companies and third parties, ensuring assumption of compliance with the third party's obligation, in case the original debtor does not do so.

The financial transactions carried out by the subsidiaries and guaranteed by Petrobras are presented in note 39.6 to Petrobras' financial statements as of December 31, 2020.

30.4Investments in debt securities of subsidiaries

As of March 31, 2021, a subsidiary of PIB BV maintained resources invested directly or through an investment fund abroad that held, among others, debt securities of PGF and CDMPI, equivalent to R$ 5,964 (R$ 5,368, as of December 31, 2020).

30.5Transactions with joint ventures, associates, government entities and pension plans

The company does, and expects to continue to do, business in the normal course of various transactions with its joint ventures, affiliates, pension funds, as well as with its controlling shareholder, the Brazilian federal government, which includes transactions with banks and other entities under its control, such as financing and banking services, asset management and others.

Significant transactions resulted in the following balances:

    Consolidated
  03.31.2021 12.31.2020
  Asset Liability Asset Liability
Joint ventures and associates
Petrobras Distribuidora (BR) 878 278 1,020 205
Natural Gas Transportation Companies 325 1,134 383 994
State-controlled gas distributors (joint ventures) 1,077 281 1,170 355
Petrochemical companies (associates) 54 70 88 46
Other associates and joint ventures 641 175 789 624
Subtotal 2,975 1,938 3,450 2,224
Brazilian government        
Government bonds 7,707 8,483
Banks controlled by the Brazilian Government 40,559 18,098 39,892 19,266
Receivables from the Electricity sector 949 1,064
Petroleum and alcohol account - receivables from the Brazilian Government (note 9.1) 2,566 2,503
Brazilian Federal Government – dividends 9 9
Empresa Brasileira de Administração de Petróleo e Gás Natural – Pré-Sal Petróleo S.A. – PPSA 111
Others 122 172 201 238
Subtotal 51,912 18,381 52,152 19,504
Pension plans 271 169 268 339
Total 55,158 20,488 55,870 22,067
Current assets 12,124 4,948 13,841 6,366
Non-current assets 43,034 15,540 42,029 15,701

 

 

The income/expenses of significant transactions are set out in the following table:

51 

NOTES TO THE FINANCIAL STATEMENTS

PETROBRAS

This interim financial information should be read together with the Company’s audited annual financial statements

(Expressed in millions of reais, unless otherwise indicated)

 

 

 

  Consolidated
  2021 2020
  Jan-Mar Jan-Mar
Joint ventures and associates
Petrobras Distribuidora (BR) 18,152 14,205
Natural Gas Transportation Companies (1,345) (2,328)
State-controlled gas distributors (joint ventures) 2,461 2,501
Petrochemical companies (associates) 4,210 4,374
Other associates and joint ventures 234 417
Subtotal 23,712 19,169
Brazilian government    
Government bonds 37 56
Banks controlled by the Brazilian Government (347) (410)
Receivables from the Electricity sector 83 60
Petroleum and alcohol account - receivables from the Brazilian Government 63 6
Brazilian Federal Government – dividends (11)
Empresa Brasileira de Administração de Petróleo e Gás Natural – Pré-Sal Petróleo S.A. – PPSA (169) (177)
Others 54 1
Subtotal (279) (475)
      Pension funds
Total 23,433 18,694
 
Revenues, mainly sales revenues 25,960 22,216
Purchases and services (2,083) (3,191)
Operating income and expense (235)
Foreign exchange and inflation indexation charges, net (219) (265)
Finance income (expenses), net 10 (66)
Total 23,433 18,694

 

The liability with pension plans of the company's employees and managed by the Petros Foundation, which includes debt instruments, is presented in note 13.

30.6Compensation of key management personnel

The total compensations of Executive Officers and Board Members of Petrobras parent company are governed by the Secretariat of Management and Governance for the State-owned Companies (Secretaria de Coordenação e Governança das Empresas Estatais – SEST), Ministry of Economy and Ministry of Mines and Energy of Brazil, and are set out as follows:

Parent Company

  Jan-Mar/2021 Jan-Mar/2020
  Officers Board Members Total Officers Board Members Total
Wages and short-term benefits 3.8 0.2 4.0 3.5 0.1 3.6
Social security and other employee-related taxes 1.1 1.1 0.9 0.9
Post-employment benefits (pension plan) 0.3 0.3 0.3 0.3
Benefits due to termination of tenure 0.2 0.2 0.0 0.0
Total compensation recognized in the statement of income 5.4 0.2 5.6 4.7 0.1 4.8
Total compensation paid 5.6 0.2 5.8 4.7 0.1 4.8
Average number of members in the period (*) 9.00 10.00 19.00 9.00 9.33 18.33
Average number of paid members in the period (**) 9.00 5.00 14.00 9.00 4.00 13.00
 
(*) Monthly average number of members.
(**) Monthly average number of paid members.

 

 

In the first quarter of 2021, the consolidated expense (Petrobras and affiliates) with the total compensation of the company's officers and directors totaled R$ 19.15 (R$ 16.14 in the first quarter of 2020).

On July 22, 2020, the Company’s Annual Shareholders’ Meeting set the threshold for the overall compensation for executive officers and board members at R$ 43.3 from April 2020 to March 2021. On April 14, 2021, the Company’s Annual Shareholders’ Meeting set the threshold at R$ 47 from April 2021 to March 2022.

The compensation of the Advisory Committees to the Board of Directors is separate from the fixed compensation set for the Board Members and, therefore, has not been classified under compensation of Petrobras’ key management personnel.

The members of the Board of Directors who participate in the Statutory Audit Committee waive the remuneration of the Board Member, as established in art. 38, § 8 of Decree No. 8,945, of December 27, 2016. These members were entitled to a total compensation of R$ 618 thousand in the period from January to March 2021 (R$ 741.3 thousand, considering social charges) . As of March 31, 2020, the accumulated remuneration in the period was R$ 549 thousand (R$ 659 thousand, considering social charges).

52 

NOTES TO THE FINANCIAL STATEMENTS

PETROBRAS

This interim financial information should be read together with the Company’s audited annual financial statements

(Expressed in millions of reais, unless otherwise indicated)

 

 

31Supplemental information on statement of cash flows
  Consolidated
  2021 2020
  Jan-Mar Jan-Mar
Amounts paid/received during the period:
Withholding income tax paid on behalf of third-parties 1,029 1,965
Capital expenditures and financing activities not involving cash    
Lease 2,106 1,964
Provision/(reversals) for decommissioning costs (7)
 

 

 

32Subsequent events

Sale of Mangue Seco Wind Farms 1, 3 and 4

In April 2021, Petrobras finalized the sale of its entire 49% interest in the companies Eólica Mangue Seco 1, 3 and 4 - Geradora e Comercializadora de Energia Elétrica S.A. to V2I Energia S.A., invested by Vinci Energia Fundo de Investimento em Participações em Infraestrutura, which is managed by Vinci Infraestrutura Gestora de Recursos Ltda.

After the fulfillment of all the precedent conditions, the operations were concluded with the payment of R$ 44 to Petrobras (Wind Farm 1) and R$ 78.2 (Wind Farms 3 and 4), already with the adjustments foreseen in the purchase contract and sale of shares. In relation to Wind Farms 3 and 4, it is added to the amount of R$ 22.5 paid to Petrobras at the signing of the contract, totaling R$ 100.7.

Petrobras on agreement with Amazonas Energia

On April 7, 2021, Petrobras and its subsidiaries Breitener Tambaqui S.A. and Breitener Jaraqui S.A. signed a legal agreement with Amazonas Energia S.A. (debtor) and Centrais Elétricas Brasileiras S.A. - Eletrobras (jointly responsible) , in the amount of R$ 436, for the collection of amounts relating to seven lawsuits, which will be suspended until the full settlement of the negotiated credits. The amount will be settled by the debtor in 60 installments, calculated by the constant amortization system - SAC, updated based on 124.75% of the CDI, until its full settlement.

The agreement also included the recovery of Petrobras' credit, in the amount of approximately R$ 3.2 related to an invoice issued in September 2019, settled by Amazonas Energia S/A in April 2021.

The signing of the agreement will generate a positive effect on the Company’s statement of income in the second quarter of 2021 of R$ 328, net of tax effects.

Surplus of Transfer of Rights in the Production Sharing Agreement in Atapu and Sépia

On April 9, 2020, the Company’s Board of Directors approved the signing of an agreement with the Brazilian Federal Government that establishes the participation in each contract and the compensation value to Petrobras in case of bidding for the Surplus Oil of Transfer of Rights Agreement in Sepia and Atapu fields. On April 16, 2021, this agreement was approved by the Ministry of Mines and Energy.

With the publication of MME Ordinance No. 23/2020, complemented by MME Ordinance No. 493/2021, Petrobras and PPSA previously reviewed and defined the amounts of compensation to be paid by the new contractor prior to the bidding process for the Surplus Oil of Transfer of Rights Agreement to Petrobras for the deferral of cash flow in the two areas, as well as the participation of the Transfer of Rights and production sharing contracts.

The agreement provides for the following terms: compensation of US$ 3,254 million for the 60.5% stake of the new contractor in Atapu field and US$ 3,200 million for the 68.7% stake in Sepia field. In addition, there is contingent payment (earn out), due between 2022 and 2032, which will be payable as of the last business day of January of the subsequent year since the Brent oil price reaches an annual average higher than US$ 40 per barrel, limited to US$ 70 per barrel. Such payments have a one-year grace period for the payment of the first installment of the earn out, from 2023 to 2024, adjusted at 8.99% p.a.

These conditions will be established in a Co-Participation Agreement that will bind Petrobras to the new contractor in the area(s). The Co-Participation Agreement will only be effective with the signing of the Production Sharing Contract and the payment of compensation to Petrobras, when the contractors will have access to their participation in the production from Sépia and Atapu fields.

On April 28, 2021, Petrobras expressed to the National Energy Policy Council (Conselho Nacional de Política Energética -CNPE) the interest in the preemptive right in the Second Bidding Round of the Excessive Volumes of the Transfer of Rights in the Production Sharing regime, with the expression of interest in the right preferably in the areas of Atapu and Sépia, with a percentage of 30%, considering the parameters disclosed in the Resolution of CNPE nº 05, of April 22, 2021, and in the Ordinance of the Ministry of Mines and Energy (MME) nº 08, of April 19, 2021.

53 

NOTES TO THE FINANCIAL STATEMENTS

PETROBRAS

This interim financial information should be read together with the Company’s audited annual financial statements

(Expressed in millions of reais, unless otherwise indicated)

 

 

The amounts corresponding to the subscription bonuses to be paid, if there is confirmation of the participation percentages under the terms above by CNPE, will be R$ 1,201 for Atapu and R$ 2,141 for Sépia.

Settlement of cash tender offer

On April 12, 2021, Petrobras concluded the tender offer to buy back global notes maturing between 2024 and 2050, made by its wholly-owned subsidiary PGF BV. The principal amount delivered by investors, excluding unpaid accrued interest, was US$ 2,496 million. The total amount paid was US$ 2,720 million, considering the prices offered and excluding accrued interest until the closing date.

Petrobras on approval of the sale of a 10% interest in NTS

On April 30, 2021, Petrobras concluded the sale of its remaining 10% interest in Nova Transportadora do Sudeste S.A. (NTS) to Nova Infraestrutura Gasodutos Participações S.A., a company formed by the Nova Infraestrutura Fundo de Investimentos em Participações Multiestratégia (FIP), an investment fund managed by Brookfield Brasil Asset Management Investimentos Ltda, and by Itaúsa SA, current controlling shareholders of NTS, for the amount of R$ 1.8 billion.

Considering the dividend discount, interest on shareholders’ equity and restitution through capital reduction, received by Petrobras throughout the year 2020 and 2021, and the other adjustments provided for in the contract according to the base date of the operation, the entry cash flow was R$ 1.5 billion, an amount totally received on the date of signature and conclusion of the transaction.

Petrobras extends the term of the committed credit line

On April 30, 2021, Petrobras extended part of the Revolving Credit Facility with maturity in March 2024, in the amount of US$ 3,250 million, for another two years. Thus, of the total credit line, US$ 2,050 million can be withdrawn until 2026. The other amount remains due in the original term.

Petrobras signs contract for the sale of thermoelectric plants

On May 3, 2021, Petrobras signed with São Francisco Energia SA, a subsidiary of Global Participações em Energia SA, a contract for the sale of the three thermoelectric plants powered by fuel oil, located in Camaçari, in the state of Bahia (UTEs Polo Camaçari). The value of the contract is R$ 95, of which R$ 27 is a contingent installment to be deposited in an escrow account, depending on the favorable solution of the administrative process, being also subject to adjustments provided for in the contract until the closing of the transaction, and the fulfillment of precedent conditions, such as the approvals of the Administrative Council for Economic Defense (Conselho Administrativo de Defesa Econômica - CADE) and of the National Electricity Agency (Agência Nacional de Energia Elétrica - ANEEL).

The Company will recognize a loss in the amount of R$ 294, net of tax effects, due to the difference between the sale value and the book value of the assets.

Agreement with Companhia de Eletricidade do Amapá

On May 11, 2021, Petrobras signed a judicial agreement with Companhia de Eletricidade do Amapá (CEA) to close the dispute and recover credit, in the amount of R$ 314. The agreement establishes the payment to Petrobras of R$ 132,6 unconditionally, to be settled in 24 successive monthly installments (sub-credit A). Negative goodwill will be granted in the remaining amount of R$ 181.4, which was also divided into 24 monthly and successive installments (subcredit B), provided that payments occur on time. For each installment paid in sub-credit A, CEA will receive a bonus corresponding to a portion of sub-credit B of the debt. In the event of default, as provided for in the agreement, Petrobras may require all installments to be due on both debt sub-credits.

The agreement is subject to the following suspensive conditions: (i) the successful bid for the privatization of CEA scheduled to take place by June 30, 2021; and (ii) transfer of controlling interest in CEA until December 31, 2021.

Given these conditions, the agreement will have a positive effect on Petrobras' consolidated result of R$ 132.6, without considering the tax effects. The credit was already provisioned on December 31, 2020.

54 

NOTES TO THE FINANCIAL STATEMENTS

PETROBRAS

This interim financial information should be read together with the Company’s audited annual financial statements

(Expressed in millions of reais, unless otherwise indicated)

 

 

33.Correlation between the explanatory notes of December 31, 2020 and the ones of March 31, 2021
  Number of notes
Notes to the Financial Statements

Annual

for 2020

Quarterly information for 1Q-21
Basis of preparation and presentation of financial statements 2 1
Summary of significant accounting policies 3 2
Cash and cash equivalents and Marketable securities 8 3
Sales revenues 9 4
Costs and Expenses by nature 10 5
Other income and expenses 11 6
Net finance income (expense) 12 7
Segment information – Statement of Income 13 8
Trade and other receivables 14 9
Inventories 15 10
Taxes 17 11
Short-term benefits 18 12
Employee benefits (Post-Employment) 19 13
Provisions for legal proceedings 20 14
Provision for decommissioning costs 21 15
The “Lava Jato (Car Wash) investigation” and its effects on the Company 23 16
Property, plant and equipment 25 17
Intangible assets 26 18
Impairment 27 19
Exploration and evaluation of oil and gas reserves 28 20
Collateral for crude oil exploration concession agreements 29 21
Investments 31 22
Disposal of Assets and other changes in organizational structure 32 23
Segment information – Asset 33 24
Finance debt 34 25
Leases 35 26
Equity 36 27
Fair value of financial assets and liabilities 37 28
Risk management 38 29
Related-party transactions 39 30
Supplemental information on statement of cash flows 40 31
Subsequent events 41 32

 

 

The notes to the annual report 2020 that were suppressed in the interim financial statements of March 31, 2021 because they do not have significant changes and / or may not be applicable to interim financial information are:

 

Notes to the Financial Statements Number of notes
The Company and its operations 1
Accounting estimates 4
New standards and interpretations 5
Context, resilience measures and impacts caused by COVID-19 6
Capital management 7
Trade payables 16
Other assets and liabilities 22
Commitment to purchase natural gas 24
Partnerships in exploration and production activities 30

 

 

55 

 

STATEMENT OF DIRECTORS ON INTERIM ACCOUNTING INFORMATION AND REPORT ON THE REVIEW OF QUARTERLY INFORMATION

PETROBRAS

 

 

 

In compliance with the provisions of items V and VI of article 25 of CVM Instruction 480, of December 7, 2009, the chief executive officer and directors of Petróleo Brasileiro S.A. - Petrobras, a publicly-held corporation, headquartered at Avenida República do Chile, 65, Rio de Janeiro, RJ, registered with the CNPJ under nº 33.000.167 / 0001-01, declare that the financial statements were prepared in accordance with the law or the bylaws and that:

(i)reviewed, discussed and agreed with the Interim Financial Statements of Petrobras for the three-month period ended March 31, 2021;

(ii) reviewed, discussed and agreed with the opinions expressed in the report of KPMG Auditores Independentes regarding the Interim Financial Statements of Petrobras for the three-month period ended March 31, 2021.

 

Rio de Janeiro, May 13, 2021.

 

Joaquim Silva e Luna   Rodrigo Araujo Alves
     
Chief Executive Officer Chief Financial and Investor Relations Officer
     
     
Rodrigo Costa Lima e Silva   Fernando Assumpção Borges
     
Chief Refining and Natural Gas Executive Officer    Chief Exploration and Production Executive Officer
     
     
Cláudio Rogério Linassi Mastella   Roberto Furian Ardenghy
     
Chief Logistics and Trade Executive Officer Chief Institutional Relations and Sustainability Executive Officer
                   
     
João Henrique Rittershaussen   Marcelo Barbosa de Castro Zenkner
     
Chief Production Development Executive Officer    Chief Governance and Compliance Executive Officer
     
     
Nicolás Simone    
     
Chief Digital Transformation and Innovation Officer     

 

 

56 

 

 

 

KPMG Auditores Independentes

Rua do Passeio, 38 - Setor 2 - 17º andar - Centro

20021-290 - Rio de Janeiro/RJ - Brasil

Caixa Postal 2888 - CEP 20001-970 - Rio de Janeiro/RJ - Brasil

Telefone +55 (21) 2207-9400, Fax +55 (21) 2207-9000

www.kpmg.com.br

 

 

Report on the review of quarterly information - ITR

(A free translation of the original report in Portuguese, as filed with the Brazilian Securities and Exchange Commission (CVM), prepared in accordance with the accounting practices adopted in Brazil, rules of the CVM and of the International Financial Reporting Standards - IFRS)

 

To the Board of Directors and Shareholders of

Petróleo Brasileiro S.A. - Petrobras

Rio de Janeiro - RJ

 

Introduction

We have reviewed the interim accounting information, individual and consolidated, of Petróleo Brasileiro S.A. - Petrobras (“the Company”), identified as Parent Company and Consolidated, respectively, included in the quarterly information form - ITR for the quarter ended March 31, 2021, which comprises the balance sheet as of March 31, 2021 and the respective statements of income and comprehensive income and statements of changes in shareholders' equity and of cash flows for the three-months period then ended, including the explanatory notes.

 

The Company`s Management is responsible for the preparation of these interim accounting information in accordance with the CPC 21(R1) and the IAS 34 - Interim Financial Reporting, issued by the International Accounting Standards Board - IASB, as well as the presentation of these information in accordance with the standards issued by the Brazilian Securities and Exchange Commission, applicable to the preparation of quarterly information - ITR. Our responsibility is to express our conclusion on this interim accounting information based on our review.

 

 

 

 

 

KPMG Auditores Independentes, uma sociedade simples brasileira e firma-membro da rede KPMG de firmas-membro independentes e afiliadas à KPMG International Cooperative (“KPMG International”), uma entidade suíça. KPMG Auditores Independentes, a Brazilian entity and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.

 

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Scope of the review

We conducted our review in accordance with Brazilian and International Interim Information Review Standards (NBC TR 2410 - Revisão de Informações Intermediárias Executada pelo Auditor da Entidade and ISRE 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively). A review of interim information consists of making inquiries primarily of the management responsible for financial and accounting matters and applying analytical procedures and other review procedures. The scope of a review is significantly less than an audit conducted in accordance with auditing standards and, accordingly, it did not enable us to obtain assurance that we were aware of all the material matters that would have been identified in an audit. Therefore, we do not express an audit opinion.

 

 

Conclusion on the individual and consolidated interim accounting information

Based on our review, we are not aware of any fact that might lead us to believe that the individual and consolidated interim accounting information included in the aforementioned quarterly information was not prepared, in all material respects, in accordance with CPC 21(R1) and IAS 34, issued by the IASB, applicable to the preparation of the quarterly review - ITR, and presented in accordance with the standards issued by the Brazilian Securities and Exchange Commission.

 

 

Other matters - Statements of added value

The individual and consolidated statements of value added for the three-months period ended March 31, 2021, prepared under the responsibility of the Company's management, and presented as supplementary information for the purposes of IAS 34, were submitted to the same review procedures followed together with the review of the Company's interim financial information. In order to form our conclusion, we evaluated whether these statements were reconciliated to the interim financial information and to the accounting records, as applicable, and whether their form and content are in accordance with the criteria set on Technical Pronouncement CPC 09 - Statement of Value Added. Based on our review, nothing has come to our attention that causes us to believe that the accompanying statements of value added were not prepared, in all material respects, in accordance with the individual and consolidated interim financial information taken as a whole.

 

 

Rio de Janeiro, May 13, 2021

 

 

KPMG Auditores Independentes

CRC SP-014428/O-6 F-RJ

Original report in Portuguese signed by

Marcelo Gavioli

Accountant CRC 1SP201409/O-1

 

 

KPMG Auditores Independentes, uma sociedade simples brasileira e firma-membro da rede KPMG de firmas-membro independentes e afiliadas à KPMG International Cooperative (“KPMG International”), uma entidade suíça. KPMG Auditores Independentes, a Brazilian entity and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Date: May 14, 2021

 

PETRÓLEO BRASILEIRO S.A–PETROBRAS

By: /s/ Rodrigo Araujo Alves

______________________________

Rodrigo Araujo Alves

Chief Financial Officer and Investor Relations Officer