Financial

Petrobras Accession to non-Tax Debt Settlement Program (PRD)

Rio de Janeiro, October 25, 2017 – Petróleo Brasileiro S.A. – Petrobras reports that its Board of Directors approved today accession to the non-Tax Debt Settlement Program (Programa de Regularização de Débitos não Tributários, “PRD”), according to Law no. 13.494, of October 24, 2017. PRD allows the inclusion of government take debts with the National Agency of Petroleum, Natural Gas and Biofuels (ANP).

The accession will enable the use of the benefits proposed in this program to settle legal proceedings in the total amount of R$ 1 billion, which, after the reductions, will be settled for approximately R$ 700 million, in 2 installments, R$ 430 million in the act of accession and the remainder in January 2018.

The company will include in this program debts relating to special participation and royalties on the oil and gas production, whose loss expectations were classified as probable in the financial statements, due to legal decisions occurred in July and August 2017.

These amounts will be provisioned in the third quarter of 2017 result, with a negative net impact of approximately R$ 520 million.

The information pertaining to this lawsuit are incorporated in the financial statements for the second quarter of 2017, under explanatory note 29.3 (Provisions for legal proceedings – item 29.3 – non-provisioned legal proceedings).

Categories: Financial, Petrobras

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