Pursuant to Rule 13a-16 or 15d-16 of the
20035-900 - Rio de Janeiro, RJ
Federative Republic of Brazil
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes _______ No___X____THIS REPORT ON FORM 6-K IS INCORPORATED BY REFERENCE INTO THE REGISTRATION STATEMENT ON FORM F-3, FILE NO. 333-92044, OF PETRÓLEO BRASILEIRO S.A -- PETROBRAS AND PETROBRAS INTERNATIONAL FINANCE COMPANY AND INTO THE PROSPECTUS THAT FORMS A PART OF THE REGISTRATION STATEMENT, AS WELL AS THE REGISTRATION STATEMENT ON FORM F-4, FILE NO. 333-102107, OF PETROBRAS INTERNATIONAL FINANCE COMPANY.
PETROBRAS ANNOUNCES THIRD QUARTER OF 2002 RESULTS
(Rio de Janeiro - December 23, 2002) - PETROLEO BRASILEIRO S.A. - PETROBRAS today announced its consolidated results stated in U.S. Dollars, prepared in accordance with U.S. GAAP.-
Consolidated sales of products and services totaled U.S.$ 24,693 million and net operating revenues totaled U.S.$ 16,682 million for the nine-month period ended September 30, 2002, primarily due to a 16.9% devaluation of the Real against the U.S. dollar. During the nine-month period ended September 30, 2001 consolidated sales of products and services totaled U.S.$ 26,053 million and net operating revenues totaled U.S.$ 18,925 million.
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Consolidated net income for the nine-month period ended September 30, 2002 was U.S.$ 2,238 million, as compared to a net income of U.S.$ 3,348 million for the nine-month period ended September 30, 2001.
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Adjusted EBlTDA for the nine-month period ended September 30, 2002 was U.S.$ 5.9 billion as compared to U.S.$ 6.8 billion for the nine-month period ended September 30, 2001, mainly as a result of a decrease in net operating revenues.
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Earnings per share for the nine-month period ended September 30, 2002 decreased to U.S.$ 2.06 per share, as compared to U.S.$ 3.08 per share for the nine-month period ended September 30, 2001.
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In the nine-month period ended September 30, 2002, oil, NGL and natural gas production increased approximately 13% when compared to the nine-month period ended September 30, 2001, reaching an average of 1,828 thousand barrels/day. In August 2002, PETROBRAS posted a new record in the monthly output of oil and NGL in Brazil producing an average of 1,551 thousand barrels/day, with 77% of such production coming from the Campos Basin.
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On October 31, 2002, the Board of Directors of PETROBRAS approved the distribution of remuneration to stockholders in the form of interest on capital amounting to U.S.$298 million (U.S.$0.27 per share). This remuneration will be payable by January 15, 2003, to shareholders and will be deducted from the dividend calculated on adjusted net income for the 2002 fiscal year.
COMMENTS FROM THE PRESIDENT, MR. FRANCISCO GROS
Petrobras' third quarter results reflect both international and domestic market volatility. Concerns over the effects of a possible military intervention in the Middle East caused oil prices to rise significantly, while continued poor economic performance from developed nations put pressure on refining margins. In the Brazilian market, the currency depreciation caused by the domestic uncertainty generated a lag between oil product prices in foreign currency and in local currency.
Operating Highlights
Despite a decrease in global demand for oil and oil products and exchange rate volatility, Brazilian oil and NGL production increased 13% in the third quarter of 2002, far above the industry average. Increased production led to a 59% increase in exports of crude oil and oil products compared with the third quarter of 2001.
Total oil, NGL and natural gas production reached 1,833 thousand barrels of oil equivalent per day, in the third quarter of 2002, compared to 1,637 thousand in the third quarter of 2001, a 12% increase. This was achieved as a result of higher domestic production, despite lower international production due to lower sales in Argentina and the sale of certain production assets in the United States and the United Kingdom. Domestic oil and NGL production attained a new monthly production record of 1,551 thousand barrels per day in August 2002.
The higher production, plus a program of investments aimed at adjusting Brazil’s refining capacity, meant that domestic oil represented 80% of total refinery throughput, both in the third quarter and in the nine-month period ended September 30, 2002 period, compared to 75% in the third quarter of 2001 and 76% in the nine-month period ended September 30, 2001. The higher share of domestic oil in refinery throughput was one of the major factors enabling Petrobras to maintain operating profits, before financial income and expenses, for the third quarter.
Net imports of oil and oil products continued at low levels, averaging approximately 98 thousand barrels/day. Exports of Marlim oil have increased 219% since the third quarter of 2001, proof of its increasing acceptance in world markets.
Financial and corporate highlights
The market’s confidence in Petrobras was reflected in the positive investor response to the two issuances of debentures in the domestic capital markets, totaling US$ 440 million (US$ 240 million in August and US$ 200 million in October), which were fully subscribed. This is evidence that domestic capital markets do exist and represent viable alternatives to international markets.
Recent events:
The process for acquisition of control of Petrolera Santa Fé S.A. was completed and the final agreement was also reached on the acquisition of the majority ownership of Perez Companc S.A. in Argentina. These acquisitions will enable Petrobras to consolidate its position as one of the major regional oil and gas companies and to become a genuine Brazilian multinational.
An accident resulted in a shutdown of operations of the P-34 platform. The potential impact of this accident was minimized as a result of the prompt action of PETROBRAS’ emergency teams. Contingency plans were enacted and the platform was recovered without threat to the environment.
I would also like to highlight recent important awards in the field of corporate governance:-
In a study on ethical risk performed by the business analysis group “Management & Excellence”, Petrobras was named as the company with the best ethical practices, social responsibility and corporate governance in the Latin American oil and gas sector;
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Petrobras received the 2002 Excellence Prize from América Economia magazine in its September edition, in recognition of its profitability and international expansion;
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Petrobras’ 2001 Annual Report was elected the best of its kind by the Brazilian Association of Publicly Listed Companies (Abrasca), together with the Brazilian Association of Capital Markets Analysts (ABAMEC – SP), the São Paulo Stock Exchange (Bovespa), the Brazilian Institute of Corporate Governance (IBGC) and the Brazilian Institute for Investor Relations (IBRI). This award, bestowed on PETROBRAS for the second consecutive year, is recognition that the company relates to its shareholders and other constituencies in a fair and transparent way.
Finally, in November, the Company announced its proposal for tendering the shares of BR Distribuidora, with a view to de-listing the Company in the future. This measure is intended to allow shareholders to concentrate exclusively on Petrobras, as is customary in the oil industry.
(1)Income from operations is calculated as net operating revenues (before
elimination of intersegment revenues) less: cost of sales, depreciation,
depletion and amortization, exploration, including dry holes, and impairment for
the Exploration and Production, Supply, Distribution, Gas and Energy, and
International Segment.
(2) Gross margin is calculated as net operating revenues less cost of sales divided by net operating revenues.
(3) Operating margin is calculated as income from operations divided by net operating revenues.
(4) Net margin is calculated as net income divided by net operating revenues.
(5) Adjusted EBITDA is calculated as income before income taxes and minority interest less:
financial income, equity in results of non-consolidated companies, monetary and exchange variation on monetary assets
and liabilities, net, plus financial expense and depreciation, depletion and amortization.
(6) Debt to equity ratio is calculated as current liabilities plus long-term
liabilities divided by the sum of total liabilities and total stockholders’
equity.
(1) Total debt includes short-term debt, long-term debt, capital lease obligations and project financings.
(2) Net debt is calculated as total debt less cash and cash equivalents. At December 31, 2001 and at September 30, 2002, this item excludes
Junior Notes in the amount of U.S.$150 million.
(3) Stockholders' equity includes a loss in the amount of U.S.$ 1,112 million, U.S.$ 1,867 million and U.S.$ 1,109 million, for
the nine-month period ended September 30, of 2002, the year ended December 31, 2001 and for the nine-month period ended September
30, 2001, respectively, related to an "Amount not recognized as net periodic pension cost".
(4) Total capitalization means stockholders' equity plus total debt.
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Price Regulation and Other Government Policies
PETROBRAS’ financial
condition and results of operations have been, and most likely will continue to
be, substantially impacted by International and Brazilian political and economic
conditions. Until January 2, 2002, when
price deregulation was fully implemented, PETROBRAS’ financial condition
and results of operations reflected the effects of governmental policies that
the Federal Government maintained, changed or implemented to address prevailing
conditions in the Brazilian economy, including the level of inflation and the
level of gross domestic product. Because the regulation of crude oil and oil
products prices was one of the tools available to the Federal Government for the
control of inflation, the Federal Government periodically changed the prices at
which PETROBRAS could sell its products based upon political and economic
conditions in Brazil. As part of the deregulation
of the Brazilian oil and gas sector, effective July 29, 1998, the Federal
Government changed its price regulation policies. Under these policies, the
Federal Government continued to establish PETROBRAS’ sales prices until
January 2, 2002, at which time all such price controls ended, in accordance with
Law 9,990. Pursuant to the Oil Law and
subsequent legislation, the crude oil and oil products markets in Brazil were
opened in their entirety beginning January 2, 2002. As part of this action:
the Federal Government deregulated fuel sales prices and fuel realization
prices, and as a consequence, the PPE – Specific Parcel Price was
eliminated; and
the Contribution of Intervention in the Economic Domain Charge
(Contribuição de Intervenção no Domínio Econômico
- CIDE) on the importation and sale of fuels was established by Law 10,336 dated
December 19, 2001. The CIDE is a per-transaction payment to the Brazilian
Government required to be made by producers, blenders and importers upon sales
and purchases of specified oil and fuel products at a set amount for different
products based on the unit of measurement typically used for such products.
The determination of
expenses and liabilities for pensions and other post-retirement obligations
requires Petrobras to make certain assumptions regarding discount rates, rates
of increase in compensation levels and the expected long-term rate of return on
assets. Each of these assumptions reflects estimates that are highly uncertain
for a number of reasons, including uncertainty regarding long-term economic
conditions in Brazil. Notwithstanding changes in inflation, interest rates and
other economic variables, Petrobras has not changed the assumptions, because the
uncertainty concerning long-term developments in the Brazilian economy makes it
difficult to apply the principles set forth in U.S. GAAP and to agree on
specific assumptions. It may change these assumptions in the future, and any
such changes could have a material effect on reported liabilities and, to a
lesser extent, on reported earnings. In particular, Petrobras believes that the
weighted average discount rate that it applies to determine the present value of
its future obligations for pensions and other post-retirement obligations may be
subject to revision to reflect changes in the Brazilian financial markets.
U.S. GAAP require that the
discount rate reflect the price at which the pension benefits could be
effectively settled, and encourage the use of rates of return on high-quality
fixed-income investments currently available and expected to be available in the
market. In recent years, the Brazilian government has issued long-term
inflation-indexed securities that are traded in an increasingly liquid market.
Petrobras believes that the high rates of return on these securities suggest
that it would be appropriate to increase the discount rate assumption, but these
are interpretive problems under U.S. GAAP with this view and with increasing the
spread between the discount rate assumption and the assumed rate of future
increase in compensation. Petrobras is currently discussing these issues with
its auditors, and these discussions could result in a change in assumptions in
the near future. Such a change could have a significant effect on the amount of
Petrobras’ pension liability and expense. RESULTS OF OPERATIONS
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2002 COMPARED TO THE NINE-MONTH
PERIOD ENDED SEPTEMBER 30, 2001 The comparison between
PETROBRAS’ results of operations has been significantly impacted by the
Real’s devaluation against the U.S. dollar, due to the fact that the
average exchange rate for the nine-month period ended September 30, 2002 was
16.9% higher than the average exchange rate for the nine-month period ended
September 30, 2001. Net operating revenues
decreased 11.8% to U.S.$ 16,682 million for the nine-month period ended
September 30, 2002, as compared to net operating revenues of U.S.$ 18,925
million for the nine-month period ended September 30, 2001. This decrease is
primarily attributable to the devaluation of the Real against the U.S. dollar
and a 4.5% decrease in domestic sales volumes. This decrease was partially
offset by an increase in sales volumes outside Brazil, which includes both
international sales and exports. Consolidated sales of
products and services decreased 5.2% to U.S.$ 24,693 million for the nine-month
period ended September 30, 2002, as compared to U.S.$ 26,053 million for the
nine-month period ended September 30, 2001. Included in sales of
products and services are the following amounts which PETROBRAS collected on
behalf of the federal or state governments:
Value-added and other taxes on sales of products and services and social
security contributions. These taxes decreased to U.S.$ 3,887 million for the
nine-month period ended September 30, 2002, as compared to U.S.$ 6,610 million
for the nine-month period ended September 30, 2001, primarily due to the
decrease in sales of products and services and to the reduction in PASEP/COFINS
charges during the nine-month period ended September 30, 2002, since the amounts
paid as CIDE are permitted to be deducted from the amount over which the PASEP
and COFINS are calculated;
CIDE, the newly instituted per-transaction tax due to the Federal Government, which amounted to U.S.$ 4,124 million for the
nine-month period ended September 30, 2002; and
PPE, which amounted to an expense of U.S. $ 518 million for the nine-month period ended September 30, 2001 and which was
eliminated at the end of 2001.
Cost of sales for the
nine-month period ended September 30, 2002 decreased 15.3% to U.S$ 8,131
million, as compared to U.S.$ 9,600 million for the nine-month period ended
September 30, 2001. This decrease was principally a result of:
a decrease in imports of U.S.$ 1,499 million, primarily as a result of the elimination of our legal obligation to import
naphtha;
the effect of the devaluation of the Real against the U.S. dollar on our cost of sales as expressed in U.S. dollars, since a
significant portion of our cost of sales is denominated in Reais; and
a decrease of approximately U.S.$ 346 million related to the 4.5% reduction of domestic sales volumes.
These decreases were
partially offset by a net increase in cost of sales outside Brazil of
approximately U.S.$ 447 billion, attributable to an increase in PETROBRAS’
sales volume in the international market. Depreciation, depletion and
amortization relating to exploration and production assets are calculated on the
basis of the units of production method. Depreciation, depletion and
amortization expenses increased 5.4% to U.S.$ 1,528 million for the nine-month
period ended September 30, 2002, as compared to U.S.$ 1,450 for the nine-month
period ended September 30, 2001. This increase was primarily attributable to a
13% increase in production of oil, NGL and natural gas primarily in the Campos
Basin and was partially offset by the effect of the devaluation of the Real
against the U.S. dollar.
Exploration costs, including exploratory dry holes increased 6.7% to U.S. $ 301 million for the nine-month period ended September 30,
2002, as compared to U.S. $ 282 million for the nine-month period ended September 30, 2001. This increase was mainly caused by an
increase of approximately U.S.$ 22 million in dry holes expenses and U.S.$ 31 million in geological and geophysical expenses, and was
partially offset by the effect of the devaluation of the Real against the U.S. dollar.
Selling, general and administrative
expenses increased 3.7% to U.S.$ 1,376 million for the nine-month period ended
September 30, 2002, as compared to U.S.$ 1,327 million for the nine-month period
ended September 30, 2001. Selling expenses increased
7.4% to U.S.$ 796 million for the nine-month period ended September 30, 2002, as
compared to U.S.$ 741 million for the nine-month period ended September 30,
2001. Although partially offset by the effect of the devaluation of the Real on
these expenses when expressed in U.S. dollars, this increase was primarily
attributable to the following:
a U.S.$ 36 million charge for doubtful accounts and gas station improvements;
U.S.$ 15 million in expenses of EG3 (new subsidiary) in the nine-month period ended September 30, 2002;
an increase of U.S.$ 51 million in expenses related to technical consulting services in connection with PETROBRAS' increased
outsourcing of selected non-core activities; and
an increase of U.S.$ 36 million in transportation costs of oil products resulting primarily from increases in prevailing
international freight charges.
General and administrative
expenses decreased 1.0% to U.S.$ 580 million for the nine-month period ended
September 30, 2002, as compared to U.S.$ 586 million for the nine-month period
ended September 30, 2001. This decrease was primarily attributable to the effect
of the devaluation of the Real against the U.S. dollar, and was partially offset
by an increase of U.S.$ 31 million in expenses related to technical consulting
services in connection with PETROBRAS’ increased outsourcing of selected
non-core general and administrative activities. Research and development expenses
increased 10.7% to U.S.$ 103 million for the nine-month period ended September
30, 2002, as compared to U.S.$ 93 million for the nine-month period ended
September 30, 2001. This increase was primarily related to the additional
investments in programs for environmental safety and deepwater and refining
technologies of approximately U.S.$ 24 million, which was partially offset by
the effect of the devaluation of the Real against the U.S. dollar. Equity in results of
non-consolidated companies decreased to a loss of U.S.$ 9 million for the
nine-month period ended September 30, 2002, as compared to a gain of U.S.$ 23
million for the nine-month period ended September 30, 2001. This decrease is
mainly attributable to a loss of U.S.$ 25 million related to the effect of the
devaluation of the Argentine Peso against the U.S. dollar, which impacted the
result of PETROBRAS’ equity investments in Compañia Mega, an Argentine
company which is engaged in natural gas activities.
Financial income decreased 27.8% to U.S.$ 914 million for the nine-month period ended September 30, 2002 as compared to
U.S.$ 1,266 million for the nine-month period ended September 30, 2001. This decrease is primarily attributable to:
a reduction in financial interest income from short-term investments, which
declined 21.7% to U.S.$ 695 million for the nine-month period ended September
30, 2002, as compared to U.S.$ 888 million for the nine-month period ended
September 30, 2001, primarily due to the fact that the average exchange rate for
the third quarter of 2002 was 16.9% higher than the average exchange rate for
the third quarter of 2001; and
a reduction in financial interest income from Government securities (National
Treasury Bonds), which were transferred last year to PETROS to reduce
PETROBRAS’ pension liability, which decreased 68.6% to U.S.$ 59 million for
the nine-month period ended September 30, 2002, as compared to U.S.$ 188 million
for the nine-month period ended September 30, 2001. Financial expense decreased
10.6% to U.S.$ 522 million for the nine-month period ended September 30, 2002,
as compared to U.S.$ 584 million for the nine-month period ended September 30,
2001.This decrease was primarily attributable to the decrease in the LIBOR rate
during the third quarter of 2002.
Monetary and exchange variation on monetary assets and liabilities, net
Monetary and exchange
variation on monetary assets and liabilities, net decreased 2.9% to an expense
of U.S.$ 1,514 million for the nine-month period ended September 30, 2002, as
compared to an expense of U.S.$ 1,559 million for the nine-month period ended
September 30, 2001. Approximately 86% of PETROBRAS’ indebtedness was
denominated in foreign currencies during the nine-month period ended September
30, 2002 and 2001. Although the effect of a
40.4% devaluation of the Real against the U.S. dollar during the nine-month
period ended September 30, 2002 is higher when compared to a 26.8% devaluation
of the Real against the U.S. dollar during the nine-month period ended September
30, 2001, the following events contributed to the decrease in monetary and
exchange variation on monetary assets and liabilities, net in the nine-month
period ended September 30, 2002 as compared to the same period in 2001:
a loss of U.S.$ 53 million in respect of PETROBRAS’ hedging contracts,
due to the devaluation of the Japanese Yen against the U.S. dollar for the
nine-month period ended September 30, 2001 as compared to a loss of
U.S.$ 22 million for the nine-month period ended September 30, 2002; and
a U.S.$ 149 million foreign exchange gain on advances to foreign suppliers.
Employee benefits expenses increased 42.0% to U.S.$ 345 million for the nine-month period ended September 30, 2002, as compared to
U.S.$ 243 million for the nine-month period ended September 30, 2001. This increase is primarily attributable to an increase in the
provision of U.S.$ 103 million due to the annual actuarial calculation of the pension plan liability and an expense of U.S.$ 34
million related to the migration process to the new pension plan. These increases were partially offset by the effect of the
devaluation of the Real against the U.S. dollar.
Other taxes
Other taxes increased 40.3% to U.S.$ 317 million for the nine-month period ended September 30, 2002, as compared to U.S.$ 226 million
for the nine-month period ended September 30, 2001. This increase is primarily attributable to an increase of U.S.$ 102 million in
the PASEP/COFINS taxes payable in respect of foreign exchange gain on assets. This increase was partially offset by the effect of the
devaluation of the Real against the U.S. dollar. Other expenses, net for the
nine-month period ended September 30, 2002 decreased 21.1% to U.S.$ 236 million,
as compared to an expense of U.S.$ 299 million for the nine-month period ended
September 30, 2001. The most significant nonrecurring charges for the nine-month
period ended September 30, 2002 were:
a U.S.$ 151 million loss for contractual contingencies relating to thermoelectric plants; and
a U.S.$ 72 million expense for general advertising and marketing expenses unrelated to direct revenues.
The most significant
nonrecurring charges for the nine-month period ended September 30, 2001 were:
a U.S.$ 95 million loss recorded in respect of the sinking of Platform P-36;
a U.S.$ 78 million allowance for doubtful accounts recorded with respect to advances to suppliers;
a U.S.$ 174 million expense relating to the reduction in the balance of the Petroleum and Alcohol Account resulting from the
partial completion of the certification of the balance of the account by the Federal Government;
a U.S.$ 81 million expense for general advertising and marketing expenses unrelated to direct revenues; and
a U.S. 89 million gain related to the sale of PETROBRAS U.K.
Income before income taxes
and minority interest decreased 29.4% from U.S.$ 4,551 million for the
nine-month period ended September 30, 2001, to U.S.$ 3,214 million for the
nine-month period ended September 30, 2002, as a consequence PETROBRAS recorded
an income tax expense of U.S.$ 1,350 million for the nine-month period ended
September 30, 2002, a 4.5% decrease from an expense of U.S.$ 1,413 million for
the nine-month period ended September 30, 2001. The most significant factors
that influenced this decrease were:
a U.S.$ 66 million loss in respect of the results of operations from our foreign subsidiaries, which was subject to
different tax rates, as compared to a U.S.$ 22 million gain for the same period in 2001; and
a U.S.$ 336 million valuation allowance as of September 30, 2002, as compared to a balance of U.S.$ 181 million for the same
period in 2001.
The reconciliation between
the tax calculated based upon statutory tax rates to income tax expense and
effective rates is shown in Note 6 to PETROBRAS’ Unaudited Consolidated
Financial Information as of September 30, 2002. The Petroleum and Alcohol Account
- Receivable from the Federal Government has been used to accumulate the impact
on PETROBRAS of the Federal Government’s regulatory policies for the
Brazilian oil and gas industry. According to legislation
applicable to the Petroleum and Alcohol Account until December 31, 2001,
PETROBRAS had the right to offset amounts owed to the Federal Government
relating to the regulatory policies of the Brazilian oil and gas industry
against the receivable that increased and decreased the Petroleum and Alcohol
Account. On June 30, 1998, the
Federal Government issued National Treasury Bonds - Series H in the name of
PETROBRAS, which were placed with a federal depositary to support the balance of
this account. The value of the outstanding Series H bonds as of September
30, 2002 was U.S.$ 42 million. The Federal Government
certified the balance of the Petroleum and Alcohol Account as of June 30, 1998.
In accordance with ANP Ruling No 50, effective April 19, 2002, and subsequent
legislation, the changes in the Petroleum and Alcohol Account in the period from
July 1, 1998 to December 20, 2002, will be subject to audits by the National
Petroleum Agency - ANP, and the results of the audit will be the basis for the
settlement of the account with the Federal Government. This procedure will
enable the settlement of accounts with the Federal Government, which will be
formalized by means of a Debt Acknowledgement Agreement to be signed by December
31, 2002, in accordance with Decree No. 4,292 of June 28, 2002. The Company does
not expect significant adjustments from the ANP audit of this period. As a result of the
deregulation of the market and applicable legislation, effective January 2,
2002, PPE was eliminated and the Petroleum and Alcohol Account will no longer be
used to reimburse expenses related to the supply of oil products and alcohol to
PETROBRAS and third parties. The balance of the
Petroleum and Alcohol Account at September 30, 2002 represents a credit to
PETROBRAS against the Federal Government in the amount of US$ 202 million, an
increase of 149% or US$ 121 million when compared with December 31, 2001. This
increase is primarily attributable to a provision of US$ 259 million for
expenses in connection with Article 7 of Law No. 10,453, of May 13, 2002, which
includes the Sugar Cane Cost Equalization Program in the Northeast Region as
well as the receipt of credits and settlement of debits relating to events prior
to December 31, 2001, as established by the ANP. The following summarizes
the changes in the Petroleum and Alcohol Account for the nine-month period ended
September 30, 2002:
BUSINESS
SEGMENTS
The segment information
included herein was prepared based on the same accounting policies reflected in
the PETROBRAS Audited Consolidated Financial Statements and the Interim
Consolidated PETROBRAS Financial Information. Inter-segment net revenues
includes sales to external clients and inter-segment sales based upon an
internal transfer price established for transactions among the segments. The following table sets
forth by segment the consolidated operating revenues and income from operations
(net operating revenues before elimination of inter-segment revenues less: cost
of sales; depreciation, depletion and amortization; and exploration, including
dry holes), reflecting PETROBRAS’ domestic and international activities for
the nine-month periods ended September 30, 2002 and September 30, 2001.
PETROBRAS’ income from
operations decreased 5.8% to U.S.$ 7,159 million in the nine-month period ended
September 30, 2002, as compared to U.S.$ 7,603 million for the nine-month period
ended September 30, 2001. This decrease was largely due to a decrease in sales
prices of oil products as discussed above.
PETROBRAS' exploration and production, and supply activities in the nine-month period ended September 30, 2002 contributed to income
from operations in the amount of U.S.$ 5,052 million and U.S.$ 1,460 million, respectively. During the same period, PETROBRAS'
distribution, gas and energy and international segments contributed income from operations of U.S.$ 445 million, U.S.$ 117
million and U.S.$ 85 million, respectively.
Exploration and production, and supply activities in the nine-month period ended September 30, 2001 contributed to income from
operations in the amount of U.S.$ 4,057 million and U.S.$ 2,831 million, respectively. During the same period, PETROBRAS'
distribution, gas and energy and international segments contributed to income from operations of U.S.$ 448 million, U.S.$ 134
million and U.S.$ 133 million, respectively.
In accordance with the
objectives established in the strategic plan for 2001 – 2005, PETROBRAS
continues to prioritize capital expenditures in the development of crude oil and
natural gas production. In the nine-month period ended September 30, 2002, total
capital expenditures were U.S.$ 3,574 million, representing an increase of 24 %
over capital expenditures made in the nine-month period ended September 30,
2001.
Of the capital expenditures incurred during the nine-month period ended
September 30, 2002, U.S. $ 2,239 million (63%), were directed to domestic
exploration and production activities, which includes our exploration and
production segment and our project financings.
This press release contains statements that constitute forward-looking statements within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended. Such forward-looking statements are necessarily dependent on assumptions, data or methods that may be
incorrect or imprecise and that may be incapable of being realized. Prospective investors are cautioned that any such forward looking
statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from
those in the forward-looking statements as a result of various factors. The Company does not undertake, and specifically disclaims, any
obligation to update any forward-looking statements, which speak only as of the date made.
This press release may contain forward-looking statements. These statements are
statements that are not historical facts, and are based on management's current view
and estimates offuture economic circumstances, industry conditions, company performance and
financial results. The words "anticipates", "believes", "estimates", "expects",
"plans" and similar expressions, as they relate to the company, are intended to
identify forward-looking statements. Statements regarding the declaration or
payment of dividends, the implementation of principal operating and financing
strategies and capital expenditure plans, the direction of future operations and
the factors or trends affecting financial condition, liquidity or results of
operations are examples of forward-looking statements. Such statements reflect
the current views of management and are subject to a number of risks and
uncertainties. There is no guarantee that the expected events, trends or results
will actually occur. The statements are based on many assumptions and factors,
including general economic and market conditions, industry conditions, and
operating factors. Any changes in such assumptions or factors could cause actual
results to differ materially from current expectations. 
(1) Includes production from shale oil reserves.
(2) Government take includes royalties, special government participation and rental of areas.
Revenues
Cost of sales
Financial
expense
Employee
benefit expense
Income tax
(expense) benefit
(in millions of U.S. dollars, except for share data)
Investor Relations Department
Luciana Bastos de
Freitas Rachid - Executive Manager
E-mail:
petroinvest@petrobras.com.br
Av. República do Chile, 65 - 4th floor
20031-912 - Rio de Janeiro, RJ
(55-21) 2534-1510 / 2534-9947