2014 first half gross profit was R$ 38.5 billion, up by 2% year-on-year, mainly due to higher prices for oil products. 

Net income was R$ 10.3 billion, down by 25% year-on-year, mainly due to the provision for the Voluntary Separation Incentive Plan (PIDV), lower gains from asset sales and higher write-offs of dry and uncommercial wells, as well as write-offs of assets.

Compared to the previous quarter, operating income (R$ 8.8 billion) rose by 17%, reflecting lower operating expenses, which, in the first quarter, included provision for the PIDV. However, quarterly net income (R$ 5.0 billion) decreased by 8%, impacted by lower financial result and higher tax bracket of income tax.

2014 first half oil and NGL production in Brazil averaged 1 million 947 thousand barrels per day, a 1.4% rise in output year-on-year. This increase was fueled by the start-up of new production systems:   P-63, (Papa-Terra), P-55 (Roncador), P-62 (Roncador) and P-58 (Jubarte), and by the ramp up of FPSOs Cidade de Itajaí (Baúna), Cidade de Paraty (Lula NE) and Cidade de São Paulo (Sapinhoá).

In June, we set a new monthly output record in the pre-salt of 477 thousand barrels of oil per day, and on July 13, we set a daily record of 546 thousand bpd with only 25 production wells.

As of June 2014, we had interconnected 30 new wells, which is close to the total number of wells interconnected throughout 2013. This year we have already added three new PLSVs to Petrobras’ fleet, increasing the availability of the necessary equipment to sustain production growth.

In refining, we increased throughput processed and the production of oil products. In June, we set an oil processing record of 2 million 172 thousand barrels of oil per day at Brazilian refineries.

PROEF (Campos Basin Operational Efficiency Increase Program) has contributed 96 thousand barrels per day in additional oil output during the semester. Operational efficiency stood at 80% at the Campos Basin Operational Unit (UO-BC) in the end of the period, and, in May, the operational efficiency record for the past 47 months of 81.2% was set.

The structuring programs (PRODESIN, PROCOP, INFRALOG, PRC-Poço and PRC-Sub) have achieved savings of R$ 5.6 billion during the first half of this year. 

2014 first half net income stood at R$ 10 billion 352 million – The company’s net result fell 25% year-on-year, especially due to the impact of operating expenses such as the provision for the Voluntary Separation Incentive Plan - PIDV (R$ 2 billion 376 million), increased write-offs of dry or uncommercial wells (R$ 1 billion 321 million), and write-offs of assets related to returned fields (R$ 494 million), as well as lower gains from the sale of assets (R$ 279 million) and higher selling costs (R$ 650 million).

Year-on-year gross profit rose by 2% to R$ 38 billion 469 million. This growth reflects the 10% rise in the average price of oil products sold in Brazil, mainly due to the diesel and gasoline price increases of 2013. These factors were partially offset by higher import costs, reflecting increased sales of oil products in the domestic market (+3%) and higher volumes of imported natural gas to meet the demand of the thermoelectric sector, combined with the effect of foreign exchange depreciation (+13%) on imports and government participations.

Operating cash flow generation as measured by adjusted EBITDA amounted to R$ 30 billion 595 million, down by 11% year-on-year, mainly due to the provision for the PIDV and increased write-offs of dry, uncommercial wells and assets, as well as lower gains from the sale of assets and higher selling costs.

First half net financial result was negative by R$ 1 billion 114 million, i.e., R$ 1 billion 47 million more favorable than year-on-year financial result, due to the effects of changes in the exchange rate on dollar-denominated debt. There was a 6% appreciation of the real against the dollar in the first half of 2014, compared to an 8.4% depreciation in the first half of 2013.

Compared to the first quarter of 2014, net income fell by 8% - Compared to the first quarter of the year, operating result (R$ 8 billion 484 million) rose 17% mainly due to lower operating expenses, which, in the first quarter, included the provision for the Voluntary Separation Incentive Plan - PIDV (R$ 2 billion 396 million).

Despite the higher operating profit, net income (R$ 4 billion 959 million) fell by 8% compared to the first quarter of 2014, due to lower financial result and higher income tax brackets, as, in the first quarter, there was the recognition of some tax credits.

Economic contribution of Petrobras – The economic contribution of Petrobras in Brazil, as measured by the generation of current taxes, fees and social contributions, totaled R$ 37 billion 499 million in the first half of 2014, a 4% increase year-on-year.

Government participation in Brazil rose by 13% due to increased total production and by the 14% increase in the average reference price of domestic oil, which was R$/bbl 221.33 (US$/bbl 96.40) in the first half of 2014 versus R$/bbl 194.16 (US$/bbl 95.61) for the same period of 2013.