Petrobras Posts Q1 Financial Results, Profits Down by 20%

Net Profit

Petrobras' consolidated net profit in the 1st quarter of 2009 was R$5 billion 816 million. The company's result was influenced by the strong decrease in the oil price in the quarter, which affected the average domestic oil sales price (63% decrease) and the revenues derived from oil and derivatives exports. The lower demand for derivatives in the internal market, a reflex of the decreased industrial activity, also affected the result. On the other hand, the increases made to the diesel fuel and gasoline prices in May 2008, as well as the reduced imports and the lower government take attenuated these effects. As a result, the company's net profit declined 20% compared to a year ago. In spite of the expressive oil price reduction (55%), cash generation, as measured by the EBITDA, reached R$13 billion 423 million (only 5% less than in 1Q09 compared to 1Q08), while the net operating revenue was R$42 billion 595 million.

Compared to 4Q08, the net profit was down 6%. The financial result diminished from a positive R$2.4 billion in 4Q08, to a negative R$849 billion in the period on account of the exchange rate effects on assets valued in Dollars. More income tax and social contributions were paid because of the fiscal benefit brought on by the provisioning of interest on equity done in 4Q08. Cash generation (EBITDA), meanwhile, was up 46%, reflecting a reduction in costs and operating expenses.

Petrobras Sets a Daily Production Record

Oil & natural gas production in Brazil reached 2,261,000 barrels of oil equivalent per day (boed) in the 1st quarter 2009, up 7% over a year ago. Production going on stream at platforms P-53 (Marlim Leste), P-51 (Marlim Sul), and FPSO Cidade de Niterói (Marlim Leste), between 4Q08 and 1Q09, and the increased production at units P-52 and P-54 (Roncador) contributed to this increase, surpassing the natural decline of the mature fields. The exclusive oil production in Brazil topped-out at 1,952,000 barrels per day (bpd), 7% more than a year ago, while the natural gas production reached 309,000 boed, 2% above the average achieved in 1Q08. A daily oil production record in Brazil was set on May 4: 2,059,000 barrels.

Oil and gas production abroad reached 221,000 boed, 2% lower than a year ago. Petrobras’ total oil and natural gas production, including Brazil and abroad, was 6% higher than a year ago: 2,482,000 boed.

Extended Well Test at Tupi

The Extended Well Test (EWT) of Tupi, at Block BM-S-11, operated by Petrobras (65%), in partnership with BG Group (25%) and Galp Energia (10%), was kicked-off on May 5. FPSO BW Cidade de São Vicente, capable of producing up to 30,000 barrels of oil per day, is currently producing at the site and achieving good results. The test, which commenced production in the Santos Basin’s pre-salt layer, is scheduled to last 15 months and will collect technical information that will contribute to the development of the pre-salt reservoirs.

Investments Up 41%

Investments made in 1Q09 reached R$14 billion 380 million, a 41% surge compared to a year ago. In line with the goals set forth by its Strategic Planning, Petrobras continues prioritizing investments in oil and natural gas production capacity development in Brazil by means of own investments and by structuring projects with partners. Of the total invested, R$7.1 billion were allocated to the E&P segment, 52% more than 1Q08. Resources allocated to the Gas & Energy area were increased by 303% compared to a year ago, focusing on enhancing the gas pipeline network to offload production and develop associated and non-associated natural gas projects to supply the Brazilian demand. The capital invested in Downstream rose 59% on account of the projects carried out to improve fuel quality and to boost heavy oil processing at the company's refineries.


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