PETR3 Petrobras

Petróleo Brasileiro S.A. – Petrobras is a Brazilian mixed-capital company, incorporated in 1953 by the Federal Government as a corporation, with the purpose of conducting activities related to the oil and natural gas industry in the country. Operations began in 1954, in a context in which the company held, for approximately forty years, exclusivity in the exploration and production of oil and natural gas, as well as in oil refining in Brazil. As of Constitutional Amendment No. 9 of 1995 and Law No. 9,478/1997, known as the Oil Law, the state monopoly was relaxed, Petrobras began to operate under a free-competition regime and the sector was opened to the participation of other companies, both private and state-owned. The regulation of the oil and natural gas market came to be exercised by the National Agency of Petroleum, Natural Gas and Biofuels (ANP), linked to the Ministry of Mines and Energy. The company’s common and preferred shares, traded under the tickers PETR3 and PETR4, have been listed on B3 since 1968, while the common shares are also listed on the New York Stock Exchange (NYSE) in the form of American Depositary Shares (ADSs).

Petrobras’ corporate purpose covers the entire oil, natural gas and other fluid hydrocarbons chain, including exploration, production, refining, processing, trading and transportation of these products and their derivatives. The company may also develop activities related to energy in general, including research, development, production, transportation, distribution and commercialization of various forms of energy, as well as initiatives related to the energy transition, low‑carbon economy and carbon dioxide capture, utilization and storage services. These activities are carried out under a free-competition regime, in Brazil and abroad, through its own operations or through subsidiaries and controlled companies. Petrobras was structured as a state‑owned enterprise with the requirement that the majority of the voting capital remain under the control of the Federal Government, a condition that has been maintained even after the regulatory changes that introduced competition into the Brazilian oil and gas industry.

Petrobras’ business model is characterized by integrated operations in different links of the oil, gas and energy value chain. Activities are organized into three main operating segments: Exploration and Production (E&P); Refining, Transportation and Marketing (RTC); and Gas and Low Carbon Energy (G&EBC). The E&P segment concentrates activities related to exploration, development and production of oil, natural gas and natural gas liquids, in Brazil and abroad, primarily to supply the company’s refineries. The RTC segment encompasses crude oil refining, logistics, transportation, acquisition and export operations, as well as the purchase and sale of oil products, in addition to interests in petrochemicals and fertilizer production. The G&EBC segment integrates natural gas logistics and marketing, power generation and marketing, liquefied natural gas (LNG) transportation and marketing, natural gas processing, renewable energy businesses, low‑carbon services and biodiesel production from coproducts.

From an economic standpoint, Petrobras remains highly relevant in the exploration and production segment. In 2024, fields operated by the company accounted for 89.4% of Brazil’s total oil and natural gas production, while, from the viewpoint of production by concession holder, Petrobras was responsible for 61.8% of the volume produced in the country. Over more than five decades of operations in Brazilian offshore basins, the company has developed specific technical know‑how in deep and ultra‑deepwater operations, which has positioned it as a global leader in this class of assets according to specialized industry databases. Most of its proved reserves are concentrated in the offshore Campos and Santos basins, in Southeastern Brazil, which allows optimization of production infrastructure and reduction of operating costs. As of December 31, 2024, the company held 232 exploration and production blocks and fields, 201 under concession contracts, 22 under production‑sharing contracts and 9 under transfer‑of‑rights contracts, in addition to interests in major pre‑salt projects such as Búzios, Mero, Atapu, Sépia, Itapu and Tupi.

Petrobras also plays a significant role in oil refining, transportation logistics and product marketing. The company operates 10 refineries, which concentrate most of Brazil’s installed refining capacity, with a strong presence in the Southeast region, the country’s most populous and industrialized area and close to the main oil and natural gas producing areas in the Campos and Santos basins. These units process domestically produced oil and, when necessary, imported oil, generating fuels and other products destined for the domestic market and for export. In the RTC segment, Petrobras exports crude oil and products and also imports products when required by domestic demand. The segment also includes investments in petrochemicals, notably a 36.1% stake in Braskem, and fertilizer production activities, connecting the company to industrial chains such as plastics, chemicals and agribusiness. In 2024, the RTC segment accounted for a relevant share of the company’s aggregate revenue, although profitability was more concentrated in E&P.

The Gas and Low Carbon Energy segment expands Petrobras’ presence in the energy chain beyond oil. Operations include natural gas logistics and marketing, both via pipeline and as LNG, power generation primarily by natural gas‑fired and other thermal power plants, and natural gas processing. This segment also includes projects in renewable energy, low‑carbon solutions such as carbon capture, utilization and storage (CCUS) services, and biodiesel production from coproducts. International trading of oil, products, LNG and renewables is carried out by specialized subsidiaries, such as Petrobras America Inc. in North America and Petrobras Singapore Private Limited in Singapore, enabling the company to access strategic markets such as China, India, Southeast Asia, Europe, Africa, the Middle East and the Americas.

Geographically, most of Petrobras’ revenue comes from Brazil, which accounted for about 73% of net revenue in 2024, with the remainder distributed across more than 17 countries in the Americas, Europe and Asia. Among the most relevant foreign markets in terms of revenue are China, the United States, Singapore, European countries and other South American nations. The company’s international presence includes both exploration and production assets, such as in Argentina, Bolivia, Colombia and the United States, and trading, finance and holding operations in the Netherlands, Germany, Spain, Mexico, Singapore and African countries such as the Democratic Republic of São Tomé and Príncipe and, subject to approvals, South Africa. This geographic diversification is aligned with the strategy of leveraging its experience in deep and ultra‑deepwater, while expanding access to consumer markets for Brazilian oil, gas and products.

Petrobras’ operations are heavily influenced by the Brazilian regulatory environment for the oil and gas sector. The company operates under different contractual regimes, including concession, production sharing and transfer of rights, all regulated by the ANP and by specific laws such as the Oil Law and the laws of the new pre‑salt regulatory framework enacted in 2010. Petrobras holds preemptive rights to act as operator, with a minimum 30% interest, in blocks offered under the production‑sharing regime in the pre‑salt polygon, ensuring access to significant reserves. The company is also governed by Law No. 13,303/2016, which establishes the legal framework for state‑owned enterprises and defines governance, bidding and control rules applicable to federal mixed‑capital companies. The relationship with the public administration involves obtaining authorizations, licenses and approvals from regulatory bodies and ministries, especially for exploration, development and production activities, as well as competition and environmental aspects.

In the environmental, social and governance (ESG) field, Petrobras periodically discloses information through specific reports, such as the Sustainability Report, the Climate Change Report, the Human Rights and Corporate Citizenship Report and the Annual Letter on Public Policies and Corporate Governance. These documents follow international methodologies and standards, such as the Global Reporting Initiative guidelines (GRI Standards 2021), Sustainability Accounting Standards Board (SASB) indicators for the oil and gas industry, Task Force for Climate‑related Financial Disclosures (TCFD) recommendations and Ipieca guidelines. Certain information in these reports, especially sustainability data, is subject to limited assurance by an independent entity, such as KPMG. In the climate sphere, the company publishes data on greenhouse gas emissions, climate‑related risks and initiatives linked to the energy transition and the low‑carbon economy, reinforcing the integration of ESG factors into its corporate strategy and into the management of risks and opportunities throughout its value chain.

The PETR3 and PETR4 shares traded on B3 reflect this set of integrated activities in exploration and production, refining, logistics, natural gas, power generation and low‑carbon initiatives, in a context of complex regulation, international presence and the strong importance of offshore production in deep and ultra‑deepwater. The mixed‑capital corporate structure, with controlling interest held by the Federal Government, adds a particular dimension to governance and decision‑making processes, in balance with the transparency, accountability and financial‑discipline requirements expected of a publicly traded company with shares listed in Brazilian and international markets.