Good afternoon and Welcome to Petrobras Webcast. It's an honor and a pleasure to be with you today. Today we'll have the opportunity to participate in discussions with our top management and to optimize our time. We'll initiate with our President Magda's speech, followed by the Q&A session. You can send us questions through the email petroinvest@petrobras.com, and it's already available on our investor relations website: the full detailed plan. This event is being held in Portuguese with simultaneous translation into English. The links to the corresponding languages are on our web page.
With us today, we have Magda Chambriard, Petrobras President, Clarice Coppetti, the CEO for, or the Executive Director for Corporate Affairs, Daniel Correia, the Executive Director of Markets, Fernando Melgarejo, Executive Director of Investor Relations, Mario Spinelli, Executive Director of Compliance, Maurício Tolmasquim, Executive Director of Sustainability and Energy Transition, Renata Baruzzi for Technology and Innovation, Sylvia dos Anjos, Executive Director of Exploration and Production, and William França, Executive Director of Processes and Products. To begin, I will give the floor to Magda Chambriard for her initial statements.
Dear analysts, dear investors, and all of our listeners, good afternoon. It's a huge pleasure to be here to talk about our strategic plan, our business plan for 2025-2029, and our strategic plan 2050. Both designed based on realism and with the commitment to find value for our shareholders, whether they're public or private.
The time is short, and we want to take questions at the end. I'll summarize our main proposals for the generation of value in the long term. But before I do that, I have to remind you that we have a few parallel subjects that overlap with the idea of announcing this strategic plan that show you the level of solidity of these plans and that we're going to be able to deliver on our promises. The first thing that I want to tell you is that our decision yesterday to pay extraordinary dividends, that was a commitment and that was complied with, and that reinforces our theory that Petrobras is not interested in accumulating money from these operations. If we have enough cash and funds to finance our business plan, there is no reason for us to store cash.
It will be redistributed to our investors through dividends, whether they're extraordinary or ordinary. Another aspect that I want to talk about is about the feasibility of the plan. When we look at a 2428 plan, we see a plan that was designed with a lot of perseverance, transparency, and ethics, but in the second quarter of 2024, we noticed that our commitments around CapEx investments were not being 100% fulfilled. We were actually fulfilling it by 30% less, and we reviewed that, and by the end of the second quarter, we adjusted the investment CapEx, and we moved from $18 billion to $14 billion, a $4 billion difference, more or less 30% of the total amount. And we reviewed all that, adjusted our internal procedures, and focused on cross-sectional processes, expedited things, and as of August, we started to deliver 100% of the CapEx.
Since August 2024, we've been complying with all of our guidance, both in terms of investments and oil and gas production. This is what gives you the assurance that what we are presenting here is real, is feasible, and will require a lot of effort and dedication from Petrobras. Obviously, investing is a priority and a policy, and we established the payment of dividends only after we can guarantee the feasibility of the investments provided for in our business plan. That's why when we announced the results for the third quarter, many people asked us, "What about the extraordinary dividends?" We asked people to wait, and they would come along with the announcement of the business plan, which is the basis for the announcement of the extraordinary dividends. We needed to have the guarantee, like Fernando Melgarejo and insisted on. We needed to make sure that the plan was feasible.
Once that is done, there is no reason for us not to pay dividends, whether they're ordinary or extraordinary. Now talking about the plan, our investments amount to $111 billion for this five-year period. For the next five years, we will be investing $111 billion. Out of this total, $77 billion will be for the exploration and production segment, which means that it will continue being the focus of the company. This industry, or this segment, is our priority when it comes to our capital allocation. I have to mention something about these $111 billion. Some may ask if this is not growing as much because the previous plan had $102 billion. Our answer to that is that yes, in comparison to what was planned, but not what was being executed.
If we consider what was being actually executed from the previous year until July this year, we can see that this $111 billion actually represents an increase in investments of about 35%. So it is not small. It's a lot. The number of projects, the number, or the invested value that we are adding to the production process is significant in our company. We're going to see a growing production of oil and gas. We are ramping up our production until 2030 or to 2032. And this will include economic and environmental resilience characterized by very low breakevens. Our projects, on average, have a scenario of $45 per barrel of oil. So these are projects that are extremely solid and profitable that had three different scenarios before them. And the main and most challenging scenario considers oil at $45 per barrel.
These projects have a low carbon footprint, and they're in tune with all of the demands that our planet has to reduce emissions and reduce greenhouse gas emissions as well. This entire portfolio at Petrobras connects very deeply to all of the scenarios in the Paris Agreements. So we are in tune with the Brazilian government's policies for energy transition. In 2025, we expect to have a production of 2.3 million bbl of oil per day. In 2024, we had 2.2. So for next year, we expect to produce 100 barrels of oil per day more. And that is based, of course, on the 2024 average. Between 2027 and 2029, we are going to have 2.5 million bbl a day of oil. If we consider oil-equivalent barrels, it will be 2.8 million bbl . And this is Petrobras's share of the projects that are operated in the company.
We're going to remain in this level from 2027 to 2029, which puts us in the position of being one of the only companies that is ramping up its production in the oil industry, and to pass this value to society and our shareholders, we're going to direct all of our efforts and the company and the board of directors to pursue one thing that we've been able to achieve and that is already factual since August 2024, which is 100% of the planned CapEx being executed and complying to the guidance in our strategic plan. When we talk about ramping up until 2030, we were talking about peak production in 2030. We're working with a non-renewable resource, so this resource will have a peak production level, and then we'll start naturally declining. This natural decline has to be faced in our strategic plan.
It will be done by repositioning reserves, whether they come from exploring the Brazilian equatorial margin, the Pelotas Basin in the south of the country, the offshore regions in the Brazilian southeast, or abroad in South America or in the Atlantic Margin of Africa. You might be asking why. I can answer that even though we expect lower demand for oil, all of our scenarios, including the ones considered in the Paris Agreements, consider that oil will still be very important and extremely relevant until 2050. From now until 2050, the next 25 years at least, Petrobras will focus on exploring and producing oil despite investing in source diversity and investing in renewable energies. In this strategic plan, there was a discussion, and this was an assumption in the plan. We talked about what Petrobras represents for Brazilian society.
I have a figure to share with you. It's extremely interesting. Our conclusion was, and this was measured, that Petrobras generates 31% of all primary energy consumed in Brazil. If we want for Brazil a company that is just as relevant as it is today in 2050, we will need to expand the company as Brazil grows at the same level. Brazil is growing by about 2% a year. By 2050, this means a 60% growth in primary energy consumption. To maintain the same share of 31%, then Petrobras has to grow for the next 25 years by at least 60%. That is our strategic plan. This is what we're addressing. In Brazil, oil is our main exported good. It's the main product that is being exported by Brazil. We export more oil than we do or soybean meal or any agricultural products.
We're now responsible for the biggest exported good in Brazil, which is crude oil. Oil in Brazil means this. Brazil is one of the biggest 10 economies in the world or among the top oil producers and the top oil exporters because of Petrobras and its work. It's also one of the top 10 consumer markets for liquid fuels in the world. This is what we're talking about. We're going to face the challenge of supplying energy for this entire country. As you know, Brazil is the size of a continent. That's why I'm saying that we're going to do it. We're going to do it with oil, with the lowest carbon footprint possible, which is less than half of the global average. We're going to do it by supplying oil byproducts that are increasingly clean, renewable. We have efforts to produce net zero gasoline.
We have efforts to produce co-processed diesel with vegetable oil. We're also using ethanol, SAF, HEFA, and so on. So we're having cleaner and more renewable fuels generating wealth for our investors, whether they are in the government, private investors, and for all of Brazilian society. And that's why we're not scared of saying that if Brazil stopped producing oil through Petrobras, the world would probably be dirtier, would probably have more emissions. This oil would need to be imported and would definitely have twice as much in emissions as we do. Oil byproducts would need to be imported, and they would generate more pollution than we do. Our planet would be more polluted, and Brazil would definitely be much poorer. So this is what Petrobras represents for our country. This is what we represent to Brazilian society.
This is what Petrobras represents for its shareholders, whether they are in the government or private shareholders. Another thing that we'd like to highlight is that all oil matters for us. It doesn't matter if it's a lot or very little oil. Our business is producing oil, and oil matters to us. It gives us profit. We're going to make money with this oil. Oil and gas foster technology development in Brazil. They foster economic and social development in our country. Especially, it's profitable. It's very profitable. This is what we're going to pursue. We believe that in Brazil, we cannot let go of oil and the role it plays in our portfolio. This oil is also generating an income and employment in our country.
Ladies and gentlemen, analysts, investors, at the same time as we're prioritizing oil and gas, we're also getting ready for an energy transition. This is a reality in the present. We're not talking about the future. We're talking about the present. We understand that there are no dichotomies in producing oil while we're going through the energy transition. You can have energy transition while you're still producing oil and gas. Because in practice, we understand that the world cannot depend on fossil fuels and cannot let go of fossil fuels while we're expanding the offer of renewable energies. Oil will foot the bill for the energy transition. So we're aware and we're convinced of that. Our investment plan, $111 million, excuse me, $111 billion, of which 77% is for exploring and producing, will require investments of $16.3 billion into low carbon. So that's 15% of our CapEx.
Our total investment for these five years is 15% in low carbon projects. About one-third of these projects are dedicated to decarbonize our activities. Two-thirds are dedicated to opportunities in wind, solar power, hydrogen, carbon sinking, bioproducts, and especially what is new in this plan. We are referring to ethanol again in this plan. Ethanol is the main competitor against gasoline. We have a unique country in the world because our fleet is flexible. It can use ethanol or gasoline. But the competitor for gasoline earlier this year was more viable than gasoline economically in over 20 states of Brazil. It was recently more viable than gasoline in 15 Brazilian states. Petrobras has been working with ethanol since the 1970s. Recently, Petrobras was removed from the ethanol market, but we are going back. We have the molecule in our DNA.
When we talk about energy transition, this relates to this greener molecule that is a byproduct of animal and plant products. And we're also talking about the electrons that come from wind and solar power plants. So this account is now more balanced. We're focusing on the molecule again, and that's why we're referring back to ethanol. And why are we doing that? In order to distribute liquids, you need to have infrastructure. You need to have tanks and pipes. Petrobras has this in its DNA. For us, electrons are a little bit more difficult. For us, electrons require building bigger infrastructure, but we already have installed infrastructure for a molecule. So that's why we're referring back to ethanol. That's why we're connecting back to this product in order to be a relevant operator to transport ethanol in Brazil.
Everyone, ladies and gentlemen, we're also going to generate value through integration. We are referring to integration in oil refineries. Our understanding is that the Brazilian demand will be more resilient than the global demand. It will demand fossil fuels and increasingly green fuels. We have investments of $15.2 billion for these five years focused on high-quality products and low-carbon products. I have an example of that, which we're very proud of. In 2006, Petrobras started researching ways of producing greener diesel. It's now a reality. It's already produced in five of our refineries. This greener diesel is co-processed with vegetable oil, and it now has 5% vegetable oil content. This diesel is so perfect, and it's patented by Petrobras that it can only be differentiated from the previous one with carbon-14 tests. It's that perfect.
So we are looking at co-processed Diesel R5. We can sell bunkers with 25% renewable content. We're now moving to HEFA, cleaner aviation fuel. We have a myriad of products generated in Petrobras. And I like to say that this is not just the fuel of the future. It's already a fuel of the present. In logistics, we'll invest 3.6 billion bbl. We're going to invest in the construction of cabotage ships and in the expansion of strategic markets, especially the Midwest and the Northern Arc, given the economic growth of these regions. And in investments in refineries, we have 0.9 billion bbl forecast to resume our activities in the fertilizer industry. Many people ask us, "Well, how's Petrobras related to fertilizers?" And I tell them, "Brazil imports 80% of its fertilizers. Natural gas is an absolutely relevant asset to manufacture fertilizers." And we have that.
It's a product that accounts for a large portion of the final price of fertilizers. We have that gas, and we inject it. We have to put gas into our pockets. We want to bring the financial returns from this gas. We want to make profit from it, and we want to use it to expand the market of natural gas that we produce, and we want to monetize. In gas and energy, we invest 2.6 billion bbl with the possibility of building up to two thermal power plants in the Boaventura Energy Complex in Rio de Janeiro State. Depending on the market, it will be one or two over a five-year period, depending on the market and on the demand for energy.
It's also extremely important that we say that all of these investment decisions, whether they're related to the expansion of refineries or related to the expansion of production or the construction of new oil rigs or the trading logistics or energy transition, all of them are strongly grounded on a strong governance and on the certainty that all of these projects need to be profitable for the company, and they have to add value to our business portfolio. We are not here to destroy values. We're here to build values for society and for our investors. And again, whether they're public or private, we have a strong governance that serves as the basis for the development of these projects. We approve investments that are, as I said, lucrative, even in a scenario of robustness.
That is, even if the oil price is extremely low, according to our forecast, and again, I'm talking about $45 per barrel, all of these projects will be equally profitable with no loss of value for our investors. So, ladies and gentlemen, analysts and investors, I want to wrap up by reiterating my certainty that our Petrobras is on the right path to generate sustainable value. I believe that we were able to set a good balance between society's legitimate demand for fossil energies with a lower carbon footprint and the need for us to get prepared to thrive in a world where energy transition intensifies, even though there are doubts about the pace of this transition. Thanks for listening to me. And now I'll give the floor to our CFO, Fernando Melgarejo, who will say a few words about our 2025-2029 business plan. Thank you.
Thank you so much, Magda. Dear analysts, investors, good afternoon. It's great to be back with you. I'll start off by going back to a few important aspects touched upon by President Magda and also go over our plan. I hope to have time for Q&A at the end. As the president said, we are moving forward with lucrative investments, even in a scenario of robustness. It's extremely important that our projects use a positive NPV in more challenging scenarios. Otherwise, they won't be approved. Otherwise, they wouldn't even be approved by our governance. Our internal return rate is of 22% in this plan, with a prospective Brent of only $28 per barrel. And we made an adjustment to the cost here. It used to be $25 in the previous plans. For RTM, we forecast a 14% IRR.
In the gas and low carbon energy segment, our expectation is 10%, which is superior to that of the previous plan, which was 8% due to ethanol businesses, where we expect greater returns. I must emphasize that all of the returns mentioned here are in real dollars with no inflation. In the plan, the CapEx forecast is also more realistic. Our annual CapEx will be around $20 billion per year in a more stable trajectory that's more in line with the execution capacity, both internally and in the supply chain. We're working on more efficient financial management as a value generation driver in the plan. We translated it into greater flexibility to our gross debt, which is now $75 billion. And it would maintain a low leverage even in a scenario of low oil weight, even if we used all of that amount.
It's important to highlight that this does not mean that we are forecasting working with this level of debt or indebtedness of 75. Our forecast points towards an indebtedness of 65 billion bbl throughout the year. The key word for us is flexibility in debt management due to a series of reasons, such as, for instance, the current financial leverage at suboptimal levels and also freight at higher costs. About freight management, it's important to highlight that most of the contracts are associated to assets from the production of oil and gas, which generate cash flow upon acknowledgment of the debt. The concept of flexibility is closely related to financial efficiency.
With greater efficiency to manage the debt, we add value to the business by allowing room for the anticipation of oil rigs, as was the case with the FPSO of Maria Quitéria, which is to say that we anticipated value by the generation of cash flow, which could be a problem if the limitations imposed by the debt cap would not allow for room for the anticipated registration of the amortized debt. We also avoid another potential problem related to anticipations to respect the cap. We could come across a situation that would require the prepayment of debt with the VPL that might not be an NPV that might not be the best economic alternative. The effect of that is that we can work with an even lower minimum cash of 6 billion bbl as opposed to 8 billion bbl as we had before.
We also added value by allowing affreightment, longer affreightment contracts with a proportional increase in the debt, but that can definitely bring about better economic conditions with a longer term. I also want to talk about the ordinary dividends forecast by the plan of $45-$55 billion for the duration of the five-year plan. Our policy is fundamental and this is to say that we always prioritize investment and reinvestment, something that our president also said before, because they will obviously generate more value for shareholders and society since the returns are always greater than the cost of capital. No project is below the capital cost under our governance. That's why our dividend format establishes that payments can only be made after discounting the investments. Given the quality of our assets, Petrobras generates cash flow that is superior to the requirements of the business.
Therefore, this surplus of cash results in a distribution of cash for the shareholders. That's exactly what we did with yesterday's decision about the extraordinary dividends of around 20 million bbl. We understand that all of the quality projects that bring about synergy and value to shareholders and that are in line with our strategies are and will be prioritized in this plan. This is undoubtedly our biggest goal to invest to create value for the shareholder. That is why I echo President Magda's words about the fundamental role of the equatorial margin in this equation. We'll look for profitable opportunities, overcome hurdles, surpass challenges, and reinvest to make sure that Petrobras continues to be a profitable perennial company, maintaining its socio-economic relevance for all Brazilians because Brazil is our biggest energy. Right, Mr. President? Thank you for your attention. I'll give the floor back to Eduardo.
Thank you, Magda and Fernando. We'll now start the Q&A session. I'd like to ask the analysts that will ask questions. So please ask up to one question so that we can have time to answer questions from all of you. The first question comes from Rodolfo from JP Morgan.
Good afternoon. Can you hear me? Thank you. I'd like to thank the executive officers and Magda's presence. We always have the presence of the senior management, but of course, it's great to have her. So thank you for the opportunity, Magda. I have one question, or you asked us to ask one question. So I'll focus on the fact that I think that the plan is extremely coherent and quite aligned with the propositions of the administration concerning the return on investment and return to shareholders.
We saw that in upstream, you displaced some FPSOs basically with no effect on the company's production curve, but there were some delays or postponements, and we also noticed that there's a novelty when it comes to CapEx, which is the fact that it's a number now with more or less 10%, so my question is, why did these delays happen? Should we see that as, no, the normal difficulties of the market where it's hard to sign contracts? So I'd like to hear a take on that.
Thank you for your question, Rodolfo. We've been talking about the difficulties we've been facing when contracting FPSOs, especially for Albacora. Companies have had some challenges finding funds in the market, so we reviewed our contracting strategy, and we are waiting for the green light from our partners.
Our directors are working on that so that we can go back to the market, so with these difficulties contracting SEAP 1, that's why these delays happened. Another thing that suffered a delay was the Búzios 9 project. The biggest problem in Búzios 9 was with the subsea equipment. The market is extremely warmed up, and we had a difficulty contracting the equipment, so that was postponed from 2026 to 2027. That's basically it. In terms of the production curve, it absorbed these variations, and we always outline the curves based on the risk assessment, so it absorbed these postponements, and in 2026, where this postponement occurred from 2026 to 2027, Director Sylvia and her team are looking for complementary projects so that we can supplement production. Concerning the CapEx variation, we'll start doing something that's similar to what we do with the oil curve.
We offer a range of what we think will be feasible, and that's also based on our risk analysis and just like we defined our limits for the second quarter, which was between 13.5 and 14.5, now we're getting the habit of giving you a range that we believe is feasible, so it's a matter of risk assessment and defining what is feasible or not, and of course, when we do the risk assessment, we try to mitigate these risks so that we're able to reach the top of the range.
Thank you, Renata. Next question comes from Pedro Soares. Pedro.
Thank you and good afternoon to everybody. My question is very quick about the capital structure. I think you mentioned that the financial leveraging of the company was at suboptimal levels, but maybe you could talk in greater depth about how you saw that inefficiency and for what levels we could expect an increased leveraging or if there is an optimal target for you? And my question is because if we look at the mid-range of the debt between 55 and 65, that's not too far from the limits of the previous debt. And even though the reference cash flow in the past used to stay way above the $8 billion that were used as a reference.
So my question is about the space you want to create if it's in the range of $2 billion for the reference cash flow or if you intend to open up the space for the payment of extraordinary debts once all of the investment needs of the company are met. Thank you.
Thanks for your question, Pedro. Our reference cash was $6 billion, and it was never reached. It used to stay at a superior level. When we defined it at $6 billion, the cash will also stay above that because the company generates cash flow. So it's cycles. You generate cash, and you accumulate it.
You have the option of paying the debts or not, but we decided that we would act on the payments and to reach a more flat debt of $55 billion with an additional $10 billion as a margin, even though we expect not to use that anymore. But as I told you, it's a matter of cycles. You escalate, and if you need to make a decision, you can reach up to the limit of $6 billion, and the decision may be related to the distribution of dividends or investments in excess of what is outlined in the plans. And what we just did with the decision about the extraordinary dividends, that was the result of a technical analysis and level of confidence and looking at the future cash flow in a very prospective vision, but it still allows us to finance the entire plan.
We'll constantly review these perspectives, but we are constantly working below what we are working with at 15. It used to be 22 or 25 billion, but since we have this flexibility with the debt, we want to be now more in line with our current limits, especially because this new debt cap, if we have a problem, we have enough limits to seek resources in the market.
Thank you. The next question will be asked by Guilherme from Goldman Sachs. Go ahead, Guilherme.
Hi everyone. Thank you for giving me this opportunity. We have a couple of questions on our side about production. We saw that there was an increase in your expected production for next year, and we understand that this is related to some platforms that are going online earlier, like we saw this year.
We'd just like to understand what you included in this guidance considering downtimes, environmental licenses, and operation. At first, it still seems a little conservative when you compare to the production levels we saw in the last few months. Thank you.
Good afternoon. So our forecasted production uses a very robust risk analysis model. So we include not only the platforms going online, but also the inherent risks, variations in the reservoir, natural production decline, programmed downtimes, any disruptive risks. So it's always important to look at this rate and give some safety to our investors. That's why we are so confident in doing this prediction because it only includes new units going online.
Thank you, Sylvia. The next question will be asked by Regis from XP. Go ahead.
Thank you, Eduardo. Thank you to the entire management for giving us some time for questions, and also thank you for presenting the plan. I'd like to focus on your portfolio. I'd like to understand how this portfolio is calculated. Actually, I'd like to understand how it's distributed. So does it include M&A projects, or is it more organic projects? Are they small? Are they very few big ones from this entire pool or portfolio? Do you also have Braskem, ethanol, the ethanol market? So in any case, if you could tell us a bit about your portfolio and what it is made up of and priorities. If you could tell us anything about that, that would be great.
Thank you, Regis. So we continue with the same logic as before. Of course, there are multiple initiatives. It's concentrated in gas, low carbon, and energy. Of course, we started with ethanol right now. That's another driver that we're looking at. We do have some space for an M&A. If anything happens, of course, we don't have any details on that for obvious reasons, but we do have some space for M&As in the five years, and the low carbon, gas, and energy segment is in focus here.
Thank you. The next question will be asked by Vicente from Bradesco. Go ahead, Vicente.
Thank you to the entire Petrobras team. Congratulations, Magda, for your first strategic year. You mentioned, as Edu said, that you intend to have investments with a large ethanol company. So what kind of partner are you looking for? Would it be a company that is already running? And do you prefer sugarcane or corn ethanol?
Thank you for that question. In our plan, as we said, we set that ethanol was mandatory for us as the main competitor for one of our products in the market, which is gasoline. So we decided to do it. We have a mergers and acquisitions area in the company that's dealing with this kind of possibility. We're also speaking to four or five companies. And of course, we can't say what they are and what is the size of that business, but when it comes to Petrobras, it has to be a significant company. You can't have a company this size dealing with very small businesses. So we have to do something big and compatible with Petrobras's size. So we're speaking to some players in the market, and I apologize, but I cannot say who they are.
Thank you, Magda. The next question will be asked by Caio from Bank of America. Go ahead, Caio.
Good afternoon, everyone. Thank you for this opportunity. In the plan you announced, you mentioned that investments upstream include projects that aim to increase gas availability. So my question is, is this reflected in your implemented projects? Have platforms already been contracted, or would this be for projects that are being studied? And how is that affecting your CapEx considering your current portfolio? Thank you.
Our project with gas is a part of our production strategy. So we're always seeking the best value for our products. The pre-salt with high CO2 levels have reinjection as an opportunity to not issue CO2 and favor our reservoirs and increase the recovery rate. So this is a part of our strategy as well. So these decisions are always looking at the best opportunities.
It also includes some of our discussions if we're going to reinject or not so that we can generate the most value. Right now, we also have a project analyzing alternatives called Búzios 12. The intention is not only to produce oil, but also to significantly increase gas production and even produce a gas hub in several areas in Búzios. We're also assessing opportunities, but we are looking at that to ensure that we can supply gas without creating any issues with our product's profitability and so on.
Thank you, Sylvia. The next question will be asked by Rodrigo from Santander. Go ahead.
Good afternoon, Edu, Magda, everyone else from the Petrobras team, and congratulations for your results. We see that your quality is always improving. So my question is about cash use sources. I want to connect to leasing. We saw relevant change in your investment plan and also in your leasing plan. We understand that there was a change in production contracts, and I'd just like to understand the reason behind this. If you could tell us a bit more, that would be great. Thank you.
Rodrigo, thank you for that question. It's a great thing that we can explain to everyone. So this year, we had some adjustments to our methodologies that allocated these values. We allocated some operational flows, some items, and some investment cash. And some of our cash flow went into our investments. So throughout this time, we improved our methodology, and some things are still being used in leasing. I'll give you a very clear example because it's a CapEx-related lease. It's registered as a lease, but it's actually a part of our investments. We have vessels scheduled to receive flexible pipes.
This would be a CapEx investment. But this service, the leasing, used to be listed as an investment cash flow. So out of this entire total, $17 billion just represents the adjustment, and $13 billion is the inflation added to the leasing price.
Thank you, Fernando. The next question will be asked by Erik from Itaú BBA.
Hi, everyone. So on our side, I'd just like to understand some of the underlying assumptions. So when is the company inferring its oil price averages, at crack spread, and its exchange rates, and what led to this change in comparison to the previous year? Thank you.
Thank you, Erik. Fernando, you can answer that.
I don't know if I understood the question. Can you say that again, Erik?
Of course. I'd like to understand the company's timing. I know that the company was inferring some rates for its current plan.
So I'd just like to understand what that is based on, especially the price of oil and the crack rate. Yes, we've been defining that from the beginning of the year. We have a market view. We look at what analysts bring us. So for example, Brent is $60-$92. We're trying to find something that's more in the middle, just like the US dollar prices. And we've been talking about this throughout our entire plan. So we adopted dollars. Brent was above $80, and dollar was about 5 bbl. And this combination is important, Brent versus dollars for the total rates used in the plan.
Thank you. The next question will be asked by Matheus from UBS. Go ahead, Matheus.
Thank you for taking my question. I'd like to praise your communication of this plan. I think it was very clear. My question is about dividends and cash position. I have a question about the possibility of working closer to the minimum cash. But what degree of confidence does the company have that it will reach this minimum throughout this time? And what are the consequences or mitigation initiatives if you get close to this minimum at any point? Also, internally, is your reference cash kept above this minimum? Thank you.
So this is a question for Fernando again.
Okay. So we have a confidence level for the entire plan, but of course, we have a reliability index that is produced yearly. Naturally, in the beginning, this level is much higher, and it goes down according to the uncertainties that happen. In our matrix, 60% and above is the optimal level as long as we have a firm basis for it. And there's also some discretionary things. So if nothing else works, we can stop investing at any point if it hasn't been contracted yet. And that gives us the guarantee that the entire plan is financeable. About the $6 billion, we do intend to work with smaller cash levels than we had before.
Thank you, Fernando. The next question will be asked by Bruno from Morgan Stanley. Go ahead, Bruno.
Good afternoon. Thank you for taking my question. Maybe I'll let Fernando rest for a bit. I'd like to ask about production again, but with a longer-term outlook. When we look at the plan, the curve stops at 3.2 million boe per day. So is that the optimal level for you, considering how you pay back the investments necessary to reach this production level? And what is the optimal level for you when we're talking about reserve replacement over time? Also, if you could invest more, would we see higher production levels than these 3.2 million barrels of oil per day in the next iterations of the strategic plan? So what should happen if you reach this production level that is higher? Is that a possibility? Thank you.
Bruno, we're actually always looking at that. According to our discoveries and our production, we are constantly updating it. And our strategy is maximizing value, and we're always focusing on profitable assets. We currently are attempting to decarbonize our operations, replace our reserves, and increase the production levels for our reservoirs. Reserve replacement is a constant focus of our management here. We have an investment of $7.9 billion in this Workfront for this five-year plan. We have 51 exploration wells to be drilled during this time. And maintenance for this curve is fully aligned to our strategy.
We want to have assets at the highest profitability level, and new discoveries are always considered when wells are drilled. We've mentioned this before. We see a lot of potential for the Equatorial Margin basin. We're going to continue investing strongly in the south and southeast. The Pelotas Basin in the south is receiving investments of about $60 million, so this entire group will result in a production curve, and we're now operating it at about 4 million barrels per day. So with this curve, it would be about 4.5 in operation. So this is what we've been doing in an attempt to get the best results for our investments possible.
Okay. So the next question will be asked by George from Scotiabank. Go ahead, George.
Can you hear us?
Let's move forward to the next question from the next panelist, Gabriel from Citi. Over to you, Gabriel.
Hello, everybody. Thanks for accepting my question. I want to thank you for your time and for the organization for the presentation. Great job. It's very clear what the company's priorities are. And in terms of priorities, I'd like to talk about M&A and the asset portfolio. I think you gave a little bit more of emphasis in petrochemicals. I don't know if I'm mistaken, but that's my impression from the presentation, especially because Braskem's name was mentioned. And this week, we had a few discussions about a possible discussion with the banks. And I'd like to hear from you how you're dealing with the subject internally and what's the company's natural trajectory, considering the possibilities of having a very strong natural gas market in Brazil over the course of the next few years. So how does Braskem fit into this plan? Thank you.
So I'll go forward to Fernando.
Thanks for your question. Concerning the business, we already have an important part of Braskem around 36% of the total, 47% of the ONs, and ideally for us, we should have a relevant operational partner that knows the market and could guide the company in the best possible way, and obviously, with synergies with us, we're not at all interested in surpassing 50% of public capital that would have implications on our balance sheet and also other effects. I'll give the floor to William to talk about the synergies and the importance of petrochemicals in the Petrobras complex.
Thanks for your question. I was in a very big event about refineries in Europe, and the discussions revolved around the fact that the refineries will become increasingly more integrated with petrochemicals and also green petrochemicals, highlighting the fact that companies should try to reinforce their synergies with refining.
And we already have that. We have a very strong synergy between our refining structure and petrochemicals by supplying raw materials and by exchanging products. Raw materials go to Rio de Janeiro to Braskem, and they come back as petrochemicals that are then treated. So we already have this integration. And with Braskem, we already own a share of their capital. So we are also owners, as it were. And in addition to Braskem, we have very strong possibilities when it comes to gas. And increasing with a greater production of C2 plus ethane, I've been able to work with polyethylene and other important products such as acetic acid. And Brazil basically imports this acid, which is fundamental for many activities. So we have a lot of potential to look for greater synergies with Braskem.
And that's a natural path forward, especially for the use of naphtha. And also a few possibilities for ethane available in the pre-salt gas.
Thanks, Fernando and William. Now let's take the last question from HSBC Lily Yang. Over to you.
Thank you. Thank you for the presentation and the transparency of the investment plan. My question is, the projected cash flow generation for 2025 is based on a Brent curve of $83 of refining spread at $14 or $22 per barrel. And hopefully, it will come to life. But they sound a bit too optimistic because the recent data are actually higher than the values. Could we talk about the assumptions of 2026, 2027, and 2028 that are not in the plan and put them in the context of they are becoming actual?
My implicit question is, if your projected cash flow generation for 2025 is not actualized, what would your dividend distribution look like? What's your flexibility in terms of postponing the investments or increasing your level of indebtedness beyond your current guidelines? Thank you.
Thank you, Lily, Fernando.
In the first years of the plan, our level of confidence is greater than 85%. The first two years are the years with the greatest level of confidence of the entire plan. We can guarantee that this will be an actual flow. In any case, we always work with three scenarios. In the worst-case scenario, we are working with a Brent at $45. If not, the project is discarded, and we move to a different project.
In order for us to have a problem, we would need to have a Brent below $45 in these two years. Still, we have the flexibility of having a greater debt. Even though we're locking it at $65 billion, we have a limit of $75, an additional $10 billion that we would be able to use. In addition to that, we see a cash flow surplus of between $5 and $10 billion that can be used for extraordinary dividends, but they can also be used for new investments. If something is not actualized, you can also use this amount to cover cash flow needs or investment needs, especially because we'll always focus on investments if you have to prioritize that as opposed to dividends. If you have to prioritize, it will be investments as long as the NPV is positive.
In terms of the ordinary ones, the investments will also be guaranteed, and there would be a reduction in the ordinary dividends.
Thanks, Fernando. We're now closing the Q&A session. I'd like to thank you on behalf of the entire team for the comments, the feedback, the contributions that you, analysts and shareholders, provide to us throughout the year. We always listen to you, and that contributes to us having increasingly better materials. I'd also like to reinforce that it's very important for the sell-side analysts to propagate this and to work closely with our teams. Thank you. I also want to thank you all for your participation. We had thousands of people connected to this webcast, and if there's any additional questions, we'll be together over the course of the next few weeks and months to discuss and clarify the details of the plan.
With that, I will give the floor to President Magda for some closing remarks.
As you could see, the Petrobras business plan and the 2050 strategic plan was widely discussed by the company. And it required the involvement of many different departments and staff members who worked tirelessly to deliver a consistent and feasible strategic and business plan with good returns for shareholders and society in general. And we believe that this plan is highly feasible. In its more optimistic scenarios, we are now bringing more platforms, and 2025 will see the completion of Maria Quitéria and Almirante Tamandaré FPSOs. Just to give you an idea of an approximate amount, when we anticipate an FPSO like Maria Quitéria in six by six months, we're talking about something in the range of $1 billion of additional NPV. And with Almirante Tamandaré, we're talking about an additional $1 billion.
So by moving forward, the completion times of these two platforms, that in itself produces an approximate NPV of around $3 billion, which is what we're delivering to you. And this is what's reflected here. This is Petrobras's commitment. This is my commitment and the commitment of our entire staff to make these investments with efficiency and timeliness. And we're working for this to happen. And you can rest assured that Petrobras will not let down its shareholders and Brazilian society. Thank you so much. And if ever you have any questions, please feel free to contact us. It will be a pleasure. Thank you.
Thank you, Magda. We'll make this recording available. Thank you, and have a great weekend. See you next time.