By Brazil Stock Guide – Petrobras (B3: PETR4; NYSE: PBR) told investors that its ramp-up in spending is a sign of operational efficiency, not budget creep. The company invested US$ 5.5 billion in the third quarter and US$ 12.9 billion year-to-date, with 85% directed to exploration and production. The faster pace, executives said, anticipates revenue streams without raising costs — a key pillar of the 2026–2030 Strategic Plan to be unveiled on November 27.
The company reported an adjusted EBITDA of US$ 12 billion and net income of US$ 5.2 billion, up 28% from the previous quarter. Free cash flow rose 44% to US$ 5 billion, supported by record oil output and disciplined capital allocation. Gross debt stood at US$ 70.7 billion, below the US$ 75 billion ceiling in the current plan. The board approved R$ 12.2 billion (US$ 2.2 billion) in dividends — equivalent to 45% of free cash flow — to be paid in two installments in early 2026.
“This is not about spending more, but about delivering faster and better. Staying ahead of schedule, not above budget, creates value sooner,” said CFO Fernando Melgarejo, adding that Petrobras took advantage of favorable credit conditions to strengthen its cash position without affecting leverage.
Efficiency as the New Growth Driver
Petrobras has intensified project execution while simplifying designs and broadening supplier competition. The topside of the Búzios 12 FPSO was made 20% lighter after engineering adjustments suggested by vendors, cutting costs and shortening delivery times. “We’re producing more with the same budget,” said Renata Baruzzi, executive director of engineering.
In the pre-salt fields, production rose 8% in the quarter and 17% year over year, supported by operational efficiency and the ramp-up of new systems. Platforms such as Almirante Tamandaré — which reached a record instantaneous output of 270,000 barrels of oil per day — operated above their nominal capacity without additional CAPEX.
Meanwhile, the P-78 and P-79 units advanced faster than planned, reinforcing the company’s ability to anticipate revenue streams. “It’s a model that reduces costs and accelerates returns,” said Sílvia Anjos, head of Exploration and Production
Debt, Dividends and Financial Discipline
The company reiterated that it has no plans to alter its debt ceiling of US$ 75 billion or its dividend policy. More than 60% of total debt consists of platform and rig lease liabilities — assets that generate revenue. Petrobras issued two bonds of US$ 1 billion each, maturing in 2030 and 2036, reinforcing liquidity and keeping net leverage stable.
The payout formula remains tied to free cash flow — “flexible but predictable,” according to Melgarejo. Petrobras also underscored its fiscal relevance, paying R$ 68 billion (US$ 12 billion) in taxes during the quarter and R$ 200 billion (US$ 36 billion) year-to-date, keeping its position as Brazil’s largest single taxpayer.
Morpho Well and the New Frontier
In October, Petrobras obtained an operational license from Ibama and began drilling the Morpho exploratory well off the coast of Amapá — at 7,000 meters deep, it’s the company’s most technically challenging to date. The campaign may include up to eight wells to assess the potential of Brazil’s Equatorial Margin, seen as a key exploration frontier comparable to Guyana and Ghana.
The company also advanced its low-carbon agenda. It launched a carbon capture and storage (CCS) pilot in Macaé, capable of storing 100,000 tons of CO₂ per year, and secured preliminary environmental approval for a renewable diesel and bioQAV (sustainable aviation fuel) facility at RPBC.
Braskem: Strategic, But No Rush
Analysts pressed Petrobras on its stake in Braskem (B3: BRKM5; NYSE: BAK), where it holds 36.1% of voting shares. Executives described the petrochemical group as a “strategic asset under continuous monitoring”, stressing that no concrete proposal is currently on the table to change its participation.
Melgarejo said the company is “closely following Braskem’s situation,” but any decision will depend on “market conditions and governance clarity.” He reaffirmed that exposure remains limited and integration with refining and gas operations is strategically valuable.
The tone was cautious, as investors remain wary of Braskem’s balance-sheet fragility and the uncertainty surrounding controlling shareholder Novonor (formerly Odebrecht). For now, Petrobras plans to hold its position while focusing on liquidity and execution of core upstream and refining projects.
Refining, Gas and Other Highlights
Refining utilization reached 94%, with a 5% rise in fuel sales and a 14% increase in crude exports. Combined exports of oil and refined products exceeded 1 million barrels per day, reaffirming Petrobras as Brazil’s largest exporter.
In natural gas, processing plants at Cabiúnas, Caraguatatuba, Itaboraí, and Cacimbas hit a record 44 million cubic meters per day, equivalent to 80% of national demand. The company also expanded its footprint in the free gas market, reaching 6.5 million cubic meters per day in contracted volumes.
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