Hello, everyone. Welcome to Petrobras Webcast with Analysts and Investors about the Second Quarter 2021 Results. It's great to have you join us today. We'd like to inform you that all participants will follow the transmission by listeners. After introduction, a Q&A session will begin. You can send us questions by email at petroinvest@petrobras.com.br. We also inform you that all executives are participating in the event remotely in their individual rooms, respecting all security and safety protocols. Today, we have with us Claudio Mastella, Chief Trading and Logistics Officer, Fernando Borges, Chief Exploration and Production Officer, João Henrique Rittershaussen, Chief Production and Development Officer, Nicolás Simone, Chief Digital Transformation and Innovation Officer, Roberto Ardenghy, Chief Institutional Relations and Sustainability Officer, Rodrigo Araujo, Chief Financial and Investor Relations Officer, Rodrigo Costa, Chief Refining and Natural Gas Officer, and Salvador Dahan, Chief Governance and Compliance Officer.
To initiate, I'll pass to Rodrigo, our CFO. Please, Rodrigo, go ahead.
Thank you, Carla. Thank you. Hello, everyone. It's a great pleasure to be here with you today talking about our Second Quarter of 2021 Results. We had a very impressive quarter with substantial results, and I'm very glad to be here with you today. Thank you. Next slide, please. Starting with our safety metrics, it's very important to report that we' e continuing to comply in the first half of 2021 with our 0.7 level of alert with respect to total recordable injuries per million man-hours. Of course, you always know that we have a zero fatalities ambition, and we unfortunately had one fatality in 2021. We're always working to improve safety. That's an unconditional value for Petrobras, and we're always focused on improving safety, and we're very glad to be below our alert level of 0.7 for 2021. Next, please.
With respect to our emission indicators, it's important to see that, in terms of carbon intensity in our E&P operations, we are significantly below the level that we set as a target for 2021, and we are already below 2020. During the year of 2021, we had a ramp-up of important production units, and we have already reinjected 4.3 million tons of CO2 during this year, which is already the same level of 2019, and we expect to have a higher level when compared to 2020 as well. We continue with our lower carbon footprint and reducing our emissions significantly. When we talk about our carbon intensity in the refining operations, it's important to realize that we had several scheduled stoppages. We had six scheduled stoppages in 2021, and in spite of that, we're still maintaining the same level of 2020.
We believe that we can recover during the second half of 2021 and achieve our goal for the year 2021. We have already announced earlier this year our RefTOP program, which is a very important program focused on improving the energy efficiency of our refining operations. We're therefore highly focused on reducing carbon intensity in our refining operations. Next, please. When we look at the highlights of our operational and financial results for the second quarter of 2021, these results reflect very clearly our commitment with executing our business plan and our discipline focused on our strategy.
We have very important results for this quarter, which is something that the company's been working on since basically 2015, 2016, to manage its portfolio, to have a very resilient portfolio that is resilient to lower prices and also is able to capture the upside of scenarios like the one we're seeing in 2021. We set the company for a $40 Brent price for the year 2021, what we see is significantly above that. We have been able to show in the second quarter of 2021 that our portfolio is capturing all the upside that is related to higher Brent prices. We had a recurring adjusted EBITDA of $11.4 billion and an EBITDA margin of 54%. We had $10.8 billion operating cash flow and our very substantial level of free cash flow as well after our investments of $9.3 billion in the second quarter of 2021.
This is, of course, a result of a very important operational performance with high exports of oil and oil products. We're also diversifying the destinations of our exports, of course, always focused on generating value and trying to find the best consumers for our oil in the international market. This is a very important movement, we see oils like Tupi, Búzios, Itapu being more and more recognized in the international market as well. We had in the second quarter higher margins and higher sales in the domestic market as well from our refining operations, especially diesel and gasoline in the Brazilian market. It's good to highlight that the second quarter is not our highest volume in terms of seasonality. It was a very important result to have such high volumes in the second quarter of 2021.
When we look at our gross debt reduction, we reduced our debt in the second quarter by $7.3 billion, reaching a level that is substantially below the target that we set for 2021 of $67 billion. We are already in $63.7 billion for 2021. Of course, we're highly focused on reaching our $60 billion debt target, which is something that continuing with the space that we have now, we believe that we can reach $60 billion debt target by the end of the year 2021. We also had the support of important cash flows from our portfolio management strategy. We had inflows of $0.3 billion in the first half of the year, in the second quarter, sorry. We also had the follow-on transaction of our remaining shares in BR Distribuidora of $2.2 billion. This cash inflow happened in the beginning of the third quarter in July.
We had a positive impact in our earnings for the second quarter of the reversal of the impairment that we had in BR Distribuidora. The cash inflow actually happened in the third quarter, in the beginning of July. Of course, we had earnings of $7.7 billion in the second quarter of 2021. This was positively impacted by our very substantial operational performance, and we also had a positive impact of foreign exchange gains that are non-cash, but they impacted positively in our second quarter results. With all the debt reduction that we had and with CapEx discipline, the cost discipline that we have, and the portfolio management strategy that we have in place, we've been able to approve and announce anticipated dividend distribution of $6 billion for the second half of 2021. Part of it in August, part of it in December of 2021.
We're very glad to announce that, and of course, we're trying more and more to balance our focus on debt reduction and getting to the BRL 60 billion debt target, but at the same time, being able to add value, to generate value, to reduce our debt with the lowest cost possible for prepayments and for debt reduction. At the same time, being able to balance that with dividend distribution for our shareholders. Next, please. When we look at the external environment, Brent prices were 13% above the first quarter of 2021 in the second quarter, which, of course, as I mentioned before, we were able to capture these additional prices with our portfolio, which is a very cost Brazilian portfolio. When we consider the average exchange rate real dollar for the period, we had a slight reduction of 3%.
On average, we had an important improvement in margins and prices for the second quarter of 2021. As I mentioned before, when we consider the end-of-period exchange rate, we had an appreciation of the Brazilian real during the second quarter of 12%. This, of course, impacted positively our earnings for Q2 2021. It's non-cash. Next slide, please. It's very interesting to see the trajectory of our gross debt over time. If we go back a couple of years, we can see that in 2015, we had a total gross debt of $135 billion. Without considering the leases that only became part of our debt as of January 1st, 2019, when we implemented IFRS 16. It's basically a $90 billion debt reduction from 2015 to 2021, which is a very impressive result.
As I mentioned, we're already below the target that we set for 2021, and we've been more selective in trying to balance value generation and dividend distribution with reaching our gross debt level of $60 billion by the end of 2021. It's very interesting to mention as well that we have a net debt to EBITDA ratio much closer to our peers now. This is, of course, positively impacted by the level of EBITDA that we have. It's important to continue focusing on reducing our total debt as well. It's a very important result of 1.49x .
When we look at the ratio between our cash flow from operations and our interest payments, we already have something around 12, which brings us much closer to our peers, and that's a very important trajectory of reducing our leverage, and therefore making the company more sustainable and more reliable and resilient to challenging scenarios. Next slide, please. When we look at the results in terms of EBITDA for the second quarter, as I mentioned before, we had a very important quarter, very important operational results. The increase in oil products margins and the increase of exports as well, and sales reflected in an increase in our recurring EBITDA of 31% to $11.4 billion in the second quarter of 2021. Of course, we also had a positive impact.
We look at the adjusted EBITDA, we had a positive impact of the decision, the gain that we had related to the exclusion of VAT of ICMS. That is a state-level taxation in Brazil from the calculation of PIS/COFINS . It was a very impressive result in terms of our operational performance for the second quarter. Next, please. Looking at the dynamics of the results by business segment, we can see that our upstream segment captured an upside of 20% from the second quarter when compared to the first quarter. We had higher Brent prices, also an increase in our production. We had a 2.8 million BOE production in the second quarter of 2021, and 70% of that is already represented by oils from the pre-salt layer, which are very resilient in terms of costs and, of course, in terms of emissions as well.
We're very glad to see the successful results of our exploration in the pre-salt area. When we look at the refining, transport, and commercialization segment, even when we look at the performance at replacement costs and excluding the inventory turnover effect, we had a very positive quarter. We basically more than doubled the results from Q1 to Q2 with higher margins and higher volumes in the sale of diesel and gasoline in the domestic markets. We also have a very lower inventory turnover effect when we look at the results of our EBITDA with inventory turnover, but it's still a very important performance for the RTC segment.
Looking at the gas and power segment, we had a 20% increase in the results of Q2 when compared to Q1, with the recovery of the natural gas margins due to higher prices and, of course, due to a higher non-thermal demand, and to the improvement in the Brazilian economy that also improved the levels that we sell of natural gas. Next slide, please. When we look at the cash generation and how we used that cash during the quarter, as I mentioned before, we have a cash flow from our operations of around $10.8 billion and investments of $1.5. We had a free cash flow of $9.3 billion and $0.3 inflows from our portfolio management strategy. That results in $9.6 billion of free cash flow after divestments. We basically used all that free cash flow to pre-pay debt.
When I mentioned the efforts that we're making in terms of liability management, it's also important to include the pension plans that we've had a $0.4 prepayment in Q2 2021, which is, of course, more expensive debt that we have. We're also trying to manage our liabilities in a more structured and consolidated way, looking both at our finance debt and pension liabilities as well. Of course, as I mentioned, the level of free cash flow that we have, way above what we expected for 2021. The successful movement that we have towards achieving the $60 billion debt target is enabling us to anticipate dividends. That's also very important for the company. Next, please. We also focused on improving the profile of our remaining debt. We had a very important transaction in Q2 2021.
We issued $1.5 billion. We had an almost simultaneous tender offer as well. We were able to have the lowest historical yield for our 30-year bond for Petrobras in the history of the company. We also made substantial prepayments and repurchases both in the debt capital market and also with bilateral transactions with the banking market as well. We improved the average maturity of our debt to more than 12.5 years and reduced the cost to 5.9%. This is a very important movement, especially considering the challenges around the energy transition. It's very important for us to be able to continue improving the maturity and reducing the average cost of the remaining debt, alongside with reaching the $60 billion debt target that we have. Also, we had important news from S&P during the third quarter, sorry, in the month of July.
S&P announced an upgrade in our standalone credit rating. This was also very positive and reflects the successful financial recovery of Petrobras. Next, please. In terms of portfolio management, it's important to highlight the transaction involving the remaining shares that we had of BR Distribuidora, and that's a BRL 2.24 billion transaction. As I mentioned before, it was a follow-on transaction in capital markets, the largest transaction in the Brazilian market for 2021. The cash inflow happened in the beginning of July, so it's, of course, supporting our de-leveraging and dividend payment. We also had relevant signings during year 2021, especially in the movements that we're making in terms of opening the natural gas and the refining market. We had the signing of RLAM, an important refining plant. We also had the signing of Gaspetro now in July as well. We had important movements.
Also when we think about E&P operations, we also had signing of transactions involving onshore and shallow water fields that were very substantial during the quarter. During the year, we had a total of BRL 5.7 billion in transactions and already have a cash inflow of BRL 2.8 billion in 2021. Next, please. This is just a general picture of what's happening in all the portfolio management projects that we have, and you can see that the ones that have the yellow box are the ones that have movements in the second quarter. You can see that several processes advanced during the second quarter, both in terms of signing or closing off relevant transactions. We remain very committed to our portfolio management strategy. Next, please. Next, please. Okay. In terms of earnings, we had BRL 7.7 billion of recurring net income for the second quarter of 2021.
As I mentioned before, this is the result of a very important operational performance, and alongside with a positive impact of non-cash foreign exchange gains, given the appreciation of the Brazilian real, the period in Brazilian real, that impacts our exposure in terms of dollar-indexed gross debt. This was a positive impact for the second quarter of 2021. We also have had earnings related to a reversal of impairment in BR Distribuidora, and also the important results of Braskem in the second quarter of 2021. Next, please. Finally, as I mentioned, we approved the anticipated dividend distribution of $6 billion, which is around 3 x the average dividend distribution for the last three years.
It's divided into a first payment in August 2021 and a second one in December 2021, which is a very important movement from the company, reinforcing our commitment to add value to our shareholders and, of course, the Brazilian society as a whole. It's an important movement of balancing our de-leveraging strategy with the remuneration of our shareholders. As I mentioned, we're being more and more selective in terms of the next steps for our de-leveraging so that we can reach the BRL 60 billion debt target by the end of 2021, but generating the highest value possible. That's my last slide. Thank you very much for being here with us today, we move on with Carla to the Q&A session. Thank you.
Thank you, Rodrigo. The first question that we receive comes from Luiz Carvalho with UBS, and it's for Mastella. Mastella, we have been following company pricing policy in a very detailed way for a long time, we still see changes on the approach through the years. In certain times, we saw more frequent adjustments. On others, a gap closer to parity. Now calls our attention that price moves are less frequent and with a higher gap than before. Why do we see different approaches to this subject over time?
Well, Luiz, thank you a lot for your question. That will help me clarify, I hope, some issues on the subject so many times criticized either for being too low or being too high, some way in between that. First, we must say that the alignment of prices with international markets is essential to ensure that the Brazilian market continues to be supplied without risk of shortages by the different suppliers, either distributors, importers, or other producers, in addition to Petrobras. In the first quarter, trying to answer more specifically your question, the increase in international prices and the exchange rate to the dollar required more frequent adjustments to the domestic prices. More recently, in the last months, the variations in international prices and, at the same time, in the exchange rates, have often moved in opposite directions, with a certain compensation between them.
As a result of this, less frequent price adjustments were needed in the second quarter. Well, our prices continue to seek balance with the international market, following changes in the value of products and the exchange rate up and down, trying to avoid, that's important, trying to avoid the transfer to internal prices of the external volatility caused by congeneric events or market movement. The continuing monitoring of the markets by our team remains unchanged, which includes, among other procedures, the daily computation and analysis of the behavior of prices in relation to international prices, competitor prices, and the planning of actions to correct deviations, if necessary. The regular and the uninterrupted presence of other players in the Brazilian market, especially importers, is showing that our prices remain aligned with the international market. Thank you.
Thank you, Mastella. The second question from Luiz Carvalho is for Rodrigo. Rodrigo Araujo. On the Gaspetro divestment, we saw some recent news about the potential remedies that could be imposed by the antitrust body. Did the company have interactions about the potential solutions to move forward with the process prior to the binding phase? What about Braskem? Any news on this potential divestment?
Thank you, Luiz. Thank you for your question. Well, first of all, with respect to the agreement that we have with the Brazilian antitrust body with respect to the opening of the natural gas market, the CADE, our antitrust bodies, is closely following all our movements, and, of course, is following up on all the sale processes that we have. Of course, Gaspetro was a relevant one within this context. It's good also to give you a more general perspective in terms of next steps, because, first of all, we have the state-level governments that have shares in those natural gas distribution companies, so they have preferred rights that can or cannot be exercised. Later on, we still have Mitsui, which is our partner in Gaspetro, which can exercise their right as well.
We have the Brazilian antitrust body analysis that, of course, we expect to be a complex one, given the nature of this natural gas distribution market and the complexity of the transaction. We are highly focused on concluding the transaction, and we are positive that the resolution with the antitrust body will be positive in the end, and we'll be able to conclude the divestment of Gaspetro. With respect to Braskem, of course, we've been following up on the movements of Novonor. That is, of course, a relevant shareholder of Braskem as well. We have already engaged financial advisors to support us in several possible strategies for conclusion of the divestment and to add value for our portfolio. We don't have a definite answer with respect to that at this point.
We are moving forward with potential different paths, and we're focused now on realizing the highest value possible in the divestment of Braskem. Thank you for your question.
Thank you, Rodrigo. The next question comes from Rodolfo Angele with JP Morgan, and it's for Mastella. Mastella, about fuel pricing, how are talks with the government about a possible fund to stabilize price? Has Petrobras been involved in these discussions with the government?
Thank you, Rodolfo. As I said, it is very important that Petrobras continues to practice prices in balance with the competitive markets. This economic reason doesn't apply exclusively to petroleum products. Other commodities traded in Brazilian markets, of course, in any market, such as food, ore, and metals, also have their prices associated with variations in the international market and the exchange rates. While using this economic logic and respecting this, there is naturally an incentive for investments and attraction of new players to Brazil, which contribute, we believe, to the increase in the local offer of products with direct benefits to the consumers. On the other hand, prices out of line with the market value would compromise the industry's investment capacity and interest, which can lead to assets obsolescence and increased risk of shortages.
Likewise, we do actively contribute to discussions within the Ministry of Mines and Energy in Brazil regarding possible programs such as price stabilization fund. Thank you.
Thank you, Mastella. The second question from Rodolfo is to Rodrigo. Rodrigo, about asset sale, please provide an update on refineries in other key assets. You are on mute, Rodrigo.
Sorry. Last time I was invisible, now I was mute. Thank you, Rodolfo, for your question. Well, first of all, as I mentioned during the presentation, we had, of course, signed and closed important transactions during the year 2021. Of course, BR Distribuidora is the most relevant one that happened in the beginning of July. As I mentioned, we are highly focused on concluding the transactions, both in the agreement that we have with CADE for the natural gas market and for the refining market as well. We are, of course, highly focused on closing the transaction regarding RLAM, which was signed in March this year. Looking at the process as a whole, we have REMAN, LUBNOR, and SIX a little bit more advanced, and we are in the negotiations in different stages for REFAP, REGAP, and RNEST.
We have the agreements with CADE in terms of deadlines, we're focused and committed to comply with those deadlines. In terms of other relevant assets, in the presentation, I showed a slide regarding the advancement of other processes. As I mentioned, we had the signing of Gaspetro recently, and we also had other important assets, both in onshore and shallow water E&P assets. We're very glad with the evolution of our portfolio management strategy, and focused on concluding additional transactions for the year 2021. Thank you.
Thank you, Rodrigo. The next question comes from Bruno Montanari with Morgan Stanley, and it's also for you. Regarding the enhanced dividend policy, once the debt targets are met, how should we think about the actual implementation of the policy? Would the higher payments come only at the end of the fiscal year, be it 2021 or 2022, or would management be inclined to start distributions as soon as possible? On that aspect, is there a preference for quarterly, semiannually, or annually dividend distribution?
Thank you. Thank you, Bruno, for your question. Well, first of all, it's important to see that 2021 is, of course, a transition year. It's an important year in terms of our target to reduce gross debt. We expected to reach the BRL 60 billion debt target only in 2022. Of course, given the much more favorable conditions in 2021, we've been able to move much faster. At the current pace, we expect that we may be able to reach the BRL 60 billion debt target closer to the end of the year 2021. Now it's more of a transition time, and as we announced in this quarter, we want to make sure that we can balance our focus on reaching the BRL 60 billion debt target with potential dividend distributions, and we want to do that adding as much value as possible.
We see that the timing of the prepayments is relevant. Of course, we want to get to the $60 billion debt target, but we also want to do that generating more value. Once we reach the $60 billion debt target, of course, that we expect to improve our dividend payments and start applying the 60% dividend policy, 60% of our free cash flow. As I mentioned, 2021 is a transition year, so we will try to balance those two aspects of distributing more dividends and reaching the $60 billion debt target. In terms of a preference with respect to quarterly, semiannual, or annual, we don't have an explicit preference. Of course, we want to balance the financial sustainability of the company, and we will continue to monitor the scenario to see how can we best balance the sustainability of the company with the distribution.
It's important to highlight that we are highly focused on improving dividend payments and complying with our dividend policy. Thank you.
Thank you, Rodrigo. Bruno has another question for you as well. Thinking about energy transition, the company hinted that the upcoming business plan would bring more emphasis on this important topic. When does the company expect to announce the updated plan? Is the mindset increasing the investment level to address energy transition, given that Petrobras is generating very healthy cash flows? Is the mindset to stay at a similar investment range with a different composition between fossil fuels and energy transition projects?
Thank you. Thank you, Bruno, for your question. Well, first with respect to the timing of the business plan, we expect to announce the business plan closer to the end of the year, November or beginning of December. In terms of general picture, we're of course analyzing closely the energy transition subject. Of course, we have to be very careful with the movements that we make, especially considering that we have a very resilient portfolio. We have a portfolio that has significant competitive advantages, both in terms of being resilient to lower oil prices and being environmentally resilient as well. We see that a profitable diversification is a challenge for the industry. We want to make sure that whatever decision we make in terms of diversification is one that is accretive in terms of value and creates value to our shareholders.
This is a very important aspect for us. Of course, we want to keep our commitment with having a BRL 35 price target for approving projects and being environmentally resilient as well. We acknowledge that we have to keep moving towards the ESG agenda, but we want to make movements that are both sustainable and that we are always focused on adding value to our shareholders. Ardenghy, if you want to jump in as well. Thank you.
Yeah, just to add to what Rodrigo just mentioned, that we don't see a competition of projects when we see fossil fuels and energy transition, but rather a synergy. Petrobras has been very focused on that since the early stages of our production in the Santos Basin, the pre-salt. We have been very focused on the reinjection of CO2, for instance, and this create a double advantage. We are not putting in the atmosphere all the CO2 that has been locked in the reservoir for millions of years. Also we are able to improve the recovery factor of the reservoir. The same happens when we study right now the second generation of biofuels, the Green Diesel and the aviation bio-jet.
We are going to be using room that we have in our hydrogen plants, in our refining plants, to foster the use for those plants with that end. Working in our own process, understanding how we can improve our carbon results in terms of oil and other products, is key to the future of this energy transition. With this strategy, we are going to be able to offer to the market in the future, a range of products that are competitive in price, but also low in terms of carbon emission. That is the strategy. We are going to be studying those kind of projects in the upcoming strategic plans that we will announce in the end of the year. Thank you.
Thank you, Ardenghy. The next question is from André Hachem with Itaú BBA, and it's for Fernando. Fernando, with the upcoming transfer of rights auction, would Petrobras have the appetite to be the sole operator on these fields, or is the company actively discussing with partners?
Our strategic planner has a guideline for us to act in partnership. With this approach, we share risk, we share costs, we share investments and benefits. Petrobras is seeking for good partners for the next bid round. Thank you.
Thank you, Fernando. The next question comes from Vicente Falanga with Bradesco, and it's for Mastella. Mastella, did Petrobras incurring losses importing diesel in the quarter? If yes, could you provide us a ballpark estimate on how much?
Thank you for your question, Vicente. Well, I can answer that by repeating that the presence of other agents in Brazilian market, especially fuel importers, indicate that Brazilian prices are in line with international parity. For your reference, our diesel market share decreased in the second quarter from around 87% on the first quarter to 83% on the second quarter, reflecting the increased presence of other suppliers. Worth mentioning that competitive price in Brazil, take into account not only international prices, but also values that are added to them, such as freight costs, and some that are subtracted from, for example, U.S. prices, such as RVO, which is the renewable volume obligations, which is a cost added to the published prices of gasoline, for example, and diesel in U.S. We have to remove that from the price when we compose our import parities in Brazil.
Therefore, domestic prices and their margins cannot be directly perceived as a sum of international prices. I hope to be clear with that. Thank you for the question again.
Thank you, Mastella. The second question from Vicente is for João Henrique. João Henrique, could you please provide updates on the Almirante Barroso FPSO? In what quarter of 2022 are operations expected to start up?
Good afternoon, Vicente, thank you for the question. The FPSO Almirante Barroso is the fifth unit of Búzios field. It is under construction in the Cosco shipyard in China. We already started lifting the modules on April 2001. We are facing some challenges about the COVID-19, but until now, we have scheduled to start the production till the end of 2022. I'd like to address the development of the field, you have already 4 units in operation. You already have Búzios 5, Búzios 6, 7, 8, already hired and under construction. We are on the bidding phase of Búzios 9, the P-80 unit. We, as upstream segment, me and Mr. Fernando Borges, we are working hard in order to reduce the time to start production of all these new units, and have high efficiency units when they start operations.
Búzios field is bringing a lot of value to the company, and we understand that it is very important to speed the first oil date of all the units that are in the construction phase. Thank you for the question.
Thank you, João Henrique. The next question comes from Christian Audi with Santander. He sends a message with congratulations for the results and also with the anticipated payments of dividends. His first question is for Rodrigo, it's about CapEx. Given the very strong cash flow generation and payment of dividends, I was wondering if this may allow you to also adjust CapEx up in order to incorporate new, higher return projects, for example, in exploration and production or any other segments.
Thank you. Thank you, Christian, for your question. Well, as I mentioned before, we are always going to have appetite for projects that are accretive in terms of value. Of course, those projects that are resilient to lower Brent prices and that support the $35 breakeven price that we have for approving projects. We're in the middle of the revision of our business plan. Of course, whenever we have projects that add value to the portfolio and that are resilient, both in terms of lower Brent prices and environmental behavior, especially in terms of emissions, we'll be looking into those projects. Of course, as I mentioned in the Portuguese earnings call as well, we have projects that are able to add value to the remaining portion of our refining portfolio, like GasLub, for example.
We are also focused on that kind of projects that create value, that are connected with our refining plants, especially in the Southeast, and that can enjoy the benefits of the oil and natural gas from the pre-salt. Whenever we have projects that are resilient and value-adding projects, we'll be, of course, always interested in looking at them. Of course, we want to maintain our commitment with a much higher level of dividend payments. This is something that we will always balance, but we want to maintain our 60% of paying dividends that represents 60% of our free cash flow. This is what we're going to be focused on. Thank you for the question.
Thank you, Rodrigo. Christian also has another question for you, it's about use of cash. Given, one, how strong your cash flow generation? Two, that you're almost at BRL 60 billion gross debt target, and three, the large payment of dividends, how would you prioritize your use of cash going forward between debt reduction, CapEx, and dividends?
Thank you. Thank you, Christian. Well, first of all, as I mentioned before, we're highly focused on reaching our $60 billion debt target. We believe that given the current pace, we'll be able to do that in the end of this year, in the end of 2021. Of course, we want to do that in the most value accretive form possible. We want to make sure that our prepayments have the lowest cost possible. We want to balance that going forward so that we can add value to our shareholders and be able to reach the $60 billion debt target at the same time. In terms of CapEx, of course, we have a very robust business plan and a significant level of CapEx for the upcoming years in our 2021, 2025 business plan.
We are currently reviewing the business plan for 2022, 2026, as I mentioned, we are always going to be focused on only adding projects that are resilient to lower prices and that add value to the portfolio. We may see future increases in CapEx, but we don't expect substantial increases, and we do expect that whatever increase in our CapEx is always a very resilient and value-adding project. Again, as I mentioned, we are expecting to improve substantially dividend payments and to, as soon as possible, start paying the 60% of our free cash flow. That is the expected dividend policy. Thank you.
Thank you, Rodrigo. The next question comes from Regis Cardoso, with Credit Suisse, and it's for Fernando and João Henrique. It's about E&P projects. What E&P projects can be included in Petrobras production curve? Can you comment specifically about the status of Júpiter and Sergipe-Alagoas?
Thank you for the question, Regis. In addition to the 13 units that we start the production till to enter 2025, we have started the Búzios 9 and the SEAP, Sergipe Águas Profundas, bidding process in the first half of this year. Búzios 9, P-80, will be widely under the EPC contract. We will use the high-capacity project that belongs to Petrobras. In SEAP, that we will name the P-81, will be highly using the BOT model. We understand that is a very important step in the development of SEAP field. About Júpiter is a field that will have a high volume, but with a big challenge, the CO2 content. We are studying hard the new technology and the project in order to make it feasible to develop this field under our approval scenarios that we need to have resilient projects.
I pass to Fernando to complement about the new project that we are studying in the E&P area.
Regis, thank you for the question. Just to stress a little bit more, the P-81, the Sergipe-Alagoas, is in the market for bid, in the bidding process, that's going to bring production we expect in 2026. As João Henrique said, the Júpiter, we are progressing with the [bottom-making] of the technological challenges with the HISEP. We going to go to the market for the HISEP of Mero 3, in the coming month. It's a key element in having a robust design for Júpiter development. Once we have very big volumes in Júpiter, and we have to manage the high CO2 content, HISEP is a very good way. We can reinject this phase direct from the sea bottom. Considering the next bid round for Atapu and SEAP areas, for sure, there are extra volumes that can encompass new projects for SEAP and for Atapu.
That's going to be released with the bidding process. We have the continuity of the development of Búzios. We have until now, we are contracting the Búzios 9, but the whole production development project for the Búzios going to encompass up to 12 units, and for sure that's going to add new production to our next business plan. I think that we can talk now. For sure you have a great effort in exploration that for sure will bring some more discoveries to be developed in the coming years. Thank you.
Thank you, Fernando. The next question is also from Regis, is to Mastella. Mastella, regarding fuel prices, Petrobras seems to be taking a growing share of gasoline and diesel imports in recent months. Can you explain if this is related to the recent maintenance stoppage in the refining park, or if this could be the result of the company not passing through all the upward volatility in Brent prices to the pump?
Well, thank you, Regis. You are right about the relationship between increased imports and our refineries maintenance. In this first half of 2021, there was a greater amount of scheduled maintenance, mainly due to the restrictions imposed by the pandemic in 2020. You can imagine the difficulty. It was almost impossible to put 2,000, 3,000 people in the site to do the scheduled predicted maintenance in refineries. We have a concentration really in the first half. In this way, to ensure the commitment to our customers, we do import oil products to meet this temporary reduction in production. Just to ensure the regular presence of other agents in the Brazilian market, especially fuel import, indicates again that prices in Brazil are in line with the international part.
Another important point in this decision, of course, is based always, all the time, the import of products is always subject to economic analysis to support them. You're right about the relationship. Thank you.
Thank you, Mastella. The next question is from Lilyanna Yang with HSBC, and it's for Rodrigo. Rodrigo, do you believe it's now a good time to rethink Petrobras' investment strategy?
Thank you. Thank you, Lilyanna, for your question. Well, as I mentioned before, we're in the process of reviewing our business plan, and we expect to announce our 2022/26 business plan closer to the end of the year, end of November, beginning of December. Of course, we don't expect major changes in terms of the overall strategy. We want to continue to be a company that has a significant cost resilience, that is focused on approving projects that are resilient to lower oil prices and are also environmentally resilient as well. Of course, we're looking into projects that can add value to our portfolio, as I mentioned, both in the upstream and related to the integration between the oil from the pre-salt, especially in the southeast, with the remaining portion of the refining portfolio that we have, like GasLub, for example. We don't expect substantial changes.
That energy transition is an important subject, we want to take further steps toward our energy transition strategy. As I mentioned, having a profitable diversification strategy is still a challenge for the industry as a whole. This is what we can share with you for the moment, we expect to announce our business plan closer to the end of the year. Thank you for your question.
Thank you, Rodrigo. The next question comes from Thiago Duarte with BTG Pactual, and it's for you as well. It's about dividends. Analyzing the first half of 2021 profits, earnings would be about BRL 17 billion in 2021. Dividends that were announced yesterday are equivalent to a payout of about 36%, or above the 25% minimum. Can we assume that the company is already anticipating dividends, assuming the formula of 60% payout of the free cash flow?
Thank you for your question, Thiago. As I mentioned before, 2021 is a transition year. As you all know, we expected to reach the $60 billion debt target in 2022. Given the current pace and the more positive scenario, we think that at this pace, we may be able to reach by the end of the year. Our dividend policy gives us enough flexibility to approve extraordinary dividends. As I mentioned, we are trying to balance what we still have to do in terms of debt reduction to reach the $60 billion debt target and adding value for our shareholders through dividend payment. This is not an anticipation of the formula of the 60% of free cash flow. As I mentioned, we are still focused on reaching the $60 billion debt target and prospectively distribute 60% of our free cash flow.
As 2021 is a transition year and we're seeing a much more favorable scenario, and given the prospects that we have, both in terms of earnings and free cash flow, we have been able to announce the anticipated dividends. For the remaining part of 2021, we're going to be focused on balancing value generation for our shareholders and getting to the BRL 60 billion debt target by the end of the year. Thank you for your question.
Thank you, Rodrigo. Now we receive questions from Bruno Amorim with Goldman Sachs, and it's for you as well. Petrobras has been successfully selling non-core assets and becoming a leaner and more efficient company with a much lower leverage and now similar to global peers. What's next? A significant and consistent increase in dividends? How to reconcile this with the need to comply with ESG standards in the future?
Thank you. Thank you for your question, Bruno. Well, when we look at the results of 2020 and 2021, they show how important it is for us to have a leaner and more resilient portfolio. When we think about 2020, we had $40 average price. Our portfolio showed that it was resilient to that level of prices. This was very important. At the same time in 2021, when we have an important upside with higher prices, our portfolio shows that it's also able to capture the additional value that comes from higher prices. This is very important for us. Of course, part of our future strategy is to become a more consistent and higher dividend payment.
You guys already know that we have the 60% of free cash flow dividend policy, and we're studying how to be more consistent as well in terms of paying dividends, even when we have lower Brent prices scenarios. With respect to the ESG agenda, as I mentioned before, we acknowledge that we have to continue moving towards that direction, reducing our emissions. We also want to be conservative in that sense so that we don't destroy value to our shareholders. We want to make sure that the steps that we take, both towards new projects or reducing emissions, are always value accretive and always generate value to our shareholders. This is how we see this now, and as I mentioned, we expect to announce our 2022/26 business plan by the end of the year. Thank you for your question.
Thank you, Rodrigo. We have a question from Barbara Halberstadt with JP Morgan. Will the pace of the bond redemption decelerate from here? Any significant change to capital allocation strategy? It's for you as well, Rodrigo.
Thank you. Thank you for your question, Barbara. No, we don't see substantial changes to the capital allocation strategy. As I've already mentioned, we expect to continue to invest in projects that are resilient to lower prices and are environmentally resilient as well. With respect to the bond redemption, I'll divide your question into two different parts. Of course, at this moment, we're focused on reaching the $60 billion debt target, so we want to be able to both do that and generate value to our shareholders. We're always looking for the cheapest opportunities to reduce our gross debt. Even when we achieve the $60 billion debt target, with the remaining debt that we will still have, we will be focused on doing liability management transactions so that we can improve the maturity and reduce the cost of our debt.
That's also an important action in terms of resilience for the energy transition scenario. Even when we reach the BRL 60 billion debt target, we still want to be able to continue doing either cash neutral or cash negative transactions that reduce the cost and improve the maturity of our gross debt. Thank you for your question.
Thank you, Rodrigo. We have one last question from Badr El Moutawakil with Barclays, and it's for you as well. It's about liability management. Will gross debt reduction still be a priority once you reach the $60 billion mark? Is the idea to keep the $60 billion gross debt target, or will you measure your credit profile by another metric? Will the company continue to do liability management after the $60 billion mark?
Thank you. Thank you for your question, Badr. Well, as I mentioned in the prior question, once we reach the $60 billion debt target, of course, we will continue to do liability management. We want to improve the profile of the remaining debt. That's, of course, going to happen, but always focused on either cash neutral or cash negative transactions that improve the maturity and reduce the cost of our debt. In terms of credit profile, as I mentioned during the presentation, we can see that through several different lenses, we've been able to have a very positive credit profile. We have a very substantial level of cash flows from operations compared to the interest expenses that we have, and that's, of course, very positive for us in terms of resilience.
When we look at the future of our business plan, we can see that with additional units coming online, we see an increase in the level of our leases. That's, of course, something that is important for us, and it's necessary to reduce our finance debt so that we can remain in the $60 billion target after we reach it. We want to be able to make that level sustainable in the long run. Of course, we will continue to monitor. Now, we don't expect to reduce that level substantially. Even in that scenario, we will have to have an important liability management strategy so that we can sustain our $60 billion debt level going forward. Thank you for your question. Well, I think that's the last question that we have, right, Carla?
Yes, that's right.
Well, thank you, everyone, for being with us today. We're very glad to announce the very positive operational and financial results for the second quarter. We're also very glad to announce anticipated dividend distribution that is part of our strategy to be able to deleverage the company and, at the same time, generate value for our shareholders. We're very happy with the results. It's, of course, very relevant work from all the Petrobras team. I want also to thank all the Petrobras team and all the officers for these impressive results. Thank you for being with us today. Have a great day.