Petrobras Announces New Actions to Strengthen Resilience

Source: 4/1/2020, Location: South America

Petrobras, following up on the release disclosed on 03/26/2020, informs that due to the contraction of oil and oil products demand it has decided to adopt new measures that comprise reduction of oil production, postponement of cash disbursement and reduction of costs.

As of today, oil production will be cut by 200,000 barrels per day, a volume that includes the reduction announced on 03/26/2020.

For the definition ofthe fields that will have their production reduced, Petrobras will take into consideration the market and operational conditions. The duration of the constraint, as well as potential increases or decreases, will be continuing evaluated.

The company is also adjusting the oil processing in its refineries, aligned to oil products demand. As part of the actions to achieve the reduction already announced of US$ 2 billion in 2020 of operating expenses, there were additional decisions to safe around R$ 700 million from personnel expenses:
- Postponement of payment, between 10% to 30%, of the monthly remuneration of other employees with managerial position (managers, coordinators, consultants and supervisors);
- Temporary change of shift work and on-call shift to administrative work of around 3,200 employees;
- Temporary reduction in working hours, from 8 hours to 6 hours, of around 21,000 employees.

Transpetro, a wholly-owned subsidiary of Petrobras, also approved a resilience plan, which comprises of measures to reduce its cost structure, both for operating expenses and investments, postponing or optimizing disbursements, in the amount of R$ 507 million in 2020.

Petrobras reinforces its commitment to managing its portfolio and to its strategy supported by the five pillars: maximizing the return on capital, reduction of the cost of capital, relentless search for low costs, meritocracy and respect for people, environment and safety. The current crisis highlights the importance of these pillars that must continue to be implemented with even more focus and intensity.

The company continues monitoring the market and, if necessary, will make new adjustments always ensuring safety conditions for people, operations and processes. Petrobras will keep the markets informed about future movements.

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