After Petrobras Celebrates and Sees Gross Debt of Over $160 Billion Plummet to $59.6 Billion, State-Owned Company Recovers R$6.17 Billion from Operation Car Wash

After Celebrating Debt Reduction That Seemed Unpayable, State Company Ends 2021 With Over R$ 6 Billion in Resources Recovered Through Leniency Agreements and Whistleblower Reports

After Petrobras celebrated, on November 16, the significant reduction in the amount of interest and charges of its financial debt, and seeing its gross debt of over 160 billion dollars plummet to 59.6 billion, the state company reported yesterday (12/28), in a relevant fact to the market, that it ended the year 2021 with approximately R$ 6.17 billion accumulated in resources recovered through leniency agreements, repatriations, and whistleblower reports.

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The most recent recovery refers to the plea bargain agreement made by the Federal Public Ministry of Rio de Janeiro (MPF/RJ) with executives from Carioca Engenharia. The company clarified that the reimbursements result from Petrobras’s status as a victim in the crimes investigated in the scope of Operation Car Wash.

In a statement, the company reaffirmed its commitment to “take appropriate measures to seek adequate compensation for the resulting damages.” Petrobras acts as a co-author with the Federal Public Ministry and the Union in 31 ongoing administrative impropriety actions, as well as being an assistant in 85 criminal actions related to illicit acts investigated by Operation Car Wash.

Petrobras’s Gross Debt of Over 160 Billion Dollars Plummets to 59.6 Billion, and State Company Achieves Stipulated Goal More Than One Year Ahead!

The debt that seemed unpayable for Petrobras: in 2014, expenses reached approximately US$ 1.7 billion per quarter; the significant reduction is a demonstration of the financial rebalancing process achieved by the Brazilian oil giant.

On November 16, Petrobras informed the market, in a relevant fact, that it is significantly reducing the amount of interest and charges of its financial debt. Expenses related to these financings dropped to US$ 669 million in the 3rd quarter of 2021, a figure about 31.1% lower than the US$ 971 million spent in the 3rd quarter of 2020. When comparing the first nine months of 2021 with the same period last year, the reduction obtained was also significant: a drop from approximately US$ 2.8 billion to around US$ 2.3 billion, a reduction of 17.9%.

For Many, The Debt Seemed Unpayable. Reduction of Debt Service Costs is Another Demonstration of The Financial Rebalancing Process Achieved by The Brazilian Oil Giant

“The reduction of debt service costs is another demonstration of the financial rebalancing process achieved by Petrobras. These are interest and charges related to the loans that the company contracted, amounts that were diverted to creditors. Now, part of these resources is available for allocation to profitable projects that generate value for the company or to be distributed to shareholders, with Brazilian society being the largest beneficiary, receiving approximately 37% of the returned amounts, which add to nearly R$ 180 billion in taxes we expect to pay in 2021,” highlights Rodrigo Araujo, Financial Director and Investor Relations Director.

In 2014, The State Company Had Expenses of Over 160 Billion Dollars

The decrease in expenses with interest and charges is yet another reflection of the significant drop in the total amount of Petrobras’s debt. In 2014, these expenses reached approximately US$ 1.7 billion per quarter solely in financing costs, and the total amount of its debt reached over US$ 130 billion, or more than US$ 160 billion when considering the charters of oil platforms and other assets that began to be considered as debt as of 2019 with the adoption of the IFRS 16 (Leases).

For many, this debt seemed unpayable. Petrobras, however, set as a goal the reduction of its total gross debt (financings and leases) to US$ 60 billion, an amount considered healthy for a company like Petrobras, by the end of 2022. Recently, in the results of the 3rd quarter of 2021, Petrobras reported that it reduced its gross debt to US$ 59.6 billion, thus achieving the stipulated goal more than a year ahead.