Good day, ladies and gentlemen. Welcome to Petrobras Conference Call with Analysts and Investors for the Presentation of the Second Quarter of 2018 Results. We would like to inform you that participants will be in listen-only mode during the conference call, during the presentation which we will conducted in Portuguese with simultaneous translation into English. Following the presentation, a Q&A session will begin in Portuguese and in English in which time instructions on how to participate will be provided. [Operator Instructions] Today with us we have Mr. Rafael Salvador Grisolia, Petrobras' CFO and Investor Relations Officer; Ms. Solange da Silva Guedes, Chief Exploration and Production Officer; Mr. Jorge Celestino Ramos, Chief Refining and Natural Gas Officer; Mr. Nelson Luiz Costa Silva, Chief Strategy and Performance Officer; Mr. Hugo Repsold, Jr., Chief Technology and Production Development Officer; Mr. Rafael Mendes Gomes, Chief Governance and Compliance Officer; Mr. Eberaldo de Almeida, Chief Human Resources and Services Officer, as well as other company executives. We would like to remind you that this meeting is being recorded, and please be mindful of Slide number 2, which contains a notice to shareholders and investors. The words believe, expects and similar ones related to projections and targets of mere forecasts, which are based on the expectations of Petrobras executives regarding the future of company. To begin, we will hear Mrs. Isabela Carneiro da Rocha, Executive Manager of Investor Relations, who will start with a presentation about the second quarter of 2018 results. Subsequently, the questions from participants will be answered. Please, Mrs. Rocha, you may proceed.

Good afternoon and thank you very much for your participation and attention. We will start the presentation of the second quarter of 2018 results. Let’s go to Slide number 3 and we start the presentation with focus on our top metrics. We have the safety indicator, which is measured by the total recordable injuries per man hour, which had a slight increase this quarter to 1.06, but the company remains committed to maintaining safety and is working to maintain the downward trend that we saw since 2015 and a commitment to go back to the lower than the alert limit of one injury per million man hour at the end of 2018. The leverage metrics which is measured by net debt to EBITDA ratio has incurred the reduction towards 2.5 times per year, we reached 3.23 and additionally we make adjustments excluding the effects of the class action agreement because this is the way it will be by the end of 2018 and the effect no longer will impact the adjusted EBITDA of the last 12 months. With these adjustments, we reached 2.86. Going to Slide number 4, we showed the results of the discipline in the execution of our business plan – business and management plan and we had [indiscernible] presented in 2017 – in September 2017 and we have been executed with discipline and we bring you the results of this execution. We would like to highlight on the operational side. The start-up of the first production system in the area of Transfer of Rights in the Búzios field on 20 April by the platform P-74 and a new production system in Campos Basin, in the Tartaruga Verde field on June 22 and allow system to start operation in Campos Basin was in 2015 and we highlight the…

Now we will begin the Q&A session. [Operator Instructions] Our first question comes from Bruno Montanari with Morgan Stanley. Mr. Montanari, go ahead.

Thank you. My first question has to do with the diesel subsidy program. Could you help me understand how this was recognized in the balance sheet, what has been received, what is pending? And there was a concern a point you said this morning, in the press conference about the imports. I understood that imports would be returning but I had a different impression listening to the comments of the distribution companies yesterday. So what kind of imports do you expect? My second question is about divestments, particularly TAG, I’d like to understand what was the reaction of the companies they were negotiating that with you. Does the company feel that the appetite remains the same and the restriction is removed? Do you think that the process will go back to the very beginning? And a quick question to Solange. I thought the Sururu field oil column was very interesting, we have a lot of information on the Lula, Sepia and Búzios and others. I would love to hear your opinion about the productivity of this cluster, because it seems to be bringing more and more positive data. I’d like to understand if the flow rate transits to increase, given the reservoir and its current characteristics. Thank you.

Hi Bruno, this is Rafael Grisolia, thank you for the question. I will speak a little about the subsidy and how we recognize this in our financials and divestments. But first, I will turn the floor to Jorge Celestino to speak about imports then I'll turn the floor to Solange and I'll finally close your set of questions, talking about divestments and subsidy.

Thank you, Bruno for the question. Regarding the subsidy program where we saw – I haven't got the totally consolidated figures for July. But our June numbers was increase of about 560,000 cubic meters, which is being discussed because the pricing model changed through the subsidy. What we have noted is the companies have signaled an operation that more or less at that level. For example, I don’t have any increase in the number of orders for August. I don’t see a possible increase in demand for Petrobras. There would be two differences from what we had in June. This is why we are signaling more or less the same level of imports. At least considering the clients, they do talk directly with Petrobras.

This is Solange, Bruno. Thank you for your question. I really liked your question because it gives me an opportunity to show you what’s happening. We have different realities in the presold, and if time goes by we got more experience. And we are acquiring a lot of knowledge but it becomes clear every day that – every area is different, every area has a different characteristic and the Sururu field as you could see, you followed recent events in Sururu field that is showing positive data both for wells and for protest production pack that we’re running in different areas of the field. That raises an interesting expectation for our partners. We look at productivity, but we also consider Baúna [indiscernible] experience in trends up how we equip the wells and complete the wells. When we join this experience drilling wells at more affordable prices with higher productivity, then we’re getting to a new generation of well. So we have to measure the high quality of reservoirs, but putting it altogether, we can potentialize the productivity of the area. So we do have optimistic prospects, but considering the whole, by the whole I mean knowledge about the reservoirs and knowledge about the ability to make them more and more profitable and yield more. So BRL0.5 [ph] again, you are about the financials, he was seeing the explanatory note. We recognize accounts receivable of subsidies of BRL590 million in the quarter. This amount basically refers to the second phase of the first part. It is a recognition that we did via revenue with a counterpart of accounts receivable. It is in the explanatory note. So that when you stretch the period, the first part of the second phase, the amount receivable that comes just on days of July and that’s…

This is [indiscernible]. You may proceed.

Good afternoon and thank you for the question. I would like to ask a question about upstream. You have the spend for 2018 and so far two have been delivered that IT in the plan that you have an additional two, 369 that will leave the yard, shipyard and the other one in the fourth quarter of 2018. So would it be consider that 376 could be in 2019 and 369 maybe as well. And my second question has to do with the sale of assets as you mentioned. You were expecting BRL7 billion for this year and I would like to confirm. This is what you expect for cash in 2018. So when this is reviewed the other assets would go back to signing or the sale of more assets would be in 2018 and the original target of BRL21 billion would be maintained. And the third question I would like to better understand the dynamics of the compensation. We should see a very big accelerate and their views of the pre-salt, is this because of the as assets or lack of investment. And could you give us some more color about that?

Thank you for the questions once again. This is Rafael. And I will turn the floor over to Hugo first.

About the upstream and operations and the platforms and then afterwards I will be back talking about investment. Hi Andre, thank you for the questions. In relation to 69, we are – it would be in August, even if it takes some time or to put it introduction, we should start production this year and our expectation would be at the beginning of the last quarter. And if possible to bring this forward 76 is leaving the shipyard and go into the location in the fourth quarter. And we should – this should be at the end of the year. Even if it’s not producing this year it will only contribute to production next year. So any uncertainty in relation to the start up could affect that, because it was the right at the end of the year the 376. But the major contribution of 376 of production is for 2019. Thank you. Andre going back to your questions about investment. So once again, we made it clear that the target for investment for the two years continues to be the same and this is a sign concept that is to see the close of the operations in – we have already talked in public about the processes that have been suspended and basically our participation in at Okada in the Nitrogen fertilizer plant and tag and policy Northeast for the cash inflow what we expect for this year. Seven plus five plus two, these are all cash inflows that are associated to the project that are effected by this suspension February, suspension and that are in the binding phase and we’re going to the next phase as we close. So this is the estimate for cash for this year. The processes have been suspended and some in-house work that we do, wow, we work with these processes, we continue to do this. And Solange will be entry your other question.

Good afternoon, Andre. Your question about the Campo space and is very interesting, because it allows us to clarify some repercussion about this metric. Yes, you’re correct. When you make an evolution as it is perform a slightly lower than we expected and it has – the stock is slightly higher than we expected that where the 9% of the business plan. So opportunity are given these that, I can clarify that this has nothing to which potential – our potential for the Campo space is totally preserved. And we are only facilitating some days or some producing wells or some platforms that are being consolidated with other demand and because of that we are postponing this. Because we have sit these days into a planning. So this is not the permanent situation, this is not the recurrent situation and the Campo space is continues to be a major cash generation.

Thank you, Solange. I would like to ask another question to Jorge. We saw relevant increase in the import of diesel by Petrobras. So how they intend to supply the market in terms of diesel import vis-à-vis the utilization rate.

In relation to oil product, the planning model that we ran is according to the price of oil, the differences in prices between diesel and oil, gasoline and oil. And you ran this model and the best result or the economic result in the overall balance of these products. And then based on that we – you decide, whether you’re going to export or import the oil product. And this has a lot to do, which are availability mainly in what we call conversion activities, the activities where you transform them in diesel – gasoline in Coker Unit and Catalytic Unit and this we do permanently and for [indiscernible] given the diesel market that we have to supply and the availability of oil and the availability of that. For August, it showed that some import was something economical. So it would be worthwhile to import and this was a decision that we made and this was the best decision based on the system that I have just described.

Our next question comes from Regis Cardoso with Crédit Suisse. Mr. Cardoso, go ahead.

Good morning, Rafael, welcome. This is your first webcast and the first earnings conference call with strong results. I hope, you will be the first as many. I have two questions. First, I have to do with the dynamic of cash flow. Based on the projection that you provided, it seems that we had a higher concentration of CapEx along the second quarter and compelling that with your cash generation, it seems that achieving a goal of 2.5 times by year end will be relying a lot on the operational cash flow generation, particularly considering the difficulties of having cash flow from new project, in addition to the once that you already having a pipeline for this year. So my objective, I would like to understand if you see – if you expect a similar profile of cash flow. Free cash flow, that would be almost neutral for the second half of the year and if in your vision, making new investments we’d be necessary to achieve that year-over-year EBITDA of 2.5 times or if it really depends on the operational cash flow generation. That’s my first question. But I would like to go back also to downstream, and how about the subsidy program.

First, the subsidy program was adopted after the first few months. What is the diagnosis? Now the things come down, it seems to be – solution at the end of the day was now bad as initially expected. The potential product control for Petrobras, the market is that would happen we’re doing the truckers strike. So what’s still need to tie? You know refer two things, for example, the ability to use the prices above commercialization or marketing prices.

Do you think said, bringing forward two days, the ANP 5 that would open up the possibility of arbitration. Are there anything – any things and the program that could be worse some. And also talking about refining. That’s the follow-up for the last question.

From what level onwards Celestino an increment in the utilization factor would be detrimental to the possibility of the refining part. I know that this is a complicated analysis for the overall. And then order of magnitude, we should expect a utilization sector are close to 100% is being good, but is the truly good. And just because overall people think about 2014 for diesel come from 1 million to 1.1 million barrels a day and now it’s a substantially lower about 850 per day. So in 2014, even when Petrobras was operating with 100%, so diesel production was about 800,000 barrels a day and since then we have started in that I guess, should add 70,000 barrels a day of capacity. It seems that the whole refining part would be able to supply the domestic demand if necessary. So do you see this in the same, is it a fair statement?

Regis, thank you for the questions and for the comments. I will address your question about cash generation and budget in the leveraging and then I’ll turn the floor Celestino. You are correct, and that is why we are focused on informing in our guidance exactly this message. With the current portfolio management, the current Brent oil price, well, we can see as the number for cash generation and EBITDA will be the first indicator of this year. We mostly likely can achieve up the goal of the leveraging for the year. Even with the cash in coming from the management of our divestment portfolio the expectation of more than $2 billion in the second half alone but this was true, this was the message that we want to convey. So again, in a constant monitoring of our portfolio when we decide on new investments and on divestments we have to work with all of the projects. So cash generation is important and maintaining the conditions that we saw in the second quarter. Again linking with everything we’re saying here, it is important to stress that the quality of Petrobras assets, the management and financial discipline that we have in terms of cost of capital all of that allows us to capture the EBITDA that we have projected for the year. And with the current variables on Brent oil price in the international market. I will turn the floor now to Celestino.

Regis, regarding the subsidies, the model created for the program is very, very competitive. We have the marketing price, and the reference price. And they are linked to the international oil price they vary with the dollar price and the exchange rate. So permanently we have prices aligned with the international market. Not just the marketing price but the subsidy also.

And the question is, if the reference prices above $0.30 of the subsidy. If the cap is $0.30 that exceeding amount would be compensated offset in the following month considering the marketing price. So in a general way, the way that the prices you see in the subsidy program are very similar to the prices that the market would be exercising dynamically day by day. The model that was implemented is one that is competitive and as competitiveness to market operations. When it exceeds $1.30 that amount will be offsets in the following months. So that is one important point. And something that you mentioned, the operation of the model given the volume of information, the volume of invoices that take place. But it always feels a learning period for ANP and for market agents.

So regarding the subsidy program, this is the best view that we can give you. Regarding operating efficiency, obviously I will try to simplify a discussion, which is a little bit more complex. But let's consider the following; when you look at crude oil there are three products that are worth more than crude oil diesel, jet fuel and gasoline. These products despite since annuity they are always worth crude oil plus the margin. And we have to simply fuel oil and naphtha that are worth less than crude oil, minus $15 or $20 per barrel. When we run the refinery with crude oil it produces a set of oil products, when we run the refinery you import crude oil and it will come out as diesel, Naphtha and fuel oil. And depending on the cost that we have for example, if we produce fuel oil in Brazil the best destination of this product is China then you have to consider freight cost. So when you produce more diesel the marginal diesel that you produce if you had a lot of fuel oil in Naphtha when you add up all of the products that you produce it is all worth less than crude oil. And when that happens its worth – it's worthwhile exporting crude oil then importing diesel. And this is the rational of the model. For example when you have a thermal that use fuel oil in Brazil, thermal power plants obviously you have diesel production in Brazil in your refining park will be competitive. Because the market is coarser when you open up the possibility of instead of exporting oil and importing diesel it opens up the possibility of producing diesel domestically. So this is how the model does all of the calculations, I'm not sure that I was able to explain this to you.

Perfect, Celestino. I understand the mechanic. And exactly because of the limitations in hardware that you mentioned the coking model and others typically secondary utilization factor very close to 100%. Despite arbitration of freight internationally and domestically typically would be transforming oil into fuel oil. I understand and correct me if I’m wrong. The utilization factor are very close to 100%. It tends to be bad or worse. Then the utilization factor close to 95%, is this a fair statement. And the other question was regarding the diesel balance. Because if we have a utilization sector above 90%, is it necessary?

It will be possible to supply the whole domestic demand with production in the Brazilian refining park, which was not possible in 2014 for example. You are correct. We’ll have to do this assessment permanently every market, every set of conditions have to be analyzed.

Chris Ainsley, Banco Santander.

Thank you. My first question has to do with CapEx. As you are in a round way there is to say you had given the objective of $50 million and it is lower now, we use still intend to reach 15 or something changing along the year that could maybe lead to levels lower than 15. Because, I know that there is seasonality there coming into play? And the second question has to do with the things that you were talking about refining and it was not quite clear to me in a more simplified or oversimplified way. I would like to ask if you are happy with 80 give or take percent. It is ideally the level that allows you to have market share that makes you happy and at the same time, having high margins. Are do you still see room for improvements there? And lastly, about price given everything that is going on, what do you suggest to the market in terms of how we could think about gasoline prices for 2019 and the remainder of 2018? Could we use model up sizes in line with international prices or not, so anything you say about it will help as a lot?

Thank you very much for the questions. The question about CapEx, I would like to ask Hugo to answer. But in fact, we have a different run rate for the second half. And this is why we are reinforcing their guidance and Hugo will say a few words about that and I would like to remind you that we are not changing production of our business and management plan. Then we will come back to your question and then let Celestino to answer.

I think your question has already been answered because what we're doing, this adjustment has to do with including what will be realizing this year and also based on the pace of the first quarter and the implementation of – the first half of the implementation that we have for the second half of the year. So we already giving the guidance that is to say, that we will read 15 still by the end of 2018. And the remainder will be in 2019 and this does not changes whatsoever the investment plan that we are finalizing in within our plan or business and management plan. And now with relation of the metrics for our refining cluster, I would like to reinforce once again that we run refining for – in order to give the maximum return, maximum value to our shareholders. There has been metric regarding market share or utilization factor. We will have the market share and the utilization factory. We have a very adequate hardware for that, investment in quality and quality of conversion. So our guideline is so operate always in order to maximize profits to our shareholders. So this is our guidance, our guiding line. And regarding price, price is always aligned with the international markets. So this is a statement that this management has been making over all these years. And this is what we have been putting into practice and will continue to put into practice.

Our next question comes from Luiz Carvalho with UBS. Mr. Carvalho go ahead.

Hello everyone. I have three questions. First to Rafael. You showed the slide with the free cash flow of $16 billion, when you breakdown operational cash flow generation, investment et cetera. I have two questions regarding that. First, you just said dividend, because looking forward that number should be lower. And given the perception so far, I understand that you will be painted against this year. My second question is regarding capital allocation looking forward, it going to have cash generation that will be very strong assuming that the oil price will continue to be up its level. And with the pricing policy and leveraging have reduce. So what would be the other quick level for capital generation? Do you want to deleverage the company, then further, how should we see this looking forward. My second question goes to Solange. Solange next week the Senate House will go back to productivities and we will have an expectation that you will probably vote the transfer of ROI for months on the sands. Regarding Petrobras as much as you can share with us, what are the procedures that you still need to do how close are you in this agreement with the government. Assuming that the small goal pass at the upper house. So these are my question. Thank you very much.

Luiz, thank you for the question. I’ll trying to answer the first two questions and then obviously, Solange will be answered the third question. Regarding the guidance for cash generation, we are being careful in terms of operational cash generation. And assuming net EBITDA number slightly different, increasing cash generation and we are considering a dividend payout policy. And the way that it is previously informed some capital variation and some other non-cash elements that make up the EBITDA, so we think that this operational cash generation will continue according to what was important into our dividend policy. In terms of cash generation, we continue to have the same driver to achieve the goal, that we have informed the market. In terms of our debt goal with that indicator net debt over adjusted EBITDA ratio and when I know that when we compare Petrobras with its main international peers and competitors internationally. Our debt level remains high even if we achieve our goal. And this is something that we are considering internally at the management level and together with the board, we will decide on the future goals for the next year. Now, I’ll turn the floor to Solange.

Good afternoon, Eberaldo. Thank you for the question about the transfer of rights. In terms of procedures necessary procedures to finalize. In our assessment what we have ahead of us is the next steps are. When the Senate House both the laws that regulates some aspects of the previous law, it's an amendment to the previous law, right. Based on that, we have to take a step ahead of us. You can quick steps, so that the amendments will be agreed upon by the parties and so the government and Petrobras and move on to our respective deliberations. So have to wait for the voting and there are just a few things standing.

Pedro Medeiros from Citibank. Mrs. Pedro Medeiros. You may proceed.

Good afternoon everyone and congratulations for the results, Rafael welcome. And I have a few questions. Some of them are already a follow-up of previous questions. I would like to talk about the capital allocation of the company, I think we should expect the business plan to be reviewed, but you have already reported an expressive cash generation and it could have been even better if it were not for the consumption of cash for your working capital, when we look at a business plan it was totally prepared with a oil price much lower than the market prices that we have today. The company at the beginning of the year decided to adopt the strategy of a partial head of the oil price in such a way as to facilitate reaching the target for your leveraging. So how do you consider the maintenance of this strategy of locking in the price of oil from now on how do you see that for 2019? So this is my first question. And the second question is to Solange. Solange I would like to understand what you could say about improving operation and the use of the translating assets, we haven't seen the industry working in a more opportunistic way, because of the oil price hike and having more competitive prices for campaigns regarding, like drilling campaigns, et cetera, because of the reservoirs. So you have the projects of [indiscernible] in Roncador revitalization projects and we started as many years. What else could we expect from Petrobras regarding the Campos Basin. And one last question, about the lifting costs for the quarter. We saw an improvement or relevant improvement in the lifting cost in spite of the fact that the company have a slight loss in production and with the start off, of two new systems that have not yet had the ramp up. So what was the driver for the drop in your lifting cost this quarter and does it have to do with the investment you made Roncador. Thank you.

Pedro, thank you for the question and for the welcome. The first question which was about the situation of our hedging policy and what we're thinking for our planning and Solange will be answering the other questions.

Pedro, good afternoon, thank you for the question. Starting with a hedging policy basis reevaluated on an annual basis and at the time when we made the decision was after we made a risk analysis there is always a basis for our decisions we understood that it was the best measure to be taken as a time in order to decrease the risk of not reaching the target at the time. And of course from then on the market has evolved positively and rents surprised us positively in the sense of being quite higher then we had in the plan it was $53. And the policy or the in-house process of establishing a reference in Brent this has to do with our governance. And this is a very detailed process and it takes around two, three months and you have all the governance because of approval levels with Executive Board and the Board of Directors and when we look at the Brent now and when we look at the $53 that we had in our plan for 2018, your see that it was rather conservative but after time and we had to publish the secret some people do not, but we do. But more or less all the oil and gas operators were around $50 a slightly higher level or low level, but it was correct at the time. So we made the right decision as a time and we will continue to do our work and always complying with the very strict governance that we have for that. Pedro, good afternoon. Answering the first part of your question regarding the use of the Campos Basin assets. We have three different fronts here that should be mentioned, axis of less expensive equipment and we are continuing are going back to…

Our next question is from Vicente Falanga with Bradesco BBI. Go ahead, sir.

Good day, everyone. I have two quick questions. If inputs drop more and if we have to – if Petrobras has to work with every business, can you expect an increase in refining? And please correct me if I’m wrong that you reduce the price of gasoline, it was a little reduced vis-à-vis the international markets in the last two months. With this, just to compete with ethanol, which is a lot cheaper or can this be considered a strategy that would last until the end of the year? Thank you.

So, thanks for the question. Celestino will be answering both questions.

Good question. Regarding if we have to increase the production of ethane, the impact on the refining costs would be very small, marginal actually. We have a set of operators. And so this is not very sensitive ethane at 500. So nothing much about that and as for gasoline, we have great asymmetry with ethanol and it’s hard to overcome that via price. the asymmetry is more than R$ 400 per cubic meter. It doesn’t make any sense to adjust the margin to compete with ethanol.

Our next question comes from Vinicius Tsubone with HSBC. Please go ahead.

Hello, good afternoon. If possible, could you elaborate regarding that loss of R$ 1.2 billion referring the sale of assets, which is a tale more, what are the main reasons leading to a reduction in CapEx for this year? And another question when you say, if there were a 15% reduction in the unit cost of upload, what would be the comparison base for that? Thank you.

This is Rafael. Thank you for the question. But could you repeat? The sound wasn’t clear.

[Operator Instructions] Go ahead sir, please repeat your question.

Yes. to repeat my question, I would like you to give a more color on what were the reasons that led Petrobras to recognize a lot of more R$ 1 billion in the second quarter results referring to the sale of assets. My second question is regarding the main drivers that lead to a reduction in your CapEx estimate? And my third question regarding what you mentioned in the slides, regarding a 16% reduction in the offloading costs, what would be the comparison base for that number? Thank you.

This is Rafael Grisolia. We are very sorry. We couldn’t hear your question at the first time. we apologize. Okay. Your first question, I’ll give you more color regarding that reduction in fact, is basically related to the Roncador investment. So, we are recognizing in the quarter, the finalization of the operation. When we close the deal, completed the deal, we have to account for it, if you need more on that, we can speak offline. And as for that CapEx question, we mentioned this. We just wanted to illustrate, pick up that with the guidance of our cash generation. And to say that we continue to invest, we’re not canceling any investment, is just what we were expecting for the year. Our investment indicators announced that the NPR maintains is just that for cash realization, we expect R$ 15 billion and not R$ 17 billion. But again, this is not impacting any of the key investments, no cancelations whatsoever. This is just a better indication of what the operation will be until the end of the year. And your third question, I will turn the floor to Jorge, to answer the last question.

Denis, it’s regarding a reduction of offloading costs. if you look at the number of vessels that we reduced from 27 to 26 that already gives you a color of the increase in efficiency in offloading operations, because we have a better utilization sector of the vessels, we use our trips better. This new way of operating, this new way of planning offloading, as all of those led to a reduction in the offloading costs.

The next question comes from Mr. Paul Cheng from Barclays. Please, Mr. Paul, speak loud with the question. Please proceed.

Hello. Hi, good afternoon. Three quick questions, first what is your concept at your reforming system and do you have any plan of the maximum remote to the upcoming level to new spend of the IMO 2020. Second question, possibly is that the counseling is that the plan that the trail of inventory and we qualified the benefit. Lastly if you can get the activity improvement to concern how that you worked through this, which is going to change. We are driving reps, we are going to change how that certainly is? Thank you.

Mr. Paul, can you repeat your question please.

Well, first question is what is your hindsight of your refining system, and now you’re planning any investment related to the upcoming new Global Greenfield Standard to IMO 2020. My second question is, we actually lose, you mentioned the downstream of the side, they can destroy as we enjoy like we qualified with respect benefit in the second quarter. Lastly, the productivity improvement in the consorting and we had, how that’s impacting, our look for how many works in the loop [indiscernible].

Thank you for repeating the question.

Thank you for the questions. So, we will try to answer them and if you have any additional doubts, we will be pleased to answer them afterwards with relation to your first question. First, about the adaptation of our products in order to comply with the IMO 2020 rule. Petrobras has a very good position regarding low sulfur, because we produced oil with low sulfur. So, here we do this is the way that oil is produced. So, it will be – it will not be necessary to make any addition of refining facilitated in order to adapt our production to the specifications of new code. In fact, we see this as a competitive advantage for Petrobras, because of the availability of oil with low sulfur. Now regarding the gains in terms of prices, processes of the inventories, between the upstream and downstream areas. In fact, this does not bring any result outside the company it tells. So, this is something internal to the company. regarding productivity – your question about productivity, this is the beginning of our activities of our exploration to the pre-salt as we see ourselves with a unique type of reservoir with just a handful of similar reservoirs in the entity layer. We were very careful when we made the forecast for EU productivity and after eight years, producing in the pre-sell, we saw that our most probable view is the realized and with a bullish by it, so to say, because it’s slightly higher than what we expected in terms of the most probable level of viewed and we are fine-tuning our capacity to understand how the well engineering projects and also under sea project can increase our productivity. So, we have a lesson learned in these last eight years and this led us to improve the way we place this reservoir production. And in these eight years, we saw no events that could draw our attention to some kind of deviation vis-à-vis what we are projecting and we also saw that initial decision that we made were very good, because ever since the beginning of production of the fields, we had announcement of that interaction of oil and gas. And it has been proving to be very good. And so this is our best estimate.

Thank you very much. now, we close the question-and-answer session of this webcast and we would like to give the floor to Mr. Rafael Grisolia for his closing remarks. So, Mr. Grisolia, you may proceed.

Once again, I would like to thank you all for participating in our call. in case, you have any additional doubts, our whole Investor Relations team of Petrobras will be available to you as always. So once again, thank you when I wish you a very good afternoon. Thank you ladies and gentlemen. The audio for replay and the slides presentation will be available at the Investor Relations website at www.petrobras.com.br/ir.

This concludes today’s conference call. Thank you very much for your participation. Please disconnect your lines now, and have a very good afternoon.