Petroleo Brasileiro S.A. Petrobras ADS

The links for both languages are available on our investor relations website. We would like to inform you that all participants are connected to the webcast in listen-only mode. After our introductions, we will have a question-and-answer session, and you'll be able to send your questions via email to PetroInvest at Petrobras.com.br. Joining us today are Magna Chambriard, Petrobras' president. who will start our session but will not remain for the Q&A due to a prior commitment. Valerio Scopacci, Executive Director of Corporate Affairs. Claudia Schlosser, Executive Director of Logistics, Commercialization and Markets. Fernando Melgarejo, Executive Director of Finance and Investor Relations. And Carlo Valli. Director of Governance and Compliance, Mauricio Tomaschi, Executive Director of Energy Transition and Sustainability, Renata Baruzzi, Executive Director of Engineering, Technology and Innovation, Silvia dos Anjos, Executive Director of Exploration and Production, and William Franca, Executive Director of Industrial Processes and Other Products. So to begin, I will hand over to our President, Magda Chambriard, for her initial remarks. Please go ahead, ma'am. Ladies and gentlemen, good afternoon. It's a great pleasure to join you today to talk a little bit about our performance in the first quarter of 2025. I believe that they were excellent results, but I will take this opportunity to also draw your attention to the challenging scenario that we have currently with the price of oil. This requires from us redoubled efforts. Going from $84 per barrel in the first quarter of 2024 to face this first quarter of 2025 with an average of $75 per barrel and to post the results that we are posting was not an easy task. This is an an arduous task that was carried forward with a lot of dedication and a lot of wisdom by the Petrobras board and all of its technical staff. What we will have in the future will be even more challenging. This is the second quarter of 2025, and oil is at $65 per barrel, a difference of about $20 versus the first quarter of 2024. We are certain and we are committed to resolving this issue, delivering good results and dedicating a lot of our effort in capital discipline for 2025. This challenging scenario of $65 per barrel requires and will require from us simplified projects, an assurance that we will have good trading margins for our products, a significant cost reduction, and a lot of cooperation between the different areas in the company. so that we can have the best results possible for our business. This is what we are already addressing, and this is what all main oil companies are doing. And, of course, we have to make this effort to have better results in such a challenging scenario. Again, it's $65 per barrel. So in this scenario, we're going to talk about a few words that you will hear constantly, such as austerity, simplification, optimization, reducing investment costs, reducing operational costs, and overhead. Our products, and we know this very well, are priced by the international market and they vary according to their prices and the exchange rate and this is out of our control. What we know and we're certain of this is that we have the obligation to react to these fluctuations. Petrobras is absolutely aware of its obligations to react to these fluctuations. When prices go up, we have more comfort to expand our initiatives. But when prices go down, it's time to tighten our belts. With that being said, this is my message to you. Please remain confident we are addressing this cost reduction in face of a challenging scenario so that we can have the best results possible for our investors, whether they are in the government or private. but also I have to highlight the excellent results that we have had in the first quarter of 2025. First of all, I'd like to say that there's no future for an oil company without exploration. And I like saying that this is what we have been doing. This is what we've been bringing as a result for our company. We are constantly expanding our reserves and building up our efforts to expand the Brazilian equatorial margins. We believe in this potential, and we will carry on doing pursuing the opportunity to show Brazilian society and our investors that we will have relevant gains that we can seek from exploring oil and gas in the Brazilian equatorial margin. So in that aspect, as I mentioned, we have been very successful. We have added a We have added more reserves constantly, especially with the pre-salt layer. Last week, we disclosed a new discovery of the pre-salt layer in the Aram block. And if everything works out, we believe that we will have advanced production for the Aram block. more pre-salt with good quality oil without contaminants, but still with a challenging rock for our project. But this is within our potential. This is what we know how to do. Before the second discovery in Arun, we made a new discovery in the compost basin in the North Brava area. We also made discoveries in Colombia and we had an excellent test in Colombia's offshore area. This is a block that, if all works out, will be responsible for supplying all of the gas consumption in Colombia. And let's hope that this will happen. But that's not all, ladies and gentlemen. We still have many opportunities ahead of us, whether it is in the Brazilian eastern margin or in the equatorial margin. We have to remember the Pelotas Basin, where we're also exploring, and soon we will consider drilling wells there. As we will hear later on, we have about 50 exploratory wells to drill in the next years. And this repeats what I mentioned before. We're very proud of it because an oil company will not have a future without exploration. And we want a strong, long-lasting company that contributes to our investors, whether they are in the government or private investors, and also contributes to Brazilian society in general. We're sinking new reserves at the same time as we work to develop the fields that have already been discovered. And you have been seeing our results. In the first quarter of 2025, Our production went up 5.4% versus the previous quarter. This increase was a decisive contribution to our financial results. Oil is our main product. And with it, especially because of it, we are generating 8.5 billion U.S. dollars in cash with our operations. And we reached a net income of 6 billion U.S. dollars. After my message, our director, Nogares, will go into details about our financial performance, and he will draw our attention to the impact of variations in Brent oil prices and our exchange rate. And you will be reminded that in the previous quarter, the foreign exchange for the Brazilian oil had a negative impact in our company's results. This quarter, the opposite happened. We recovered a part of those losses. The appreciation of the Brazilian real had an impact on our results again, and without these foreign exchange effects, our results would have been 4 billion U.S. dollars, which is not bad, but it was even better on the fact that it was 6 billion. Our results are often impacted by the price of oil and by the foreign exchange rate, as happens with all oil companies. And both of these variables are out of our control. And that is why we are saying that right now is a moment for austerity. It's a moment in which we will have to control our costs in general. We will have to do what we still do well, which is exploring producing oil and its byproducts and trading these byproducts and our oil with the best profit margins as we can have. But we need to do it, and this moment is propelling us in that direction. but we need to do it with capital discipline and seeking major cost reductions, the highest we can have. So after that message, which I think will soothe your, um, thoughts about how much the company is spending we are not here for that i have to repeat we're going to highlight our physical results for the first quarter and as i said they were very good and they justify the capacity that the company has

On February 15, FSO Admiral Temerair went into production in the Búzios field. It was the first of a series of five oil rigs that will make Búzios field the biggest field in Brazil by far. That rig has a production capacity of 225,000 barrels of oil per day. in addition to gas. As I said, it was the first of a series of five giant rigs that will comprise the facilities around the Buzios field. On March 3rd, Admiral Alexandre de Guzmão went into the Guzmão field. Alexandre de Guzmão will also operate in the pre-salt in the Santos Basin, and it was finally anchored in 10 days. I need to draw your attention to these 10 days, which is a record-breaking period for Petrobras. It will begin its production towards the end of the second quarter of this year, the beginning of the third quarter. And with that, will be another 180 000 barrels a day operated by patcher brass in the pre-salt along with refining we also completed the revamping of chain one of our refinery going from 80 barrels per day of refined oil to 130,000 barrels a day in terms of processing capacity. So with very little investment, with the introduction of the SOX unit plus a small revamp involving maintenance, we basically doubled The capacity of RENES Chain 1. It may sound simple, but it's no small feat. We're talking about 50,000 additional barrels per day in terms of processed load. 70% of this capacity generating diesel, which is our main product. As I said, this means more diesel on the market. And once you complete Train 2, which is undergoing a bidding process, it will be 260,000 barrels per day processed in the northeast of Brazil, a market that's hungry for diesel. I used to say that Among all of the refineries, we're undertaking more efforts around diesel, and S10 diesel, which emits much less and adds more value. But especially at Renest, among all of the refineries, this has the highest conversion of crude into diesel. We're talking about a conversion of around 70%, which shows how modern and economically feasible this refinery is. And the second module of natural gas processing will go into operations in the second half of The boat interior complex in Itaburaí, Rio de Janeiro, added to the first module the total processing capacity of that unit will achieve 21 million cubic meters per day, increasing the supply of natural gas and also of its byproducts including liquid natural gas. We're also on the brink of inaugurating the new RDT at replan. This new unit will have the capacity to produce 63,000 barrels per day of S-10 diesel. As I told you, our efforts around increasing capacity and increasing the supply and production of diesel especially the s10 diesel is real these are our highest added value products and as i told you we are seeking the highest possible level of attractiveness for our investments the s10 diesel has a high added value in that it emits much less it throws much less sulfur into the atmosphere it's almost negligible and this high added value also shows us that not only are we looking for more value we're also looking for products with the lowest possible emissions we're still on the lookout for the opportunities to decarbonize, which means that, and this is what it means, and that is why in February we sold the first bunker of vessel fuel with 24% of renewable content in the Asian market. This is a huge achievement. We now set foot in the Asian market with a high added value product that is produced and traded by Petrobras. The product is a mixture of 76% of mineral fuel oil and 24% of biofuels produced from used cooking oil. And again The mixture of these two components allows us to create a product that's highly valued in the international market. We are developing new products also involving the low-carbon market, which is extremely attractive as a market to us, innovating to generate value and enabling solutions around new energies and decarbonization. In March, we signed a contract with the National Development Bank of Brazil to reforest the Amazon. In the ProForest Plus program, one of the biggest programs for acquiring carbon credits in Brazil will promote the reforestation of up to 50,000 hectares of now degraded areas in the Amazon. To give you one idea, this is equivalent to 50,000 football fields and to capturing 15 million carbon times which is equivalent to what is annually emitted by around 9 million gas fuel gas fuel cars this is a structuring project around the climate but also in terms of a reputation and it is a project an initiative that sows the seed of decarbonization when right when petrobras is planning on making money with the capture of co2 We are confident in our 2050 strategic plan, not forgetting that a low rent price brings about additional challenges, and that we should review our plan generating a 2026-2030 business plan, considering the need for us to overcome these challenges. extremely high challenges imposed by price reductions. We'll do that by preserving our cash, reducing costs, and through capital discipline. This is part of our values. The commitment with Brazil and with our investors, whether they're governmental or private, all of that is part of our values. And that is why we'll keep on investing and keep on focusing on more projects that are financially feasible and making money for our investors, whether they're from the government or from the private market. This is what we're doing here. with the highest possible dedication and strictness, we are now here to believe in the potential of Brazil, knowing that if we are doing well, Brazil will also be well. It's fundamental that we all understand this because our results depend on the optimal conditions of the Brazilian market. The Brazilian market is currently the sixth highest consuming market of oil products in the world. So it is a market that should be seen for the value for the importance it has that's why i say that we walk hand in hand petrobras benefits from the uh appreciation of brazil and vice versa it's a two-way street that is why we're committed to this path and that is why we're committed to our planning and with making expenditures that are in line with the current level of oil prices. You can rest assured that our common goal at Petrobras is to have a long-lived and strong company. The workforce at Petrobras, the board, investors, and Brazilian society. Having said that, I want to thank you for your trust our shareholders partners employees and you can rest assured that we are here to overcome the challenges ahead of us and to take all of the possible opportunities along the way. Thank you for your presence, and now I will give the floor to my colleagues for the presentations. Unfortunately, I will not be able to stay for the presentations, but I wish you well. a great presentation. And please analyze your purchase recommendations. We want all of you investing in Petrobras, and we'll make you proud of your investments. Thank you. Thank you, Magda. Now we'll start the presentation about the performance of the first quarter of 2025. I'll give the floor to Fernando Milgaresio, our financial director. Fernando, you have the floor. Good morning. President Magda, thank you for the message. I want to thank you all for being here for yet another webcast. We'll start by looking at the... highlights of the first Q of 2025. After the presentation, both me and the other directors will be here for the Q&A session. This slide shows the financial highlights of the company with an adjusted EBITDA excluding one-off events of $10 billion, 8% above the last quarter, and a net income of $4 billion. cash generation is still strong with an operational cash flow of 8.5 million dollars and a net cash flow of 4.5 billion dollars i also want to highlight our contributions we approved 11.7 billion uh highs in dividends related to the first quarter of this year and we paid more than 65 billion reais in taxes This growth is the result of Auge's work in a well-implemented strategy, demonstrating Petrobras' financial solidity. Our commitment is clear to keep on generating return for our shareholders, including the Brazilian society, in a responsible and consistent manner. Slide 6 shows the details of the EBITDA and the operational cash flow on the right-hand side. Here I want to highlight the effects of our operational performance on the result with the greater production and volumes traded. The EBITDA was $10.7 billion in the quarter with a growth of 8% compared to the fourth quarter of 2024. As I said, this was driven mainly by the increased oil sales, both in the internal and the external markets. In addition to the increased crack spread of diesel, in terms of OCF on the right-hand side, we had a growth of 4% versus the previous quarter, totaling $8.5 billion. The next slide shows that our net profit was $6 billion, not considering the one-off events. The result was $4 billion. an increase of 31% vis-a-vis the previous quarter. In the table below, you can see the external scenario. Part of the results reflects an increase of 28% of the diesel crack spread, the appreciation of 1% of the brand quarter by quarter, and the appreciation of 7% of the HAL versus the end-of-the-year dollar. moving on to slide number eight in the first quarter of 2025 investments totaled 4.1 billion dollars which represents a reduction of 29 vis-a-vis the last quarter of 2024. this volume of investments corroborates the message that i brought to you on our last webcast when we said that we wouldn't see the level of capex of the first quarter of 2024 in the first quarter of 2025. You can remember that in the last quarter of last year, the capex was higher because of the reduction of this mismatch between the physical and financial advancement of our own units towards Boozer's Fields. The capex of the first quarter of 2025 was lower than that of the fourth quarter of 2024, but it's higher if compared to the capex of the first quarter of last year. There was an increase of 34%, especially as a result of the big investments and the investments in the pre-salt in the Santos Basin, and also the new production systems in the Buzios and Acapulco fields. Slide 9 shows the investments... that were performed. You can see that we're investing more, but also delivering more. These are investments connected to greater physical deliveries that support a production curve and ensure the entry into production of new systems. The acceleration of CapEx towards the end of 2024 allowed us to shorten the physical financial gap by 14 percentage points, reflecting our commitment with the packages with the reduction of delay risks. Some of these results show the evolution of deliveries over the course of the last 12 months. I must highlight that the five rigs that were undergoing constructions in the first quarter of 2024 went from 51 to 76% in terms of physical advancement. In addition to that, we also started the construction of two more rigs reaching seven units per in construction this year. Our higher cap, specifically that of last year, reflects the higher number of owned platforms that we're building, which bring about the benefit of not having affected platforms with an impact on our debt. We also doubled the number of interconnections and wells in one year. It was 16 wells interconnected in the first quarter of 2025 and eight in the same period of last year. It's our best result for the last eight years. We had 27 drill interventions for new wells, a growth of 13% vis-a-vis that of the first quarter of 2024. We are working We're drilling more and interconnecting wells and advancing towards the construction of the new units that will give support to our production curve. These are investment projects that generate value for our shareholders and will translate into profitable growth for the next few years. Slide 10 shows a reconciliation between CapEx competence and the cash CapEx for the first quarter of 2025. You can see that the cash investment of the quarter was impacted by a higher CapEx in the fourth quarter of 2024.

First of all, it's important to clarify that there is a normal lag between measurements and payments. This means that all quarters, we observe a certain level of time lag. This is absolutely normal. However, as there was a large concentration of measurements at the end of the fourth quarter of 2024, especially in December due to our efforts to recover the physical and financial gap of the new systems, a significant portion of the payments were only made in January, and this impacted the cash investment of the first quarter of 2025. To illustrate this atypical effect, we detail the impact of this time lag between measurement and payment in this point graph. In the first quarter of 2025, around $1 billion that came out of our cash for investments were related to the measurements of the fourth quarter of 2024, while $400 million were measured in the first quarter of 2025 and will only come out of cash in the second quarter of 2025, returning to normal. I'd like to take this opportunity to draw your attention to the part relating to IFRS 16. This amount is considered in the CAPEX competence, but in the cash view. It is classified as an outflow of resources used in financing activities since it refers to leases. We now turn to slide 11, which shows the company's debt levels. In the first quarter of 2025, we saw an increase in gross debt, mainly due to the entry of the FPSO Almirante de Mandaré. This is a charter unit that impacts our leasing costs. It's important to emphasize that it has a capacity of 250 barrels a day, and it can ramp up still this year. And it's also important to emphasize here that that remains within the limits defined in the 2025-2029 business plan, with a debt ceiling of $75 billion. In this way, we maintain an efficient and more flexible capital structure. Now let's go to slide 12. As you can see, we remain committed to the distribution of the results generated and the financial sustainability of the company. With gross debt under control within the level established in the business plan and positive results, our board of directors approved the distribution of remuneration to shareholders for the first quarter of 2025 of 11.7 billion reais, equivalent to 0.91 cents per share, which will be paid in two equal installments in August and September. Slide 13 shows the important contribution our activities make in terms of taxes. All in all, 65.7 billion reais were paid in taxes to the union, states, and municipalities, including government participation. In addition, we have earmarked around 66 million reais in voluntary social and environmental investments and sponsorships. There are more than 200 initiatives, including social and environmental projects and cultural, sports and science technology sponsorships. We always make a point of bringing these values to show you how Petrobras' performance materializes in positive impacts for Brazilian society. Here we have our direct and indirect, well, these are direct covenants, but we also have indirect sponsorships. Continuing with the last slides, we've just seen how we performed in the first quarter of 2025, but our attention, and certainly yours too, is on the current moment and how the company is prepared for this lower-bred scenario. The first thing I'd like to remind you is that Petrobras has a strategic plan and a project renewal governance that prepares a company to generate value in adverse price scenarios. Here we see a screenshot of our business plan released last year, in which we talked about our robustness, even in low oil price scenarios. Our E&P projects need to demonstrate a positive NPV in scenarios of up to $45 per barrel. In addition, the prospective break-even brand for our E&P portfolio is, on average, $28 per barrel. Our plan also has a portfolio under evaluation, which is made up of projects subject to the condition that they do not affect the company's capital structure. in addition to proving their return in a robust scenario like all the other projects. As for our shareholder remuneration policy, the formula already ensures dividends compatible with different oil prices without compromising the company's financial sustainability. We therefore have confidence in our strategy and our governance. I emphasize that our long-term strategy has been maintained, but that doesn't mean we aren't fully aware of and attentive to the global scenario of lower prices in our industry. So let's move on to the next slide. We are incorporating cost-cutting actions and adapting the business plan to the new reality. Here on the last slide are some examples of what we're doing. We have three work fronts mainly. First, measures to minimize the effects of inflation by optimizing spending. Here we're basically talking about reducing transversal corporate spending seeking to return to levels of the past. Second, actions aimed at mitigating the impact of lower prices on our free cash flow. Let me give you some examples. Simplifying engineering projects. We're already doing this with the CEAP projects. Reassessment of the scope of recently tendered projects that were not very attractive. Examples include the Revit, Abacora, Marlin-Sue, Marlin-Leste, and Barracuda and Caratinga. Reduced hibernation costs for systems awaiting decommissioning. Reassessment of the cost structure of mature systems such as onshore fields. And finally, in our portfolio, we are going to prioritize projects that generate cash flow in shorter timeframes. Actions on this front include greater rigidity in the inclusion of new projects in the portfolio under implementation, reprioritization of projects under implementation with higher returns in the short and medium term. And we will continue to study appropriate measures to strengthen our resilience. We will keep you informed of the developments and impacts of these actions. I'll end my presentation here, and thank you once again for your attention. I give the floor to Eduardo, who will start the question and answer session. Thank you, everyone. Thank you, Fernando. We will now continue with the question and answer session. The first question was asked by Bruno Amorim from Goldman Sachs. Bruno, over to you. Hi, thank you. Thank you for taking my question. My first question is about capital allocation. If you can tell us a bit more about the potential processes and how that you are buying back that refinery in Bahia, also ethanol, if you have progress there. And as you've shown, most of the company's projects are resilient to oil prices or oil prices being low. So I'd just like to confirm if thus far you don't believe there are any changes necessary to the investment plan. And as a follow-up there, let's imagine a scenario in which oil prices go down even more. Are there specific areas in which you can make adjustments, whether it is by making onshore investments or investments in other areas where returns are lower than in deep waters. So that's a broader question about your capital allocation. Thank you. Thank you, Bruno. Fernando, if you may. Hi, Bruno. So about Rulam, we didn't have any changes. We still follow the same logic. So we can't look at any investments and any M&As, but we need to have compatible returns to our investments. But for a rental loan, we don't see any news. There have not been any advances. Considering capital, and this is important to mention to you, Petrobras will celebrate its 72nd anniversary this year. And we're working on a commodity that has intrinsic volatility. And our 70-year experience has created a structure in which everything is thought out for volatile moments. And it was not different when we built this strategic plan for 2025 to 2029. So that was taken into consideration. Some important things about resilience. Our break-even is $28 per barrel. So we always work with testing and modeling at $45 per barrel. And if it doesn't pass, then the projects are not continued. So this year, or at least thus far, we didn't see any changes to what we had planned with our CapEx. So we've maintained what we want to do without any further changes. Thank you, Fernando. Now, we will receive questions from Caio Ribeiro from Bank of America. Caio? Good afternoon. Thank you. First of all, recently Shell mentioned that it's going to some blocks in the Caribbean where they have some participation with Ecopetrol. So since Petrobras has some presence in Caribbean offshore assets, would you be interested in assessing or even taking over this participation from Shell if Ecopetrol is seeking a new partner for these fields? Secondly, Despite the adjustments to diesel prices made recently, we still see a premium on PPE for diesel of about 6%, especially gasoline, which is close to 10% according to our calculations. So can you give us some color about this decision, this recent decision on changing diesel prices but not gasoline? And do you see a reason for new adjustments? Thank you. Thank you, Caillou. I'll let Sylvia answer the first question, and then Shloss will answer the second question. Hi, good afternoon, Caillou. Yes, Shell is letting go of this asset. And just like this one, we're assessing others in our portfolio. So it's a constant. uh process in which we assess opportunities to see what uh has the best adjustment what provides the best returns and those that are the most significant and we have to say that exploration as our head always says cannot continue indefinitely so Of course, we have to look at our full portfolio, and we are assessing everything. But in Colombia, not only do we have this discovery, we're drilling two wells. One is Buenos Aires, which will hopefully give us good luck, as its name implies. But yes, we are assessing these possibilities. But this is in our global portfolio. Thank you, Sylvia. Schlosser, please. Hi, Caio. Good afternoon. Thank you for that question. Before I talk about your specific points, it's important to highlight that obviously we are trying to see movements from the international market, but the company's strategy doesn't only take into consideration international prices. And now, on May 19, We will celebrate our second year after implementing the new commercial strategy, which considers all of these aspects. To answer your question, Caillou, I think there are two points that we need to clarify here and to try to address this issue of diesel and gasoline. We think each product deserves a specific look. Why am I saying that? Contrary to diesel, which is going down in the international market, gasoline is going up. So inventories will probably be recomposed in the U.S. especially, where the consumption of gasoline will go up, and that pressures international prices. So not only are we looking at this, but we're also seeing our own internal potential in Brazil, especially in our refining capacity for the oil that we produce and our logistics. So in diesel and gasoline, we have a broader perspective. And external volatility is also a factor. There are extremely... strong geopolitical factors putting pressure on prices, prices of oil, spreads for products. They're all very pressured, and they have a high level of volatility. To give you an example, in early April, and this was recent, because of fake news, oil went up $4 in a couple of minutes, and after that was debunked, it went down again. So the market is very volatile, and we're not transferring this volatility to the client as we did in the past. In the past, in previous commercial strategies, you had in some years more than 90 adjustments or readjustments of fuel prices, which ensures some stability. Just to give you a comparison for diesel, We were nearly for 400 days with stable prices. And that has a significant value for society, for our economy in general. And this is within our strategy. We have gasoline adjustments. And as you mentioned, the last one was in February. June 2024. So we have had stable prices for over 300 days while the market is having a lot of volatility. So we're looking at prices every day and we assess our logistics capacity and our infrastructure, and this helps us to keep it balanced. So, I'd just like to underscore that for diesel, with the market parameters and our commercial strategy, we recently had three price reductions. The first quarter was very interesting. We advanced in the Midwest. It grew 9.7%. We captured a very significant part of this increase in the Midwest. And it represented an expansion of about 72% to 74% of the diesel market. So we have been making use of that. But we also saw some effects. The tariff wars... There was another announcement from OPEC to continue their production. And that's why we have three reductions. Just to give you an idea, they all completed 0.45 cents. And our expectation for... is that 0.39 would be reflected as a cost reduction for our consumers. But this also has not happened. In conclusion, we're looking at all of these elements to decide how we're going to apply readjustments and do our commercial strategy in the best way possible. Thank you. We will now hear from Rodolfo Angeli from JPMorgan. Go ahead, sir. Thank you. Good afternoon, everyone. My first question is about costs. The message from the CEO was very interesting. and adjusting the company for lower oil prices. And we've noticed and we've had a discussion with investors, we posted a report on the fact that lifting costs have gone up, so we like to see this focus on cutting costs. My question is, can you give us some more color about what initiatives you are taking? What is the highest potential for cost cutting? And if possible, what is your ambition? What value do you expect to capture? That's my first question. The second question is, with lower price scenarios, we will obviously see companies getting more conservative about their cash use, but We would also like to know if, considering capital allocation, if there's any space for, you know, in this effort of reviewing expenses and so on, if we'll see lower CapEx levels and maybe some extraordinary dividends throughout the year. Thank you.