Petrobras (PBR.US) released its third-quarter 2026 results after the U.S. market close on November 10. Quarterly sales revenue came in at US$32.962 billion, up 40.4% year on year; net profit attributable to shareholders was US$7.740 billion, up 28.4% year on year; and net profit excluding one-off items reached US$9.316 billion, surging 78.0% year on year. Adjusted EBITDA (excluding one-off items) totaled US$18.394 billion, up 53.9% year on year. Operating cash flow was US$12.026 billion and free cash flow was US$6.618 billion, up 22% and 33.2% respectively year on year.
"Our operational performance was extremely strong," Chief Executive Officer Magda Chambriard said in the earnings report. "This quarter we once again achieved record oil and gas production, pushing the company's production curve to an unprecedented level. At the start of the year, production guidance pointed to an average of 3.1 million barrels of oil equivalent per day in 2026, but we now expect to average 3.3 million to 3.4 million barrels of oil equivalent per day. This performance reflects the strength of our operational management and our ability to maximize the potential of our assets." She also stressed that the refining business set a record for diesel output in the quarter, with average refinery utilization reaching 99%, which she said was "crucial to safeguarding Brazil's energy security during a geopolitical crisis." Chief Financial Officer Fernando Melgarejo said: "The outstanding operational performance this quarter generated strong cash creation, and these funds supported investments that are accelerating project delivery and bringing new capacity online as early as possible. Operating cash flow also ensured the payment of shareholder dividends and helped reduce the company's financial debt. We are accelerating profitable investments that make up the company's unique asset portfolio and will continue to create value through growth and operating cash flow."
The core support for the results came from record production. Average oil and gas equivalent production in the quarter reached 3.512 million barrels of oil equivalent per day, up 11.7% year on year and 5.3% quarter on quarter, setting a new all-time record; diesel output of 769,000 barrels per day also set a record, while refinery utilization remained at a high level of 99%. The company attributed this to the ramp-up of new platforms at pre-salt projects such as Búzios and Mero, as well as the highest production efficiency in nearly eight years, with 12 new production wells coming on stream during the quarter (six in the Campos Basin and six in the Santos Basin). Benefiting from economies of scale, Brazil's extraction cost fell to US$6.12 per barrel of oil equivalent, the lowest since the third quarter of 2024, with the pre-salt extraction cost at just US$4.48 per barrel of oil equivalent.
By segment, the exploration and production (E&P) division posted adjusted EBITDA of US$12.686 billion in the quarter, up 16.2% year on year but down 20.1% quarter on quarter, mainly due to the decline in Brent oil prices (quarterly average of US$97 per barrel, down 7.2% quarter on quarter) and the fact that about 140,000 barrels per day of crude oil was still in transit at the end of the quarter and exports were not included in the period; the refining, transportation and marketing (RTM) division recorded adjusted EBITDA of US$5.880 billion, surging 363% year on year, making it the standout segment of the quarter, driven by growth in domestic refined product sales (diesel sales up 14.4% quarter on quarter, aviation kerosene up 9.9%), fuel oil exports and improved profit margins on crude oil exports. The gas and low-carbon energy (G&LCE) division posted adjusted EBITDA of US$521 million, up 156.7% year on year, supported by growth in fixed revenue from the power capacity reserve auction (LRCAP) contracts that took effect in August.
Financial soundness continued to improve. As of the end of September, net debt stood at US$57.847 billion, down 4.2% quarter on quarter; the net debt to trailing 12-month adjusted EBITDA ratio fell to 1.00 times (1.53 times in the same period a year earlier), the total debt to trailing 12-month adjusted EBITDA ratio was 1.21 times, the weighted average debt maturity was about 11.8 years and the average cost was 6.7%. During the quarter the company repaid about US$2.1 billion in principal and interest, including US$1.2 billion of bonds repurchased and redeemed in the international capital markets, while raising US$1.2 billion in the international bank market over the same period. The board approved third-quarter shareholder returns of 15.3 billion reais (about US$2.8 billion); taxes paid to the federal, state and municipal governments during the quarter totaled 90.4 billion reais.
Notably, the company significantly raised its full-year guidance: production guidance was lifted from 3.1 million barrels of oil equivalent per day at the start of the year to 3.3 million to 3.4 million barrels; capital expenditure (on an asset portfolio under construction basis) was raised from US$19.4 billion to US$24 billion to US$25.5 billion (on a cash basis from US$16.9 billion to US$21 billion to US$22 billion); operating cash flow was raised from US$35 billion to US$45 billion to US$50 billion; and lease payments were raised from US$10 billion to US$11 billion to US$11.5 billion. The company emphasized that the increase in capital expenditure was not due to project overruns, but mainly reflected exchange rate effects and better-than-planned execution progress, including faster-than-expected construction of its own FPSOs such as Búzios, Atapu and Sépia, improved rig availability, an increased number of well connections, and plans to localize the Búzios 9 and 10 FPSOs in 2026.
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