On Monday (24), after the market closed, Petrobras (PETR3)(PETR4) released its third quarter production report, with crude oil production at 2,115 KBPD, a 7% A/A contraction and quarterly stability.

These numbers were previously released by ANP and came mainly in line with what Goldman Sachs projected, of -6% A/A (+1% T/T) for the period.
Analysts noted that the year-over-year contraction was mainly supported by the start of the production sharing agreement for the surplus ToR volumes from the Atapu and Sepia fields in May 2022, which led to a lower participation of Petrobras in these fields.
Additionally, the company mentioned that as a result of the good performance observed in the quarter, it would reiterate its expectation of reaching the production guidance for 2022E of 2.6 million BOED +/- 4% (vs. GSe, of about 2.7 million BOED).

In the refining segment, domestic sales volumes were up approximately +5% quarter-on-quarter in the July-September range due to increased consumption of all products, especially diesel and gasoline.

In addition, Petrobras noted that the increase in diesel demand followed the seasonality of demand, while the higher demand for gasoline was possibly explained by the drop in the average price to the consumer following the tax reduction at the pump .
And, finally, the total refining utilization factor reached 88% in the quarter (+3 p.p. A/A). Finally, the state-owned company noted that diesel imports fell 2% A/A in the third quarter.

They believe that Petrobras’ production data from July to September is well mapped out by the market, as ANP previously released third quarter oil production data. As such, they expect a neutral reaction to these numbers.

At 11:15 am this Tuesday (25), the common shares (PETR3) were down 0.11% at R$37.41, while the preferred shares (PETR4) were down 0.08% at R$34.22.
Analysts at GS reiterated a buy recommendation for PETR3 and PETR4, with target prices of R$34.90 and R$31.70 in twelve months, respectively.