Petróleo Brasileiro S.A. – Petrobras (NYSE:PBR) Q4 2023 Earnings Call Transcript
Petróleo Brasileiro S.A. - Petrobras (NYSE:PBR) Q4 2023 Earnings Call Transcript March 8, 2024
Petróleo Brasileiro S.A. - Petrobras isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Good morning, and welcome to Petrobras's Earnings Call for the Fourth Quarter of 2023. It's a pleasure to have you with us today. This event will be in Portuguese, and we have simultaneous translation into English. You can find the links to both on our Investor Relations page. All participants will be in listen-only mode during the company's presentation, and then we will have a Q&A session. And you may send us your questions to, petroinvest@petrobras.com.br. We have Jean Paul Prates, President of Petrobras; Clarice Coppetti, Corporate Affairs; Sergio Caetano Leite, Financial and Investor Relations Director; Mario Spinelli, Governance and Compliance Director; Tolmasquim, Energy Transition and Sustainability Director; Joelson Mendes, Exploration and Production Director; William Franca, Industrial Processes and Products; Claudio Schlosser, Logistics, Trade and Markets; Carlos Travassos, Engineering, Technology and Innovation; and Maiza Goulart, CENPES.
We'll start with a word from our CEO. Go ahead, sir.
Jean Paul Prates: Thank you. Good morning, everyone. Dear shareholders, investors, I'm very happy to talk to you today, not only because of the excellent economic and financial results we're going to present today, but especially because I am convinced we're building a more robust Petrobras that is more resilient and is better able to generate value on the long-term to its shareholders and for society facing the numerous challenges that we know and don't know created by this world in transition. From the beginning of our administration, we have emphasized this need to adapt the company to a new energy context in which the main driver is decarbonizing operations and energy sources. This is due to a legitimate request from society, and it requires new solutions to reduce the use of fossil fuels.
We're aware of the challenge, and so we built a strategic plan that was based on realism and being coherent. We aim to be responsible and transparent in our plan. We understand that we will have to go through a gradual transition. And so, we will continue investing in producing and exploring oil and gas, an industry that generates the biggest returns, and also in integrating our downstream logistics, supplies and refinement. We're also going to generate value through a fair and responsible transition process. We wanted to -- again, we wanted to be fair and responsible, diversifying our operations into profitable low carbon businesses by prioritizing partnerships. And as I've emphasized, we want to do what we know how to do. In each industry, we have synergy between what we used to do and what we will start doing as well.
And all of it will be done by focusing on capital discipline and on a solid governance, remaining rational across all decision processes. And this rationality has guided the commercial strategy that we've implemented. We're aiming to increase the company's competitiveness to achieve new markets and to create more stability for our decision-making process and for our consumers, as well as our payout policy because we want to consider higher investments and we have a need of maintaining our financial health. So I'd like to highlight the proposed dividends for 2023, BRL72.4 billion that will be paid to Brazilian society, which owns 37% of Petrobras shares. And they've benefited from over BRL240 billion in taxes. We've also had market value records since our administration started.
In 2023, the total returns from our preferential shares in the New York Stock Exchange in U.S. dollars reached 112%, which is far above the highest returns of the majors, 20%. 20% versus 112%. This was all possible because we put people first. And to give them value, we created a diversity, equity and inclusion policy and a racial equality program. People are definitely our highest asset due to their effort, due to the love for what they do and we're building a solid and promising future for our company. Actually, people were the driver behind our biggest results this year, especially now that we're celebrating 15 years of exploring the pre-salt layer. We're reaching record oil and gas production levels with fewer emissions. We've also inaugurated four new platforms.
We've reached record refinement levels. And we had the highest energy efficiency in our history. We expanded our bio refinement capacity and we were able to process 100% of soybean oil in an industrial refinement unit with a Petrobras patent. We also improved our carbon efficiency, cutting 1.8 million tons of CO2 from our emissions. And that's not all. We won the main global offshore award, OTC Distinguished Achievement Award in 2024. So we are being recognized for our efforts in renewing the Campos Basin, which has become a benchmark for the global industry. We were also record holders in patents. This is only a part of what we've achieved. We had so many victories that it could be an entire book. So that's why I always say to our dear shareholders that Petrobras is back.
It's back to prosperity, generating long-term value and building a better world. We're going to face the challenges we have and make use of the synergies in our business based on our expertise, which is well known by all. We've never neglected and we never will neglect generating economic value, which is a requirement for any company that wants to be competitive and perpetuate its value for future generations. As I said about a year ago, it's very pleasing to lead Petrobras. And these results are a source of pride for all Brazilians and for all shareholders and investors as well. Believing in Petrobras, trusting our administration has paid off. These are the results that we're giving to the people who are sticking with us, who know that we're on the right track and who know that we're going to get it even more right in the future.
Sergio Caetano Leite: Thank you, Jean. We'll begin our presentation on fourth quarter earnings results, so I'll pass it over to our Corporate Affairs Director, Clarice.
Clarice Coppetti: Hello. Good morning. I have a few highlights from our corporate affairs department at Petrobras. I know that you are probably more interested in other topics, so I'll go very briefly through a few highlights. I'd like to start by thanking my fellow directors for letting me go first because of the numerous activities we have in the company currently for International Women's Day. So I'm going to start with something that was very important for the company, which is reorganizing our workforce. In the last year, we took on nearly 2,300 new employees, all completing the training program. No employee can go into the company without these training courses, which can take four months to even more than a year, depending on where they're going to work for.
In the current world, in our society, we also invested in -- this could not be different. We created a diversity, equity and inclusion department in the company, and we also established goals to achieve better equity and diversity in the company's leadership positions. We also launched a diversity, equity and inclusion policy. All of our terms of cooperation have a diversity clause, and we also won some awards due to the achievements that our teams had last year. Some other highlights. I have to mention our supercomputers, which are not only designed to have energy efficiency, but they're also reducing processing time for our simulations. Petrobras does a lot of simulations for our oil and gas reservoirs. We're also investing on quantum computing studies.
That's the next level that we hope to have some results on this year still. We had training sessions on human rights for all of our security professionals and everyone who works with corporate security. And this was for our units and our headquarters. Another important highlight that we had last year is that Petrobras is starting to work across the country, taking advantage of regional potentials. And we started placing our teams in some of our areas that had been in hibernation in the northeast of Brazil, especially in the states of Bahia and Rio Grande do Norte. We also made investments into artificial intelligence. There's a huge discussion in society, and so our teams have been working on that as well. And of course, I have to highlight this not only because today is International Women's Day, but also because we're making dedicated investments at all levels of the company in actions aimed at women in the workforce.
When we talk about the workforce, we're not only talking about our Petrobras employees, we're also referring to our outsourced workforce. We have a number of actions for this. We will also be available to go into details about them if any analyst is interested. Another significant highlight is our commitments to environmental, social and governance aspects. We have a program titled Commitment with Life, which encompasses our environment, operational safety, excellence and health and well-being initiatives. We had great records last year, and I have a few highlights for you. We had over 700,000 hours of HSE training. We're also working in the company to be positive in water. So we're launching a number of programs for water safety. And not only do we want to treat all the water we used, but we also want to return clean water to society.
We also had a very important process training our leadership in the company in mental health. This is also a significant discussion that I'm sure is taking place in all companies that you analyze. Let's continue with the next slide. Also want to highlight the social responsibility actions such as entering the technical cooperation agreement with the Ministry of Human Rights and Citizenship, promoting an enhancement in public policies and business governance practices when it comes to human rights. The launch of our Racial Equity Program last year. Also, the 2023 public selection of the Petrobras socio-environmental program. 432 million are to be invested in over 60 projects over the course of the three years of execution in segments where Petrobras operates.
So this is a program that we've been dedicating ourselves to very dearly because it has direct impact on the communities that surround our operations. Additionally, the update of our social responsibility policy and also a recognition of our sustainability report as one of the 10 best reports of 2023. This is my last slide. I know that we are covering several different segments and I'd like to make myself available and make Investor Relations available to answer any questions you might have. And with that, I'd like to give the floor to our dear Financial Director, Sergio Caetano. Over to you, Sergio.
Sergio Caetano Leite: Good morning, everybody, and a very special day to women on this Women's International Day. Like President Jean Paul said, our market valuation was way above our ADR 120 -- 112%, whereas the others at 20%. In the first slide, you see the valuation of Petrobras in Brazil. The ONs and PNs are highlighted where you see very good numbers and also a comparison with the other majors, the TSRs. With the return to investors, you can see Petrobras. We added value to the company in the amount of BRL150 billion and compensation to shareholders 20.4 billion with 19.7 billion in dividends and $0.7 billion in the repurchase of shares. To society, we paid between taxes and governmental shares, BRL240 billion, BRL36.6 billion of all dividends paid by Petrobras went to the controlling group that's comprised by the federal government.
We also contributed another BRL54 billion in the valuation of the public assets of the state. So in addition to adding value, that was also an important collaboration to society in terms of reverting these resources in taxes and dividends. These are some more data in terms of our financial earnings. An EBITDA of 52.4 billion is the second biggest in history. The operational cash flow, 43.2 billion, the second biggest in history. A free cash flow, $31.1 billion, the third biggest in history. A net revenue, a net profit of 24.9 billion, the second biggest in history. And these numbers, the second highest and third highest, they were produced in a very adverse external environment. So we achieved second and third place with a special highlight.
We're going to look at the devaluation to customer, to clients but there was no decrease in investment. Quite the opposite Petrobras has been investing, which brings even more value to these results. Our gross debt in line between 55 billion and 65 billion. And it's important to tell you that at the end of five years, the debt has been forecast to achieve a reduction vis-a-vis the end of last year. Another important aspect when it comes to our financial debt of 28.8 billion, with a reduction of $1.2 billion this year. Return on capital employed 11.2%, which is in line with the previous results. We also brought about the lowest difference vis-a-vis, the American bond to the market. And with that, we won an award, the Quasi-Sovereign Bond Deal of the Year award by issuing $1.5 billion in 10-year bonds.
Also, it's worth mentioning the transparency movement by the UN Global Compact. It's an effort that requires the investment and the involvements of the entire company, and we've been disclosing these results to investors and shareholders. In the external scenario, on average, in comparison with last year, we had a valuation of 18% in the brand, which is significant and has impacts on our financial results. And as you know, the diesel is the oil byproduct that Petrobras sells the most. Between the Brent oil and the diesel sold, we had a margin devaluation of 23%. In 2022, the oil appreciated, reflecting the beginning of the Russia-Ukraine conflict. And with the stabilization of the conflict, it went back to the margin. But we had an impact of minus 18 on the Brent, crack spread minus 23, in the FX minus 3%, the real appreciated 3% in comparison with the dollar.
So this combination of factors has big impacts on the net results and the EBITDA. And we can see that in line with Brent and crack spread, you see a reduction of 21% to our EBITDA. You can see the Brent prices at the bottom of the slide. But we're going to see that in spite of these adverse conditions, Petrobras did well. Here, you can see our power, showing usage sources, showing our cash generation and how it was allocated in 2023. You see a cash flow of 12.1 billion in investments. We actually invested $12.1 billion in 2023. And there's also an impact on the debt of 8.7 billion with the trade of new platforms. There's also a peak in the debt at the end of the year because we anticipated the addition of an FPSO and that will be felt further ahead with the anticipation of revenue in oil curve, our dividends including repurchase 20.4 billion, financial expenses and financial amortizations.
You can see at the bottom of the tower, a comparison of the impacts of these scenarios and these are the groups that we compare ourselves to. The free cash flow of Petrobras at 31.1 billion and we were second to Shell only with the second highest free cash flow in the segment -- in the segment of peer companies. If you look at the oil production as Director Joelson will give you the details about, we ended first in a tie with Chevron. And we're by far the leaders in the highest generation, the organic generation of reservoirs. This is the result of the E&P teamwork, something that did not start last year and involves lots of people. Our EBITDA, one of the best in the segments, we finished third behind Shell and Exxon, which are much bigger companies than Petrobras.
But we're there fighting for the third place with them. It's important to talk about downstream with an expressive increase in foot. This comes from a decision of Petrobras to win market share. We're an integrated oil company. The biggest -- the bigger the foot of our refineries, the bigger the operational results we can present to our investors. And now, talking about our debt, you see the indebtedness trajectory since 2019 in a decreasing curve. In 2023, you see slight increase that happened due to the anticipation of platforms with additional inflation costs in the supply chain, which is felt across the industry, and the 28 billion line with a decreasing trajectory. There was a reduction between 2023 and 2022. And that's a difference that refers to freights.
If you look at the amortization, Petrobras closed '23 with a cash of close -- something in the range of $18 billion and cash available in the short term of 8 billion, which is solid and in line with the market turbulence, which reassures us that Petrobras will be able to face the situation. In the line, you can see the amortization profile that's forecast for our debt. As we said before, our net profit suffered an impact of the adverse scenario, but it was still able to deliver to the market the second highest net profit in history without divestments, considering only our work, even in the face of adverse conditions with the crack went -- going down and the dollar going up. Our contribution to the society, we also covered that. You can see the data close to BRL277 billion, of which 36.6 billion -- almost 37 billion are related to the payment of dividends to the controlling shareholder or the Brazilian state, 61.4 billion in government takes and 178.8 billion in taxes paid.
Generation to shareholders. Overall, we remunerated the shareholders in BRL78.4 billion Ais in 2023, out of 72.4 billion, they're deducted from the repurchase program. This was the first year where Petrobras implemented, on a constant basis, a repurchase program. And in this program, we repurchased 3.6 billion shares from the market. This amount is deducted from the total and we distributed in dividends the 72.4 billion in 2023. It's important to say that the net adjusted profit, after deducting the payments of dividends and anticipation of dividends and capital interest in 2023, what we were left with at the end of the year, we allocated to the administrative council to form a capital remuneration reserve. As we know, that was extensively discussed in 2023, and the purpose of this reserve is to pay dividends.
There were some questions as to whether the resources could be used in investments. And no, they will not be able to be used to buy investments. This is for dividend distribution alone. So we allocated its profit -- the Petrobras' profit surplus to that line, and that's where it's going to stay allocated. To put it simply, these were the results. As I said, and as President Jean Paul said, these are very significant results for the first year of an administration. This is the result of the work of the entire company. This makes us very proud. And with that, I'd like to give the floor to Director Spinelli, Director of Governance and Compliance at Petrobras.
Mario Spinelli: Good morning, everybody. Good morning to those watching us. Special greetings to women. Some highlights in governance and compliance. 2023 was a very important year. And in 2024, our Board will celebrate its 10th anniversary. In 2023, we had the first major restructuring in the department, creating new managements and broadening our possibilities in terms of disciplinary responsibilization. I'd like to highlight that Petrobras is the entity that applies the anti-corruption law most heavily in Brazil. Around 20% of the sanctions are applied to companies under Petrobras' responsibility. We also created an area to work with data science, making Petrobras increasingly more capable to detect irregularities and also a specific section to deal with violence at the workplace.
Last year, we once again did our survey, a compliant survey with 80% overall. This is a weighted average between all of the replies. And this is a clear demonstration of how the compliance culture is disseminated across the company. We were awarded several prizes, of which I'd like to highlight two. The Public Ethics Committee awarded us prize. We were the only awarded company in the five categories in the UN Global Pacts 100% transparency, which is also a clear demonstration of how our integrity and governance actions are robust. And our professionals also won awards in several different categories. Now, to tell you a bit about something that I think is relevant for everyone in our decision-making process. We have a governance strategy at Petrobras that gives privilege to technical aspects, so every decision is either shared or done through a collegiate process.
In some cases, we need to have statutory committees or technical committees present, so that the decision-making process is entirely based on technical aspects. We also have a governance structure that deals with compliance, and it's very robust. We have a director's office for compliance, which is one of the eight executive directors' offices in Petrobras, along with our CEO. Besides that, we also have internal audits, which are also independent. We have a reporting channel that is -- works in three languages 24/7 across all the countries where Petrobras is. We're supervised by a number of regulatory bodies. And it all aims to ensure that we have technical decisions. We want to prevent undue political interference and ensure that our projects are executed with a financial return for the company.
It's also important to highlight a few issues in this process that ensures that we have technical decisions. The compliance officer has the power of veto in the executive board, and it can be used if any decisions do not comply with the applicable legislation or our internal regulations. As I said, the chief governance and compliance officer is independent. They're selected from the market and have a two-year term, which can only be interrupted if there's a majority of Board members elected by minority shareholders, and that ensures that they are independent enough to do their activities. I have 25 years of experience in anti-corruption and governance. And I played many roles in the federal government and also state and city governments, and also in the private sector.
I've talked about strengthening governance last year. As I said, our main highlight was the biggest restructuring for the governance and compliance office in the company since 2014. So we created new management positions responsible for the entire disciplinary process in the company. So now we have a very robust structure, as we've never had before. It's important to highlight that because it demonstrates how this area was strengthened in the previous year. Well, that's what I had to say, and I'll now pass it over to our Executive Officer for Energy Transition and Sustainability, Mauricio Tolmasquim, and I'll be here for any questions you may have at the end of the presentations.
Mauricio Tolmasquim: Good morning. I'd like to greet everyone, especially women who may be watching us. So I'll start talking a bit about the gas industry. This was a very good year for it, but we launched new products with more flexibility and terms, indexing, and we made a number of changes that were accepted very well by the market. That led to a record number of new contracts signed in 2023. We had 34 new contracts with 15 distributors, a total of BRL167 billion in estimated revenues. We also traded 22 million cubic meters per day starting in 2024. This is about 55% of the total consumption in the thermal market in Brazil. We also made significant strides in resolving a number of disputes, especially with a few of our distributors.
So we were able to reach deals and allowed us to sign new contracts. Next slide, please. I'd also like to briefly discuss the importance of thermal generation for our energy transition. Some people might think, how are thermal plants related to renewable energy. We know that renewable generation is intermittent. You can only generate wind power when you have wind or solar power when you have sunlight. The graph on the left shows how it changes across two normal days. In yellow, we see sunlight, but as we reach the end of the day, it reduces because you have less sunlight and you need to have sources to replace it during the nighttime. And here, we have two main sources, wind -- or excuse me, hydroelectric power when it is available, but usually it is not enough.
You also need to complement it with some thermoelectric power. So to illustrate this challenge, on the right hand side graph, we see the variation in thermal generation. You can see that significant increase around 12. And that represents thermal generation. So in less than four hours, we need to add 2 gigawatts to our power generation. That's about the same as what is generated in the Angra 2 and Angra 1 plants. Next slide, please. We also had a very good year in decarbonizing our processes. At E&P, we had a 10% reduction in our carbon intensity, which is very important for Petrobras to continue to use its oil in the future. In the future, we will only be able to take oil to the market if you can reduce its emissions. In 2022 to 2023, the refining industry reduced carbon intensity as well, and the same happened to the thermoelectric industry.
There was also a significant reduction in methane emissions, 51%. Why is it so significant? Because methane's impact on global warming is much higher than CO2. In 100 years, a methane molecule has a 25-fold higher impact than CO2. Finally, this is the newest section, renewables. In the first year and actually our term isn't even one year long, it will be in May. But during this last year, we created a governance program to approve projects for renewables. And this is done in a very safe and responsible manner. We signed MoUs with about 45 companies. So we have 45 business opportunities that are being analyzed, and this doesn't mean that we are going to take all of them. Actually, it will be a much smaller percentage than this total number. But it's important to have this number of possibilities because this allows us to select things better.
In carbon capture, we're looking at a new business which is providing carbon capture services for other industries, like refinement. So we're going to run a pilot in Rio de Janeiro, and we also want to highlight the low carbon product area. We have, for example, a partnership with the logistics area launching Podium gasoline, a carbon neutral gasoline that has a certain market niche. The refinement office is also working on diesel are which is also very important to ensure that our refineries, even after the age of oil still have a use, still can add value. We also can produce, for example, low emission asphalt. And I'd just like to conclude by showing this graph, which was created by BCG. It's a very interesting slide. The first graph shows that really if you look at that green curve, it shows low carbon companies and in blue, a selection of oil and gas companies.
We can see that on the short term, the returns of oil and gas companies cannot be denied. In general, they are much higher on average than the returns paid by the selection of companies that have low carbon emissions. But what properties do we see here? Oil and gas companies have a variable ROCE. They can go to quite low values, while the average ROCE for low carbon companies is stable. So we can see that investments into these activities and businesses, the low carbon ones, I mean, mitigate risks and generate value while you're still protecting and gaining market share. A good example is Diesel R. If you don't have Diesel R, your biodiesel mandates would little by little lose market. So Diesel R is a way of fighting for this space with our products as well.
Podium gasoline is an example of how you can gain market share in a special niche, and this can be done at the same time. The strategy allows you to mitigate risks of having, for example, rising CO2 costs. So over the long term, and this is shown by the last graph, investors who have invested $1 in a pool of companies in the oil and gas industry versus an investor who invested $1 in a low carbon company. In 2022, they would have about the same returns in total for that investment. This shows the importance of this strategy in the long term. If you have any questions, please let me know. And with that, I'd like to give the floor to our colleague, Joelson Mendes, Director of Exploration and Production.
Joelson Mendes: Good morning to all of you who are watching us. I want to start out by showing the numbers of our operated production. Last year, there was a significant increase vis-a-vis the previous year. That was due to the fact that many projects started production phase. Our operated production grows less because many of these projects that started to operate, we are operating. So part of the production goes to the partners. We also had very significant numbers and the pre-salt production in our mix has been growing from '22 to '23, it grew from 73% to 78%. We had important records last year. The operated production surpassed 4.05 barrels of oil per day, which is compared to the majors and that is a very robust operation.
Our pre-salt production also broke records last year and also very important is the IUGA index. In the fourth Q, it reached 98%. Very good numbers. Our production last year surpassed our initial forecast, but staying within what we call the risk tunnel, we've been working very hard to analyze all of the factors that can influence the production up or down over the course of the year. And this level of accuracy of our projection has been around 96% over the course of the last few years, which is very reassuring in terms of what we forecast for the current year. The highlights in production, and I'll repeat myself, we started to operate major production projects starting with the renovation of the Marlim field, which is something that we worked very hard on.
The environmental licensing of these projects were very complex, but we won and we were able to recover almost to get involved in projects that will recover almost 1 billion barrels of oil equivalent. Our fifth unit in Buzios field is now operating at maximum production. The FPSO Sepetiba also started production in the marrow fields with the large capacity of 180 Kbpd and Petrobras accounts for 40% of that production. And in 2023, two projects that had started in the previous year, Guanabara and 71, they have reached a peak production in a very short time frame. So this is our lifting cost and total cost of produced oil. The lifting cost went down from 5.8 to 5.6 barrels of oil equivalents produced, very significant amounts. The presence of the pre-salts from 73 to 78, as I said before, largely accounts for this decrease in the total production cost in deep waters and shallow waters, a little more than 20% of our production, with very attractive numbers.
Even though we're talking about mature fields, there are still very important numbers. And our total cost of produced oil has gone down, largely due to the decrease in the price of the oil barrel abroad, which allows us to pay our governmental participations based on the oil price. So with this decrease, we see this important impact on Brent, and $35 per barrel is a very robust price. This is one of the most relevant news to us. Director Sergio had already talked about this. We closed the reserves of 2023 with an organic recomposition of more than 150%, which is extremely significant if you consider the universe of majors in the world. And over the course of the last few years, we've been achieving 200% in reserve replacement, which shows the consistency of our production curve for the future.
This is the reserve that we've been achieving. We've been managing to increase year after year and we were able to replace these reserves after a lot of hard work in Buzios, Tupi, Atapu, Raia Manta, Raia Pintada fields, and the approval of new complementary projects, especially in the Campos Basin. So this work around reserves involves costs, projects, and lots of simulations, and a very hard technical work by the team that coordinates this segment. Lastly, these are some highlights in the production area with our operations in Africa and also in the Pelotas Basin. We are also exploring Latin America as a whole and West Africa. These are areas that we know very -- very well and we're always looking for opportunities. And I also have to mention that we will continue to explore the equatorial margin.
And now we're drilling a well in the Potiguar Basin and in the future, hopefully, we're going to be able to drill new wells. We're also exploring new wells in the Campos and Santos Basins as a routine. So that's what I had. If you have any questions, please let me know. Director William, you have the floor.
William Franca: Thank you, Director Joelson. Good morning. I will talk about the RTC segment with possibly the best results in history, both from an operational and financial standpoint, as well as from a sustainability perspective, with HSC results and also with very good progress in energy efficiency. The utilization factor has to be highlighted. We reached 92% on average and in some months we reached more than 97% in the utilization factor due to the integration across the entire RTC division. And also with the RP division achieving very good results for the company, which has certainly contributed to us reaching the financial earning results with the pre-salt load of 65% in the processing of the pre-salt oil across all refineries.
And this utilization factor comes along with an increase in the value, reaching 68%. We're talking about diesel and aviation kerosene. So we're using our refineries with better yields. Our current CapEx BRL3.1 billion in 2023 with very important stops for our refinery system, with the longest downtime in Kubaton, with very important projects to optimize the refinery REFAP with important downtimes and REGAP and our Duque de Caxias refinery, including the downtime of one of the lube trains. For 2024, we predict BRL3.8 billion in current CapEx. We'll move forward with the maintenance of our units leading to high availability of our units to refine oil, especially pre-salt oil. We ended the year at 60% of participation from diesel S10 and you can see on the left-hand side a few important production numbers in several of our production units, with our refineries having contributed to these fantastic operational results in 2023.
The best historical results in energy efficiency with our RefTOP program with reduction in carbon intensity and also with an increased energy intensity in the refineries, leading to a lower consumption of fuel natural gas with very significant results, putting us on the path to even faster energy transition. We also reached our lowest historical level of gas flaring rate and a record in pre-salt gas processed in our PGNs. In 2023, we saw the return of investments in fertilizers and petrochemical sectors and fertilizers. We're working towards achieving a definitive solution for Bahia and Sergipe plants. We also close studies for the Araucaria plants, Parana, and UFN-III Tres Lagoas. So we soon will return to being a strong player in the fertilizer sector and not only a plant.
And for that we've been engaging in discussions with several partners and also with the strategic partnerships involving biomethane, green ammonia, and other interesting byproducts that will lead to a carbon footprint reduction. As I said, we're focusing on high-value, low-carbon products. And with that we're working in Kubaton and gas lube plants in Kubaton where we're entering Phase 3 this year as well as in GASLUB and Travassos will talk about RNEST Train 2 and EGM with the Routes 3 being completed by the beginning of the second half of this year. And we have very good results that give us strength to face the challenges involved in expanding our downstream in line with our strategic planning, as I said. So it's a year of achievement and we'll continue to work strongly in that direction to achieve these goals.
With that, I'd like to give the floor to our Director of Logistics, Trade and Markets, Claudio Schlosser.
Claudio Schlosser: Thanks to William. Good afternoon, everybody. It's a pleasure to be with you today to talk about our 2023 results. I'd like to take the opportunity to greet all women both in person and online. The first slide covers the selling of byproducts both in Brazil and abroad. The sales of gas grew and they were powered by a greater competitiveness of gas versus ethanol. If you look at diesel, you see a reduction of 1% as compared to 2022, basically because of two factors. REMAN had been considered up until the end of 2023 and also because of the mandatory mix with biodiesel that went from 10% to 12% in April. Concerning the exports of byproducts, there was an increase of 5% and I'd like to highlight the increase in the exports of gas because of the change in quality, which is quite positive for the operation.
Concerning the oil sales, we had an increase -- resulting from an increased production in exploration and production, as Director Joelson mentioned. What I'd like to highlight in 2023 is that we added three new refineries as clients, in addition to expanding the purchasing of our oil by other refineries, which resulted in a significant increase in the refining of oil. And now we have 26 new pairs in our customer portfolio, which allows us to capture and diversify in new destinations for our oil. We're constantly trying to expand our customer database to maximize the value of our oil, which is extremely valuable in terms of quality and also carbon footprint. Talking about market share, our share of the market is stable in comparison to 2022.
And as you can see here, by adding up the blue parts of the graph. The share of gasoline imported and produced is a consequence of optimizing production and the change in quality with the foreign market. So we're capturing more value for Petrobras. The diesel market grew overall. We were able to maintain our share. And the diesel produced by the company increased due to higher level of refinement. And this higher availability of refineries and our logistics park utilization in 2023 was mentioned by William and it contributed to reducing diesel imports and capturing margins from the Brazilian market, which is a better destination to monetize our reserves. Here, Director Tolmasquim has also made a point of mentioning each topic here. We talked about our commitment to low-carbon products.
So the Petrobras Podium Gasoline, Diesel R, Cap Pro, our asphalt line. And I would add as a highlight that we started selling our R Diesel in Sao Paulo. That's a significant market for us and it was a milestone. We were able to advance in that area. Also related to Diesel R, this is voluntary consumption. We don't have any mandates for it. So we're working through partnerships with national and regional distributors, especially CIM and Ipiranga. Simply, if you don't know, it is a regional distributor in the State of Rio Grande do Sul and it has values related to reducing a carbon footprint and it's the only company that has a specific contract to buy Diesel R. Some other highlights that we have for you are on the next slide. Related to how we execute our commercial strategy, this was mentioned by the President.
We were very successful throughout the year, considering the best logistics and refinement conditions we have. We're offering to our clients a very competitive price, maximizing how we optimize our assets and we're capturing good margins from the Brazilian market as we said before. Considering sales hubs, we created two of them in line with our strategy to improve access in different markets of the country. It's a way of improving our logistics chain and also to be in communication with our clients. In 2023, we expanded our operations in Rondonopolis in the State of Mato Grosso and recently we started selling diesel and gasoline in Rio Verde. One final highlight is platform recycling, we are decommissioning some of our vessels and this is making Petrobras a reference company through the shipbreaking platform NGO in responsible vessel disposal.
This is a very important milestone for us. So those were our main highlights in this area. And I'll pass it over to Travassos.
Carlos Travassos: Thank you, Schlosser. Good morning and I'd also like to greet everyone, especially any women watching us. I'm going to continue talking about technology with the OTC award, the highest award in the oil and gas industry. In 2023, we received seven awards by OTC, two from OTC Brazil and five from OTC International. In Brazil, this was about our technology that allows us to use dynamic wells and stable waters, and this gives us a higher decommissioning capacity. The OTC award we received and may refers to the innovations and technologies that were used in our revitalization process in Marlim and other areas of the Campos Basin. We're celebrating the 50th Anniversary of its discovery. So we're now receiving another award for its revitalization.
It's a very current approach for the oil and gas industry because this is a very resilient process from an environmental standpoint because we reduced greenhouse gas emissions by 55% and also makes it more economically viable because we're increasing production capacity by replacing nine units with two new ones. This is a peculiar project because not only are we installing new lines, but we're also removing active lines, decommissioning old wells, and building new wells. We have about 60 wells that will be connected, and I highlighted three of the nine pioneering technologies we have been developing. TOT-3P well design that accelerates the construction of post-salt wells reducing 110 days to 56 days on average. This is in the Campos Basin. We also have flexible pipe envelopes that reduce engineering processes and allow us to reuse lines, and that even reduces our inventory.
And the last technology I'd like to highlight is a new methodology and extension tools that allowed us to extend the life of Wet Christmas Trees and pipelines. So this will all add to how economic our projects are. The next slide refers to another milestone that we had in the last 12 months. We were the only company that installed five production systems in 12 months, from December 2022, when the P-71 unit started, to December 2023, when FPSO Sepetiba was started. We're highlighting FPSOs, but we actually started five production systems with 1,300 kilometers of lines and 106 wells. So that gives the company an installed capacity to produce 630,000 barrels in 12 months. We'd also like to highlight FPSO Almirante Barroso, the fifth unit in Buzios that started its production in less than five months, another record for the company.
This used to be P-76 that reached this production level in eight months. This is due to a joint effort with the company, but we're also delivering units at a very high reliability and safety level and this is a benchmark for the entire world. The next slide also highlights how we're decommissioning some platforms. This was an effort that started with our exploration and production companies we were prepared for decommissioning the unit and it's a significant highlight for the submarine teams that disconnect and unmore the unit and also the wells team. This is a very important portfolio for Petrobras. In our strategic plan, we will decommission 23 units, and after 2028, we will have an additional four units to decommission. So it's a circular economy market.
We're building opportunities for Brazilian companies. Schlosser has mentioned that we were recognized by a Belgian NGO called Shipbreaking Platform for establishing a new green disposal policy. This is an organization that represents several environmental agencies that monitor how maritime units are being decommissioned and we were recognized by them. And this is very relevant for our practices and how aligned they are to sustainability and governance. Let's continue with the next slide. Here we have some of our highlights downstream, some of the advances we've had in the Duque de Caxias refinery, adapting our hydro treatments, Diesel S-10. We also have a hydro treatment area for Diesel S10 being built by REPLAN and also REFAP. We're also increasing our diesel capacity.
We heard about RNEST, this is not on the screen, but we are also conducting some works there. And in the next weeks, possibly next week, we will receive proposals for the second adaptation and that would allow it to process 260,000 barrels of oil a day. We signed a contract to acquire HEFA Technology, which will be adopted in RPBC's dedicated plant, and another significant milestone was that we are completing our natural gas unit in Itaborai. That will be UPGN gas lube, which will increase our capacity. This is forecast to be concluded in the second half of 2024. The next slide will be my last. Another thing I'd like to highlight about our technology is that we started lab tests and a pilot plant. And in November last year we concluded industrial scale tests to produce bio aromatics.
So products that can be used for the petrochemical industry based on vegetable inputs, in this case soybean oil. This was also developed by our research center and we just wanted to highlight how we are adapting our products to find new markets. So we're not concluding with me this time. We're still going to talk a little bit about CENPES, but I'd like to invite a young executive, Maiza Goulart to do that. She's been in the company for 20 years. She's worked offshore. She's released platforms. She's led FPSOs. Our production development area has been led by her and now she is a leader for the biggest research center in Latin America, CENPES. So I'll pass it over to her.
Maiza Goulart: Thank you, Travassos, for that introduction. It's a pleasure to be here on this International Women's Day. And it will be an opportunity to talk about some of the achievements by some female researchers at CENPES. Before I mention them, I'd just like to say that we are the biggest applied research center in Latin America. We have over 1,000 employees, nearly 1,000 researchers, and we invested BRL3.6 billion in RDI last year. Of course, we're very proud of the results we had in implementing our technologies at Petrobras, the industry for which we work and we're also celebrating the different awards that we've received. Travassos and our CEO have mentioned our OTC award, but I'd also like to highlight that we were finalists for five categories in NP awards, and we won four of them.
We were among the Top 20 Most Innovative Companies in Brazil, according to the MIT Technology Review. We were the second place holders for Valor in Brazil, an award for companies that work across several industries. So being in second place was our highest position. It was the highest for oil and gas. And we also had a very good placement in the Top 100 Corps Ranking on innovation with startups. Last year, we also celebrated a national record of partnerships in our Connections for Innovation program. And for the third year in a row, we had the national record of registered patents. But I'm here to talk a bit about women. If we can go back just one slide. No, excuse me, go ahead. We used to have a picture, and the picture you see behind the slide was a picture that we took this week at CENPES.
It doesn't include all women in our research center, but I'm very happy to see every smile and every story there. We have brilliant women in our research center. 25% of our researchers are -- excuse me 25% of our employees are women, 32% of our leaders are women, and 21% of our researchers are women. I could say something about each one of them out of these 270, but we -- of course, we have to select a few of them. I'd like to start out by talking about Aline Machado, who was awarded the Brazilian Women in Chemistry Award last year; Marcia Khalil, a very experienced consultant leader in one of the research lines at CENPES. In 2023, we would like to highlight her Digital Monitoring of guarantee of flow occurrences projects that avoids many losses due to hydrate formation.
Director Travassos talked about the test at the Riograndense refinery, behind that, there's a brilliant advisor, Andrea Pinho. Thamires, she is one of the youngest researchers in a brand new sector, the search for geological hydrogen with remote sensing, use of AI and satellite data to find, what the industry calls the fairy circles, where there is indication of geological hydrogen formation. Katia Moniz, she worked in the development of carbon-neutral gasoline that started at the CENPES labs and behind that, there's this brilliant researcher, Katia Moniz. Teresa Villano. She developed an anticorrosion adhesive made from 100% recycled PET. You can use that on surfaces that are starting to corrode, and that's going through the development phase with the market.
Ana Musse, she also leads the research line for the capture of CO2. And Helga and Priscilla for the implementation of something that resulted in one of the highest VPRS. The implementation and scope of magnetic devices and on top side systems to reduce falling. As I said, I could talk about the achievements of each one of these 270 women, but through these few women, I'd like to pay this tribute to every woman at CENPES. And I'd like to convey this message to each woman watching us. I think that our biggest achievement is to be what we want to be and we are respected for that.
Operator: Thank you, Maiza. Now we will start the Q&A session. I'd like to ask each participant to please ask up to two questions. The first question comes from Mr. Rodolfo Angele. Go ahead, Rodolfo.
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