The O&G industry is characterized by being capital intensive. The review of the investment portfolio occurs annually within the process of preparing the Strategic Plan for the five-year period. In Petrobras' investment portfolio, disclosed in the 2024-2028+ Strategic Plan, it is noted that the company plans to invest US$102 billion over the next five years. This volume of resources will materialize in orders for goods and services that will meet the company's need to modernize and increase its production capacity. This is what guarantees our future, with the achievement of production and efficiency targets. The resources will trigger an entire income and employment multiplier process, especially in the Brazilian economy, where a large part of the investments will be made.

Furthermore, the role that our products play as a fundamental input for economic growth must be highlighted. We produce the energy necessary for the expansion of agricultural production, our industry, and our services, as well as that which guarantees us mobility, heat, electricity, and comfort.

When conducting acquisition processes, partnerships and divestments, we are guided by systems based on applicable legislation, including the State Law (law no. 13,303/16) and the General Petroleum Law (law no. 9,478/98), as well as decrees 9,355/2018 and 9,188/2017, combining best market practices with the principles of public administration.

Safety and operational continuity, attention and respect for people are fundamental principles that we apply in all our actions. In 2023, structured actions of portfolio management projects were planned and executed, with prior presentation to union entities regarding actions to demobilize employees to other regions. The company sought to reconcile the company's needs with the interests of employees, whenever possible, offering all employees covered the opportunity to remain in the same state of residence at the time of divestment.

Furthermore, aligned with the strategic guideline of full attention to people, we improved the integrated change management journey for employees covered by collective transfers, considering business interests and the diversity of individual situations in this process. The actions carried out also include a moment of individual attention by the Health area, which aims to map exceptional cases that may impact the transfer due to socio-family and health aspects.

The entire process is planned and communication to employees of plans related to portfolio management occurs four to six months in advance, with the offering of opportunities in the state of residence, in other states with available vacancies and the possibility of voluntary termination to those who wish. The execution includes the improvement of other actions, such as: communication, specific relocation and dismissal programs, qualification and change of emphasis of employees.

The actions of the Personnel Plans are monitored by the Change Management Committee for Portfolio Management, established as part of the agreement signed between Petrobras and the Public Labor Prosecution Office (MPT), to regulate the process of collective movement of employees.

On May 15, 2023, our Executive Board approved the commercial strategy for defining gasoline and diesel prices, aligned with the Pricing Guideline for Petroleum and Natural Gas Derivatives in the Internal Market (available for consultation on our Investor Relations), with the premise of competitive prices per sales hub, in balance with national and international markets. This strategy allows Petrobras to compete more efficiently, taking into account its market share, to optimize its refining assets, under the premise of maintaining the company's financial sustainability.

This commercial strategy uses market benchmarks such as: (a) the customer's alternative cost, as a value to be prioritized in pricing, and (b) the marginal value for Petrobras. The customer's alternative cost includes the main supply alternatives, whether suppliers of the same products or substitute products, while the marginal value for Petrobras is based on the opportunity cost given the various alternatives for the company, including production, imports, and exports of said product and/or oils used in refining.

As we are aware of the importance of our products to Brazilian society, we point out that, when setting our prices, we seek to avoid passing on the volatility of the international market and the exchange rate, while preserving a healthy competitive environment under the terms of the current legislation.

The aforementioned guideline, approved on July 27, 2022 by our Board of Directors, reiterated the competence of the Executive Board in executing price policies, preserving, and prioritizing the company's economic result, seeking to maximize its value generation, and incorporated an additional layer of supervision by the Board of Directors itself and the Fiscal Council.

Finally, it is essential to differentiate Petrobras' sales prices for the retail companies from those perceived by the final consumer. Petrobras' sales price at refineries and terminals is just a portion of the resale price perceived by consumers at service stations. Before the fuel reaches the consumer, taxes are added, costs for the mandatory mixture of anhydrous ethanol in gasoline, and biodiesel in diesel; and costs and margins of retail companies and resellers. Each portion has its own formation dynamics, without any influence from Petrobras. Historically, the final price of fuels is highly influenced by the tax burden on these products.

In 2023, we had an added value distribution of around BRL 378.7 billion. Through our activities we distribute value to our employees, federal, state, and municipal governments, through the payment of taxes, royalties and special participations, financial institutions, the supply chain, and our shareholders.

In addition to other contributions to society such as voluntary socio-environmental projects, donations and environmental monitoring and impact mitigation projects, as detailed in the table below:

In 2023, Petrobras paid a total of BRL 240.2 billion as taxes and Government Participations (PGOV) in Brazil and US$ 452.7 million abroad. The payment of taxes and PGOV considerably increases the availability of financial resources to states, in all spheres of government, necessary to fund the public machinery and the provision of services to society, in addition to expanding the investment capacity in terms of infrastructure and projects based on the development policies of the countries in which Petrobras operates.

In the last five years, Petrobras has paid more than BRL 1 trillion in taxes and government contributions for the federal, state and municipal governments, providing a larger government budget for implementing public policies that serve society.

Additionally, we have the legal responsibility to pay the amounts due as government shares (PGOV) to the ANP. These payments are financial compensation for our oil and natural gas exploration and production activities in Brazilian territory, which aim to provide monetary  retribution to society for the exploitation of non-renewable resources. They are: royalties, special participation, signature bonus and payment for the retention or occupation of contracted areas.

In 2023, a total of BRL 61.4 billion was paid as government contributions. The PGOV amounts paid are mainly made up of royalties (BRL 35.3 billion) and special participation (BRL 25.1 billion). In addition to these two recurring items, there was also payment for the retention or occupation of area, in the amount of BRL 0.3 billion, and the disbursement of BRL 0.7 billion in signature bonus, resulting from the acquisition of participation in three blocks: Sudoeste de
Sagitário, Norte de Brava and Água Marinha.

Our businesses generate jobs and income, not only because of the direct impacts of our activities, but also because of our indirect impact on the production chain. The purchase of goods and services by the company will become income for suppliers, who, in their production processes, will pay for new inputs, suppliers and labor in the production chain, driving the economy.

As for the profile of the contracted goods and services, there were no significant changes in 2023 compared to the previous year, with the main contracted categories being:

Parent company: Chartering of production platforms, chartering of rigs, well services, Engineering, Procurement, Construction, and Installation - EPCI, underwater operations, flexible lines, valves, tubes, aerial chartering, chartering of ships and special vessels, chemicals and catalysts, geophysical services, Engineering, Procurement and Construction (EPC) services, and equipment maintenance.

Transpetro: Operational support services, infrastructure maintenance, logistics, inspection, docking and complementary services, such as transportation and property security.

Petrobras Biocombustível: Regarding the profile of contracting for goods and services, there were no significant changes in 2023 compared to the previous year, with the main categories contracted being national manufacturers and traders of vegetable oils (soybean, cotton, palm, residual oils, and fats), animal fats (from cattle, pigs, fish, and poultry), in addition to methanol and sodium methylate, which are the main inputs used in the industrial process. Also, to maintain the concessions to use the Social Biofuel Seal (SBS) of the Biodiesel Plants, the subsidiary makes agreements with cooperatives of family producers to provide raw materials and technical assistance services.

In procurement, we have a complex supply chain, with thousands of suppliers and the need for permanent availability of materials for our various operations. At the same time, we have the challenge of avoiding a shortage of materials at the units, while simultaneously preventing expenses inherent to possible excessive or untimely inventories.

Petrobras, as a certified member of ASCM (Association for Supply Chain Management) since 2019, has been implementing the most modern inventory management practices in the E&P, Gas and Refining areas, having stood out for developing initiatives using technology, focusing balancing the supply chain and optimizing inventories.

The total investments forecast in the 2024- 2028+ Strategic Plan, US$ 102 billion, have the capacity to support 280,000 direct and indirect jobs per year.

In order to support the supply chain and promote the improvement of contract performance, we provide two incentive programs for the oil and gas industry: Progress and More Value Program.