Petroleo Brasileiro S.A.- Petrobras NYSE: PBR reported higher production, stronger refinery utilization and continued investment in upstream projects during the first quarter of 2026, while executives said the company is monitoring fuel-price volatility and prioritizing capital discipline.
Chief Executive Officer Magda Chambriard said Petrobras is “overcoming challenges every day,” pointing to capacity expansions, stronger pre-salt well productivity and new production systems as the operational foundation for the quarter’s results.
Production Rises as Búzios Expands
Chief Financial and Investor Relations Officer Fernando Sabbi Melgarejo said Petrobras produced 2.58 million barrels of oil per day in the first quarter. In April, production reached 2.73 million barrels per day, which Melgarejo described as a new monthly record for the company.
Melgarejo said April production was about 30% higher than Petrobras’ 2024 average of 2.152 million barrels per day. He attributed the increase to new capacity projects, improved operational efficiency and reservoir management.
Chambriard highlighted the Búzios field, which she said is producing a little more than 1 million barrels of oil per day and could eventually reach 1.5 million and potentially 2 million barrels per day. She also noted that both Búzios and Tupi have surpassed the milestone of 1 million barrels per day.
The P-79 platform, the eighth platform in the Búzios field, began production on May 1, three months ahead of schedule, according to Chambriard. She said Petrobras expects the platform to reach capacity of 180,000 barrels per day with only three or four wells.
Chambriard also cited capacity gains at FPSO Almirante Tamandaré, saying Petrobras expanded the unit’s capacity from an original design of 225,000 barrels per day to 270,000 barrels per day. She said three similar rigs under construction could also see capacity expansions, together adding 180,000 barrels per day beyond their original designs.
Refining Output and Diesel Supply Increase
Petrobras executives emphasized higher refinery throughput and increased production of S10 diesel, the company’s low-sulfur diesel product. Chambriard said S10 diesel output reached 512,000 barrels per day in March, reflecting investments in refinery modernization, including a new hydrotreatment unit at REPLAN and modernization work at Revap.
Melgarejo said Petrobras’ refineries produced 1.8 million barrels per day of byproducts in the quarter. He said the refinery utilization factor increased by six percentage points and exceeded 97% in March, the highest level since 2014. Chambriard said utilization later surpassed 100% in April and May.
William França da Silva, Director of Industrial Processes and Products, said Petrobras has been operating refineries at levels above 100% and recently reached 103%. He also said the RNEST refinery has increased processing levels, contributing additional diesel production.
Executives said there is no indication of a structural shortage in Brazil’s fuel market. In response to an analyst question, company executives said Petrobras expects to import diesel in the second half of the year, when seasonal demand is typically higher, but said the company could do so without difficulty if necessary.
Financial Results and Capital Spending
Melgarejo said Petrobras generated EBITDA excluding one-time items of BRL 11.7 billion, net income excluding one-time items of $4.5 billion and operating cash flow of $8.4 billion in the first quarter.
He said higher Brent prices were not fully reflected in the first-quarter results because the price surge began in March and many exports recognized in the month were priced earlier. He also said record production had “virtually no impact” on earnings because of an export backlog of about 80,000 barrels per day, which he expects to support second-quarter results as inventory is monetized at higher prices.
Petrobras invested $5 billion in the first quarter, with nearly 90% directed to exploration and production projects, according to Melgarejo. He said investment increased in wells, subsea activities and rig construction, and noted that Petrobras is focusing on the construction of P-80, P-82 and P-83, each expected to have capacity of 225,000 barrels per day.
Gross debt ended the quarter at $71.2 billion, below the company’s $75 billion ceiling under its business plan. Melgarejo said Petrobras still expects debt to converge to $67 billion in 2026 and $65 billion by the end of the plan, or potentially lower. He said more than 60% of total debt is related to leases recognized under accounting standards.
Petrobras also reported BRL 72.4 billion in tax payments and government take during the quarter, including BRL 27.3 billion in federal taxes, BRL 29 billion to states, BRL 700 million to municipalities and nearly BRL 15 billion in government royalties.
Fuel Pricing, Subsidies and Dividends
Chambriard said Petrobras is monitoring international oil and fuel-price volatility but is not passing abrupt price movements directly to Brazilian consumers. She said the company is following its pricing policy while also working with the federal government on support mechanisms for domestic fuel sales.
She said diesel in Brazil currently has a subsidy of BRL 1.50 per liter, following government support measures in March, and said Petrobras is also assessing gasoline prices in light of international prices and competition from ethanol in Brazil’s flex-fuel vehicle market.
Melgarejo said March subsidies were recorded in accounts receivable and included in BRL 740 million of results, with payment expected within the quarter. He said further subsidies are still going through operational procedures.
On capital allocation, Melgarejo said the company’s priorities are investment in profitable projects and debt reduction. He said Petrobras does not want to operate with excess cash, but added that extraordinary dividends would only be considered if investment needs and debt targets are satisfied. “We don’t believe there’s any possibility for that this year,” he said, citing uncertainty and oil-price volatility.
Mexico, Braskem and Future Projects
Chambriard said Petrobras is evaluating potential opportunities in Mexico, including a possible partnership with Pemex in the Mexican portion of the Gulf of Mexico. She said discussions are at an early stage and include exploration, mature-field operations, refining, gas processing and potential petrochemical synergies.
She also said Petrobras is interested in becoming more active in Braskem, where it holds 46% to 47% of voting shares. Chambriard said Petrobras had been “basically absent” from Braskem in recent years and now wants to participate more strongly because of potential synergies with refining, gas and petrochemicals.
Melgarejo said Petrobras does not intend to consolidate Braskem’s debt and expects to remain a minority shareholder. He said Petrobras and IG4 are evaluating operations, logistics, trading and refinery synergies during a transition period following the signing of a shareholder agreement.
Chambriard closed the call by saying Petrobras remains focused on capital discipline, governance and profitable growth. “Petrobras is a strong cash generator,” she said, adding that the company intends to continue strengthening free cash flow while serving shareholders and Brazilian society.
About Petroleo Brasileiro S.A.- Petrobras NYSE: PBR
Petróleo Brasileiro SA – Petrobras is a Brazilian, state-controlled integrated oil and gas company headquartered in Rio de Janeiro. Founded in 1953, Petrobras is principally engaged in the exploration and production of crude oil and natural gas, and operates across the full value chain from upstream activities through refining, transportation and downstream marketing of petroleum products. The company is a major player in Brazil's energy sector and is a listed public company with global capital market presence.
Petrobras's core activities include deepwater and ultra-deepwater exploration and production, where it has been a pioneer in developing pre-salt reserves off Brazil's coast.
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