Filed Pursuant to Rule 424(b)(2)
Registration Statement Nos. 333-229096 and 333-229096-01
PROSPECTUS SUPPLEMENT
(To Prospectus dated March 1, 2019)
Petrobras Global Finance B.V.
Unconditionally guaranteed by
Petróleo Brasileiro S.A. — Petrobras
(Brazilian Petroleum Corporation — Petrobras)
U.S.$1,500,000,000 5.500% Global Notes due 2051
The 5.500% Global Notes due 2051 (the “Notes”)
are general, unsecured, unsubordinated obligations of Petrobras Global Finance B.V. (“PGF”), a wholly-owned subsidiary of
Petróleo Brasileiro S.A. — Petrobras (“Petrobras”). The Notes will be unconditionally and irrevocably guaranteed
by Petrobras. The Notes will mature on June 10, 2051 and will bear interest at the rate of 5.500% per annum. Interest on the Notes is
payable on June 10 and December 10 of each year, beginning on December 10, 2021.
PGF will pay additional amounts related to
the deduction of certain withholding taxes in respect of certain payments on the Notes. PGF may redeem, in whole or in part, the
Notes at any time or from time to time prior to December 10, 2050 (the date that is six months prior to the scheduled maturity of
the Notes), by paying the greater of the principal amount of the Notes to be redeemed and a “make-whole” amount, in each
case plus accrued and unpaid interest. Beginning on December 10, 2050, PGF may redeem, in whole or in part, the Notes at a price
equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest. The Notes will also be
redeemable in whole without premium prior to maturity at PGF’s option upon the imposition of certain withholding taxes. See
“Description of the Notes—Optional Redemption.”
In connection with the offering, the underwriters
are not acting for anyone other than the issuer. Neither the underwriters nor any of their affiliates regulated by the Financial Conduct
Authority will be responsible to anyone other than the issuer for providing the protections afforded to their clients nor for providing
advice in relation to the offering.
PGF intends to apply to have the Notes approved for
listing on the New York Stock Exchange, or the “NYSE.”
See “Risk Factors” beginning on
page S-14 to read about factors you should consider before buying the Notes offered in this prospectus supplement and the accompanying
prospectus.
Neither the U.S. Securities and Exchange Commission
nor any state securities commission has approved or disapproved of these securities or determined if this prospectus supplement is truthful
or complete. Any representation to the contrary is a criminal offense.
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Initial price to the public(1):
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Underwriting discount(2):
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Proceeds, before expenses, to PGF:
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Per Note
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Total
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Per Note
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Total
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Per Note
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Total
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Notes
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96.446
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%
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U.S.$
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1,446,690,000
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0.300
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%
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U.S.$
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4,500,000
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96.146
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%
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U.S.$
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1,442,190,000
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(1) Plus accrued interest from June 10, 2021, if settlement occurs after
such date.
(2) See
“Underwriting” beginning on page S-42 of this prospectus supplement for additional information regarding underwriting compensation.
The underwriters
expect to deliver the Notes in book-entry form only through the facilities of The Depository Trust Company and its direct and indirect
participants, including Clearstream Banking, société anonyme, and Euroclear SA/NV,
as operator of the Euroclear System, against payment in New York, New York on or about June 10, 2021.
Joint Bookrunners
BofA Securities
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Goldman Sachs & Co. LLC
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Itaú BBA
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J.P. Morgan
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MUFG
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Santander
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UBS Investment Bank
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The date of this
prospectus supplement is June 2, 2021.
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
PROSPECTUS
ABOUT THIS PROSPECTUS SUPPLEMENT
This document consists of
two parts. The first part is this prospectus supplement, which describes the specific terms of the Notes that PGF is offering and certain
other matters relating to PGF and Petrobras and Petrobras’s financial condition. The second part, the accompanying prospectus, gives
more general information about securities that PGF and Petrobras may offer from time to time. Generally, references to the prospectus
mean this prospectus supplement and the accompanying prospectus combined. If the information in this prospectus supplement differs from
the information in the accompanying prospectus, the information in this prospectus supplement supersedes the information in the accompanying
prospectus.
We are responsible for the
information contained and incorporated by reference in this prospectus supplement and in any related free-writing prospectus we prepare
or authorize. PGF and Petrobras have not authorized anyone to give you any other information, and we take no responsibility for any other
information that others may give you. Neither PGF nor Petrobras is making an offer to sell the Notes in any jurisdiction where the offer
is not permitted.
You should not assume that
the information in this prospectus supplement, the accompanying prospectus or any document incorporated by reference is accurate as of
any date other than the date of the relevant document.
In this prospectus supplement,
unless the context otherwise requires or as otherwise indicated, references to “Petrobras” mean Petróleo Brasileiro
S.A. – Petrobras and its consolidated subsidiaries taken as a whole, and references to “PGF” mean Petrobras Global Finance
B.V., a wholly-owned subsidiary of Petrobras. Terms such as “we,” “us” and “our” generally refer to
both Petrobras and PGF, unless the context requires otherwise or as otherwise indicated.
References herein to “reais”
or “R$” are to the lawful currency of Brazil. References herein to “U.S. dollars” or “U.S.$” are to
the lawful currency of the United States.
Prohibition of Sales to
EEA Retail Investors: The Notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold
or otherwise made available to any retail investor in the European Economic Area (“EEA”). For these purposes, a retail investor
means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended,
“MiFID II”); or (ii) a customer within the meaning of Directive (EU) 2016/97 (as amended, the “Insurance Distribution
Directive”), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II;
or (iii) not a qualified investor as defined in Regulation (EU) 2017/1129 (as amended, the “Prospectus Regulation”); and the
expression “offer” includes the communication in any form and by any means of sufficient information on the terms of the offer
and the Notes to be offered so as to enable an investor to decide to purchase or subscribe the Notes. Consequently, no key information
document required by Regulation (EU) No 1286/2014 (as amended, the “PRIIPs Regulation”) for offering or selling the Notes
or otherwise making them available to retail investors in the EEA has been prepared and therefore offering or selling the Notes or otherwise
making them available to any retail investor in the EEA may be unlawful under the PRIIPs Regulation.
This prospectus
supplement has been prepared on the basis that any offer of Notes in any Member State of the EEA will be made pursuant to an
exemption under the Prospectus Regulation from the requirement to publish a prospectus for offers of Notes. Accordingly any person
making or intending to make an offer in that Member State of Notes which are the subject of the offering contemplated in this
prospectus supplement may only do so to legal entities that are qualified investors as defined in Article 2 of the Prospectus
Regulation, provided that no such offer of Notes shall require PGF or any of the underwriters to publish a prospectus pursuant to
Article 3 of the Prospectus Regulation or supplement a prospectus pursuant to Article 23 of the Prospectus Regulation, in each case
in relation to such offer.
Neither PGF nor the underwriters
have authorized, nor do they authorize, the making of any offer of Notes to any legal entity which is not a qualified investor as defined
in the Prospectus Regulation. Neither PGF nor the underwriters have authorized, nor do they authorize, the making of any offer of Notes
through any financial intermediary, other than offers made by the underwriters, which constitute the final placement of the Notes contemplated
in this prospectus supplement.
The expression “Prospectus
Regulation” means Regulation (EU) 2017/1129 (as amended or superseded).
Each person in a Member State
of the EEA who receives any communication in respect of, or who acquires any Notes under, the offers to the public contemplated in this
prospectus supplement, or to whom the Notes are otherwise made available, will be deemed to have represented, warranted, acknowledged
and agreed to and with each underwriter and PGF that it and any person on whose behalf it acquires Notes is: (1) a “qualified investor”
within the meaning of Article 2(e) of the Prospectus Regulation; and (2) not a “retail investor” (as defined above).
Prohibition of Sales to
UK Retail Investors: The Notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold
or otherwise made available to any retail investor in the United Kingdom (“UK”). For these purposes, a retail investor means
a person who is one (or more) of: (i) a retail client, as defined in point (8) of Article 2 of Regulation (EU) No 2017/565 as it forms
part of domestic law by virtue of the European Union (Withdrawal) Act 2018 (the “EUWA”); or (ii) a customer within the meaning
of the Financial Services and Markets Act 2000 (as amended, the “FSMA”) and any rules or regulations made under the FSMA to
implement the Insurance Distribution Directive, where that customer would not qualify as a professional client, as defined in point (8)
of Article 2(1) of Regulation (EU) No 600/2014 as it forms part of domestic law by virtue of the EUWA; or (iii) not a qualified investor
as defined in Article 2 of the Prospectus Regulation as it forms part of domestic law by virtue of the EUWA; and the expression “offer”
includes the communication in any form and by any means of sufficient information on the terms of the offer and the Notes to be offered
so as to enable an investor to decide to purchase or subscribe the Notes. Consequently, no key information document required by the PRIIPs
Regulation as it forms part of domestic law by virtue of the EUWA (the “UK PRIIPs Regulation”) for offering or selling the
Notes or otherwise making them available to retail investors in the UK has been prepared and therefore offering or selling the Notes or
otherwise making them available to any retail investor in the UK may be unlawful under the UK PRIIPs Regulation.
This prospectus supplement
has been prepared on the basis that any offer of Notes in the UK will be made pursuant to an exemption under the UK Prospectus Regulation
and section 85 of the Financial Services and Markets Act 2000 (as amended, the “FSMA”) from the requirement to publish a prospectus
for offers of Notes. Accordingly any person making or intending to make an offer in the UK of Notes which are the subject of the offering
contemplated in this prospectus supplement may only do so to legal entities which are qualified investors as defined in Article of the
UK Prospectus Regulation, provided that no such offer of Notes shall require PGF or any of the underwriters to publish a prospectus pursuant
to Article 3 of the UK Prospectus Regulation or section 85 of the FSMA or supplement a prospectus pursuant to Article 23 of the UK Prospectus
Regulation, in each case in relation to such offer.
Neither PGF nor the underwriters
have authorized, nor do they authorize, the making of any offer of Notes to any legal entity which is not a qualified investor as defined
in the UK Prospectus Regulation. Neither PGF nor the underwriters have authorized, nor do they authorize, the making of any offer of Notes
through any financial intermediary, other than offers made by the underwriters, which constitute the final placement of the Notes contemplated
in this prospectus supplement.
The expression “UK Prospectus
Regulation” means Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of the EUWA.
Each person in the UK who
receives any communication in respect of, or who acquires any Notes under, the offers to the public contemplated in this prospectus supplement,
or to whom the Notes are otherwise made available, will be deemed to have represented, warranted, acknowledged and agreed to and with
each underwriter and PGF that it and any person on whose behalf it acquires Notes is: (1) a “qualified investor” within the
meaning of Article 2(e) of the UK Prospectus Regulation; and (2) not a “retail investor” (as defined above).
FORWARD-LOOKING STATEMENTS
Some of the information contained
or incorporated by reference in this prospectus supplement are forward-looking statements that are not based on historical facts and are
not assurances of future results. Many of the forward-looking statements contained, or incorporated by reference in this prospectus supplement
may be identified by the use of forward-looking words, such as “believe,” “expect,” “estimate,” “anticipate,”
“intend,” “plan,” “aim,” “will,” “may,” “should,” “could,”
“would,” “likely,” “potential” and similar expressions.
Readers are cautioned not
to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. There is no assurance
that the expected events, trends or results will actually occur.
We have made forward-looking
statements that address, among other things:
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Petrobras’s marketing and expansion strategy;
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Petrobras’s exploration and production activities, including drilling;
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Petrobras’s activities related to refining, import, export, transportation of oil, natural gas and
oil products, petrochemicals, power generation, biofuels and other sources of renewable energy;
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Petrobras’s projected and targeted capital expenditures, commitments and revenues;
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Petrobras’s liquidity and sources of funding;
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Petrobras’s pricing strategy and development of additional revenue sources; and
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the impact, including cost, of acquisitions and divestments.
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Our forward-looking statements
are not guarantees of future performance and are subject to assumptions that may prove incorrect and uncertainties that are difficult
to predict. Our actual results could differ materially from those expressed or forecast in any forward-looking statements as a result
of a variety of assumptions and factors. These factors include, but are not limited to, the following:
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Petrobras’s ability to obtain financing;
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general economic and business conditions, including crude oil and other commodity prices, refining margins
and prevailing exchange rates;
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global economic conditions;
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Petrobras’s ability to find, acquire or gain access to additional reserves and to develop Petrobras’s
current reserves successfully;
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uncertainties inherent in making estimates of our oil and gas reserves, including recently discovered
oil and gas reserves;
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technical difficulties in the operation of Petrobras’s equipment and the provision of Petrobras’s
services;
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changes in, or failure to comply with, laws or regulations, including with respect to fraudulent activity,
corruption and bribery;
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receipt of governmental approvals and licenses;
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international and Brazilian political, economic and social developments;
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natural disasters, accidents, military operations, terrorist acts, acts of sabotage, wars or embargoes;
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global health crises, such as the COVID-19 pandemic;
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the cost and availability of adequate insurance coverage;
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Petrobras’s ability to successfully implement assets sales under Petrobras’s portfolio management
program;
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Petrobras’s ability to successfully implement its Strategic Plan, whether that Strategic Plan remains
in place, and the direction of any subsequent strategic plans;
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the outcome of ongoing corruption investigations and any new facts or information that may arise in relation
to the Lava Jato investigation;
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the effectiveness of Petrobras’s risk management policies and procedures, including operational
risk;
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potential changes to the composition of Petrobras’s board of directors and management team; and
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litigation, such as class actions or enforcement or other proceedings brought by governmental and regulatory
agencies.
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For additional information
on factors that could cause our actual results to differ from expectations reflected in forward-looking statements, please see “Risk
Factors” in this prospectus supplement and in documents incorporated by reference in this prospectus supplement and the accompanying
prospectus.
All forward-looking statements
attributed to us or a person acting on our behalf are expressly qualified in their entirety by this cautionary statement, and you should
not place undue reliance on any forward-looking statement included in this prospectus supplement or the accompanying prospectus. We undertake
no obligation to publicly update or revise any forward-looking statements, whether as a result of new information or future events or
for any other reason.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Petrobras is incorporating
by reference into this prospectus supplement the following documents that it has filed with the U.S. Securities and Exchange Commission
(“SEC”):
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9.
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Any future reports of Petrobras on Form 6-K furnished to the SEC that are identified in those forms as
being incorporated by reference into this prospectus supplement or the accompanying prospectus.
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We will provide without charge
to any person to whom a copy of this prospectus supplement is delivered, upon the written or oral request of any such person, a copy of
any or all of the documents referred to above which have been or may be incorporated herein by reference, other than exhibits to such
documents (unless such exhibits are specifically incorporated by reference in such documents). Requests should be directed to Petrobras’s
Investor Relations Department located at Avenida República do Chile, 65 — 18th Floor, 20031-912—Rio de Janeiro,
RJ, Brazil, Attn: Leandro da Rocha Santos, Institutional Investors Manager at Investor Relations Department (telephone: +55 (21) 3224-0792;
fax: +55 (21) 3224-1401; e-mail: petroinvest@petrobras.com.br).
WHERE YOU CAN FIND MORE INFORMATION
Information that Petrobras
files with or furnishes to the SEC after the date of this prospectus supplement, and that is incorporated by reference herein, will automatically
update and supersede the information in this prospectus supplement. You should review the SEC filings and reports that Petrobras incorporates
by reference to determine if any of the statements in this prospectus supplement, the accompanying prospectus or in any documents previously
incorporated by reference have been modified or superseded.
Documents incorporated by
reference in this prospectus supplement are available without charge. Each person to whom this prospectus supplement and the accompanying
prospectus are delivered may obtain documents incorporated by reference herein by requesting them either in writing or orally, by telephone
or by e-mail from us at the following address:
Investor Relations Department
Petróleo Brasileiro S.A.- Petrobras
Avenida República do Chile, 65 — 18th Floor
20031-912 — Rio de Janeiro — RJ, Brazil
Attn: Leandro da Rocha Santos, Institutional Investors Manager at Investor Relations Department
Telephone: +55 (21) 3224-0792
Fax: +55 (21) 3224-1401
E-mail: petroinvest@petrobras.com.br
Petrobras is subject to the
information requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), applicable to a foreign
private issuer, and accordingly files or furnishes reports, including annual reports on Form 20-F, reports on Form 6-K, and other information
with the SEC. Any filings Petrobras makes electronically will be available to the public over the Internet at the SEC’s web site
at http://www.sec.gov. The information on this website, which might be accessible through a hyperlink resulting from this URL, is not
and shall not be deemed to be incorporated into this prospectus supplement.
SUMMARY
This summary highlights
key information described in greater detail elsewhere, or incorporated by reference, in this prospectus supplement and the accompanying
prospectus. This summary is not complete and does not contain all of the information you should consider before investing in the Notes.
You should read carefully the entire prospectus supplement, the accompanying prospectus, including “Risk Factors” and the
documents incorporated by reference herein, which are described under “Incorporation of Certain Documents by Reference” and
“Where You Can Find More Information.”
PGF
PGF is a wholly-owned finance
subsidiary of Petrobras, incorporated under the laws of the Netherlands as a private company with limited liability (besloten vennootschap
met beperkte aansprakelijkheid) on August 2, 2012. PGF is an indirect subsidiary of Petrobras, and all of PGF’s shares are held
by Petrobras’s Dutch subsidiary Petrobras International Braspetro B.V. PGF’s business is to raise financing to fund the operations
of companies within the Petrobras group, including by issuing debt securities in the international capital markets. PGF does not currently
have any operations, revenues or assets other than those related to the issuance, administration and repayment of its debt securities.
All debt securities issued by PGF are fully and unconditionally guaranteed by Petrobras. PGF was incorporated for an indefinite period
of time.
Petrobras uses PGF as its
main vehicle to issue securities in the international capital markets. PGF’s first offering of notes fully and unconditionally guaranteed
by Petrobras occurred in September 2012. In December 2014, PGF assumed the obligations of Petrobras’s former finance subsidiary
Petrobras International Finance Company S.A. (“PifCo”) under all then outstanding notes originally issued by PifCo, which
continue to benefit from Petrobras’s full and unconditional guaranty.
PGF’s registered office
is located at Weena 762, 9th floor, Room A, 3014 DA Rotterdam, the Netherlands, and our telephone number is +31 (0) 10 206-7000.
Petrobras
Petrobras is one of the world’s
largest integrated oil and gas companies, engaging in a broad range of oil and gas activities. Petrobras is a sociedade de economia
mista (partially state-owned enterprise) organized and existing under the laws of Brazil. For the years ended December 31, 2020 and
2019, Petrobras had sales revenues of U.S.$53,683 million and U.S.$76,589 million, respectively, gross profit of U.S.$24,488 million and
U.S.$30,857 million, respectively, and net income attributable to shareholders of Petrobras of U.S.$1,141 million and U.S.$10,151 million,
respectively. For the three-month periods ended March 31, 2021 and 2020, Petrobras had sales revenues of U.S.$15,698 million and U.S.$17,143
million, respectively, gross profit of U.S.$8,007 million and U.S.$7,264 million, respectively, and net income (loss) attributable to
shareholders of Petrobras of U.S.$180 million and U.S.$(9,715) million, respectively. In 2020, Petrobras’s average domestic daily
oil and Natural Gas Liquids (“NGL”) production was 2.266 million bbl/d. In the three-month period ended March
31, 2021, Petrobras’s average domestic daily oil and NGL production was 2.196 million bbl/d.
Petrobras currently divides
its activities into the following segments of operations:
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Exploration and Production: this segment covers the activities
of exploration, development and production of crude oil, NGL and natural gas in Brazil and abroad, for the primary purpose of supplying
Petrobras’s domestic refineries. Petrobras’s exploration and production segment also operates through partnerships with other
companies, including holding interests in non-Brazilian companies in this segment;
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Refining, Transportation and Marketing: this segment
covers the activities of refining, logistics, transport, marketing and trading of crude oil and oil products in Brazil and abroad, exports
of ethanol, petrochemical operations, such as extraction and processing of shale, as well as holding interests in petrochemical companies
in Brazil; and
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Gas and Power: this segment covers the activities of
logistics and trading of natural gas and electricity, transportation and trading of liquefied natural gas (“LNG”),
generation of electricity by means of thermoelectric power plants, as well as holding interests in transportation and distribution companies
of natural gas in Brazil and abroad. It also includes natural gas processing and fertilizer operations.
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Additionally, Petrobras has
a Corporate and Other Business classification that includes activities that are not attributed to the business segments, notably those
related to corporate financial management, corporate overhead and other expenses, provision for the class action settlement, and actuarial
expenses related to the pension and medical benefits for retired employees and their dependents. It also comprises biofuels and distribution
businesses. The biofuels business covers the activities of production of biodiesel and its co-products and ethanol. The distribution business
includes the equity interest in the associate Petrobras Distribuidora S.A. (“BR Distribuidora”) and the business for
the distribution of oil products abroad (in Argentina, Bolivia, Colombia and Uruguay). For further information regarding Petrobras’s
business segments, see Notes 13 and 33 to Petrobras’s audited consolidated financial statements included in the 2020 Form 20-F incorporated
by reference herein.
Petrobras’s principal
executive office is located at Avenida República do Chile, 65, 20031-912 – Rio de Janeiro RJ, Brazil, its telephone number
is +55 (21) 3224-4477, and Petrobras’s website is www.petrobras.com.br. The information on Petrobras’s website, which might
be accessible through a hyperlink resulting from this URL, is not and shall not be deemed to be incorporated into this prospectus supplement.
The Offering
Issuer
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Petrobras Global Finance B.V. (“PGF”).
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The Notes
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U.S.$1,500,000,000 aggregate principal amount of
5.500% Global Notes due 2051 (the “Notes”).
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Issue Price
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96.446% of the aggregate principal amount,
plus accrued interest from June 10, 2021, if settlement occurs after such date.
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Closing Date
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June 10, 2021.
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Maturity Date
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June 10, 2051.
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Interest
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The Notes will bear interest from June 10, 2021, the date of issuance of the Notes, at
the rate of 5.500% per annum, payable semi-annually in arrears on each interest payment
date.
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Interest Payment Dates
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June 10 and December 10 of each
year, commencing on December 10, 2021.
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Denominations
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PGF will issue the Notes only in denominations of U.S.$2,000 and integral multiples of U.S.$1,000 in excess thereof.
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Trustee, Registrar, Paying Agent and Transfer Agent
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The Bank of New York Mellon
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Codes
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(a) ISIN
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US71647NBJ72
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(b) CUSIP
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71647NBJ7
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Use of Proceeds
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PGF intends to use the net proceeds from the sale of the Notes to repurchase its 6.750% Global Notes due 2050, 5.093% Global Notes due 2030, 6.250% Global Notes due 2024, 5.299% Global Notes due 2025, 6.900% Global Notes due 2049, 6.875% Global Notes due 2040, 8.750% Global Notes due 2026, 7.375% Global Notes due 2027, 5.999% Global Notes due 2028, 5.750% Global Notes due 2029, 6.750% Global Notes due 2041, 5.625% Global Notes due 2043 and 7.250% Global Notes due 2044 (collectively, the “Old Notes”), in each case that PGF accepts for purchase in the tender offers described below, and to use any remaining net proceeds for general corporate purposes. See “Use of Proceeds.”
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Tender Offers
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Concurrently with this offering, PGF announced
the commencement of cash tender offers (the “Tender Offers”), on the terms and subject to the conditions described in an offer
to purchase (the “Offer to Purchase”), that is being made available to eligible holders of Old Notes. The Tender Offers for
the Old Notes are conditioned upon certain customary conditions, including the closing of the sale of the Notes offered hereby. This offering
is not conditioned on the successful consummation of the Tender Offers. The underwriters are also acting as dealer managers in the Tender
Offers.
Although PGF currently intends to consummate the
Tender Offers, it cannot guarantee that the Tender Offers will be consummated on the terms contained in the Offer to Purchase, or, if
consummated, the number of Old Notes that will be tendered.
This prospectus supplement is not an offer
to purchase or a solicitation of an offer to sell the Old Notes. The Tender Offers will be made only by and pursuant to the terms of
the Offer to Purchase.
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Indenture
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The Notes offered hereby will be issued pursuant to an indenture between PGF and The Bank of New York Mellon, a New York banking corporation, as trustee, dated as of August 28, 2018, as supplemented by the fourth supplemental indenture to be dated as of the closing date, among PGF, Petrobras and The Bank of New York Mellon, as trustee (the “indenture”). See “Description of the Notes.”
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Guaranty
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The Notes will be unconditionally guaranteed by Petrobras under the guaranty. See “Description of the Guaranty.”
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Ranking
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The Notes constitute general senior unsecured
and unsubordinated obligations of PGF that will at all times rank pari passu among themselves and with all other unsecured unsubordinated
indebtedness issued from time to time by PGF.
The obligations of Petrobras under the guaranty
constitute general senior unsecured obligations of Petrobras that will at all times rank pari passu with all other senior unsecured
obligations of Petrobras that are not, by their terms, expressly subordinated in right of payment to Petrobras’s obligations under
the guaranty.
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Optional Redemption
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PGF may redeem the Notes, in whole or in
part, at any time or from time to time prior to December 10, 2050 (the date that is six months prior to the scheduled maturity of
the Notes) by paying the greater of the principal amount of the Notes to be redeemed and a “make-whole” amount, plus, in
each case, accrued and unpaid interest, as described under “Description of the Notes—Optional Redemption— Optional
Redemption With ‘Make-Whole’ Amount for the Notes.”
Beginning on December 10, 2050, PGF may redeem, in whole or in part,
the Notes at a price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, as described
under “Description of the Notes—Optional Redemption—Optional Redemption at Par.”
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Early Redemption at PGF’s Option Solely for Tax Reasons
|
|
PGF has the option, subject to certain conditions, to redeem the Notes in whole at their principal amount, plus accrued and unpaid interest, if any, to the date of redemption, if and when, as a result of a change in, execution of, or amendment to, any laws or treaties or the official entry into effect, application or interpretation of any laws or treaties, PGF would be required to pay additional amounts related to the deduction of certain withholding taxes in respect of certain payments on the Notes. See “Description of Debt Securities―Special Situations―Optional Tax Redemption” in the accompanying prospectus.
|
Covenants
|
|
|
(a) PGF
|
|
The terms of the indenture will require PGF, among other things, to:
|
|
|
·
|
pay all amounts owed by it under the indenture and the Notes when such amounts are due;
|
|
|
·
|
maintain an office or agent for the purpose of service of process and a paying agent, in each case in the United States;
|
|
|
·
|
ensure that the Notes continue to be senior obligations of PGF;
|
|
|
·
|
use proceeds from the issuance of the Notes for specified purposes; and
|
|
|
·
|
replace the trustee upon any resignation or removal of the trustee.
|
|
|
In addition, the terms of the indenture will restrict the ability of PGF and its subsidiaries, among other things, to:
|
|
|
·
|
undertake certain mergers, consolidations or similar transactions; and
|
|
|
·
|
create certain liens on its assets or pledge its assets.
|
|
|
PGF’s covenants are subject to a number of important qualifications and exceptions. See “Description of the Notes—Covenants.”
|
(b) Petrobras
|
|
The terms of the guaranty will require Petrobras, among other things, to:
|
|
|
·
|
pay all amounts owed by it in accordance with the terms of the guaranty and the indenture;
|
|
|
·
|
maintain an office or agent in the United States for the purpose of service of process;
|
|
|
·
|
ensure that its obligations under the guaranty will continue to be senior obligations of Petrobras; and
|
|
|
·
|
make available certain financial statements to the trustee.
|
|
|
In addition, the terms of the guaranty will restrict the ability of Petrobras and its subsidiaries, among other things, to:
|
|
|
·
|
undertake certain mergers, consolidations or similar transactions; and
|
|
|
·
|
create certain liens on its assets or pledge its assets.
|
|
|
Petrobras’s covenants are subject to a number of important qualifications and exceptions. See “Description of the Guaranty—Covenants.”
|
Events of Default
|
|
The following events of default will be events of default with respect to the Notes:
|
|
|
·
|
failure to pay principal on the Notes within seven calendar days of its due date;
|
|
|
·
|
failure to pay interest on the Notes within 30 calendar days of any interest payment date;
|
|
|
·
|
breach by PGF of a covenant or agreement in the indenture or by Petrobras of a covenant or agreement in the guaranty if not remedied within 60 calendar days;
|
|
|
·
|
acceleration of a payment on the indebtedness of PGF or Petrobras or any material subsidiary that equals or exceeds U.S.$200 million;
|
|
|
·
|
certain events of bankruptcy, reorganization, liquidation, insolvency, moratorium or intervention law or law with similar effect of PGF or Petrobras or any material subsidiary;
|
|
|
·
|
certain events relating to the unenforceability of the Notes, the indenture or the guaranty against PGF or Petrobras; and
|
|
|
·
|
Petrobras ceasing to own at least 51% of PGF’s outstanding voting shares.
|
|
|
The events of default are subject to a number of important qualifications and limitations. See “Description of the Notes—Events of Default.”
|
Further Issuances
|
|
PGF reserves the right, from time to time, without the consent of the holders of the Notes, to issue additional Notes on terms and conditions identical to those of the Notes, which additional Notes shall increase the aggregate principal amount of, and shall be consolidated and form a single series with, the Notes offered hereby. PGF may also issue other securities under the indenture that have different terms and conditions from the Notes. See “Description of the Notes—Further Issuances.”
|
Modification of Notes, Indenture and Guaranty
|
|
The terms of the indenture may be modified by
PGF and the trustee, and the terms of the guaranty may be modified by Petrobras and the trustee, in some cases without the consent of
the holders of the Notes. See “Description of the Notes—Amendments.”
|
Clearance and Settlement
|
|
The Notes will be issued in book-entry form through the facilities of The Depository Trust Company (“DTC”), for the accounts of its direct and indirect participants, including Clearstream Banking, société anonyme, and Euroclear SA/NV, as operator of the Euroclear System, and will trade in DTC’s Same-Day Funds Settlement System. Beneficial interests in Notes held in book-entry form will not be entitled to receive physical delivery of certificated Notes except in certain limited circumstances. For a description of certain factors relating to clearance and settlement, see “Clearance and Settlement.”
|
Withholding Taxes; Additional Amounts
|
|
Any and all payments of principal, premium, if
any, and interest in respect of the Notes will be made free and clear of, and without withholding or deduction for, any taxes, duties,
assessments, levies, imposts or charges whatsoever imposed, levied, collected, withheld or assessed by Brazil, the jurisdiction of PGF’s
incorporation (currently the Netherlands) or any other jurisdiction in which PGF appoints a paying agent under the indenture, or any political
subdivision or any taxing authority thereof or therein, unless such withholding or deduction is required by law. If PGF is required by
law to make such withholding or deduction, it will pay such additional amounts as are necessary to ensure that the holders receive the
same amount as they would have received without such withholding or deduction, subject to certain exceptions. In the event Petrobras is
obligated to make payments to the holders under the guaranty, Petrobras will pay such additional amounts as are necessary to ensure that
the holders receive the same amount as they would have received without such withholding or deduction, subject to certain exceptions.
See “Description of the Notes—Covenants—Additional Amounts.”
|
Governing Law
|
|
The indenture, the Notes, and the guaranty will be governed by, and construed in accordance with, the laws of the State of New York.
|
Listing
|
|
PGF intends to apply to have the Notes approved for listing on the NYSE.
|
Risk Factors
|
|
You should carefully consider the risk factors discussed beginning on page S-14, the section entitled “Risk Factors” in Petrobras’s 2020 Form 20-F, which is incorporated by reference in this prospectus supplement, and the other information included or incorporated by reference in this prospectus supplement, before purchasing any Notes.
|
RISK FACTORS
Our
2020 Form 20-F includes extensive risk factors relating to our operations, our compliance and control risks, our relationship with the
Brazilian federal government, and to Brazil. You should carefully consider those risks and the risks described below, as well as the other
information included or incorporated by reference in this prospectus supplement and the accompanying prospectus, before making a decision
to invest in the Notes.
Risks Relating to PGF’s Debt Securities
The market for the Notes
may not be liquid.
The Notes are an issuance
of new securities with no established trading market. We intend to apply to list the Notes on the NYSE. We can provide no assurance as
to the liquidity of or trading markets for the Notes offered by this prospectus supplement. We cannot guarantee that holders of the Notes
will be able to sell their Notes in the future. If a market for the Notes does not develop, holders of the Notes may not be able to resell
the Notes for an extended period of time, if at all.
Restrictions on the
movement of capital out of Brazil may impair your ability to receive payments on the guaranty and restrict Petrobras’s ability to
make payments to PGF in U.S. dollars.
In the past, the Brazilian
economy has experienced balance of payment deficits and shortages in foreign exchange reserves, and the government has responded by restricting
the ability of Brazilian or foreign persons or entities to convert reais into foreign currencies. The government may institute
a restrictive exchange control policy in the future. Any restrictive exchange control policy could prevent or restrict our access to U.S.
dollars, and consequently our ability to meet our U.S. dollar obligations under the guaranty and could also have a material adverse effect
on our business, financial condition and results of operations. We cannot predict the impact of any such measures on the Brazilian economy.
In the event that any such restrictive exchange control policies were instituted by the Brazilian government, we may face adverse regulatory
consequences in the Netherlands that may lead us to redeem the Notes prior to their maturity.
In addition, payments by Petrobras
under the guaranty in connection with PGF’s Notes do not currently require approval by or registration with the Central Bank of
Brazil. The Central Bank of Brazil may nonetheless impose prior approval requirements on the remittance of U.S. dollars, which could cause
delays in such payments.
Petrobras would be required
to pay judgments of Brazilian courts enforcing its obligations under the guaranty only in reais.
If proceedings were brought
in Brazil seeking to enforce Petrobras’s obligations in respect of the guaranty, Petrobras would be required to discharge its obligations
only in reais. Under Brazilian exchange controls, an obligation to pay amounts denominated in a currency other than reais,
which is payable in Brazil pursuant to a decision of a Brazilian court, will be satisfied in reais at the rate of exchange in effect
on the date of payment, as determined by the Central Bank of Brazil.
A finding that Petrobras
is subject to U.S. bankruptcy laws and that any of the guaranty executed by it was a fraudulent conveyance could result in the relevant
PGF noteholders losing their legal claim against Petrobras.
PGF’s obligation to
make payments on the Notes is supported by Petrobras’s obligation under the guaranty. Petrobras has been advised by its external
U.S. counsel that the guaranty is valid and enforceable in accordance with the laws of the State of New York and the United States. In
addition, Petrobras has been advised by its general counsel that the laws of Brazil do not prevent the guaranty from being valid, binding
and enforceable against Petrobras in accordance with their terms.
In the event that U.S. federal
fraudulent conveyance or similar laws are applied to the guaranty, and Petrobras, at the time it entered into the guaranty:
|
·
|
was or is insolvent or rendered insolvent by reason of our entry into such guaranty;
|
|
·
|
was or is engaged in business or transactions for which the assets remaining with Petrobras constituted
unreasonably small capital; or
|
|
·
|
intended to incur or incurred, or believed or believe that Petrobras would incur, debts beyond Petrobras’s
ability to pay such debts as they mature; and
|
|
·
|
in each case, intended to receive or received less than the reasonably equivalent value or fair consideration
therefor,
|
then Petrobras’s obligations under the guaranty
could be avoided, or claims with respect to that agreement could be subordinated to the claims of other creditors. Among other things,
a legal challenge to the guaranty on fraudulent conveyance grounds may focus on the benefits, if any, realized by Petrobras as a result
of the issuance of the Notes. To the extent that the guaranty is held to be a fraudulent conveyance or unenforceable for any other reason,
the holders of the Notes would not have a claim against Petrobras under the guaranty and would solely have a claim against PGF. Petrobras
cannot ensure that, after providing for all prior claims, there will be sufficient assets to satisfy the claims of the noteholders relating
to any avoided portion of the guaranty.
We cannot assure you
that the credit ratings for the Notes will not be lowered, suspended or withdrawn by the rating agencies.
The credit ratings of the
Notes may change after issuance. Such ratings are limited in scope, and do not address all material risks relating to an investment in
the Notes, but rather reflect only the views of the rating agencies at the time the ratings are issued. An explanation of the significance
of such ratings may be obtained from the rating agencies. We cannot assure you that such credit ratings will remain in effect for any
given period of time or that such ratings will not be lowered, suspended or withdrawn entirely by the rating agencies, if, in the judgment
of such rating agencies, circumstances so warrant. Any lowering, suspension or withdrawal of such ratings may have an adverse effect on
the market price and marketability of the Notes.
Risks Relating to PGF and Petrobras
PGF’s operations
and debt servicing capabilities are dependent on Petrobras.
PGF’s financial position
and results of operations are directly affected by Petrobras’s decisions. PGF is an indirect, wholly-owned finance subsidiary of
Petrobras incorporated in the Netherlands as a private company with limited liability. PGF does not currently have any operations, revenues
or assets other than those related to its primary business of raising money for the purpose of on-lending to Petrobras and other subsidiaries
of Petrobras. PGF’s ability to satisfy its obligations under the Notes will depend on payments made to PGF by Petrobras and other
subsidiaries of Petrobras under the loans made by PGF. The Notes and all debt securities issued by PGF will be fully and unconditionally
guaranteed by Petrobras. Petrobras’s financial condition and results of operations, as well as Petrobras’s financial support
of PGF, directly affect PGF’s operational results and debt servicing capabilities.
USE OF PROCEEDS
The net proceeds from the
sale of the Notes, after payment of underwriting discounts but before expenses, are expected to be approximately U.S.$1,442.2 million.
PGF intends to use the net
proceeds from the sale of the Notes to purchase the Old Notes that PGF accepts for purchase in the Tender Offers announced concurrently
with this offering, and to use any remaining net proceeds for general corporate purposes.
The underwriters are acting
as dealer managers in connection with the Tender Offers and will receive a commission for also acting in such capacity. See “The
Offering—Tender Offers.”
SELECTED FINANCIAL AND OPERATING
INFORMATION
This prospectus supplement
incorporates by reference (i) our unaudited consolidated interim financial statements as of March 31, 2021 and for the three-month periods
ended March 31, 2021 and 2020, prepared and presented in accordance with IAS 34 – “Interim Financial Reporting” as issued
by the IASB, and (ii) our audited consolidated financial statements as of December 31, 2020 and 2019 and for the years ended December
31, 2020, 2019 and 2018, which have been prepared in accordance with the International Financial Reporting Standards (IFRS) as issued
by the IASB.
The selected financial information
as of December 31, 2020 and 2019 and for the years ended December 31, 2020, 2019, and 2018, presented in the tables below have been derived
from Petrobras’s audited consolidated financial statements. The selected financial data as of March 31, 2021 and for the three-month
periods ended March 31, 2021 and 2020 have been derived from Petrobras’s unaudited consolidated interim financial statements, which
in the opinion of management, reflect all adjustments that are of a normal recurring nature necessary for a fair presentation of the results
for such periods. The results of operations for the three months ended March 31, 2021 are not necessarily indicative of the operating
results to be expected for the entire year. The selected consolidated financial data should be read in conjunction with, and are qualified
in their entirety by reference to, Petrobras’s financial statements and the accompanying notes incorporated by reference in this
prospectus supplement.
Balance
Sheet Data
|
|
As of March 31,
|
|
|
As of December 31,
|
|
|
|
2021
|
|
|
2020
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(U.S.$ million)
|
|
|
(U.S.$ million)
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
11,963
|
|
|
|
11,711
|
|
|
|
7,372
|
|
|
|
13,899
|
|
Marketable securities
|
|
|
579
|
|
|
|
659
|
|
|
|
888
|
|
|
|
1,083
|
|
Trade and other receivables, net
|
|
|
2,358
|
|
|
|
4,731
|
|
|
|
3,762
|
|
|
|
5,746
|
|
Inventories
|
|
|
6,973
|
|
|
|
5,677
|
|
|
|
8,189
|
|
|
|
8,987
|
|
Assets classified as held for sale
|
|
|
2,045
|
|
|
|
785
|
|
|
|
2,564
|
|
|
|
1,946
|
|
Other current assets
|
|
|
3,107
|
|
|
|
3,825
|
|
|
|
5,037
|
|
|
|
5,401
|
|
Long-term receivables
|
|
|
20,004
|
|
|
|
20,200
|
|
|
|
17,691
|
|
|
|
22,059
|
|
Investments
|
|
|
3,167
|
|
|
|
3,273
|
|
|
|
5,499
|
|
|
|
2,759
|
|
Property, plant and equipment
|
|
|
111,406
|
|
|
|
124,201
|
|
|
|
159,265
|
|
|
|
157,383
|
|
Intangible assets
|
|
|
13,618
|
|
|
|
14,948
|
|
|
|
19,473
|
|
|
|
2,805
|
|
Total assets
|
|
|
175,220
|
|
|
|
190,010
|
|
|
|
229,740
|
|
|
|
222,068
|
|
Liabilities and equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
21,847
|
|
|
|
26,225
|
|
|
|
28,816
|
|
|
|
25,051
|
|
Non-current liabilities(1)
|
|
|
50,138
|
|
|
|
54,207
|
|
|
|
67,918
|
|
|
|
43,334
|
|
Non-current finance debt(2)
|
|
|
47,025
|
|
|
|
49,702
|
|
|
|
58,791
|
|
|
|
80,508
|
|
Total liabilities
|
|
|
119,010
|
|
|
|
130,134
|
|
|
|
155,525
|
|
|
|
148,893
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share capital (net of share issuance costs)
|
|
|
107,101
|
|
|
|
107,101
|
|
|
|
107,101
|
|
|
|
107,101
|
|
Reserves and other comprehensive income (deficit)(3)
|
|
|
(52,092
|
)
|
|
|
(47,753
|
)
|
|
|
(33,778
|
)
|
|
|
(35,557
|
)
|
Equity attributable to the shareholders of Petrobras
|
|
|
55,009
|
|
|
|
59,348
|
|
|
|
73,323
|
|
|
|
71,544
|
|
Non-controlling interests
|
|
|
1,201
|
|
|
|
528
|
|
|
|
892
|
|
|
|
1,631
|
|
Total equity
|
|
|
56,210
|
|
|
|
59,876
|
|
|
|
74,215
|
|
|
|
73,175
|
|
Total liabilities and equity
|
|
|
175,220
|
|
|
|
190,010
|
|
|
|
229,740
|
|
|
|
222,068
|
|
(1)
|
Excludes non-current finance debt.
|
(2)
|
Excludes current portion of finance debt.
|
(3)
|
Capital transactions, profit reserve and accumulated other comprehensive income (deficit).
|
Income
Statement Data
|
|
For the Three Months Ended
March 31,
|
|
|
For the Year Ended December 31,
|
|
|
|
2021
|
|
|
2020(4)
|
|
|
2020(1)
|
|
|
2019(2)
|
|
|
2018(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(U.S.$ million, except for share and per share data)
|
|
|
(U.S.$ million, except for share and per share data)
|
|
Sales revenues
|
|
|
15,698
|
|
|
|
17,143
|
|
|
|
53,683
|
|
|
|
76,589
|
|
|
|
84,638
|
|
Operating income (loss)
|
|
|
5,975
|
|
|
|
(8,427
|
)
|
|
|
10,063
|
|
|
|
20,614
|
|
|
|
16,788
|
|
Net income (loss) attributable to our shareholders
|
|
|
180
|
|
|
|
(9,715
|
)
|
|
|
1,141
|
|
|
|
10,151
|
|
|
|
7,173
|
|
From continuing operations
|
|
|
180
|
|
|
|
(9,715
|
)
|
|
|
1,141
|
|
|
|
7,660
|
|
|
|
6,572
|
|
From discontinued operations
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,491
|
|
|
|
601
|
|
Weighted average number of shares outstanding(5):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
|
|
|
7,442,231,382
|
(6)
|
|
|
7,442,231,382
|
(6)
|
|
|
7,442,231,382
|
(6)
|
|
|
7,442,231,382
|
|
|
|
7,442,231,382
|
|
Preferred
|
|
|
5,601,969,879
|
(6)
|
|
|
5,601,969,879
|
(6)
|
|
|
5,601,969,879
|
(6)
|
|
|
5,601,969,879
|
|
|
|
5,601,969,879
|
|
Basic and diluted earnings (losses) per:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common and preferred shares
|
|
|
0.01
|
|
|
|
(0.74
|
)
|
|
|
0.09
|
|
|
|
0.78
|
|
|
|
0.55
|
|
From continuing operations
|
|
|
0.01
|
|
|
|
(0.74
|
)
|
|
|
0.09
|
|
|
|
0.59
|
|
|
|
0.50
|
|
From discontinued operations
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.19
|
|
|
|
0.05
|
|
Common and preferred ADS(5)
|
|
|
0.02
|
|
|
|
(1.48
|
)
|
|
|
0.18
|
|
|
|
1.56
|
|
|
|
1.10
|
|
From continuing operations
|
|
|
0.02
|
|
|
|
(1.48
|
)
|
|
|
0.18
|
|
|
|
1.18
|
|
|
|
1.00
|
|
From discontinued operations
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.38
|
|
|
|
0.10
|
|
Operating income (loss) per:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common and preferred shares
|
|
|
0.46
|
|
|
|
-0.65
|
|
|
|
0.77
|
|
|
|
1.58
|
|
|
|
1.29
|
|
Common and preferred ADS(5)
|
|
|
0.92
|
|
|
|
-1.30
|
|
|
|
1.54
|
|
|
|
3.16
|
|
|
|
2.58
|
|
Cash dividends per(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares
|
|
|
-
|
|
|
|
-
|
|
|
|
0.15
|
|
|
|
0.19
|
|
|
|
0.07
|
|
Preferred shares
|
|
|
-
|
|
|
|
-
|
|
|
|
0.15
|
|
|
|
0.23
|
|
|
|
0.24
|
|
Common ADS(5)
|
|
|
-
|
|
|
|
-
|
|
|
|
0.30
|
|
|
|
0.38
|
|
|
|
0.14
|
|
Preferred ADS(5)
|
|
|
-
|
|
|
|
-
|
|
|
|
0.30
|
|
|
|
0.46
|
|
|
|
0.48
|
|
(1)
|
In 2020, Petrobras recognized impairment losses of U.S.$7,339 million.
|
(2)
|
In July 2019, Petrobras closed the transaction under which it sold a further portion of its interest in BR Distribuidora. After the closing of this transaction, Petrobras is no longer the controlling shareholder of BR Distribuidora and, since August 2019, Petrobras has been reflecting BR Distribuidora’s results as an equity-accounted investment. Thus, from January to July 2019, Petrobras presented its post-tax profit of BR Distribuidora as Net income from discontinued operations in its consolidated statement of income, in accordance with IFRS 5, since it represented a separate major line of business. The statement of income for 2018 was revised accordingly to reflect this classification. In 2019, Petrobras recognized impairment losses of U.S.$2,848 million.
|
(3)
|
In 2018, Petrobras recognized the effects of the settlement of open matters with the Department of Justice and the SEC investigation, in the amount of U.S.$853 million. Petrobras also recognized impairment losses of U.S.$2,005 million.
|
(4)
|
In the three-month period ended March 31, 2020, Petrobras recognized impairment losses amounting to U.S.$13,371 million.
|
(5)
|
The ratio of ADR to Petrobras’s common and preferred shares is two shares to one ADR.
|
(6)
|
The total number of shares does not include shares in treasury, of which 222,760 are common shares and 72,909 are preferred shares.
|
(7)
|
Pre-tax interest on capital and/or dividends proposed for the periods. Amounts were based on the exchange rate prevailing at the date of the approval by Petrobras’s board of directors, except for minimum mandatory dividends, which is based on the closing exchange rate on the date that Petrobras’s audited consolidated financial statements were released.
|
CAPITALIZATION
The following table sets out
the consolidated debt and capitalization of Petrobras as of March 31, 2021, including accrued interest (i) on an actual basis, which have
been derived from Petrobras’s unaudited consolidated interim financial statements and (ii) as adjusted to give effect to the issuance
of the Notes offered hereby (including the underwriting discount indicated on the cover page of this prospectus supplement), but without
giving effect to the application of net cash proceeds of this offering.
|
|
As
of March 31, 2021
|
|
|
|
Actual
|
|
|
As
Adjusted(1)
|
|
|
|
(U.S.$ million)
|
|
|
|
(Unaudited)
|
|
Lease Liability:
|
|
|
|
|
|
|
|
|
Current portion
|
|
|
5,370
|
|
|
|
5,370
|
|
Non-current portion
|
|
|
15,279
|
|
|
|
15,279
|
|
Total lease liability
|
|
|
20,649
|
|
|
|
20,649
|
|
Finance debt:
|
|
|
|
|
|
|
|
|
Current portion
|
|
|
3,292
|
|
|
|
3,292
|
|
Non-current portion (2)
|
|
|
47,025
|
|
|
|
48,467
|
|
Finance debt
|
|
|
50,317
|
|
|
|
51,759
|
|
Foreign currency denominated
|
|
|
43,086
|
|
|
|
44,528
|
|
Local currency denominated
|
|
|
7,231
|
|
|
|
7,231
|
|
Total finance debt
|
|
|
50,317
|
|
|
|
51,759
|
|
Non-controlling interest
|
|
|
1,201
|
|
|
|
1,201
|
|
Petrobras’s shareholders’ equity(3)
|
|
|
55,009
|
|
|
|
55,009
|
|
Total capitalization
|
|
|
127,176
|
|
|
|
128,618
|
|
|
(1)
|
As adjusted to reflect the issuance of Notes offered hereby (including the underwriting discount indicated
on the cover page of this prospectus supplement), without giving effect to the application of net cash proceeds of this offering.
|
|
(2)
|
Non-current portion includes indebtedness in an amount of U.S.$2,496 million that was repaid by Petrobras
after March 31, 2021.
|
|
(3)
|
Consisting of (a) 7,442,454,142 shares of common stock and (b) 5,602,042,788 shares of preferred stock,
in each case with no par value and in each case which have been authorized and issued.
|
DESCRIPTION OF THE NOTES
The following description
of the terms of the Notes supplements and modifies the description of the general terms and provisions of debt securities and the indenture
set forth in the accompanying prospectus, which you should read in conjunction with this prospectus supplement. In addition, we urge you
to read the indenture, including the fourth supplemental indenture in connection with the Notes, because they will define your rights
as holders of the Notes. If the description of the terms of the Notes in this prospectus supplement differs in any way from that in the
accompanying prospectus, you should rely on the information contained in this prospectus supplement. You may obtain copies of the indenture,
including the fourth supplemental indenture, upon written request to the trustee or with the SEC at the addresses set forth under “Where
You Can Find More Information.”
The Fourth Supplemental Indenture
PGF will issue the Notes under
an indenture dated as of August 28, 2018 between PGF and The Bank of New York Mellon, a New York banking corporation, as trustee. This
indenture will be supplemented by the fourth supplemental indenture to be dated as of the closing date, among PGF, Petrobras and The Bank
of New York Mellon, as trustee, which provide the specific terms of the Notes offered by this prospectus supplement, including granting
holders rights against Petrobras under the guaranty.
Whenever we refer to the “indenture”
in this prospectus supplement, we are referring to the indenture dated as of August 28, 2018, as supplemented by the fourth supplemental
indenture.
The Notes
The Notes will be general,
senior, unsecured and unsubordinated obligations of PGF having the following basic terms:
The title of the Notes will
be the 5.500% Global Notes due 2051;
The Notes will:
|
·
|
be issued in an aggregate principal amount of U.S.$1,500,000,000;
|
|
·
|
mature on June 10, 2051;
|
|
·
|
bear interest at a rate of 5.500% per annum from June 10, 2021, until maturity or early redemption and
until all required amounts due in respect of the Notes have been paid;
|
|
·
|
be issued in global registered form without interest coupons attached;
|
|
·
|
be issued and may be transferred only in principal amounts of U.S.$2,000 and in integral multiples of
U.S.$1,000 in excess thereof; and
|
|
·
|
be unconditionally guaranteed by Petrobras pursuant to a guaranty described below under
“—Guaranty.”
|
All payments of principal and interest
on the Notes will be paid in U.S. dollars;
Interest on the Notes will be paid semi-annually
on June 10 and December 10 of each year (each of which we refer to as an “interest payment date”), commencing on December
10, 2021 and the regular record date for any interest payment date will be the business day preceding that date; and
In the case of amounts not paid by
PGF under the indenture and the Notes (or Petrobras under the guaranty for the Notes), interest will continue to accrue on such
amounts at a default rate equal to 0.5% in excess of the interest rate on the Notes, from and including the date when such amounts
were due and owing and through and excluding the date of payment of such amounts by PGF or Petrobras.
Despite the Brazilian government’s
ownership interest in Petrobras, the Brazilian government is not responsible in any manner for PGF’s obligations under the Notes
or Petrobras’s obligations under the guaranty for the Notes.
Guaranty
Petrobras will unconditionally
and irrevocably guarantee the full and punctual payment when due, whether at the maturity date of the Notes, or earlier or later by acceleration
or otherwise, of all of PGF’s obligations now or hereafter existing under the indenture and the Notes, whether for principal, interest,
make-whole premium, fees, indemnities, costs, expenses or otherwise. The guaranty will be unsecured and will rank equally with all of
Petrobras’s other existing and future unsecured and unsubordinated debt including guaranties previously issued by Petrobras in connection
with prior issuances of indebtedness. See “Description of the Guaranty.”
Depositary with Respect to Global Notes
The Notes will be issued in
global registered form with The Depository Trust Company (“DTC”), as depositary. For further information in this regard, see
“Clearance and Settlement.”
Events of Default
The following events will
be events of default with respect to the Notes:
|
·
|
PGF does not pay the principal on the Notes within seven calendar days of its due date and the trustee
has not received such amounts from Petrobras under the guaranty by the end of that seven-day period.
|
|
·
|
PGF does not pay interest or other amounts, including any additional amounts, on the Notes within 30 calendar
days of their due date and the trustee has not received such amounts from Petrobras under the guaranty by the end of that 30-day period.
|
|
·
|
PGF or Petrobras remains in breach of any covenant or any other term in respect of the Notes issued under
the indenture or guaranty for 60 calendar days after receiving a notice of default stating that it is in breach. The notice must be sent
by either the trustee or holders of 25% of the principal amount of the Notes.
|
|
·
|
The maturity of any indebtedness of PGF or Petrobras or a material subsidiary in a total aggregate principal
amount of U.S.$200,000,000 (or its equivalent in another currency) or more is accelerated in accordance with the terms of that indebtedness,
it being understood that prepayment or redemption by us or a material subsidiary of any indebtedness is not acceleration for this purpose.
|
|
·
|
PGF or Petrobras or any material subsidiary stops paying or is generally unable to pay its debts as they
become due, except in the case of a winding-up, dissolution or liquidation for the purpose of and followed by a consolidation, spin-off,
merger, conveyance or transfer duly approved by the note holders.
|
|
·
|
If proceedings are initiated against PGF, Petrobras or any material subsidiary under any applicable bankruptcy,
reorganization, insolvency, moratorium or intervention law or law with similar effect, or under any other law for the relief of, or relating
to, debtors, and such proceeding is not dismissed or stayed within 90 calendar days.
|
|
·
|
An administrative or other receiver, manager or administrator, or any such or other similar official is
appointed in relation to, or a distress, execution, attachment, sequestration or other process is levied or put in force against, the
whole or a substantial part of the undertakings or assets of PGF or Petrobras or any material subsidiary and is not discharged or removed
within 90 calendar days.
|
|
·
|
PGF or Petrobras or any material subsidiary voluntarily commences or consents to proceedings under any
applicable liquidation, bankruptcy, reorganization, insolvency, moratorium or any other similar laws, PGF or Petrobras or any material
subsidiary enters into any composition or other similar arrangement with our creditors under applicable Brazilian law (such as a recuperação
judicial or extrajudicial, which is a type of liquidation agreement).
|
|
·
|
PGF or Petrobras or any material subsidiary files an application for the appointment of an administrative
or other receiver, manager or administrator, or any such or other similar official, in relation to PGF or Petrobras or any material subsidiary,
or PGF or Petrobras or any material subsidiary takes legal action for a readjustment or deferment of any part of its indebtedness.
|
|
·
|
An effective resolution is passed, or any authorized action is taken by any court of competent jurisdiction,
directing PGF or Petrobras or any material subsidiary’s winding-up, dissolution or liquidation, except for the purpose of and followed
by a consolidation, merger, conveyance or transfer duly approved by the note holders.
|
|
·
|
Any event occurs that under the laws of any relevant jurisdiction has substantially the same effect as
the events referred to in the six immediately preceding paragraphs.
|
|
·
|
The Notes, the indenture, the guaranty or any part of those documents cease to be in full force and effect
or binding and enforceable against PGF or Petrobras, or it becomes unlawful for PGF or Petrobras to perform any material obligation under
any of the foregoing documents to which it is a party.
|
|
·
|
PGF or Petrobras contests the enforceability of the Notes, the indenture or the guaranty, or denies that
it has liability under any of the foregoing documents to which it is a party.
|
|
·
|
Petrobras fails to retain at least 51% direct or indirect ownership of the outstanding voting and economic
interests (equity or otherwise) of and in PGF.
|
For purposes of the events
of default:
|
·
|
“indebtedness” means any obligation (whether present or future, actual or contingent and including
any guaranty) for the payment or repayment of money which has been borrowed or raised (including money raised by acceptances and all leases
which, under IFRS, would be a capital lease obligation).
|
|
·
|
“material subsidiary” means, as to any person, any subsidiary of such person which, on any
given date of determination accounts for more than 15% of such person’s total consolidated assets (as set forth on such person’s
most recent consolidated financial statements prepared in accordance with IFRS).
|
Covenants
PGF will be subject to the
following covenants with respect to the Notes:
Payment of Principal
and Interest
PGF will duly and punctually
pay the principal of and any premium and interest and other amounts (including any additional amounts in the event withholding and other
taxes are imposed in Brazil or the jurisdiction of incorporation of PGF) on the Notes in accordance with the Notes and the indenture.
Maintenance of Corporate
Existence
PGF will maintain its corporate
existence and take all reasonable actions to maintain all rights, privileges and the like necessary or desirable in the normal conduct
of business, activities or operations, unless PGF’s board of directors determines that maintaining such rights and privileges is
no longer desirable in the conduct of PGF’s business and is not disadvantageous in any material respect to holders.
Maintenance of Office
or Agency
So long as Notes are outstanding,
PGF will maintain an office or agency in the United States where notices to and demands upon it in respect of the indenture and the Notes
may be served.
PGF has initially appointed
Petrobras America Inc., with offices located at 10350 Richmond Ave., Suite 1400, Houston, TX 77042, as its agent. PGF will not change
the appointment of the agent without prior written notice to the trustee and appointing a replacement agent or designating an office,
in the United States.
Ranking
PGF will ensure that the Notes
will at all times constitute its general senior, unsecured and unsubordinated obligations and will rank pari passu, without any
preferences among themselves, with all of its other present and future unsecured and unsubordinated obligations (other than obligations
preferred by statute or by operation of law).
Use of Proceeds
PGF intends to use the net
proceeds from the sale of the Notes to purchase the Old Notes that PGF accepts for purchase in the Tender Offers announced concurrently
with this offering, and the remainder, if any, for general corporate purposes.
Statement by Managing Directors as
to Default
PGF will deliver to the trustee,
within 90 calendar days after the end of its fiscal year, a directors’ certificate, stating whether or not to the best knowledge
of its signers thereof there is an event of default in connection with the performance and observance of any of the terms, provisions
and conditions of the indenture or the Notes and, if there is such an event of default by PGF, specifying all such events of default and
their nature and status of which the signers may have knowledge.
Provision of Financial Statements and
Reports
In the event that PGF
files any financial statements or reports with the SEC or publishes or otherwise makes such statements or reports publicly available
in the Netherlands, the United States or elsewhere, PGF will furnish a copy of the statements or reports to the trustee within 15
calendar days of the date of filing or the date the information is published or otherwise made publicly available. As long as the
financial statements or reports are publicly available and accessible electronically by the trustee, the filing or electronic
publication of such financial statements or reports will comply with PGF’s obligation to deliver such statements and reports
to the trustee. PGF will provide to the trustee with prompt written notification at such time that PGF becomes or ceases to be a
reporting company. The trustee will have no obligation to determine if and when PGF’s financial statements or reports, if any,
are publicity available and accessible electronically.
Along with each such financial
statement or report, if any, PGF will provide a directors’ certificate stating (i) that a review of PGF’s activities has been
made during the period covered by such financial statements with a view to determining whether PGF has kept, observed, performed and fulfilled
its covenants and agreements under the indenture; and (ii) that no event of default, has occurred during that period or, if one or more
have actually occurred, specifying all those events and what actions have been taken and will be taken with respect to that event of default.
Delivery of these reports,
information and documents to the trustee is for informational purposes only and the trustee’s receipt of any of those will not constitute
constructive notice of any information contained in them or determinable from information contained in them, including PGF’s compliance
with any of its covenants under the indenture (as to which the trustee is entitled to rely exclusively on directors’ certificates).
Appointment to Fill
a Vacancy in Office of Trustee
PGF, whenever necessary to
avoid or fill a vacancy in the office of trustee, will appoint a successor trustee in the manner provided in the indenture so that there
will at all times be a trustee with respect to the Notes.
Payments and Paying Agents
PGF will, prior to 3:00 p.m.,
New York City time, on the business day preceding any payment date of the principal of or interest on the Notes or other amounts (including
additional amounts), deposit with the trustee a sum sufficient to pay such principal, interest or other amounts (including additional
amounts) so becoming due.
All payments on the Notes
will be subject in all cases to any applicable tax, fiscal or other laws and regulations in any jurisdictions, but without prejudice to
the provisions of “—Additional Amounts.” For the purposes of the preceding sentence, the phrase “applicable tax,
fiscal or other laws and regulations” will include any obligation on us to withhold or deduct from a payment pursuant to Section
1471(b) of the Internal Revenue Code of 1986, as amended (the “Code”), or otherwise imposed pursuant to Sections 1471 through
1474 of the Code, any regulations thereunder or official interpretations thereof or any law implementing an intergovernmental approach
thereto (collectively, “FATCA”).
Additional Amounts
Except as provided below,
PGF or Petrobras, as applicable, will make all payments of amounts due under the Notes and the indenture and each other document entered
into in connection with the Notes and the indenture without withholding or deducting any present or future taxes, levies, deductions or
other governmental charges of any nature imposed by Brazil, the jurisdiction of PGF’s incorporation (currently the Netherlands)
or any jurisdiction in which PGF appoints a paying agent under the indenture, or any political subdivision of such jurisdictions (the
“taxing jurisdictions”). If PGF or Petrobras, as applicable, is required by law to withhold or deduct any such taxes, levies,
deductions or other governmental charges, PGF or Petrobras, as applicable, will make such deduction or withholding, make payment of the
amount so withheld to the appropriate governmental authority and pay the holders any additional amounts necessary to ensure that they
receive the same amount as they would have received without such withholding or deduction. For the avoidance of doubt, the foregoing obligations
shall extend to payments under the guaranty.
All references to principal,
premium, if any, and interest in respect of the Notes will be deemed to refer to any additional amounts which may be payable as set forth
in the indenture or in the Notes.
PGF or Petrobras, as applicable,
will not, however, pay any additional amounts in connection with any tax, levy, deduction or other governmental charge that is imposed
due to any of the following (“excluded additional amounts”):
|
·
|
the holder or any other person that beneficially owns an interest in its Notes (a “beneficial owner”)
has a connection with the taxing jurisdiction other than merely holding the Notes or receiving principal or interest payments on the Notes (such
as citizenship, nationality, residence, domicile, or existence of a business, a permanent establishment, a dependent agent, a place of
business or a place of management, present or deemed present within the taxing jurisdiction);
|
|
·
|
any tax imposed on, or measured by, net income;
|
|
·
|
the holder fails to comply with any certification, identification or other reporting requirements concerning
its or any beneficial owner’s nationality, residence, identity or connection with the taxing jurisdiction, if (i) such compliance
is required by applicable law, regulation, administrative practice or treaty as a precondition to exemption from all or a part of the
tax, levy, deduction or other governmental charge, (ii) the holder is able to comply with such requirements without undue hardship and
(iii) at least 30 calendar days prior to the first payment date with respect to which such requirements under the applicable law, regulation,
administrative practice or treaty will apply, PGF or Petrobras, as applicable, has notified all holders or the trustee that they will
be required to comply with such requirements;
|
|
·
|
the holder fails to present (where presentation is required) its Notes within 30 calendar days after PGF
has made available to the holder a payment under the Notes and the indenture, provided that PGF or Petrobras, as applicable, will
pay additional amounts which a holder would have been entitled to had the Notes owned by such holder been presented on any day (including
the last day) within such 30 calendar day period;
|
|
·
|
a withholding or deduction is required to be made pursuant the Dutch Withholding Tax Act 2021 (Wet
bronbelasting 2021);
|
|
·
|
any estate, inheritance, gift, value added, Financial Transactions Tax (“FTT”), use or sales
taxes or any similar taxes, assessments or other governmental charges; or
|
|
·
|
where the holder or any beneficial owner would have been able to avoid the tax, levy, deduction or other
governmental charge by taking reasonable measures available to such holder or beneficial owner.
|
PGF shall promptly pay when
due any present or future stamp, court or documentary taxes or any other excise or property taxes, charges or similar levies that are
imposed by a taxing jurisdiction from any payment under the Notes or under any other document or instrument referred to in the indenture
or from the execution, delivery, enforcement or registration of the Notes or any other document or instrument referred to in the indenture.
PGF shall indemnify and make whole the holders of the Notes for any present or future stamp, court or documentary taxes or any other excise
or property taxes, charges or similar levies payable by PGF as provided in this paragraph paid by such holder. As provided in “—Payments
and Paying Agents,” all payments in respect of the Notes will be made subject to any withholding or deduction required pursuant
to FATCA, and we will not be required to pay any additional amounts on account of any such deduction or withholding required pursuant
to FATCA.
Negative Pledge
So long as any Notes remain
outstanding, PGF will not create or permit any lien, other than a PGF permitted lien, on any of its assets to secure (i) any of its indebtedness
or (ii) the indebtedness of any other person, unless PGF contemporaneously creates or permits such lien to secure equally and ratably
its obligations under the Notes as is duly approved by a resolution of the holders of the Notes in accordance with the indenture. In addition,
PGF will not allow any of its material subsidiaries, if any, to create or permit any lien, other than a PGF permitted lien, on any of
its assets to secure (i) any of its indebtedness; (ii) any of the material subsidiary’s indebtedness or (iii) the indebtedness of
any other person, unless it contemporaneously creates or permits the lien to secure equally and ratably its obligations under the Notes
and the indenture or PGF provides such other security for the Notes and the indenture as is duly approved by a resolution of the holders
of the Notes in accordance with such indenture. This covenant is subject to a number of important exceptions, including an exception that
permits PGF to grant liens in respect of indebtedness the principal amount of which, in the aggregate, together with all other liens not
otherwise described in a specific exception, does not exceed 20% of PGF’s consolidated total assets (as determined in accordance
with IFRS) at any time as at which PGF’s balance sheet is prepared and published in accordance with applicable law.
Limitation on Consolidation, Merger,
Sale or Conveyance
PGF will not, in one or a
series of transactions, consolidate or amalgamate with or merge into any corporation or convey, lease, spin-off or transfer substantially
all of its properties, assets or revenues to any person or entity (other than a direct or indirect subsidiary of Petrobras) or permit
any person (other than a direct or indirect subsidiary of PGF) to merge with or into it unless such
consolidation, amalgamation, merger, lease, spin-off or transfer of properties, assets or revenues does not violate any provision of Dutch
financial regulatory laws and:
|
·
|
either PGF is the continuing entity or the person (the “successor company”) formed by the
consolidation or into which PGF is merged or that acquired (through a transfer of assets, a spin-off or otherwise) or leased the property
or assets of PGF will assume (jointly and severally with PGF unless PGF will have ceased to exist as a result of that merger, consolidation
or amalgamation), by a supplemental indenture, all of PGF’s obligations under the indenture and the Notes;
|
|
·
|
the successor company (jointly and severally with PGF unless PGF will have ceased to exist as part of
the merger, consolidation or amalgamation) agrees to indemnify each holder against any tax, assessment or governmental charge thereafter
imposed on the holder solely as a consequence of the consolidation, merger, conveyance, spin-off, transfer or lease with respect to the
payment of principal of, or interest on, the Notes;
|
|
·
|
immediately after giving effect to the transaction, no event of default, and no default has occurred and
is continuing;
|
|
·
|
PGF has delivered to the trustee a directors’ certificate and an opinion of counsel, each stating
that the transaction, and each supplemental indenture relating to the transaction, comply with the terms of the indenture, and that all
conditions precedent provided for in such indenture and relating to the transaction have been complied with; and
|
|
·
|
PGF has delivered notice of any such transaction to the trustee.
|
Notwithstanding anything to
the contrary in the foregoing, so long as no default or event of default under the indenture or the Notes will have occurred and be continuing
at the time of the proposed transaction or would result from the transaction:
|
·
|
PGF may merge, amalgamate or consolidate with or into, or convey, transfer, spin-off, lease or otherwise
dispose of all or substantially all of its properties, assets or revenues to a direct or indirect subsidiary of PGF or Petrobras in cases
when PGF is the surviving entity in the transaction and the transaction would not have a material adverse effect on PGF and its subsidiaries
taken as a whole, it being understood that if PGF is not the surviving entity, PGF will be required to comply with the requirements set
forth in the previous paragraph; or
|
|
·
|
any direct or indirect subsidiary of PGF may merge or consolidate with or into, or convey, transfer, spin-off,
lease or otherwise dispose of assets to, any person (other than PGF or any of its subsidiaries or affiliates) in cases when the transaction
would not have a material adverse effect on PGF and its subsidiaries taken as a whole; or
|
|
·
|
any direct or indirect subsidiary of PGF may merge or consolidate with or into, or convey, transfer, spin-off,
lease or otherwise dispose of assets to, any other direct or indirect subsidiary of PGF or Petrobras; or
|
|
·
|
any direct or indirect subsidiary of PGF may liquidate or dissolve if PGF determines in good faith that
the liquidation or dissolution is in the best interests of Petrobras, and would not result in a material adverse effect on PGF and its
subsidiaries taken as a whole and if the liquidation or dissolution is part of a corporate reorganization of PGF or Petrobras.
|
PGF may omit to comply with
any term, provision or condition set forth in certain covenants applicable to the Notes or any term, provision or condition of the indenture,
if before the time for the compliance the holders of at least a majority of the principal amount of the outstanding Notes waive the compliance,
but no waiver can operate except to the extent expressly waived, and, until a waiver becomes effective, PGF’s obligations and the
duties of the trustee in respect of any such term, provision or condition will remain in full force and effect.
As used above, the following
terms have the meanings set forth below:
“indebtedness”
means any obligation (whether present or future, actual or contingent and including any guaranty) for the payment or repayment of money
which has been borrowed or raised (including money raised by acceptances and all leases which, under IFRS, would be a capital lease obligation).
A “guaranty” means
an obligation of a person to pay the indebtedness of another person including, without limitation:
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an obligation to pay or purchase such indebtedness;
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an obligation to lend money or to purchase or subscribe for shares or other securities or to purchase
assets or services in order to provide funds for the payment of such indebtedness;
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an indemnity against the consequences of a default in the payment of such indebtedness; or
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any other agreement to be responsible for such indebtedness.
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A “lien” means
any mortgage, pledge, lien, hypothecation, security interest or other charge or encumbrance on any property or asset including, without
limitation, any equivalent created or arising under applicable law.
A “PGF permitted lien”
means any:
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(a)
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lien arising by operation of law, such as merchants’, maritime or other similar liens arising in
PGF’s ordinary course of business or that of any subsidiary or lien in respect of taxes, assessments or other governmental charges
that are not yet delinquent or that are being contested in good faith by appropriate proceedings;
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(b)
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lien arising from PGF’s obligations under performance bonds or surety bonds and appeal bonds or
similar obligations incurred in the ordinary course of business and consistent with PGF’s past practice;
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(c)
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lien arising in the ordinary course of business in connection with indebtedness maturing not more than
one year after the date on which that indebtedness was originally incurred and which is related to the financing of export, import or
other trade transactions;
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(d)
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lien granted upon or with respect to any assets hereafter acquired by PGF or any subsidiary to secure
the acquisition costs of those assets or to secure indebtedness incurred solely for the purpose of financing the acquisition of those
assets, including any lien existing at the time of the acquisition of those assets, so long as the maximum amount so secured does not
exceed the aggregate acquisition costs of all such assets or the aggregate indebtedness incurred solely for the acquisition of those assets,
as the case may be;
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(e)
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lien granted in connection with indebtedness of a wholly-owned subsidiary owing to PGF or another wholly-owned
subsidiary;
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(f)
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lien existing on any asset or on any stock of any subsidiary prior to the acquisition thereof by PGF or
any subsidiary, so long as the lien is not created in anticipation of that acquisition;
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(g)
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lien existing as of the date of the original issuance of the Notes;
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(h)
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lien resulting from the indenture or the guaranty, if any;
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(i)
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lien incurred in connection with the issuance of debt or similar securities of a type comparable to those
already issued by PGF, on amounts of cash or cash equivalents on deposit in any reserve or similar account to pay interest on those securities
for a period of up to 24 months as required by any rating agency as a condition to the rating agency rating those securities as investment
grade;
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(j)
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lien granted or incurred to secure any extension, renewal, refinancing, refunding or exchange (or successive
extensions, renewals, refinancings, refundings or exchanges), in whole or in part, of or for any indebtedness secured by liens referred
to in paragraphs (a) through (i) above (but not paragraph (c)), so long as the lien does not extend to any other property, the principal
amount of the indebtedness secured by the lien is not increased, and in the case of paragraphs (a), (b) and (f), the obligees meet the
requirements of the applicable paragraph; and
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(k)
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lien in respect of indebtedness the principal amount of which in the aggregate, together with all other
liens not otherwise qualifying as PGF permitted liens pursuant to another part of this definition of PGF permitted liens, does not exceed
20% of PGF’s consolidated total assets (as determined in accordance with IFRS) at any date as at which PGF’s balance sheet
is prepared and published in accordance with applicable law.
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A “wholly-owned subsidiary”
means, with respect to any corporate entity, any person of which 100% of the outstanding capital stock (other than qualifying shares,
if any) having by its terms ordinary voting power (not dependent on the happening of a contingency) to elect the board of directors (or
equivalent controlling governing body) of that person, is at the time owned or controlled directly or indirectly by that corporate entity,
by one or more wholly-owned subsidiaries of that corporate entity or by that corporate entity and one or more wholly-owned subsidiaries.
Notices
For so long as Notes in global form are outstanding,
notices to be given to holders will be given to the Trustee in accordance with its applicable policies in effect from time to time. If
Notes are issued in individual definitive form, notices to be given to holders will be deemed to have been given upon the mailing by first
class mail of such notices to holders of the Notes at their registered addresses as they appear in the registrar’s records.
Optional Redemption
PGF will not be permitted
to redeem the Notes before their stated maturity, except as set forth below. The Notes will not be entitled to the benefit of any sinking
fund (we will not deposit money on a regular basis into any separate account to repay your Notes). In addition, you will not be entitled
to require us to repurchase your Notes from you before the stated maturity.
On and after the redemption
date, interest will cease to accrue on the Notes or any portion of the Notes called for redemption (unless we default in the payment of
the redemption price and accrued and unpaid interest). On or before the business day prior to any redemption date, we will deposit with
the trustee money sufficient to pay the redemption price of and (unless the redemption date shall be an interest payment date) accrued
and unpaid interest to the redemption date on the Notes to be redeemed on such date. If less than all of the Notes are to be redeemed,
the Notes to be redeemed shall be selected by the trustee by such method as set forth in the indenture.
Optional Redemption
at Par
PGF will have the right
at our option to redeem the Notes, in whole or in part, at any time or from time to time on or after December 10, 2050 (the date
that is six months prior to the scheduled maturity of the Notes) (the “Par Call Date”), on at least 15 days’ but
not more than 60 days’ notice, at a redemption price equal to 100% of the principal amount of the Notes to be redeemed plus
accrued and unpaid interest on the principal amount of such Notes to the date of redemption.
Optional Redemption
With “Make-Whole” Amount for the Notes
PGF will have the right
at our option to redeem the Notes, in whole or in part, at any time or from time to time prior to the Par Call Date, on at least 15
days’ but not more than 60 days’ notice, at a redemption price equal to the greater of (i) 100% of the principal amount
of such Notes and (ii) the sum of the present values of each remaining scheduled payment of principal and interest thereon that
would be due after the redemption date as if the Notes were redeemed on the Par Call Date (exclusive of interest accrued to the date
of redemption) discounted to the redemption date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months)
at the Treasury Rate plus 50 basis points, plus in each case accrued and unpaid interest on the principal amount of such Notes to
the date of redemption.
A redemption notice may at
PGF’s option be subject to the satisfaction of one or more conditions precedent, and such notice may be rescinded or the redemption
date delayed in the event that any or all such conditions shall not have been satisfied by the redemption date.
“Treasury Rate”
means, with respect to any redemption date, the rate per annum equal to the semiannual equivalent yield to maturity or interpolated maturity
(on a day count basis) of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage
of its principal amount) equal to the Comparable Treasury Price for such redemption date.
“Comparable Treasury
Issue” means the United States Treasury security or securities selected by an Independent Investment Banker as having an actual
or interpolated maturity comparable to the Par Call Date that would be utilized, at the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt securities of a comparable maturity to the Par Call Date.
“Independent Investment
Banker” means one of the Reference Treasury Dealers appointed by us.
“Comparable Treasury
Price” means, with respect to any redemption date (i) the average of the Reference Treasury Dealer Quotations for such redemption
date, after excluding the highest and lowest such Reference Treasury Dealer Quotation or (ii) if the Independent Investment Banker obtains
fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations.
“Reference Treasury
Dealer” means each of BofA Securities, Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC and UBS Securities LLC, or,
in each case, their respective affiliates or a primary dealer selected by them, which are primary United States government securities
dealers in New York City reasonably designated by us; provided, however, that if any of the foregoing shall cease to be a primary United
States government securities dealer in New York City (a “Primary Treasury Dealer”), we will substitute therefor another Primary
Treasury Dealer.
“Reference Treasury
Dealer Quotation” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the
Independent Investment Banker, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of
its principal amount) quoted in writing to the Independent Investment Banker by such Reference Treasury Dealer at 3:30 p.m., New York
City time on the third business day preceding such redemption date.
On and after the redemption
date, interest will cease to accrue on the Notes or any portion of the Notes called for redemption (unless we default in the payment of
the redemption price and accrued and unpaid interest). On or before the redemption date, we will deposit with the trustee money sufficient
to pay the redemption price of and (unless the redemption date shall be an interest payment date) accrued and unpaid interest to the redemption
date on the Notes to be redeemed on such date. If less than all of the Notes are to be redeemed, the Notes to be redeemed shall be selected
by the trustee by such method as set forth in the indenture.
Redemption for Taxation Reasons
We have the option,
subject to certain conditions, to redeem the Notes in whole at their principal amount, plus accrued and unpaid interest, if any, to
the date of redemption, if and when, as a result of a change in, execution of, or amendment to, any laws or treaties or the official
entry into effect, application or interpretation of any laws or treaties, we would be required to pay additional amounts related to
the deduction of certain withholding taxes in respect of certain payments on the Notes.
The Optional Tax Redemption
set forth in the accompanying prospectus shall apply with the reincorporation of PGF being treated as the adoption of a successor entity.
Such redemption shall not be available if the reincorporation was performed in anticipation of a change in, execution of or amendment
to any laws or treaties or the official application or interpretation of any laws or treaties in such new jurisdiction of incorporation
that would result in the obligation to pay additional amounts.
Amendments
See “Description of Debt Securities—Special
Situations—Modification and Waiver” in the accompanying prospectus.
Further Issuances
The indenture by its terms
does not limit the aggregate principal amount of securities that may be issued under it and permits the issuance, from time to time, of
additional notes (also referred to as add-on Notes) of the same series as those offered under this prospectus supplement. The ability
to issue add-on Notes is subject to several requirements, however, including that (i) no event of default under the indenture or event
that with the passage of time or other action may become an event of default (such event being a “default”) will have occurred
and then be continuing or will occur as a result of that additional issuance, (ii) the add-on Notes will rank pari passu and have
equivalent terms and benefits as the Notes offered under this prospectus supplement except for the price to the public and the issue date
and (iii) any add on Notes shall be issued under a separate CUSIP or ISIN number unless the add on Notes are issued pursuant to a “qualified
reopening” of the original series, are otherwise treated as part of the same “issue” of debt instruments as the original
series or are issued with no more than a de minimis amount of original discount, in each case for U.S. federal income tax purposes.
Any add-on Notes with respect to the Notes will be part of the same series as such Notes that PGF is currently offering and the holders
will vote on all matters in relation to the Notes as a single series.
Covenant Defeasance
Any restrictive covenants
of the indenture may be defeased as described in the accompanying prospectus.
Conversion
The Notes will not be convertible
into, or exchangeable for, any other securities.
Listing
PGF intends to apply to have
the Notes approved for listing on the NYSE.
Currency Rate Indemnity
PGF has agreed that, if a
judgment or order made by any court for the payment of any amount in respect of any Notes is expressed in a currency (the “judgment
currency”) other than U.S. dollars (the “denomination currency”), PGF will indemnify the relevant holder and the trustee
against any deficiency arising from any variation in rates of exchange between the date as of which the denomination currency is notionally
converted into the judgment currency for the purposes of the judgment or order and the date of actual payment. This indemnity will constitute
a separate and independent obligation from PGF’s other obligations under the indenture, will give rise to a separate and independent
cause of action, will apply irrespective of any indulgence granted from time to time and will continue in full force and effect notwithstanding
any judgment or order for a liquidated sum or sums in respect of amounts due in respect of the Note or under any judgment or order described
above.
The Trustee, Paying Agent and Transfer Agent
The Bank of New York Mellon,
a New York banking corporation, is the trustee under the indenture and has been appointed by PGF as registrar, paying agent and transfer
agent with respect to the Notes. The address of the trustee is 240 Greenwich Street, 7E, New York, New York 10286. PGF will at all times
maintain a paying agent in New York City until the Notes are paid.
Any corporation or association
into which the trustee or any agent named above may be merged or converted or with which it may be consolidated, or any corporation or
association resulting from any merger, conversion or consolidation to which the trustee or any agent shall be a party, or any corporation
or association to which all or substantially all of the corporate trust business of the trustee or any agent may be sold or otherwise
transferred, shall be the successor trustee or relevant agent, as applicable, hereunder without any further act.
DESCRIPTION OF THE GUARANTY
General
In connection with the execution
and delivery of the fourth supplemental indenture and the Notes offered by this prospectus supplement, Petrobras will guarantee the Notes
(the “guaranty”) for the benefit of the holders.
The guaranty will provide
that Petrobras will unconditionally and irrevocably guarantee the Notes on the terms and conditions described below.
The following summary describes
the material provisions of the guaranty. You should read the more detailed provisions of the guaranty, including the defined terms, for
provisions that may be important to you. This summary is subject to, and qualified in its entirety by reference to, the provisions of
the guaranty.
Despite the Brazilian government’s
ownership interest in Petrobras, the Brazilian government is not responsible in any manner for PGF’s obligations under the Notes
or Petrobras’s obligations under the guaranty.
Ranking
The obligations of Petrobras
under the guaranty will constitute general unsecured obligations of Petrobras which at all times will rank pari passu, without
any preferences among themselves, with all other senior unsecured obligations of Petrobras that are not, by their terms, expressly subordinated
in right of payment to the obligations of Petrobras under the guaranty.
In addition, Petrobras’s
obligations under the guaranty of the Notes rank, and will rank, pari passu with its obligations in respect of outstanding and
future guaranties of indebtedness issued by PGF.
Nature of Obligation
Petrobras will unconditionally
and irrevocably guarantee (by way of a first demand guarantee) the full and punctual payment when due, whether at the maturity date of
the Notes, or earlier or later by acceleration or otherwise, of all of PGF’s obligations now or hereafter existing under the indenture
and the Notes, whether for principal, interest, make-whole premium, fees, indemnities, costs, expenses, tax payments or otherwise (such
obligations being referred to as the “guaranteed obligations”).
The obligation of Petrobras
to pay amounts in respect of the guaranteed obligations will be absolute and unconditional (thus waiving any benefits of order set forth
under Brazilian law, including those established in articles 827, 834, 835, 838 and 839 of the Brazilian Civil Code, under article 794,
caput, of the Brazilian Civil Procedure Code) upon failure of PGF to make, at the maturity date of the Notes or earlier upon any acceleration
or otherwise of the Notes in accordance with the terms of the indenture, any payment in respect of principal, interest or other amounts
due under the indenture and the Notes on the date any such payment is due. If PGF fails to make payments to the trustee in respect of
the guaranteed obligations, Petrobras will, upon notice from the trustee, immediately pay to the trustee such amount of the guaranteed
obligations payable under the indenture and the Notes. All amounts payable by Petrobras under the guaranty will be payable in U.S. dollars
and in immediately available funds to the trustee. Petrobras will not be relieved of its obligations under any guaranty unless and until
the trustee receives all amounts required to be paid by Petrobras under such guaranty (and any related event of default under the indenture
has been cured), including payment of the total non-payment overdue interest.
Events of Default
There are no events of default
under the guaranty. The fourth supplemental indenture, however, contains events of default relating to Petrobras that may trigger an event
of default and acceleration of the Notes. See “Description of the Notes―Events of Default.” Upon any such acceleration
(including any acceleration arising out of the insolvency or similar events relating to Petrobras), if PGF fails to pay all amounts then
due under the Notes and the indenture, Petrobras will be obligated to make such payments pursuant to the guaranty.
Covenants
For so long as any of the
Notes are outstanding and Petrobras has obligations under the guaranty, Petrobras will, and will cause each of its subsidiaries, as applicable,
to comply with the terms of the following covenants:
Performance Obligations
under the Guaranty and Indenture
Petrobras will pay all amounts
owed by it and comply with all its other obligations under the terms of the guaranty and the indenture in accordance with the terms of
those agreements.
Maintenance of Corporate Existence
Petrobras will maintain in
effect its corporate existence and all necessary registrations and take all actions to maintain all rights, privileges, titles to property,
franchises, concessions and the like necessary or desirable in the normal conduct of its business, activities or operations. However,
this covenant will not require Petrobras to maintain any such right, privilege, title to property or franchise if the failure to do so
does not, and will not, have a material adverse effect on Petrobras taken as a whole or have a materially adverse effect on the rights
of the holders of the Notes.
Maintenance of Office or Agency
So long any Notes are outstanding,
Petrobras will maintain an office or agency in the United States where notices to and demands upon Petrobras in respect of the guaranty
for such Notes may be served.
Petrobras has initially appointed
Petrobras America Inc., with offices located at 10350 Richmond Ave., Suite 1400, Houston, TX 77042, as its agent. Petrobras will not change
the appointment of the agent without prior written notice to the trustee and appointing a replacement agent or designating an office,
in the United States.
Ranking
Petrobras will ensure at all
times that its obligations under the guaranty will be its general senior unsecured and unsubordinated obligations and will rank pari
passu, with all other present and future senior unsecured and unsubordinated obligations of Petrobras (other than obligations preferred
by statute or by operation of law) that are not, by their terms, expressly subordinated in right of payment to the obligations of Petrobras
under the guaranty.
Provision of Financial Statements and
Reports
Petrobras will provide to
the trustee, in English or accompanied by a certified English translation thereof, (i) within 90 calendar days after the end of each fiscal
quarter (other than the fourth quarter), its unaudited and consolidated balance sheet and statement of income calculated in accordance
with IFRS, and (ii) within 120 calendar days after the end of each fiscal year, its audited and consolidated balance sheet and statement
of income calculated in accordance with IFRS. As long as the financial statements or reports are publicly available and accessible electronically
by the trustee, the filing or electronic publication of such financial statements or reports will comply with the Petrobras’s obligation
to deliver such statements and reports to the trustee. The trustee will have no obligation to determine if and when Petrobras’s
financial statements or reports, if any, are publicity available and accessible electronically.
Along with each such financial
statement or report, if any, Petrobras will provide an officers’ certificate stating that a review of Petrobras’s and PGF’s
activities has been made during the period covered by such financial statements with a view to determining whether Petrobras and PGF have
kept, observed, performed and fulfilled their covenants and agreements under the guaranty and the indenture, as applicable, and that no
event of default has occurred during such period.
In addition, whether or not
Petrobras is required to file reports with the SEC, Petrobras will file with the SEC and deliver to the trustee (for redelivery to all
holders of the Notes, upon written request, of the Notes) all reports and other information it would be required to file with the SEC
under the Exchange Act if it were subject to those regulations. If the SEC does not permit the filing described above, Petrobras will
provide annual and interim reports and other information to the trustee within the same time periods that would be applicable if Petrobras
were required and permitted to file these reports with the SEC.
Delivery of these reports,
information and documents to the trustee is for informational purposes only and the trustee’s receipt of any of those shall not
constitute constructive notice of any information contained in them or determinable from information contained therein, including Petrobras’s
compliance with any of its covenants in the guaranty (as to which the trustee is entitled to rely exclusively on officer’s certificates).
Negative Pledge
So long as any Notes remain
outstanding, Petrobras will not create or permit any lien, other than a Petrobras permitted lien, on any of its assets to secure (i) any
of its indebtedness or (ii) the indebtedness of any other person, unless Petrobras contemporaneously creates or permits the lien to secure
equally and ratably its obligations under the guaranty or Petrobras provides other security for its obligations under the guaranty and
the indenture as is duly approved by a resolution of the holders of Notes in accordance with the indenture. In addition, Petrobras will
not allow any of its material subsidiaries, if any, to create or permit any lien, other than a Petrobras permitted lien, on any of Petrobras’s
assets to secure (i) any of its indebtedness; (ii) any of the material subsidiary’s indebtedness or (iii) the indebtedness of any
other person, unless Petrobras contemporaneously creates or permits the lien to secure equally and ratably Petrobras’s obligations
under the guaranty and the indenture or Petrobras provides such other security for its obligations under the guaranty and the indenture
as is duly approved by a resolution of the holders of the Notes in accordance with the indenture.
As used in this “Negative
Pledge” section, the following terms have the respective meanings set forth below:
A “guaranty” means
an obligation of a person to pay the indebtedness of another person including without limitation:
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an obligation to pay or purchase such indebtedness;
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an obligation to lend money, to purchase or subscribe for shares or other securities or to purchase assets
or services in order to provide funds for the payment of such indebtedness;
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an indemnity against the consequences of a default in the payment of such indebtedness; or
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any other agreement to be responsible for such indebtedness.
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“Indebtedness”
means any obligation (whether present or future, actual or contingent and including, without limitation, any guaranty) for the payment
or repayment of money which has been borrowed or raised (including money raised by acceptances and all leases which, under generally accepted
accounting principles in the country of incorporation of the relevant obligor, would constitute a capital lease obligation).
A “lien” means
any mortgage, pledge, lien, hypothecation, security interest or other charge or encumbrance on any property or asset including, without
limitation, any equivalent created or arising under applicable law.
A “project financing”
of any project means the incurrence of indebtedness relating to the exploration, development, expansion, renovation, upgrade or other
modification or construction of such project pursuant to which the providers of such indebtedness or any trustee or other intermediary
on their behalf or beneficiaries designated by any such provider, trustee or other intermediary are granted security over one or more
qualifying assets relating to such project for repayment of principal, premium and interest or any other amount in respect of such indebtedness.
A “qualifying asset”
in relation to any project means:
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any concession, authorization or other legal right granted by any governmental authority to Petrobras
or any of Petrobras’s subsidiaries, or any consortium or other venture in which Petrobras or any subsidiary has any ownership or
other similar interest;
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any drilling or other rig, any drilling or production platform, pipeline, marine vessel, vehicle or other
equipment or any refinery, oil or gas field, processing plant, real property (whether leased or owned), right of way or plant or other
fixtures or equipment;
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any revenues or claims that arise from the operation, failure to meet specifications, failure to complete,
exploitation, sale, loss or damage to, such concession, authorization or other legal right or such drilling or other rig, drilling or
production platform, pipeline, marine vessel, vehicle or other equipment or refinery, oil or gas field, processing plant, real property,
right of way, plant or other fixtures or equipment or any contract or agreement relating to any of the foregoing or the project financing
of any of the foregoing (including insurance policies, credit support arrangements and other similar contracts) or any rights under any
performance bond, letter of credit or similar instrument issued in connection therewith;
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any oil, gas, petrochemical or other hydrocarbon-based products produced or processed by such project,
including any receivables or contract rights arising therefrom or relating thereto and any such product (and such receivables or contract
rights) produced or processed by other projects, fields or assets to which the lenders providing the project financing required, as a
condition therefore, recourse as security in addition to that produced or processed by such project; and
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shares or other ownership interest in, and any subordinated debt rights owing to Petrobras by, a special
purpose company formed solely for the development of a project, and whose principal assets and business are constituted by such project
and whose liabilities solely relate to such project.
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A “Petrobras permitted
lien” means a:
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(a)
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lien granted in respect of indebtedness owed to the Brazilian government, Banco Nacional de Desenvolvimento
Econômico e Social or any official government agency or department of Brazil or of any state or region of Brazil;
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(b)
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lien arising by operation of law, such as merchants’, maritime or other similar liens arising in
Petrobras’s ordinary course of business or that of any subsidiary or lien in respect of taxes, assessments or other governmental
charges that are not yet delinquent or that are being contested in good faith by appropriate proceedings;
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(c)
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lien arising from Petrobras’s obligations under performance bonds or surety bonds and appeal bonds
or similar obligations incurred in the ordinary course of business and consistent with Petrobras’s past practice;
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(d)
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lien arising in the ordinary course of business in connection with indebtedness maturing not more than
one year after the date on which that indebtedness was originally incurred and which is related to the financing of export, import or
other trade transactions;
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(e)
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lien granted upon or with respect to any assets hereafter acquired by Petrobras or any subsidiary to secure
the acquisition costs of those assets or to secure indebtedness incurred solely for the purpose of financing the acquisition of those assets, including
any lien existing at the time of the acquisition of those assets, so long as the maximum amount so secured will not exceed the aggregate
acquisition costs of all such assets or the aggregate indebtedness incurred solely for the acquisition of those assets, as the case may
be;
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(f)
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lien granted in connection with the indebtedness of a wholly-owned subsidiary owing to Petrobras or another
wholly-owned subsidiary;
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(g)
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lien existing on any asset or on any stock of any subsidiary prior to its acquisition by Petrobras or
any subsidiary so long as that lien is not created in anticipation of that acquisition;
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(h)
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lien over any qualifying asset relating to a project financed by, and securing indebtedness incurred in
connection with, the project financing of that project by Petrobras, any of Petrobras’s subsidiaries or any consortium or other
venture in which Petrobras or any subsidiary has any ownership or other similar interest;
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(i)
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lien existing as of the date of the original issuance of the Notes;
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(j)
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lien resulting from the indenture or the guaranty, if any;
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(k)
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lien incurred in connection with the issuance of debt or similar securities of a type comparable to those
already issued by Petrobras, on amounts of cash or cash equivalents on deposit in any reserve or similar account to pay interest on such
securities for a period of up to 24 months as required by any rating agency as a condition to such rating agency rating such securities
investment grade, or as is otherwise consistent with market conditions at such time;
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(l)
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lien granted or incurred to secure any extension, renewal, refinancing, refunding or exchange (or successive
extensions, renewals, refinancings, refundings or exchanges), in whole or in part, of or for any indebtedness secured by any lien referred
to in paragraphs (a) through (k) above (but not paragraph (d)), provided that such lien does not extend to any other property,
the principal amount of the indebtedness secured by the lien is not increased, and in the case of paragraphs (a), (b), (c) and (g), the
obligees meet the requirements of that paragraph, and in the case of paragraph (h), the indebtedness is incurred in connection with a
project financing by Petrobras, any of Petrobras’s subsidiaries or any consortium or other venture in which Petrobras or any subsidiary
have any ownership or other similar interest; and
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(m)
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lien in respect of indebtedness the principal amount of which in the aggregate, together with all liens
not otherwise qualifying as Petrobras permitted liens pursuant to another part of this definition of Petrobras permitted liens, does not
exceed 20% of Petrobras’s consolidated total assets (as determined in accordance with IFRS) at any date as at which Petrobras’s
balance sheet is prepared and published in accordance with applicable law.
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A “wholly-owned subsidiary”
means, with respect to any corporate entity, any person of which 100% of the outstanding capital stock (other than qualifying shares,
if any) having by its terms ordinary voting power (not dependent on the happening of a contingency) to elect the board of directors (or
equivalent controlling governing body) of that person is at the time owned or controlled directly or indirectly by that corporate entity,
by one or more wholly-owned subsidiaries of that corporate entity or by that corporate entity and one or more wholly-owned subsidiaries.
A “material subsidiary”
means a subsidiary of Petrobras which on any given date of determination accounts for more than 15% of Petrobras’s total consolidated
assets (as set forth on Petrobras’s most recent balance sheet prepared in accordance with IFRS).
Limitation on
Consolidation, Merger, Sale or Conveyance
Petrobras will not, in one
or a series of transactions, consolidate or amalgamate with or merge into any corporation or convey, lease, spin-off or transfer substantially
all of its properties, assets or revenues to any person or entity (other than a direct or indirect subsidiary of Petrobras) or permit
any person (other than a direct or indirect subsidiary of Petrobras) to merge with or into it unless:
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either Petrobras is the continuing entity or the person (the “successor company”) formed by
such consolidation or into which Petrobras is merged or that acquired (through a transfer of assets, a spin-off or otherwise) or leased
such property or assets of Petrobras will assume (jointly and severally with Petrobras unless Petrobras will have ceased to exist as a
result of such merger, consolidation or amalgamation), by an amendment to the guaranty, all of Petrobras’s obligations under such
guaranty;
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the successor company (jointly and severally with Petrobras unless Petrobras will have ceased to exist
as part of such merger, consolidation or amalgamation) agrees to indemnify each holder against any tax, assessment or governmental charge
thereafter imposed on such holder solely as a consequence of such consolidation, merger, conveyance, spin-off, transfer or lease with
respect to the payment of principal of, or interest on, the Notes;
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·
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immediately after giving effect to the transaction, no event of default, and no default has occurred and
is continuing; and
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·
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Petrobras has delivered to the trustee an officers’ certificate and an opinion of counsel, each
stating that that such merger, consolidation, sale, spin-off, transfer or other conveyance or disposition and the amendment to the guaranty
comply with the terms of the guaranty and that all conditions precedent provided for in such guaranty and relating to such transaction
have been complied with.
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Notwithstanding anything to
the contrary in the foregoing, so long as no default or event of default under the indenture or the Notes has occurred and is continuing
at the time of such proposed transaction or would result therefrom and Petrobras has delivered notice of any such transaction to the trustee:
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Petrobras may merge, amalgamate or consolidate with or into, or convey, transfer, spin-off, lease or otherwise
dispose of all or substantially all of its properties, assets or revenues to a direct or indirect subsidiary of Petrobras in cases when
Petrobras is the surviving entity in such transaction and such transaction would not have a material adverse effect on Petrobras and its
subsidiaries taken as whole, it being understood that if Petrobras is not the surviving entity, Petrobras will be required to comply with
the requirements set forth in the previous paragraph;
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any direct or indirect subsidiary of Petrobras may merge or consolidate with or into, or convey, transfer,
spin-off, lease or otherwise dispose of assets to, any person (other than Petrobras or any of its subsidiaries or affiliates) in cases
when such transaction would not have a material adverse effect on Petrobras and its subsidiaries taken as a whole;
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any direct or indirect subsidiary of Petrobras may merge or consolidate with or into, or convey, transfer,
lease or otherwise dispose of assets to, any other direct or indirect subsidiary of Petrobras; or
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·
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any direct or indirect subsidiary of Petrobras may liquidate or dissolve if Petrobras determines in good
faith that such liquidation or dissolution is in the best interests of Petrobras, and would not result in a material adverse effect on
Petrobras and its subsidiaries taken as a whole and if such liquidation or dissolution is part of a corporate reorganization of Petrobras.
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Amendments
The guaranty may only be
amended or waived in accordance with its terms pursuant to a written document which has been duly executed and delivered by
Petrobras and the trustee, acting on behalf of the holders of the Notes. Because the guaranty forms part of the indenture, it may be
amended by Petrobras and the trustee, in some cases without the consent of the holders of the Notes. See “Description of Debt
Securities—Special Situations—Modification and Waiver” in the accompanying prospectus.
Except as contemplated above,
the indenture will provide that the trustee may execute and deliver any other amendment to the guaranty or grant any waiver thereof only
with the consent of the holders of a majority in aggregate principal amount of the Notes then outstanding.
Governing Law
The guaranty will be governed
by the laws of the State of New York.
Jurisdiction
Under the guaranty, Petrobras
will consent to the non-exclusive jurisdiction of any court of the State of New York or any U.S. federal court sitting in the Borough
of Manhattan, The City of New York, New York, United States and any appellate court from any thereof.
Waiver of Immunities
To the extent that Petrobras
may in any jurisdiction claim for itself or its assets immunity from a suit, execution, attachment, whether in aid of execution, before
judgment or otherwise, or other legal process in connection with the guaranty (or any document delivered pursuant thereto) and to the
extent that in any jurisdiction there may be immunity attributed to Petrobras, PGF or their assets, whether or not claimed, Petrobras
will irrevocably agree with the trustee under the guaranty, for the benefit of the holders, not to claim, and to irrevocably waive, the
immunity to the full extent permitted by law.
Currency Rate Indemnity
Under the guaranty, Petrobras
will agree that, if a judgment or order made by any court for the payment of any amount in respect of any of its obligations under the
guaranty is expressed in a currency (the “judgment currency”) other than U.S. dollars (the “denomination currency”),
Petrobras will indemnify the relevant holder and the trustee against any deficiency arising from any variation in rates of exchange between
the date as of which the denomination currency is notionally converted into the judgment currency for the purposes of the judgment or
order and the date of actual payment. This indemnity will constitute a separate and independent obligation from Petrobras’s other
obligations under the guaranty, will give rise to a separate and independent cause of action, will apply irrespective of any indulgence
granted from time to time and will continue in full force and effect.
CLEARANCE AND SETTLEMENT
Book-Entry Issuance
Except under the limited circumstances
described in the accompanying prospectus, all Notes will be book-entry Notes. This means that the actual purchasers of the Notes will
not be entitled to have the Notes registered in their names and will not be entitled to receive physical delivery of the Notes in definitive
(paper) form. Instead, upon issuance, all the Notes will be represented by one or more fully registered global Notes.
Each of the Notes will be
represented by one or more global notes. Each global note will be deposited directly with The Depository Trust Company, a securities depositary,
and will be registered in the name of DTC’s nominee. Global Notes may also be deposited indirectly with Clearstream, Luxembourg
and Euroclear, as indirect participants of DTC. For background information regarding DTC and Clearstream, Luxembourg and Euroclear, see
“—The Depository Trust Company” and “—Clearstream, Luxembourg and Euroclear” below. No global note
representing book-entry Notes may be transferred except as a whole by DTC to a nominee of DTC, or by a nominee of DTC to another nominee
of DTC. Thus, DTC will be the only registered holder of the Notes and will be considered the sole representative of the beneficial owners
of the Notes for purposes of the indenture. For an explanation of the situations in which a global note will terminate and interests in
it will be exchanged for physical certificates representing the Notes, see “Legal Ownership—Global Securities” in the
accompanying prospectus.
The registration of the global
notes in the name of DTC’s nominee will not affect beneficial ownership and is performed merely to facilitate subsequent transfers.
The book-entry system, which is also the system through which most publicly traded common stock is held in the United States, is used
because it eliminates the need for physical movement of securities certificates. The laws of some jurisdictions, however, may require
some purchasers to take physical delivery of their Notes in definitive form. These laws may impair the ability of beneficial holders to
transfer the Notes.
In this prospectus supplement,
unless and until definitive (paper) Notes are issued to the beneficial owners as described in the accompanying prospectus, all references
to “registered holders” of Notes shall mean DTC. PGF, Petrobras, the trustee and any paying agent, transfer agent, registrar
or other agent may treat DTC as the absolute owner of the Notes for all purposes.
Primary Distribution
Payment Procedures
Payment for the Notes will
be made on a delivery versus payment basis.
Clearance and Settlement
Procedures
DTC participants that hold
securities through DTC on behalf of investors will follow the settlement practices applicable to United States corporate debt obligations
in DTC’s Same-Day Funds Settlement System. Notes will be credited to the securities custody accounts of these DTC participants against
payment in the same-day funds, for payments in U.S. dollars, on the settlement date.
Secondary Market Trading
We understand that secondary
market trading between DTC participants will occur in the ordinary way in accordance with DTC’s rules. Secondary market trading
will be settled using procedures applicable to United States corporate debt obligations in DTC’s Same-Day Funds Settlement System.
If payment is made in U.S. dollars, settlement will be free of payment. If payment is made in other than U.S. dollars, separate payment
arrangements outside of the DTC system must be made between the DTC participants involved.
The Depository Trust Company
The policies of DTC will govern
payments, transfers, exchange and other matters relating to the beneficial owner’s interest in the Notes held by that owner. Neither
the Trustee, Registrar, Paying Agent and Transfer Agent nor we have any responsibility for any aspect of the actions of DTC or any of
their direct or indirect participants. Neither the Trustee, Registrar, Paying Agent and Transfer Agent nor we have any responsibility
for any aspect of the records kept by DTC or any of their direct or indirect participants. In addition, neither the Trustee, Registrar,
Paying Agent and Transfer Agent nor we supervise DTC in any way. DTC and their participants perform these clearance and settlement functions
under agreements they have made with one another or with their customers. Investors should be aware that DTC and its participants are
not obligated to perform these procedures and may modify them or discontinue them at any time. The description of the clearing systems
in this section reflects our understanding of the rules and procedures of DTC as they are currently in effect. DTC could change its rules
and procedures at any time.
DTC has advised us as follows:
a limited purpose
trust company organized under the laws of the State of New York;
a member of the
Federal Reserve System;
a “clearing
corporation” within the meaning of the Uniform Commercial Code; and
a “clearing
agency” registered pursuant to the provisions of Section 17A of the Exchange Act.
DTC was created
to hold securities for its participants and to facilitate the clearance and settlement of securities transactions between participants
through electronic book-entry changes to accounts of its participants. This eliminates the need for physical movement of certificates.
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Participants in DTC include securities brokers and dealers, banks, trust companies and clearing corporations
and may include certain other organizations. DTC is partially owned by some of these participants or their representatives.
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Indirect access to the DTC system is also available to banks, brokers, dealers and trust companies that
have relationships with participants.
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The rules applicable to DTC and DTC participants are on file with the SEC.
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Clearstream, Luxembourg and Euroclear
Clearstream, Luxembourg has
advised that: it is a duly licensed bank organized as a société anonyme incorporated under the laws of Luxembourg
and is subject to regulation by the Luxembourg Commission for the supervision of the financial sector (Commission de surveillance du
secteur financier); it holds securities for its customers and facilitates the clearance and settlement of securities transactions
among them, and does so through electronic book-entry transfers between the accounts of its customers, thereby eliminating the need for
physical movement of certificates; it provides other services to its customers, including safekeeping, administration, clearance and settlement
of internationally traded securities and lending and borrowing of securities; it interfaces with the domestic markets in over 30 countries
through established depositary and custodial relationships; its customers include worldwide securities brokers and dealers, banks, trust
companies and clearing corporations and may include certain other professional financial intermediaries; its U.S. customers are limited
to securities brokers and dealers and banks; and indirect access to the Clearstream, Luxembourg system is also available to others that
clear through Clearstream, Luxembourg customers or that have custodial relationships with its customers, such as banks, brokers, dealers
and trust companies.
Euroclear has advised that:
it is incorporated under the laws of Belgium as a bank and is subject to regulation by the Belgian Banking and Finance Commission (Commission
Bancaire et Financière) and the National Bank of Belgium (Banque Nationale de Belgique); it holds securities for its
participants and facilitates the clearance and settlement of securities transactions among them; it does so through simultaneous electronic
book-entry delivery against payments, thereby eliminating the need for physical movement of certificates; it provides other services to
its participants, including credit, custody, lending and borrowing of securities and tri-party collateral management; it interfaces with
the domestic markets of several countries; its customers include banks, including central banks, securities brokers and dealers, banks,
trust companies and clearing corporations and certain other professional financial intermediaries; indirect access to the Euroclear system
is also available to others that clear through Euroclear customers or that have custodial relationships with Euroclear customers; and
all securities in Euroclear are held on a fungible basis, which means that specific certificates are not matched to specific securities
clearance accounts.
Clearance
and Settlement Procedures
We understand that investors
that hold their Notes through Clearstream, Luxembourg or Euroclear accounts will follow the settlement procedures that are applicable
to securities in registered form. Notes will be credited to the securities custody accounts of Clearstream, Luxembourg and Euroclear participants
on the business day following the settlement date for value on the settlement date. They will be credited either free of payment or against
payment for value on the settlement date.
We understand that secondary
market trading between Clearstream, Luxembourg and/or Euroclear participants will occur in the ordinary way following the applicable rules
and operating procedures of Clearstream, Luxembourg and Euroclear. Secondary market trading will be settled using procedures applicable
to securities in registered form.
You should be aware that investors
will only be able to make and receive deliveries, payments and other communications involving the Notes through Clearstream, Luxembourg
and Euroclear on business days. Those systems may not be open for business on days when banks, brokers and other institutions are open
for business in the United States or Brazil.
Because of time zone differences,
the securities account of a Euroclear or Clearstream, Luxembourg participant purchasing an interest in a global note from a participant
in DTC will be credited and reported to the relevant Euroclear or Clearstream, Luxembourg participant, during the securities settlement
processing day (which must be a business day for Euroclear and Clearstream) immediately following the settlement date of DTC. DTC has
advised us that cash received in Euroclear or Clearstream, Luxembourg as a result of sales of interests in a global note by or through
a Euroclear or Clearstream, Luxembourg participant to a participant in DTC will be received with value on the settlement date of DTC but
will be available in the relevant Euroclear or Clearstream, Luxembourg cash account only as of the business day for Euroclear or Clearstream,
Luxembourg following DTC’s settlement date.
Clearstream, Luxembourg or
Euroclear will credit payments to the cash accounts of participants in Clearstream, Luxembourg or Euroclear in accordance with the relevant
systemic rules and procedures, to the extent received by its depositary. Clearstream, Luxembourg or the Euroclear, as the case may be,
will take any other action permitted to be taken by a registered holder under the indenture on behalf of a Clearstream, Luxembourg or
Euroclear participant only in accordance with its relevant rules and procedures.
Clearstream, Luxembourg and
Euroclear have agreed to the foregoing procedures in order to facilitate transfers of the debt securities among participants of Clearstream,
Luxembourg and Euroclear. However, they are under no obligation to perform or continue to perform those procedures, and they may discontinue
those procedures at any time.
UNDERWRITING
Under the terms and
subject to the conditions contained in the underwriting agreement dated June 2, 2021, by and among PGF, Petrobras and
BofA Securities, Inc., Goldman Sachs & Co. LLC, Itau BBA USA Securities, Inc., J.P. Morgan Securities LLC, MUFG Securities
Americas Inc., Santander Investment Securities Inc. and UBS Securities LLC, as representatives of the several underwriters, each
underwriter has severally and not jointly agreed to purchase, and PGF has agreed to sell to the underwriters, the number of Notes
set forth opposite the name of such underwriter below:
Underwriters
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Principal Amount of Notes
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BofA Securities, Inc
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U.S.$
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214,286,000
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Goldman Sachs & Co. LLC
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U.S.$
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214,286,000
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Itau BBA USA Securities, Inc.
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U.S.$
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214,286,000
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J.P. Morgan Securities LLC
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U.S.$
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214,286,000
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MUFG Securities Americas Inc.
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U.S.$
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214,285,000
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Santander Investment Securities Inc.
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U.S.$
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214,285,000
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UBS Securities LLC
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U.S.$
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214,285,000
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Total
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U.S.$
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1,500,000,000
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The underwriting agreement
provides that the obligation of the underwriters to pay for and accept delivery of the Notes is subject to, among other conditions, the
delivery of certain certificates and legal opinions. The underwriters are offering the Notes, subject to prior sale, when, as and if issued
to and accepted by them. The underwriters are obligated to take and pay for all of the Notes offered by this prospectus supplement if
any Notes are taken. The underwriting agreement also provides that if an underwriter defaults, the purchase commitments of the non-defaulting
underwriters may be increased or the offering of the Notes may be terminated. The Notes will initially be offered at the price indicated
on the cover page of this prospectus supplement. After the initial offering of the Notes, the offering price and other selling terms may
from time to time be varied by the underwriters. The Notes may be offered and sold through certain of the underwriters’ affiliates.
The underwriters reserve the right to withdraw, cancel or modify offers to the public and to reject orders in whole or in part.
The underwriting agreement
provides that PGF and Petrobras will indemnify the underwriters against certain liabilities, including liabilities under the U.S. Securities
Act of 1933, as amended (“Securities Act”), and will contribute to payments the underwriters may be required to make in respect
of the underwriting agreement.
PGF has been advised by the
underwriters that the underwriters intend to make a market in the Notes as permitted by applicable laws and regulations. The underwriters
are not obligated, however, to make a market in the Notes and any such market-making may be discontinued at any time at the sole discretion
of the underwriters. In addition, such market-making activity will be subject to the limits imposed by the Exchange Act. Accordingly,
no assurance can be given as to the liquidity of, or the development or continuation of trading markets for, the Notes.
In connection with this offering,
the underwriters (or persons acting on their behalf) participating in this offering may engage in transactions that stabilize, maintain
or otherwise affect the price of the Notes. Specifically, the underwriters (or persons acting on their behalf) may bid for and purchase
Notes in the open market to stabilize the price of the Notes. The underwriters (or persons acting on their behalf) may also over-allot
this offering, creating a short position, and may bid for and purchase Notes in the open market to cover the short position. These activities
if carried out, will be carried out with a view to stabilize, maintain and support the market price of the Notes during the stabilization
period above market levels that may otherwise prevail. The underwriters are not required to engage in these activities, and these activities
may not necessarily occur.
Any stabilization action may
begin on or after the date on which adequate public disclosure of the terms of the offer of the Notes is made and, if begun, may be ended
at any time, but it must end no later than 30 days after the date on which the issuer received the proceeds of the issue, or no later
than 60 days after the date of allotment of the Notes, whichever is the earlier. Any stabilization action or over-allotment must be conducted
by the relevant underwriters (or persons acting on their behalf) in accordance with all applicable laws and rules and will be undertaken
at the offices of the underwriters (or persons acting on their behalf) and on the NYSE or the over-the-counter market.
The underwriters and their
affiliates have engaged in, and may in the future engage in, investment banking and other commercial dealings in the ordinary course of
business with Petrobras, PGF and their affiliates. They have received, or may in the future receive, customary fees and commissions for
these transactions.
In addition, in the ordinary
course of their business activities, the underwriters and their affiliates may make or hold a broad array of investments and actively
trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account
and for the accounts of their customers. Such investments and securities activities may involve securities and/or instruments of ours
or our affiliates. In particular, certain of the underwriters and/or their affiliates may hold debt securities or other indebtedness issued
by PGF, including indebtedness guaranteed by Petrobras, which may be repurchased or repaid with proceeds of this offering. If any of the
underwriters or their affiliates has a lending relationship with us, certain of those underwriters or their affiliates routinely hedge,
and certain other of those underwriters or their affiliates may hedge, their credit exposure to us consistent with their customary risk
management policies. Typically, these underwriters and their affiliates would hedge such exposure by entering into transactions
which consist of either the purchase of credit default swaps or the creation of short positions in our securities, including potentially
the Notes offered hereby. Any such credit default swaps or short positions could adversely affect future trading prices of the Notes
offered hereby. The underwriters and their affiliates may also make investment recommendations and/or publish or express independent
research views in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or
short positions in such securities and instruments.
The underwriters and/or their
affiliates may acquire the Notes for their own accounts. Such acquisitions may have an effect on demand for and the price of the Notes.
The expenses of the
offering, excluding the underwriting discount, are estimated to be U.S.$2 million and will be borne by PGF. PGF has agreed to
reimburse the underwriters up to approximately U.S.$100,000 for certain of their expenses relating to the offering, including the
fees and disbursements of counsel to the underwriters. Such reimbursement is deemed underwriting compensation by the Financial
Industry Regulatory Authority Inc. (FINRA).
Petrobras has been advised
by the underwriters that they propose to offer the Notes initially at the public offering price set forth on the cover page of this prospectus
supplement and to dealers at that price less a selling concession not in excess of 0.300% of the principal amount of the Notes. After
the initial public offering of the Notes, the public offering price and concession and discount to dealers may be changed.
Under Rule 15c6-1 of the
Exchange Act, trades in the secondary market generally are required to settle in two business days, unless the parties to such trade
expressly agree otherwise. Accordingly, purchasers who wish to trade the Notes prior to the date that is two business days prior to
the delivery of the Notes will be required, by virtue of the fact that the Notes initially will settle in six business days
(T+6), to specify alternative settlement arrangements to prevent a failed settlement.
The Notes are offered for
sale in the United States and other jurisdictions where it is legal to make these offers. The distribution of this prospectus supplement
and the accompanying prospectus, and the offering of the Notes in certain jurisdictions may be restricted by law. Persons into whose possession
this prospectus supplement and the accompanying prospectus come and investors in the Notes should inform themselves about and observe
any of these restrictions. This prospectus supplement and the accompanying prospectus do not constitute, and may not be used in connection
with, an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorized, or in which the person
making such offer or solicitation is not qualified to do so, or to any person to whom it is unlawful to make such offer or solicitation.
The underwriters have agreed
that they have not offered, sold or delivered, and they will not offer, sell or deliver any of the Notes, directly or indirectly, or distribute
this prospectus supplement, the accompanying prospectus or any other offering material relating to the Notes, in or from any jurisdiction
except under circumstances that will, to the best knowledge and belief of the underwriters, after reasonable investigation, result in
compliance with the applicable laws and regulations of such jurisdiction and which will not impose any obligations on PGF except as set
forth in the underwriting agreement.
Neither PGF nor the underwriters
have represented that the Notes may be lawfully sold in compliance with any applicable registration or other requirements in any jurisdiction,
or pursuant to an exemption, or assumes any responsibility for facilitating these sales.
Conflicts of Interest
The underwriters are acting
as dealer managers in connection with the Tender Offers and will receive a commission for also acting in such capacity. See “The
Offering—Tender Offers.”
General
No action has been or will
be taken in any jurisdiction other than the United States by PGF or any underwriter that would, or is intended to, permit a public offering
of the Notes, or possession or distribution of this prospectus supplement or any other offering material, in any country or jurisdiction
where action for that purpose is required. Persons outside the United States into whose hands this prospectus supplement comes are required
by PGF and the underwriters to comply with all applicable laws and regulations in each country or jurisdiction in which they purchase,
offer, sell or deliver Notes or have in their possession, distribute or publish this prospectus supplement or any other offering material
relating to the Notes, in all cases at their own expense.
Brazil
Neither the Notes, nor their
offer for sale, have been, or will be, registered with the Comissão de Valores Mobiliários – CVM. The Notes
may not be offered or sold in Brazil, except in circumstances that do not constitute a public offering or distribution under Brazilian
laws and regulations.
Chile
Pursuant to Chilean Capital
Markets Act and Norma de Carácter General (“General Rule”) No. 336, dated June 27, 2012, issued by the Chilean Financial
Market Commission (“CMF”), the existing Notes may be privately offered in Chile to certain “qualified investors”
identified as such by CMF General Rule No. 336 (which in turn are further described in CMF General Rule No. 216, dated June 12, 2008,
and in CMF General Rule No. 410, dated July 27, 2016). General Rule No. 336 requires the following information to be provided to prospective
investors in Chile:
1. Date
of commencement of the offer: June 2, 2021. The offer of the Notes is subject to General Rule No. 336, dated June 27, 2012, issued
by the CMF;
2. The
subject matter of this offer are securities not registered with the Foreign Securities Registry (Registro de Valores Extranjeros) of the
CMF, and as such are not subject to the oversight of the CMF;
3. Since
the Notes are not registered in Chile there is no obligation by Issuer to make publicly available information about the Notes in Chile;
and
4. The
Notes shall not be subject to public offering in Chile unless registered with the relevant Securities Registry of the CMF.
Información a los
Potenciales Inversionistas Chilenos
De conformidad con la Ley
de Mercado de Valores y la Norma de Carácter General N° 336 (la “NCG 336”), de 27 de junio de 2012, de la Comisión
para el Mercado Financiero (“CMF”), la oferta por los bonos puede ser efectuada de forma privada a ciertos “Inversionistas
Calificados”, a los que se refiere la NCG 336 y que se definen como tales en la norma de carácter general N° 216, de
12 de junio de 2008 y en la Norma de Carácter General N° 410 de fecha 27 de Julio de 2016, ambas de la CMF. La NCG 336 dispone
que la siguiente información debe ser entregada a los inversionistas:
1. La
oferta de los bonos comienza el 2 de junio de 2021 y se encuentra acogida a la NCG N° 336, de fecha 27 de junio de 2012, de
la CMF;
2. La
oferta versa sobre valores que al ser emitidos y colocados no fueron inscritos en el Registro de Valores o en el Registro de Valores extranjeros
que lleva la CMF, por lo que tales valores no están sujetos a la fiscalización de la CMF;
3. Por
tratarse de valores no inscritos en Chile no existe la obligación por parte del emisor de entregar en Chile información
pública sobre estos valores; y
4. La
oferta por los bonos no es objeto de oferta pública y estos valores no han sido y ni podrán ser objeto de oferta pública
en Chile mientras no sean inscritos en el registro de valores correspondiente.
Peru
The Notes and the information
contained in this prospectus supplement have not been and will not be registered with or approved by the Peruvian Capital Markets Superintendency
(Superintendencia del Mercado de Valores) or the Lima Stock Exchange. Accordingly, the Notes cannot be offered or sold in Peru,
except if such offering is considered a private offering under the securities laws and regulations of Peru. The Peruvian securities market
law establishes, among others, that any particular offer may qualify as private if it is directed exclusively to institutional investors.
United Kingdom
This prospectus supplement
is for distribution only to persons who (i) have professional experience in matters relating to investments falling within Article
19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the “Financial Promotion Order”),
(ii) are persons falling within Article 49(2)(a) to (d) (“high net worth companies, unincorporated associations etc.”) of
the Financial Promotion Order, (iii) are members or creditors of certain bodies corporate as defined by or within Article 43(2) of the
Financial Promotion Order, (iv) are outside the United Kingdom, or (v) are persons to whom an invitation or inducement to engage
in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000 (the “FSMA”)) in connection
with the issue or sale of any securities may otherwise lawfully be communicated or caused to be communicated (all such persons together
being referred to as “relevant persons”). This document is directed only at relevant persons and must not be acted on or relied
on by persons who are not relevant persons. Any investment or investment activity to which this document relates is available only to
relevant persons and will be engaged in only with relevant persons.
Switzerland
This prospectus supplement
is not intended to constitute an offer or solicitation to purchase or invest in the Notes. The Notes may not be publicly offered, directly
or indirectly, in Switzerland within the meaning of the Swiss Financial Services Act (“FinSA”) and no application has or will
be made to admit the Notes to trading on any trading venue (exchange or multilateral trading facility) in Switzerland. Neither this prospectus
supplement nor any other offering or marketing material relating to the Notes constitutes a prospectus pursuant to the FinSA, and neither
this prospectus supplement nor any other offering or marketing material relating to the Notes may be publicly distributed, or otherwise
made publicly available in Switzerland.
Canada
The Notes may be sold only
to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106
Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument
31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the Notes must be made in accordance with
an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws.
Securities legislation in
certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this prospectus supplement
and the accompanying prospectus (including any amendment thereto) contains a misrepresentation, provided that the remedies for
rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s
province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s
province or territory for particulars of these rights or consult with a legal advisor.
Pursuant to section 3A.3 of
National Instrument 33-105 Underwriting Conflicts (NI 33-105), the underwriters are not required to comply with the disclosure requirements
of NI 33-105 regarding underwriter conflicts of interest in connection with this offering.
Abu Dhabi Global Market
This prospectus supplement
is for distribution only to persons who (a) are outside the Abu Dhabi Global Market, or (b) are Authorised Persons or Recognised Bodies
(as such terms are defined in the Financial Services and Markets Regulations 2015 (“FSMR”)), or (c) are persons to whom an
invitation or inducement to engage in investment activity (within the meaning of section 18 of FSMR) in connection with the issue or sale
of any securities may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as
“relevant persons”). This prospectus supplement is directed only at relevant persons and must not be acted on or relied on
by persons who are not relevant persons. Any investment or investment activity to which this prospectus supplement relates is available
only to relevant persons and will be engaged in only with relevant persons.
This prospectus supplement
is an Exempt Offer in accordance with the Market Rules of the ADGM Financial Services Regulatory Authority. This Exempt Offer document
is intended for distribution only to Persons of a type specified in the Market Rules. It must not be delivered to, or relied on by, any
other Person. The ADGM Financial Services Regulatory Authority has no responsibility for reviewing or verifying any documents in connection
with Exempt Offers. The ADGM Financial Services Regulatory Authority has not approved this Exempt Offer document nor taken steps to verify
the information set out in it, and has no responsibility for it. The Notes to which this Exempt Offer relates may be illiquid and/or subject
to restrictions on their resale. Prospective purchasers of the Notes offered should conduct their own due diligence on the Notes. If you
do not understand the contents of this Exempt Offer document you should consult an authorised financial advisor.
Dubai International Financial
Centre
This
prospectus supplement is for distribution only to persons who (a) are outside the Dubai International Financial Centre, (b) are persons
who meet the Professional Client criteria set out in Rule 2.3.4 of the Dubai Financial Services Authority (“DFSA”) Conduct
of Business Module or (c) are persons to whom an invitation or inducement in connection with the issue or sale of any securities may otherwise
lawfully be communicated or caused to be communicated (all such persons together being referred to as “relevant persons” for
the purposes of this paragraph). This prospectus supplement is directed only at relevant persons and must not be acted on or relied on
by persons who are not relevant persons. Any investment or investment activity to which this prospectus supplement relates is available
only to relevant persons and will be engaged in only with relevant persons.
This
prospectus supplement relates to an Exempt Offer in accordance with the Offered Securities Rules of the DFSA. This prospectus supplement
is intended for distribution only to persons of a type specified in the Offered Securities Rules of the DFSA. It must not be delivered
to, or relied on by, any other person. The DFSA has no responsibility for reviewing or verifying any documents in connection with Exempt
Offers. The DFSA has not approved this prospectus supplement nor taken steps to verify the information set forth herein and has no responsibility
for the prospectus supplement. The Notes to which this prospectus supplement relates may be illiquid and/or subject to restrictions on
their resale. Prospective purchasers of the Notes offered should conduct their own due diligence on the Notes. If you do not understand
the contents of this prospectus supplement you should consult an authorized financial advisor.
Hong Kong
The
contents of this prospectus supplement have not been reviewed by any regulatory authority in Hong Kong and no action has been taken in
Hong Kong to authorize or register this prospectus supplement or to permit the distribution of this prospectus supplement or any document
issued in connection with it. You are advised to exercise caution in relation to the offer. If you are in any doubt about any of the contents
of this prospectus supplement, you should obtain independent professional advice.
The
Notes may not be offered or sold in Hong Kong by means of any document other than (i) in circumstances which do not constitute an offer
to the public within the meaning of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap.32, Laws of Hong Kong) or an
invitation to the public within the meaning of the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong), or (ii) to “professional
investors” within the meaning of the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong) and any rules made thereunder,
or (iii) in other circumstances which do not result in the document being a “prospectus” within the meaning of the Companies
(Winding Up and Miscellaneous Provisions) Ordinance (Cap.32, Laws of Hong Kong), and no advertisement, invitation or document relating
to the Notes may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere),
which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do
so under the laws of Hong Kong) other than with respect to Notes which are or are intended to be disposed of only to persons outside Hong
Kong or only to “professional investors” in Hong Kong within the meaning of the Securities and Futures Ordinance (Cap. 571,
Laws of Hong Kong) and any rules made thereunder.
Japan
The
Notes have not been and will not be registered under the Financial Instruments and Exchange Law of Japan (the “FIEL”) and
each underwriter has agreed that it will not offer or sell any Notes, directly or indirectly, in Japan or to, or for the benefit of, any
resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organized under
the laws of Japan), or to others for re-offering or resale, directly or indirectly, in Japan or to a resident of Japan, except pursuant
to an exemption from the registration requirements of, and otherwise in compliance with, the FIEL and any other applicable laws, regulations
and ministerial guidelines of Japan.
Singapore
This
prospectus supplement and the accompanying prospectus have not been registered as a prospectus with the Monetary Authority of Singapore.
Accordingly, this prospectus supplement, the accompanying prospectus, and any other document or material in connection with the offer
or sale, or invitation for subscription or purchase, of the Notes may not be circulated or distributed, nor may the Notes be offered or
sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other
than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the “SFA”);
(ii) to a relevant person pursuant to Section 275(1), or any person pursuant to Section 275(1A), and in accordance with the conditions,
specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision
of the SFA, in each case subject to conditions set forth in the SFA.
Where
the Notes are subscribed or purchased under Section 275 of the SFA by a relevant person which is: (a) a corporation (which is not an accredited
investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which
is owned by one or more individuals, each of whom is an accredited investor; or (b) a trust (where the trustee is not an accredited investor)
whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor, shares, notes
and units of shares and notes of that corporation or the beneficiaries’ rights and interest (howsoever described) in that trust
shall not be transferred within six months after that corporation or that trust has acquired the Notes pursuant to an offer made under
Section 275 except: (1) to an institutional investor under Section 274 of the SFA or to a relevant person pursuant to Section 275(1A)
of the SFA and in accordance with the conditions specified in Section 275 of the SFA; (2) where no consideration is or will be given for
the transfer; or (3) where the transfer is by operation of law.
Singapore
Securities and Futures Act Product Classification – Solely for the purposes of its obligations pursuant to sections 309B(1)(a) and
309B(1)(c) of the Securities and Futures Act (Chapter 289 of Singapore) (the "SFA"), the Issuer has determined, and hereby notifies
all relevant persons (as defined in Section 309A of the SFA) that the Notes are "prescribed capital markets products"
(as defined in the Securities and Futures (Capital Markets Products) Regulations 2018) and Excluded Investment Products (as defined in
MAS Notice SFA 04-N12: Notice on the Sale of Investment Products and MAS Notice FAA-N16: Notice on Recommendations on Investment Products).
Taiwan
The Notes have not been and
will not be registered with the Financial Supervisory Commission of Taiwan pursuant to relevant securities laws and regulations and may
not be sold, issued or offered within Taiwan through a public offering or in circumstances which constitutes an offer within the meaning
of the Securities and Exchange Act of Taiwan that requires a registration or approval of the Financial Supervisory Commission of Taiwan.
No person or entity in Taiwan has been authorized to offer, sell, give advice regarding or otherwise intermediate the offering and sale
of the Notes in Taiwan.
TAXATION
The following discussion summarizes
certain U.S. federal income, Brazilian and Dutch tax considerations that may be relevant to the ownership and disposition of the Notes
acquired in this offering at their original issue price. This summary does not describe all of the tax considerations that may be relevant
to you or your situation, particularly if you are subject to special tax rules. You should consult your tax advisors about the tax consequences
of holding the Notes, including the relevance to your particular situation of the considerations discussed below, as well as of any other
tax laws. There currently is no income tax treaty between Brazil and the United States. Although Brazilian and U.S. tax authorities have
had discussions that may culminate in such a treaty, we cannot make any assurances regarding whether or when such a treaty will enter
into force or how it will affect holders of the Notes.
U.S. Federal Income Tax Considerations
The following is a
summary of material U.S. federal income tax considerations that may be relevant to a beneficial owner of Notes. This summary
addresses only investors that purchase Notes at the relevant offering price in this offering, and that hold such Notes as capital
assets for U.S. federal income tax purposes. The summary does not address tax considerations applicable to investors that may be
subject to special tax rules, such as banks or other financial institutions, tax-exempt entities, partnerships (or entities or
arrangements treated as partnerships for U.S. federal income tax purposes) or partners therein, insurance companies, dealers in
securities or currencies, traders in securities electing to mark to market, persons that will hold the Notes as a position in a
“straddle” or conversion transaction, or as part of a “synthetic security” or other integrated financial
transaction, persons that have a “functional currency” other than the U.S. dollar, persons that acquired or sell the
Notes as part of a wash sale for tax purposes or nonresident alien individuals present in the United States for 183 days or more in
a taxable year. In addition, the discussion does not address the alternative minimum tax, the U.S. federal estate and gift tax, the
Medicare tax on net investment income, special timing rules prescribed under section 451(b) of the Internal Revenue Code or other
aspects of U.S. federal income or state and local taxation that may be relevant to an investor. For purposes of this discussion, a
“U.S. Holder” is a beneficial owner of the Notes that is, for U.S. federal income tax purposes, a citizen or resident of
the United States, a domestic corporation or an entity otherwise subject to U.S. federal income taxation on a net income basis in
respect of the Notes. A “Non-U.S. Holder” is a beneficial owner of the Notes that is not a U.S. Holder.
This summary is based on the
Internal Revenue Code of 1986, as amended, existing, proposed and temporary U.S. Treasury regulations and judicial and administrative
interpretations thereof, in each case as of the date hereof. All of the foregoing are subject to change (possibly with retroactive effect)
or to differing interpretations, which could affect the U.S. federal income tax consequences described herein.
INVESTORS SHOULD CONSULT
THEIR OWN TAX ADVISORS REGARDING THE TAX CONSEQUENCES OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF THE NOTES, INCLUDING THE APPLICATION
TO THEIR PARTICULAR CIRCUMSTANCES OF THE U.S. FEDERAL INCOME TAX CONSIDERATIONS DISCUSSED BELOW, AS WELL AS THE APPLICATION OF U.S. FEDERAL
ESTATE, GIFT AND ALTERNATIVE MINIMUM TAX LAWS, the
Medicare tax on net investment income, U.S. STATE AND LOCAL TAX LAWS AND FOREIGN TAX LAWS.
Payments of Interest
and Additional Amounts
Payments of interest on the
Notes (which may include additional amounts) generally will be taxable to a U.S. Holder as ordinary interest income when such interest
is accrued or received, in accordance with the U.S. Holder’s regular method of accounting for U.S. federal income tax purposes.
It is expected, and this discussion assumes, that the Notes will not be issued with original issue discount (“OID”) for U.S.
federal income tax purposes. In general, however, if either series of Notes is issued with OID at or above a prescribed de minimis
threshold, a U.S. holder will be required, with respect to that series, to include OID in gross income, as ordinary income, under
a “constant-yield method” before the receipt of cash attributable to such income, regardless of the U.S. holder’s regular
method of accounting for U.S. federal income tax purposes.
Interest income
(including additional amounts) in respect of the Notes generally will constitute foreign-source income for purposes of computing the
foreign tax credit allowable under the U.S. federal income tax laws. The limitation on foreign income taxes eligible for credit is
calculated separately with respect to specific classes of income. Such income generally will constitute “passive category
income” for foreign tax credit purposes for most U.S. Holders. The calculation and availability of foreign tax credits and, in
the case of a U.S. Holder that elects to deduct all foreign income taxes for that taxable year, the availability of such deduction
involves the application of complex rules that depend on the U.S. Holder’s particular circumstances. In addition, foreign tax
credits generally will not be allowed for certain short-term or hedged positions in the Notes.
A U.S. Holder should consult
its own tax advisors regarding the availability of foreign tax credits or deductions in respect of foreign taxes and the treatment of
additional amounts.
A Non-U.S. Holder generally
will not be subject to U.S. federal income or withholding tax on interest income earned in respect of the Notes.
Sale or Disposition
of Notes
A U.S. Holder generally will
recognize capital gain or loss upon the sale, exchange, retirement or other taxable disposition of a Note in an amount equal to the difference
between the amount realized upon such disposition and such U.S. Holder’s adjusted tax basis in the Note. A U.S. Holder’s tax
basis in a Note generally will equal such U.S. Holder’s purchase price of the Note, excluding, if applicable, amounts attributable
to accrued interest, which will be treated as such. Gain or loss recognized by a U.S. Holder on the disposition of a Note generally will
be long-term capital gain or loss if, at the time of the disposition, the Note has been held for more than one year. The net amount of
long-term capital gain recognized by an individual U.S. Holder generally is subject to tax at a reduced rate. The deductibility of capital
losses is subject to limitations.
Capital gain or loss recognized
by a U.S. Holder generally will be U.S.-source gain or loss. Consequently, if any such gain is subject to foreign withholding tax, a U.S.
Holder may not be able to credit the tax against its U.S. federal income tax liability unless such credit can be applied (subject to the
applicable limitation) against tax due on other income treated as derived from foreign sources. U.S. Holders should consult their own
tax advisors as to the foreign tax credit implications of a disposition of the Notes.
A Non-U.S. Holder generally
will not be subject to U.S. federal income or withholding tax on gain realized on the sale or other taxable disposition of Notes.
Specified Foreign Financial
Assets
Certain U.S. Holders that
own “specified foreign financial assets” with an aggregate value in excess of U.S.$50,000 on the last day of the taxable year
or $75,000 at any time during the taxable year generally are required to file an information statement along with their tax returns, currently
on IRS Form 8938, with respect to such assets. Specified foreign financial assets include any financial accounts held at a non-U.S.
financial institution, as well as securities issued by a non-U.S. issuer (which would include the Notes) that are not held in accounts
maintained by financial institutions. Higher reporting thresholds apply to certain individuals living abroad and to certain married
individuals. Regulations extend this reporting requirement to certain entities that are treated as formed or availed of to hold
direct or indirect interests in specified foreign financial assets based on certain objective criteria. U.S. Holders who fail to
report the required information could be subject to substantial penalties. In addition, the statute of limitations for assessment
of tax would be suspended, in whole or in part. Prospective investors should consult their own tax advisors concerning the application
of these rules to their investment in the Notes, including the application of the rules to their particular circumstances.
Backup Withholding and Information Reporting
Payments in respect of
the Notes that are paid within the United States or through certain U.S.-related financial intermediaries are subject to information
reporting, and may be subject to backup withholding, unless the U.S. person (i) is a corporation (other than an S corporation) or
other exempt recipient, and demonstrates this fact when so required, or (ii) provides a correct taxpayer identification number,
certifies that it is not subject to backup withholding and otherwise complies with applicable requirements of the backup withholding
rules. Non-U.S. persons may be required to comply with applicable certification procedures to establish that they are not U.S.
persons in order to avoid the application of such information reporting requirements and backup withholding. The amount of any
backup withholding collected from a payment to a U.S. or Non-U.S. person will be allowed as a credit against the holder’s U.S.
federal income tax liability, and may entitle the person to a refund, provided that certain required information is timely
furnished to the IRS.
Brazilian Tax Considerations
The following discussion is
a summary of the Brazilian tax considerations relating to an investment in the Notes by a non-resident of Brazil. This discussion is based
on the tax laws of Brazil as in effect on the date of this prospectus supplement and is subject to any change in Brazilian law that may
come into effect after such date. The information set forth below is intended to be a general discussion only and does not address all
possible tax consequences relating to an investment in the Notes.
PROSPECTIVE INVESTORS SHOULD
CONSULT THEIR OWN TAX ADVISERS AS TO THE CONSEQUENCES OF PURCHASING THE NOTES, INCLUDING, WITHOUT LIMITATION, THE CONSEQUENCES OF THE
RECEIPT OF INTEREST AND THE SALE OR OTHER DISPOSITION OF THE NOTES OR COUPONS.
Payments in Respect of the Notes, and Sale
or Other Disposition of Notes
Generally, an individual,
entity, trust or organization that is domiciled for tax purposes outside Brazil (a “Non-Resident”) is subject to income tax
in Brazil only when income is derived from a Brazilian source or when the transaction giving rise to such earnings involves assets located
in Brazil. Therefore, based on the fact that PGF is considered to be domiciled abroad for tax purposes, any interest, gains, fees, commissions,
expenses and any other income paid by PGF in respect of the Notes it issues to Non-Resident holders should not be subject to withholding
or deduction in respect of Brazilian income tax or any other taxes, duties, assessments or governmental charges in Brazil, provided that
such payments are made by PGF with funds held outside of Brazil.
Any capital gains generated
outside Brazil as a result of a transaction between two Non-Resident holders with respect to assets not located in Brazil are generally
not subject to tax in Brazil. If the assets are located in Brazil, then capital gains realized thereon are subject to income tax, according
to Law No. 10,833, enacted on December 29, 2003. Since the Notes will be issued by a legal entity incorporated outside of Brazil
and registered abroad, the Notes should not fall within the definition of assets located in Brazil for purposes of Law No. 10,833, gains
realized on the sale or other disposition of the Notes made outside Brazil by a Non-Resident holder to another Non-Resident should not
be subject to Brazilian taxes. However, considering the general and unclear scope of this legislation and the absence of judicial guidance
in respect thereof, we cannot assure prospective investors that such interpretation of this law will prevail in the courts of Brazil.
If the income tax is deemed to be due, the gains may be subject to income tax in Brazil, effective as from January 1, 2017, (as confirmed
by Declaratory Act No. 3, of April 27, 2016), at progressive rates as follows: (i) 15% for the part of the gain that does not exceed R$5
million, (ii) 17.5% for the part of the gain that exceeds R$5 million but does not exceed R$10 million, (iii) 20% for the part of the
gain that exceeds R$10 million but does not exceed R$30 million and (iv) 22.5% for the part of the gain that exceeds R$30 million; or
25.0% if such Non-Resident holder is located in a Low or Nil Tax Jurisdiction as it will be further detailed below. A lower rate, however,
may apply under an applicable tax treaty between Brazil and the country where the Non-Resident holder has its domicile.
Payments Made by Petrobras as Guarantor
In the event the issuer
fails to timely pay any due amount, including any payment of principal, interest or any other amount that may be due and payable in
respect of the Notes, the guarantor will be required to assume the obligation to pay such due amounts. As there is no specific legal
provision dealing with the imposition of withholding income tax on payments made by Brazilian sources to Non-Resident beneficiaries
under guarantees and no uniform decision from the Brazilian courts, there is a risk that tax authorities will take the position that
the funds remitted by the guarantor to the Non-Resident holders may be subject to the imposition of withholding income tax at a
general 15% rate, or at a 25% rate, if the Non-Resident holder is located in a Low or Nil Tax Jurisdiction. Arguments exist to
sustain that (a) payments made under the guarantee structure should be subject to imposition of withholding income tax according to
the nature of the guaranteed payment, in which case only interest and fees should be subject to taxation at a rate of 15%, or 25%,
in cases of beneficiaries located in Low or Nil Tax Jurisdictions, as defined by the Brazilian legislation; or (b) payments made
under guarantee by Brazilian sources to Non-Resident beneficiaries should not be subject to the imposition of withholding income
tax, to the extent that they should qualify as a credit transaction by the Brazilian party to the borrower. The imposition of
withholding income tax under these circumstances has not been settled by the Brazilian courts.
If the payments with respect
to the Notes are made by Petrobras as a guarantor, then Non-Resident holders will be indemnified so that, after payment of applicable
Brazilian taxes imposed by deductions or withholding with respect to principal or interest payable with respect to the Notes, subject
to certain exceptions, as mentioned in “Description of the Notes—Covenants—Additional Amounts,” a Non-Resident
holder will receive an amount equal to the amount that such Non-Resident holder would have received if no such taxes were imposed. See
“Description of the Notes—Covenants—Additional Amounts.”
Discussion on Low or Nil Tax Jurisdictions
According to Law No. 9,430,
dated December 27, 1996, as amended, a Low or Nil Tax Jurisdiction is a country or location that (i) does not impose taxation on income,
(ii) imposes income tax at a maximum rate lower than 20% or (iii) imposes restrictions on the disclosure of shareholding composition or
the ownership of the investment.
Additionally, on June 24,
2008, Law No. 11,727/08 created the concept of Privileged Tax Regimes, which encompasses the countries and jurisdictions that (i) do not
tax income or tax it at a maximum rate lower than 20%; (ii) grant tax advantages to a Non-Resident entity or individual (a) without the
need to carry out a substantial economic activity in the country or a said territory or (b) conditioned to the non-exercise of a substantial
economic activity in the country or a said territory; (iii) do not tax proceeds generated abroad or tax them at a maximum rate lower than
20% or (iv) restrict disclosure about the ownership of assets and ownership rights or restrict disclosure about economic transactions
carried out.
On November 28, 2014, the
Brazilian tax authorities issued Ordinance 488, which decreased, from 20% to 17%, the minimum threshold for certain specific cases. The
reduced 17% threshold applies only to countries and regimes aligned with international standards of fiscal transparency in accordance
with rules to be established by the Brazilian tax authorities.
We consider that the best
interpretation of the current Brazilian tax legislation, especially in regard to the abovementioned Law 11,727/08, should lead to the
conclusion that the concept of Privileged Tax Regimes should only apply for certain Brazilian tax purposes, such as transfer pricing and
thin capitalization rules. According to this interpretation, the concept of Privileged Tax Regimes should not be applied in connection
with the taxation of payments related to the Notes to Non-Residents. Regulations and non-binding tax rulings issued by Brazilian federal
tax authorities seem to confirm this interpretation.
Notwithstanding the fact that
such “privileged tax regime” concept was enacted in connection with transfer pricing rules and is also applicable to thin
capitalization and cross-border interest deductibility rules, Brazilian tax authorities may take the position that such Privileged Tax
Regime definition also applies to other types of transactions.
In the event that the privileged
tax regime concept is interpreted to be applicable to transactions such as payments related to the Notes to Non-Residents, this tax law
would accordingly result in the imposition of taxation to a Non-Resident that meets the privileged tax regime requirements in the same
way applicable to a resident located in a Low or Nil Tax Jurisdiction. Prospective investors should therefore consult with their own tax
advisors regarding the consequences of the implementation of Law No. 11,727, Normative Instruction No. 1,037/2010, as amended, and of
any related Brazilian tax laws or regulations concerning Low or Nil Tax Jurisdictions and Privileged Tax Regimes.
Other Tax Considerations
Brazilian law imposes a
Tax on Foreign Exchange Transactions (Imposto sobre Operações de Crédito, Câmbio e Seguro, ou
relativas a Títulos e Valores Mobiliários), or IOF/Exchange, due on the conversion of reais into foreign
currency and on the conversion of foreign currency into reais. Currently, the IOF/Exchange rate for almost all foreign
currency exchange transactions is 0.38%. According to Section 15-B of the Decree No. 6,306, as amended, the settlement of exchange
transactions in connection with foreign financing or loans, for both inflow and outflow of proceeds into and from Brazil, are
subject to IOF/Exchange at a 0% rate. Currently, in the case of the settlement of foreign exchange transactions (including
simultaneous foreign exchange transactions), in connection with the inflow of proceeds to Brazil deriving from foreign loans,
including those obtained through the issuance of notes in the international market, with the minimum average term not exceeding 180
days, the IOF/Exchange tax rate is 6% (this rate of 6% will be levied with penalties and interest in the case of financings or
international bonds with a minimum average term longer than 180 days in which an early redemption occurs in the first 180 days). The
Brazilian government is permitted to increase this rate at any time up to 25.0%. Any such increase in rates may only apply to future
transactions.
In addition, the Brazilian
tax authorities could argue that a Tax on Loan Transactions (Imposto sobre Operações de Crédito, Câmbio e Seguro,
ou relativas a Títulos e Valores Mobiliários), or IOF/Credit, due on loan transactions could be imposed upon any amount
paid in respect of the Notes by the guarantor under the guarantee given at a rate of up to 1.88% of the total amount paid. IOF/Credit,
however, can only be levied on on-shore loan transactions, so cross-border payments to investors resident outside Brazil should not be
subject to this taxation.
Generally, there are no inheritance,
gift, succession, stamp, or other similar taxes in Brazil with respect to the ownership, transfer, assignment or other disposition of
the Notes by a Non-Resident, except for gift and inheritance taxes imposed by some Brazilian states on gifts or bequests by individuals
or entities not domiciled or residing in Brazil to individuals or entities domiciled or residing within such states.
Dutch Tax Considerations
The following describes certain
material Dutch tax consequences for a holder who is neither a resident nor deemed to be a resident of the Netherlands for Dutch tax purposes
in respect of the ownership, acquisition and disposal of the Notes.
This section is based on the
Dutch tax laws, published regulations thereunder and published authoritative case law, all as in effect on the date hereof, and all of
which are subject to change or to different interpretation, possibly with retroactive effect. For the purpose of this section, “Dutch
Tax” and “Dutch Taxes” shall mean taxes of whatever nature levied by or on behalf of the Netherlands or any of its subdivisions
or taxing authorities. The Netherlands means the part of the Kingdom of the Netherlands located in Europe.
This section is intended as
general information only, it does not constitute tax or legal advice and it does not purport to describe all possible Dutch tax considerations
or consequences that may be relevant to a holder and does not purport to deal with the tax consequences applicable to all categories of
investors, some of which may be subject to special rules. In view of its general nature, it should be treated with appropriate caution.
PROSPECTIVE INVESTORS SHOULD CONSULT THEIR OWN
TAX ADVISERS AS TO THE CONSEQUENCES OF PURCHASING THE NOTES, INCLUDING, WITHOUT LIMITATION, THE CONSEQUENCES OF THE RECEIPT OF INTEREST
AND THE SALE OR OTHER DISPOSITION OF THE NOTES OR COUPONS.
For Dutch tax purposes, a
holder of Notes may include, without limitation:
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an owner of one or more Notes who, in addition to the title to such Notes, has an economic interest in
such Notes;
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a person or an entity that holds the entire economic interest in one or more Notes;
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a person or an entity that holds an interest in an entity, such as a partnership or a mutual fund, that
is transparent for Dutch tax purposes, the assets of which comprise one or more Notes; and
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a person who or an entity that does not have the legal title to the Notes, but to whom the Notes are
attributed based either on such person or entity holding a beneficial interest in the Notes or based on specific statutory
provisions, including statutory provisions pursuant to which the Notes are attributed to a person who is, or who has directly or
indirectly inherited the Notes from a person who was, the settlor, grantor or similar originator of a trust, foundation or similar
entity that holds the Notes.
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Dutch Individual and Corporate Income Tax
Please note that this section
does not describe the tax considerations for:
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holders of the Notes if such holders, and in
the case of an individual, his or her partner or certain of his or her relatives by blood or marriage in the direct line (including foster
children), have a substantial interest (aanmerkelijk belang) or deemed substantial interest (fictief aanmerkelijk belang)
in PGF under the Dutch Income Tax Act 2001 (Wet inkomstenbelasting 2001). Generally speaking, a holder of notes has a substantial
interest in PGF if it has, directly or indirectly (and, in the case of an individual, alone or together with certain relatives) (i) the
ownership of, a right to acquire the ownership of, or certain rights over, shares representing 5 per cent. or more of either the total
issued and outstanding capital of PGF or the issued and outstanding capital of any class of shares of PGF, or (ii) the ownership of, or
certain rights over, profit participating certificates (winstbewijzen) that relate to 5 per cent. or more of either the annual
profit or the liquidation proceeds of PGF. A deemed substantial interest may arise if a substantial interest (or part thereof) has been
disposed of, or is deemed to have been disposed of, on a non-recognition basis;
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pension funds, investment institutions (fiscale
beleggingsinstellingen), exempt investment institutions (vrijgestelde beleggingsinstellingen) (as defined in the Dutch Corporate
Income Tax Act 1969 (Wet op de vennootschapsbelasting 1969)) and other entities that are, in whole or in part, not subject to or
exempt from Dutch corporate income tax;
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holders of Notes who are individuals and for
whom the Notes or any benefit derived from the Notes are a remuneration or deemed to be a remuneration for activities performed by such
holders or certain individuals related to such holders (as defined in the Dutch Income Tax Act 2001).
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A holder of Notes will not be treated as a resident
of the Netherlands by reason only of the holding of a Note or the execution, performance, delivery and/or enforcement of the Notes.
A holder who is not a resident of the Netherlands,
nor deemed to be a resident, is not taxable on income derived from the Notes and capital gains realized upon the disposal or redemption
of the Notes, except if:
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(i)
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such holder derives profits from an enterprise, whether as entrepreneur (ondernemer) or pursuant
to a co-entitlement to the net worth of the enterprise, other than as an entrepreneur or a shareholder, which enterprise is, in whole
or in part, carried on through a (deemed) permanent establishment (vaste inrichting) or a permanent representative (vaste vertegenwoordiger)
that is taxable in the Netherlands, to which the Notes are attributable;
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(ii)
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the holder is an individual and derives benefits from miscellaneous activities (overige werkzaamheden)
carried out in the Netherlands in respect of the Notes, including without limitation activities which are beyond the scope of active portfolio
investment activities;
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(iii)
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the holder is not an individual and is entitled to a share in the profits of an enterprise or a co-entitlement
to the net worth of an enterprise, which is effectively managed in the Netherlands, other than by way of securities, and to which enterprise
the Notes are attributable; or
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(iv)
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the holder is an individual and is entitled to a share in the profits of an enterprise that is effectively
managed in the Netherlands, other than by way of securities, and to which enterprise the Notes are attributable.
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Dutch Withholding Tax
Holders of Notes Not
Related to PGF
All payments made by PGF under
the Notes to holders of Notes other than holders that are "related entities" in respect of PGF (within the meaning of the Dutch
Withholding Tax Act 2021; Wet bronbelasting 2021) (see below) can be made free of withholding or deduction for any taxes of any
nature imposed, levied, withheld or assessed by the Netherlands or any political subdivision or taxing authority thereof or therein, unless
the Notes qualify as equity of PGF for Dutch tax purposes.
Holders of Notes Related
to PGF
Payments of interest (or amounts
deemed interest) made by PGF under the Notes to holders of Notes that are related entities in respect of PGF (within the meaning of the
Dutch Withholding Tax Act 2021, as defined below) may become subject to Dutch withholding tax at a rate of 25% (rate for 2021), if such
related entity:
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is considered to be resident (gevestigd) in a jurisdiction that is listed in the yearly updated
Dutch regulation on low-taxing states and non-cooperative jurisdictions for tax purposes (Regeling laagbelastende staten en niet-coöperatieve
rechtsgebieden voor belastingdoeleinden) (a "Listed Jurisdiction"); or
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has a permanent establishment located in a Listed Jurisdiction to which the interest payment is attributable;
or
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is entitled to the interest payment for the main purpose or one of the main purposes to avoid taxation
for another person; or
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is a hybrid entity (a hybrid mismatch); or
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is not resident in any jurisdiction;
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all within the meaning of
the Dutch Withholding Tax Act 2021.
For the fiscal year 2021,
the following 23 jurisdictions are Listed Jurisdictions: American Samoa, Anguilla, Bahamas, Bahrain, Barbados, Bermuda, the British Virgin
Islands, the Cayman Islands, Fiji, Guam, Guernsey, Isle of Man, Jersey, Palau, Panama, Samoa, Seychelles, Trinidad and Tobago, Turkmenistan,
Turks and Caicos Islands, Vanuatu, the United Arab Emirates and the U.S. Virgin Islands.
For purposes of the Dutch
Withholding Tax Act 2021, an entity is considered a “related entity” in respect of PGF if:
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such entity has a Qualifying Interest (as defined below) in PGF; or
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PGF has a Qualifying Interest in such entity; or
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a third party has a Qualifying Interest in both PGF and such entity.
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The term "Qualifying
Interest" means a directly or indirectly held interest – either individually or jointly as part of a collaborating group (samenwerkende
groep) – that confers a definite influence over the entity's decisions and allows the holder of such interest to determine its
activities (within the meaning of case law of the European Court of Justice on the right of freedom of establishment (vrijheid van
vestiging)).
Dutch Gift and Inheritance
Taxes
No Dutch gift or inheritance
taxes are due in respect of any gift of Notes by, or inheritance of the Notes on the death of a holder, except if:
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(i)
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at the time of the gift or death of the holder, the holder is a resident, or is deemed to be a resident,
of the Netherlands or the transfer is otherwise construed as a gift or inheritance made by, or on behalf of, a person who, at the time
of the gift or death, is or is deemed to be a resident of the Nether-lands;
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(ii)
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the holder dies within 180 days after the date of the gift of the Notes and is not, or not deemed to be,
at the time of the gift, but is, or deemed to be, at the time of his or her death, a resident of the Netherlands; or
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(iii)
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the gift of the Notes is made under a condition precedent and the holder is a resident.
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For purposes of Dutch gift
and inheritance taxes, among others, a person that holds Dutch nationality will be deemed to be resident in the Netherlands if such person
has been resident in the Netherlands at any time during the 10 years preceding the date of the gift or his/her death. Additionally, for
purposes of Dutch gift tax, among others, a person not holding Dutch nationality will be deemed to be resident in the Netherlands if such
person has been resident in the Netherlands at any time during the 12 months preceding the date of the gift.
Other Taxes and Duties
No other Dutch taxes, including
value-added tax (VAT) and taxes of a documentary nature, such as capital tax, stamp or registration tax or duty, are payable by or on
behalf of a holder of the Notes by reason only of the purchase, ownership and disposal of the Notes.
DIFFICULTIES OF ENFORCING
CIVIL LIABILITIES AGAINST NON-U.S. PERSONS
Petrobras is a sociedade
de economia mista (partially state-owned enterprise) organized and existing under the laws of Brazil, and PGF is a private company
with limited liability incorporated under the laws of the Netherlands. A substantial portion of the assets of Petrobras and PGF are located
outside the United States, and at any time all of their respective executive officers and directors, and certain advisors named in this
prospectus supplement, may reside outside the United States. As a result, it may not be possible for you to effect service of process
on any of those persons within the United States. In addition, it may not be possible for you to enforce a judgment of a United States
court for civil liability based upon the United States federal securities laws against any of those persons outside the United States.
For further information on
potential difficulties in effecting service of process on any of those persons or enforcing judgments against any of them outside the
United States, see “Difficulties of Enforcing Civil Liabilities Against Non-U.S. Persons” in the accompanying prospectus.
LEGAL MATTERS
NautaDutilh N.V., special
Dutch counsel for PGF, will pass upon the validity of the Notes and the indenture for PGF as to certain matters of Dutch law. Petrobras’s
general counsel or acting general counsel, will pass upon, for Petrobras, certain matters of Brazilian law relating to the guaranty. The
validity of the Notes, the indenture and the guaranty will be passed upon for PGF and Petrobras by Cleary Gottlieb Steen & Hamilton
LLP as to certain matters of New York law.
Pinheiro Neto Advogados will
pass upon the validity of the guaranty for the underwriters as to certain matters of Brazilian law. Shearman & Sterling LLP will pass
upon the validity of the Notes, the indenture and the guaranty for the underwriters as to certain matters of New York law.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
With respect to the unaudited
consolidated interim financial information of Petrobras as of March 31, 2021 and for the three-month periods ended March 31, 2021 and
2020, incorporated by reference herein, KPMG Auditores Independentes, independent registered public accounting firm, has reported that
they applied limited procedures in accordance with professional standards for a review of such information. However, their separate report
included in the Petrobras Form 6-K furnished to the SEC on May 14, 2021 and incorporated by reference herein, states that they did not
audit and they do not express an opinion on that unaudited consolidated interim financial information. Accordingly, the degree of reliance
on their report on such information should be restricted in light of the limited nature of the review procedures applied. The accountants
are not subject to the liability provisions of Section 11 of the Securities Act for their report on the unaudited consolidated interim
financial information because that report is not a ‘report’ or a ‘part’ of the registration statement prepared
or certified by the accountants within the meaning of Sections 7 and 11 of the Securities Act.
The consolidated financial
statements of Petrobras as of December 31, 2020 and 2019 and for each of the years in the three-year period ended December 31, 2020, and
management’s assessment of the effectiveness of internal control over financial reporting as of December 31, 2020 (which is included
in Management’s Report on Internal Control over Financial Reporting) incorporated herein by reference to the Annual Report on Form 20-F filed with the SEC on March 25, 2021 have been so incorporated in reliance on the reports of KPMG Auditores Independentes, independent
registered public accounting firm, incorporated by reference herein and upon the authority of said firm as experts in auditing and accounting.
The audit report refers to a change in the method of accounting for lease arrangements as of January 1, 2019 due to the adoption of IFRS
16 “Leases.”
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