Table of contents

MESSAGE FROM THE CEO ............................................................................................................ ERRO! INDICADOR NÃO DEFINIDO.

SALES AND PRODUCTION 2020 ........................................................................................................................................ 11

PROVED RESERVES IN 2020 .............................................................................................................................................. 16

FINANCIAL PERFORMANCE 2020 ...................................................................................................................................... 18

SHAREHOLDERS' COMPENSATION .............................................................................. ERRO! INDICADOR NÃO DEFINIDO.

VALUE CREATION .............................................................................................................................................................. 32

VISION, PURPOSE AND VALUES ........................................................................................................................................ 34

STRATEGIC PLAN 2021-2025 ........................................................................................ ERRO! INDICADOR NÃO DEFINIDO.

SUSTAINABILITY ................................................................................................................................................................ 48

HUMAN RESOURCES .................................................................................................... ERRO! INDICADOR NÃO DEFINIDO.

ADDIOTIONAL INFORMATION ..................................................................................................... ERRO! INDICADOR NÃO DEFINIDO.

Disclaimer

The Management Report seeks to comply with current regulations, such as Law no. 6404/1976 and the guidelines of the Brazilian Securities and Exchange Commission, or CVM (Comissão de Valores Mobiliários). In addition, the financial information contained in this report was prepared in compliance with the International Financial Reporting Standards (IFRS) and also in accordance with the accounting practices adopted in Brazil by the Accounting Pronouncements Committee, or CPC (Comitê de Pronunciamentos Contábeis).

This document may contain forward-looking statements that reflect only the expectations of Company's managers. The terms "anticipates," "believes," "expects," "predicts," "intends," "plans," "projects," "objective," "should" and other similar terms are intended to identify such forward-looking statements, which evidently involve risks or uncertainties that may or may not be anticipated by the Company, and therefore are not guarantees of our future results. Therefore, the future results of our operations may differ from the current expectations, and the reader should not rely exclusively on the information contained herein.

Management's comments on our financial performance consider the scope of each business segment, as defined in Note 13 to the Petrobras Financial Statements.

NOTICE: This publication is a free translation of Petrobras' 2020 Management Report, filed with the CVM.

We inform that in case of divergences between the wording of this version and the original Portuguese wording of the report, the original Portuguese wording will prevail.

MESSAGE FROM THE CEO

Message from de CEO -

Dear Shareholders,

I am very happy to present the report on Petrobras financial performance in 2020, a superb performance in a very challenging environment.

Amidst a severe global recession and the effects of a major global shock to the oil industry, we promised to engineer a J-shaped recovery. The goal was to emerge better than before.

We delivered on our promises.

Costs were reduced and are set to remain on a downward path, productivity is growing, the company is laser focused on investing in world-class assets and has a large pipeline of non-core assets to divest.

We are very proud of our team for the fast and efficient response to the oil crisis. Our employees worked relentlessly to win, corporate people at their homes and operations people at the refineries, plants and oil and gas platforms in the sea.

The execution of the strategy launched in January 2019 was accelerated as well as digital transformation to support the efforts to lower costs and to boost efficiency and operational safety. The work of multidisciplinary agile teams was instrumental to leverage our key resources and to enhance resiliency.

Oil and oil & gas production reached all-time highs at 2.28 MMbpd and 2.84 MMboed, respectively, while most of our global competitors showed output reduction. A major part of our production - about 66% - came from the pre salt fields at an average lifting cost of US$2.5 per boe. This means also higher oil quality sold at a premium on the Brent price as well as less greenhouse gases (GHG) emissions.

Total average lifting cost, at US$ 5.2 per boe in 2020, dropped 42.2% relatively to the 2015-2019 average of US$9.0 per boe.

Petrobras oil and fuel oil exports also reached historical records. Crude oil sales increased 33% and our Tupi and Buzios brand names were consolidated with Asian clients.

Our sales and marketing team is developing initiatives to diversify by geographies and clients. In 2020 they were able to add 14 new clients to the clientele.

Exports of fuel oil climbed 45,9%, primarily due to the successful exploration of low sulphur grade to the Singaporean market, a global shipping hub.

New and successful inroads were made in the sales of naphta, propane, ethane and coke.

Whereas oil prices plunged 35%, our operational cashflow (CFFO) went up 13% and free cash flow (FCF) 20%.

This is an excerpt of the original content. To continue reading it, access the original document here.

Attachments

  • Original document
  • Permalink

Disclaimer

PETROBRAS - Petróleo Brasileiro SA published this content on 05 March 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 05 March 2021 15:24:05 UTC.