巴西石油 (PBR) 2017 Q4 法說會逐字稿

Good afternoon, ladies and gentlemen. Welcome to Petrobras' conference call with analysts and investors for the presentation of information referring to the results of the year of 2017. (Operator Instructions)

Today with us, we have: Mr. Ivan de Souza Monteiro, Petrobras' Chief Financial and Investor Relations Officer; Mrs. Solange da Silva Guedes, Chief Exploration and Production Officer; Mr. Jorge Celestino Ramos, Chief Refining and Natural Gas Officer; Mr. Nelson Luiz Costa Silva, Chief Strategy and Performance Officer; Mr. Hugo Repsold, Jr., Chief Technology and Production Development Officer; Mr. Eberaldo de Almeida, Chief Human Resources, HSE and Services Officer, and other company executives.

I would like to remind you that this meeting is being recorded. And please be mindful of Slide #2, which contains a notice to shareholders and investors. The words believe, expect and similar ones related to projections and targets are mere forecast based on the expectations of the company's management regarding the future of Petrobras.

To begin, we will hear the executive manager of Investor Relations, Mrs. Isabela Carneiro da Rocha, who will start with a presentation about the results of the full year of 2017. Subsequently, questions from the participants will be answered. Mrs. Rocha, you may proceed.

Good afternoon, everybody, I thank you very much for your attention. Let's start our presentation of our annual results. You can see our agenda about main deliveries and then our integrated report, the results highlights, the outlook for 2018 and also some operational highlights.

Starting with our main deliveries, the top metrics, which are the total recordable injuries. We were able to reduce this very much vis-à-vis 2015 and we reached 1.08. So this metric was fully complied with. And I would like to remind you that we have planned for 1.4 at the end of 2018. So we made great strides in this metric. And we will continue to follow the stat. And our target will be 1 by the end of 2018.

The other top metric is net debt/adjusted EBITDA ratio. You can see it's constant during 2017. And in the fourth quarter, there is an increase to 3.67 because of the class action settlement. And we would like to mention that without this agreement or settlement, we would have reached 3.2. And it is also important to mention that the agreement was considered as extremely important to eliminate uncertainties and also make it possible for us to have more predictability in our results. So we have the specific effect of the class action.

On the next slide, we talk about our main deliveries overall besides the top metrics. Starting with the announcement that we made this morning about studies that were determined by our Board of Directors regarding quarterly payment of dividend to our shareholders and interest on equity. And after approval by the board and by the Shareholders' Meeting, would need a change in our bylaws and in our dividend policy. And the approval by the board gives us more predictability regarding our results.

Having eliminated this major uncertainty, which is the class action, by means of the settlement that we just have referred to, our net result was BRL 446 million last year. But net of this settlement, we would have over BRL 7 billion for the year. In terms of production, we had record production in Brazil for the fourth consecutive year and the third year in which we reached the target in a row.

In terms of operating cost, we were able to reduce by 10% our manageable operating expenses. And we have already reduced that since 2015, 6%, and now an additional 10% vis-à-vis last year. In cash flow, free cash flows, free cash flow was positive the 11th consecutive quarter. So we have a positive free cash flow, which we have been achieving since 2015 and reaching BRL 44 billion, 6% higher than the previous year. Our program for partnerships and divestments, $6.4 billion in cash inflow last year coming from this program.

Internal controls, which is also important for us to say that we were able to eliminate by means of compliance and our initiatives. We were able to eliminate the 4 material weaknesses that we mentioned in our last quarter and also we eliminated all significant control deficiencies. And this is evidence of the great stride that we have been having.

And lastly, the integrated report, which is the first report of Petrobras, including the annual report, sustainability, financial statements. And it is a different way of showing the company, talking about it in an integrated fashion, integrating all the information about the company and also our financial statements. The objective here was to improve the quality of information made available to our investors and other stakeholders.

On the next slide, we see -- we show the best moments of this integrated report. Materiality, 22 themes that we consider as material. And we went in depth in these 22 themes in a totally connected fashion. These are items that impact the result of the company. On the right, we have our business model that shows how the company generates value by means of its imported products and how this value is distributed to all stakeholders, investors and all the other stakeholders. So I would like to invite you to read this. And it is already on our website in Portuguese. And in English, it will be made available very soon.

So starting with our results. Last year, we have seen higher Brent prices, 24% vis-à-vis 2016, $54 per barrel on average. And this was very important. And we will see later on in our results the increasing -- appreciation of the real during the year, average exchange rate BRL 3.19 per dollar.

In the summary of our results on Slide #8, I have already talked about the BRL 446 million of result that we presented. And the impact of the class action, that would be BRL 7 billion. Adjusted EBITDA was BRL 76.6 billion. And without the class action, it would have been BRL 87.8 billion, very much in line with the previous year. Free cash flow, BRL 44 billion, once again in reais.

The main nonrecurring items on the next slide that account for the negative result of BRL 446 million and these items. More importantly, because of the risk perception of the company, the first one is the class action agreement. And by means of this agreement, we will be paying BRL 11.2 billion overall in 3 installments over the year, taxes included. And the company also considered it would be important to take advantage of the Brazilian Federal settlement program in order to settle the debt of BRL 47 billion. So the company will be paying BRL 10.4 billion in order to close that. BRL 38 billion already materialized in our balance sheet and now BRL 9 billion that still have to be materialized. So these were the main nonrecurring items that account for our results for the bottom line.

Operating income, a very big increase during the year, BRL 35.6 billion. Basically, due to the lower impairment of assets, BRL 16.3 billion less in impairments vis-à-vis 2016 and important cost reduction as well, lower cost with personnel and dry wells and equipment idleness and higher crude exports at higher prices. So these were the fundamental points that explain the operating income, 108% increase in operating income. And it exceeds the net finance expenses that were BRL 31.6 billion in 2017. And they were impacted by the settlement programs and also exchange rate variations, dollar, in pounds and in euro.

On the next slide, we have the adjusted EBITDA, BRL 76.6 billion that we had in 2017. You can see how much that would be without the class action. And on the right, E&P downstream increased in exports at higher prices that offset the drop in margins and in volume that we had in diesel and gasoline in the domestic market. So we saw an increase in the Brent prices and maintenance of the realization prices of oil products so the margin of downstream went down, which explains the lower EBITDA on downstream, and as a consequence, the higher exports of crude at higher prices, which explains the increase in the results of E&P.

Besides these items, we had lower expenses, as I said before, with write-off of wells and equipment. And we should mention that gas and energy that are not included here, there was an increase in sales at a higher price of domestic gas produced here, increase in volume and was able to cater to the demand and also more electric generation with a higher price, selling price.

Positive free cash flow, BRL 44.1 billion, a 6% increase vis-à-vis the previous year, more than enough to cover interest expense, as then you can see, a reduction in interest expenses, BRL 3.3 billion. And this is due to the reduction of our debt that we will be seeing later on.

CapEx, $13.3 billion last year, 2017, 84% of these investments concentrated in E&P. And we know that this amount is lower than the ones that we estimated before and that we had disclosed. And here, we mention the reasons why this amount was lower. Efficiency gains in scheduled stoppages and well construction, we continue in a learning curve and improving the result in the construction of wells, replanning investments in wells and platforms with no impact on projected production. And also this amount of CapEx includes the payment of the signing bonus of the areas that we acquired, BRL 2.9 billion.

And on the next slide, we have evolution of our operating expenses. A major reduction here as well, 10% of the manageable operating costs and selling expenses. There was an increase of 5% due to the payment of the NTS tariffs after the divestment in NTS. G&A, a reduction of 19% vis-à-vis 2016 and very much because of the reduction in the workforce and the number of workforce now 62,700 at the end of 2017, which is a result of our program of -- that we carried out, the Voluntary Separation Incentive program, over 18,000 employees and some Petrobras (inaudible).

Debt reduction on Slide 15. We see a consistent reduction in our debt, $84.9 billion at the end of last year. And we intend to reach $77 billion as we announced for the end of 2018 or by the end of 2018. The average terms of our financing went from 7.6 to 8.6 and with a slight reduction in the average rate of financing and reduction in leverage as well.

Now we have our public institutions' exposure. And what we see here is a drop in this exposure, BNDES, Banco do Brasil, the Caixa savings bank with amortizations last year that exceeded our funding and changed our debt profile. And today, we have an exposure of 21% to capital markets and 39% in banking markets. And this illustrates the reduction vis-à-vis these 3 banks or public institutions.

Liability management. We have this new amortization schedule because of the measures taken, $2.6 billion now in 2018. And the cash position, the growing cash position is enough -- or at the end of last year is enough to cover the next 4 years without having to go to the market. I'm not saying this is not going to happen. But we have a much more comfortable position as far as cash and liquidity are concerned. And I would like to mention the credit line here, the resulting credit facilities, as you can see here, that was the biggest facility ever contracted in Brazil, 4.36 -- $4.35 billion.

Partnership and divestment in progress. We see the cash-in profile. We have already received $11.6 billion for sales in 2015, including NTS and distribution [in Chile], the IPO of BR, the sale of Guarani and the assets that are part of our partnership with Total. And we have other competitive processes underway that are mentioned here and that follow our strategic plan and also based on the portfolio management that we have. And we have strategic partnerships with large players in this sector, as you can see here on the lower side.

The outlook for 2018 is the following. The company expect an improvement in operating cash flow. We will have a production of 2.7 million boed to Brazil and export higher diesel and gasoline sales. Let's see how market share behaves and continuous cost reduction efforts and accomplishment of partnerships and investments. We are saying that we are going to hit the target of $21 billion and with a lot of interest on the part of the market for the assets of Petrobras and these divestments. And together, with the debt reduction, as I said before, we have the factors will lead to an improvement of our results overall and probably dividend distribution.

As we said before, we have a new dividend policy in place, or we'll have as soon as it is approved. Our projections for 2018, the best estimate that we have to date is an average Brent of $65 per barrel; and operating EBITDA rate at $30 billion; divestments in terms of cash-in this year, $11 billion; investments amounting to $17 billion; interest payment, $6 billion; and amortization of the principal, as we've said, $2.6 billion. So these are our best estimates for 2018.

Operational highlights. Replacement of reserves. And one important information is that our production was exceeded by the incorporation of pre-salt and oil and natural gas reserves. And we were able to fully replace the production of the year. And we reached the end of the year with reserves of 9.75 billion of oil equivalent by the SEC criteria, 10.6 -- 10.5 years in R/P.

And in the recent auctions in Brazil, we acquired selectively new areas by means of strategic partnerships with major players. We acquired 10 new exploration blocks, BRL 2.9 billion were the cost. And we have already expressed our interest in the fourth round that will happen this year, so Dois Irmãos, Três Marias, Uirapuru. This year, we already started the seismic activities in the blocks acquired and increased our exploration area by 17%. On the right, we show which areas are under concession or in the PSC and which ones have been already built in and which ones still will be.

The next slide shows the production record in Brazil for the fourth consecutive year. That is 2.15 million barrels of oil per day. The production of gas is also a record in Brazil due to the increase in pre-salt production that has more gas in its composition, a total of 79.6% (inaudible) and 96.5% natural gas availability record. Predictability, we reached the target for the third consecutive year. Net total production of Petrobras in Brazil and abroad, as last year, we reached 2.7 million of barrels of oil equivalent per day.

We have the E&P highlights and operating cost that reduced operating expenses reduced by 6% and the lifting costs in Brazil and abroad reaching $11 per barrel. Excluding the foreign exchange effect, this lifting cost would be at $10.4, in line with the previous year. And if you consider the lifting cost in Brazil, this value would be, instead of $11, would be $11.27, slightly above the previous year.

Here, we have our main projects for the pre-salt fields. The Lula and Cernambi area are the 2 new final platforms that shall be installed this year under development of production for this year with a total of 9 platforms in that area. The Búzios area, where we have the transfer of rights, will have the first oil this year to P-74 that's already on location. For the development of this area, we're planning 5 platforms. And in Mero, which is the first [union] on the PSC, we will have our first unit -- will be implemented by 2021 and 4 units in Mero, this blue area, where we declared commerciality for the Libra area in green. This Libra area remains in the exploratory stage.

As for lower risk for the new production systems startup, P-74 is already on location, should begin operations in the Búzios Field. Campo dos Goytacazes in Tartaruga Verde and Mestiça is being prepared for the pre-mooring activity. The other activities for 2018 are moving forward. They have -- with the production start-up forecast for 2018. Mero and Sépia, the areas of the transfer of rights with the production forecasted for 2021. And we already started the procurement process for 5 new systems, the Parque das Baleias integrated projects, Mero 2, Búzios 5 with the fifth platform in the Búzios area and the Marlim revitalization plan for forecasting 29 new platforms.

Next, we have the sales of oil products have decreased by 6% in Brazil compared to 2016. And it's important to note here that the objective has been to maximize the company's results, not necessarily [under stagnant.] And the options are imports, processing. And it's an economic decision, thinking what's best for the company, as we already discussed. There was a reduction in the sales of diesel and gasoline in the domestic markets. But there was an increase in the crude oil export that partly offset this decrease. Domestic oil has increased in value. And the percentage of processed feedstock had been greater participation of domestic oil. It was 93% last year. And this remains at a very high level. And the [use factor] has been 77% compared to the previous year due to the economic decisions to optimize the company's results.

Next, we show the market share evolution. For gasoline, we had a reduction of market share reaching 83% last year. And diesel, 74% of market share at year-end. On the right, we have third-party imports behavior. In green, it's diesel, in red, gasoline. Gasoline imports remained stable for the year. But for diesel, we saw a steep increase. And we maintained our price policy, acting on this policy to recover market share that has already started to occur in the beginning of 2018. So we expect our market share to increase to 79% in diesel in February, noticing this reduction in imports.

Slide 30 of oil exports. We have a total exports of 669,000 barrels per day and a reduction on the exports of oil products with a net balance of around 360,000 barrels per day. So we took advantage of the increase in Brent price, the increase in oil import. And that was very important to our result. We next show the natural gas supply and demand. There was an increase in demand, non-thermoelectric and thermoelectric growth. And the production of natural gas were sufficient to meet this increasing demand. So our imports of NGL was at minimal level. And that also includes the performance of this segment.

Finally, we show higher thermoelectric generation due to the increase of the spot price that we show on the larger graphic on the right. The result for the energy plant was also important. And that will show through the reservoir level, how it decreased from 2016 to 2017. And for hydrology, was partly responsible for the increase on the spot price. That brings a better result in the energy segment.

This concludes our presentation. We expect to have presented a consistent result in line with our strategies. I thank you all for your attention.

(Operator Instructions) Our first question, Mr. Regis Cardoso from Crédit Suisse.

Two questions. First, concerning the manageable costs in 2017, 10% in -- (inaudible), the decrease was even steeper. My question is, is there more to come? The main initiatives have already occurred. Now it's a matter of maybe preventing the cost from being a factor and growing. And if you can talk about how you intend to continue cutting costs? My second question is about the fuel import. You showed on this slide about the diesel import in February. What I would like to know is, in your understanding, is this only the beginning of these reversion trends for the imports? And in your opinion, what has had a greater -- a factor (inaudible) imports? Is it a result of the commercial policy? Or is it a pricing matter, the scope of margins?

I will turn your first question over to Nelson and the second will be answered by Mr. Celestino later.

The evolution process that we carried out last year continued to operate. We will evaluate it every week. We have that governance that we talked to you about of having meetings with all areas of the company on Monday. Looking at the variables of the scorecards and looking at the details of the costs, and this will continue running. It is true that the main adjustments is related to the departure of people with the reduction of the workforce. But we will continue to look very closely at all opportunities for cost reductions. The manager of the meeting this morning has already mentioned the cost reductions in the [NT] areas as you saw with -- through interventions and so on. And we will continue looking at all opportunities for cost reductions in 2018.

Actually, what we've been reporting is that our operation in the market always has the focus on maximum profitability. So the condition for us to compete in the market (inaudible) one of the assets in downstream more economically and of course, this has effect in the competitive prices for each region. The current market dynamics lead us to a very competitive position in March, probably the month of April, showing that we do have a [trend] to maintain our market share in the Brazilian market. This has been the reasoning for the operation of our systems. And of course, that leads to an increase in the market share.

If I could add 2 more questions. Mr. Celestino, if you can talk about the import (inaudible) , the import trend, if you think that the flexible [integration] of the economic policy is already a matter of opinion. Adding a quicker question, the class action provisional of 11.2 billion, it seems like it's higher than what was expected, and it includes taxes. Can you please talk about which taxes are involved?

First, concerning the trends for imports. Considering flexibility with the market conditions, the cost of diesel and gasoline, it's just been more competitive to the domestic market. So this trend is for us to have a reduction in imports since we are quite competitive. Regis, the value includes the taxes for the (inaudible) and after payment.

Our next question is from Bruno Montanari from Morgan Stanley.

First, about the transfer of rights, from what was mentioned in the press conference earlier, the expectation of timing to the [transfer] is May. I would like to understand the dynamics on the oil price that's being discussed, not getting into the merits of the prices, but where is the potential divergence between the price that the company proposes and what the government proposes since the transfer of rights makes it a little bit unclear. The second question about dividends. I understand that the proposal to change the policy is still being evaluated. But in this logic, the idea would have -- would be to have an equalization of the potential intermediate dividend. So maybe, if you could be more technical for the refining. The margin in the fourth quarter also had an effect. But the gain in margin for refining is it related to temporary handling of inventory? Or do you see anything negative in the elimination?

I'll transfer to Solange so she can answer your question.

Thank you for the opportunity for us to clarify this. What I said this morning was referring to the duration of the federal government, the [duration] that they intend to renew for another 60 days. This is not related to durations of terms. These terms do not exist. It's a negotiation that will only be concluded when we reach an agreement and when both parties evaluate that we have something positive for both sides. These parameters that are being discussed are all the possible parameters related to cash flow, and we don't have any definition. And to preserve the commission, we are not discussing or disclosing to the public what exactly, which parameters are being evaluated. But as soon as we have a final result, a closure for the subject, we will bring it forward to the market. But on the dividend discussion, we will stick to what was informed this morning. We're talking only about the frequency, the reason for quarterly payments. And for the refining margins, I'll transfer you to Celestino.

Bruno, for the refining margins, that's basically inventory turnover. When we have Brent price with an upwards trend, that drives the inventory.

Our next question is from Mr. Andre Hachem from Itaú.

Perhaps 2 questions. First, about the deleveraging metrics. When we -- when you made the plan, you had an [activity] chart, and I imagine it would not include the settlement of the class action. So how would that impact your deleveraging metrics? My second question is about the new dividend policy. This is a change to pay over the profit reserve. Is it also going to influence the deleveraging or not?

We'd like to continue (inaudible) but anyway it's not included what will be paid in the class action settlement. Not necessarily we will see an increase in the amount partnership as I said (inaudible). But should this be necessary, this will be done. You see the behavior of Brent higher than the average. But as you said the market estimate [hit] as well, so we do not see a need to seek a major increase in our cash flow divestment because it (inaudible) leverages to the 2.5 target, which was a dividend we had [above which] [was already approved] for 2018 that we made. At the time it was drafted, we established that it would have a positive result. However, this should not materialize as the company did not declare a dividend. Then the possibility of paying against the reserves is not, right now, on the table. But it will be included in the study with [recommendation] by the board.

Mr. Luiz Carvalho, UBS.

I have 2 questions. One, about the [sale] of assets. I know that you cannot say anything more specific about such-and-such asset, but what about the evolution about planning, refining? I would like to know if there has been any progress in this regard. Do you have any forecast regarding disclosing this, maybe in the next few months? My second question goes to Celestino. We have been discussing this exchange, if you would, about the optimal point [where this a] reduction in premiums and [imports] and the use of your (inaudible). And in the fourth quarter, you saw limited margin a little bit better for refining. So what about your review of contract for the distribution companies that you started at the beginning of the year?

The (inaudible) studies continue regarding divestments from refining and there is still an in-house debate going on but the studies continue and they are intensifying, in fact. Now regarding margin, market share, et cetera, [those were mentioned.]

Thank you for the question. With regard to an optimal point of operation, you have to consider the economics of the operation, first of all, of course, because these are the core issue that we have to turn our eyes to. And the economics are very much impacted by the market, the market consensus (inaudible) and also by the [stores] and the price of Brent, mainly the storage. If you have a very [vigorous wager] that spreads the diesel was higher, significantly higher. So the assumptions have had a very big impact on the utilization side of the utility of the plant. Regarding the contract, we have already advanced quite a lot in the contract that we have today. Go back to when Petrobras was the only one in the market practically and we are introducing, now new contracts with a more modern tools of pricing, bonus for sales and discounts, depending on the level of service that the [guys] wants to have. So we are modernizing the contract of Petrobras so that they may be more competitive in the market. This is what we have already been doing. We have already submitted the first draft for the company. And now we expect to start a debate to converge.

To the [tune discounts declined], so does that mean that you have different prices for refining?

Well, we already have a differentiated price for refinery. But in each refinery, you could also have a differentiated price for the company, is that what you mean? No. No. It will not be a differentiated price for the distributor but it will be depending on the level of service that they want and also on their performance on sales. Let's say selling -- exceeding the target for instance, these are just common tools in the market. But instead of selling 10 cubic meters or you sell 100, this is different but we have a [good] price for the whole market at [vast] point of sales.

(Operator Instructions) Luiz Carvalho from UBS.

Going back to the first question that I asked regarding divestments from assets. I don't know whether, as you mentioned, you will be able to talk about that, but is there some kind of evolution regarding the possibility of selling assets that are under the [current sale] price? I believe that there is a bill of law in Congress and that would allow Petrobras to flow these assets in the (inaudible). I know you went straight to the point about the dividend policy but I would like to know the rationale for the proposal that you submitted to the board. Was it because you wanted to be more recurring [and less seen] for discussions such as happened with the pricing policy, the more frequent it is, the less events you will have? Or am I completely wrong?

Solange, and then I will come back.

Well, this question was asked by many analysts that evaluate that and, in fact, there is no definition whatsoever but any type of sale or divestment or sale of part of the transfer of rights because what we have today and what we've written in the contract and that is enforced is that, now, Petrobras is not free to carry out any kind of deal with these assets, and any kind of evaluation can be made only after -- together with this renegotiation, we have some possibility of doing this in the future.

Well, the rationale was that we want to have more and more predictability in the result of the company, so it becomes more predictable. We want to have predictability in production, in our pricing policy, in our cost reduction. So this is what we want to shorten because as we have more predictability because of all the measures put in place and we are very bullish about performing. So we believe that we should carry out this policy that is similar to many companies, international companies, but also many companies here in Brazil as well do this. And the second important component brought by investor relations is that we have a whole set of investors that are very much focused on dividend payout for their decision-making, for the acquisition of shares in a company or a stake in the company. Thank you.

Vicente Falanga, Bank of America.

We have read about the possibility of increasing [higher] ethanol from 27.5% to 40% in gasoline as part of a (inaudible) bio. Do you think it is feasible? How are you dealing with that from a functional viewpoint? In terms of logistics? And is there a logistic capacity to mix this higher amount of ethanol? And I would like to have a follow-up on other questions. When Petrobras has -- is profitable again, will it be [valid] for both kinds of [shares, for warranty] and et cetera? And regarding class action, just to confirm, the -- will it really come to an end? That is to say, are you hearing about any other class actions that could happen?

Celestino will answer, then I'll come back.

With relation to the mandates, we have discussed this at 5 [meetings] and other (inaudible) and there is no consensus yet. But there is a plan for stabilization of the energy matrix. So the discussion is about carbon credit introduction and the decree [they signed yesterday] and the target will be discussed by June 2018. So there is nothing concrete about that and how the mandates will vote. And regarding carbon credits, this part is not decided yet, so we have to wait and see in order to wait for the definition. We think it should-- the amount that we mentioned [simply] and with class actions for the U.S. investors under the scope of this class action. And the rule for payment has not changed. It is exactly the same rule, okay. Thank you.

Fernanda Cunha, Citibank.

I have a question about CapEx. Could you talk about your plans, investment plans, maybe focusing on shallow water? And could you please estimate how much this would bring down your CapEx estimate for next year because the maintenance of these [stakes] is very high, very high quality stakes . So could this be introduced for 2018? And my second question has to do with the discount of the crude in the fourth quarter. When you compare to the last 2 quarters, the discount was $3 to $4 a barrel of crude, and now, it's around $6. And it drew my attention because [we thought] it was disproportionately higher [on barrels here,] due to the fact that the heavy oil -- heavy crude price showed discounts going down in this last quarter. So could you tell me about these dynamics? Distinctions between the second and the third quarter in these discounts, and then that how do you think (inaudible)

Thank you very much for the opportunity that you're giving us with the questions that you have just asked. Our focus, our estimate is that this project will [come to an end soon] by the end of 2018 and the horizon of our plan as of 2019 has no CapEx allocated for that specific type of asset. So this is the way that we did our planning. Jorge will talk about discount, okay?

Fernanda, in the year, the discount was from 4.5 to 3.5, so the average, the heavier vis-à-vis the lighter crude base is a worldwide trend. And in the fourth quarter, we have to go more in-depth regarding what happened because there could be some effect from import of crude from the U.S. I don't know whether you remember, but in the third quarter, there was difficulty regarding the intro of oil to the United States, so this might have had some impact on the prices that you refer to. Thank you.

Do you allow me a follow-up? Could you break down how much, let's say, of these projects have to do with the drop of CapEx, that will be from 14 billion to 12 billion?

I do not have this information now, Fernanda, but I can guarantee that ever since we started, we have the active portfolio management. One of the exercises that we do, one of the drills that we do in our portfolio management activity that is [quality] into the divestment plan and strategic partnerships plan. It also gives origin to the investment allocation decisions. And for some time already, these assets have not been priority in our plans to allocate investments. So what I can tell you is that they are not very significant amount. Thank you very much.

Thank you very much. Now the question-and-answer session is closed for our webcast. And we give the floor back to Mr. Ivan de Souza Monteiro for his closing remarks.

Thank you very much. I would like to thank you all for your participation, and the Investor Relations area of the company is available if you have any additional doubts. Thank you very much.

Ladies and gentlemen, the audio for replay and the slide presentation will be available at the Investor Relations website, www.petrobras.com.br/investorrelations (sic) [http://www.investidorpetrobras.com.br/en/]. This concludes the webcast, and thank you very much for participating. Please disconnect your lines now, and we wish you a very good afternoon.