Petrobras : Production & Sales Report 4Q21

Highlights on production and sales in 2021

Rio de Janeiro, February, 9th, 2022

Petrobras posted an excellent operational performance in 2021, reaching all production targets for the year with the achievement of the following marks:

Production	Accomplished	Target
Oil and NGL (MMbpd)	2.22	2.21 +/- 4%
Oil, NGL and commercial natural gas (MMboed)	2.46	2.43 +/- 4%
Total oil, NGL and natural gas (MMboed)	2.77	2.72 +/- 4%

The highlights for 2021 were:

• FPSO Carioca production start-up, on August 23, the first platform in Sépia field, in Santos Basin pre-salt. Throughout the year, 3 new producing wells were connected and currently the operated production stands above 130 thousand bpd;

"The start-up of the first Sépia project is a milestone for all of us who work at Petrobras. It is the victory of the determination, persistence and technical capacity of our professionals, in a challenging external scenario due to the pandemic", says the Chief Production Development Officer, João Henrique Rittershaussen;

• conclusion, on July 18, of P-70'sramp-up, in Atapu field, in less than 13 months. The FPSO reached, with 4 producing wells, an operated production of 161 thousand bpd, exceeding the project's nominal capacity;
• record in pre-salt production, with an annual average of 1.95 MMboed, representing 70% of Petrobras' total production. Our production in the pre-salt has been growing rapidly and this record represents more than twice the production volume of 5 years ago;
• annual record of gas utilization with the mark of 97.2% of gas produced. This record contributes significantly to reduction of emissions and higher carbon efficiency;
• on September 1st, the co-participation agreement for the Búzios field came into effect, regulating the coexistence of the Transfer of Rights (ToR) Agreement and the Production Sharing Agreement for the ToR Surplus production for the field. We now hold 90% of the exploration and production rights for the surplus volumes, excluding the PPSA portion, and 92.666% of the volumes in the shared reservoir;
• acquisition, on December 17, of exploration and production rights for the ToR surplus volumes in the Atapu and Sépia fields. Petrobras exercised its preemptive rights to act as operator, with a 30% interest in the winning consortium of Sépia. For Atapu, the winning consortium is integrated by Petrobras as operator, with a 52.5% stake. With the beginning of the Production Sharing Regime in Atapu and Sépia fields scheduled for early May 2022, Petrobras' interests in the shared reservoir, including the shares of the ToR Agreements and of the Concession Agreements and will be respectively 65.69% for Atapu and 55.30% for Sepia.

"The achievement of those results demonstrates Petrobras' commitment to meeting its goals and the focus on assets in deep and ultra-deep waters, which have demonstrated great competitive advantage, producing low- cost, high-quality oil with low greenhouse gases emissions", says Exploration and Production Officer, Fernando Assumpção Borges.

In 4Q21, average production of oil, NGL and natural gas reached 2.70 MMboed, 4.5% below 3Q21, due to the beginning of the Búzios Co-participation Agreement and maintenance stoppages in pre-salt platforms with high

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production (P-66,P-75,P-76, FPSO Cidade de Ilhabela, FPSO Cidade de Mangaratiba and FPSO Cidade de São Paulo). These factors were partially offset by the ramp-up of FPSO Carioca.

As part of our portfolio management strategy, we highlight the closing of the sale, in 4Q21, of our entire stake in the onshore fields of the clusters (i) Miranga and Remanso, in Bahia and (ii) Cricaré, in Espírito Santo and (iii) of thr Rabo Branco concession, in Sergipe. These fields had a combined average production of 5.2 kbpd of oil and 468,000 m3/day of gas from January to November 2021.

More recently, we revised the production target disclosed in the 2022-2026 Strategic Plan, following the results of the 2nd Bidding Round for the Surplus Volumes of the ToR in Atapu and Sépia, which resulted, for 2022, in a reduction of 70 Mboed for total oil and gas production. For the 2023-2026 horizon, the estimated average production impact is a reduction of 0.1 MMboed.

FPSO Anchieta, located in the Jubarte field, in Campos Basin, has been shut down since January 22 after oil was detected close to the vessel. Adequate anti-pollution measures were immediately deployed and were proven to be effective. The situation is under control and the FPSO will resume operations when an action plan is approved by the authorities.

On January 28, 2022, FPSO Guanabara arrived in Mero field. This will be the first definitive production system to be installed in this field, with start-up scheduled for the first half of 2022.

Sales volumes of oil products grew 8.5% in 2021 compared to the previous year, and the highlight was the increase in the sales of gasoline, diesel and jet fuel, mainly due to the strong impact on sales caused by the COVID-19 pandemic in 2020, in addition to lower imports of gasoline and diesel by third parties between the periods, resulting in an increase in the company's market share. In the case of gasoline, the gain in market share over ethanol was also relevant, mainly due to lower pump prices for final consumers, and in the case of diesel, the growth of the economy in 2021, especially the industrial sector. Another oil product that contributed to total sales growth was fuel oil, whose sales grew in 2021 compared to the previous year, due to greater demand from thermopower plants.

We achieved an annual record for S-10 diesel sales and production in 2021, with a 34.7% increase in sales and a 10% increase in production. The growth in S-10 diesel consumption happens alongside the modernization of the national fleet, ensuring better environmental and economic benefits for users.

Oil products output in 2021 also exceeded 2020 volumes, despite the concentration of scheduled maintenance stoppages, postponed from 2020, the initial and most critical phase of the pandemic.

Even with several maintenance stoppages, we reached an average total utilization factor (FUT) of 83% in our refineries in 2021, the highest mark in the last five years, which demonstrates the efficiency gains in the units' management.

With the beginning of the RefTOP program in May 2021, we also achieved improvements in environmental and energy performance metrics. The Greenhouse Gas Emissions Index (IGEE) for the refining segment was 39.7 gCO2e/CWT in 2021, exceeding the target. In total, emissions of around 2.8 million tons of CO2 equivalent were avoided when comparing the actual emissions with the ones that would be generated if the refineries had operated in 2021 with 2020 metrics. This is equivalent to approximately 60% of the emission of the urban bus fleet in the city of São Paulo in 2021, according to data from the Energy and Environment Institute (IEMA).

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In 2021, we reached an annual record of pre-salt throughput in our refining park, reaching 59% of the processed feedstock, 9% above 2020. Our pre-salt oil processing capacity has been increasing continuously and there was strong progress in 4Q21 in line with the company's strategy of leveraging the processing of pre-salt oil, which has a low sulfur content, bringing competitive advantages and opportunities to increase refining margins, favoring the production of S-10 and bunker diesel.

In 4Q21, we highlight the conclusion of the sale of the RLAM refinery, on November 30, whose capacity corresponded to around 13% of our total refining system. This divestment, along with seasonal factors, contributed to lower sales in the domestic market in 4Q21, compared to 3Q21, totaling 1.848 MMbpd, and to the drop of 1.1%.in oil products output in the same period.

Net exports were 38.8% lower in 2021 due to the combination of lower export volume and higher import volume in the year. Oil exports were lower in 2021 due to lower oil production and higher domestic demand. These factors, together with the greater number of scheduled stoppages at the refineries, resulted in an increase in imports, to enable the fulfillment of sales contracts with customers.

We achieved a record of oil transshipment (ship-to-ship) operations for monthly oil exports in May 2021, carrying out 24 transshipment operations. The previous record consisted of 21 operations, which also took place in 2021, in March.

In 2021, Búzios was the main stream in our export basket. In 4Q21, Búzios continued to be the highlight, but we increased Atapu's share by including two new clients for this stream in our portfolio, reflecting the results of our marketing and sales strategy. In addition, we carried out the first export of the Sepia stream with a cargo exported in the period.

The development of new markets for the pre-salt oil streams has been a relevant factor for the increase in value generation in oil exports, since it enables us to explore arbitrage at any given time, always seeking markets where Petrobras' oils fetch higher prices. In 2021, approximately 45% of exports were destined for refiners in China, 20% for Europe, 20% for the Americas, and 15% for other destinations in Asia.

In 2021, power generation reached 3,419 average MW, an increase of 94.7% compared to 2020, due to hydrological conditions throughout 2021 and the effects of the economic recovery after the peak of the COVID-19 pandemic. We highlight the contracting of 1,284 MW of power in December 2021 in the country's first reserve capacity auction (A-5), an important opportunity to re-contract our plants, especially in the context in which thermoelectric plants have played a fundamental role in providing extra energy to the National Interconnected System.

Natural gas sales volumes increased 25% in 2021, compared to the previous year. This increase can be explained by both the higher thermoelectric dispatch and by the recovery in consumption by the industrial segment, impacted by the effects of the COVID-19 pandemic in 2020.

On the supply side, the volume of regasified LNG reached 23 million m³/day in 2021 (an increase of 188% compared to 2020), contributing to a total supply of natural gas of approximately 85 million m³/day. This greater volume of LNG delivered to the market was made possible by the expansion of regasification capacity at the Guanabara Bay terminal (RJ), which grew from 20 MM m³/day to up to 30 MM m³/day. This fact evidences the efforts made by Petrobras to ensure compliance with the commitments made to our customers.

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1 - Exploration & Production

																			Variação (%)
	Thousand barrels of oil equivalent per			4Q21			3Q21			4Q20			2021			2020		4Q21 X		4Q21 X		2021 X
	day (kboed)												3Q21		4Q20		2020
	Crude oil, NGL and natural gas - Brazil			2,663			2,790			2,637			2,732			2,788		(4.6)		1.0		(2.0)
	Crude oil and NGLs (Kbpd)	2,151	2,269	2,135	2,211	2,266	(5.2)	0.7		(2.4)
	Onshore and Shallow water			92			95			114			99			137		(3.2)		(19.3)		(27.7)
	Post-salt - deep and ultra deep	458	501	556	496	582	(8.6)	(17.6)		(14.8)
	Pre-salt			1,601			1,673			1,465			1,616			1,546		(4.3)		9.3		4.5
	Natural gas (Kboed)	513	520	502	521	522	(1.3)	2.2		(0.2)
	Crude oil, NGL and natural gas -Abroad			41			41			45			42			48		−		(8.9)		(12.5)
	Total (Kboed)	2,704		2,830		2,682	2,774		2,836	(4.5)	0.8		(2.2)
	Total - comercial (Kboed)			2,404			2,501			2,383			2,460			2,531		(3.9)		0.9		(2.8)

The average production of oil, LGN and natural gas in 4Q21 was 2,704 kboed, a reduction of 4.5% compared to 3Q21, mainly due to scheduled stoppages on high production platforms and the start-up of the Búzios Coparticipation Agreement, factors that were partially offset by the ramp-up of FPSO Carioca.

These factors also explained the variation in production in the pre-salt fields, which reached 1,601 kbpd in the quarter, 4.3% lower than in 3Q21. Total production in the pre-salt was 1,930 kboed in the quarter, representing 71% of Petrobras' total production.

Post-salt production in 4Q21 was 458 kbpd, 8.6% lower than the previous quarter, due to higher losses from maintenance stoppages and the natural decline of reservoirs.

Onshore and shallow water production, in turn, was 92 kbpd, 3 kbpd lower than the previous quarter, due to onshore field divestments and the natural decline in production.

Production abroad was 41 kbpd, relative to fields in Bolivia, Argentina and the United States, in line with 3Q21.

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