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____

Petrobras Financial Performance in 1Q21

Petrobras posted solid financial and operating results in 1Q21. Regarding 1Q21 results, Petrobras’ CEO Joaquim Silva e Luna made the following comments: “The figures show the capacity of our team to deliver sustainable results to our investors and to society, even in a challenging environment. Petrobras will continue down the path of value generation, with its management based on transparency, dialogue and rationality and with investments concentrated in assets in which we are recognized as global leaders”.

CFO Rodrigo Araujo Alves also commented: “Those very strong figures show that we are in the right path. We will continue to focus on the strategies set forth in our Strategic Plan, generating value in all our operations and projects and managing our portfolio aiming to maximize returns to our shareholders and other stakeholders”.

Main highlights of 1Q21:

·        36% increase in recurring adjusted EBITDA in the quarter, even with lower sales volume.

·        Recurring net income impacted by the effect of Brazilian real depreciation over debt.

·        Positive free cash flow of R$ 31.1 billion.

·        Cash inflow from asset sales of US$ 472 million up to May 11^th, 2021.

·        Gross debt reduction of US$ 18.3 billion in the annual comparison and of US$ 4.6 billion in the quarterly comparison, reaching US$ 71 billion.

·        More than US$ 3.2 billion in pre-payments and amortizations in April.

·        Reduction of foreign exchange exposure in US$ 8.4 billion, reaching US$ 34.9 billion.

Table 1 - Main items^*

* See reconciliation of Recurring net income and Adjusted EBITDA in the Special Items section.

** Ratio calculated in USD

Consolidated Results

Net Revenues

Table 2 – Net revenues by products

Net revenue in 1Q21 was R$ 86.2 billion, 14.9% higher than 4Q20, mainly due to the 38% appreciation in Brent prices. This result was also supported by higher diesel revenues, which reached R$ 25.2 billion (27% higher than 4Q20), due to Petrobras’ higher market share in the diesel market and the growth in S-10 diesel sales, despite the drop in total diesel sales volume.

The increase in Brent price also resulted in higher revenues for other oil products, although sales volumes of oil products in the domestic market decreased by 5.6% due to seasonality and restrictions imposed by COVID-19. The exception was the 8.3% increase in fuel oil sales volume for thermoelectric generation and use in the industrial segment.

In 1Q21, despite lower volumes of exported crude oil and oil products, export revenue reached R$ 22.8 billion, 16.2% higher when compared to 4Q20, as a result of the hike in Brent prices. The 3% increase in oil and gas production in 1Q21 was not fully translated into revenues, with 27 MMbbl of ongoing crude oil exports.

In terms of revenue breakdown in the domestic market, diesel and gasoline continued to be the main products, accounting, together, for 70% of the domestic oil products sales revenues in 1Q21.

There was an increase in China's share of exports in 1Q21, reaching 56%. Singapore remained the main destination for exports of oil products, with 75%, taking advantage of the opportunities brought by IMO 2020. In 1Q21, we had the following distribution of export destinations:

Table 3 – Crude oil exports volume

Table 4 – Oil products exports volume

Cost of Goods Sold

Table 5 – Cost of goods sold

Compared to 4Q20, the cost of goods sold increased by 21.8% in 1Q21, mainly due to higher production taxes and imports costs, which are directly correlated to Brent prices, and to the absence of the gain from the actuarial review of the health plan in 4Q20.

In addition to the increase in Brent prices, higher participation of imported crude oil in the processed feedstock and of imported oil products in the sales mix also contributed to higher import costs.

Operating Expenses

Table 6 – Operating expenses

Selling expenses fell 14% in 1Q21, when compared to 4Q20, in line with lower sales volumes.

The increase in general and administrative expenses reflects the absence of the R$ 1.2 billion actuarial gain relative to the health plan in 4Q20, partially offset by lower consulting costs and lower headcount.

There was a reduction in exploration costs, mainly due to higher write-offs in 4Q20 in the Espirito Santo and Campos basins.

In 1Q21, impairment was R$ 508 million, mainly due to the shut-down of platform P-33 in Campos basin.

There were other expenses of R$1.5 billion in 1Q21 as opposed to other revenues of R$ 6.5 billion in 4Q20, due to the absence of the gain from the actuarial review of the health plan carried out in 4Q20 and to lower gains from divestments, partially offset by the lower provision related to the variable compensation program and higher reimbursement from the Lava Jato operation.

Adjusted EBITDA

Adjusted EBITDA in 1Q21 reached R$ 48,9 billion, 4% higher than 4T20. This result reflects higher oil margins due to the appreciation of Brent prices, offset by lower sales volumes. In addition, excluding the effect of the absence of the gain from the actuarial review of the health plan, occurred in 4Q20, there were lower operating expenses impacting this metric.

Financial results

Table 7 – Financial results

The financial result for 1Q21 was negative R$ 30.76 billion, compared to the R$ 6.8 billion revenue in 4Q20. We ended 1Q21 with an FX exposure of US$ 34.9 billion, compared to US$ 43.3 billion in 4Q20, with lower passive exposure in dollars.

Despite the lower FX exposure in 1Q21, there was an increase in foreign exchange losses, reaching R$ 18.7 billion, mainly due to the 9.6% depreciation of the Brazilian real over the US dollar against the appreciation of 7.9% in 4Q20. It is also worth mentioning the lower premium in the repurchase of bonds (R$ 1 billion) and the positive effects of active liability management, which made possible the reduction of finance expenses (R$ 4.1 billion).

Net income (loss) attributable to Petrobras’ shareholders

We recorded a net income of R$ 1.2 billion in 1Q21, R$ 58.7 billion lower than 4Q20, reflecting the impact of FX losses in the financial result due to the depreciation of the Brazilian real over the US dollar, as well as the reversals of impairment and of past expenditures with the health plan, both in 4Q20.

Recurring net income attributable to Petrobras’ shareholders and recurring adjusted EBITDA

In 1Q21, few non-recurring items impacted results. Excluding such items, mainly the impairment of R$ 508 million and the goodwill on the repurchase of bonds of R$ 1 billion, we would have had a net income of R$ 1.6 billion in 1Q21. Recurring EBITDA would have been R$ 47.8 billion, 34% higher than 4Q20.

Special Items

Table 8 – Special itens

In management's opinion, the special items presented above, although related to the Company's business, were highlighted as complementary information for a better understanding and evaluation of the result. Such items do not necessarily occur in all periods and are disclosed when relevant.

Capex

Investment amounts (Capex) encompass acquisition of property, plant and equipment, including costs with leasing, intangible assets, investments in subsidiaries and affiliates, costs with geology and geophysics, costs with research and development and pre-operating costs.

Table 9- Capex

In 1Q21, investments amounted US$ 1.9 billion, 7% below 4Q20 and 21% below 1Q20. More than 71% of capex is related to growth capex.

Growth investments are those with the main objective of increasing the capacity of existing assets, implementing new production systems up to the full ramp up, disposal and storage assets, increasing efficiency or profitability of the asset and implementing essential infrastructure to enable other growth projects. It includes acquisitions of assets / companies and remaining investments in systems that started in 2019, exploratory investments, and investments in R&D.

Sustaining investments, on the other hand, have the main objective of maintaining the operation of existing assets, they do not aim at increasing the capacity of the facilities. Includes investments in safety and reliability of installations, substitute well projects, complementary development, remaining investments in systems that entered before 2019, scheduled stoppages and revitalizations (without new systems), 4D seismic, HSE projects, line changes, infrastructure operational and ICT.

In 1Q21, investments in the Exploration and Production segment totaled US$ 1.6 billion, with approximately 78% related to growth. Investments were mainly concentrated in: (i) development of production in ultra-deep waters of the Santos Basin pre-salt (US$ 1 billion); (ii) exploratory investments (US$ 0.1 billion) and (iii) development of new projects in deep waters (US$ 0.1 billion).

In the Refining, Transportation and Marketing segment, investments totaled US$ 193 million in 1Q21, approximately 23% of which were growth investments. Investments in the Gas and Power segment totaled US$ 63 million in 1Q21, of which approximately 60% are investments in growth.

The following table presents the main information on the new, already contracted, oil and gas production systems.

Table 10 – Main Projects^1*

Portfolio Management

In 2021, up to May, 11^th, we concluded the sale of: Frade field, the wind power plants Mangue Seco 1, Mangue Seco 3 and Mangue Seco 4, Petrobras Uruguay Distribución (PUDSA), the remaining 10% stake in NTS and BSBios company. Cash inflows from those transactions, coupled with upfront cash inflows from the signing of Peroá and Miranga clusters divestments, totaled US$ 472 million in the period.

Table 11 – Amounts received up to May 11^th, 2021 and respective transaction value

¹ Amounts agreed in the signing date, subject to adjustments upon closing

² Original amounts in BRL, converted to US $ at the PTAX rate on the day of the SPA signing or of the cash inflow.

³Transaction signed in 2019

⁴Transaction signed in 2020

Petrobras reinforces the importance of portfolio management focusing on world-class assets in deep and ultra-deep waters, in order to improve our capital allocation, enable debt and capital cost reduction, and the consequent increase in value generation to the company and to our shareholders.

Liquidity and Capital Resources^[1]

Table 12 - Liquidity and Capital Resources

As of March 31^st, 2021, cash and cash equivalents were R$ 68.2 billion and adjusted cash and cash equivalents totaled R$ 71.5 billion.

In 1Q21, despite the reduction in sales volumes in the domestic and external markets and the higher built-up of inventories relative to 4Q20, there was an increase in net cash provided by operating activities, which reached R$ 40.1 billion, mainly due to the hike in Brent prices. Free cash flow reached R$ 31.1 billion in 1Q21.

This level of cash generation, alongside cash inflows from divestments of R$ 1.1 billion and cash and cash equivalents, were used: (i) to prepay debt and amortize principal and interest due in the period (R$ 23 billion) and (ii) to amortize lease liabilities (R$ 8 billion), reducing gross debt to R$ 404 billion (US$ 71 billion). In addition, CAPEX was R$ 9 billion.

In 1Q21, the company settled several loans and financial debts, amounting to R$ 23 billion, notably: (i) repayment of loans in the amount of R$ 6.1 billion, (ii) prepayment of banking loans in the domestic and international market totaling R$ 536 million and (iii) R$ 8 billion (US$ 1.4 billion) in the repurchase of global bonds previously issued by the Company in the capital market, with net premium paid to bond holders amounting to R$ 1 billion (iv) total prepayment of loans with export credit agencies, in the amount of R$ 1.3 billion.

^[1] * Includes short-term government bonds and time deposits and cash and cash equivalents of companies classified as held for sale.

** In accordance with the Shareholders’ remuneration policy, the additions (reductions) in investments shall not be considered in the calculation

Conciliation EBITDA x OCF x FCF x FCFE

R$ billion

Debt

The cash flow generation and continuous liability management allowed a relevant reduction in our indebtedness. Gross debt reached US$ 71 billion, 6% lower than December 31^st 2020, mainly due to debt prepayments. In April, there was a high volume of repayments and prepayments, in the amount of US$ 3.2 billion, which reinforces our commitment to deleveraging.

In addition, liability management helped increase the average maturity from 11.71 years to 11.84 years.

The Gross Debt/LTM adjusted EBITDA ratio decreased from 2.66x on December 31^st, 2020 to 2.47x on March 31^st, 2021.

Net debt reduced 7.5%, reaching US$ 58.4 billion. The Net Debt/LTM adjusted EBITDA ratio decreased from 2.22x on December 31^st, 2020 to 2.03x on March 31^st, 2021, the best recorded mark since 2012.

Table 13 – Debt indicators

Results by Segment

Exploration and Production

Table 14 – E&P results

In 1Q21, gross profit reached R$ 35.3 billion, an increase of 33% when compared to 4Q20. This increase was due to higher revenues and was partially offset by higher production taxes, both mainly due to higher Brent prices. Operating profit was 36% lower than in 4Q20, mainly due to the reversal of impairment losses, which occurred in 4Q20.

When compared to 1Q20, gross profit increased by 65% in 1Q21, mainly reflecting higher Brent prices. Operating profit was US$ 32.4 billion, a higher result mainly due to impairment losses occurred in 1Q20.

Lifting cost in 1Q21, without production taxes and without leases, was US$ 4.91/boe, which represents a 13% reduction compared to 4Q20. The result is due to lower expenses with integrity, such as maintenance and subsea inspections, which were concentrated in 4Q20.

When compared to 1Q20, lifting cost without production taxes and without leases decreased by 17%. This drop is explained by the 23% depreciation of the real against the dollar, the mothballing of shallow water platforms, divestments, and the start-up of P-70.

In the pre-salt, lifting cost remained stable in 1Q21. We continue to observe the maintenance of low unit costs, at levels below US$ 3/boe.

In the post-salt layer, lifting cost decreased 16% compared to 4Q20, due to lower expenses with maintenance and subsea inspections.

In onshore and shallow water assets, lifting cost in 1Q21 remained stable compared to the previous quarter.

Higher production taxes in 1Q21 are explained by higher Brent prices.

Refining, Transportation and Marketing

Table 15 - RTM results

In 1Q21, gross profit was R$ 5.15 million higher than 4Q20 due to a higher inventory turnover effect between quarters, with a variation of approximately R$ 6.13 billion, which reflect the increase in Brent prices in 1Q21 (the positive inventory turnover effect was R$ 8.97 billion in 1Q21 and R$ 2.84 billion in 4Q20). Excluding the inventory turnover effect, gross profit would have been R$ 2.79 billion in 1Q21 and R$ 3.77 billion in 4Q20.

In 1Q20, there were higher margins for oil products in the domestic market, especially diesel and gasoline, partially offset by lower LPG margins and lower sales volumes. There were better margins in crude oil and fuel oil exports, partially offset by lower volumes of exported oil.

The increase in operating income reflects the higher gross profit. Operating expenses increased in 1Q21 due to the positive effect in 4Q20 relative to the impairment reversal of Comperj and gains on the sale of Liquigás. Excluding these effects, operating expenses were lower, mainly reflecting the reduction in sales expenses due to lower sales volumes.

Gas and Power

Table 16 - Gas and Power results

In 1Q21, gross profit was R$ 4.8 billion, a reduction of 10% when compared to 4Q20, as a result of lower margins in energy generation and lower margins in gas commercialization, both resulting from higher acquisition costs for gas, mainly due to the increase in the regasified LNG costs, given the increase in consumption due to the harsh winter and restrictions on supply.

In 1Q21, operating income was R$ 646 million lower than 4Q20, mainly due to (i) lower gross profit, (ii) higher tax expenses, (iii) reversal of impairment in Baixada Santista Energia S.A, occurred in 4Q20, and (iv) higher sales expenses due to contractual readjustment in transportation tariffs.

Reconciliation of Adjusted EBITDA

EBITDA is an indicator calculated as the net income for the period plus taxes on profit, net financial result, depreciation and amortization. Petrobras announces EBITDA, as authorized by CVM Instruction 527 of October 2012.

In order to reflect the management view regarding the formation of the company's current business results, EBITDA is also presented adjusted (Adjusted EBITDA) as a result of: investments, impairment, results with divestments and write-off of assets, and reclassification of comprehensive income (loss) due to the disposal of equity-accounted investments.

Adjusted EBITDA, reflecting the sum of the last twelve months (Last Twelve Months), also represents an alternative to the company's operating cash generation. This measure is used to calculate the Gross Debt to Adjusted EBITDA metric, helping to evaluate the company's leverage and liquidity.

EBITDA and Adjusted EBITDA are not provided for in International Financial Reporting Standards (IFRS) and should not serve as a basis for comparison with those disclosed by other companies and should not be considered as a substitute for any other measure calculated in accordance with IFRS. These measures should be considered in conjunction with other measures and indicators for a better understanding of the company's performance and financial condition.

Table 17 - Adjusted EBITDA Reconciliation

FINANCIAL STATEMENTS

Table 18 - Income Statement - Consolidated

Table 19 - Statement of Financial Position – Consolidated

Table 20 - Statement of Cash Flows – Consolidated

SEGMENT INFORMATION

Table 21 - Consolidated Income Statement by Segment – 1Q21

Table 22 - Consolidated Income Statement by Segment – 1Q20

Table 23 - Consolidated Income Statement by Segment – 4Q20

Table 24 - Other Income (Expenses) by Segment – 1Q21

Table 25 - Other Income (Expenses) by Segment – 1Q20

Table 26 - Other Income (Expenses) by Segment – 4Q20

Table 27 - Consolidated Assets by Segment – 03.31.2021

Table 28 - Consolidated Assets by Segment – 12.31.2020

Table 29 - Reconciliation of Consolidated Adjusted EBITDA Statement by Segment – 1Q21