Earnings Call Transcript - PBR Q4 2022

Operator, Operator

Good afternoon, everyone. Welcome to Petrobras Webcast with Analysts and Investors about the Fourth Quarter 2022 Results. It's great to have you join us today. We'd like to inform you that all participants will follow the transmission by Internet as listeners. After an introduction, a Q&A session will begin. You can send us questions by e-mail at petroinvest@petrobras.com.br. Today, we have with us Jean Paul Prates, CEO; Claudio Mastella, Chief Trading and Logistics Officer; Fernando Borges, Chief Exploration and Production Officer; Joao Henrique Rittershaussen, Chief Production Development Officer; Paulo Palaia, Chief Digital Trading and Innovation Officer; Rafael Chaves, Chief Institutional Relations and Sustainability Officer; Rodrigo Araujo, Chief Financial and Investor Relations Officer; Rodrigo Costa, Chief Refining and Natural Gas Officer; and Salvador Dahan, Chief Governance and Compliance Officer. To initiate, I'll pass the floor to Petrobras CEO, Jean Paul Prates. Please Jean, go ahead.

Jean Paul Prates, CEO

Hello to all of you. It is an honor to speak to you as the CEO of Petrobras at a time when we are disclosing such expressive and symbolic results for the company. At the same time, we met all our production targets. We advanced in the prospecting of new reserves and in the decarbonization of our operations. We maintain our competitiveness, raising the utilization factor of our refineries, while launching new products with renewable content. All these achievements are extremely important in the complex scenario we live today. As global consumption of fossil fuel hits record highs, we must prepare ourselves for the inevitable energy transition. While no one can say precisely how long the traditional oil and gas industry will be dominant, it is indisputable that this moment is getting closer and closer. We will maintain our leading role in oil and gas production, while working to build a new future. Our main goal in the new management that starts now is to make Petrobras an increasingly balanced, strong, and prepared company to be the protagonist of the energy transition, drawing on its unique knowledge of Brazil's potential for this growing market. Investment in renewable energy sources such as hydrogen and offshore wind is already foreseen in the current strategic plan. Our operations in deep and ultra-deepwater put us in a privileged position for the generation of offshore wind energy, even integrated with oil and gas production. We are major producers of natural gas, the transition fuel for hydrogen. We will continue in a responsible and transparent manner, seeking more opportunities to diversify our operation, attentive to society's demand for a fair energy transition, guaranteeing energy that is available, accessible, and sustainable for all. I reiterate our ambition to neutralize our operational emissions within a time frame compatible with that established by the Paris agreement. To this end, we have invested in the decarbonization of our operations. We already operate the world's largest offshore carbon reinjection program, and we are implementing a series of state-of-the-art technologies to reduce emissions. We are a company in permanent transformation. We are working every day to make Petrobras a company that is increasingly stronger, more responsible, and connected to the future, because we believe this is the best way to fulfill our responsibility to society and to our investors. Thank you very much. Welcome.

Operator, Operator

Thank you, Jean. Now I'll pass the floor to Petrobras CFO, Rodrigo Araujo. Please Rodrigo, go ahead.

Rodrigo Araujo, CFO

Thank you, Carla. Thank you, Jean. Thanks, everyone, for being with us today and joining our earnings call for the fourth quarter of 2022. I'm very glad to be here and to report the important and strong results that we have for fiscal year 2022 and for the fourth quarter of 2022. First, I would like to just show my respect for my colleagues on the Executive Board and the important work that has been done in terms of deleveraging the company, keeping our capital structure optimized, and delivering the relevant projects that we have on time and within budget. As we all know, about 90% of the results and the returns from projects come from the Final Investment Decision and delivering the projects on time. So I'm very glad with the work that has been done in terms of well drilling, time reduction, delivering, contracting on time, and delivering efficient platforms and projects on time. We have also managed to achieve important operational results in 2022. We have, of course, reached the highest incorporation of reserves in the history of the company. So that's very important in terms of looking to the company's future. We have also reached the highest utilization factor of our refineries in the last five years. In a year where we had relevant scheduled stoppages, we faced challenges, especially as we are still dealing with the impact of COVID-19, not only on the teams but also on the supply chain. We also achieved very important results in terms of our commercial and trading operations in 2022. We were able to diversify our export base not only for the US market but also for Europe and other Asian markets. We have been able to deliver pre-salt oil that is quite competitive in terms of cost and emissions in new markets in this environment, where the Russia-Ukraine war has significantly impacted the industry. We also have relevant highlights that we're going to share in terms of reducing emissions of our operations and also in terms of digital transformation and governance. So, I'm going to start with the earnings presentation. Next, please. So, our usual disclaimer with respect to forward-looking statements and forecasts. Next, please. As we always do, we start discussing safety, which is our number one value. We're very concerned about safety, about being able to deliver and create strong value while maintaining the highest degree of safety standards in the industry. As you well know, we're well-positioned in terms of comparison with our peers. But as the results of 2022 show, safety is always a significant challenge. We have to be continuously looking for safety metrics and ways of improving and reducing the impact of incidents and occurrences that happen within the company. We have the ambition of zero fatalities. Unfortunately, in 2022, we had five fatalities on site during operations. So, we're of course very sorry about that and focused on improving our safety conditions so that we're always performing better and more focused on delivering our results with more safety. Next, please. So, starting with our ESG results and agenda, I would like to highlight what we had in terms of carbon intensity, not only in the upstream segment, in which we delivered results that were substantially below the acceptable limit that we set for 2022, but also in the downstream segment, where we already see the results of our energy efficiency program called RefTOP on our refineries, reducing the energy intensity of our refineries, and consequently, the overall carbon intensity of our operations. It's always important to remember that the pre-salt oil, especially in the Tupi and Búzios fields, have between 9 and 9.5 kilos of CO2 per barrel equivalent emissions. It’s quite competitive. It’s one of the top-notch frontiers in the world. So, we're very pleased with the results that we've been finding and focused on continually improving our ability to reduce our carbon footprint and to deliver substantial technology to help that happen. We reinforce our commitment with the targets that we set for carbon intensity for 2025 and 2030 and we've been able to comply with all the targets that we’ve been setting and continue to challenge ourselves in terms of future results. Next please. When we look at our absolute emissions for 2022, it's important to highlight that we had a substantial decrease in total operational emissions when we compare to 2021. We should remember that at the end of 2021, we had the hydro crisis in Brazil that caused a substantial increase in thermal power plant generation, increasing the consumption of natural gas and, consequently, increasing the operational emissions. That impacted significantly in 2021. As you can see, this was mostly an outlier and we have managed to continue the downward trend that we have for total operational emissions. Also, when we examine oil and gas operational emissions, we've been continually reducing our oil and gas operational emissions basically since 2008. This downward trend continues, and we are committed to improving our results in terms of lower emissions. Next, please. Looking at the carbon capture results, as you know, we have the largest offshore carbon capture program in the world. Since 2008, we've managed to sequester approximately 41 million tons of CO2. In 2022, about 11 million tons were reinjected. This represents our best results to date and reinforces our commitment and capability to deal with carbon-intensive reservoirs through a combination of technology and action to reduce the carbon footprint of the pre-salt oil. Next, please. Also regarding climate highlights, we've reduced methane emissions in 2022 by 60% compared to 2015. Just to reiterate, we always consider 2015 as the initial baseline for the targets that we set for methane reduction. We have also joined the UN initiative focusing on methane mission reduction and are pleased to be part of an important group committed to delivering even better results than we have achieved thus far. Next, please. We've also been nominated again as one of the members of the Dow Jones Sustainability Index, which is always a significant achievement. We set targets for the executive teams to maintain our presence in the Index; this is an important external acknowledgment. We're proud to highlight that we received top marks for environmental reporting, social reporting, as well as for water-related risks. We also stood out in terms of operational efficiency, labor practices, and human rights. This marks the second consecutive year we have been part of the Index, and we are pleased to have achieved this result once again. Next, please. In terms of governance, it's important to emphasize that we are continuing our efforts in digital transformation and governance risk and control. We have a strong internal controls automation process that is ongoing and we already have more than 30% of internal controls automated, and we continue to focus on increasing that level; we are one of the best performers in the industry. We have also been certified by the bylaws that follow the SOEs in Brazil, once again, with top-tier governance certification. We have also updated our code of ethical conduct, which is one of the most important guidelines we adhere to. This is available on our website for your review. Additionally, we have once again been awarded for the transparency of our financial statements, and we have recently approved our tax policy in January 2023, which reinforces our commitment to fair taxation, transparency, and accountability. Alongside the financial results for the year, we released our tax report yesterday as well. I welcome everyone to look at it. We provide significant reports regarding the company’s contributions to Brazil and Brazilian society as an important taxpayer and how our contributions to various Brazilian states are also quite relevant. Next, please. In terms of tax payments for 2022, we paid BRL 279 billion in taxes for the year, a record level of taxation. We also paid BRL 72 billion in dividends to the controlling group related to the federal government. Additionally, it's important to note that over 60% of our cash flow generation returns to Brazilian society, including taxes and dividends that we paid to the Brazilian state as the company's controlling shareholder. Next, please. As I mentioned earlier, our focus on project management and solid project implementation governance has resulted in substantial outcomes over the last years. In 2022, we had the start-up of FPSO Guanabara in the Mero field, we also anticipated P-71, which was expected to start production in 2023, instead starting production in late 2022 in the Atapu field. Furthermore, we've reached the full production capacity of P-68 in the Berbigão and Sururu fields. We achieved significant results in terms of efficiencies in the new production units that we launched over the past couple of years. We also have FPSO Anna Nery that has arrived at the Marlim field, and Almirante Barroso along with Anita Garibaldi are at the shipyard in Brazil. Looking ahead to 2023, we maintain our forecast that we expect all four units scheduled for 2023 to come online. We have also contracted three owned platforms for the Búzios field, a crucial step in continuing the development of that field, and initiated contracting for other relevant FPSOs, such as Atapu and Sépia too. As you remember, we have 17 units expected to come online according to our business plan, and we will remain highly focused on achieving this substantial challenge. Next, please. Regarding the key financial highlights for 2022, several of the metrics represent Petrobras' best historical results. We achieved strong EBITDA in 2022 of $66 billion, with $50 billion of cash flow from our operations. We recorded our highest net income ever at $36.6 billion. During the year, we paid out approximately $3 per share in dividends. Additionally, we effectively managed to maintain our capital structure close to what we consider optimal, reducing our net debt by $6.1 billion when comparing it to 2021. We also reduced gross debt. As mentioned, BRL 279 billion was paid in taxes throughout the year. Another important milestone was reaching double-digit returns on capital employed for the first time in a very long time, which is a crucial result of our focus on value creation and profitability from the relevant projects we have been implementing over time. As previously mentioned, we achieved the highest incorporation of reserves in the history of the company, at 2 billion barrels of oil equivalent for the year 2022. Next, please? When we evaluate production KPIs, we have more than delivered on our production target for the year. We were approximately 3% above the midpoint of the year's target for oil and commercial production as well as total production. We increased production without compromising our cost efficiency; the lifting cost for the year was under $6 per barrel, indicating highly competitive lifting costs. Of course, lifting costs are only a minor aspect of the overall equation. We face substantial taxation and other costs associated with the necessary return on capital employed, which is essential in an industry that carries significant risks such as the oil sector. So we are committed to improving our efficiency over time as well. We also achieved record-level 10 ppm diesel sales, phasing out 500 ppm diesel to the 10 ppm diesel. Over the course of 2022, it is important to highlight that in addition to delivering record levels of 10 ppm diesel, we were also able to maintain competitive prices aligned with international markets throughout the year. This was indeed a very challenging year marked by substantial impacts from the Russia-Ukraine war, which led to significant volatility in crack spreads. Despite this, we maintained a healthy competitive environment in Brazil without completely transferring this volatility to end consumers. We also achieved a record number of patents filed in Brazil for the second consecutive year. The company holds more than 1,000 active patents focused on innovation and creating value through our innovation system. I have already mentioned the start of production from P-71 FPSO Guanabara and the full production capacity for P-68. In terms of natural gas sales contracts, we achieved improvement and diversification in the benchmark pricing of our contracts. You might recall that there were significant impacts in Q4 2021. Since then, we have focused on enhancing the quality of our natural gas commercial portfolio by linking more contracts to crude and to spot prices of natural gas, such as JKM. Thus, solid results in the natural gas segment stemmed from extensive work related to commercial diversification. I have already touched on decarbonization and the significant reinjection project we undertake, but it’s important to note the successful production of the first batch of renewable diesel and the initial trials of a batch of bunker fuel with renewable content, reaffirming our commitment to diversifying our sources and products in relation to Scope 3 as well. The Refining segment faced a challenging year with multiple scheduled stoppages, but these were successfully managed and we achieved the highest utilization factor in five years, at 88% utilization, with healthy margins and optimized use of our refineries. This represents very healthy and sustainable outcomes. Additionally, we returned to notable results regarding our placement in the Dow Jones Index. Next, please. Of course, we encountered a positive external environment in 2022, characterized by much higher prices compared to 2021. However, it is essential to emphasize that we have seen similar crude prices in the past, and the results the company achieved were significantly different from those we have delivered now. Thus, the 2022 results were closely aligned with an effective management strategy and a substantial turnaround of the company over the previous six or seven years. Consequently, we reported solid and significant results in 2022. When comparing Q4 with Q3, we did record lower Brent prices during Q4, which will reflect in the financial results for the various segments. Next, please. Additionally, we posted strong EBITDA for Q4 at $14 billion. Compared to Q3, we experienced lower prices and consequently lower margins, which we will discuss. Another crucial aspect is that the results were generally in line with expectations. Delivering solid, predictable, and stable results is one of our main targets. The primary differentiation between anticipated and actual results was due to non-cash expenses, which pose challenges for the analyst community to forecast, such as the write-offs of exploratory expenses as we've progressed with the development of the Sépia area. We also encountered provisions for legal contingencies that are similarly difficult to predict. Overall, other than those one-off impacts—which we deem nonrecurring, although they regularly affect the company’s results—the results matched our consistent performance over time. Next, please. In terms of results by business segment, we see that the upstream segment was affected by lower Brent prices, coupled with the non-cash write-offs of exploratory costs that were capitalized. However, we reported solid results in the downstream segment as well. Q4 in Brazil showed lower diesel sales due to seasonality, but this was partially offset by increased gasoline sales and higher export volumes. In Q4, it’s particularly important to highlight that while managing the company's pricing policy, we did not pass through all of the volatility encountered; in Q3, prices dropped sharply, and thus we managed to sustain a better margin during that period. In Q4, we did align our prices more closely with international markets, though we maintained positive margins, albeit closer to Q3 pricing levels. In the Gas & Power segment, I have already mentioned the significant improvements in our contract mix, but we also faced nonrecurring gains recorded in Q3, which comparisons skewed Q4 results. If we examine Q4 2022 against Q4 2021, we see the positive impact of our improvements in commercial policy for our natural gas contracts. Next, please. Evaluating cash flow generation, we achieved $15 billion from operations. It's interesting to see that companies are paying income tax again. Once again, we have utilized all previously recorded income tax credits resulting from prior periods of losses. We also invested $10 billion throughout the year and noted a ramp-up in terms of investments for Q4, especially when contrasting 2023 and 2022; in 2023, we expect investments of $15 billion, compared to $10 billion in 2022. This anticipated 50% increase reflects in our investments for 2022. Following divestments and cash inflows from the transfer of rights surplus auction, we achieved $52 billion in free cash flow for the year. This was primarily allocated to maintaining our capital structure at an optimal level and distributing the value we created to our shareholders. Next, please. Regarding our leverage, as I stated previously, we reduced gross debt from $59 billion to around $54 billion. This was anticipated as we had FPSOs coming online in 2022, and we foresee our leverage to increase thereafter. Our maturity profile is also quite robust; the maturity schedule for the forthcoming years is manageable and stable in terms of leverage. Next, please. In terms of portfolio management, we've highlighted the transactions that were finalized in Q4. Essentially, the REMAN and SIX refineries, the Onshore Fields of Carmópolis and Papa-Terra, as well as the Offshore Albacora Leste fields were all completed during Q4 2022. Next, please. In terms of net income, I previously mentioned we achieved record net income for 2022 along with very solid results for Q4. Although we witnessed lower Brent prices, we faced lower margins on oil products as well. Our business plan was released in Q4, leading to updated forecasts influenced by impairment of assets observed during Q4. None of that jeopardized the company’s overall results or raised concerns regarding future performance. This was offset partially by financial gains from Sépia, Atapu, and Búzios transfer of rights auctions, as well as by the appreciation of the Brazilian real during this period, which positively influenced our financial results. Next, please. In terms of dividend payments, the Executive Board proposed to the Board of Directors payment in two installments of BRL 1.37 per share. This represents 60% of free cash flow, coupled with the distribution of the remaining net income for 2022. The Board approved the Executive Board's recommendation while also suggesting that shareholders create a statutory reserve to retain BRL 0.50 per share. Should shareholders disagree with this recommendation, it was suggested that the payment of BRL 0.50 per share be issued by the end of 2023. Next, please. This concludes my presentation. Once again, I thank you all for being with us today for our earnings call. I take pride in the results we have achieved and wish to congratulate my peers on the Executive Board for the critical work accomplished over the past two years, as well as thanking all investors and shareholders for the trust you've placed in us as executives of the company. Now, I'll pass the floor back to Carla. Thank you.

Operator, Operator

Thank you, Rodrigo. We can move to our Q&A session. The first question that we received from Bruno Montanari with Morgan Stanley. Bruno also sent us a message, I would like to give you a very warm welcome to Mr. Jean Paul Prates and hope that Petrobras can perpetuate the government's standard design and strengthen over the past years. So, Jean, the first question is for you. It would be great to hear your thoughts about the company's fuel pricing policies. How do you think Petrobras can balance its financial targets and its social role in Brazil? Can the import parity policy be sustained? Still on this topic, I understand you are a strong supporter of the creation of a fuel stabilization fund. Should we expect this option to be the number one choice for Brazil to manage fuel prices and to avoid volatility to the final consumer?

Jean Paul Prates, CEO

Bruno, first, regarding your last question, I cannot speak as a policymaker or minister or legislator anymore in my new position. The fuel stabilization fund was a proposition made in a crisis period, particularly during the latest hikes of oil, gas, and fuel prices globally and also in Brazil. I still believe it would be part of the solution; however, it's not the entire solution when we discuss government policy, sectorial policy, and economics in the country. It would be up to Congress to decide if this is part of the solution. The bill that exists in Congress is still pending approval. Regarding Petrobras and its pricing policy, I should emphasize what I’ve consistently stated: Petrobras sells fuels predominantly in the Brazilian market, so it must adopt the most competitive pricing and commercial terms to retain its market share. It's not up to us to dictate, lead, or strongly suggest the pricing policy for the country. We will handle our own pricing policy with our clients in our selected markets, which is fundamentally what we will do. We can facilitate government policy through suggestions or participation in study groups but, fundamentally, our duty is to maintain our own pricing model.

Operator, Operator

Thank you, Jean. The next question is also for you, and it's regarding the temporary taxation on oil exports. Do you see risks of such a tax becoming permanent in the industry? Even if temporary, does it jeopardize the investment climate in oil and gas, especially for foreign direct investments?

Jean Paul Prates, CEO

Look, I think especially as oil companies, we need to be resilient and accustomed to government rules and changes in perspective, especially during election periods. The risks are inherent. Currently, I would believe that the primary risk lies more with the government than it does with us. I think the risk lies in not having sufficient votes to approve this temporary tax. The origin of this tax appears to stem from the discussion around the reinstatement of gasoline taxes, which were recently examined. So it may have been proposed as a type of compensation for that division in timing. However, we have to deal with it; we are not inherently in favor of this tax; we clearly expressed this to Congress. However, we will handle it as it comes. The government faces the challenge of building support for its approval. I advocate for inducing the domestic market in other ways. It's important to remember that our contributions to the Brazilian state have been significant, totaling about BRL 350 billion last year in taxes and dividends.

Operator, Operator

Thank you, Jean. The next question comes from Regis Cardoso with Credit Suisse. He also sent us a message. Congratulations to the entire Petrobras team for another quarter of excellent results. I also take the opportunity to congratulate Jean Paul on his new position and wish him much success. Regis's first question is about the pricing policy. Recent discussions about fuel tax hikes have again put Petrobras's pricing policy in the spotlight. The company reduced prices this week but remains aligned with international parity. Does Petrobras intend to change the way it prices products in the domestic market? If so, what conditions would be required for such a new pricing policy?

Jean Paul Prates, CEO

Regis, I believe I addressed part of your question earlier, but one expression you used is critical to elaborate on. International parity and import parity are two distinct concepts. I believe no credible entity in the oil and gas industry could disregard international references today. It's nearly impossible, unless you are a big exporter with a small domestic market wanting to offer gasoline or diesel nearly free for other reasons, or if you are a state company that does not require investments from private sector partners. That said, in Brazil, for the domestic market, import parity—which is the price from the outside plus freight costs—serves as the maximum price we can reach in the market. However, we must operate with the most competitive domestic price and strategize according to regional preferences, customer segments, and pricing differentiations. This is fundamentally Petrobras's policy. If the government orders a shift in directive pricing, we’ll discuss it, analyze the implications, and adapt as necessary.

Operator, Operator

Thank you, Jean. The question from the hedge section also pertains to you, regarding strategic priorities. What are your impressions after these first few weeks leading Petrobras? Can you outline what the new management's strategy priorities will be—what should be maintained in the current strategic plan and what should be revised?

Jean Paul Prates, CEO

Yes. I'm not coming into Petrobras for the first time; I’m returning. I spent nearly 30 years here at the end of the '80s and beginning of the '90s. Therefore, returning to this exceptional team and workforce brings me great pride and encourages me to deliver positive outcomes for our investors and the Brazilian populace. We will openly, transparently discuss our new strategic priorities, including input from you, who manage investor finances. In a company of this size, swift changes are challenging. I would anticipate that the majority of the current strategic plan will remain, however, we will have our own suggestions to introduce improvements together at an appropriate time. We'll need to establish our teams and make changes to the Board of Directors; thus, we will proceed methodically to advance successfully.

Operator, Operator

Thank you, Jean. The next question comes from Luiz Carvalho with UBS. He also sent us a message. First, we would like to congratulate the company's management and team on the solid results. We also congratulate Mr. Prates and wish you good luck in your new role. Luiz's first question as CEO is how to avoid conflicts of interest between the controller, minority shareholders, politicians, and the company's best interests in decision-making processes?

Jean Paul Prates, CEO

Luis, first of all, I would suggest a shift in perspective. Your position emphasizes selling. It's important to acknowledge the challenge presented by your question because it reflects a fair perception given our recent past. We need to aim to transform government participation in Petrobras into an advantage, not a disadvantage for investors. We need to ensure investors see partnering with the Brazilian state as beneficial. This shift allows for improved dialogue and reduces risk when embarking on new projects or regulations. We must understand that there will always be government engagement, which has been a reality for Petrobras across various administrations, and we will find ways to manage this scenario positively.

Operator, Operator

Thank you, Jean. The second question from Luis also pertains to you. There have been numerous comments on Petrobras's focus, particularly on non-core investments. What would you view as the optimal portfolio for Petrobras? Could you outline a few potential options? Do you see the company venturing into renewable power generation, offshore wind, fertilizers, biofuels, fuel distribution, new refineries, or other sectors? What target do you have in mind for how much of the company's future investment plan this could represent?

Joao Henrique Rittershaussen, Chief Production Development Officer

Yes, Luis, while it would be unwise not to engage in the energy transition, it's equally important to manage expectations regarding the rate of change. We do not intend to abruptly switch direction to an entirely different type of energy source or business model. Our upstream oil and gas operations will continue to be our primary focus, accounting for approximately 83% of our investment portfolio. In the foreseeable future, I can speculate that we will not exceed 20% to 25% for investments in different segments, such as refineries transitioning to biorefineries, renewable energies, etc. It's crucial that this transition is conducted thoughtfully rather than abruptly. We will seek to integrate more bio components into our refineries, which is the quickest route to merge our traditional oil and gas sector into future energy solutions. We also aim to pursue new avenues for natural gas production, as natural gas remains integral to energy transitions.

Operator, Operator

Thank you, Joao. The next question comes from Frank McGann with Bank of America Merrill Lynch. The first question for you is: Petrobras is expected to continue to generate significant free cash flow. What should be the priorities in using that cash flow? Should strong cash flow lead to payouts above the legal minimums

Jean Paul Prates, CEO

Frank McGann, first of all, it's wonderful to have you here and welcome back. I would suggest that the priorities for cash flow usage should include solid projects. If people are merely holding onto their cash, they can choose to keep it in their wallets, so they invest in companies to multiply their wealth through valuable ventures for society. Obvious as this may seem, it's essential to ensure that our investments align solidly with future expectations and that we collaborate with recognized partners during this transition. Above all, we must continue focusing on what we know best—our core areas, as this forms the foundation for our transition. Our objective must be to ensure that Petrobras remains a robust entity for the next 70 years.

Operator, Operator

Thank you, Jean. The second question from Frank, and our last question, pertains to you. Will Petrobras consider expanding into petrochemicals as a further expansion of its downstream segment?

Jean Paul Prates, CEO

Why not? It's possible. However, to be strictly guided by current rules, I would indicate that we need to approve a new strategic plan. Nothing is excluded. When devising this new strategic plan, we need to address opportunities in petrochemicals as well as fertilizers and international activities. We have some good opportunities to assess and will move forward as new strategic discussions develop. We will not pursue random initiatives but will instead build upon our historical strengths and have holistic conversations involving all stakeholders.

Operator, Operator

Thank you, Jean. Thank you all. At this time, the Q&A session is over. If you have any further questions, you can send them to our Investor Relations team. Petrobras CFO, Rodrigo Araujo will now make his final remarks. Please, Rodrigo.

Rodrigo Araujo, CFO

Thank you. Thank you, Carla. Thank you, Jean. Thanks, everyone, for being with us today for the results of the fourth quarter of 2022. I would like once again to congratulate my peers at the Executive Board for the brilliant work that they've executed and, on behalf of the Executive Board, thank all investors and shareholders for placing your trust in us as executives of the company. I also wish to commend Carla for skillfully facilitating our earnings call. Thank you once again, and have a great day.

Operator, Operator

Thank you, Rodrigo. And I will pass the floor to Petrobras CEO, Jean Paul Prates. Please, Jean.

Jean Paul Prates, CEO

Thank you, Carla. I just want to take a moment to extend a final welcome to all of you. We aim to increase the frequency of these discussions, not just during results announcements. I promised some of you this in the past, especially those representing shareholders in Brazil. We aim to meet each one of you in the upcoming months or at different locations. We are planning to visit Houston and then New York on certain occasions as we strive to connect with our investors either in person or via video. We will consistently maintain open channels of communication, both with shareholders and our workforce, as these groups are fundamental in shaping our future. Thank you.