Petrobras Announce Third Quarter 2014 Condensed Information
Petrobras announces that today, in light of new facts that occurred after November 13, 2014, directly or indirectly related to the “Lava Jato Operation”, it decided not to file its consolidated interim financial statements for the 3rd quarter 2014 not reviewed by the independent auditors. These facts are set out below:
(i) Obtained a waiver for its earliest financial reporting covenants that allows the Company to release its interim financial statements for the 3rd quarter 2014 by January 31, 2015, with no risk of acceleration of its finance debt by its creditors;
(ii) On November 21, 2014, Petrobras received a subpoena from the U.S. Securities and Exchange Commission (SEC) requesting certain documents relating to an investigation of the Company by the SEC;
(iii) On December 3, 2014, Petrobras gained access to the depositions of Mr. Julio Gerin de Almeida Camargo (Grupo Toyo) and Mr. Augusto Ribeiro de Mendonça Neto (Grupo Setal) given as state’s evidence to prosecutors;
(iv) On December 9, 2014, the Company was served with a class-action complaint filed by Mr. Peter Kaltman before the U.S. Court (United States District Court, Southern District of New York). We expect additional complaints to be filed, which could potentially be consolidated with Kaltman’s complaint;
(v) On November 11, 2014, criminal charges were filed by the Brazilian Public Prosecutor’s Office against several individuals, including the Former Director of Downstream, Paulo Roberto Costa, and managers of other companies for active corruption, passive corruption, organized crime, money-laundering and falsification of documents.
However, in order to comply with its responsibility to inform and to foster diligence and transparency the Company is releasing information regarding its operational performance and certain other financial information that Petrobras believes would not be affected by the potential adjustments to its financial statements resulting from the “Lava Jato Operation”.
Sales Revenues reached R$ 88,378 million and Cash and Cash Equivalents reached R$ 62,409 million in the 3Q-2014.
Sales revenues were 7% higher when compared to the 2Q-2014, resulting from higher crude oil exports and increased domestic demand, mainly diesel, which was mostly met by domestic output of oil products. When compared to Jan-Sep/2013, the 13% increase in sales revenues is attributable to higher oil product prices in the domestic market resulting from the impact in the full year of 2014 of diesel and gasoline price adjustments in 2013 and the impact of foreign currency depreciation (8%) over the price of oil products that are adjusted to reflect international prices and export prices, as well as higher electricity and natural gas prices. Domestic demand for oil products increased by 3%, mainly diesel (2%), gasoline (5%) and fuel oil (21%), and crude oil exports volume was 12% higher, partially offset by a decrease in fuel oil exports volume (14%).
Our Executive Officers recently approved the implementation of a series of actions that will be undertaken in order to maintain our cash level, which was R$ 62.4 billion as of September 30, 2014, and the liquidity of the Company. These actions include, for example, discounting receivables, reducing the level of capital expenditures, reviewing product pricing strategies and reducing operating costs in activities that were out of the scope of our structuring cost reduction programs; and assure positive free cash flow next year, considering crude oil prices of around U.S.$ 70/bbl and foreign exchange rate of R$ 2.60/U.S.$; thus eliminating the need for additional financing in the capital markets next year
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