Our Portfolio

E&P

Due to the quality of our reserves, technology, and assets, we can remain a competitive producer, supplying oil and gas with reliability and superior quality in terms of carbon intensity and resilience to low oil prices. The value of our E&P portfolio comes from our strengths in deepwater and ultra-deepwater oil exploration and production. Our portfolio resilience assessment ensures that every investment project is viable at an oil price of $35/bbl over the long term.

The cost of production is an important element of resilience in all scenarios, particularly in scenarios of accelerated transition to a low-carbon economy. Then, our perspective is to operate with average E&P extraction costs of US$ 5.5/boe, being as low as US$ 4.2/boe in the pre-salt production, which will represent around 80% of the company’s total at the end of the five-year period.

Our total cost of oil produced1 (CTPP), which includes extraction costs, government royalties, and depreciation and amortization, remains competitive, with a value of US$ 33/bbl.

Decision-making Process for Investments, Acquisitions, and Divestments

Capital investments are approved only if they maintain their viability (net present value greater than zero) in all our scenarios, including Resilience. This premise applies to all projects2 and ensures that our investments remain economically viable even in lower price scenarios.

Assessments of aspects related to emissions and climate change are an integral part of the investment project phase gate process. In addition to emission estimates, absolute and/or intensity indicators are calculated, and potential mitigation measures or reduction opportunities are evaluated. Sensitivity analysis to carbon pricing is also part of the evaluation process for new ventures, in which economic indicator changes are evaluated when considering the carbon prince curve of the Base scenario.

Rtm

Our refining, transportation, and marketing strategy is based on portfolio management and regional synergy with exploration and production assets and with the main Brazilian markets. We seek resilience through operational excellence in energy efficiency, emissions, and reliability, anchored by the RefTOP Program and AVANÇA LOG, aiming to be among the best refiners in the world regarding efficiency and operational performance.

In an environment of the energy transition, the second source of transformation is adapting our production to market evolution. The refining park continues to be modernized, expanding the production capacity for low-sulfur fuels. Among the highlights of these investments, we have the projects to implement a new HDT (Hydrotreating) at REPLAN and the revamp of HDTs at REVAP and REDUC, which will increase our capacity to produce S-10 diesel (ultra-low sulfur diesel fuel that has a maximum sulfur content of 10 parts per million). With the start-up of the GASLUB cluster and the 2nd production train of RNEST in 2028, our S-10 diesel production capacity grows by 318 thousand bpd.

Also, we see the opportunity to capture value by applying our technical skills to market development and the production of less carbon-intensive fuels through advanced industrial routes. For example, our BioRefining Program focus on producing Sustainable Aviation Kerosene and renewable diesel in plants integrated with oil refineries. These actions represent approximately 8% of total Refining investments.

We also seek to offer non-energy products with greater added value, as in the case of the production of Group II lubricating base oils at the GASLUB cluster, adding around 12,000 barrels per day of advanced lubricants.

In terms of logistics, investments are planned for the maintenance of 36 ships, also considering the demands of environmental legislation, as well as the installation and replacement of 178 km of pipelines to improve the flow of our products and reach even higher levels of safety and protection to the environment.

In maritime transport, we seek to optimize routes, control the speed of vessels, and advance in contracting vessels with better consumption performance and, consequently, lower greenhouse gas emissions.

G&P

Our G&P strategy adapts to the high share of renewables in the Brazilian energy matrix. Considering the intermittency of modern (wind and solar) sources and the seasonality of hydropower, dispatchable thermal power plants are necessary to provide energy security to the growing incorporation of renewable sources. In this sense, we continue focusing on selling gas from our portfolio and optimizing our thermal power plants portfolio, seeking efficiency gains in thermal power plants.

In collaboration with our partners, we will expand our infrastructure and portfolio and continue to operate competitively in the natural gas market, seeking a significant increase in the supply of about 50 million m³/d of natural gas. We highlight the startup of the integrated ROTA 3 project, in 2024 (gas pipeline and Natural Gas Process Unit capacity at the GASLUB cluster of 21 million m³/d), SEAP - Sergipe Águas Profundas (Sergipe deep-water), in 2027 (gas pipeline capacity of 18 million m³/d), and BM-C–33– pre-salt in the Campos Basin, in 2027 (gas pipeline capacity of 16 million m3/d). The optimization of our thermal power portfolio profile focuses on natural gas-fired power plants with high efficiency, seeking to offer a capacity of 3.6 Gigawatt average in 2027, reaching 5.1 Gigawatt average in 2030.

Profitable Diversification

Moving forward with initiatives aimed at portfolio diversification, throughout 2022, specific governance mechanisms were implemented. The most promising businesses in the energy transition were mapped and characterized from our perspective. A relevant range of knowledge about these businesses already developed in the company was gathered.

In addition to the efforts to offer products with lower carbon intensity, with emphasis on biorefining, the SP 2023-2027 brings as an evolution the businesses that were identified by a multicriteria analysis, among several studied, as the most suitable for further studies by the Company: offshore wind power, hydrogen, and carbon capture. We do not have investment provided in this strategic plan for these possible new businesses.