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Petrobras - Petroleo Brasileiro SA – ‘6-K’ for 12/31/18

On:  Thursday, 1/2/20, at 5:07pm ET   ·   For:  12/31/18   ·   Accession #:  1193125-20-685   ·   File #:  1-15106

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  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 1/02/20  Petrobras - Petroleo Brasilei… SA 6-K        12/31/18  235:38M                                    Donnelley … Solutions/FA

Report by a Foreign Issuer   —   Form 6-K   —   Rule 13a-16 / 15d-16
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 6-K         Report by a Foreign Issuer                          HTML    140K 
 2: EX-99.1     Miscellaneous Exhibit                               HTML   2.70M 
153: R1          Cover                                               HTML     84K  
20: R2          Consolidated Statement of Financial Position        HTML    213K 
103: R3          Consolidated Statement of Income                    HTML    153K  
179: R4          Consolidated Statement of Comprehensive Income      HTML    159K  
151: R5          Consolidated Statement of Comprehensive Income      HTML     74K  
                (Parenthetical)                                                  
18: R6          Consolidated Statement of Cash Flows                HTML    204K 
101: R7          Consolidated Statement of Changes in Shareholders   HTML    123K  
                Equity                                                           
181: R8          The Company and its operations                      HTML     75K  
147: R9          Basis of preparation                                HTML    199K  
133: R10         The "Lava Jato (Car Wash) Operation" and its        HTML     91K  
                effects on the Company                                           
223: R11         Summary of significant accounting policies          HTML    145K  
87: R12         Critical accounting policies: key estimates and     HTML    112K 
                judgments                                                        
61: R13         New standards and interpretations                   HTML     85K 
131: R14         Cash and cash equivalents and Marketable            HTML     94K  
                securities                                                       
222: R15         Trade and other receivables                         HTML    151K  
86: R16         Inventories                                         HTML     78K 
60: R17         Disposal of assets and other changes in             HTML    145K 
                organizational structure                                         
135: R18         Investments                                         HTML    249K  
220: R19         Property, plant and equipment                       HTML    140K  
96: R20         Intangible assets                                   HTML    119K 
13: R21         Impairment                                          HTML    205K 
162: R22         Exploration and evaluation of oil and gas reserves  HTML    103K  
186: R23         Trade payables                                      HTML     74K  
95: R24         Finance debt                                        HTML    203K 
10: R25         Leases                                              HTML    100K 
159: R26         Related-party transactions                          HTML    173K  
185: R27         Provision for decommissioning costs                 HTML     77K  
90: R28         Taxes                                               HTML    294K 
15: R29         Short-term benefits                                 HTML     90K 
54: R30         Employee benefits (Post-Employment)                 HTML    374K 
77: R31         Equity                                              HTML    127K 
231: R32         Sales revenues                                      HTML    115K  
139: R33         Other income and expenses                           HTML     98K  
55: R34         Costs and expenses by nature                        HTML    107K 
80: R35         Net finance income (Expense)                        HTML     90K 
234: R36         Supplemental information on statement of cash       HTML     78K  
                flows                                                            
140: R37         Segment information                                 HTML    356K  
51: R38         Provisions for legal proceedings                    HTML    234K 
84: R39         Commitment to purchase natural gas                  HTML     71K 
33: R40         Collateral for crude oil exploration concession     HTML     71K 
                agreements                                                       
112: R41         Risk management                                     HTML    234K  
195: R42         Fair value of financial assets and liabilities      HTML     87K  
165: R43         Subsequent events                                   HTML     74K  
36: R44         Information related to guaranteed securities        HTML    729K 
                issued by subsidiaries                                           
115: R45         Summary of significant accounting policies          HTML    208K  
                (Policies)                                                       
198: R46         Basis of preparation (Tables)                       HTML    187K  
168: R47         Cash and cash equivalents and Marketable            HTML     93K  
                securities (Tables)                                              
32: R48         Trade and other receivables (Tables)                HTML    142K 
116: R49         Inventories (Tables)                                HTML     76K  
75: R50         Disposal of assets and other changes in             HTML    101K 
                organizational structure (Tables)                                
47: R51         Investments (Tables)                                HTML    248K 
121: R52         Property, plant and equipment (Tables)              HTML    128K  
210: R53         Intangible assets (Tables)                          HTML    108K  
72: R54         Impairment (Tables)                                 HTML    162K 
44: R55         Exploration and evaluation of oil and gas reserves  HTML    104K 
                (Tables)                                                         
118: R56         Trade payables (Tables)                             HTML     73K  
207: R57         Finance debt (Tables)                               HTML    196K  
71: R58         Leases (Tables)                                     HTML     98K 
48: R59         Related-party transactions (Tables)                 HTML    144K 
175: R60         Provision for decommissioning costs (Tables)        HTML     75K  
206: R61         Taxes (Tables)                                      HTML    293K  
110: R62         Short-term benefits (Tables)                        HTML     80K  
31: R63         Employee benefits (Post-Employment) (Tables)        HTML    367K 
170: R64         Equity (Tables)                                     HTML    110K  
201: R65         Sales revenues (Tables)                             HTML    108K  
105: R66         Other income and expenses (Tables)                  HTML     97K  
26: R67         Costs and expenses by nature (Tables)               HTML    107K 
177: R68         Net finance income (Expense) (Tables)               HTML     89K  
200: R69         Supplemental information on statement of cash       HTML     77K  
                flows (Tables)                                                   
212: R70         Segment information (Tables)                        HTML    355K  
124: R71         Provisions for legal proceedings (Tables)           HTML    209K  
37: R72         Risk management (Tables)                            HTML    223K 
65: R73         Fair value of financial assets and liabilities      HTML     84K 
                (Tables)                                                         
217: R74         Information related to guaranteed securities        HTML    719K  
                issued by subsidiaries (Tables)                                  
129: R75         The Company and Its Operations - Additional         HTML     73K  
                Information (Detail)                                             
42: R76         Basis of preparation - Additional Information       HTML     86K 
                (Detail)                                                         
70: R77         Basis of preparation - Schedule of discontinued     HTML    117K 
                operation for income statement (Detail)                          
218: R78         Basis of preparation - Schedule of discontinued     HTML    160K  
                operation for cash flow (Detail)                                 
122: R79         Basis of preparation - Summary of Effect Of         HTML     76K  
                Changes in Foreign Exchange Rates (Detail)                       
213: R80         Basis of preparation - Summary of Consolidated      HTML    133K  
                Impacts on Financial Assets and Liabilities                      
                Resulting from Adoption of IFRS 9 (Detail)                       
126: R81         Basis of preparation - Impacts of Adoption of IFRS  HTML    102K  
                15 Standard (Detail)                                             
39: R82         The "Lava Jato (Car Wash) Operation" and its        HTML    101K 
                Effects on the Company - Additional Information                  
                (Detail)                                                         
66: R83         Summary of significant accounting policies -        HTML     74K 
                Additional Information (Detail)                                  
216: R84         Critical accounting policies: key estimates and     HTML     89K  
                judgments - Additional Information (Detail)                      
127: R85         New standards and interpretations - Additional      HTML     81K  
                Information (Detail)                                             
40: R86         Cash and cash equivalents and Marketable            HTML     95K 
                securities - Schedule of Cash and Cash Equivalents               
                (Detail)                                                         
69: R87         Cash and cash equivalents and Marketable            HTML     78K 
                securities - Additional Information (Detail)                     
219: R88         Cash and cash equivalents and Marketable            HTML     92K  
                securities - Schedule of Marketable Securities                   
                (Detail)                                                         
123: R89         Trade and other receivables, net - Schedule of      HTML    110K  
                trade and other receivables, net (Detail)                        
174: R90         Trade and other receivables, net - Schedule of      HTML     72K  
                trade and other receivables, net (Parenthetical)                 
                (Detail)                                                         
204: R91         Trade and other receivables, net - Additional       HTML    119K  
                Information (Detail)                                             
108: R92         Trade and Other Receivables - Summary of Aging of   HTML     84K  
                Trade and other Receivables (Detail)                             
30: R93         Trade and Other Receivables - Schedule of Changes   HTML     83K 
                in credit losses provision (Detail)                              
171: R94         Trade and Other Receivables - Schedule of trade     HTML    139K  
                receivables (Detail)                                             
203: R95         Inventories - Summary of Inventories (Detail)       HTML     87K  
107: R96         Inventories - Additional Information (Detail)       HTML     75K  
27: R97         Disposal of Assets and Other Changes in             HTML    456K 
                Organizational Structure - Additional Information                
                (Detail)                                                         
176: R98         Disposal of Assets and other changes in             HTML    104K  
                organizational structure - Summary of Assets                     
                Classified as Held for Sale (Detail)                             
199: R99         Disposal of Assets and other changes in             HTML     72K  
                organizational structure - Summary of Assets                     
                Classified as Held for Sale (Parenthetical)                      
                (Detail)                                                         
167: R100        Disposal of Assets and Other Changes in             HTML     83K  
                Organizational Structure - Summary of Cash Flows                 
                From Sales of Interest With Loss of Control                      
                (Detail)                                                         
197: R101        Investments - Information on Direct Subsidiaries,   HTML    316K  
                Joint Arrangements and Associates (Detail)                       
114: R102        Investment - Additional Information (Detail)        HTML    105K  
35: R103        Investments - Summary of Investments in Associates  HTML    124K 
                and Joint Ventures (Detail)                                      
166: R104        Investments - Summary of Investments in Listed      HTML     86K  
                Companies (Detail)                                               
196: R105        Investments - Summary of Condensed Financial        HTML    144K  
                Information (Detail)                                             
113: R106        Investments - Summary of Company Investments in     HTML    175K  
                Joint Ventures and Associates (Detail)                           
34: R107        Property, Plant and Equipment - Summary of          HTML    156K 
                Property Plant and Equipment by Class of Assets                  
                (Detail)                                                         
169: R108        Property, Plant and Equipment - Additional          HTML     99K  
                Information (Detail)                                             
194: R109        Property, Plant and Equipment - Summary of          HTML    139K  
                Estimated Useful Life of Property Plant and                      
                Equipment (Detail)                                               
208: R110        Property, plant and equipment - Summary of Effects  HTML     82K  
                of Unitization Agreements (Detail)                               
119: R111        Intangible Assets - Summary by Class of Assets      HTML    124K  
                (Detail)                                                         
45: R112        Intangible Assets - Additional Information          HTML     91K 
                (Detail)                                                         
73: R113        Intangible assets - Summary of Exploratory Phases   HTML     77K 
                (Detail)                                                         
209: R114        Impairment - Schedule of Impairment Losses, Net of  HTML    164K  
                Reversals, Recognized Within Statement of Income                 
                (Details) (Detail)                                               
120: R115        Impairment - Schedule of Cash Flow Projections      HTML     95K  
                Used to Measure the Value in Use of CGUs (Detail)                
46: R116        Impairment - Additional Information (Detail)        HTML    484K 
74: R117        Impairment - Summary of Assets and CGU Most         HTML     81K 
                Sensitive to Future Impairment Losses (Detail)                   
211: R118        Exploration and Evaluation of Oil and Gas Reserves  HTML     88K  
                - Summary of Changes in Balances of Capitalized                  
                Costs (Detail)                                                   
117: R119        Exploration and Evaluation of Oil and Gas Reserves  HTML     86K  
                - Summary of Exploration Costs (Details) (Detail)                
28: R120        Exploration and Evaluation of Oil and Gas Reserves  HTML     79K 
                - Additional Information (Detail)                                
106: R121        Exploration and Evaluation of Oil and Gas Reserves  HTML     76K  
                - Summary of Aging Capitalized Exploratory and                   
                Well Costs by Year (Detail) (Detail)                             
202: R122        Exploration and Evaluation of Oil and Gas Reserves  HTML     86K  
                - Summary of Aging Capitalized Exploratory and                   
                Well Costs by Year (Detail)                                      
172: R123        Trade Payables - Summary of Trade Payables          HTML     77K  
                (Detail)                                                         
29: R124        Finance Debt - Balance by Type of Finance Debt      HTML     95K 
                (Detail)                                                         
109: R125        Finance Debt - Additional Information (Detail)      HTML    105K  
205: R126        Finance Debt - Changes in Finance Debt and          HTML    114K  
                Reconciliation with Cash Flows from Financing                    
                Activities (Detail)                                              
173: R127        Finance Debt - Summarized Information on Current    HTML    219K  
                and Non-current Finance Debt (Detail)                            
25: R128        Finance Debt - Summarized Information on Current    HTML     72K 
                and Non-current Finance Debt (Parenthetical)                     
                (Detail)                                                         
111: R129        Finance Debt - Lines of Credit (Detail)             HTML    111K  
68: R130        Leases - Schedule of Future Minimum Lease Payments  HTML     99K 
                / Receipts - Finance Leases (Detail)                             
41: R131        Leases - Schedule of Future Minimum Lease Payments  HTML     84K 
                - Operating Leases (Detail)                                      
128: R132        Leases - Additional Information (Detail)            HTML     75K  
215: R133        Related-Party Transactions - Summary of Balances    HTML    137K  
                of Significant Transactions (Detail)                             
67: R134        Related-Party Transactions - Additional             HTML    135K 
                Information (Detail)                                             
38: R135        Related-Party Transactions - Summary of Diesel      HTML     73K 
                Price Subsidy Program (Detail)                                   
125: R136        Related-Party Transactions - Summary of             HTML     76K  
                Compensation of Employees (Including Those                       
                Occupying Managerial Positions) and Officers                     
                (Detail)                                                         
214: R137        Related-Party Transactions - Summary of Total       HTML     96K  
                Compensation of Executive Officers and Board                     
                Members of Petrobras Parent Company (Detail)                     
63: R138        Provision for Decommissioning Costs - Summary of    HTML     86K 
                Provision for Decommissioning Costs (Detail)                     
43: R139        Provision for Decommissioning Costs - Summary of    HTML     75K 
                Provision for Decommissioning Costs                              
                (Parenthetical) (Detail)                                         
104: R140        Provision for Decommissioning Costs - Additional    HTML     71K  
                Information (Detail)                                             
21: R141        Taxes - Summary of Income Taxes (Detail)            HTML     85K 
152: R142        Taxes - Summary of Other Taxes (Detail)             HTML     99K  
180: R143        Taxes - Summary of Other Taxes (Parenthetical)      HTML     69K  
                (Detail)                                                         
102: R144        Taxes - Additional Information (Detail)             HTML    132K  
19: R145        Taxes - Summary Of Settlement Of Tax Disputes       HTML     84K 
                (Detail)                                                         
149: R146        Taxes - Summary Of Settlement Of Tax Disputes       HTML     69K  
                (Parenthetical) (Detail)                                         
178: R147        Taxes - Summary Of Tax Liabilities Presented In     HTML    114K  
                Consolidated Statements Of Financial Position                    
                (Detail)                                                         
99: R148        Taxes - Summary Of Outstanding Amount Of            HTML     95K 
                Settlement Year (Detail)                                         
23: R149        Taxes - Schedule of Impacts of Tax Settlement       HTML    126K 
                Programs within Statement of Income of 2017                      
                (Detail)                                                         
59: R150        Taxes - Summary of Tax Disputes by Joining States   HTML     97K 
                Amnesty Settlement Programs (Detail)                             
85: R151        Taxes - Summary of Tax Disputes by Joining States   HTML     71K 
                Amnesty Settlement Programs (Parenthetical)                      
                (Detail)                                                         
221: R152        Taxes - Summary of the Changes in the Deferred      HTML    147K  
                Income Taxes (Detail)                                            
130: R153        Taxes - Summary of Estimated Schedule of            HTML     97K  
                Recovery/Reversal of Net Deferred Tax Assets                     
                (Liabilities) Recoverable (Payable) (Detail)                     
62: R154        Taxes - Summary of Aging of the Unrecognized Tax    HTML     92K 
                Carryforwards (Detail)                                           
88: R155        Taxes - Summary of Reconciliation between           HTML    102K 
                Statutory Tax Rate and Effective Tax Expense Rate                
                (Detail)                                                         
224: R156        Taxes - Summary of Reconciliation between           HTML     72K  
                Statutory Tax Rate and Effective Tax Expense Rate                
                (Parenthetical) (Detail)                                         
134: R157        Short-term benefits - Summary of Short-term         HTML     81K  
                Benefits (Detail)                                                
58: R158        Short-term benefits - Summary of Provision for      HTML     81K 
                Profit Sharing (Detail)                                          
89: R159        Short-term benefits - Additional Information        HTML     84K 
                (Detail)                                                         
183: R160        Employee Benefits (Post-Employment) - Summary of    HTML     90K  
                Employee Benefits (Detail)                                       
158: R161        Employee benefits (Post-Employment) - Additional    HTML    121K  
                Information (Detail)                                             
 9: R162        Employee Benefits (Post-Employment) - Disclosure    HTML    437K 
                of Changes in the Actuarial Liabilities, Fair                    
                Value of Assets and Amounts Recognized in                        
                Statement of Financial Position (Detail)                         
93: R163        Employee benefits (Post-Employment) - Summary of    HTML    112K 
                Pension Plans Assets (Detail)                                    
189: R164        Employee benefits (Post-Employment) - Summary of    HTML    120K  
                Pension Plans Assets by Type of Asset (Detail)                   
164: R165        Employee Benefits (Post-Employment) - Schedule of   HTML    124K  
                Defined Benefit Costs (Detail)                                   
14: R166        Employees Benefits (Post-Employment) - Disclosure   HTML     87K 
                of Effect of Basis Points Change in the Assumed                  
                Discount Rate and Medical Cost (Detail)                          
98: R167        Employees Benefits (Post-Employment) - Summary of   HTML    115K 
                Actuarial Assumptions (Detail)                                   
191: R168        Employee Benefits (Post-Employments) - Summary of   HTML    123K  
                Expected Maturity Analysis of Pension and Medical                
                Benefits (Detail)                                                
155: R169        Equity - Additional Information (Detail)            HTML    153K  
142: R170        Equity - Summary of Quarterly Distribution Of       HTML    115K  
                Interest On Capital (Detail)                                     
235: R171        Equity - Earnings (Losses) Per Share (Detail)       HTML    104K  
81: R172        Sales Revenues - Additional Information (Detail)    HTML     85K 
57: R173        Sales Revenues - Summary of Sales Revenues          HTML    115K 
                (Detail)                                                         
136: R174        Sales Revenues - Summary of Remaining Performance   HTML    113K  
                Obligations (Detail)                                             
229: R175        Other Income and Expenses, Net - Summary of Other   HTML    119K  
                Income and Expenses (Detail)                                     
76: R176        Other Income and Expenses, Net - Summary of Other   HTML     70K 
                Income and Expenses (Parenthetical) (Detail)                     
52: R177        Costs and Expenses by Nature - Disclosure of Cost   HTML    135K 
                and Expenses By Nature (Detail)                                  
145: R178        Costs and Expenses by Nature - Disclosure of Cost   HTML     73K  
                and Expenses By Nature (Parenthetical) (Detail)                  
227: R179        Net Finance Income (Expense) - Summary of Net       HTML     97K  
                Finance Income (Expense) (Detail)                                
141: R180        Net Finance Income (Expense) - Summary of Net       HTML     73K  
                Finance Income (Expense) (Parenthetical) (Detail)                
233: R181        Supplemental Information on Statement of Cash       HTML     79K  
                Flows - Summary of Supplemental Information on                   
                Statement of Cash Flows (Detail)                                 
79: R182        Segment Information - Consolidated assets by        HTML    142K 
                Business Area (Detail)                                           
56: R183        Segment Information - Consolidated Statement of     HTML    231K 
                Income by Business Area (Detail)                                 
138: R184        Segment Information - Additional Information        HTML     77K  
                (Detail)                                                         
232: R185        Provisions for legal proceedings - Summary of       HTML     86K  
                Provisions for Legal Proceedings (Detail)                        
78: R186        Provisions for legal proceedings - Summary of       HTML     81K 
                Reconciliation of Provisions for Legal Proceedings               
                (Detail)                                                         
53: R187        Provisions for legal proceedings - Summary of       HTML     79K 
                Judicial Deposits with Legal Proceedings (Detail)                
143: R188        Provisions for legal proceedings - Summary of       HTML     79K  
                reconciliation of Judicial Deposits with Legal                   
                Proceedings (Detail)                                             
225: R189        Provisions for legal proceedings - Additional       HTML     94K  
                Information (Detail)                                             
184: R190        Provisions for legal proceedings - Summary of       HTML     79K  
                Contingent Liabilities (Detail)                                  
160: R191        Provisions For Legal Proceedings - Summary Of       HTML    306K  
                Nature Of Contingent Liabilities (Detail)                        
11: R192        Commitment to Purchase Natural Gas - Additional     HTML     76K 
                Information (Detail)                                             
94: R193        Collateral for crude oil exploration concession     HTML     78K 
                agreements (Detail)                                              
187: R194        Risk Management - Summary of the Positions of the   HTML    111K  
                Derivative Financial Instruments Held by the                     
                Company (Detail)                                                 
161: R195        Risk Management - Summary of Amounts Recognized     HTML     90K  
                and Guarantees Given Related to Derivative                       
                Financial Instruments (Detail)                                   
12: R196        Risk Management - Summary of Sensitivity Analysis   HTML     88K 
                of the Derivative Financial Instruments (Detail)                 
97: R197        Risk Management - Summary of Sensitivity Analysis   HTML     77K 
                of the Derivative Financial Instruments                          
                (Parenthetical) (Detail)                                         
193: R198        Risk Management - Additional Information (Detail)   HTML    137K  
157: R199        Risk Management - Summary of Carrying Amounts, the  HTML     96K  
                Fair Value and Schedule of Expected                              
                Reclassifications (Detail)                                       
154: R200        Risk Management - Summary of Roll-Forward Schedule  HTML     99K  
                of Cumulative Foreign Exchange Losses Recognized                 
                in Other Comprehensive Income (Detail)                           
190: R201        Risk Management - Summary of Ratio of Highly        HTML     90K  
                Probable Future Exports to Debt Instruments                      
                (Detail)                                                         
91: R202        Risk Management - Summary of Sensitivity Analysis   HTML    167K 
                for Foreign Exchange Risk on Financial Instruments               
                (Detail)                                                         
16: R203        Risk Management - Summary of Sensitivity Analysis   HTML     82K 
                for Foreign Exchange Risk on Financial Instruments               
                (Parenthetical) (Detail)                                         
156: R204        Risk Management - Summary of Credit Quality of      HTML    103K  
                Cash and Cash Equivalents, and Marketable                        
                Securities (Detail)                                              
192: R205        Risk Management - Summary of Maturity Schedule of   HTML     98K  
                the Company's Finance Debt (Detail)                              
92: R206        Risk Management - Summary of Information            HTML     77K 
                Concerning the Insurance Coverage Outstanding                    
                (Detail)                                                         
17: R207        Fair Value of Financial Assets and Liabilities -    HTML     98K 
                Fair Value Measured of Assets and Liabilities                    
                (Detail)                                                         
163: R208        Subsequent events - Additional Information          HTML     86K  
                (Detail)                                                         
188: R209        Information Related to Guaranteed Securities        HTML    117K  
                Issued by Subsidiaries - Additional Information                  
                (Detail)                                                         
228: R210        Information Related to Guaranteed Securities        HTML    108K  
                Issued by Subsidiaries - Summary of Capitalized                  
                Costs Relating to Oil and Gas Producing Activities               
                (Detail)                                                         
146: R211        Information Related to Guaranteed Securities        HTML     98K  
                Issued by Subsidiaries - Summary of Costs Incurred               
                in Oil and Gas Property Acquisition, Exploration                 
                and Development Activities (Detail)                              
50: R212        Information Related to Guaranteed Securities        HTML    131K 
                Issued by Subsidiaries - Summary of Operations for               
                Oil and Gas Producing Activities (Detail)                        
83: R213        Information Related to Guaranteed Securities        HTML    126K 
                Issued by Subsidiaries - Summary of Annual Changes               
                in Proved Developed and Undeveloped Reserves of                  
                Oil (Detail)                                                     
226: R214        Information Related to Guaranteed Securities        HTML     98K  
                Issued by Subsidiaries - Summary of Annual Changes               
                in Proved Developed and Undeveloped Reserves of                  
                Oil (Parenthetical) (Detail)                                     
144: R215        Information Related to Guaranteed Securities        HTML    126K  
                Issued by Subsidiaries - Summary of Annual Changes               
                in Proved Developed and Undeveloped Reserves of                  
                Natural Gas (Detail)                                             
49: R216        Information Related to Guaranteed Securities        HTML     98K 
                Issued by Subsidiaries - Summary of Annual Changes               
                in Proved Developed and Undeveloped Reserves of                  
                Natural Gas (Parenthetical) (Detail)                             
82: R217        Information Related to Guaranteed Securities        HTML    153K 
                Issued by Subsidiaries - Summary of Annual Changes               
                in Proved Developed and Undeveloped Reserves of                  
                Oil and Natural Gas (Detail)                                     
230: R218        Information Related to Guaranteed Securities        HTML    108K  
                Issued by Subsidiaries - Summary of Annual Changes               
                in Proved Developed and Undeveloped Reserves of                  
                Oil and Natural Gas (Parenthetical) (Detail)                     
137: R219        Information Related to Guaranteed Securities        HTML    127K  
                Issued by Subsidiaries - Summary of Supplementary                
                Information on Oil and Gas Exploration Production                
                of Net Proved Developed and Undeveloped Reserves                 
                Explanatory (Detail)                                             
24: R220        Information Related to Guaranteed Securities        HTML     98K 
                Issued by Subsidiaries - Summary of Supplementary                
                Information on Oil and Gas Exploration Production                
                of Net Proved Developed and Undeveloped Reserves                 
                Explanatory (Parenthetical) (Detail)                             
100: R221        Information Related to Guaranteed Securities        HTML    111K  
                Issued by Subsidiaries - Summary of Supplementary                
                Information on Standardized Measure of Discounted                
                Future Net Cash Flow Relating to Proved Oil and                  
                Gas Quantities Explanatory (Detail)                              
182: R222        Information Related to Guaranteed Securities        HTML     76K  
                Issued by Subsidiaries - Summary of Supplementary                
                Information on Standardized Measure of Discounted                
                Future Net Cash Flow Relating to Proved Oil and                  
                Gas Quantities Explanatory (Parenthetical)                       
                (Detail)                                                         
148: R223        Information Related to Guaranteed Securities        HTML    133K  
                Issued by Subsidiaries - Summary of Standardized                 
                Measure of Discounted Future Net Cash Flow                       
                Projections Explanatory (Detail)                                 
22: R224        Information Related to Guaranteed Securities        HTML     84K 
                Issued by Subsidiaries - Summary of Standardized                 
                Measure of Discounted Future Net Cash Flow                       
                Projections Explanatory (Parenthetical) (Detail)                 
150: XML         IDEA XML File -- Filing Summary                      XML    493K  
132: EXCEL       IDEA Workbook of Financial Reports                  XLSX    448K  
 3: EX-101.INS  XBRL Instance -- pbr-20181231                        XML  16.48M 
 5: EX-101.CAL  XBRL Calculations -- pbr-20181231_cal                XML    734K 
 6: EX-101.DEF  XBRL Definitions -- pbr-20181231_def                 XML   3.52M 
 7: EX-101.LAB  XBRL Labels -- pbr-20181231_lab                      XML   5.99M 
 8: EX-101.PRE  XBRL Presentations -- pbr-20181231_pre               XML   4.54M 
 4: EX-101.SCH  XBRL Schema -- pbr-20181231                          XSD   1.27M 
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‘6-K’   —   Report by a Foreign Issuer
Document Table of Contents

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11st Page  –  Filing Submission
"Table of Contents
"Explanatory Note
"Presentation of Financial Information
"Results of Operations -- Years Ended December 31, 2018, 2017 and 2016
"Exhibit Index

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  6-K  
Table of Contents

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of January 2020

Commission File Number 001-15106

PETRÓLEO BRASILEIRO S.A. - PETROBRAS

(Exact name of registrant as specified in its charter)

Brazilian Petroleum Corporation - PETROBRAS

(Translation of Registrant’s name into English)

Avenida República do Chile, 65

20031-912 - Rio de Janeiro, RJ

Federative Republic of Brazil

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F x                Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____

 

 

 

 


Table of Contents

TABLE OF CONTENTS

 

Explanatory Note

     3  

Presentation of Financial Information

     4  

Results of Operations – Years Ended December  31, 2018, 2017 and 2016

     5  

Exhibit Index

     14  

 

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EXPLANATORY NOTE

Prior to July 2019, Petróleo Brasileiro S.A. - Petrobras (“Petrobras”) held a controlling equity interest in Petrobras Distribuidora S.A. (“BR Distribuidora”) and, as a result, BR Distribuidora’s financial position, results of operations and cash flows were consolidated in Petrobras’s consolidated financial statements.

In July 2019, Petrobras completed the sale of a 33.75% equity interest in BR Distribuidora. Following the sale, Petrobras now holds a non-controlling 37.50% equity interest in BR Distribuidora. As such, from the date of the sale, Petrobras (i) ceased to consolidate BR Distribuidora’s financial position, results of operations and cash flows in Petrobras’s consolidated financial statements, (ii) recognized a gain arising from such sale and (iii) commenced accounting for BR Distribuidora’s financial results under the equity method.

As required by the Securities and Exchange Commission (the “SEC”), Petrobras has retrospectively revised its consolidated financial statements as of December 31, 2018 and 2017 and for the years ended December 31, 2018, 2017 and 2016, to report the net income and operating, investing and financing cash flows related to the disposed interest in BR Distribuidora in separate line items as discontinued operations.

Petrobras has prepared this report to provide investors with its revised audited consolidated financial statements as of December 31, 2018 and 2017 and for the years ended December 31, 2018, 2017 and 2016, and with its revised managements’ discussion of Petrobras’s results of operations for such years.

The information in this report supersedes the information contained in Petrobras’s annual report on Form 20-F for the year ended December 31, 2018 (File No. 001-15106), filed with the SEC on April 1, 2019.

 

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PRESENTATION OF FINANCIAL INFORMATION

Unless the context otherwise requires, the terms “Petrobras,” “we,” “us,” and “our” refer to Petróleo Brasileiro S.A.—Petrobras and its consolidated subsidiaries, joint operations and structured entities.

References to “U.S. dollars” or “US$” are to United States dollars. Certain figures included herein have been subject to rounding adjustments; accordingly, figures shown as totals in certain tables may not be an exact arithmetic aggregation of the figures that precede them.

Our revised audited consolidated financial statements as of December 31, 2018 and 2017 and for the years ended December 31, 2018, 2017 and 2016 and the accompanying notes contained in this report have been presented in U.S. dollars and prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board. See Note 2 to our revised audited consolidated financial statements appearing elsewhere in this report.

 

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RESULTS OF OPERATIONS –

YEARS ENDED DECEMBER 31, 2018, 2017 AND 2016

The information below has been derived from our revised audited consolidated financial statements as of December 31, 2018 and 2017 and for the years ended December 31, 2018, 2017 and 2016 and the accompanying notes contained in this report (the “revised audited financial statements”) which have been prepared in accordance with IFRS. For more information, see Notes 2, 4 and 5 to our revised audited financial statements.

You should read the following discussion of our results of operations together with our revised audited financial statements appearing elsewhere in this report.

Results of Operations—2018 compared to 2017

Sales Revenues

Sales revenues increased by 9% to US$84,638 million in 2018 from US$77,884 million in 2017, driven primarily by:

 

   

Increase in domestic revenues, in the amount of US$2,797 million, mainly as a result of:

 

  a)

Increase in oil products revenues (US$6,260 million), primarily reflecting an increase in the average prices of diesel, gasoline and other oil products, as a result of the increase in international prices, as well as an increase in diesel sales volume due to lower imports from competitors. These effects were partially offset by the decrease in sales volume mainly for gasoline, due to a higher portion of ethanol in the domestic fuel market, as well as lower sales of naphtha to Braskem; and

 

  b)

Decrease in electricity revenues, in the amount of US$1,589 million, as a result of lower prices when expressed in U.S. dollars.

 

   

Increase in export revenues, in the amount of US$2,736 million, driven by an increase in international prices of crude oil and oil products and by higher volume of gasoline exports due to the higher market share of ethanol in the domestic market, partially offset by the decrease in crude oil volume exported due to lower production; and

 

   

Increase in revenues from operations abroad, in the amount of US$1,221 million following higher international prices.

Cost of Sales

Cost of sales increased by 2% to US$52,184 million in 2018, compared to US$51,198 million in 2017, mainly due to:

 

   

Higher production tax expenses and import costs of crude oil, oil products and natural gas, due to higher international prices. Production taxes were also impacted by increased production in fields with higher special participation rates;

 

   

Increased costs from operations abroad, as a result of higher international prices; and

 

   

Higher share of crude oil imports on feedstock processed and of LNG on sales mix, due to lower production.

Foreign exchange translation effects partially offset the aforementioned factors due to the decrease of the average cost of sales when expressed in U.S. dollars, reflecting the depreciation of the average real.

Selling Expenses

Selling expenses increased by 6% to US$3,827 million in 2018 from US$3,614 million in 2017, mainly due to increased impairment of trade and other receivables, primarily relating to companies from the electricity sector, higher expenses with LNG regasification terminals and coastal navigation services (cabotage), as well as higher

 

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transportation charges. Selling expenses also increased due to the payment of tariffs for the use of third party gas pipelines, following the sale of Nova Transportadora do Sudeste (NTS) in April 2017.

General and Administrative Expenses

General and administrative expenses decreased by 16% to US$2,239 million in 2018 from US$2,656 million in 2017. This decrease mainly reflects lower expenses with outsourced consulting and IT and administrative services, in line with our financial discipline strategy of controlled expenses.

Exploration Costs

Exploration costs decreased by 35% to US$524 million in 2018 from US$800 million in 2017, mainly due to a decrease in exploration expenditures written off on projects without commercial feasibility, in the amount of US$192 million and to a decrease of US$61 million in provisions related to contractual penalties arising from local content requirements. A breakdown of our exploration costs by type is set forth in Note 15 to our revised audited consolidated financial statements as of December 31, 2018 and 2017 and for the years ended December 31, 2018, 2017 and 2016 attached to this report on Form 6-K as Exhibit 99.1 (the “revised audited financial statements”).

Research and Development Expenses

Research and development expenses increased by 12% to US$641 million in 2018 from US$572 million in 2017, driven by the decrease in gross revenues from highly productive oil fields in Brazil, since the ANP requires that we invest at least 1% of our gross revenues originating from those fields in research and development projects. See Item 5. “Operating and Financial Review and Prospects—Research and Development” of our annual report on Form 20-F filed with the Securities and Exchange Commission (the “SEC”) on April 1, 2019 (the “2019 Form 20-F”) for further details about our research and development activities.

Other taxes

Other taxes decreased by 62% to US$670 million in 2018 from US$1,789 million in 2017, mainly as a result of our decision, in 2017, to benefit from tax settlement programs, which generated an expense of US$883 million in that year. See Note 21 to our revised audited financial statements for further information on these tax amnesty and refinancing programs.

Impairment of Assets

Impairment of assets in the amount of US$2,005 million was recognized in 2018 mainly for E&P and RTM assets (US$1,391 million and US$442 million, respectively), primarily driven by higher estimates of decommissioning costs in producing properties in Brazil, the sale of production fields in Gulf of Mexico and lower freight rate forecasts pertaining to transportation assets. In 2017, impairment charges of US$1,191 million were mainly related to RTM and Gas & Power assets (US$781 million and US$446 million, respectively), mainly due to higher costs of raw materials and the lower refining margin projection, as well as the lower expectation of a successful sale of fertilizers and nitrogen products plants.

Impairment losses in 2018 were 68% higher when compared to 2017. See Notes 4.10, 5.2, 5.3 and 14 to our revised audited financial statements for more information about the impairment of our assets.

Other Income and Expenses

Other income and expenses totaled US$5,760 million of expenses in 2018, a 4% increase as compared to US$5,511 million of expenses in 2017, mainly reflecting:

 

   

The agreement to settle Lava Jato Investigations with U.S. authorities (US$895 million) in the third quarter of 2018;

 

   

An increase of US$1,422 million in provision for legal, administrative and arbitration proceedings , mainly affected by: (i) unitization agreements with the ANP related to the Parque das Baleias complex

 

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entered into in the fourth quarter of 2018 (US$928 million); and (ii) arbitration in the United States for drilling service agreement related to Titanium Explorer (Vantage) drillship, also in the fourth quarter of 2018 (US$698 million). These factors were partially offset by reversal of disputes involving state taxes after joining Rio de Janeiro State Tax Amnesty Program in the 4Q-2018 (US$319 million); and

 

   

Losses on the fair value of commodities put options related to the hedge of part of crude oil production (US$416 million) that were made in 2018.

These increases in other expenses were partially offset by:

 

   

Expenses in 2017 that did not recur in 2018, related to the agreement to settle the Class Action in the United States (US$3,696 million); and

 

   

Decrease in the net gain on the sale and write-off of assets, in the amount of US$1,092 million, mainly driven by the US$1,952 million gain on sale of interests in NTS recognized in 2017, when compared to the gains in 2018, on sale of Lapa and Iara field (US$689 million) and by the contingent payment received for, the sale of Carcará area (US$300 million).

Net Finance Income (Expense)

Net finance expense decreased by 33% to US$6,484 million in 2018 from US$9,719 million in 2017, resulting from a reduction of US$876 million in debt interest and charges, due to:

 

   

Lower interest expenses following pre-payment of debts;

 

   

Financial income recognized in 2018 based on the agreements reached and conclusion of the privatization process of companies in the electricity sector (US$708 million); and

 

   

Finance expenses in 2017 following our decision to benefit from Brazilian federal settlement programs (US$837 million).

Results in equity-accounted investments

Gain on equity-accounted investments decreased by 22%, to US$523 million in 2018 from US$673 million in 2017, due to lower results in investments in the petrochemical sector, notably Braskem.

Income Taxes

Income tax expenses were US$4,256 million in 2018, a 151% increase as compared to US$1,697 million in 2017, as a result of higher taxable income (before taxes) for the year, partially offset by the tax benefits from the deduction of interest on capital distribution and by our decision, in 2017, to benefit from tax settlement programs.

The effective tax rate based on our results decreased to a rate of 39.3% from a rate of 112.6% in 2017. In 2018 the difference between the statutory corporate tax rate (34%) and our effective tax rate were primarily affected by tax benefits from the deduction of interest on capital distribution (see Item 10. “Payment of Dividends and Interest on Capital” in our 2019 Form 20-F) and nondeductible expenses and nontaxable income including post-retirement health care plan expenses and results in equity accounted investments.

Tax benefits from interest on capital distribution occur to the extent that we distribute dividends in this manner. Expenses related to post-retirement health care benefits are recognized and we account for results in equity-accounted investees for each reporting period.

See Note 21.6 to our revised audited financial statements for a reconciliation of statutory tax rates and our tax expense.

 

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Discontinued operations

See Note 2.1 for more information on the basis of preparation of our revised audited financial statements and our presentation of discontinued operations as a result of the sale of a 33.75% equity interest in Petrobras Distribuidora S.A. (BR Distribuidora).

Net income from discontinued operations in 2018 was US$843 million, a 135% increase compared to US$359 million in 2017, primarily due to gains arising from BR Distribuidora mainly as a result of agreements signed in 2018 with companies in the electricity sector (US$710 million) and the reversal of a provision regarding an extrajudicial settlement of BR Distribuidora relating to tax debts with the state of Mato Grosso (US$347 million). These gains were partially offset by higher income tax expenses of BR Distribuidora as a result of increased taxable income.

Net Income (Loss) by Business Segment

We measure performance at the business segment level based on net income. The following is a discussion of the net income (loss) of our three significant operating business segments for 2018, as compared to 2017.

See Item 4. “Information on the Company in our 2019 Form 20-F, and Notes 4.2 and 30 to our revised audited financial statements for more information about our business segments.

 

     Year  Ended December 31,  
           2018                  2017(1)                Percentage    
Change
 
     (US$ million)      (%)  

Exploration and Production

     12,190         7,021         74   

Refining, Transportation and Marketing

     2,393         4,235         (43)  

Gas and Power

     471         1,891         (75)  

Distribution

     20         40         (50)  

Biofuel

     (1)        (47)        (98)  

Corporate(2)

     (7,991)        (13,232)        (40)  

Eliminations

     (510)        (255)        100   

Net income (loss) from continuing operations

     6,572         (347)        (1,994)  

 

(1)

Excluding non-controlling interests.

(2)

Our Corporate segment comprises our financing activities not attributable to other segments, including corporate financial management, central administrative overhead and actuarial expenses related to our pension and medical benefits for retirees. In 2017, it includes the provision for the class action settlement and, in 2018, the agreement to settle the investigations with the U.S. Department of Justice and the SEC.

Exploration and Production

Net income in our E&P segment was US$12,190 million in 2018 as compared to US$7,021 million in 2017. Even with lower production, there was an increase in operating income due to the effects of higher Brent prices. In addition, we had greater impairment costs and higher expenses with production taxes and judicial agreements and contingencies, mitigated by the positive result with de-commissioning of areas. See Note 14 to our revised audited financial statements for further information about impairment expenses. The lifting cost decreased 4%, mainly due to lower expenses with interventions in wells.

Refining, Transportation and Marketing

Net income in our Refining, Transportation and Marketing segment was US$2,393 million in 2018 as compared to US$4,235 million in 2017. Operating income was reduced due to the lower margin of oil products, mainly gasoline, diesel and LPG, and higher selling expenses, partially offset by inventories formed at lower prices and lower impairment costs. The implementation of cost optimization measures resulted in a reduction in the unit cost of refining.

 

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Gas and Power

Net income in our Gas and Power segment was US$471 million in 2018 as compared to US$1,891 million in 2017. This decrease was mainly due to higher selling expenses for the use of pipelines of the southeast grid and the gain with the sale of our interest in NTS in 2017, partially offset by better margins and decrease in impairment.

Results of Operations—2017 compared to 2016

Sales Revenues

Sales revenues increased by 7% to US$77,884 million in 2017 from US$72,426 million in 2016, driven primarily by:

 

   

Higher export revenues (US$4,563 million) due to higher international prices of crude oil and oil products, as well as higher volume of exported crude oil reflecting an increase in the domestic market share.

 

   

Higher domestic revenues (US$3,540 million), as a result of:

 

  a)

Higher oil products revenues (US$432 million), mainly reflecting the average increase in diesel and gasoline prices when expressed in U.S. dollars, as well as higher average realization prices for other oil products, such as liquefied petroleum gas and jet fuel, following the increase in their international prices. These effects were partially offset by the decrease in oil products sales volume due to drop in market share, mainly for diesel and gasoline markets;

 

  b)

Increased electricity revenues (US$1,677 million) due to higher thermoelectric dispatch with higher prices in the spot market, as a result of worsened hydrological conditions; and

 

  c)

Higher natural gas revenues (US$1,191 million), reflecting higher thermoelectric dispatches with higher prices and sales.

 

   

Lower revenues from operations abroad (US$2,645 million), due to the sale of Petrobras Argentina S.A. in the third quarter of 2016 and Petrobras Chile Distribución Ltda in the first quarter of 2017.

Cost of Sales

Cost of sales increased by 6% to US$51,198 million in 2017, compared to US$48,301 million in 2016, mainly due to:

 

   

Foreign exchange translation effects which increased the average cost of sales when expressed in U.S. dollars, reflecting the appreciation of the average real;

 

   

Higher production taxes expenses due to the increase in international prices and rise in production of Lula field, which has a higher special participation rate imposed on it; and

 

   

Increased electricity expenses as a result of higher prices in the spot market.

These effects were partially offset by:

 

   

Lower import costs of oil and oil products due to higher share of domestic crude oil on the processed feedstock and the lower oil product sales volume in the domestic market;

 

   

Lower import costs of natural gas due to higher share of domestic natural gas in sales mix;

 

   

Decreased depreciation expenses, reflecting impairments of assets recognized in 2016; and

 

   

Lower costs from operations abroad mainly attributable to the sale of Petrobras Argentina S.A. and Petrobras Chile Distribución Ltda.

Selling Expenses

Selling expenses increased by 26% to US$3,614 million in 2017 from US$2,869 million in 2016, mainly due to foreign exchange translation effects, which increased the average selling expenses when expressed in U.S. dollars,

 

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and higher transportation charges by the use of third-parties’ gas pipelines, following the sale of Nova Transportadora do Sudeste (NTS). These effects were partially offset by lower impairment of trade and other receivables, primarily relating to companies from the electricity sector, and the effects of the sale of Petrobras Argentina S.A. and Petrobras Chile Distribución Ltda.

General and Administrative Expenses

General and administrative expenses decreased by 14% to US$2,656 million in 2017 from US$3,080 million in 2016. This decrease mainly reflects lower personnel expenses, following the separations under the voluntary separation incentive program (PIDV), and lower expenses with outsourced administrative services. For further information, see Item 6. “Directors, Senior Management and Employees—Employees and Labor Relations” in our 2019 Form 20-F.

Exploration Costs

Exploration costs decreased by 55% to US$800 million from US$1,761 million in 2016 due to decrease in exploration well costs written off as a dry hole or sub-commercial wells amounting to US$1,002 million. A breakdown of our exploration costs by nature is set out in Note 15 to our revised audited financial statements.

Research and Development Expenses

Research and development expenses increased by 9% to US$572 million in 2017 from US$523 million in 2016, driven by foreign exchange translation effects which increased Research and Development expenses when expressed in U.S. dollars. See Item 5. “Operating and Financial Review and Prospects—Research and Development” in our 2019 Form 20-F for further details about our research and development activities.

Other taxes

Other taxes increased by 165% to US$1,789 million from US$675 million in 2016, mainly due to our decision to benefit from the Brazilian federal settlement programs. See Note 21 to our revised audited financial statements for further information on these tax amnesty and refinancing programs.

Impairment of Assets

We recognized impairment charges of US$1,191 million in 2017 mainly for RTM and Gas & Power assets (US$781 million and US$446, respectively), mainly due to higher costs of raw materials and the lower refining margin projection, as well as following the lower expectation of a successful sale of fertilizers and nitrogen products plants.

Regarding E&P assets, the enhanced risk perception of the Brazilian market decreased the discount rates applied for impairment testing purposes, along with the better operational efficiency of certain fields and the lower tax burden set forth in the new tax rules applicable to the oil and gas industry, resulting in reversals of US$1,733. By contrast, expected acceleration of production cessation of certain fields reflecting an optimization of investment portfolio, as well as lower risk-adjusted discount rate for decommissioning costs, which also increased the costs of assets related to the abandonment and dismantling of these areas were the main contributing factors for impairment losses on producing properties in Brazil. In addition, we accounted for impairment losses for E&P under the scope of partnerships and divestments, mainly with respect to oil and gas production and drilling equipment in Brazil and to the sale of a portion of Roncador field in Campos basin (US$405 million).

Impairment losses in 2017 were 81% lower when compared to 2016. See Notes 4.10, 5.2, 5.3 and 14 to our revised audited financial statements for more information about the impairment of our assets.

 

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Other Income and Expenses

Other income and expenses increased by 17% to US$5,511 million in 2017 from US$4,721 million in 2016, mainly attributable to:

 

   

Higher provision for losses on legal proceedings (US$3,470 million), mainly impacted by the agreement to settle the class action in the United States;

 

   

Lower gains on review of provision for decommissioning costs, as a result of higher discount rate and the appreciation of the real against the U.S. dollar in 2017 (US$1,154 million);

 

   

Higher pension and medical benefit expenses associated with retirees (US$428 million), due to unwinding of discount over an increased net actuarial obligation;

 

   

Gain on sale and write-off of assets (US$1,215 million), mainly driven by the sale of interests in NTS and on its remaining interests measured at fair value (US$217 million);

 

   

Reversal of provisions relating to the PIDV due to the cancellation of enrollments in 2017 (US$192 million), compared to the PIDV expenses in 2016 (US$1,096 million); and

 

   

Lower foreign exchange losses reclassified from equity to results triggered by the sale of certain investees (US$1,420 million), mainly reflecting the sale of PESA in the 2016 (US$1,428 million).

Net Finance Income (Expense)

Net finance expense increased by 28% to US$9,719 million in 2017 from US$7,578 million in 2016, resulting from:

 

   

Higher foreign exchange and inflation indexation charges (US$1,623 million), generated by:

 

  a)

Foreign exchange variation losses of US$718 million driven by the impact of a 13.7% depreciation of the U.S. dollar against our net debt in 2017 in Euro, compared to the foreign exchange gains of US$191 million due to the 3.1% appreciation on the net debt in 2016 (US$909 million);

 

  b)

Foreign exchange losses of US$39 million driven by the impact of a 9.1% depreciation of the U.S. dollar against the pound sterling over the average net debt in pound sterling in 2017, compared to the foreign exchange gains of US$405 million due to the 16.5% appreciation on the net debt in 2016 (US$444 million);

 

  c)

Foreign exchange losses of US$90 million driven by the impact of an appreciation of the real against the U.S. dollar over the average positive exposure in U.S. dollar in 2017, compared to the foreign exchange gains of US$172 million due to the 16.5% appreciation of the real against the U.S. dollar over the average negative exposure in U.S. dollar in 2016 (US$262 million); and

 

  d)

Foreign exchange gains due to lower real x Euro exposure (US$39 million).

 

   

Higher finance expenses (US$593 million), mainly due to:

 

  a)

Finance charges arising from our decision to join Brazilian federal settlement programs in 2017 (US$837 million); and

 

  b)

Lower financing expenses in Brazil, due to pre-payment of debts (US$360 million), along with higher capitalized borrowing costs (US$249 million).

Results in equity-accounted investments

Positive results in equity-accounted investments of US$673 million in 2017, mainly due to the higher income of associates, as compared to the negative result of US$218 million in 2016, which was impacted by the Braskem’s leniency agreement and by the negative result of our former associate Guarani S/A.

 

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Income Taxes

Our net income before income taxes, along with the permanent difference pertaining to income taxes recognized in the scope of tax settlement programs created by the Brazilian federal government, resulted in income taxes expenses of US$1,697 million in 2017, a 119% increase compared to 2016. See Note 21.2 to our revised audited financial statements for information on our decision to join these settlement programs, thereby enabling us to resolve significant disputes.

The effective tax rate based on the results increased to a positive rate of 112.6% from a negative rate of 22.2% in 2016. Besides the income taxes under the aforementioned tax settlement programs, in 2017 the difference between the statutory corporate tax rate (34%) and our effective tax rate was also affected to a lesser extent by other permanent difference, primarily the nondeductible expenses and nontaxable income including post- retirement health care plan expenses and results in equity-accounted investments, as well as different jurisdictional tax basis for foreign subsidiaries. These permanent differences arise to the extent that expenses related to post-retirement health care benefits are recognized and we account for results in equity-accounted investees for each reporting period, and profits and losses arising in higher and lower tax rate jurisdictions for overseas subsidiaries occur.

See Note 21.6 to our revised audited financial statements for a reconciliation of statutory tax rates and our tax expense.

Discontinued operations

See Note 2.1 for more information on the basis of preparation of our revised audited financial statements and our presentation of discontinued operations as a result of the sale of a 33.75% equity interest in Petrobras Distribuidora S.A. (BR Distribuidora).

Net income from discontinued operations in 2017 was US$359 million, as compared to a loss amounting to US$81 million in 2016. This increase was mainly due to decreased expenses with expected credit losses, decreased expenses with provisions for legal proceedings, and reversal of expenses related to the PIDV, in each case relating to BR Distribuidora.

Net Income (Loss) by Business Segment

We measure performance at the business segment level based on net income. The following is a discussion of the net income (loss) of our three significant business segments for 2017, as compared to 2016.

See Item 4. “Information on the Company” in our 2019 Form 20-F, and Notes 4.2 and 29 to our revised audited financial statements for more information about our business segments.

 

     Year Ended December 31,  
           2017(1)                  2016(1)              Percentage Change    
     (US$ million)      (%)  

Exploration and Production

     7,021         1,106         535   

Refining, Transportation and Marketing

     4,235         5,746         (26)  

Gas and Power

     1,891         718         163   

Distribution

     40         19         111   

Biofuel

     (47)        (323)        (85)  

Corporate(2)

     (13,232)        (10,966)        21   

Eliminations

     (255)        (1,080)        (76)  

Net Income (Loss) from continuing operations

     (347)        (4,780)        (93)  

 

(1)

Excluding non-controlling interests.

(2)

Our Corporate segment comprises our financing activities not attributable to other segments, including corporate financial management, central administrative overhead and actuarial expenses related to our pension and medical benefits for retirees. In 2017, it includes the provision for the class action settlement.

 

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Exploration and Production

Net income in our Exploration and Production segment was US$7,021 million in 2017 as compared to US$1,106 million in 2016. This increase was mainly attributable to higher oil prices, lower depreciation and impairment expenses of oil and gas producing properties in Brazil. These effects were partially offset by higher production taxes. See Note 14 to our revised audited financial statements for further information about impairment expenses.

Refining, Transportation and Marketing

Net income in our Refining, Transportation and Marketing segment was US$4,235 million in 2017 as compared to US$5,746 million in 2016. This decrease was mainly due to the reduction in volumes of domestic sales associated with lower margins and the increase in oil prices, partially offset by lower expenses associated with sales, voluntary separation plan and impairment, as well as higher results in equity-accounted investments.

Gas and Power

Net income in our Gas and Power segment was US$1,891 million in 2017 as compared to US$718 million in 2016. This increase was mainly due to growth in natural gas sales, at higher prices, increase in the participation of national gas in the sales mix as well as the gain with the sale of our interest in NTS, partially offset by increase in impairment.

 

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EXHIBIT INDEX

 

  Exhibit
  Number        
 

Description

99.1   Revised audited consolidated financial statements as of December 31, 2018 and 2017 and for the years ended December 31, 2018, 2017 and 2016

 

14


Table of Contents

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: January 2, 2020

 

PETRÓLEO BRASILEIRO S.A. — PETROBRAS
By:  

            /s/ Larry Carris Cardoso

               Name:       Larry Carris Cardoso
  Title:   Attorney in Fact

 

PETRÓLEO BRASILEIRO S.A. — PETROBRAS
By:  

            /s/ Tomaz Andres

               Name:       Tomaz Andres
  Title:   Attorney in Fact

Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘6-K’ Filing    Date    Other Filings
Filed on:1/2/206-K
4/1/1920-F,  6-K
For Period end:12/31/1820-F,  6-K
12/31/1720-F
12/31/1620-F,  6-K,  6-K/A
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Filing Submission 0001193125-20-000685   –   Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

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