Good afternoon, ladies and gentlemen. Welcome to Petrobras conference call and Webcast with analysts and investors for the presentation of information relative to the results of the second quarter of 2017. We would like to inform you that participants will be in listen-only mode with simultaneous translation into English. After the presentation, we will have a question-and-answer session, when further instructions will be provided. [Operator Instructions] Today with us we have; Mr. Ivan de Souza Monteiro, CFO and Investor Relations Officer; Ms. Solange da Silva Guedes, Chief Exploration and Production Officer; Mr. Roberto Moro, Development and Technology Director; Mr. Hugo Repsold Junior, Chief Human Resources; Mr. Joao Adalberto Elek Junior, Chief Governance and Compliance Executive Officer; Mr. Nelson Luiz Costa Silva, Chief Strategy, Organization and Management System Officer; Mr. [indiscernible], Industrial Executive Officer representing the Chief Refining and Natural Gas Officer; and other executives of the Company. I would like to remind you that this meeting is being recorded and please be mindful of Slide 2, which contains a notice to shareholders and investors. The words believe, expect, and similar ones related to projections and targets are mere assumptions based on the expectations of the Company management regarding the future of Petrobras. In order to start, we will listen to the Executive Investor Relations Manager, Ms. Isabela Carneiro da Rocha, who will make a presentation about the results of the second quarter 2017. Afterwards, we will have a question-and-answer session. Ms. Rocha, you may begin.

Good afternoon. I would like to thank you for joining us in this conference call to discuss Petrobras second quarter 2017 results. Please go to Slide 3 where we highlight the main achievements for the quarter. We'll start as always with safety results, with an important reduction in TRI, total recordable injury per million man hours, which reached 1.11 in the second quarter. Net income totaled R$4.8 billion in the first six months of 2017, reversing the loss of the first half of 2016. Operating income was R$29.3 billion, up 91% from first half 2016. Adjusted EBITDA increased 6% to R$44.3 billion year to date, 33% margin. In the quarter, the result was R$19.1 billion with a 29% adjusted EBITDA margin. Free cash flow remained positive with a nice month in a row totalling R$9.4 billion in the quarter and R$22.7 billion year to date. Net debt decreased both in Reais and dollars. Liability management enabled an increase of average duration of debt to 7.88 years and a reduction of the average cost of debt of 6.1%. Net debt/adjusted EBITDA ratio continued the downward trend and is now at 3.23. On Slide 4, we see our operating performance. Production increased to 2.79 million barrels of oil equivalent per day, of which 2.67 million in Brazil, up 6% from first half of 2016. In June, we had a record in operated pre-salt production of 1.686 million barrels of oil equivalent per day. There was a 7% decline in the sale of oil products due to a market retraction for these products. We maintained a net exporting position with a balance of 401,000 bpd. Oil exports reached 548,000 barrels per day, with higher prices. In terms of efficiency in costs, we reduced operating costs, manageable operating expenses by 12%, and SG&A expenses…

Now we will have the question-and-answer session. Each participant will be allowed to question and could you please ask a question in a clear manner and consecutively, so that the executives may answer them consecutively as well. Please do not use the speakerphone for your questions. Questions in English will be heard by all participants in the original language and answered in Portuguese by the executives with simultaneous translation. [Operator Instructions]

[Operator Instructions] Our first question comes from Andre Natal, Credit Suisse.

I have a few questions, the first one about SG&A. When we compare to what happened in the first quarter, we see that G&A had a drop, but selling expenses went up about R$1.5 billion, and we see that included there we have the payment of the NTS tariff. But I would like to understand why R$1.5 billion was the amount, because we thought it would be a lower tariff for this year, around R$1 billion for the whole year. So this R$1.5 billion for one quarter seems a little bit too much and I would like to know if this increase is exclusively related to NTS or whether you have another large item that could explain the difference. And the second question, it seemed to us that R$1.5 billion was concentrated in energy. So, maybe this suggests – I would like to know whether it is related, all of that to NTS or not. And the other one is also related to cost regarding lifting. You have a very interesting achievement in pre-salt below US$7, and on the other hand on the quarter we saw lifting go up a little in spite of production that was quite similar to the previous quarter, that is to say the first quarter of this year. So, what explains this increase of the lifting cost? Is it because of a higher participation of the Campos Basin in this quarter vis-a-vis the first one and which are the major items that explain the increase of the lifting cost, if the pre-salt is lower? And the third question about CapEx, we saw that year-to-date CapEx for the first half, if we annualize, it is quite lower than the guidance that you have just reaffirmed in this presentation, about R$17 billion for the year. So we would like to understand if this is below physically and financially, but you expect this to go up over the next half year or does it have to do with efficiency and what kind of dynamics is coming into play in CapEx so that this is lower, and although you reaffirmed the R$17 billion in your presentation today?

This is Ivan. We talked about selling expenses and it is concentrated in energy and the payment of the NTS tariff. There could be some other items and then afterwards the other officers will answer, but the major or the bulk is the payment of the NTS tariff. About SG&A, Nelson Silva will answer, and I would like to ask Repsold to talk about the program of employee severance, and about the part related to investment Solange will answer.

Good afternoon. What we see here is a result of the effort that we have been carrying out. It has to do with the evolution process and the ZBB methodology. And this also means that we have been reducing our expenditures and it has to do also with our plan for voluntary separation, and other efforts that we have been making to reduce admin-related expenses, mainly the application of ZBB in the [indiscernible] that generate value and afterwards we benchmark to ourselves in order to do this again, which I'd like to.

We had two programs of voluntary separation with a major reduction in our headcount, about 18% compared to last year. But overall, now that the program have already ended and we have just a little bit of the voluntary separation assessment left over, but we have 16,300 employees of the 19,400 that had enrolled initially in the two programs. So, 16,300, 2,700 gave up and some were suspended, and the balance was very positive according to our expectations and giving a major contribution to this reduction.

These 16,300, how many were in the second program?

9,200, 9,181 and some were suspended. Altogether, it will be 9,300.

First, you were asking about the costs vis-a-vis the slight increase that we had in the second quarter of 2017, and I think it has already been perceived, that is to say the many benefits for the Company as a whole coming from the higher production on the pre-salt layer impacting in several ways upstream and downstream of the Company. And one of the positive impacts is the cost. As we announced, we are operating below US$7 per barrel and in the second quarter there was an increase in maintenance such that we had more expenses, 4% higher in fact, in maintenance cost. And we also had a slight variation in production, 1%. And this led us to have this small amount related to other aspects. And also, you were asking a question about CapEx. You were asking about the dynamics that come into play once we have restated the figure that we had stated in the last call, and in fact we do have a perspective. However, as it may not materialize, we are going to seek very intensively to recover this level of advancement by the end of this year, and we have already seen some optimization that I would say that there are less than 1% of this amount has to do with optimizations that we are doing in terms of the allocation of the CapEx, and that could be included in our forecast. Nevertheless, we are maintaining these amounts because we are making our best endeavors in order to recover the allocation of these investments over the year of 2017. Thank you very much.

Next question, Vicente Falanga Neto, Bank of America Merrill Lynch.

I had two questions. The first one is about the remarks of Pedro Parente saying that important sales of assets would be done in the second half. So, could you tell us what are the assets that Petrobras believe will be sold by the end of the year? And the second question about the sale of assets, [indiscernible] made a communication saying that it was reviewing the shareholders agreement to divest [indiscernible]. So I would like to know if in your frame of mind would it make sense to reunite the cost of action and lifting abroad as has been published in the newspapers consistently?

Regarding the second question, the discussion about the review of the shareholders agreement, this was published in the material [indiscernible] and it was available, it is available. And the shareholders talked about this review for [indiscernible] and this is the only public information that we can mention so far. Regarding the divestment program, our expectation is that effectively during the second half we'll see a more intensive activity there, and I can say that besides the usual market information that we have already disclosed to the market, such as the intention of having the BR Distribuidora IPO, the intention of selling the gas pipeline of the Northeast region and the other assets that were mentioned as not the core business of the Company, like biofuels, et cetera, I think that the whole regulatory operation in the segment of biogas aiming at the higher competitiveness in the next auction is highly beneficial for Petrobras and as soon as these assets are ready according to the new system together with the Court of Accounts, they will be brought to the market according to what is established by this system. And we expect as this year [indiscernible] we expect a higher intensity in this area in the second half of the year.

Thank you, Ivan.

Rodolfo Angele, JP Morgan.

I have two questions. Could you please give us some more color about the new discoveries that were announced yesterday, and giving us more details regarding return and the economics involved, as I would like to know if you have an update about the model of sales?

Rodolfo, we did not understand your second question.

Do you have any news about the potential sales model of the [GSF] [ph] assets?

Yes, we were very happy when we were able to make that announcements and I think it's very easy for you to understand and perceive how much value this kind of discovery brings to us, because the exploration area of Petrobras is in an area that's already in production. So we have in the Campos Basin, we have a reality of platforms, large platforms, and we have room there to receive more production. And when we discovered in the Marlim Sul field a discovery that was made in July, a field that we will be testing in October with 45 meters depth, this is something that is most welcome, and we have already had the effects of this kind of experience in Marlim Leste, Marlim because you connect these discoveries to an already existing infrastructure, so you have more room to have more production. And sometimes it is less productive than what we have – so it is basically because of the high productivity of this discovery. So we had a [indiscernible] also about a relevant discovery that we had in the Albacora field in the Campos Basin and that is called the furlough area, and we are about to finish the exploratory work in order to determine these fields and we are expecting to have EWT in 2019. And my interest yesterday when I made this general evaluation about the performance of the pre-salt in the Campos Basin from [indiscernible], it is exactly because we have very competitive areas. So they end up bringing this important result to the Company, which is the lifting cost below $7 per barrel. And even if we achieve lower volumes than the Santos Basin, they are still very competitive because they will be using an already depreciated investment structure. We objectively regarding Marlim Sul or Marlim South, we do not have yet a date because we still have to do the appraisal, but 45 meters gives us already a lot of information and share that we have something interesting there. [Indiscernible] will be talking about the investments in the refining.

We are still discussing the ideal model of how the development of the business model would be for the refining area. So, we do not have any news yet to convey to you.

Next question, Luiz Carvalho, UBS.

I have two quick questions. So talking about divestment, as some time has already elapsed and we have less time to reach the target, do you have a Plan B or something that you could do in order to get to your deleveraging target? And the second question is the following. Looking at import and talking with some companies, trading companies that import oil, they say that they are investing in capacity and that from now on it's going to be [indiscernible]. So, in your mind how do you see the import situation and is there room for you to further reduce in order to use more the capacity of your oil refineries?

Our target is maintained at R$21 billion for 2017-2018, and I would like to remind you that we are already publishing the new teasers and we are already proceeding according to the Court of Accounts of the unit. So, you may expect more intensity in this activity in the second half. It is correct that we have less time now but it is also correct that we already have the landing curve of the first partnerships done. So we are going to use the learning that we have achieved in the next processes. All the knowledge about the due diligence that we did before, we can see very clearly where investors will be focusing in terms of concerns regarding assets or companies that they might be acquiring, but the sense of urgency remains. Regarding Plan B, we monitor our risks and I would like to remind you that in the new business plan we have been emphasizing that it is not only about performance, it's about everything that risks the achievement of the target. But right now I want to confirm that the Company remains seeking R$21 billion as a target for 2017-2018 in the partnership and investment program. Regarding infrastructure, for import I would like to give the floor to Jorge.

Regarding import, year-over-year should decline, and this is basically due to the domestic market and due to inputs. Imports have increased. In July, the Company adopted a new policy, a more agile policy. Our work is being developed in terms of the main factors. One of them is predictability. We established mechanisms to identify import firms, and in addition through predictability we want to have agility. The new policy, more frequent adjustments will also rise by our marketing department and that gives us more agility. And we also have one-time actions. And the ultimate objective of the Company is to have a global in terms of the first [indiscernible] FUT, the quality of FUT that we are losing. We still have very high level of conversion units converting heavy products and more added-value products. And as was mentioned before, the increase of the percentage of domestic oil that gives us more profitability for our assets because of the sulfur content, because of the profile of the crude oil, and it also gives us a logistic advantage because we can process the oil for export. So this would be kind of an overview of the market.

And could you explain what FUT is?

FUT is the use of the refineries that was mentioned in the question. It has to do with the distillation of feedstock, that's just distillation. So the most relevant factor that we follow is the factor of utilization at conversion, because that's where we convert. And that's what gives us the difference of quality in FUT, so we can have a lower quality FUT.

Thank you very much. A quick follow-up question, Ivan, could you give us some color in terms of the level of interest of potential buyers in your recent talks with them?

I can speak about this, generally speaking, not only about the assets that were made available but some specific ones that are raising more interest, because we are divesting from non-core activities for the Company. And we have seen a lot of interest. We can clearly see the profile of investors that these are investors that know Brazil, have an interest in making investments to remain in the country for the long run. These are not opportunistic investors. These are not investors that are concerned about what's going to happen with the Brazilian economy in the next 6 to 12 months, but they are thinking about a time frame of 15 to 20 years.

Okay, thank you very much.

Our next question comes from Bruno Montanari with Morgan Stanley.

I have two questions, two for Solange. I'd like to go back to the lifting cost, I'd like to understand what explains this lifting cost below $7 per barrel. Is it related to efficiency or renegotiation with service providers or a little bit of everything? I'd like to listen to mechanics of that evolution. And do you think there is more reduction to come or do you believe that this is a sustainable level for the Company? And I want to understand, this is a cost that applies to all fields, Lula and others, or is it specific to a certain field? My second question has to do with potential changes in the regulatory environment, particularly related to local content. Assuming that you can migrate to a new regime, even in the old concessions, will the Company chose this to go that way or will you get away with possible conformities to local content? And then the third question to Ivan, your efforts to reduce debt has shown results. Now we see that we are below R$90 billion. But looking at the makeup of the debt, the Company has a lot of cash debt. So, I'd like to know what is your opinion about the cash because the cash call can be a little [indiscernible], does it make sense to expect a reduction in gross debt along the third quarter?

Thank you, Bruno. Solange will answer your first two questions.

This is Solange. For the first question, you asked me to give you a general assessment of the nature of our cost reduction. Here is what I can tell you. First, we have some units that are performing really well in the pre-salt pole of the Campos Basin notably. I'll draw your attention to our P-66 platform. It has been operating with a 97% operating efficiency from day one, and this is an important value, an important mark, and we want to implement that efficiency mark for all units in the Campos Basin. It is a very important number for our area, development of production, and we are really paying attention to this number. Now overall, you asked whether this would be a general or a one-time [indiscernible]. We are working intensely on our offshore logistics costs and this year we are doing – we are working hard and this is yielding good results to the pre-salt, but it is also yielding structurally in the upstream segment. In other words, we are looking to establish new relationships in the way we work with our logistics costs in terms of cargo, personnel, et cetera. And all of this has been yielding generalized effects in our offshore activity notably. Now moving to your second point, you asked about local content and how the Company and how ANP is dealing with this in the Company. So, I'd like to underscore this, and I have mentioned this before, I think that it's a very positive and smart approach by the Brazilian National Petroleum Agency in applying this from the seventh bidding round forward, because they are simplifying the proceeding and quite a lot. That's very positive because it makes it attractive to migrate. In our best assessment, we haven't come to a final decision yet. Within our best assessment, it would be positive to migrate all of the content. [Waivers] [ph] need to be agreed on and this will entail a lot of effort that might not necessarily give us better results than migrating. So, Petrobras trend is to migrate and to acknowledge that this was a very positive decision by ANP.

Bruno, to answer your question about cash, I think that we can divide clearly the positioning of the Company from the beginning of 2015 and now. If in 2015 we needed to have high liquidity to deal with a lot of investment grade of the Company in the country and given that difficulty that the Company had back then and to disclose the balance sheet until we could develop a methodology that could capture Operation Car Wash effect and something that would be accepted by the regulators, this was a great concern back then. We didn't have a balance sheet. We lost investment grade and you knew that this can make liquidity more difficult for the Company. So this was the main reason why we maintained very high liquidity back then. Now let's come back to today. We are at R$24 billion to R$25 billion for our liquidity, because we are still dealing with a challenging economic environment in Brazil. There are some difficulties, additional difficulties regarding the geopolitical risk, involving North Korea issues, and also because the commodity, the Brent price has been very volatile. But adding to all that, we continue with discussions with the U.S. We don't know exactly how this will be solved. That was an appellate court recent decision. But this is the main driver because the big good news is that all of this traditional fundability sources for the Company are available. We have announced a number of operations with commercial banks in different geographies, showing that the Company now has all of the components in place to better manage our liability. We have commercial banks, development banks on board. Yesterday in the press conference I mentioned the delight that perhaps in the next 180 days we have the possibility of going back to operating with BNDES, the Brazilian Development Bank, just like the operations we have with the Chinese Development Bank. So these are different reasons leading to the current liquidity. But in our internal discussions with the Company's risk committee, as soon as we understand that the risks are at adequate level, we'll see a reduction in the gross debt of the Company and the use of cash.

Excellent. This was very clear. Thank you.

Our next question from Christian Audi with Santander.

My first question has to do with your pricing policy. You have now implemented this new policy very efficiently. Have you seen any improvement of Petrobras domestic market share vis-a-vis imported product? What is your target of refineries utilization, what would be your target? And finally, Ivan, is there any way to shield this new pricing policy, for example including it in the byelaws of the Company just to avoid few other changes that might happen eventually? And my last question, it's another topic, the transfer of rights, I know that you are very dedicated to this process. Could you give us an update on it, particularly regarding the potential of Petro getting paid in barrels? Would you need changes in the law in case Petrobras wants to monetize these barrels as quickly as possible? Thank you very much.

You asked about the pricing policy and the utilization factor versus market share. So I'll give this to [indiscernible] and then I'll speak about shielding the byelaws, and Solange will answer your fourth and final question.

The pricing policy was implemented in the beginning of July. It is ongoing and the expectation to have greater agility in a closer follow-up of variations, of brand enterprise adjustments, price is domestically aligned with international markets. A lot of this will be seen later on because we have imports that have been made and the expectation is that the effects will be seen more in the future. It is important to understand that the FUT, the utilization factor of our refineries is not a goal for the Company, not a target for the Company. Not even reducing imports is understood or imports are seen as negative, exactly because it creates a competitive market. So I would underscore what was said before. First, FUT is aligned between the first and the second FUT. Again, the factor of utilization of the facilities and the utilization factor of converting units which are the most profitable ones, they remain quite high compared to periods where we had very high processed feedstock. And similar to what we did this week, together with [indiscernible], we joined the compliance program from B3 for second companies. And so, you can expect that we'll do everything to shield the policies that will ensure profitability return to shareholders and creation of value to shareholders or to anyone who buys securities of Petrobras. So, all opportunities that present themselves to the Company, the Company is taking. The company said that the future IPO of BR Distribuidora, the company will be a new company [indiscernible]. Also joining the compliance program for second companies, we want to be in level two as well in B3. So you can expect all and every initiative. It might include changing the byelaws. It will be submitted to internal governance, the executives, management and the Board of Directors and their shareholders agreement. So this is the goal of our management, as has been for a while, i.e., to adopt practices and mechanisms that will, using your expression, shield the company for inadequate interventions that can reduce its profitability. Now I'll turn the floor to Director Solange.

Christian, there is no new fact to disclose to the market about those renegotiations. Now what we see is a [indiscernible] appraisal or a very positive evaluation both at Petrobras and the agency that represents that contract, in the sense of they are gaining this renegotiation and there are advantages for all parties involved, provided we do this carefully and diligently vis-a-vis the opportunities that it brings. Nevertheless, we have no more information to share with you now.

So, just to finalize, the renegotiations with ANP, it is already underway or we are not sitting with them yet?

No, we are not yet beginning this renegotiation.

Because it seems to me that the alignment that I see between the government and [Pet] [ph], it seems to me to be one of the best that we have seen in the last few years. So I'm just curious about why the process is not going forward because this is being discussed since the beginning of this year?

Yes, I do agree with you. It's also our perception, and in fact it's a very positive alignment among many other players under the institution, not only these two. And this all creates a very positive agenda overall. As Ivan has already said that some topics of this positive agenda bring about a very bullish frame of mind to the industry. But however, this is the reason why we have a very positive expectation, because of what you have just described. But there are other things involved and we have to be very careful so that we may really have all the elements in our hand before we start the process.

Thank you, Solange and Ivan.

Andre Hachem, Itau BBA.

My first question has to do with the debt amortization schedule. Have you already reached a comfortable level for 2018 and 2019, and could you please tell me about the outlook for new funding, and what about the development of pre-salt? There is a lot of gas associated that should be marketed for the production. In the case gas is not economically interesting, what could happen with that?

The evaluation of all of us, we are very comfortable for 2018, but as 2018 is an election year, we believe there are still opportunities and you should expect any announcement from the Company in the next few weeks with the same profile. That is to say, we have been trying to get the shorter maturities and prepay some instalments and extend to between five and seven years what remains or the outstanding debt, of the principal that is to say, and regarding commercial bank. So, for 2018 and 2019, mainly 2018, due to the fact that it is an election year in Brazil, you should see some announcement regarding funding. Petrobras had a major funding operation with lower cost than the cost that it paid in 2014. So, we have no plan regarding funding from [indiscernible] the market for this year. We are right now [indiscernible] fixed income in the domestic capital market as we are very happy with that. So, these are the operations you could expect from our part.

Your question is very interesting because it gives you the opportunity to mention a point that is very interesting for all of you who evaluate the pre-salt. The bigger presence of pre-salt in the Company has many positive consequences, and as you said, it produces our unit cost, unit lifting cost, it delivers more value to the segment due to the reduction in the spread, and [indiscernible] has already talked about the reduction in logistics costs in our downstream segment, R$300 that are processed feedstock, and we have already mentioned in our call about the more noble oil products that increases the profitability and the higher participation of gas. We had an increase in the thermoelectric demand of 2017 and we have a consistent and growing presence of gas in our portfolio and this delivers a higher margin for the Petrobras system as a whole, and this is something that we shared with you yesterday. So overall, the pre-salt gas as well as the pre-salt liquid is much welcome, because it is having a very important impact on the value chain of the Company, and this is where it's for gas as well. And we do have some specific cases in which due to the excessive presence of CO2, the economic evaluation shows that in specific cases we could have the reversion, reinjection of the gas with a high percentage of CO2, because it also could bring about an even more positive effect. This is not the general rule. The general rule is that we are having incrementally gradually a very positive impact of the pre-salt in the value chain of the Company.

Filipe Gouveia, Bradesco BBI.

Let me go back to the expenses regarding the use of the gas pipelines. Could we consider the level of this quarter as the reference, as a base work for the next one? And these expenditures, were they contemplated in your manageable gas expenses late last year? And I would like to have an update about the [indiscernible] section.

Yes, you could take the same cost level. This was considered when we factored the plan for Sec 17 and this is the level that you can expect for the next few years. Regarding the class action, there was a decision made by the Court of Appeals that considered that it did not follow the legal requirements. So, establishing a re-evaluation by the lower court regarding this. So, we are waiting for the decision of the lower court and then carry out everything that is necessary to promote the defense of Petrobras interest.

Pedro Medeiros, Citigroup.

There are three questions. The first one is a little bit complicated and I will split it into three. Could you talk about the evolution of the improvement in the Company in terms of manageable expenses and operating costs regarding what was in the investment plan last year, and could you please divide your answer into three? The first one on the administrative expenses side, and I know that we have talked about it, but it was not clear for me [indiscernible] if the levels reached this quarter could be considered as the level that should be expected to be reached according to the plan that was defined, that is to say when we look at the expenses from there on? And the second is the unit cost for refining operations. At least in this quarter, it seems to me that there was a major evolution of this unit cost, a drop of 3% in dollars, dropping also in Reais in spite of a lower utilization rate for the system. So, are there more opportunities to reduce the cost or should we expect this level to be recurrent? And lastly, Solange, on the lifting cost side, could you clarify how much you consider as the platform lease and the cost of the pre-salt, because we have here $3 to $4 estimate per barrel, and I would like to understand the opportunity for reduction of the lifting cost, because in the next two years you will have a very high level of your own capacity and that is not created? And the two other questions that are more macro, the first one, the process of the negotiation of the Petro's beneficiaries, do you have something defined according to plan, and the decision made, could they lead to a change in the overall estimate for your liabilities vis-a-vis the pension plan? And in the quarter, we had a return in the provisioning for receivables. Although the figures were small vis-a-vis what happened in the last two years, it seems to me that it is a departure from what happened in the first quarter because there were credits that were provisioned from last year. So, what are the risks of the same? Do you believe that the same could come back and what are you doing in order to recover the credits, past credits that have already been provisioned?

Pedro, okay let's start to organize ourselves here to answer all your questions. In fact you asked eight questions. So, Nelson Silva will be talking about administrative expenses and what we could expect and the performance, and then Nelson and Hugo, please feel free to answer your questions. Pedro, as I had said, our cost reduction effort is made by all areas of the Company on many fronts, all fronts. In a nutshell what I can say is that looking at the figures of the E&P area, we had a reduction that is very much consistent in all areas. When we look at E&P, we are reducing cost refining, reducing cost and logistics as well. And overall, these reductions I think I should mention because it's important, they are more than what we had in our plan. Our plan had a certain estimate and we are achieving an even better result with the involvement of all areas of the Company, the whole Company is working on that heads-on. It's not just one area or another that has an isolated result. But I must say that this culture of cost reduction and really focusing on the activity that really generates value to the Company, this is pervasive in the whole Company. All the areas contributed. When we look at the results, we see that the reduction by means of the voluntary separating incentive plan is already bringing a lot of contribution. I would like to tell how we are doing – I think your question is very timely because in the case of the voluntary separation incentive plan, although we have a few cases that have been suspended or that will be finished by the end of the year, this is a level from now on the Company gets into a normal regime and we will go back to contracting people and selecting people and we have many processes of internal mobility to adequately adapt this workforce, but the implementation, and what Nelson call it, a culture that is being pervasive in the Company has been showing other opportunities for reduction. So, we have a lot of work in the supply of goods and services yet and some results and some bidding processes have been showing that we will be able to continue to reduce cost based on more competitive processes and a participation of more suppliers. And also in terms of our stocks, our inventories, we have been achieving gains that are higher than what we planned. So, there are many ways for us to get to the end of this process. So, this is an ongoing learning, an ongoing improvement in the Company.

Pedro, still on the three important comments, first is that nothing of this is being done in detriment of safety. It is important to underscore that we never stopped focusing on safety, safety for our people and our equipment. So, we never give up on that. Secondly, the management system that we currently have in the Company is a continuous improvement system. We don't expect that this effort and these results will be reduced eventually. Oon the contrary, we will be successful when the management system is working, is implemented, is part of everyone's daily work, and when cost reduction will be a daily thing, a normal thing and something that we will continue. And again, I underscore, we never risk any people or assets, and this is the [indiscernible] comment about the Petros and the receivables from the electric system. We are fulfilling all governance sets, both at Petrobras and at the foundation, and we are discussing with the regulator how to solve that deficit. So I can't say anything about that yet but we are following governance in the approval of our discussions. This is an extremely important item. It demands a lot of attention from Petrobras human resources. But this is being adequately addressed. As per the electric setup, I don't know, we are charging in court the receipt of the credits, products that were provided and not paid for, and we'll continue with that discussion. As you can see in our market disclosure documents, we are following all the procedures and the Company will use all procedures available to recover these credits because we supplied the product and we were not paid. So, all in, every initiative to receive these credits have been adopted or will be adopted and it will continue to be adopted by the Company. I'll now turn the floor to Officer Solange.

You made an observation about the impact of chartering in the pre-salt cost, and here's what I can tell you. As I mentioned in answering a prior question, something we are working strongly on is cost of services rendered for the operation of the vessels and the ship. We are adopting lower costs. We have now lower cost because we have a high productivity of the fields. And so, we can keep our units working at their top potential, and this is very positive. The impact of chartering on operating costs can work in many ways. We have many ways of managing these costs. But chartering is something that we don't have a lot of leeway with compared to other line items of our operating costs. There is not much we can do about it. Again, I mentioned and I underscore our performance, our own units enable us to have higher degree of freedom and they end up delivering some opportunities that chartering cannot give us. One example of this experiment is the operation of P-58 at Parque das Baleias and it allows us to say that it gives us more flexibility and freedom.

Thank you. I would really like to thank you for all of the answers and congratulations on the results.

Thank you very much. We are now closing the question-and-answer session of this Webcast and conference call. I'll now turn the floor to Officer Ivan de Souza Monteiro for his final remarks. Mr. Monteiro, you have the floor.

Again, I would like to thank you all for participating in this event. I'd like to say that our Investor Relations department is available for any further questions you might have. Thank you very much.

Ladies and gentlemen, the audio of this conference call for replay and slide presentation will be available at Petrobras IR Web-site at www.petrobras.com.br/ir. This concludes today's conference call. Thank you very much for your participation. Please hang up your phones and have a great day and a great weekend.