The information in this prospectussupplement and the accompanying prospectus
to which it relates is not complete and may be changed. This prospectus
supplement and theaccompanying prospectus to which it relates are not an offer
to sell these securities and are not soliciting an offer to buy these
securitiesin any jurisdiction where the offer or sale is not permitted.
PRELIMINARYPROSPECTUS SUPPLEMENT
(SUBJECT TO COMPLETION)
DATED SEPTEMBER 3, 2024
PROSPECTUS SUPPLEMENT
(To Prospectus dated December 21, 2021)
Petrobras Global Finance B.V.
Unconditionally guaranteed by
Petroleo Brasileiro S.A. - Petrobras
(Brazilian Petroleum Corporation - Petrobras)
U.S.$ %Global Notes due 20
The % Global Notes due 20 (the "Notes")are general, unsecured, unsubordinated
obligations of Petrobras Global Finance B.V. ("PGF"), a wholly-owned
subsidiary ofPetroleo Brasileiro S.A. - Petrobras ("Petrobras"). The Notes
will be unconditionally and irrevocably guaranteedby Petrobras. The Notes will
mature on , 20 and will bear interest at the rate of % per
annum. Interest on the Notes is payable on and of each year, beginning on ,
2025.
PGF will pay additional amounts related to thededuction of certain withholding
taxes in respect of certain payments on the Notes. PGF may redeem, in whole or
in part, the Notes atany time or from time to time prior to , 20
(the date that is months prior the scheduled maturity of the Notes), by
paying the greater of the principal amount of the Notes to beredeemed and a
"make-whole" amount, in each case plus accrued and unpaid interest. Beginning
on , 20 , PGF may redeem, inwhole or in part, the Notes at a price equal to
100% of the principal amount of the Notes to be redeemed, plus accrued and
unpaid interest.The Notes will also be redeemable in whole without premium
prior to maturity at PGF's option upon the imposition of certain withholdingtaxe
s. See "Description of the Notes-Optional Redemption."
In connection with the offering, the underwritersare not acting for anyone
other than the issuer. Neither the underwriters nor any of their affiliates
regulated by the Financial ConductAuthority will be responsible to anyone
other than the issuer for providing the protections afforded to their clients
nor for providingadvice in relation to the offering.
PGF intends to apply to have the Notes approved for listing on theNew York
Stock Exchange, or the "NYSE."
See "Risk Factors" beginning onpage S-14 to read about factors you should
consider before buying the Notes offered in this prospectus supplement and the
accompanyingprospectus.
Neither the U.S. Securities and Exchange Commissionnor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus supplement is truthfulor complete. Any representation to the
contrary is a criminal offense.
Initial price to the public Underwriting discount Proceeds, before expenses, to PGF:
(1) (2)
: :
Per Note Total Per Note Total Per Note Total
Notes % U.S.$ % U.S.$ % U.S.$
(1) Plus accrued interest from , 2024, if
settlement occurs after such date.
(2) See "Underwriting" beginning on page S-42 of this prospectus supplement
for additional information regarding underwriting compensation.
Theunderwriters expect to deliver the Notes in book-entry form only through
the facilities of The Depository Trust Company and its directand indirect
participants, including Clearstream Banking,
societe anonyme
, and Euroclear
SA/NV
,as operator of the Euroclear System, against payment in New York, New York on
or about , 2024.
Joint Bookrunners
BofA Securities Bradesco BBI HSBC J.P. Morgan Mizuho Morgan Stanley
Thedate of this prospectus supplement is , 2024.
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
Page
About this Prospectus Supplement S-1
Forward-Looking Statements S-3
Incorporation of Certain Documents by Reference S-5
Where You Can Find More Information S-6
Summary S-7
Risk Factors S-14
Use of Proceeds S-16
Selected Financial and Operating Information S-17
Capitalization S-19
Description of the Notes S-20
Description of the Guaranty S-32
Clearance and Settlement S-39
Underwriting S-42
Taxation S-50
Difficulties of Enforcing Civil Liabilities Against Non-U.S. Persons S-58
Legal Matters S-59
Independent Registered Public Accounting Firm S-61
PROSPECTUS
Page
About this Prospectus 2
Forward-Looking Statements 3
Petrobras 5
PGF 6
Use of Proceeds 7
The Securities 8
Legal Ownership 9
Description of Debt Securities 12
Description of Mandatory Convertible Securities 29
Description of Warrants 30
Description of the Guaranties 36
Description of American Depositary Receipts 37
Form of Securities, Clearing and Settlement 49
Selling Shareholders 54
Plan of Distribution 55
Experts 57
Validity of Securities 58
Difficulties of Enforcing Civil Liabilities Against Non-U.S. Persons 59
Where You Can Find More Information 61
Incorporation of Certain Documents by Reference 62
ABOUT THIS PROSPECTUSSUPPLEMENT
This document consists oftwo parts. The first part is this prospectus
supplement, which describes the specific terms of the Notes that PGF is
offering and certainother matters relating to PGF and Petrobras and
Petrobras's financial condition. The second part, the accompanying
prospectus,gives more general information about securities that PGF and
Petrobras may offer from time to time. Generally, references to the
prospectusmean this prospectus supplement and the accompanying prospectus
combined. If the information in this prospectus supplement differs fromthe
information in the accompanying prospectus, the information in this prospectus
supplement supersedes the information in the accompanyingprospectus.
We are responsible for theinformation contained and incorporated by reference
in this prospectus supplement and in any related free-writing prospectus we
prepareor authorize. PGF and Petrobras have not authorized anyone to give you
any other information, and we take no responsibility for any otherinformation
that others may give you. Neither PGF nor Petrobras is making an offer to sell
the Notes in any jurisdiction where the offeris not permitted.
You should not assume thatthe information in this prospectus supplement, the
accompanying prospectus or any document incorporated by reference is accurate
as ofany date other than the date of the relevant document.
In this prospectus supplement,unless the context otherwise requires or as
otherwise indicated, references to "Petrobras" mean Petroleo BrasileiroS.A. -
Petrobras and its consolidated subsidiaries taken as a whole, and references
to "PGF" mean Petrobras GlobalFinance B.V., a wholly-owned subsidiary of
Petrobras. Terms such as "we," "us" and "our" generallyrefer to both Petrobras
and PGF, unless the context requires otherwise or as otherwise indicated.
References herein to "
reais
"or "R$" are to the lawful currency of Brazil. References herein to "U.S.
dollars" or "U.S.$" areto the lawful currency of the United States.
Prohibitionof Sales to EEA Retail Investors:
The Notes are not intended to be offered, sold or otherwise made available to
and shouldnot be offered, sold or otherwise made available to any retail
investor in the European Economic Area ("EEA"). For thesepurposes, a retail
investor means a person who is one (or more) of: (i) a retail client as
defined in point (11) of Article 4(1) ofDirective 2014/65/EU (as amended,
"MiFID II"); or (ii) a customer within the meaning of Directive (EU) 2016/97
(as amended,the "Insurance Distribution Directive"), where that customer would
not qualify as a professional client as defined in point(10) of Article 4(1)
of MiFID II; or (iii) not a qualified investor as defined in Regulation (EU)
2017/1129 (as amended,the "Prospectus Regulation"); and the expression "offer"
includes the communication in any form and by any meansof sufficient
information on the terms of the offer and the Notes to be offered so as to
enable an investor to decide to purchase orsubscribe the Notes. Consequently,
no key information document required by Regulation (EU) No 1286/2014 (as
amended, the "PRIIPsRegulation") for offering or selling the Notes or
otherwise making them available to retail investors in the EEA has been
preparedand the Notes will not be offered or sold or otherwise made available
to any retail investor in the EEA.
This prospectus supplementhas been prepared on the basis that any offer of
Notes in any Member State of the EEA will be made pursuant to an exemption
under theProspectus Regulation from the requirement to publish a prospectus
for offers of Notes. Accordingly any person making or intending tomake an
offer in that Member State of Notes which are the subject of the offering
contemplated in this prospectus supplement may onlydo so to legal entities
that are qualified investors as defined in the Prospectus Regulation, provided
that no such offer of Notes shallrequire PGF or any of the underwriters to
publish a prospectus pursuant to Article 3 of the Prospectus Regulation or
supplementa prospectus pursuant to Article 23 of the Prospectus Regulation, in
each case in relation to such offer.
Neither PGF nor the underwritershave authorized, nor do they authorize, the
making of any offer of Notes to any legal entity which is not a qualified
investor as definedin the Prospectus Regulation. Neither PGF nor the
underwriters have authorized, nor do they authorize, the making of any offer
of Notesthrough any financial intermediary, other than offers made by the
underwriters, which constitute the final placement of the Notes contemplatedin
this prospectus supplement.
The expression "ProspectusRegulation" means Regulation (EU) 2017/1129 (as
amended or superseded).
Each person in a Member Stateof the EEA who receives any communication in
respect of, or who acquires any Notes under, the offers to the public
contemplated in thisprospectus supplement, or to whom the Notes are otherwise
made available, will be deemed to have represented, warranted, acknowledgedand
agreed to and with each underwriter and PGF that it and any person on whose
behalf it acquires Notes is: (1) a "qualifiedinvestor" within the meaning of
Article 2(e) of the Prospectus Regulation; and (2) not a "retail investor"(as
defined above).
S-
1
Prohibitionof Sales to UK Retail Investors:
The Notes are not intended to be offered, sold or otherwise made available to
and shouldnot be offered, sold or otherwise made available to any retail
investor in the United Kingdom (the "United Kingdom" or the"UK"). For these
purposes, a retail investor means a person who is one (or more) of: (i) a
retail client, as definedin point (8) of Article 2 of Regulation (EU) No
2017/565 as it forms part of domestic law by virtue of the European Union
(Withdrawal)Act 2018 (the "EUWA"); (ii) a customer within the meaning of the
provisions of the Financial Services and Markets Act2000 (as amended, the
"FSMA") and any rules or regulations made under the FSMA to implement
Directive (EU) 2016/97,where that customer would not qualify as a professional
client, as defined in point (8) of Article 2(1) of Regulation(EU) No 600/2014
as it forms part of domestic law by virtue of the EUWA; or (iii) not a
"qualified investor" as definedin Article 2 of Regulation (EU) 2017/1129 as it
forms part of the domestic law by virtue of the EUWA (the "UK Prospectus
Regulation").No key information document required by Regulation (EU) No
1286/2014 as it forms part of domestic law by virtue of the EUWA (the
"UKPRIIPs Regulation") for offering or selling the Notes or otherwise making
them available to retail investors in the UK has beenprepared and the Notes
will not be offered or sold or otherwise made available to any retail investor
in the UK.
This prospectus supplementhas been prepared on the basis that any offer of
Notes in the UK will be made pursuant to an exemption under the UK Prospectus
Regulationand the FSMA from the requirement to publish a prospectus for offers
of Notes. Accordingly any person making or intending to make anoffer in the UK
of Notes which are the subject of the offering contemplated in this prospectus
supplement may only do so to legal entitiesthat are qualified investors as
defined in the UK Prospectus Regulation, provided that no such offer of Notes
shall require PGF or anyof the underwriters to publish a prospectus pursuant
to Article 3 of the UK Prospectus Regulation or section 85 of the FSMA or
supplementa prospectus pursuant to Article 23 of the UK Prospectus Regulation,
in each case in relation to such offer.
Neither PGF nor the underwritershave authorized, nor do they authorize, the
making of any offer of Notes to any legal entity which is not a qualified
investor as definedin the UK Prospectus Regulation. Neither PGF nor the
underwriters have authorized, nor do they authorize, the making of any offer
ofNotes through any financial intermediary, other than offers made by the
underwriters, which constitute the final placement of the Notescontemplated in
this prospectus supplement.
Each person in the UK whoreceives any communication in respect of, or who
acquires any Notes under, the offers to the public contemplated in this
prospectus supplement,or to whom the Notes are otherwise made available, will
be deemed to have represented, warranted, acknowledged and agreed to and
witheach underwriter and PGF that it and any person on whose behalf it
acquires Notes is: (1) a "qualified investor" withinthe meaning of Article
2(e) of the UK Prospectus Regulation; and (2) not a "retail investor" (as
defined above).
This prospectus supplementis for distribution only to persons who (i) have
professional experience in matters relating to investments falling within
Article 19(5) ofthe Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005 (as amended, the "Financial Promotion Order"),(ii) are
persons falling within Article 49(2)(a) to (d) ("high net worth companies,
unincorporated associationsetc.") of the Financial Promotion Order, (iii) are
members or creditors of certain bodies corporate as defined by or
withinArticle 43(2) of the Financial Promotion Order, (iv) are outside the
United Kingdom, or (v) are persons to whom aninvitation or inducement to
engage in investment activity (within the meaning of section 21 of the FSMA)
in connection with the issueor sale of any securities may otherwise lawfully
be communicated or caused to be communicated (all such persons together being
referredto as "relevant persons"). This document is directed only at relevant
persons and must not be acted on or relied on by personswho are not relevant
persons. Any investment or investment activity to which this document relates
is available only to relevant personsand will be engaged in only with relevant
persons.
S-
2
FORWARD-LOOKING STATEMENTS
Someof the information contained or incorporated by reference in this
prospectus supplement are forward-looking statements that are not basedon
historical facts and are not assurances of future results. Many of the
forward-looking statements contained, or incorporated by referencein this
prospectus supplement may be identified by the use of forward-looking words,
such as "believe," "expect,""estimate," "anticipate," "intend," "plan," "aim,"
"will," "may,""should," "could," "would," "likely," "potential" and similar
expressions.
Readersare cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date on which they are made.There is no
assurance that the expected events, trends or results will actually occur
.
We have made forward-lookingstatements that address, among other things:
. Petrobras's marketing and expansion strategy;
. Petrobras's exploration and production activities, including drilling;
. Petrobras's activities related to refining, import, export, transportation of oil, natural gas and
oil products, petrochemicals, power generation, biofuels and other sources of renewable energy;
. Petrobras's commitment with respect to ESG practices and low carbon and environmental sustainability;
. Petrobras's projected and targeted capital expenditures, commitments and revenues;
. Petrobras's liquidity and sources of funding;
. Petrobras's pricing strategy and development of additional revenue sources; and
. the impact, including cost, of acquisitions and divestments.
Our forward-looking statementsare not guarantees of future performance and are
subject to assumptions that may prove incorrect and to risks and uncertainties
thatare difficult to predict. Our actual results could differ materially from
those expressed or forecast in any forward-looking statementsas a result of a
variety of assumptions and factors. These factors include, but are not limited
to, the following:
. Petrobras's ability to obtain financing;
. general economic and business conditions, including crude oil and other
commodity prices, refining margins and prevailing exchange rates;
. global economic conditions;
. Petrobras's ability to find, acquire or gain access to additional
reserves and to develop Petrobras's current reserves successfully;
. uncertainties inherent in making estimates of our oil and gas reserves, including recently discovered oil and gas reserves;
. competition;
. technical difficulties in the operation of Petrobras's equipment and the provision of Petrobras's services;
. changes in, or failure to comply with, laws or regulations, including
with respect to fraudulent activity, corruption and bribery;
S-
3
. receipt of governmental approvals and licenses;
. international and Brazilian political, economic and social developments, including the
role of the Brazilian government, as our controlling shareholder, in our business;
. natural disasters, accidents, military operations, acts of sabotage, wars or embargoes;
. global health crises, such as the COVID-19 pandemic;
. the impact of expanded regional or global conflict, including the ongoing
conflict between Russia and Ukraine and the conflict in the Middle East;
. the cost and availability of adequate insurance coverage;
. Petrobras's ability to successfully implement asset sales under Petrobras's portfolio management program;
. Petrobras's ability to successfully implement its 2024-2028 Strategic Plan ("Strategic Plan"),
whether that Strategic Plan remains in place, and the direction of any subsequent strategic plans;
. the outcome of ongoing corruption investigations and any new facts or
information that may arise in relation to the Lava Jato investigation;
. the effectiveness of Petrobras's risk management policies and procedures, including operational risk;
. potential changes to the composition of Petrobras's board of directors and management team; and
. litigation, such as class actions or enforcement or other proceedings brought by governmental and regulatory agencies.
For additional informationon factors that could cause our actual results to
differ from expectations reflected in forward-looking statements, please see
"RiskFactors" in this prospectus supplement and in documents incorporated by
reference in this prospectus supplement and the accompanyingprospectus.
All forward-looking statementsattributed to us or a person acting on our
behalf are expressly qualified in their entirety by this cautionary statement,
and you shouldnot place undue reliance on any forward-looking statement
included in this prospectus supplement or the accompanying prospectus. We
undertakeno obligation to publicly update or revise any forward-looking
statements, whether as a result of new information or future events orfor any
other reason.
S-
4
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Petrobras is incorporatingby reference into this prospectus supplement the
following documents that it has filed with the U.S. Securities and Exchange
Commission("SEC"):
1. The Petrobras
Annual Report on Form 20-F for the year ended December 31, 2023 filed with the SEC on April 12, 2024
(the "2023 Form 20-F").
2. The Petrobras
Report on Form 6-K furnished to the SEC
on August 9, 2024, film number 241190833
, containing Petrobras's unaudited condensed consolidated interim financial statements in
U.S. dollars as of June 30, 2024, and for the three-month and six-month periods ended June
30, 2024 and 2023, prepared in accordance with IAS 34 - "Interim Financial Reporting" as
issued by the International Accounting Standards Board, as amended by the Petrobras Report on
Form 6-K/A furnished to the
SEC on August 29, 2024
, containing the Interactive
Data File relatingto such
unaudited consolidated interim
financial statements.
3. The Petrobras
Report on Form 6-K furnished to the SEC
on August 23, 2024, film number 241235245
, containing a discussion of Petrobras's financial information and results in U.S.
dollars as of June 30, 2024, and for the six-month periods ended June 30, 2024 and 2023.
4. Any future reports of Petrobras on Form 6-K furnished to the SEC that are identified in those forms
as being incorporated by reference into this prospectus supplement or the accompanying prospectus.
We will provide without chargeto any person to whom a copy of this prospectus
supplement is delivered, upon the written or oral request of any such person,
a copyof any or all of the documents referred to above which have been or may
be incorporated herein by reference, other than exhibits to suchdocuments
(unless such exhibits are specifically incorporated by reference in such
documents). Requests should be directed to Petrobras'sInvestor Relations
Department located at Av. Henrique Valadares, 28 - 9th floor - 20231-030 - Rio
de Janeiro, RJ, Attention:Investor Relations Department (telephone: + 55 (21)
3224-1510/+ 55 (21) 3224-9947; e-mail: petroinvest@petrobras.com.br).
S-
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WHERE YOU CAN FIND MORE INFORMATION
Information that Petrobrasfiles with or furnishes to the SEC after the date of
this prospectus supplement, and that is incorporated by reference herein, will
automaticallyupdate and supersede the information in this prospectus
supplement. You should review the SEC filings and reports that Petrobras
incorporatesby reference to determine if any of the statements in this
prospectus supplement, the accompanying prospectus or in any documents
previouslyincorporated by reference have been modified or superseded.
Documents incorporated byreference in this prospectus supplement are available
without charge. Each person to whom this prospectus supplement and the
accompanyingprospectus are delivered may obtain documents incorporated by
reference herein by requesting them either in writing or orally, by
telephoneor by e-mail from us at the following address:
Investor Relations Department
Petroleo Brasileiro S.A.- Petrobras
Av. Henrique Valadares, 28 - 9th floor
20231-030 - Rio de Janeiro, RJ, Brazil
Attention: Investor Relations Department
Telephone: + 55 (21) 3224-1510/9947
E-mail:
petroinvest@petrobras.com.br
Petrobras is subject to theinformation requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), applicable to a foreignprivate
issuer, and accordingly files or furnishes reports, including annual reports
on Form 20-F, reports on Form 6-K, andother information with the SEC. Any
filings Petrobras makes electronically will be available to the public over
the Internet at the SEC'sweb site at http://www.sec.gov. The information on
this website, which might be accessible through a hyperlink resulting from
this URL,is not and shall not be deemed to be incorporated into this
prospectus supplement.
S-
6
SUMMARY
This summary highlightskey information described in greater detail elsewhere,
or incorporated by reference, in this prospectus supplement and the
accompanyingprospectus. This summary is not complete and does not contain all
of the information you should consider before investing in the Notes.You
should read carefully the entire prospectus supplement, the accompanying
prospectus, including "Risk Factors" and thedocuments incorporated by
reference herein, which are described under "Incorporation of Certain
Documents by Reference" and"Where You Can Find More Information."
PGF
PGF is a wholly-owned financesubsidiary of Petrobras, incorporated under the
laws of the Netherlands as a private company with limited liability (
besloten vennootschapmet beperkte aansprakelijkheid
) on August 2, 2012. PGF is an indirect subsidiary of Petrobras, and all of
PGF's sharesare held by Petrobras's Dutch subsidiary Petrobras International
Braspetro B.V. PGF's business is to raise financing to fundthe operations of
companies within the Petrobras group, including by issuing debt securities in
the international capital markets. PGFdoes not currently have any operations,
revenues or assets other than those related to the issuance, administration
and repayment ofits debt securities. All debt securities issued by PGF are
fully and unconditionally guaranteed by Petrobras. PGF was incorporated foran
indefinite period of time.
Petrobras uses PGF as itsmain vehicle to issue securities in the international
capital markets. PGF's first offering of notes fully and unconditionallyguarante
ed by Petrobras occurred in September 2012. In December 2014, PGF assumed the
obligations of Petrobras's formerfinance subsidiary Petrobras International
Finance Company S.A. ("PifCo") under all then outstanding notes originally
issuedby PifCo, which continue to benefit from Petrobras's full and
unconditional guaranty.
PGF's registered officeis located at Weena 798C, 23
rd
floor, 3014 DA Rotterdam, the Netherlands, and our telephone number is +31 (0)
10 206-7000.
Petrobras
Petrobras is one of the world'slargest integrated oil and gas companies,
engaging in a broad range of oil and gas activities. Petrobras is
a sociedade de economiamista
(partially state-owned enterprise) organized and existing under the laws of
Brazil. For the years ended December 31, 2023and 2022, Petrobras had sales
revenues of U.S.$102,409 million and U.S.$124,474 million, respectively, gross
profit of U.S.$53,974 millionand U.S.$64,988 million, respectively, and net
income attributable to shareholders of Petrobras of U.S.$ 24,884 million and
U.S.$36,623million, respectively. For the six-month periods ended June 30,
2024 and 2023, Petrobras had sales revenues of U.S.$47,235 millionand
U.S.$49,750 million, respectively, gross profit of U.S.$23,984 million and
U.S.$25,750 million, respectively, and net income (loss)attributable to
shareholders of Petrobras of U.S.$4,438 million and U.S.$13,169 million,
respectively. In 2023, Petrobras's averagedomestic daily oil and Natural Gas
Liquids ("NGL") production was 2,231 million bbl/d. In the six-month period
endedJune 30, 2024, Petrobras's average domestic daily oil and NGL production
was 2,196 million bbl/d.
Petrobras currently dividesits activities into the following segments of
operations:
. Exploration and Production
: this segment covers the activities of exploration, development and production of crude
oil, NGL and natural gas in Brazil and abroad, for the primary purpose of supplying
our domestic refineries. The E&P segment also operates through partnerships with other
companies, including holding interests in non-Brazilian companies in this segment;
. Refining, Transportation and Marketing
: this segment covers the activities of refining, logistics, transport, acquisition
and exports of crude oil, as well as trading of oil products, in Brazil and abroad.
This segment also includes the petrochemical operations (which includes holding
interests in petrochemical companies in Brazil), and fertilizer production; and
S-
7
. Gas and Low Carbon Energies
: this segment covers the activities of logistics and trading of natural gas and electricity, transportation
and trading of liquefied natural gas ("LNG"), generation of electricity by means of thermoelectric
power plants, as well as natural gas processing. It also includes renewable energy businesses, low carbon
services (carbon capture, utilization and storage) and the production of biodiesel and its co-products.
Additionally, Petrobras hasa Corporate and Other Businesses classification
that includes general corporate matters, in addition to distribution business.
Corporateitems mainly include those related to corporate financial management,
trade and other receivables, allowance for credit losses, gains(losses) with
derivatives (except those with commodity derivatives included in their
respective segments), corporate overhead and otherexpenses, including
actuarial expenses related to pension and health care plans for beneficiaries.
Other Businesses comprise the distributionof oil products abroad (throughout
South America) . In 2021, the results of other businesses included the equity
interest in our associateVibra Energia (formerly Petrobras Distribuidora)
until July 2021 when we sold the remaining interest in this company. For
furtherinformation regarding Petrobras's business segments, see Note 12 to
Petrobras's audited consolidated financial statementsincluded in the
2023 Form 20-F
incorporated by reference herein.
Petrobras'sprincipal executive office is located at Av.
Henrique Valadares, 28 - 20231-030 - Rio de Janeiro RJ, Brazil, its
telephonenumber is +55 (21) 3224-1510/9947, and Petrobras's website is
www.petrobras.com.br. The information on Petrobras's website,which might be
accessible through a hyperlink resulting from this URL, is not and shall not
be deemed to be incorporated into this prospectussupplement.
S-
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The Offering
Issuer Petrobras Global Finance B.V. ("PGF").
The Notes U.S.$ aggregate
principal amount of
% Global Notes due 20 (the "Notes").
Issue Price % of the aggregate principal
amount, plus accrued interest
from , 2024, if
settlement occurs after such date.
Closing Date , 2024.
Maturity Date , 20 .
Interest The Notes will bear
interest from ,
2024, the date of issuance
of the Notes, at the
rate of % per annum,
payable semi-annually
in arrears on each interest payment date.
Interest Payment Dates and of each year, commencing
on , 2025.
Denominations PGF will issue the Notes only
in denominations of U.S.$2,000
and integral multiples of
U.S.$1,000 in excess thereof.
Trustee, Registrar, Paying The Bank of New York Mellon
Agent and Transfer Agent
Codes
(a) ISIN
(b) CUSIP
Use of Proceeds PGF intends to use the net proceeds from the sale of the Notes
to repurchase its 5.093% Global Notes due January 2030, 5.600%
Global Notes due January 2031, 5.500% Global Notes due June 2051,
5.625% Global Notes due May 2043, 6.750% Global Notes due June
2050 and 6.900% Global Notes due March 2049 (collectively, the
"Old Notes"), in each case that PGF accepts for purchase in the
tender offers described below, and to use any remaining net
proceeds for general corporate purposes. See "Use of Proceeds."
Tender Offers Concurrently with this offering, PGF announced the commencement of cash tender
offers (the "Tender Offers"), on the terms and subject to the conditions
described in an offer to purchase (the "Offer to Purchase"), that is
being made available to eligible holders of Old Notes. The Tender Offers
for the Old Notes are conditioned upon certain customary conditions,
including the closing of the sale of the Notes offered hereby. This offering
is not conditioned on the successful consummation of the Tender Offers.
The underwriters are also acting as dealer managers in the Tender Offers.
Although PGF currently intends
to consummate the Tender Offers,
it cannot guarantee that the
Tender Offers will be consummated
on the terms contained in the
Offer to Purchase, or, if
consummated, the number of Old
Notes that will be tendered.
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This prospectus supplement
is not an offer to purchase
or a solicitation of an
offer to sell the Old
Notes. The Tender Offers
will be made only by and
pursuant to the terms of
the Offer to Purchase.
Indenture The Notes offered hereby will be issued pursuant to
an indenture between PGF and The Bank of New York
Mellon, a New York banking corporation, as trustee,
dated as of August 28, 2018, as supplemented
by the sixth supplemental indenture to be dated
as of the closing date, among PGF, Petrobras
and The Bank of New York Mellon, as trustee (the
"indenture"). See "Description of the Notes."
Guaranty The Notes will be unconditionally
guaranteed by Petrobras
under the guaranty. See
"Description of the Guaranty."
Ranking The Notes constitute general
senior unsecured and
unsubordinated obligations of
PGF that will at all times rank
pari passu
among themselves and with all
other unsecured unsubordinated
indebtedness issued from
time to time by PGF.
The obligations of Petrobras under
the guaranty constitute general
senior unsecured obligations of
Petrobras that will at all times rank
pari passu
with all other senior unsecured obligations
of Petrobras that are not, by their terms,
expressly subordinated
in right of payment to
Petrobras's obligations under the guaranty.
Optional Redemption PGF may redeem the Notes, in whole or in part, at any time
or from time to time prior to , 20 (the date
that is months prior the scheduled maturity of
the Notes) by paying the greater of the principal amount
of the Notes to be redeemed and a "make-whole" amount, plus,
in each case, accrued and unpaid interest, as described
under "Description of the Notes-Optional Redemption-
Optional Redemption With `Make-Whole' Amount for the Notes."
Beginning on , 20 , PGF
may redeem, in whole or in part,
the Notes at a price equal to 100%
of the principal amount of the Notes
to be redeemed, plus accrued and
unpaid interest, as described under
"Description of the Notes-Optional
Redemption-Optional Redemption at Par."
Early Redemption at PGF's PGF has the option, subject to certain conditions, to redeem the Notes in whole
Option Solely for Tax Reasons at their principal amount, plus accrued and unpaid interest, if any, to the
date of redemption, if and when, as a result of a change in, execution of, or
amendment to, any laws or treaties or the official entry into effect, application
or interpretation of any laws or treaties, PGF would be required to pay additional
amounts related to the deduction of certain withholding taxes in respect of
certain payments on the Notes. See "Description of Debt Securities―Special
Situations―Optional Tax Redemption" in the accompanying prospectus.
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Covenants
(a) PGF The terms of the indenture will
require PGF, among other things, to:
. pay all amounts owed by it under the indenture
and the Notes when such amounts are due;
. maintain an office or agent for the purpose of service of
process and a paying agent, in each case in the United States;
. ensure that the Notes continue
to be senior obligations of PGF;
. use proceeds from the issuance of the
Notes for specified purposes; and
. replace the trustee upon any
resignation or removal of the trustee.
In addition, the terms of the indenture will restrict the
ability of PGF and its subsidiaries, among other things, to:
. undertake certain mergers, consolidations
or similar transactions; and
. create certain liens on its
assets or pledge its assets.
PGF's covenants are subject to a number of important qualifications
and exceptions. See "Description of the Notes-Covenants."
(b) Petrobras The terms of the guaranty will require
Petrobras, among other things, to:
. pay all amounts owed by it in accordance with
the terms of the guaranty and the indenture;
. maintain an office or agent in the United
States for the purpose of service of process;
. ensure that its obligations under the guaranty will
continue to be senior obligations of Petrobras; and
. make available certain financial
statements to the trustee.
In addition, the terms of the guaranty will restrict the ability
of Petrobras and its subsidiaries, among other things, to:
. undertake certain mergers, consolidations
or similar transactions; and
. create certain liens on its
assets or pledge its assets.
Petrobras's covenants are subject to a number of important qualifications
and exceptions. See "Description of the Guaranty-Covenants."
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Events of Default The following events of default will be
events of default with respect to the Notes:
. failure to pay
principal on the Notes
within seven calendar
days of its due date;
. failure to pay interest
on the Notes within 30
calendar days of any
interest payment date;
. breach by PGF of a
covenant or agreement
in the indenture or
by Petrobras of a
covenant or agreement
in the guaranty if
not remedied within
60 calendar days;
. acceleration of a payment
on the indebtedness
of PGF or Petrobras
or any material
subsidiary that equals
or exceeds U.S.$200
million (or its equivalent
in another currency);
. certain events of
bankruptcy, reorganization,
liquidation, insolvency,
winding-up, dissolution,
moratorium or intervention
law or law with similar
effect of PGF or Petrobras
or any material subsidiary;
. certain events relating to the
unenforceability of the Notes,
the indenture or the guaranty
against PGF or Petrobras; and
. Petrobras ceasing to own at
least 51% of PGF's outstanding
voting and economic interests
(equity or otherwise).
The events of default are subject to
a number of important qualifications
and limitations. See "Description
of the Notes-Events of Default."
Further Issuances PGF reserves the right, from time to time, without the consent
of the holders of the Notes, to issue additional Notes on terms
and conditions identical to those of the Notes, which additional
Notes shall increase the aggregate principal amount of,
and shall be consolidated and form a single series with, the
Notes offered hereby. PGF may also issue other securities under
the indenture that have different terms and conditions from
the Notes. See "Description of the Notes-Further Issuances."
Modification of Notes, The terms of the indenture may be
Indenture and Guaranty modified by PGF and the trustee,
and the terms of the guaranty
may be modified by Petrobras
and the trustee, in some cases
without the consent of the holders
of the Notes. See "Description
of the Notes-Amendments."
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Clearance and Settlement The Notes will be issued
in book-entry form through
the facilities of The
Depository Trust Company
("DTC"), for the accounts
of its direct and indirect
participants, including Clearstream Banking,
societe anonyme
, and Euroclear SA/NV, as
operator of the Euroclear
System, and will trade
in DTC's Same-Day Funds
Settlement System. Beneficial
interests in Notes
held in book-entry form
will not be entitled to
receive physical delivery
of certificated Notes
except in certain limited
circumstances. For a
description of certain factors
relating to clearance
and settlement, see
"Clearance and Settlement."
Withholding Taxes; Additional Amounts Any and all payments of principal, premium, if any, and interest in respect
of the Notes will be made free and clear of, and without withholding or
deduction for, any taxes, duties, assessments, levies, imposts or charges
whatsoever imposed, levied, collected, withheld or assessed by Brazil, the
jurisdiction of PGF's incorporation (currently the Netherlands) or any other
jurisdiction in which PGF appoints a paying agent under the indenture, or
any political subdivision or any taxing authority thereof or therein, unless
such withholding or deduction is required by law. If PGF is required by law
to make such withholding or deduction, it will pay such additional amounts
as are necessary to ensure that the holders receive the same amount as they
would have received without such withholding or deduction, subject to certain
exceptions. In the event Petrobras is obligated to make payments to the
holders under the guaranty, Petrobras will pay such additional amounts as
are necessary to ensure that the holders receive the same amount as they
would have received without such withholding or deduction, subject to certain
exceptions. See "Description of the Notes-Covenants-Additional Amounts."
Governing Law The indenture, the Notes, and the
guaranty will be governed by, and
construed in accordance with, the
laws of the State of New York.
Listing PGF intends to apply to have the Notes
approved for listing on the NYSE.
Risk Factors You should carefully consider the
risk factors discussed beginning
on page S-14, the section entitled
"Risk Factors" in Petrobras's
2023 Form 20-F
, which is incorporated by reference in this
prospectus supplement, and
the other information
included or incorporated
by reference in this
prospectus supplement,
before purchasing any Notes.
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RISK FACTORS
Our
2023 Form 20-F
includes extensive risk factors relating to our operations, our compliance and
control risks, our relationship withthe Brazilian federal government, and to
Brazil. You should carefully consider those risks and the risks described
below, as well asthe other information included or incorporated by reference
in this prospectus supplement and the accompanying prospectus, before makinga
decision to invest in the Notes
.
Risks Relating to PGF's Debt Securities
The market for theNotes may not be liquid.
The Notes are an issuanceof new securities with no established trading market.
We intend to apply to list the Notes on the NYSE. We can provide no assurance
asto the liquidity of trading markets for the Notes offered by this prospectus
supplement. We cannot guarantee that holders of the Noteswill be able to sell
their Notes in the future. If a market for the Notes does not develop, holders
of the Notes may not be able to resellthe Notes for an extended period of
time, if at all.
Restrictions on themovement of capital out of Brazil may impair your ability
to receive payments on the guaranty and restrict Petrobras's abilityto make
payments to PGF in U.S. dollars.
In the past, the Brazilianeconomy has experienced balance of payment deficits
and shortages in foreign exchange reserves, and the government has responded
by restrictingthe ability of Brazilian or foreign persons or entities to
convert
reais
into foreign currencies. The government may institutea restrictive exchange
control policy in the future. Any restrictive exchange control policy could
prevent or restrict our access toU.S. dollars, and consequently our ability to
meet our U.S. dollar obligations under the guaranty and could also have a
material adverseeffect on our business, financial condition and results of
operations. We cannot predict the impact of any such measures on the
Brazilianeconomy. In the event that any such restrictive exchange control
policies were instituted by the Brazilian government, we may face
adverseregulatory consequences in the Netherlands that may lead us to redeem
the Notes prior to their maturity.
In addition, payments byPetrobras under the guaranty in connection with PGF's
Notes do not currently require approval by or registration with the
CentralBank of Brazil. The Central Bank of Brazil may nonetheless impose prior
approval requirements on the remittance of U.S. dollars, whichcould cause
delays in such payments.
Petrobras would berequired to pay judgments of Brazilian courts enforcing its
obligations under the guaranty only in reais.
If proceedings were broughtin Brazil seeking to enforce Petrobras's
obligations in respect of the guaranty, Petrobras would be required to
discharge its obligationsonly in
reais
. Under Brazilian exchange controls, an obligation to pay amounts denominated
in a currency other than
reais
,which is payable in Brazil pursuant to a decision of a Brazilian court, will
be satisfied in
reais
at the rate of exchange ineffect on the date of payment, as determined by the
Central Bank of Brazil.
A finding that Petrobrasis subject to U.S. bankruptcy laws and that any of the
guaranty executed by it was a fraudulent conveyance could result in the
relevantPGF noteholders losing their legal claim against Petrobras.
PGF's obligation tomake payments on the Notes is supported by Petrobras's
obligation under the guaranty. Petrobras has been advised by its externalU.S.
counsel that the guaranty is valid and enforceable in accordance with the laws
of the State of New York and the United States. Inaddition, Petrobras has been
advised by its general counsel that the laws of Brazil do not prevent the
guaranty from being valid, bindingand enforceable against Petrobras in
accordance with their terms.
In the event that U.S. federalfraudulent conveyance or similar laws are
applied to the guaranty, and Petrobras, at the time it entered into the
guaranty:
. was or is insolvent or rendered insolvent by reason of our entry into such guaranty;
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. was or is engaged in business or transactions for which the assets
remaining with Petrobras constituted unreasonably small capital; or
. intended to incur or incurred, or believed or believe that Petrobras would
incur, debts beyond Petrobras's ability to pay such debts as they mature; and
. in each case, intended to receive or received less than the reasonably equivalent value or fair consideration therefor,
then Petrobras's obligations under theguaranty could be avoided, or claims
with respect to that agreement could be subordinated to the claims of other
creditors. Among otherthings, a legal challenge to the guaranty on fraudulent
conveyance grounds may focus on the benefits, if any, realized by Petrobras
asa result of the issuance of the Notes. To the extent that the guaranty is
held to be a fraudulent conveyance or unenforceable for anyother reason, the
holders of the Notes would not have a claim against Petrobras under the
guaranty and would solely have a claim againstPGF. Petrobras cannot ensure
that, after providing for all prior claims, there will be sufficient assets to
satisfy the claims of thenoteholders relating to any avoided portion of the
guaranty.
We cannot assure youthat the credit ratings for the Notes will not be lowered,
suspended or withdrawn by the rating agencies.
The credit ratings of theNotes may change after issuance. Such ratings are
limited in scope, and do not address all material risks relating to an
investment inthe Notes, but rather reflect only the views of the rating
agencies at the time the ratings are issued. An explanation of the
significanceof such ratings may be obtained from the rating agencies. We
cannot assure you that such credit ratings will remain in effect for anygiven
period of time or that such ratings will not be lowered, suspended or
withdrawn entirely by the rating agencies, if, in the judgmentof such rating
agencies, circumstances so warrant. Any lowering, suspension or withdrawal of
such ratings may have an adverse effecton the market price and marketability
of the Notes.
Risks Relating to PGF and Petrobras
PGF's operationsand debt servicing capabilities are dependent on Petrobras.
PGF's financial positionand results of operations are directly affected by
Petrobras's decisions. PGF is an indirect, wholly-owned finance subsidiary
ofPetrobras incorporated in the Netherlands as a private company with limited
liability. PGF does not currently have any operations, revenuesor assets other
than those related to its primary business of raising money for the purpose of
on-lending to Petrobras and other subsidiariesof Petrobras. PGF's ability to
satisfy its obligations under the Notes will depend on payments made to PGF by
Petrobras and othersubsidiaries of Petrobras under the loans made by PGF. The
Notes and all debt securities issued by PGF will be fully and unconditionallygua
ranteed by Petrobras. Petrobras's financial condition and results of
operations, as well as Petrobras's financial supportof PGF, directly affect
PGF's operational results and debt servicing capabilities.
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USE OF PROCEEDS
The net proceeds from thesale of the Notes, after payment of the underwriting
discount but before expenses, are expected to be approximately U.S.$
million.
PGFintends to use the net proceeds from the sale of the Notes
to purchase the Old Notes that PGF accepts for purchase in the TenderOffers
announced concurrently with this offering, and to use any remaining net
proceeds for general corporate purposes.
Theunderwriters are acting as dealer managers in connection with the Tender
Offers and will receive a commission for also acting in suchcapacity.
In addition, the underwriters or their affiliates may tender Old Notes in the
Tender Offers for their own account orfor the accounts of their customers, in
which case the underwriters, their affiliates or customers may receive a
portion of the proceedsof this offering. See "The Offering-Tender Offers."
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SELECTED FINANCIAL ANDOPERATING INFORMATION
This prospectus supplementincorporates by reference (i) our unaudited
condensed consolidated interim financial statements as of June 30, 2024 and
forthe three-month and six-month periods ended June 30, 2024 and 2023,
prepared in accordance with IAS 34 - "Interim FinancialReporting" as issued by
the IASB, and (ii) our audited consolidated financial statements as of
December 31, 2023 and2022 and for the years ended December 31, 2023, 2022 and
2021, which have been prepared in accordance with the International
FinancialReporting Standards (IFRS) as issued by the IASB.
The selected financial informationas of December 31, 2023 and 2022 and for the
years ended December 31, 2023, 2022, and 2021, presented in the tables below
havebeen derived from Petrobras's audited consolidated financial statements.
The selected financial data as of June 30, 2024 andfor the six-month periods
ended June 30, 2024 and 2023 have been derived from Petrobras's unaudited
condensed consolidatedinterim financial statements, which in the opinion of
management, reflect all adjustments that are of a normal recurring nature
necessaryfor a fair presentation of the results for such periods. The results
of operations for the six months ended June 30, 2024 are notnecessarily
indicative of the operating results to be expected for the entire year. The
selected consolidated financial information shouldbe read in conjunction with,
and are qualified in their entirety by reference to, Petrobras's financial
statements and the accompanyingnotes incorporated by reference in this
prospectus supplement.
Balance Sheet Data
As of June 30, As of December 31,
2024 2023 2022 2021
(U.S.$ million) (U.S.$ million)
Assets:
Current assets
Cash and cash equivalents 7,884 12,727 7,996 10,467
Marketable securities 4,290 2,819 2,773 650
Trade and other receivables 4,405 6,135 5,010 6,368
Inventories 7,339 7,681 8,779 7,255
Assets classified as held for sale 422 335 3,608 2,490
Other current assets 4,318 2,748 3,084 2,919
28,658 32,445 31,250 30,149
Non-current assets
Long-term receivables 22,166 26,798 21,220 14,334
Judicial deposits 12,479 14,746 11,053 8,038
Other long-term receivables 9,687 12,052 10,167 6,296
Investments 986 1,358 1,566 1,510
Property, plant and equipment 135,951 153,424 130,169 125,330
Intangible assets 2,688 3,042 2,986 3,025
161,791 184,622 155,941 144,199
Total assets 190,449 217,067 187,191 174,348
Liabilities and equity:
Total current liabilities 32,016 33,860 31,380 24,176
Non-current liabilities 69,081 79,753 59,597 48,301
(1)
Non-current finance debt 21,704 24,479 26,378 32,059
(2)
Total liabilities 122,801 138,092 117,355 104,536
Equity
Share capital (net of share issuance costs) 107,101 107,101 107,101 107,101
Reserves and other comprehensive income (deficit) (39,916 ) (28,518 ) (37,609 ) (37,694 )
(3)
Equity attributable to the shareholders of Petrobras 67,185 78,583 69,492 69,407
Non-controlling interests 463 392 344 405
Total equity 67,648 78,975 69,836 69,812
Total liabilities and equity 190,449 217,067 187,191 174,348
(1) Excludes non-current finance debt.
(2) Excludes current portion of finance debt.
(3) Capital reserve and capital transactions, profit reserves, retained
earnings (losses) and accumulated other comprehensive income (deficit).
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Income Statement Data
For the Six Months For the Year Ended
Ended June 30, December 31,
2024 2023 2023 2022 2021
(1) (1) (1)
(U.S.$ million, except for (U.S.$ million, except for
share and per share data) share and per share data)
Sales 47,235 49,750 102,409 124,474 83,966
revenues
Operating 15,689 20,031 38,033 57,114 37,584
income (loss)
(2)
Net income (loss) attributable 4,438 13,169 24,884 36,623 19,875
to our shareholders
(3)
Weighted average number
of shares outstanding
(4)
:
Common 7,442,231,382 7,442,231,382 7,442,231,382 7,442,231,382 7,442,231,382
Preferred 5,466,560,112 5,601,969,879 5,580,057,862 5,601,969,879 5,601,969,879
Basic and diluted
earnings (losses) per:
Common and 0.34 1.01 1.91 2.81 1.52
preferred shares
Common and 0.68 2.02 3.82 5.62 3.04
preferred ADS
(5)
Operating
income (loss)
(2)
per:
Common and 1.22 1.54 2.92 4.38 2.88
preferred shares
Common and 2.44 3.08 5.84 8.76 5.76
preferred ADS
(5)
Cash dividends
per
(6)
Common 0.19 0.24 1.14 3.31 1.42
shares
Preferred 0.19 0.24 1.14 3.31 1.42
shares
Common 0.38 0.48 2.28 6.62 2.84
ADS
(5)
Preferred 0.38 0.48 2.28 6.62 2.84
ADS
(5)
(1) Petrobras recognized impairment losses of
U.S.$2,680 million in 2023, U.S.$1,315
million in 2022 and impairment reversal
of U.S.$3,190 million in 2021.
(2) This line is equivalent to "income (loss) before
finance income (expense), results in equity-accounted
investments and income taxes" derived from our
audited consolidated financial statements.
(3) Shareholders refer to Petrobras shareholders and
do not include the noncontrolling shareholders.
(4) The total number of shares does not include shares in treasury.
(5) The ratio of ADS to Petrobras's common and
preferred shares is two shares to one ADS.
(6) Interest on capital and/or dividends proposed for the periods. Amounts were based on the
exchange rate prevailing at the date of the approval by Petrobras's board of directors,
except for minimum mandatory dividends, which is based on the closing exchange rate
on the date that Petrobras's audited consolidated financial statements were released.
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CAPITALIZATION
Thefollowing table sets out the consolidated debt and capitalization of
Petrobras as of June 30, 2024,
including accrued interest(i) on an actual basis, which have been derived from
Petrobras's unaudited condensed consolidated interim financial statementsand
(ii) as adjusted to give effect to the issuance of the Notes offered hereby
(including the underwriting discount indicated onthe cover page of this
prospectus supplement), but without giving effect to the application of net
cash proceeds of this offering.
As of June 30, 2024
Actual As Adjusted
(1)
(U.S.$ million)
Lease Liability:
Current portion 7,437
Non-current portion 25,872
Total lease liability 33,309
Finance debt:
Current portion 4,617
Non-current portion 21,704
(1)
Total finance debt 26,321
(2)
Non-controlling interest 463
Petrobras's shareholders' equity 67,185
(3)
Total capitalization 127,278
(1) As adjusted to reflect the issuance of Notes offered hereby (including the underwriting discount indicated on the cover
page of this prospectus supplement), without giving effect to the application of net cash proceeds of this offering.
(2) Of which U.S.$20,486 million is foreign currency denominated
and U.S.$5,835 million is local currency denominated.
(3) Consisting of (a) 7,442,454,142 common shares and (b) 5,602,042,788 preferred shares,
in each case with no par value and in each case which have been authorized and issued.
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DESCRIPTION OF THE NOTES
The following descriptionof the terms of the Notes supplements and modifies
the description of the general terms and provisions of debt securities and the
indentureset forth in the accompanying prospectus, which you should read in
conjunction with this prospectus supplement. In addition, we urgeyou to read
the indenture, including the sixth supplemental indenture in connection with
the Notes, because they will define your rightsas holders of the Notes. If the
description of the terms of the Notes in this prospectus supplement differs in
any way from that in theaccompanying prospectus, you should rely on the
information contained in this prospectus supplement. You may obtain copies of
the indenture,including the sixth supplemental indenture, upon written request
to the trustee or with the SEC at the addresses set forth under "WhereYou Can
Find More Information."
The Sixth Supplemental Indenture
PGF will issue the Notesunder an indenture dated as of August 28, 2018 between
PGF and The Bank of New York Mellon, a New York banking corporation, as
trustee.This indenture will be supplemented by the sixth supplemental
indenture to be dated as of the closing date, among PGF, Petrobras andThe Bank
of New York Mellon, as trustee, which provide the specific terms of the Notes
offered by this prospectus supplement, includinggranting holders rights
against Petrobras under the guaranty.
Whenever we refer to the"indenture" in this prospectus supplement, we are
referring to the indenture dated as of August 28, 2018, as supplementedby the
sixth supplemental indenture.
The Notes
The Notes will be general,senior, unsecured and unsubordinated obligations of
PGF having the following basic terms:
The title of the Notes willbe the % Global Notes due 20 ;
The Notes will:
. be issued in an aggregate principal amount of U.S.$ ;
. mature on , 20 ;
. bear interest at a rate of % per annum from , 2024, until maturity or
early redemption and until all required amounts due in respect of the Notes have been paid;
. be issued in global registered form without interest coupons attached;
. be issued and may be transferred only in principal amounts of U.S.$2,000
and in integral multiples of U.S.$1,000 in excess thereof; and
. be unconditionally guaranteed by Petrobras pursuant to a guaranty described below under
"-Guaranty."
All payments of principal and intereston the Notes will be paid in U.S. dollars;
Interest on the Notes will be paidsemi-annually on and
ofeach year (each of which we refer to as an "interest payment date"),
commencing on ,2025 and the regular record date for any interest
payment date will be the business day preceding that date; and
In the case of amounts not paid byPGF under the indenture and the Notes (or
Petrobras under the guaranty for the Notes), interest will continue to accrue
on such amountsat a default rate equal to 0.5% in excess of the interest rate
on the Notes, from and including the date when such amounts were due andowing
and through and excluding the date of payment of such amounts by PGF or
Petrobras.
Despite the Brazilian government'sownership interest in Petrobras, the
Brazilian government is not responsible in any manner for PGF's obligations
under the Notesor Petrobras's obligations under the guaranty for the Notes.
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Guaranty
Petrobras will unconditionallyand irrevocably guarantee the full and punctual
payment when due, whether at the maturity date of the Notes, or earlier or
later by accelerationor otherwise, of all of PGF's obligations now or
hereafter existing under the indenture and the Notes, whether for principal,
interest,make-whole premium, fees, indemnities, costs, expenses or otherwise.
The guaranty will be unsecured and will rank equally with all ofPetrobras's
other existing and future unsecured and unsubordinated debt including
guaranties previously issued by Petrobras inconnection with prior issuances of
indebtedness. See "Description of the Guaranty."
Depositary with Respect to Global Notes
The Notes will be issuedin global registered form with The Depository Trust
Company ("DTC"), as depositary. For further information in this regard,see
"Clearance and Settlement."
Events of Default
The following events willbe events of default with respect to the Notes:
. PGF does not pay the principal on the Notes within seven calendar days of its due date and the trustee
has not received such amounts from Petrobras under the guaranty by the end of that seven-day period.
. PGF does not pay interest or other amounts, including any additional amounts, on the Notes within 30 calendar days of their
due date and the trustee has not received such amounts from Petrobras under the guaranty by the end of that 30-day period.
. PGF or Petrobras remains in breach of any covenant or any other term in respect
of the Notes issued under the indenture or guaranty for 60 calendar days after
receiving a notice of default stating that it is in breach. The notice must be
sent by either the trustee or holders of 25% of the principal amount of the Notes.
. The maturity of any indebtedness of PGF or Petrobras or a material subsidiary in a total aggregate
principal amount of U.S.$200,000,000 (or its equivalent in another currency) or more is accelerated
in accordance with the terms of that indebtedness, it being understood that prepayment or
redemption by us or a material subsidiary of any indebtedness is not acceleration for this purpose.
. PGF or Petrobras or any material subsidiary stops paying or is generally unable
to pay its debts as they become due, except in the case of a winding-up,
dissolution or liquidation for the purpose of and followed by a consolidation,
spin-off, merger, conveyance or transfer duly approved by the note holders.
. If proceedings are initiated against PGF, Petrobras or any material subsidiary under
any applicable bankruptcy, reorganization, insolvency, moratorium or intervention law
or law with similar effect, or under any other law for the relief of, or relating to,
debtors, and such proceeding is not dismissed or stayed within 90 calendar days.
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. An administrative or other receiver, manager or administrator, or any such or other similar official
is appointed in relation to, or a distress, execution, attachment, sequestration or other process is
levied or put in force against, the whole or a substantial part of the undertakings or assets of PGF
or Petrobras or any material subsidiary and is not discharged or removed within 90 calendar days.
. PGF or Petrobras or any material subsidiary voluntarily commences or consents to proceedings
under any applicable liquidation, bankruptcy, reorganization, insolvency, moratorium or any
other similar laws, PGF or Petrobras or any material subsidiary enters into any composition
or other similar arrangement with our creditors under applicable Brazilian law (such as a
recuperacao judicial or extrajudicial
, which is a type of liquidation agreement).
. PGF or Petrobras or any material subsidiary files an application for the appointment of an
administrative or other receiver, manager or administrator, or any such or other similar official,
in relation to PGF or Petrobras or any material subsidiary, or PGF or Petrobras or any material
subsidiary takes legal action for a readjustment or deferment of any part of its indebtedness.
. An effective resolution is passed, or any authorized action is taken by any court
of competent jurisdiction, directing PGF or Petrobras or any material subsidiary's
winding-up, dissolution or liquidation, except for the purpose of and followed by a
consolidation, merger, conveyance or transfer duly approved by the note holders.
. Any event occurs that under the laws of any relevant jurisdiction has substantially the
same effect as the events referred to in the six immediately preceding paragraphs.
. The Notes, the indenture, the guaranty or any part of those documents cease
to be in full force and effect or binding and enforceable against PGF or
Petrobras, or it becomes unlawful for PGF or Petrobras to perform any material
obligation under any of the foregoing documents to which it is a party.
. PGF or Petrobras contests the enforceability of the Notes, the indenture or the guaranty, or
denies that it has liability under any of the foregoing documents to which it is a party.
. Petrobras fails to retain at least 51% direct or indirect ownership of the
outstanding voting and economic interests (equity or otherwise) of and in PGF.
For purposes of the eventsof default:
. "indebtedness" means any obligation (whether present or future, actual or
contingent and including any guaranty) for the payment or repayment of money
which has been borrowed or raised (including money raised by acceptances
and all leases which, under IFRS, would be a capital lease obligation).
. "material subsidiary" means, as to any person, any subsidiary of such person
which, on any given date of determination accounts for more than 15% of
such person's total consolidated assets (as set forth on such person's most
recent consolidated financial statements prepared in accordance with IFRS).
Covenants
PGF will be subject to thefollowing covenants with respect to the Notes:
Payment of Principaland Interest
PGF will duly and punctuallypay the principal of and any premium and interest
and other amounts (including any additional amounts in the event withholding
and othertaxes are imposed in Brazil or the jurisdiction of incorporation of
PGF) on the Notes in accordance with the Notes and the indenture.
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Maintenance of CorporateExistence
PGF will maintain its corporateexistence and take all reasonable actions to
maintain all rights, privileges and the like necessary or desirable in the
normal conductof business, activities or operations, unless PGF's board of
directors determines that maintaining such rights and privileges isno longer
desirable in the conduct of PGF's business and is not disadvantageous in any
material respect to holders.
Maintenance of Officeor Agency
So long as Notes are outstanding,PGF will maintain an office or agency in the
United States where notices to and demands upon it in respect of the indenture
and the Notesmay be served.
PGF has initially appointedPetrobras America Inc., with offices located at
10350 Richmond Ave., Suite 1400, Houston, TX 77042, as its agent. PGF will not
changethe appointment of the agent without prior written notice to the trustee
and appointing a replacement agent or designating an office,in the United
States.
Ranking
PGF will ensure that theNotes will at all times constitute its general senior,
unsecured and unsubordinated obligations and will rank
pari passu
, withoutany preferences among themselves, with all of its other present and
future unsecured and unsubordinated obligations (other than obligationspreferred
by statute or by operation of law).
Use of Proceeds
PGFintends to use the net proceeds from the sale of the Notes
to purchasethe Old Notes that PGF accepts for purchase in the Tender Offers
announced concurrently with this offering, and the remainder, if any,
for general corporate purposes.
Statement by Managing Directors as to Default
PGF will deliver to the trustee,within 90 calendar days after the end of its
fiscal year, a directors' certificate, stating whether or not to the best
knowledgeof its signers thereof there is an event of default in connection
with the performance and observance of any of the terms, provisionsand
conditions of the indenture or the Notes and, if there is such an event of
default by PGF, specifying all such events of defaultand their nature and
status of which the signers may have knowledge.
Provision of Financial Statements and Reports
In the event that PGF filesany financial statements or reports with the SEC or
publishes or otherwise makes such statements or reports publicly available in
theNetherlands, the United States or elsewhere, PGF will furnish a copy of the
statements or reports to the trustee within 15 calendar daysof the date of
filing or the date the information is published or otherwise made publicly
available. As long as the financial statementsor reports are publicly
available and accessible electronically by the trustee, the filing or
electronic publication of such financialstatements or reports will comply with
PGF's obligation to deliver such statements and reports to the trustee. PGF
will provideto the trustee with prompt written notification at such time that
PGF becomes or ceases to be a reporting company. The trustee will haveno
obligation to determine if and when PGF's financial statements or reports, if
any, are publicity available and accessible electronically.
Along with each such financialstatement or report, if any, PGF will provide a
directors' certificate stating (i) that a review of PGF's activitieshas been
made during the period covered by such financial statements with a view to
determining whether PGF has kept, observed, performedand fulfilled its
covenants and agreements under the indenture; and (ii) that no event of
default, has occurred during that periodor, if one or more have actually
occurred, specifying all those events and what actions have been taken and
will be taken with respectto that event of default.
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Delivery of these reports,information and documents to the trustee is for
informational purposes only and the trustee's receipt of any of those will
notconstitute constructive notice of any information contained in them or
determinable from information contained in them, including PGF'scompliance
with any of its covenants under the indenture (as to which the trustee is
entitled to rely exclusively on directors'certificates).
Appointment to Filla Vacancy in Office of Trustee
PGF, whenever necessary toavoid or fill a vacancy in the office of trustee,
will appoint a successor trustee in the manner provided in the indenture so
that therewill at all times be a trustee with respect to the Notes.
Payments and Paying Agents
PGF will, prior to 3:00 p.m.,New York City time, on the business day preceding
any payment date of the principal of or interest on the Notes or other amounts
(includingadditional amounts), deposit with the trustee a sum sufficient to
pay such principal, interest or other amounts (including additionalamounts) so
becoming due.
All payments on the Noteswill be subject in all cases to any applicable tax,
fiscal or other laws and regulations in any jurisdictions, but without
prejudiceto the provisions of "-Additional Amounts." For the purposes of the
preceding sentence, the phrase "applicabletax, fiscal or other laws and
regulations" will include any obligation on us to withhold or deduct from a
payment pursuant to Section 1471(b) ofthe Internal Revenue Code of 1986, as
amended (the "Code"), or otherwise imposed pursuant to Sections 1471 through
1474 ofthe Code, any regulations thereunder or official interpretations
thereof or any law implementing an intergovernmental approach thereto(collective
ly, "FATCA").
Additional Amounts
Except as provided below,PGF or Petrobras, as applicable, will make all
payments of amounts due under the Notes and the indenture and each other
document enteredinto in connection with the Notes and the indenture without
withholding or deducting any present or future taxes, levies, deductionsor
other governmental charges of any nature imposed by Brazil, the jurisdiction
of PGF's incorporation (currently the Netherlands)or any jurisdiction in which
PGF appoints a paying agent under the indenture, or any political subdivision
of such jurisdictions (the"taxing jurisdictions"). If PGF or Petrobras, as
applicable, is required by law to withhold or deduct any such taxes,
levies,deductions or other governmental charges, PGF or Petrobras, as
applicable, will make such deduction or withholding, make payment of theamount
so withheld to the appropriate governmental authority and pay the holders any
additional amounts necessary to ensure that theyreceive the same amount as
they would have received without such withholding or deduction. For the
avoidance of doubt, the foregoingobligations shall extend to payments under
the guaranty.
All references to principal,premium, if any, and interest in respect of the
Notes will be deemed to refer to any additional amounts which may be payable
as set forthin the indenture or in the Notes.
PGF or Petrobras, as applicable,will not, however, pay any additional amounts
in connection with any tax, levy, deduction or other governmental charge that
is imposeddue to any of the following:
. the holder or any other person that beneficially owns an interest in its Notes (a "beneficial owner") has a connection
with the taxing jurisdiction other than merely holding the Notes or receiving principal or interest payments on the Notes
(such as citizenship, nationality, residence, domicile, or existence of a business, a permanent establishment, a dependent
agent, a place of business or a place of management, present or deemed present within the taxing jurisdiction);
. any tax imposed on, or measured by, net income;
. the holder fails to comply with any certification, identification or other reporting requirements
concerning its or any beneficial owner's nationality, residence, identity or connection with the taxing
jurisdiction, if (i) such compliance is required by applicable law, regulation, administrative practice or
treaty as a precondition to exemption from all or a part of the tax, levy, deduction or other governmental
charge, (ii) the holder is able to comply with such requirements without undue hardship and (iii) at
least 30 calendar days prior to the first payment date with respect to which such requirements under the
applicable law, regulation, administrative practice or treaty will apply, PGF or Petrobras, as applicable,
has notified all holders or the trustee that they will be required to comply with such requirements;
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. the holder fails to present (where presentation is required) its Notes within 30 calendar
days after PGF has made available to the holder a payment under the Notes and the indenture,
provided that
PGF or Petrobras, as applicable, will pay additional amounts which a holder would have been entitled to had the
Notes owned by such holder been presented on any day (including the last day) within such 30 calendar day period;
. a withholding or deduction is required to be made pursuant the Dutch Withholding Tax Act 2021 (
Wet bronbelasting 2021
);
. any estate, inheritance, gift, value added, Financial Transactions Tax ("FTT"), use
or sales taxes or any similar taxes, assessments or other governmental charges; or
. where the holder or any beneficial owner would have been able to avoid the tax, levy, deduction or
other governmental charge by taking reasonable measures available to such holder or beneficial owner.
PGF shall promptly pay whendue any present or future stamp, court or
documentary taxes or any other excise or property taxes, charges or similar
levies that areimposed by a taxing jurisdiction from any payment under the
Notes or under any other document or instrument referred to in the indentureor
from the execution, delivery, enforcement or registration of the Notes or any
other document or instrument referred to in the indenture.PGF shall indemnify
and make whole the holders of the Notes for any present or future stamp, court
or documentary taxes or any otherexcise or property taxes, charges or similar
levies payable by PGF as provided in this paragraph paid by such holder. As
provided in"-Payments and Paying Agents," all payments in respect of the Notes
will be made subject to any withholding or deductionrequired pursuant to
FATCA, and we will not be required to pay any additional amounts on account of
any such deduction or withholdingrequired pursuant to FATCA.
Negative Pledge
So long as any Notes remainoutstanding, PGF will not create or permit any
lien, other than a PGF permitted lien, on any of its assets to secure (i) any
ofits indebtedness or (ii) the indebtedness of any other person, unless PGF
contemporaneously creates or permits such lien to secureequally and ratably
its obligations under the Notes as is duly approved by a resolution of the
holders of the Notes in accordance withthe indenture. In addition, PGF will
not allow any of its material subsidiaries, if any, to create or permit any
lien, other than a PGFpermitted lien, on any of its assets to secure (i) any
of its indebtedness; (ii) any of the material subsidiary's indebtednessor
(iii) the indebtedness of any other person, unless it contemporaneously
creates or permits the lien to secure equally and ratablyits obligations under
the Notes and the indenture or PGF provides such other security for the Notes
and the indenture as is duly approvedby a resolution of the holders of the
Notes in accordance with such indenture. This covenant is subject to a number
of important exceptions,including an exception that permits PGF to grant liens
in respect of indebtedness the principal amount of which, in the aggregate,
togetherwith all other liens not otherwise described in a specific exception,
does not exceed 20% of PGF's consolidated total assets (asdetermined in
accordance with IFRS) at any time as at which PGF's balance sheet is prepared
and published in accordance with applicablelaw.
Limitation on Consolidation, Merger, Saleor Conveyance
PGF will not, in one or aseries of transactions, consolidate or amalgamate
with or merge into any corporation or convey, lease, spin-off or transfer
substantiallyall of its properties, assets or revenues to any person or entity
(other than a direct or indirect subsidiary of Petrobras) or permitany person
(other than a direct or indirect subsidiary of PGF) to merge with or into it
unless such consolidation, amalgamation, merger,lease, spin-off or transfer of
properties, assets or revenues does not violate any provision of Dutch
financial regulatory laws and:
. either PGF is the continuing entity or the person (the "successor company") formed by the consolidation or into which
PGF is merged or that acquired (through a transfer of assets, a spin-off or otherwise) or leased the property or assets
of PGF will assume (jointly and severally with PGF unless PGF will have ceased to exist as a result of that merger,
consolidation or amalgamation), by a supplemental indenture, all of PGF's obligations under the indenture and the Notes;
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. the successor company (jointly and severally with PGF unless PGF will have ceased to exist as part of the
merger, consolidation or amalgamation) agrees to indemnify each holder against any tax, assessment or
governmental charge thereafter imposed on the holder solely as a consequence of the consolidation, merger,
conveyance, spin-off, transfer or lease with respect to the payment of principal of, or interest on, the Notes;
. immediately after giving effect to the transaction, no event of default, and no default has occurred and is continuing;
. PGF has delivered to the trustee a directors' certificate and an opinion of counsel,
each stating that the transaction, and each supplemental indenture relating to the
transaction, comply with the terms of the indenture, and that all conditions precedent
provided for in such indenture and relating to the transaction have been complied with; and
. PGF has delivered notice of any such transaction to the trustee.
Notwithstanding anythingto the contrary in the foregoing, so long as no
default or event of default under the indenture or the Notes will have
occurred and becontinuing at the time of the proposed transaction or would
result from the transaction:
. PGF may merge, amalgamate or consolidate with or into, or convey, transfer,
spin-off, lease or otherwise dispose of all or substantially all
of its properties, assets or revenues to a direct or indirect subsidiary
of PGF or Petrobras in cases when PGF is the surviving entity in
the transaction and the transaction would not have a material adverse
effect on PGF and its subsidiaries taken as a whole, it being understood
that if PGF is not the surviving entity, PGF will be required to
comply with the requirements set forth in the previous paragraph; or
. any direct or indirect subsidiary of PGF may merge or consolidate with or into, or
convey, transfer, spin-off, lease or otherwise dispose of assets to, any person (other
than PGF or any of its subsidiaries or affiliates) in cases when the transaction would
not have a material adverse effect on PGF and its subsidiaries taken as a whole; or
. any direct or indirect subsidiary of PGF may merge or consolidate with or into, or convey, transfer, spin-off,
lease or otherwise dispose of assets to, any other direct or indirect subsidiary of PGF or Petrobras; or
. any direct or indirect subsidiary of PGF may liquidate or dissolve if PGF determines in good
faith that the liquidation or dissolution is in the best interests of Petrobras, and would
not result in a material adverse effect on PGF and its subsidiaries taken as a whole and if
the liquidation or dissolution is part of a corporate reorganization of PGF or Petrobras.
PGF may omit to comply withany term, provision or condition set forth in
certain covenants applicable to the Notes or any term, provision or condition
of the indenture,if before the time for the compliance the holders of at least
a majority of the principal amount of the outstanding Notes waive the
compliance,but no waiver can operate except to the extent expressly waived,
and, until a waiver becomes effective, PGF's obligations and theduties of the
trustee in respect of any such term, provision or condition will remain in
full force and effect.
As used above, the followingterms have the meanings set forth below:
"indebtedness"means any obligation (whether present or future, actual or
contingent and including any guaranty) for the payment or repayment of
moneywhich has been borrowed or raised (including money raised by acceptances
and all leases which, under IFRS, would be a capital lease obligation).
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A "guaranty"means an obligation of a person to pay the indebtedness of another
person including, without limitation:
. an obligation to pay or purchase such indebtedness;
. an obligation to lend money or to purchase or subscribe for shares or other securities or to
purchase assets or services in order to provide funds for the payment of such indebtedness;
. an indemnity against the consequences of a default in the payment of such indebtedness; or
. any other agreement to be responsible for such indebtedness.
A "lien" meansany mortgage, pledge, lien, hypothecation, security interest or
other charge or encumbrance on any property or asset including, withoutlimitatio
n, any equivalent created or arising under applicable law.
A "PGF permitted lien"means any:
(a) lien arising by operation of law, such as merchants', maritime or other similar liens
arising in PGF's ordinary course of business or that of any subsidiary or lien
in respect of taxes, assessments or other governmental charges that are not yet
delinquent or that are being contested in good faith by appropriate proceedings;
(b) lien arising from PGF's obligations under performance bonds or surety bonds and appeal bonds or similar
obligations incurred in the ordinary course of business and consistent with PGF's past practice;
(c) lien arising in the ordinary course of business in connection with
indebtedness maturing not more than one year after the date on
which that indebtedness was originally incurred and which is related
to the financing of export, import or other trade transactions;
(d) lien granted upon or with respect to any assets hereafter acquired
by PGF or any subsidiary to secure the acquisition costs of those
assets or to secure indebtedness incurred solely for the purpose
of financing the acquisition of those assets, including any lien
existing at the time of the acquisition of those assets, so long as the
maximum amount so secured does not exceed the aggregate acquisition
costs of all such assets or the aggregate indebtedness incurred
solely for the acquisition of those assets, as the case may be;
(e) lien granted in connection with indebtedness of a wholly-owned subsidiary owing to PGF or another wholly-owned subsidiary;
(f) lien existing on any asset or on any stock of any subsidiary prior to the acquisition thereof by
PGF or any subsidiary, so long as the lien is not created in anticipation of that acquisition;
(g) lien existing as of the date of the original issuance of the Notes;
(h) lien resulting from the indenture or the guaranty, if any;
(i) lien incurred in connection with the issuance of debt or similar securities of a type comparable to
those already issued by PGF, on amounts of cash or cash equivalents on deposit in any reserve or
similar account to pay interest on those securities for a period of up to 24 months as required by
any rating agency as a condition to the rating agency rating those securities as investment grade;
(j) lien granted or incurred to secure any extension, renewal, refinancing,
refunding or exchange (or successive extensions, renewals, refinancings,
refundings or exchanges), in whole or in part, of or for any indebtedness
secured by liens referred to in paragraphs (a) through (i) above
(but not paragraph (c)), so long as the lien does not extend to any
other property, the principal amount of the indebtedness secured by the
lien is not increased, and in the case of paragraphs (a), (b) and (f),
the obligees meet the requirements of the applicable paragraph; and
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(k) lien in respect of indebtedness the principal amount of which in the aggregate, together with all other
liens not otherwise qualifying as PGF permitted liens pursuant to another part of this definition of PGF
permitted liens, does not exceed 20% of PGF's consolidated total assets (as determined in accordance with IFRS)
at any date as at which PGF's balance sheet is prepared and published in accordance with applicable law.
A "wholly-owned subsidiary"means, with respect to any corporate entity, any
person of which 100% of the outstanding capital stock (other than qualifying
shares,if any) having by its terms ordinary voting power (not dependent on the
happening of a contingency) to elect the board of directors (orequivalent
controlling governing body) of that person, is at the time owned or controlled
directly or indirectly by that corporate entity,by one or more wholly-owned
subsidiaries of that corporate entity or by that corporate entity and one or
more wholly-owned subsidiaries.
Notices
For so long as Notes in globalform are outstanding, notices to be given to
holders will be given to the Trustee in accordance with its applicable
policies in effectfrom time to time. If Notes are issued in individual
definitive form, notices to be given to holders will be deemed to have been
givenupon the mailing by first class mail of such notices to holders of the
Notes at their registered addresses as they appear in the registrar'srecords.
Optional Redemption
PGF will not be permittedto redeem the Notes before their stated maturity,
except as set forth below. The Notes will not be entitled to the benefit of
any sinkingfund (we will not deposit money on a regular basis into any
separate account to repay your Notes). In addition, you will not be entitledto
require us to repurchase your Notes from you before the stated maturity.
On and after the redemptiondate, interest will cease to accrue on the Notes or
any portion of the Notes called for redemption (unless we default in the
paymentof the redemption price and accrued and unpaid interest). On or before
the business day prior to any redemption date, we will depositwith the trustee
money sufficient to pay the redemption price of and (unless the redemption
date shall be an interest payment date) accruedand unpaid interest to the
redemption date on the Notes to be redeemed on such date. If less than all of
the Notes are to be redeemed,the Notes to be redeemed shall be selected by the
trustee by such method as set forth in the indenture.
Optional Redemptionat Par
PGF will have the right atour option to redeem the Notes, in whole or in part,
at any time or from time to time on or after , 20 ( months prior to the
scheduledmaturity date of the Notes) (the "Par Call Date"), on at least 10
days' but not more than 60 days' notice, ata redemption price equal to 100% of
the principal amount of the Notes to be redeemed plus accrued and unpaid
interest on the principalamount of such Notes to the date of redemption.
Optional RedemptionWith "Make-Whole" Amount for the Notes
PGF will have the right atour option to redeem the Notes, in whole or in part,
at any time or from time to time prior to the Par Call Date, on at least 10
days'but not more than 60 days' notice, at a redemption price equal to the
greater of (i) 100% of the principal amount of suchNotes and (ii) the sum of
the present values of each remaining scheduled payment of principal and
interest thereon that would bedue after the redemption date as if the Notes
were redeemed on the Par Call Date discounted to the redemption date on a
semiannual basis(assuming a 360-day year consisting of twelve 30-day months)
at the Treasury Rate plus basis points, less interest accrued to the dateof
redemption, plus in each case accrued and unpaid interest on the principal
amount of such Notes to the date of redemption.
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A redemption notice may atPGF's option be subject to the satisfaction of one
or more conditions precedent, and such notice may be rescinded or the
redemptiondate delayed in the event that any or all such conditions shall not
have been satisfied by the redemption date.
"Treasury Rate"means, with respect to any redemption date, the yield
determined by PGF in accordance with the following two paragraphs.
The Treasury Rate shall bedetermined by PGF after 4:15 p.m., New York City
time (or after such time as yields on U.S. government securities are posted
daily bythe Board of Governors of the Federal Reserve System), on the third
business day preceding the redemption date based upon the yield oryields for
the most recent day that appear after such time on such day in the most recent
statistical release published by the Boardof Governors of the Federal Reserve
System designated as "Selected Interest Rates (Daily) - H.15" (or any
successor designationor publication) ("H.15") under the caption "U.S.
government securities-Treasury constant maturities-Nominal"(or any successor
caption or heading). In determining the Treasury Rate, PGF shall select, as
applicable: (1) the yield for theTreasury constant maturity on H.15 exactly
equal to the period from the redemption date to the Par Call Date (the
"Remaining Life");or (2) if there is no such Treasury constant maturity on
H.15 exactly equal to the Remaining Life, the two yields - one yieldcorrespondin
g to the Treasury constant maturity on H.15 immediately shorter than the
Remaining Life and one yield corresponding to theTreasury constant maturity on
H.15 immediately longer than the Remaining Life - and shall interpolate to the
Par Call Date on astraight-line basis (using the actual number of days) using
such yields and rounding the result to three decimal places; or (3) ifthere is
no such Treasury constant maturity on H.15 shorter than or longer than the
Remaining Life, the yield for the single Treasuryconstant maturity on H.15
closest to the Remaining Life. For purposes of this paragraph, the applicable
Treasury constant maturity ormaturities on H.15 shall be deemed to have a
maturity date equal to the relevant number of months or years, as applicable,
of such Treasuryconstant maturity from the redemption date.
If on the third businessday preceding the redemption date H.15 or any
successor designation or publication is no longer published, PGF shall
calculate the TreasuryRate based on the rate per annum equal to the
semi-annual equivalent yield to maturity at 11:00 a.m., New York City time, on
the secondbusiness day preceding such redemption date of the United States
Treasury security maturing on, or with a maturity that is closest to,the Par
Call Date, as applicable. If there is no United States Treasury security
maturing on the Par Call Date but there are two or moreUnited States Treasury
securities with a maturity date equally distant from the Par Call Date, one
with a maturity date preceding thePar Call Date and one with a maturity date
following the Par Call Date, PGF shall select the United States Treasury
security with a maturitydate preceding the Par Call Date. If there are two or
more United States Treasury securities maturing on the Par Call Date or two
ormore United States Treasury securities meeting the criteria of the preceding
sentence, PGF shall select from among these two or moreUnited States Treasury
securities the United States Treasury security that is trading closest to par
based upon the average of the bidand asked prices for such United States
Treasury securities at 11:00 a.m., New York City time. In determining the
Treasury Rate in accordancewith the terms of this paragraph, the semi-annual
yield to maturity of the applicable United States Treasury security shall be
basedupon the average of the bid and asked prices (expressed as a percentage
of principal amount) at 11:00 a.m., New York City time, of suchUnited States
Treasury security, and rounded to three decimal places. PGF's actions and
determinations in determining the redemptionprice shall be conclusive and
binding for all purposes, absent manifest error.
On and after the redemptiondate, interest will cease to accrue on the Notes or
any portion of the Notes called for redemption (unless we default in the
paymentof the redemption price and accrued and unpaid interest). On or before
the redemption date, we will deposit with the trustee money sufficientto pay
the redemption price of and (unless the redemption date shall be an interest
payment date) accrued and unpaid interest to theredemption date on the Notes
to be redeemed on such date. If less than all of the Notes are to be redeemed,
the Notes to be redeemedshall be selected by the trustee by such method as set
forth in the indenture.
Redemption for Taxation Reasons
We have the option, subjectto certain conditions, to redeem the Notes in whole
at their principal amount, plus accrued and unpaid interest, if any, to the
dateof redemption, if and when, as a result of a change in, execution of, or
amendment to, any laws or treaties or the official entry intoeffect,
application or interpretation of any laws or treaties, we would be required to
pay additional amounts related to the deductionof certain withholding taxes in
respect of certain payments on the Notes.
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The Optional Tax Redemptionset forth in the accompanying prospectus shall
apply with the reincorporation of PGF being treated as the adoption of a
successor entity.Such redemption shall not be available if the reincorporation
was performed in anticipation of a change in, execution of or amendmentto any
laws or treaties or the official application or interpretation of any laws or
treaties in such new jurisdiction of incorporationthat would result in the
obligation to pay additional amounts.
Amendments
See "Description of Debt Securities-SpecialSituations-Modification and Waiver"
in the accompanying prospectus.
Further Issuances
The indenture by its termsdoes not limit the aggregate principal amount of
securities that may be issued under it and permits the issuance, from time to
time,of additional notes (also referred to as add-on Notes) of the same series
as those offered under this prospectus supplement. The abilityto issue add-on
Notes is subject to several requirements, however, including that (i) no event
of default under the indenture orevent that with the passage of time or other
action may become an event of default (such event being a "default") will
haveoccurred and then be continuing or will occur as a result of that
additional issuance, (ii) the add-on Notes will rank
pari passu
and have equivalent terms and benefits as the Notes offered under this
prospectus supplement except for the price to the public andthe issue date and
(iii) any add on Notes shall be issued under a separate CUSIP or ISIN number
unless the add on Notes are issuedpursuant to a "qualified reopening" of the
original series, are otherwise treated as part of the same "issue"of debt
instruments as the original series or are issued with less than a
de minimis
amount of original discount, in each casefor U.S. federal income tax purposes.
Any add-on Notes with respect to the Notes will be part of the same series as
such Notes that PGFis currently offering and the holders will vote on all
matters in relation to the Notes as a single series.
Covenant Defeasance
Any restrictive covenantsof the indenture may be defeased as described in the
accompanying prospectus.
Conversion
The Notes will not be convertibleinto, or exchangeable for, any other
securities.
Listing
PGF intends to apply to havethe Notes approved for listing on the NYSE.
Currency Rate Indemnity
PGF has agreed that, if ajudgment or order made by any court for the payment
of any amount in respect of any Notes is expressed in a currency (the
"judgmentcurrency") other than U.S. dollars (the "denomination currency"), PGF
will indemnify the relevant holder and the trusteeagainst any deficiency
arising from any variation in rates of exchange between the date as of which
the denomination currency is notionallyconverted into the judgment currency
for the purposes of the judgment or order and the date of actual payment. This
indemnity will constitutea separate and independent obligation from PGF's
other obligations under the indenture, will give rise to a separate and
independentcause of action, will apply irrespective of any indulgence granted
from time to time and will continue in full force and effect notwithstandingany
judgment or order for a liquidated sum or sums in respect of amounts due in
respect of the Note or under any judgment or order describedabove.
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The Trustee, Paying Agent and Transfer Agent
The Bank of New York Mellon,a New York banking corporation, is the trustee
under the indenture and has been appointed by PGF as registrar, paying agent
and transferagent with respect to the Notes. The address of the trustee is 240
Greenwich Street, 7E, New York, New York 10286. PGF will at all timesmaintain
a paying agent in New York City until the Notes are paid.
Any corporation or associationinto which the trustee or any agent named above
may be merged or converted or with which it may be consolidated, or any
corporation orassociation resulting from any merger, conversion or
consolidation to which the trustee or any agent shall be a party, or any
corporationor association to which all or substantially all of the corporate
trust business of the trustee or any agent may be sold or otherwisetransferred,
shall be the successor trustee or relevant agent, as applicable, hereunder
without any further act.
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DESCRIPTION OF THE GUARANTY
General
In connection with the executionand delivery of the sixth supplemental
indenture and the Notes offered by this prospectus supplement, Petrobras will
guarantee the Notes(the "guaranty") for the benefit of the holders.
The guaranty will providethat Petrobras will unconditionally and irrevocably
guarantee the Notes on the terms and conditions described below.
The following summary describesthe material provisions of the guaranty. You
should read the more detailed provisions of the guaranty, including the
defined terms, forprovisions that may be important to you. This summary is
subject to, and qualified in its entirety by reference to, the provisions
ofthe guaranty.
Despite the Brazilian government'sownership interest in Petrobras, the
Brazilian government is not responsible in any manner for PGF's obligations
under the Notesor Petrobras's obligations under the guaranty.
Ranking
The obligations of Petrobrasunder the guaranty will constitute general
unsecured obligations of Petrobras which at all times will rank
pari passu
, withoutany preferences among themselves, with all other senior unsecured
obligations of Petrobras that are not, by their terms, expressly subordinatedin
right of payment to the obligations of Petrobras under the guaranty.
In addition, Petrobras'sobligations under the guaranty of the Notes rank, and
will rank,
pari passu
with its obligations in respect of outstanding andfuture guaranties of
indebtedness issued by PGF.
Nature of Obligation
Petrobras will unconditionallyand irrevocably guarantee (by way of a first
demand guarantee) the full and punctual payment when due, whether at the
maturity date ofthe Notes, or earlier or later by acceleration or otherwise,
of all of PGF's obligations now or hereafter existing under the indentureand
the Notes, whether for principal, interest, make-whole premium, fees,
indemnities, costs, expenses, tax payments or otherwise (suchobligations being
referred to as the "guaranteed obligations").
The obligation of Petrobrasto pay amounts in respect of the guaranteed
obligations will be absolute and unconditional (thus waiving any benefits of
order set forthunder Brazilian law, including those established in articles
827, 834, 835, 838 and 839 of the Brazilian Civil Code, under article
794,caput, of the Brazilian Civil Procedure Code) upon failure of PGF to make,
at the maturity date of the Notes or earlier upon any accelerationor otherwise
of the Notes in accordance with the terms of the indenture, any payment in
respect of principal, interest or other amountsdue under the indenture and the
Notes on the date any such payment is due. If PGF fails to make payments to
the trustee in respect ofthe guaranteed obligations, Petrobras will, upon
notice from the trustee, immediately pay to the trustee such amount of the
guaranteedobligations payable under the indenture and the Notes. All amounts
payable by Petrobras under the guaranty will be payable in U.S. dollarsand in
immediately available funds to the trustee. Petrobras will not be relieved of
its obligations under any guaranty unless and untilthe trustee receives all
amounts required to be paid by Petrobras under such guaranty (and any related
event of default under the indenturehas been cured), including payment of the
total non-payment overdue interest.
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Events of Default
There are no events of defaultunder the guaranty. The sixth supplemental
indenture, however, contains events of default relating to Petrobras that may
trigger an eventof default and acceleration of the Notes. See "Description of
the Notes―Events of Default." Upon any such acceleration(including any
acceleration arising out of the insolvency or similar events relating to
Petrobras), if PGF fails to pay all amounts thendue under the Notes and the
indenture, Petrobras will be obligated to make such payments pursuant to the
guaranty.
Covenants
For so long as any of theNotes are outstanding and Petrobras has obligations
under the guaranty, Petrobras will, and will cause each of its subsidiaries,
as applicable,to comply with the terms of the following covenants:
Performance Obligationsunder the Guaranty and Indenture
Petrobras will pay all amountsowed by it and comply with all its other
obligations under the terms of the guaranty and the indenture in accordance
with the terms ofthose agreements.
Maintenance of Corporate Existence
Petrobras will maintain ineffect its corporate existence and all necessary
registrations and take all actions to maintain all rights, privileges, titles
to property,franchises, concessions and the like necessary or desirable in the
normal conduct of its business, activities or operations. However,this
covenant will not require Petrobras to maintain any such right, privilege,
title to property or franchise if the failure to do sodoes not, and will not,
have a material adverse effect on Petrobras taken as a whole or have a
materially adverse effect on the rightsof the holders of the Notes.
Maintenance of Office or Agency
So long any Notes are outstanding,Petrobras will maintain an office or agency
in the United States where notices to and demands upon Petrobras in respect of
the guarantyfor such Notes may be served.
Petrobras has initially appointedPetrobras America Inc., with offices located
at 10350 Richmond Ave., Suite 1400, Houston, TX 77042, as its agent. Petrobras
willnot change the appointment of the agent without prior written notice to
the trustee and appointing a replacement agent or designatingan office, in the
United States.
Ranking
Petrobras will ensure atall times that its obligations under the guaranty will
be its general senior unsecured and unsubordinated obligations and will rank
paripassu
, with all other present and future senior unsecured and unsubordinated
obligations of Petrobras (other than obligations preferredby statute or by
operation of law) that are not, by their terms, expressly subordinated in
right of payment to the obligations of Petrobrasunder the guaranty.
Provision of Financial Statements and Reports
Petrobras will provide tothe trustee, in English or accompanied by a certified
English translation thereof, (i) within 90 calendar days after the end ofeach
fiscal quarter (other than the fourth quarter), its unaudited and consolidated
balance sheet and statement of income calculatedin accordance with IFRS, and
(ii) within 120 calendar days after the end of each fiscal year, its audited
and consolidated balancesheet and statement of income calculated in accordance
with IFRS. As long as the financial statements or reports are publicly
availableand accessible electronically by the trustee, the filing or
electronic publication of such financial statements or reports will complywith
the Petrobras's obligation to deliver such statements and reports to the
trustee. The trustee will have no obligation to determineif and when
Petrobras's financial statements or reports, if any, are publicity available
and accessible electronically.
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Along with each such financialstatement or report, if any, Petrobras will
provide an officers' certificate stating that a review of Petrobras's and
PGF'sactivities has been made during the period covered by such financial
statements with a view to determining whether Petrobras and PGFhave kept,
observed, performed and fulfilled their covenants and agreements under the
guaranty and the indenture, as applicable, andthat no event of default has
occurred during such period.
In addition, whether or notPetrobras is required to file reports with the SEC,
Petrobras will file with the SEC and deliver to the trustee (for redelivery to
allholders of the Notes, upon written request, of the Notes) all reports and
other information it would be required to file with the SECunder the Exchange
Act if it were subject to those regulations. If the SEC does not permit the
filing described above, Petrobras willprovide annual and interim reports and
other information to the trustee within the same time periods that would be
applicable if Petrobraswere required and permitted to file these reports with
the SEC.
Delivery of these reports,information and documents to the trustee is for
informational purposes only and the trustee's receipt of any of those shall
notconstitute constructive notice of any information contained in them or
determinable from information contained therein, including Petrobras'scompliance
with any of its covenants in the guaranty (as to which the trustee is
entitled to rely exclusively on officer's certificates).
Negative Pledge
So long as any Notes remainoutstanding, Petrobras will not create or permit
any lien, other than a Petrobras permitted lien, on any of its assets to
secure (i) anyof its indebtedness or (ii) the indebtedness of any other
person, unless Petrobras contemporaneously creates or permits the liento
secure equally and ratably its obligations under the guaranty or Petrobras
provides other security for its obligations under the guarantyand the
indenture as is duly approved by a resolution of the holders of Notes in
accordance with the indenture. In addition, Petrobraswill not allow any of its
material subsidiaries, if any, to create or permit any lien, other than a
Petrobras permitted lien, on anyof Petrobras's assets to secure (i) any of its
indebtedness; (ii) any of the material subsidiary's indebtednessor (iii) the
indebtedness of any other person, unless Petrobras contemporaneously creates
or permits the lien to secure equallyand ratably Petrobras's obligations under
the guaranty and the indenture or Petrobras provides such other security for
its obligationsunder the guaranty and the indenture as is duly approved by a
resolution of the holders of the Notes in accordance with the indenture.
As used in this "NegativePledge" section, the following terms have the
respective meanings set forth below:
A "guaranty"means an obligation of a person to pay the indebtedness of another
person including without limitation:
. an obligation to pay or purchase such indebtedness;
. an obligation to lend money, to purchase or subscribe for shares or other securities or to
purchase assets or services in order to provide funds for the payment of such indebtedness;
. an indemnity against the consequences of a default in the payment of such indebtedness; or
. any other agreement to be responsible for such indebtedness.
"Indebtedness"means any obligation (whether present or future, actual or
contingent and including, without limitation, any guaranty) for the paymentor
repayment of money which has been borrowed or raised (including money raised
by acceptances and all leases which, under generallyaccepted accounting
principles in the country of incorporation of the relevant obligor, would
constitute a capital lease obligation).
A "lien" meansany mortgage, pledge, lien, hypothecation, security interest or
other charge or encumbrance on any property or asset including, withoutlimitatio
n, any equivalent created or arising under applicable law.
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A "project financing"of any project means the incurrence of indebtedness
relating to the exploration, development, expansion, renovation, upgrade or
othermodification or construction of such project pursuant to which the
providers of such indebtedness or any trustee or other intermediaryon their
behalf or beneficiaries designated by any such provider, trustee or other
intermediary are granted security over one or morequalifying assets relating
to such project for repayment of principal, premium and interest or any other
amount in respect of such indebtedness.
A "qualifying asset"in relation to any project means:
. any concession, authorization or other legal right granted by
any governmental authority to Petrobras or any of Petrobras's
subsidiaries, or any consortium or other venture in which Petrobras
or any subsidiary has any ownership or other similar interest;
. any drilling or other rig, any drilling or production platform,
pipeline, marine vessel, vehicle or other equipment or any refinery,
oil or gas field, processing plant, real property (whether leased
or owned), right of way or plant or other fixtures or equipment;
. any revenues or claims that arise from the operation, failure to meet specifications, failure
to complete, exploitation, sale, loss or damage to, such concession, authorization or other
legal right or such drilling or other rig, drilling or production platform, pipeline, marine
vessel, vehicle or other equipment or refinery, oil or gas field, processing plant, real
property, right of way, plant or other fixtures or equipment or any contract or agreement
relating to any of the foregoing or the project financing of any of the foregoing (including
insurance policies, credit support arrangements and other similar contracts) or any rights under
any performance bond, letter of credit or similar instrument issued in connection therewith;
. any oil, gas, petrochemical or other hydrocarbon-based products produced or processed by such project, including any
receivables or contract rights arising therefrom or relating thereto and any such product (and such receivables or contract
rights) produced or processed by other projects, fields or assets to which the lenders providing the project financing
required, as a condition therefore, recourse as security in addition to that produced or processed by such project; and
. shares or other ownership interest in, and any subordinated debt rights
owing to Petrobras by, a special purpose company formed solely for the
development of a project, and whose principal assets and business are constituted
by such project and whose liabilities solely relate to such project.
A "Petrobras permittedlien" means a:
(a) lien granted in respect of indebtedness owed to the Brazilian government,
Banco Nacional de Desenvolvimento Economico e Social
or any official government agency or department of Brazil or of any state or region of Brazil;
(b) lien arising by operation of law, such as merchants', maritime or other similar liens
arising in Petrobras's ordinary course of business or that of any subsidiary or
lien in respect of taxes, assessments or other governmental charges that are not yet
delinquent or that are being contested in good faith by appropriate proceedings;
(c) lien arising from Petrobras's obligations under performance bonds or surety bonds and appeal bonds or similar
obligations incurred in the ordinary course of business and consistent with Petrobras's past practice;
(d) lien arising in the ordinary course of business in connection with
indebtedness maturing not more than one year after the date on
which that indebtedness was originally incurred and which is related
to the financing of export, import or other trade transactions;
(e) lien granted upon or with respect to any assets hereafter acquired
by Petrobras or any subsidiary to secure the acquisition costs of
those assets or to secure indebtedness incurred solely for the purpose
of financing the acquisition of those assets, including any lien
existing at the time of the acquisition of those assets, so long as the
maximum amount so secured will not exceed the aggregate acquisition
costs of all such assets or the aggregate indebtedness incurred
solely for the acquisition of those assets, as the case may be;
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(f) lien granted in connection with the indebtedness of a wholly-owned
subsidiary owing to Petrobras or another wholly-owned subsidiary;
(g) lien existing on any asset or on any stock of any subsidiary prior to its acquisition by Petrobras
or any subsidiary so long as that lien is not created in anticipation of that acquisition;
(h) lien over any qualifying asset relating to a project financed by, and securing
indebtedness incurred in connection with, the project financing of that project by
Petrobras, any of Petrobras's subsidiaries or any consortium or other venture in
which Petrobras or any subsidiary has any ownership or other similar interest;
(i) lien existing as of the date of the original issuance of the Notes;
(j) lien resulting from the indenture or the guaranty, if any;
(k) lien incurred in connection with the issuance of debt or similar securities of a type comparable to those already issued
by Petrobras, on amounts of cash or cash equivalents on deposit in any reserve or similar account to pay interest
on such securities for a period of up to 24 months as required by any rating agency as a condition to such rating
agency rating such securities investment grade, or as is otherwise consistent with market conditions at such time;
(l) lien granted or incurred to secure any
extension, renewal, refinancing, refunding
or exchange (or successive extensions,
renewals, refinancings, refundings
or exchanges), in whole or in part, of
or for any indebtedness secured by any
lien referred to in paragraphs (a) through
(k) above (but not paragraph (d)),
provided that
such lien does not extend to any other property, the principal
amount of the indebtedness secured by the lien is not increased,
and in the case of paragraphs (a), (b), (c) and (g), the obligees
meet the requirements of that paragraph, and in the case of
paragraph (h), the indebtedness is incurred in connection with a
project financing by Petrobras, any of Petrobras's subsidiaries
or any consortium or other venture in which Petrobras or any
subsidiary have any ownership or other similar interest; and
(m) lien in respect of indebtedness the principal amount of which in the aggregate, together with all liens not otherwise
qualifying as Petrobras permitted liens pursuant to another part of this definition of Petrobras permitted
liens, does not exceed 20% of Petrobras's consolidated total assets (as determined in accordance with IFRS) at
any date as at which Petrobras's balance sheet is prepared and published in accordance with applicable law.
A "wholly-owned subsidiary"means, with respect to any corporate entity, any
person of which 100% of the outstanding capital stock (other than qualifying
shares,if any) having by its terms ordinary voting power (not dependent on the
happening of a contingency) to elect the board of directors (orequivalent
controlling governing body) of that person is at the time owned or controlled
directly or indirectly by that corporate entity,by one or more wholly-owned
subsidiaries of that corporate entity or by that corporate entity and one or
more wholly-owned subsidiaries.
A "material subsidiary"means a subsidiary of Petrobras which on any given date
of determination accounts for more than 15% of Petrobras's total consolidatedass
ets (as set forth on Petrobras's most recent balance sheet prepared in
accordance with IFRS).
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Limitation on Consolidation,Merger, Sale or Conveyance
Petrobras will not, in oneor a series of transactions, consolidate or
amalgamate with or merge into any corporation or convey, lease, spin-off or
transfer substantiallyall of its properties, assets or revenues to any person
or entity (other than a direct or indirect subsidiary of Petrobras) or
permitany person (other than a direct or indirect subsidiary of Petrobras) to
merge with or into it unless:
. either Petrobras is the continuing entity or the person (the "successor company") formed by such consolidation or into which
Petrobras is merged or that acquired (through a transfer of assets, a spin-off or otherwise) or leased such property or assets
of Petrobras will assume (jointly and severally with Petrobras unless Petrobras will have ceased to exist as a result of such
merger, consolidation or amalgamation), by an amendment to the guaranty, all of Petrobras's obligations under such guaranty;
. the successor company (jointly and severally with Petrobras unless Petrobras will have ceased to exist as part
of such merger, consolidation or amalgamation) agrees to indemnify each holder against any tax, assessment or
governmental charge thereafter imposed on such holder solely as a consequence of such consolidation, merger,
conveyance, spin-off, transfer or lease with respect to the payment of principal of, or interest on, the Notes;
. immediately after giving effect to the transaction, no event of default, and no default has occurred and is continuing; and
. Petrobras has delivered to the trustee an officers' certificate and an opinion of counsel, each stating
that that such merger, consolidation, sale, spin-off, transfer or other conveyance or disposition
and the amendment to the guaranty comply with the terms of the guaranty and that all conditions
precedent provided for in such guaranty and relating to such transaction have been complied with.
Notwithstanding anythingto the contrary in the foregoing, so long as no
default or event of default under the indenture or the Notes has occurred and
is continuingat the time of such proposed transaction or would result
therefrom and Petrobras has delivered notice of any such transaction to
thetrustee:
. Petrobras may merge, amalgamate or consolidate with or into, or convey,
transfer, spin-off, lease or otherwise dispose of all or substantially all
of its properties, assets or revenues to a direct or indirect subsidiary
of Petrobras in cases when Petrobras is the surviving entity in such
transaction and such transaction would not have a material adverse effect
on Petrobras and its subsidiaries taken as whole, it being understood
that if Petrobras is not the surviving entity, Petrobras will be required
to comply with the requirements set forth in the previous paragraph;
. any direct or indirect subsidiary of Petrobras may merge or consolidate with or into, or
convey, transfer, spin-off, lease or otherwise dispose of assets to, any person (other than
Petrobras or any of its subsidiaries or affiliates) in cases when such transaction would
not have a material adverse effect on Petrobras and its subsidiaries taken as a whole;
. any direct or indirect subsidiary of Petrobras may merge or consolidate with or into, or convey, transfer,
lease or otherwise dispose of assets to, any other direct or indirect subsidiary of Petrobras; or
. any direct or indirect subsidiary of Petrobras may liquidate or dissolve if Petrobras determines
in good faith that such liquidation or dissolution is in the best interests of Petrobras, and
would not result in a material adverse effect on Petrobras and its subsidiaries taken as a whole
and if such liquidation or dissolution is part of a corporate reorganization of Petrobras.
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Amendments
The guaranty may only beamended or waived in accordance with its terms
pursuant to a written document which has been duly executed and delivered by
Petrobrasand the trustee, acting on behalf of the holders of the Notes.
Because the guaranty forms part of the indenture, it may be amended
byPetrobras and the trustee, in some cases without the consent of the holders
of the Notes. See "Description of Debt Securities-SpecialSituations-Modification
and Waiver" in the accompanying prospectus.
Except as contemplated above,the indenture will provide that the trustee may
execute and deliver any other amendment to the guaranty or grant any waiver
thereof onlywith the consent of the holders of a majority in aggregate
principal amount of the Notes then outstanding.
Governing Law
The guaranty will be governedby the laws of the State of New York.
Jurisdiction
Under the guaranty, Petrobraswill consent to the non-exclusive jurisdiction of
any court of the State of New York or any U.S. federal court sitting in the
Boroughof Manhattan, The City of New York, New York, United States and any
appellate court from any thereof.
Waiver of Immunities
To the extent that Petrobrasmay in any jurisdiction claim for itself or its
assets immunity from a suit, execution, attachment, whether in aid of
execution, beforejudgment or otherwise, or other legal process in connection
with the guaranty (or any document delivered pursuant thereto) and to
theextent that in any jurisdiction there may be immunity attributed to
Petrobras, PGF or their assets, whether or not claimed, Petrobraswill
irrevocably agree with the trustee under the guaranty, for the benefit of the
holders, not to claim, and to irrevocably waive, theimmunity to the full
extent permitted by law.
Currency Rate Indemnity
Under the guaranty, Petrobraswill agree that, if a judgment or order made by
any court for the payment of any amount in respect of any of its obligations
under theguaranty is expressed in a currency (the "judgment currency") other
than U.S. dollars (the "denomination currency"),Petrobras will indemnify the
relevant holder and the trustee against any deficiency arising from any
variation in rates of exchange betweenthe date as of which the denomination
currency is notionally converted into the judgment currency for the purposes
of the judgment ororder and the date of actual payment. This indemnity will
constitute a separate and independent obligation from Petrobras's
otherobligations under the guaranty, will give rise to a separate and
independent cause of action, will apply irrespective of any indulgencegranted
from time to time and will continue in full force and effect.
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CLEARANCE AND SETTLEMENT
Book-Entry Issuance
Except under the limitedcircumstances described in the accompanying
prospectus, all Notes will be book-entry Notes. This means that the actual
purchasers ofthe Notes will not be entitled to have the Notes registered in
their names and will not be entitled to receive physical delivery of theNotes
in definitive (paper) form. Instead, upon issuance, all the Notes will be
represented by one or more fully registered global Notes.
Each of the Notes will berepresented by one or more global notes. Each global
note will be deposited directly with The Depository Trust Company, a
securitiesdepositary, and will be registered in the name of DTC's nominee.
Global Notes may also be deposited indirectly with Clearstream,Luxembourg and
Euroclear, as indirect participants of DTC. For background information
regarding DTC and Clearstream, Luxembourg and Euroclear,see "-The Depository
Trust Company" and "-Clearstream, Luxembourg and Euroclear" below. No
globalnote representing book-entry Notes may be transferred except as a whole
by DTC to a nominee of DTC, or by a nominee of DTC to anothernominee of DTC.
Thus, DTC will be the only registered holder of the Notes and will be
considered the sole representative of the beneficialowners of the Notes for
purposes of the indenture. For an explanation of the situations in which a
global note will terminate and interestsin it will be exchanged for physical
certificates representing the Notes, see "Legal Ownership-Global Securities"
inthe accompanying prospectus.
The registration of the globalnotes in the name of DTC's nominee will not
affect beneficial ownership and is performed merely to facilitate subsequent
transfers.The book-entry system, which is also the system through which most
publicly traded common stock is held in the United States, is usedbecause it
eliminates the need for physical movement of securities certificates. The laws
of some jurisdictions, however, may requiresome purchasers to take physical
delivery of their Notes in definitive form. These laws may impair the ability
of beneficial holdersto transfer the Notes.
In this prospectus supplement,unless and until definitive (paper) Notes are
issued to the beneficial owners as described in the accompanying prospectus,
all referencesto "registered holders" of Notes shall mean DTC. PGF, Petrobras,
the trustee and any paying agent, transfer agent, registraror other agent may
treat DTC as the absolute owner of the Notes for all purposes.
Primary Distribution
Payment Procedures
Payment for the Notes willbe made on a delivery versus payment basis.
Clearance and Settlement Procedures
DTC participants that holdsecurities through DTC on behalf of investors will
follow the settlement practices applicable to United States corporate debt
obligationsin DTC's Same-Day Funds Settlement System. Notes will be credited
to the securities custody accounts of these DTC participantsagainst payment in
the same-day funds, for payments in U.S. dollars, on the settlement date.
Secondary Market Trading
We understand that secondarymarket trading between DTC participants will occur
in the ordinary way in accordance with DTC's rules. Secondary market
tradingwill be settled using procedures applicable to United States corporate
debt obligations in DTC's Same-Day Funds Settlement System.If payment is made
in U.S. dollars, settlement will be free of payment. If payment is made in
other than U.S. dollars, separate paymentarrangements outside of the DTC
system must be made between the DTC participants involved.
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The Depository Trust Company
The policies of DTC willgovern payments, transfers, exchange and other matters
relating to the beneficial owner's interest in the Notes held by that
owner.Neither the Trustee, Registrar, Paying Agent and Transfer Agent nor we
have any responsibility for any aspect of the actions of DTC orany of their
direct or indirect participants. Neither the Trustee, Registrar, Paying Agent
and Transfer Agent nor we have any responsibilityfor any aspect of the records
kept by DTC or any of their direct or indirect participants. In addition,
neither the Trustee, Registrar,Paying Agent and Transfer Agent nor we
supervise DTC in any way. DTC and their participants perform these clearance
and settlement functionsunder agreements they have made with one another or
with their customers. Investors should be aware that DTC and its participants
arenot obligated to perform these procedures and may modify them or
discontinue them at any time. The description of the clearing systemsin this
section reflects our understanding of the rules and procedures of DTC as they
are currently in effect. DTC could changeits rules and procedures at any time.
DTC has advised us as follows:
. DTC is:
a limited purposetrust company organized under the laws of the State of New
York;
a member of theFederal Reserve System;
a "clearingcorporation" within the meaning of the Uniform Commercial Code; and
a "clearingagency" registered pursuant to the provisions of Section 17A of the
Exchange Act.
DTC was createdto hold securities for its participants and to facilitate the
clearance and settlement of securities transactions between participantsthrough
electronic book-entry changes to accounts of its participants. This eliminates
the need for physical movement of certificates.
. Participants in DTC include securities brokers and dealers, banks, trust companies and clearing corporations and may
include certain other organizations. DTC is partially owned by some of these participants or their representatives.
. Indirect access to the DTC system is also available to banks, brokers,
dealers and trust companies that have relationships with participants.
. The rules applicable to DTC and DTC participants are on file with the SEC.
Clearstream, Luxembourg and Euroclear
Clearstream, Luxembourg hasadvised that: it is a duly licensed bank organized
as a
societe anonyme
incorporated under the laws of Luxembourgand is subject to regulation by the
Luxembourg Commission for the supervision of the financial sector (
Commission de surveillancedu secteur financier
); it holds securities for its customers and facilitates the clearance and
settlement of securities transactionsamong them, and does so through
electronic book-entry transfers between the accounts of its customers, thereby
eliminating the need forphysical movement of certificates; it provides other
services to its customers, including safekeeping, administration, clearance
andsettlement of internationally traded securities and lending and borrowing
of securities; it interfaces with the domestic markets in over30 countries
through established depositary and custodial relationships; its customers
include worldwide securities brokers and dealers,banks, trust companies and
clearing corporations and may include certain other professional financial
intermediaries; its U.S. customersare limited to securities brokers and
dealers and banks; and indirect access to the Clearstream, Luxembourg system
is also availableto others that clear through Clearstream, Luxembourg
customers or that have custodial relationships with its customers, such as
banks,brokers, dealers and trust companies.
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Euroclear has advised that:it is incorporated under the laws of Belgium as a
bank and is subject to regulation by the Belgian Banking and Finance
Commission (
CommissionBancaire et Financiere
) and the National Bank of Belgium (
Banque Nationale de Belgique
); it holds securities for itsparticipants and facilitates the clearance and
settlement of securities transactions among them; it does so through
simultaneous electronicbook-entry delivery against payments, thereby
eliminating the need for physical movement of certificates; it provides other
servicesto its participants, including credit, custody, lending and borrowing
of securities and tri-party collateral management; it interfaceswith the
domestic markets of several countries; its customers include banks, including
central banks, securities brokers and dealers,banks, trust companies and
clearing corporations and certain other professional financial intermediaries;
indirect access to the Euroclearsystem is also available to others that clear
through Euroclear customers or that have custodial relationships with
Euroclear customers;and all securities in Euroclear are held on a fungible
basis, which means that specific certificates are not matched to specific
securitiesclearance accounts.
Clearanceand Settlement Procedures
We understand that investorsthat hold their Notes through Clearstream,
Luxembourg or Euroclear accounts will follow the settlement procedures that
are applicableto securities in registered form. Notes will be credited to the
securities custody accounts of Clearstream, Luxembourg and Euroclearparticipants
on the business day following the settlement date for value on the settlement
date. They will be credited either free ofpayment or against payment for value
on the settlement date.
We understand that secondarymarket trading between Clearstream, Luxembourg
and/or Euroclear participants will occur in the ordinary way following the
applicablerules and operating procedures of Clearstream, Luxembourg and
Euroclear. Secondary market trading will be settled using proceduresapplicable
to securities in registered form.
You should be aware thatinvestors will only be able to make and receive
deliveries, payments and other communications involving the Notes through
Clearstream,Luxembourg and Euroclear on business days. Those systems may not
be open for business on days when banks, brokers and other institutionsare
open for business in the United States or Brazil.
Because of time zone differences,the securities account of a Euroclear or
Clearstream, Luxembourg participant purchasing an interest in a global note
from a participantin DTC will be credited and reported to the relevant
Euroclear or Clearstream, Luxembourg participant, during the securities
settlementprocessing day (which must be a business day for Euroclear and
Clearstream) immediately following the settlement date of DTC. DTC hasadvised
us that cash received in Euroclear or Clearstream, Luxembourg as a result of
sales of interests in a global note by or througha Euroclear or Clearstream,
Luxembourg participant to a participant in DTC will be received with value on
the settlement date of DTCbut will be available in the relevant Euroclear or
Clearstream, Luxembourg cash account only as of the business day for Euroclear
orClearstream, Luxembourg following DTC's settlement date.
Clearstream, Luxembourg orEuroclear will credit payments to the cash accounts
of participants in Clearstream, Luxembourg or Euroclear in accordance with the
relevantsystemic rules and procedures, to the extent received by its
depositary. Clearstream, Luxembourg or the Euroclear, as the case maybe, will
take any other action permitted to be taken by a registered holder under the
indenture on behalf of a Clearstream, Luxembourgor Euroclear participant only
in accordance with its relevant rules and procedures.
Clearstream, Luxembourg andEuroclear have agreed to the foregoing procedures
in order to facilitate transfers of the debt securities among participants of
Clearstream,Luxembourg and Euroclear. However, they are under no obligation to
perform or continue to perform those procedures, and they may discontinuethose
procedures at any time.
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UNDERWRITING
Under the terms and subjectto the conditions contained in the underwriting
agreement dated , 2024, by and among PGF, Petrobras and BofA Securities, Inc.,
BancoBradesco BBI S.A., HSBC Securities (USA) Inc., J.P. Morgan Securities
LLC, Mizuho Securities USA LLC and Morgan Stanley & Co.LLC, as representatives
of the several underwriters, each underwriter has severally and not jointly
agreed to purchase, and PGF has agreedto sell to the underwriters, the
principal amount of Notes set forth opposite the name of such underwriter
below:
Underwriters Principal Amount of Notes
BofA Securities, Inc. U.S.$
Banco Bradesco BBI S.A. U.S.$
HSBC Securities (USA) Inc. U.S.$
J.P. Morgan Securities LLC U.S.$
Mizuho Securities USA LLC U.S.$
Morgan Stanley & Co. LLC U.S.$
Total U.S.$
Bradesco Securities Inc.will act as agent of Banco Bradesco BBI S.A. for sales
of the notes in the United States of America. Banco Bradesco BBI S.A. is not
abroker-dealer registered with the SEC, and therefore may not make sales of
any notes in the United States to U.S. persons. Banco BradescoBBI S.A. and
Bradesco Securities Inc. are affiliates of Banco Bradesco S.A.
The underwriting agreementprovides that the obligation of the underwriters to
pay for and accept delivery of the Notes is subject to, among other
conditions, thedelivery of certain certificates and legal opinions. The
underwriters are offering the Notes, subject to prior sale, when, as and
ifissued to and accepted by them. The underwriters are obligated to take and
pay for all of the Notes offered by this prospectus supplementif any Notes are
taken. The underwriting agreement also provides that if an underwriter
defaults, the purchase commitments of the non-defaultingunderwriters may be
increased or the offering of the Notes may be terminated. The Notes will
initially be offered at the price indicatedon the cover page of this
prospectus supplement. After the initial offering of the Notes, the offering
price and other selling termsmay from time to time be varied by the
underwriters. The Notes may be offered and sold through certain of the
underwriters' affiliates.The underwriters reserve the right to withdraw,
cancel or modify offers to the public and to reject orders in whole or in part.
The underwriting agreementprovides that PGF and Petrobras will indemnify the
underwriters against certain liabilities, including liabilities under the U.S.
SecuritiesAct of 1933, as amended ("Securities Act"), and will contribute to
payments the underwriters may be required to make in respectof the
underwriting agreement.
PGF has been advised by theunderwriters that the underwriters intend to make a
market in the Notes as permitted by applicable laws and regulations. The
underwritersare not obligated, however, to make a market in the Notes and any
such market-making may be discontinued at any time at the sole discretionof
the underwriters. In addition, such market-making activity will be subject to
the limits imposed by the Exchange Act. Accordingly,no assurance can be given
as to the liquidity of, or the development or continuation of trading markets
for, the Notes.
In connection with this offering,the underwriters (or persons acting on their
behalf) participating in this offering may engage in transactions that
stabilize, maintainor otherwise affect the price of the Notes. Specifically,
the underwriters (or persons acting on their behalf) may bid for and
purchaseNotes in the open market to stabilize the price of the Notes. The
underwriters (or persons acting on their behalf) may also over-allotthis
offering, creating a short position, and may bid for and purchase Notes in the
open market to cover the short position. These activitiesif carried out, will
be carried out with a view to stabilize, maintain and support the market price
of the Notes during the stabilizationperiod above market levels that may
otherwise prevail. The underwriters are not required to engage in these
activities, and these activitiesmay not necessarily occur.
Any stabilization actionmay begin on or after the date on which adequate
public disclosure of the terms of the offer of the Notes is made and, if
begun, maybe ended at any time, but it must end no later than 30 days after
the date on which the issuer received the proceeds of the issue, orno later
than 60 days after the date of allotment of the Notes, whichever is the
earlier. Any stabilization action or over-allotmentmust be conducted by the
relevant underwriters (or persons acting on their behalf) in accordance with
all applicable laws and rules andwill be undertaken at the offices of the
underwriters (or persons acting on their behalf) and on the NYSE or the
over-the-counter market.
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The underwriters and theiraffiliates have engaged in, and may in the future
engage in, investment banking and other commercial dealings in the ordinary
courseof business with Petrobras, PGF and their affiliates. They have
received, or may in the future receive, customary fees and commissionsfor
these transactions.
In addition, in the ordinarycourse of their business activities, the
underwriters and their affiliates may make or hold a broad array of
investments and activelytrade debt and equity securities (or related
derivative securities) and financial instruments (including bank loans) for
their own accountand for the accounts of their customers. Such investments and
securities activities may involve securities and/or instruments of oursor our
affiliates. In particular, certain of the underwriters and/or their affiliates
may hold debt securities or other indebtednessissued by PGF, including
indebtedness guaranteed by Petrobras, which may be repurchased or repaid with
proceeds of this offering. Ifany of the underwriters or their affiliates has a
lending relationship with us, certain of those underwriters or their
affiliates routinelyhedge, and certain other of those underwriters or their
affiliates may hedge, their credit exposure to us consistent with their
customaryrisk management policies. Typically, these underwriters and their
affiliates would hedge such exposure by entering into transactionswhich
consist of either the purchase of credit default swaps or the creation of
short positions in our securities, including potentiallythe Notes offered
hereby. Any such credit default swaps or short positions could adversely
affect future trading prices of theNotes offered hereby. The underwriters and
their affiliates may also make investment recommendations and/or publish or
express independentresearch views in respect of such securities or financial
instruments and may hold, or recommend to clients that they acquire, long
and/orshort positions in such securities and instruments.
The underwriters and/or theiraffiliates may acquire the Notes for their own
accounts. Such acquisitions may have an effect on demand for and the price of
the Notes.
Theexpenses of the offering, excluding the underwriting discount, are
estimated to be U.S.$
million and will be borne by PGF. PGFhas agreed to reimburse the underwriters
up to approximately U.S.$ for certain of their expenses relating to the
offering, includingthe fees and disbursements of counsel to the underwriters.
Such reimbursement is deemed underwriting compensation by the Financial
IndustryRegulatory Authority Inc. (FINRA).
Petrobras has been advisedby the underwriters that they propose to offer the
Notes initially at the public offering price set forth on the cover page of
thisprospectus supplement and to dealers at that price less a selling
concession not in excess of % of the principal amount of the Notes.After the
initial public offering of the Notes, the public offering price and concession
and discount to dealers may be changed.
We expect to deliver theNotes against payment for the Notes on or about ,
2024, which will be the eighth business day following the date of this
prospectus supplement(such settlement being referred to as "T+8"). Under Rule
15c6-1 of the Exchange Act, trades in the secondary marketgenerally are
required to settle in one business day, unless the parties to such trade
expressly agree otherwise. Accordingly, purchaserswho wish to trade the Notes
prior to the date that is one business day prior to the delivery of the Notes
will be required, by virtueof the fact that the Notes initially will settle in
eighth business days (T+8), to specify alternative settlement arrangements to
preventa failed settlement.
The Notes are offered forsale in the United States and other jurisdictions
where it is legal to make these offers. The distribution of this prospectus
supplementand the accompanying prospectus, and the offering of the Notes in
certain jurisdictions may be restricted by law. Persons into whosepossession
this prospectus supplement and the accompanying prospectus come and investors
in the Notes should inform themselves aboutand observe any of these
restrictions. This prospectus supplement and the accompanying prospectus do
not constitute, and may not be usedin connection with, an offer or
solicitation by anyone in any jurisdiction in which such offer or solicitation
is not authorized, orin which the person making such offer or solicitation is
not qualified to do so, or to any person to whom it is unlawful to make
suchoffer or solicitation.
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The underwriters have agreedthat they have not offered, sold or delivered, and
they will not offer, sell or deliver any of the Notes, directly or indirectly,
ordistribute this prospectus supplement, the accompanying prospectus or any
other offering material relating to the Notes, in or from anyjurisdiction
except under circumstances that will, to the best knowledge and belief of the
underwriters, after reasonable investigation,result in compliance with the
applicable laws and regulations of such jurisdiction and which will not impose
any obligations on PGF exceptas set forth in the underwriting agreement.
Neither PGF nor the underwritershave represented that the Notes may be
lawfully sold in compliance with any applicable registration or other
requirements in any jurisdiction,or pursuant to an exemption, or assumes any
responsibility for facilitating these sales.
Conflicts of Interest
Theunderwriters are acting as dealer managers in connection with the Tender
Offers and will receive a commission for also acting in suchcapacity.
In addition, the underwriters or their affiliates may tender Old Notes in the
Tender Offers for their own account orfor the accounts of their customers, in
which case the underwriters, their affiliates or customers may receive a
portion of the proceedsof this offering. See "The Offering-Tender Offers."
General
No action has been or willbe taken in any jurisdiction other than the United
States by PGF or any underwriter that would, or is intended to, permit a
public offeringof the Notes, or possession or distribution of this prospectus
supplement or any other offering material, in any country or jurisdictionwhere
action for that purpose is required. Persons outside the United States into
whose hands this prospectus supplement comes are requiredby PGF and the
underwriters to comply with all applicable laws and regulations in each
country or jurisdiction in which they purchase,offer, sell or deliver Notes or
have in their possession, distribute or publish this prospectus supplement or
any other offering materialrelating to the Notes, in all cases at their own
expense.
Brazil
Neither the Notes, nor theiroffer for sale, have been, or will be, registered
with the
Comissao de Valores Mobiliarios
- CVM. The Notesmay not be offered or sold in Brazil, except in circumstances
that do not constitute a public offering or distribution under Brazilianlaws
and regulations.
Notice to Prospective Investors in the European Economic Area
The Notes are not intendedto be offered, sold or otherwise made available to
and should not be offered, sold or otherwise made available to any retail
investorin the European Economic Area ( "EEA"). For these purposes, a retail
investor means a person who is one (or more) of: (i) aretail client as defined
in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, "MiFID
II"); or (ii) acustomer within the meaning of Directive (EU) 2016/97 (as
amended, the "Insurance Distribution Directive"), where that customerwould not
qualify as a professional client as defined in point (10) of Article 4(1) of
MiFID II; or (iii) not a qualifiedinvestor as defined in Regulation (EU)
2017/1129 (as amended, the "Prospectus Regulation"); and the expression
"offer"includes the communication in any form and by any means of sufficient
information on the terms of the offer and the Notes to be offeredso as to
enable an investor to decide to purchase or subscribe the Notes. Consequently,
no key information document required by Regulation(EU) No 1286/2014 (as
amended, the "PRIIPs Regulation") for offering or selling the Notes or
otherwise making them availableto retail investors in the EEA has been
prepared and the Notes will not be offered or sold or otherwise made available
to any retailinvestor in the EEA.
This prospectus supplementhas been prepared on the basis that any offer of
Notes in any Member State of the EEA will be made pursuant to an exemption
under theProspectus Regulation from the requirement to publish a prospectus
for offers of Notes. Accordingly any person making or intending tomake an
offer in that Member State of Notes which are the subject of the offering
contemplated in this prospectus supplement may onlydo so to legal entities
that are qualified investors as defined in the Prospectus Regulation, provided
that no such offer of Notes shallrequire PGF or any of the underwriters to
publish a prospectus pursuant to Article 3 of the Prospectus Regulation or
supplementa prospectus pursuant to Article 23 of the Prospectus Regulation, in
each case in relation to such offer.
Neither PGF nor the underwritershave authorized, nor do they authorize, the
making of any offer of Notes to any legal entity which is not a qualified
investor as definedin the Prospectus Regulation. Neither PGF nor the
underwriters have authorized, nor do they authorize, the making of any offer
of Notesthrough any financial intermediary, other than offers made by the
underwriters, which constitute the final placement of the Notes contemplatedin
this prospectus supplement.
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The expression "ProspectusRegulation" means Regulation (EU) 2017/1129 (as
amended or superseded).
Each person in a Member Stateof the EEA who receives any communication in
respect of, or who acquires any Notes under, the offers to the public
contemplated in thisprospectus supplement, or to whom the Notes are otherwise
made available, will be deemed to have represented, warranted, acknowledgedand
agreed to and with each underwriter and PGF that it and any person on whose
behalf it acquires Notes is: (1) a "qualifiedinvestor" within the meaning of
Article 2(e) of the Prospectus Regulation; and (2) not a "retail investor"(as
defined above).
Chile
Theoffer for the Notes is subject to General Rule No. 336 issued by the
Superintendencia de Valores y Seguros de Chile
("CMF"). The commencement date of this offer is the one contained on the cover
page of this prospectus supplement. TheNotes will not be registered in the
Registro de Valores
(
Securities Registry) or the
Registro de Valores Extranjeros
(Foreign Securities Registry), both kept by the CMF and will not be subject to
the supervision of the CMF. As unregistered securities,the Company has no
obligation to deliver/disclose public information about the Notes in Chile.
The Notes cannot and will not be publiclyoffered in Chile unless registered in
the
Registro de Valores
(Securities Registry) or the
Registro de Valores Extranjeros
(Foreign Securities Registry), both kept by the CMF. If the Notes are offered
within Chile, they will be offered and sold only pursuantto General Rule 336
of the CMF, an exemption to the registration requirements, or in circumstances
which do not constitute a publicoffer of securities under Chilean law.
La oferta de los valoresse acoge a la Norma de Caracter General N.^o 336 de la
Superintendencia de Valores y Seguros hoy Comision parael Mercado Financiero
("CMF"). La fecha de inicio de la presente oferta es la indicada en la portada
de este suplemento deprospecto. Los valores no estaran inscritos en el
Registro de Valores o en el Registro de Valores Extranjeros que lleva la CMF,y
tales valores no estaran sujetos a la fiscalizacion de la CMF. Por tratarse de
valores no inscritos, no existe obligacionpor parte del emisor de entregar en
Chile informacion publica respecto de los valores. Los valores no podran
serobjeto de oferta publica en Chile mientras no sean inscritos en el Registro
de Valores o el Registro de Valores Extranjeros quelleva la CMF. Si los
valores son ofrecidos dentro de Chile, seran ofrecidos y colocados solo de
acuerdo a la Norma de CaracterGeneral N.^o 336 de la CMF, una excepcion a la
obligacion de inscripcion, o en circunstancias que no constituyanuna oferta
publica de valores en Chile de conformidad a la ley chilena.
Peru
The Notes and the informationcontained in this prospectus supplement have not
been and will not be registered with or approved by the Peruvian Capital
Markets Superintendency(
Superintendencia del Mercado de Valores
) or the Lima Stock Exchange (
Bolsa de Valores de Lima
). Accordingly, the Notescannot be offered or sold in Peru, except if such
offering is considered a private offering under the securities laws and
regulationsof Peru. The Peruvian securities market law establishes, among
others, that any particular offer may qualify as private if it is
directedexclusively to institutional investors.
United Kingdom
This prospectus supplementis for distribution only to persons who (i) have
professional experience in matters relating to investments falling within
Article 19(5) ofthe Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005 (as amended, the "Financial Promotion Order"),(ii) are
persons falling within Article 49(2)(a) to (d) ("high net worth companies,
unincorporated associationsetc.") of the Financial Promotion Order, (iii) are
members or creditors of certain bodies corporate as defined by or
withinArticle 43(2) of the Financial Promotion Order, (iv) are outside the
United Kingdom, or (v) are persons to whom aninvitation or inducement to
engage in investment activity (within the meaning of section 21 of the
Financial Services and Markets Act2000 (as amended, the "FSMA")) in connection
with the issue or sale of any securities may otherwise lawfully be
communicatedor caused to be communicated (all such persons together being
referred to as "relevant persons"). This document is directedonly at relevant
persons and must not be acted on or relied on by persons who are not relevant
persons. Any investment or investmentactivity to which this document relates
is available only to relevant persons and will be engaged in only with
relevant persons.
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Notice to Prospective Investors in the United Kingdom
TheNotes are not intended to be offered, sold or otherwise made available to
and should not be offered, sold or otherwise made availableto any retail
investor in the United Kingdom (the "United Kingdom" or the "UK"). For these
purposes, a retailinvestor means a person who is one (or more) of: (i) a
retail client, as defined in point (8) of Article 2 of Regulation(EU) No
2017/565 as it forms part of domestic law by virtue of the European Union
(Withdrawal) Act 2018 (the "EUWA"); (ii) acustomer within the meaning of the
provisions of the
Financial Services and Markets Act 2000 (as amended, the "FSMA")and any rules
or regulations made under the FSMA to implement Directive (EU) 2016/97, where
that customer would not qualify as aprofessional client, as defined in point
(8) of Article 2(1) of Regulation (EU) No 600/2014 as it forms part of
domesticlaw by virtue of the EUWA; or (iii) not a "qualified investor" as
defined in Article 2 of Regulation (EU) 2017/1129as it forms part of the
domestic law by virtue of the EUWA (the "UK Prospectus Regulation"). No key
information documentrequired by Regulation (EU) No 1286/2014 as it forms part
of domestic law by virtue of the EUWA (the "UK PRIIPs Regulation")for offering
or selling the Notes or otherwise making them available to retail investors in
the UK has been prepared and the Notes willnot be offered or sold or otherwise
made available to any retail investor in the UK.
This prospectus supplementhas been prepared on the basis that any offer of
Notes in the UK will be made pursuant to an exemption under the UK Prospectus
Regulationand the FSMA from the requirement to publish a prospectus for offers
of Notes. Accordingly any person making or intending to make anoffer in the UK
of Notes which are the subject of the offering contemplated in this prospectus
supplement may only do so to legal entitiesthat are qualified investors as
defined in the UK Prospectus Regulation, provided that no such offer of Notes
shall require PGF or anyof the underwriters to publish a prospectus pursuant
to Article 3 of the UK Prospectus Regulation or section 85 of the FSMA or
supplementa prospectus pursuant to Article 23 of the UK Prospectus Regulation,
in each case in relation to such offer.
Neither PGF nor the underwritershave authorized, nor do they authorize, the
making of any offer of Notes to any legal entity which is not a qualified
investor as definedin the UK Prospectus Regulation. Neither PGF nor the
underwriters have authorized, nor do they authorize, the making of any offer
ofNotes through any financial intermediary, other than offers made by the
underwriters, which constitute the final placement of the Notescontemplated in
this prospectus supplement.
Each person in the UK whoreceives any communication in respect of, or who
acquires any Notes under, the offers to the public contemplated in this
prospectus supplement,or to whom the Notes are otherwise made available, will
be deemed to have represented, warranted, acknowledged and agreed to and
witheach underwriter and PGF that it and any person on whose behalf it
acquires Notes is: (1) a "qualified investor" withinthe meaning of the UK
Prospectus Regulation; and (2) not a "retail investor" (as defined above).
Switzerland
This prospectus supplementis not intended to constitute an offer or
solicitation to purchase or invest in the Notes. The Notes may not be publicly
offered, directlyor indirectly, in Switzerland within the meaning of the Swiss
Financial Services Act ("FinSA") and no application has orwill be made to
admit the Notes to trading on any trading venue (exchange or multilateral
trading facility) in Switzerland. Neither thisprospectus supplement nor any
other offering or marketing material relating to the Notes constitutes a
prospectus pursuant to the FinSA,and neither this prospectus supplement nor
any other offering or marketing material relating to the Notes may be publicly
distributed,or otherwise made publicly available in Switzerland.
Canada
The Notes may be sold onlyto purchasers purchasing, or deemed to be
purchasing, as principal that are accredited investors, as defined in National
Instrument 45-106Prospectus Exemptions or subsection 73.3(1) of the Securities
Act (Ontario), and are permitted clients, as defined in National Instrument31-10
3 Registration Requirements, Exemptions and Ongoing Registrant Obligations.
Any resale of the Notes must be made in accordance withan exemption from, or
in a transaction not subject to, the prospectus requirements of applicable
securities laws.
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Securities legislation incertain provinces or territories of Canada may
provide a purchaser with remedies for rescission or damages if this prospectus
supplementand the accompanying prospectus (including any amendment thereto)
contains a misrepresentation,
provided that
the remedies forrescission or damages are exercised by the purchaser within
the time limit prescribed by the securities legislation of the purchaser'sprovin
ce or territory. The purchaser should refer to any applicable provisions of
the securities legislation of the purchaser'sprovince or territory for
particulars of these rights or consult with a legal advisor.
Pursuant to section 3A.3of National Instrument 33-105 Underwriting Conflicts
(NI 33-105), the underwriters are not required to comply with the disclosure
requirementsof NI 33-105 regarding underwriter conflicts of interest in
connection with this offering.
Abu Dhabi Global Market
This prospectus supplementis for distribution only to persons who (a) are
outside the Abu Dhabi Global Market, or (b) are Authorised Persons or
RecognisedBodies (as such terms are defined in the Financial Services and
Markets Regulations 2015 ("FSMR")), or (c) are personsto whom an invitation or
inducement to engage in investment activity (within the meaning of section 18
of FSMR) in connection with theissue or sale of any securities may otherwise
lawfully be communicated or caused to be communicated (all such persons
together beingreferred to as "relevant persons"). This prospectus supplement
is directed only at relevant persons and must not be actedon or relied on by
persons who are not relevant persons. Any investment or investment activity to
which this prospectus supplement relatesis available only to relevant persons
and will be engaged in only with relevant persons.
This prospectus supplementis an Exempt Offer in accordance with the Market
Rules of the ADGM Financial Services Regulatory Authority. This Exempt Offer
documentis intended for distribution only to Persons of a type specified in
the Market Rules. It must not be delivered to, or relied on by, anyother
Person. The ADGM Financial Services Regulatory Authority has no responsibility
for reviewing or verifying any documents in connectionwith Exempt Offers. The
ADGM Financial Services Regulatory Authority has not approved this Exempt
Offer document nor taken steps to verifythe information set out in it, and has
no responsibility for it. The Notes to which this Exempt Offer relates may be
illiquid and/orsubject to restrictions on their resale. Prospective purchasers
of the Notes offered should conduct their own due diligence on the Notes.If
you do not understand the contents of this Exempt Offer document you should
consult an authorised financial advisor.
Dubai International Financial Centre
This prospectus supplementis for distribution only to persons who (a) are
outside the Dubai International Financial Centre, (b) are persons who meetthe
Professional Client criteria set out in Rule 2.3.4 of the Dubai Financial
Services Authority ("DFSA") Conduct ofBusiness Module or (c) are persons to
whom an invitation or inducement in connection with the issue or sale of any
securities mayotherwise lawfully be communicated or caused to be communicated
(all such persons together being referred to as "relevant persons"for the
purposes of this paragraph). This prospectus supplement is directed only at
relevant persons and must not be acted on or reliedon by persons who are not
relevant persons. Any investment or investment activity to which this
prospectus supplement relates is availableonly to relevant persons and will be
engaged in only with relevant persons.
This prospectus supplementrelates to an Exempt Offer in accordance with the
Offered Securities Rules of the DFSA. This prospectus supplement is intended
fordistribution only to persons of a type specified in the Offered Securities
Rules of the DFSA. It must not be delivered to, or reliedon by, any other
person. The DFSA has no responsibility for reviewing or verifying any
documents in connection with Exempt Offers. TheDFSA has not approved this
prospectus supplement nor taken steps to verify the information set forth
herein and has no responsibilityfor the prospectus supplement. The Notes to
which this prospectus supplement relates may be illiquid and/or subject to
restrictions ontheir resale. Prospective purchasers of the Notes offered
should conduct their own due diligence on the Notes. If you do not
understandthe contents of this prospectus supplement you should consult an
authorized financial advisor.
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Hong Kong
The contents of this prospectussupplement have not been reviewed by any
regulatory authority in Hong Kong and no action has been taken in Hong Kong to
authorize orregister this prospectus supplement or to permit the distribution
of this prospectus supplement or any document issued in connectionwith it. You
are advised to exercise caution in relation to the offer. If you are in any
doubt about any of the contents of this prospectussupplement, you should
obtain independent professional advice.
The Notes may not be offeredor sold in Hong Kong by means of any document
other than (i) in circumstances which do not constitute an offer to the public
withinthe meaning of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance (Cap.32, Laws of Hong Kong) or an invitation to thepublic within the
meaning of the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong),
or (ii) to "professional investors"within the meaning of the Securities and
Futures Ordinance (Cap.571, Laws of Hong Kong) and any rules made thereunder,
or (iii) inother circumstances which do not result in the document being a
"prospectus" within the meaning of the Companies (WindingUp and Miscellaneous
Provisions) Ordinance (Cap.32, Laws of Hong Kong), and no advertisement,
invitation or document relating to theNotes may be issued or may be in the
possession of any person for the purpose of issue (in each case whether in
Hong Kong or elsewhere),which is directed at, or the contents of which are
likely to be accessed or read by, the public in Hong Kong (except if permitted
todo so under the laws of Hong Kong) other than with respect to Notes which
are or are intended to be disposed of only to persons outsideHong Kong or only
to "professional investors" in Hong Kong within the meaning of the Securities
and Futures Ordinance (Cap.571, Laws of Hong Kong) and any rules made
thereunder.
Japan
The Notes have not been andwill not be registered under the Financial
Instruments and Exchange Law of Japan (the "FIEL") and each underwriter has
agreedthat it will not offer or sell any Notes, directly or indirectly, in
Japan or to, or for the benefit of, any resident of Japan (whichterm as used
herein means any person resident in Japan, including any corporation or other
entity organized under the laws of Japan),or to others for re-offering or
resale, directly or indirectly, in Japan or to a resident of Japan, except
pursuant to an exemption fromthe registration requirements of, and otherwise
in compliance with, the FIEL and any other applicable laws, regulations and
ministerialguidelines of Japan.
Singapore
This prospectus supplementand the accompanying prospectus have not been
registered as a prospectus with the Monetary Authority of Singapore.
Accordingly, thisprospectus supplement, the accompanying prospectus, and any
other document or material in connection with the offer or sale, or
invitationfor subscription or purchase, of the Notes may not be circulated or
distributed, nor may the Notes be offered or sold, or be made thesubject of an
invitation for subscription or purchase, whether directly or indirectly, to
persons in Singapore other than (i) toan institutional investor (as defined in
Section 4A of the Securities and Futures Act, Chapter 289 of Singapore, as
modified oramended from time to time (the "SFA")) pursuant to Section 274 of
the SFA; (ii) to a relevant person (as definedin Section 275(2) of the SFA)
pursuant to Section 275(1) of the SFA, or any person pursuant to Section
275(1A)of the SFA, and in accordance with the conditions specified in Section
275 of the SFA and (in the case of an accredited investor)Regulation 3 of the
Securities and Futures (Classes of Investors) Regulations 2018; or (iii)
otherwise pursuant to, and in accordancewith the conditions of, any other
applicable provision of the SFA.
Wherethe Notes are subscribed for or purchased under Section 275 of the SFA by
a relevant person which is: (a) a corporation (whichis not an accredited
investor (as defined in Section 4A of the SFA)) the sole business of which is
to hold investments and the entireshare capital of which is owned by one or
more individuals, each of whom is an accredited investor; or (b) a trust
(where the trusteeis not an accredited investor) whose sole purpose is to hold
investments and each beneficiary of the trust is an individual who is
anaccredited investor; securities or securities-based derivatives contracts
(each term as defined in Section 2(1) of the SFA)of that corporation or the
beneficiaries' rights and interest (howsoever described) in that trust, as the
case may be, shall notbe transferred within six months after that corporation
or that trust has acquired the Notes, as the case may be, pursuant to an
offermade under Section 275 of the SFA except: (1)
to an institutional investor or to a relevant person, or to any personarising
from an offer referred to in Section 275(1A) or Section 276(4)(i)(B) of the
SFA; (2) where no considerationis or will be given for the transfer; (3) where
the transfer is by operation of law; (4) as specified in Section 276(7) ofthe
SFA; or (5) as specified in Regulation 37A of the Securities and Futures
(Offers of Investments) (Securities and Securities-basedDerivatives Contracts)
Regulations 2018.
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SingaporeSecurities and Futures Act Product Classification -
In connection with Section 309B of the SFA and the Securities andFutures
(Capital Markets Products) Regulations 2018 ("CMP Regulations 2018"), the
Issuer has determined, and hereby notifiesall relevant persons (as defined in
Section 309A(1) of the SFA), that the Notes are ``prescribed capital
marketsproducts'' (as defined in the CMP Regulations 2018) and Excluded
Investment Products (as defined in MAS Notice SFA 04-N12:Notice on the Sale of
Investment Products and MAS Notice FAA-N16: Notice on Recommendations on
Investment Products).
Taiwan
The Notes have not been andwill not be registered with the Financial
Supervisory Commission of Taiwan pursuant to relevant securities laws and
regulations and maynot be sold, issued or offered within Taiwan through a
public offering or in circumstances which constitutes an offer within the
meaningof the Securities and Exchange Act of Taiwan that requires a
registration or approval of the Financial Supervisory Commission of Taiwan.No
person or entity in Taiwan has been authorized to offer, sell, give advice
regarding or otherwise intermediate the offering and saleof the Notes in
Taiwan.
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TAXATION
The following discussionsummarizes certain U.S. federal income, Brazilian and
Dutch tax considerations that may be relevant to the ownership and
dispositionof the Notes acquired in this offering at their original issue
price. This summary does not describe all of the tax considerations thatmay be
relevant to you or your situation, particularly if you are subject to special
tax rules. You should consult your tax advisorsabout the tax consequences of
holding the Notes, including the relevance to your particular situation of the
considerations discussedbelow, as well as of any other tax laws. There
currently is no income tax treaty between Brazil and the United States.
Although Brazilianand U.S. tax authorities have had discussions that may
culminate in such a treaty, we cannot make any assurances regarding whether
orwhen such a treaty will enter into force or how it will affect holders of
the Notes.
U.S. Federal Income Tax Considerations
Thefollowing is a summary of certain U.S. federal income tax considerations
that may be relevant to a holder of a Note.
This summaryis based on provisions of the Internal Revenue Code of 1986, as
amended (the "Code"), applicable Treasury regulations, laws,rulings and
decisions now in effect, all of which are subject to change, possibly with
retroactive effect. This summary deals only withbeneficial owners of Notes
that will hold Notes as capital assets and acquired notes upon original
issuance at their original issue price.This summary does not address
particular tax considerations that may be applicable to investors that are
subject to special tax rules,such as banks, tax-exempt entities, insurance
companies, regulated investment companies, dealers in securities or
currencies, tradersin securities electing to mark to market, persons that will
hold Notes as a position in a "straddle" or conversion transaction,or as part
of a "synthetic security" or other integrated financial transaction, entities
taxed as partnerships or the partnerstherein, U.S. expatriates, nonresident
alien individuals present in the United States for more than 182 days in a
taxable year, or personsthat have a "functional currency" other than the U.S.
dollar. Furthermore, this discussion does not address all of the U.S.federal
income tax considerations that may be relevant to a potential investor whose
Old Notes are repurchased in the Tender Offers,and such persons should consult
their own tax advisors regarding the U.S. federal income tax consequences to
them of the redemption oftheir Old Notes pursuant to the Tender Offers and the
acquisition of the Notes pursuant to this offering.
This summary addresses only U.S. federal incometax consequences, and does not
address consequences arising under state, local, foreign tax laws, the
alternative minimum tax or theMedicare tax on net investment income or under
special timing rules prescribed under section 451(b) of the Code.
Investorsshould consult their own tax advisors in determining the tax
consequences to them of holding Notes under such tax laws, as well as
theapplication to their particular situation of the U.S. federal income tax
considerations discussed below.
As used herein, a "U.S. holder" isa beneficial owner of a Note that is, for
U.S. federal income tax purposes, a citizen or resident of the United States
or a domesticcorporation or that otherwise is subject to U.S. federal income
taxation on a net income basis in respect of the Note.
Tax Consequences to U.S. Holders of Holding and Disposing ofNotes
Payments of Interest and Additional Amounts.
Thegross amount of stated interest and additional amounts (
i.e.
, without reduction for withholding tax at the appropriate Brazilianwithholding
tax rate applicable to the U.S. holder) will be taxable to a U.S. holder as
ordinary interest income at the time it accruesor is actually or constructively
received, in accordance with the holder
'
smethod of accounting for U.S. federal income tax purposes. It is expected,
and this discussion assumes, that the Notes will be issuedwithout original
issue discount ("OID") for U.S. federal income tax purposes. In general,
however, if the Notes are issuedwith OID at or above a
de minimis
threshold, a U.S. holder will be required to include OID in gross income, as
ordinary income,under a "constant-yield method" before the receipt of cash
attributable to such income, regardless of the U.S. holder'sregular method of
accounting for U.S. federal income tax purposes.
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Subject to generally applicable limitations andconditions, Brazilian interest
withholding tax (if any) paid at the appropriate rate applicable to the U.S.
holder may be eligible forcredit against such U.S. holder's U.S. federal
income tax liability. These generally applicable limitations and conditions
includenew requirements adopted by the IRS in regulations promulgated in
December 2021 and any Brazilian tax will need to satisfy theserequirements in
order to be eligible to be a creditable tax for a U.S. holder. In the case of
a U.S. holder that consistently electsto apply a modified version of these
rules under recently issued temporary guidance and complies with specific
requirements setforth in such guidance, any Brazilian tax on interest
generally will be treated as meeting the new requirements and therefore as a
creditabletax. In the case of all other U.S. holders, the application of these
requirements to any Brazilian tax on interest is uncertain and wehave not
determined whether these requirements have been met. If the Brazilian interest
tax is not a creditable tax or the U.S. holderdoes not elect to claim a
foreign tax credit for any foreign income taxes paid or accrued in the same
taxable year, the U.S. holder maybe able to deduct the Brazilian tax in
computing such U.S. holder's taxable income for U.S. federal income tax
purposes. Interestand additional amounts (if any) will constitute income from
sources without the United States and, for U.S. holders that elect to
claimforeign tax credits, generally will constitute "passive category income"
for foreign tax credit purposes.
The availability and calculation of foreign taxcredits and deductions for
foreign taxes depend on a U.S. holder's particular circumstances and involve
the application of complexrules to those circumstances. The temporary guidance
discussed above also indicates that the Treasury and the IRS are consideringprop
osing amendments to the December 2021 regulations and that the temporary
guidance can be relied upon until additional guidanceis issued that withdraws
or modifies the temporary guidance. U.S. holders should consult their own tax
advisors regarding the applicationof these rules to their particular
situations.
Sale, Exchange and Retirement of Notes.
Upon the sale, exchange or retirement of a Note,a U.S. holder generally will
recognize gain or loss equal to the difference between the amount realized on
the sale, exchange or retirement(less any accrued interest, which will be
taxable as such) and the U.S. holder's tax basis in such Note. A U.S.
holder'stax basis in a note will generally equal the cost of the Note to such
holder. Gain or loss recognized by a U.S. holder generally willbe long-term
capital gain or loss if the U.S. holder has held the Note for more than one
year at the time of disposition. Long-term capitalgains recognized by an
individual holder generally are subject to tax at a lower rate than short-term
capital gains or ordinary income.The deduction of capital losses is subject to
limitations.
A U.S. holder generally will not be entitledto credit any Brazilian tax
imposed on the sale or other disposition of the Notes against such U.S.
holder's U.S. federal incometax liability, except in the case of a U.S. holder
that consistently elects to apply a modified version of the U.S. foreign tax
creditrules that is permitted under recently issued temporary guidance and
complies with the specific requirements set forth in such guidance.Additionally,
capital gain or loss recognized by a U.S. holder on the sale or other
disposition of the Notes generally will be U.S. sourcegain or loss for U.S.
foreign tax credit purposes. Consequently, even if the withholding tax
qualifies as a creditable tax, a U.S. holdermay not be able to credit the tax
against its U.S. federal income tax liability unless such credit can be
applied (subject to generallyapplicable conditions and limitations) against
tax due on other income treated as derived from foreign sources. If the
Brazilian taxis not a creditable tax, the tax would reduce the amount realized
on the sale or other disposition of the Notes even if the U.S. holderhas
elected to claim a foreign tax credit for other taxes in the same year. The
temporary guidance discussed above also indicates thatthe Treasury and the IRS
are considering proposing amendments to the December 2021 regulations and that
the temporary guidance canbe relied upon until additional guidance is issued
that withdraws or modifies the temporary guidance. U.S. holders should consult
theirown tax advisors regarding the application of the foreign tax credit
rules to a sale or other disposition of the Notes and any Braziliantax imposed
on such sale or disposition.
Specified Foreign Financial Assets.
Individual U.S. holders that own "specifiedforeign financial assets" with an
aggregate value in excess of $50,000 on the last day of the taxable year or
$75,000 at any timeduring the taxable year are generally required to file an
information statement along with their tax returns, currently on Form
8938,with respect to such assets. "Specified foreign financial assets" include
any financial accounts held at a non-U.S. financialinstitution, as well as
securities issued by a non-U.S. issuer (which may include Notes issued in
certificated form) that are not heldin accounts maintained by financial
institutions. Higher reporting thresholds apply to certain individuals living
abroad and to certainmarried individuals. Regulations extend this reporting
requirement to certain entities that are treated as formed or availed of to
holddirect or indirect interests in specified foreign financial assets based
on certain objective criteria. U.S. holders who fail to reportthe required
information could be subject to substantial penalties. In addition, the
statute of limitations for assessment of tax wouldbe suspended, in whole or
part. Prospective investors should consult their own tax advisors concerning
the application of theserules to their investment in the Notes, including the
application of the rules to their particular circumstances.
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Information Reporting and Backup Withholding
Information returns will be filed with the IRSin connection with payments on
the Notes made to, and the proceeds of dispositions of Notes effected by,
certain U.S. holders. In addition,certain U.S. holders may be subject to
backup withholding in respect of such amounts if they do not provide their
taxpayer identificationnumbers to the person from whom they receive payments.
Investors who are not "United States persons" (as defined in the Code)may be
required to comply with applicable certification procedures to avoid the
application of such information reporting requirementsand backup withholding.
The amount of any backup withholding from a payment to a holder will be
allowed as a credit against the holder'sU.S. federal income tax liability and
may entitle the holder to a refund, provided that the required information is
timely furnishedto the IRS.
Brazilian Tax Considerations
The following discussionis a summary of the Brazilian tax considerations
relating to an investment in the Notes by a non-resident of Brazil. This
discussionis based on the tax laws of Brazil as in effect on the date of this
prospectus supplement and is subject to any change in Brazilian lawthat may
come into effect after such date. The information set forth below is intended
to be a general discussion only and does not addressall possible tax
consequences relating to an investment in the Notes.
PROSPECTIVEINVESTORS SHOULD CONSULT THEIR OWN TAX ADVISERS AS TO THE
CONSEQUENCES OF PURCHASING THE NOTES, INCLUDING, WITHOUT LIMITATION,
THECONSEQUENCES OF THE RECEIPT OF INTEREST AND THE SALE OR OTHER DISPOSITION
OF THE NOTES OR COUPONS
.
Payments in Respect of the Notes, and Saleor Other Disposition of Notes
Generally, an individual,entity, trust or organization that is domiciled for
tax purposes outside Brazil (a "Non-Resident") is subject to income taxin
Brazil only when income is derived from a Brazilian source or when the
transaction giving rise to such earnings involves assets locatedin Brazil.
Therefore, based on the fact that PGF is considered to be domiciled abroad for
tax purposes, any interest, gains, fees, commissions,expenses and any other
income paid by PGF in respect of the Notes it issues to Non-Resident holders
should not be subject to withholdingor deduction in respect of Brazilian
income tax or any other taxes, duties, assessments or governmental charges in
Brazil, provided thatsuch payments are made by PGF with funds held outside of
Brazil.
Any capital gains generatedoutside Brazil as a result of a transaction between
two Non-Resident holders with respect to assets not located in Brazil are
generallynot subject to tax in Brazil. If the assets are located in Brazil,
then capital gains realized thereon are subject to income tax, accordingto Law
No. 10,833, enacted on December 29, 2003. Since the Notes will be issued by a
legal entity incorporated outside of Braziland registered abroad, the Notes
should not fall within the definition of assets located in Brazil for purposes
of Law No. 10,833,gains realized on the sale or other disposition of the Notes
made outside Brazil by a Non-Resident holder to another Non-Resident shouldnot
be subject to Brazilian taxes. However, considering the general and unclear
scope of this legislation and the absence of judicialguidance in respect
thereof, we cannot assure prospective investors that such interpretation of
this law will prevail in the courts ofBrazil. If the income tax is deemed to
be due, the gains may be subject to income tax in Brazil, effective as from
January 1, 2017,(as confirmed by Declaratory Act No. 3, of April 27, 2016), at
progressive rates as follows: (i) 15% for the part of thegain that does not
exceed R$5 million, (ii) 17.5% for the part of the gain that exceeds R$5
million but does not exceed R$10 million,(iii) 20% for the part of the gain
that exceeds R$10 million but does not exceed R$30 million and (iv) 22.5% for
the part ofthe gain that exceeds R$30 million; or 25.0% if such Non-Resident
holder is located in a Low or Nil Tax Jurisdiction as it will be furtherdetailed
below. A lower rate, however, may apply under an applicable tax treaty
between Brazil and the country where the Non-Residentholder has its domicile.
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Payments Made by Petrobras as Guarantor
In the event the issuer failsto timely pay any due amount, including any
payment of principal, interest or any other amount that may be due and payable
in respectof the Notes, the guarantor will be required to assume the
obligation to pay such due amounts. As there is no specific legal
provisiondealing with the imposition of withholding income tax on payments
made by Brazilian sources to Non-Resident beneficiaries under guaranteesand no
uniform decision from the Brazilian courts, there is a risk that tax
authorities will take the position that the funds remittedby the guarantor to
the Non-Resident holders may be subject to the imposition of withholding
income tax at a general 15% rate, or ata 25% rate, if the Non-Resident holder
is located in a Low or Nil Tax Jurisdiction. Arguments exist to sustain that
(a) paymentsmade under the guarantee structure should be subject to imposition
of withholding income tax according to the nature of the guaranteedpayment, in
which case only interest and fees should be subject to taxation at a rate of
15%, or 25%, in cases of beneficiaries locatedin Low or Nil Tax Jurisdictions,
as defined by the Brazilian legislation; or (b) payments made under guarantee
by Brazilian sourcesto Non-Resident beneficiaries should not be subject to the
imposition of withholding income tax, to the extent that they should qualifyas
a credit transaction by the Brazilian party to the borrower. As noted above,
the imposition of withholding income tax under thesecircumstances has not been
settled by the Brazilian courts.
If the payments with respectto the Notes are made by Petrobras as a guarantor,
then Non-Resident holders will be indemnified so that, after payment of
applicableBrazilian taxes imposed by deductions or withholding with respect to
principal or interest payable with respect to the Notes, subjectto certain
exceptions, as mentioned in "Description of the Notes-Covenants-Additional
Amounts," a Non-Residentholder will receive an amount equal to the amount that
such Non-Resident holder would have received if no such taxes were imposed.
See"Description of the Notes-Covenants-Additional Amounts."
Discussion on Low or Nil Tax Jurisdictions
On June 23, 2008, witheffect as from January 1, 2009, Law No. 11,727 ("
Law 11,727/08
") introduced the concept of "privilegedtax regime" which concept is broader
than the concept of a Favorable Tax Jurisdiction. A "
privileged tax regime
"is a regime that (1) does not tax income or taxes it at a maximum rate lower
than 20% (or 17% if the country complies with internationaltax transparency
standards; however, Law No. 14,596 (as defined below) changed this threshold
from 20% to 17%, as a general matterfrom 2024 onwards, as discussed below);
(2) grants tax advantages to a non-resident entity or individual (a) without
the needto carry out a substantial economic activity in the country or in the
territory, or (b) conditioned upon the non-exercise of a substantialeconomic
activity in the country or in the territory; (3) does not tax or taxes foreign
sourced income at a maximum rate lower than20% (or 17% if the country complies
with international tax transparency standards; however, Law No. 14,596 (as
defined below) changedthis threshold from 20% to 17%, as a general matter
since January 2024, as discussed below); or (4) restricts the disclosureof
information related to the ownership of shares, goods and rights, as well as
to the information related to the economic transactionscarried out.
For the purpose of qualificationas a Favorable Tax Jurisdiction, a regulation
issued by the Brazilian tax authorities on November 28, 2014 (Ordinance 488,
of 2014)had already decreased from 20% to 17% the minimum threshold for
certain specific cases. The 17% threshold applied only to countries andregimes
aligned with international standards of fiscal transparency in accordance with
rules established by the Brazilian tax authorities.
On December 29, 2022,the Brazilian government published the Provisional
Measure No. 1,152, which was converted into Law No. 14,596 on June 15,2023 ("
Law No. 14,596/23
"). Specifically in relation to the concepts of Favorable Tax Jurisdictions
and"privileged tax regimes", Law No. 14,596/23 established a minimum threshold
tax rate of 17%, a change from the minimumrate of 20% mentioned above. As
mentioned above, the 17% rate was already adopted as a minimum threshold for
countries and regimes thatcomply with Normative Instruction No. 1,530, dated
December 19, 2014 ("
Normative Instruction No. 1,530
").Under these rules, however, tax authorities could reinstate the 20%
threshold at any time. Law No. 14,596/23 set in legal statutesthe minimum 17%
threshold for all cases and regardless of compliance with Normative
Instruction No. 1,530. This new threshold isin effect since January 2024,
except in the case of the taxpayers that opted to anticipate the effects of
said law (which were alreadysubject to the new threshold in 2023).
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On June 4, 2010, theBrazilian federal tax authorities enacted Normative
Instruction No. 1,037, as amended ("
IN 1,037/10
"),listing (i) the countries and jurisdictions considered Favorable Tax
Jurisdictions, and (ii) the privileged tax regimes. Thisis an exhaustive list
and has not yet been updated to reflect changes from Law No. 14,596.
The interpretation of thecurrent tax legislation could lead to the conclusion
that the concept of "Privileged Tax Regime" should apply solely forpurposes of
Brazilian transfer pricing and thin capitalization rules, stricter
deductibility rules and other specific situationsfor specific taxpayers (a
binding tax ruling -
Solucao de Consulta COSIT
No. 575, dated as of December 20,2017 - issued by Brazilian tax authorities
seems to confirm this interpretation). However, one cannot assure that
subsequent legislationor interpretations issued by the Brazilian tax
authorities regarding the definition of a "Privileged Tax Regime" providedby
Law No. 11,727/08 and Law No. 14,596/23 will not also apply to payments to
Non-Resident holders in connection with the notes.
In the event that the privilegedtax regime concept is interpreted to be
applicable to transactions such as payments related to the Notes to
Non-Resident, Law 11,727/08would accordingly result in the imposition of
taxation to a Non-Resident that meets the privileged tax regime requirements
in the sameway applicable to a resident located in a Favorable Tax
Jurisdiction.
Holders should consult withtheir own tax advisors regarding the consequences
of the implementation of Law 11,727/08, Law 14,596/23 and IN 1,037/10 and of
any relatedBrazilian tax law or regulation concerning Favorable Tax
Jurisdictions and "privileged tax regimes".
Other Tax Considerations
Brazilian law imposes a Taxon Foreign Exchange Transactions (
Imposto sobre Operacoes de Credito, Cambio e Seguro, ou relativas a Titulose
Valores Mobiliarios),
or IOF/Exchange, due on the conversion of
reais
into foreign currency and on the conversionof foreign currency into
reais
. Currently, the IOF/Exchange rate for almost all foreign currency exchange
transactions is 0.38%.According to Section 15-B of the Decree No. 6,306, as
amended, the settlement of exchange transactions in connection with
foreignfinancing or loans, for both inflow and outflow of proceeds into and
from Brazil, are subject to IOF/Exchange at a 0% rate. Currently,in the case
of the settlement of foreign exchange transactions (including simultaneous
foreign exchange transactions), in connectionwith the inflow of proceeds to
Brazil deriving from foreign loans, including those obtained through the
issuance of notes in the internationalmarket, the IOF/Exchange tax rate is 0%.
The Brazilian government is permitted to increase this rate at any time up to
25.0%. Any suchincrease in rates may only apply to future transactions.
In addition, the Braziliantax authorities could argue that a Tax on Loan
Transactions (Imposto sobre Operacoes de Credito, Cambio eSeguro, ou relativas
a Titulos e Valores Mobiliarios), or IOF/Credit, due on loan transactions
could be imposed upon anyamount paid in respect of the Notes by the guarantor
under the guarantee given at a rate of up to 1.88% of the total amount paid.
IOF/Credit,however, can only be levied on on-shore loan transactions, so
cross-border payments to investors resident outside Brazil should not
besubject to this taxation.
Generally, there are no inheritance,gift, succession, stamp, or other similar
taxes in Brazil with respect to the ownership, transfer, assignment or other
disposition ofthe Notes by a Non-Resident, except for gift and inheritance
taxes imposed by some Brazilian states on gifts or bequests by individualsor
entities not domiciled or residing in Brazil to individuals or entities
domiciled or residing within such states.
Dutch Tax Considerations
The following describes certainmaterial Dutch tax consequences for a holder
who is neither a resident nor deemed to be a resident of the Netherlands for
Dutch tax purposesin respect of the ownership, acquisition and disposal of the
Notes.
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This section is based onthe Dutch tax laws, published regulations thereunder
and published authoritative case law, all as in effect on the date hereof,
including,for the avoidance of doubt, the tax rates applicable on the date
hereof, and all of which are subject to change or to different interpretation,po
ssibly with retroactive effect. Any such change may invalidate the contents of
this section, which will not be updated to reflect suchchange. Where this
section refers to "the Netherlands" and "Dutch" it refers only to the part of
the Kingdomof the Netherlands located in Europe. In addition, this section is
based on the assumption that the Notes issued by PGF do not qualifyas equity
for Dutch tax purposes.
This section is intendedas general information only, it does not constitute
tax or legal advice and it does not purport to describe all possible Dutch tax
considerationsor consequences that may be relevant to a holder and does not
purport to deal with the tax consequences applicable to all categoriesof
investors, some of which may be subject to special rules. In view of its
general nature, it should be treated with appropriate caution.
PROSPECTIVE INVESTORSSHOULD CONSULT THEIR OWN TAX ADVISERS AS TO THE
CONSEQUENCES OF PURCHASING THE NOTES, INCLUDING, WITHOUT LIMITATION, THE
CONSEQUENCESOF THE RECEIPT OF INTEREST AND THE SALE OR OTHER DISPOSITION OF
THE NOTES OR COUPONS.
For Dutch tax purposes, aholder of Notes may include, without limitation:
. an owner of one or more Notes who, in addition to the title to such Notes, has an economic interest in such Notes;
. a person or an entity that holds the entire economic interest in one or more Notes;
. a person or an entity that holds an interest in an entity, such as a partnership or a mutual fund,
that is transparent for Dutch tax purposes, the assets of which comprise one or more Notes; and
. a person who or an entity that does not have the legal title to the Notes, but to whom the Notes are attributed based either on
such person or entity holding a beneficial interest in the Notes or based on specific statutory provisions, including statutory
provisions pursuant to which the Notes are attributed to a person who is, or who has directly or indirectly inherited the Notes
from a person who was, the settlor, grantor or similar originator of a trust, foundation or similar entity that holds the Notes.
Dutch Individual and Corporate Income Tax
Please note that this sectiondoes not describe the tax considerations for:
. holders of the Notes if such
holders, and in the case of
an individual, his or her
partner or certain of his or
her relatives by blood or
marriage in the direct line
(including foster children),
have a substantial interest (
aanmerkelijk belang
) or deemed substantial interest (
fictief aanmerkelijk belang
) in PGF under the Dutch
Income Tax Act 2001 (
Wet inkomstenbelasting 2001
). Generally speaking, a holder of notes has a substantial interest
in PGF if it has, directly or indirectly (and, in the case of an
individual, alone or together with certain relatives) (i) the
ownership of, a right to acquire the ownership of, or certain rights
over, shares representing 5 per cent. or more of either the total
issued and outstanding capital of PGF or the issued and outstanding
capital of any class of shares of PGF, or (ii) the ownership of,
or certain rights over, profit participating certificates (
winstbewijzen
) that relate to 5 per cent. or
more of either the annual profit or
the liquidation proceeds of PGF. A
deemed substantial interest may
arise if a substantial interest (or
part thereof) has been disposed of,
or is deemed to have been disposed
of, on a non-recognition basis;
. pension funds, investment institutions (
fiscale beleggingsinstellingen
) and tax exempt investment institutions (
vrijgestelde beleggingsinstellingen
) (each as defined in the Dutch Corporate Income Tax Act 1969 (
Wet op de vennootschapsbelasting 1969
)) and other entities that are, in whole or in part, not subject to or exempt from Dutch corporate income tax;
. holders of Notes who are individuals and for whom the Notes or any benefit
derived from the Notes are a remuneration or deemed to be a remuneration
for activities performed by such holders or certain individuals related
to such holders (as defined in the Dutch Income Tax Act 2001).
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A holder of Notes will notbe treated as a resident of the Netherlands by
reason only of the holding of a Note or the execution, performance, delivery
and/or enforcementof the Notes.
A holder who is not a residentof the Netherlands, nor deemed to be a resident,
is not taxable on income derived from the Notes and capital gains realized
upon thedisposal or redemption of the Notes, except if:
(i) such holder derives profits from an
enterprise, whether as entrepreneur (
ondernemer)
or pursuant to a co-entitlement to the net worth of
the enterprise, other than as an entrepreneur or a
shareholder, which enterprise is, in whole or in part,
carried on through a (deemed) permanent establishment (
vaste inrichting
) or a permanent representative (
vaste vertegenwoordiger
) that is taxable in the Netherlands,
to which the Notes are attributable;
(ii) the holder is an individual and derives
benefits from miscellaneous activities (
overige werkzaamheden
) carried out in the Netherlands in respect
of the Notes, including without limitation
activities which are beyond the scope of
active portfolio investment activities;
(iii) the holder is not an individual and is entitled to a share in the profits
of an enterprise or a co-entitlement to the net worth of an enterprise,
which is effectively managed in the Netherlands, other than by way of
securities, and to which enterprise the Notes are attributable; or
(iv) the holder is an individual and is entitled to a share
in the profits of an enterprise that is effectively
managed in the Netherlands, other than by way of securities,
and to which enterprise the Notes are attributable.
Dutch Withholding Tax
Holders of Notes NotRelated to PGF
All payments made by PGFunder the Notes to holders of Notes other than holders
that are "related entities" in respect of PGF (within the meaning ofthe Dutch
Withholding Tax Act 2021;
Wet bronbelasting 2021
) (see below) can be made free of withholding or deduction for any taxesof any
nature imposed, levied, withheld or assessed by the Netherlands or any
political subdivision or taxing authority thereof or therein,unless the Notes
qualify as equity of PGF for Dutch tax purposes.
Holders of Notes Relatedto PGF
Payments of interest (oramounts deemed interest) made by PGF under the Notes
to holders of Notes that are related entities in respect of PGF (within the
meaningof the Dutch Withholding Tax Act 2021, as defined below) may become
subject to Dutch withholding tax at a rate of 25.8% (rate for 2024),if such
related entity:
. is considered to be resident (
gevestigd
) in a jurisdiction that is listed in the yearly updated Dutch regulation
on low-taxing states and non-cooperative jurisdictions for tax purposes (
Regeling laagbelastende staten en niet-cooperatieve
rechtsgebieden voor belastingdoeleinden
) (a "Listed Jurisdiction"); or
. has a permanent establishment located in a Listed Jurisdiction to which the interest payment is attributable; or
. is entitled to the interest payment with the main purpose or one of the main purposes of avoiding taxation for another person
or entity and there is an artificial arrangement or transaction or a series of artificial arrangements or transactions; or
. is not considered to be the recipient of the interest in its jurisdiction of residence because
such jurisdiction treats another entity as the recipient of the interest (a hybrid mismatch); or
. is not resident in any jurisdiction (also a hybrid mismatch); or
. is a reverse hybrid (within
the meaning of Article
2(12) of the Dutch Corporate Income Tax Act;
Wet op de vennootschapsbelasting 1969
), if and to the extent (x) there is a participant in the reverse hybrid holding a Qualifying Interest in the
reverse hybrid, (y) the jurisdiction of residence of the participant holding the Qualifying Interest in the reverse
hybrid treats the reverse hybrid as transparent for tax purposes and (z) such participant would have been subject
to Dutch withholding tax in respect of the payments of interest without the interposition of the reverse hybrid;
all within the meaning ofthe Dutch Withholding Tax Act 2021.
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Related entity
For purposes of the DutchWithholding Tax Act 2021, an entity is considered a
"related entity" in respect of PGF if:
. such entity has a Qualifying Interest (as defined below) in PGF; or
. PGF has a Qualifying Interest in such entity; or
. a third party has a Qualifying Interest in both PGF and such entity.
The term "QualifyingInterest" means a direct or indirectly held interest -
either by an entity individually or jointly if an entity is part ofa
collaborating group (
samenwerkende groep
) - that enables such entity or such collaborating group to exercise a
definiteinfluence over another entity's decisions, such as PGF decisions, and
allows it to determine the other entity's activities (within themeaning of
case law of the European Court of Justice on the right of freedom of
establishment (
vrijheid van vestiging
).
Dutch Gift and InheritanceTaxes
No Dutch gift or inheritancetaxes are due in respect of any gift of Notes by,
or inheritance of the Notes on the death of a holder, except if:
(i) at the time of the gift or death of the holder, the holder is
a resident, or is deemed to be a resident, of the Netherlands
or the transfer is otherwise construed as a gift or inheritance made by, or on behalf of, a person
who, at the time of the gift or death, is or is deemed to be a resident of the Nether-lands;
(ii) the holder dies within 180 days
after the date of the gift of the
Notes and is not, or not deemed to be, at the time of the gift, but is, or
deemed to be, at the time of his or her death, a resident of the Netherlands; or
(iii) the gift of the
Notes is made under a condition precedent and the holder is a resident.
For purposes of Dutch giftand inheritance taxes, among others, a person that
holds Dutch nationality will be deemed to be resident in the Netherlands if
such personhas been resident in the Netherlands at any time during the 10
years preceding the date of the gift or his/her death. Additionally,
forpurposes of Dutch gift tax, among others, a person not holding Dutch
nationality will be deemed to be resident in the Netherlands ifsuch person has
been resident in the Netherlands at any time during the 12 months preceding
the date of the gift.
Other Taxes and Duties
No other Dutch taxes, includingvalue-added tax (VAT) and taxes of a
documentary nature, such as capital tax, stamp or registration tax or duty,
are payable by or onbehalf of a holder of the Notes by reason only of the
purchase, ownership and disposal of the Notes.
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DIFFICULTIES OF ENFORCING CIVIL LIABILITIESAGAINST NON-U.S. PERSONS
Petrobras is a
sociedadede economia mista
(partially state-owned enterprise) organized and existing under the laws of
Brazil, and PGF is a private companywith limited liability incorporated under
the laws of the Netherlands. A substantial portion of the assets of Petrobras
and PGF are locatedoutside the United States, and at any time all of their
respective executive officers and directors, and certain advisors named in
thisprospectus supplement, may reside outside the United States. As a result,
it may not be possible for you to effect service of processon any of those
persons within the United States. In addition, it may not be possible for you
to enforce a judgment of a United Statescourt for civil liability based upon
the United States federal securities laws against any of those persons outside
the United States.
For further information onpotential difficulties in effecting service of
process on any of those persons or enforcing judgments against any of them
outside theUnited States, see "Difficulties of Enforcing Civil Liabilities
Against Non-U.S. Persons" in the accompanying prospectus.
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LEGAL MATTERS
Heussen B.V., special Dutchcounsel for PGF, will pass upon the validity of the
Notes and the indenture for PGF as to certain matters of Dutch law.
Petrobras'sgeneral counsel or acting general counsel, will pass upon, for
Petrobras, certain matters of Brazilian law relating to the guaranty.The
validity of the Notes, the indenture and the guaranty will be passed upon for
PGF and Petrobras by Cleary Gottlieb Steen &Hamilton LLP as to certain matters
of New York law.
Pinheiro Neto Advogados willpass upon the validity of the guaranty for the
underwriters as to certain matters of Brazilian law. Allen Overy Shearman
Sterling USLLP will pass upon the validity of the Notes, the indenture and the
guaranty for the underwriters as to certain matters of New York law.
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EXPERTS
The consolidated financialstatements of Petrobras as of December 31, 2023 and
2022 and for each of the years in the three-year period ended December
31,2023, and management's assessment of the effectiveness of internal control
over financial reporting as of December 31, 2023(which is included in
Management's Report on Internal Control over Financial Reporting) incorporated
herein by reference to the
AnnualReport on Form 20-F filed with the SEC on April 12, 2024
have been so incorporated in reliance on the reports of KPMG AuditoresIndependen
tes Ltda., independent registered public accounting firm, incorporated by
reference herein and upon the authority of said firmas experts in auditing and
accounting.
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INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
With respect to the unauditedcondensed consolidated interim financial
statements of Petrobras as of June 30, 2024 and for the three-month and
six-month periodsended June 30, 2024 and 2023, incorporated by reference
herein, KPMG Auditores Independentes Ltda., independent registered
publicaccounting firm, has reported that they applied limited procedures in
accordance with professional standards for a review of such information.However,
their separate report included in the Petrobras
Form 6-K furnished to the SEC on August 9, 2024
and incorporated byreference herein, states that they did not audit and they
do not express an opinion on those unaudited condensed consolidated
interimfinancial statements. Accordingly, the degree of reliance on their
report on such information should be restricted in light of the limitednature
of the review procedures applied. The accountants are not subject to the
liability provisions of Section 11 of the SecuritiesAct for their report on
the unaudited condensed consolidated interim financial statements because that
report is not a `report'or a `part' of the registration statement prepared or
certified by the accountants within the meaning of Sections 7 and 11of the
Securities Act.
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