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Good morning, everyone. Welcome to Petrobras [indiscernible] to his analysts and investors about the First Quarter 2021 Results. It's a pleasure to have you with us today. I would like to inform you that all participants will follow the transmission by Internet as listeners. After introduction, a Q&A session will begin. You can send those questions by e-mail, petroinvest@petrobras.com.br. Today, we have with us Claudio Mastella, Chief Trading and Logistics Officer; Fernando Borges, Chief Exploration and Production Officer; João Henrique Rittershaussen, Chief Production Development Officer; Marcelo Zenkner, Chief Governance and Compliance Officer; Nicolas Simone; Chief Digital Transformation and Innovation Officer; Roberto Ardenghy, Chief Institutional Relations and Sustainability Officer; Rodrigo Araujo Alves, Chief Financial and Investor Relations Officer; Rodrigo Costa e Silva, Chief Refining and Natural Gas Officer.
The presentation will be available throughout the webcast on our company's website. We will start by watching a video of Petrobra's CEO, Mr. Joaquim Silva e Luna.
[Presentation]
[Foreign Language]
Now we start the presentation, I will call our CFO, Rodrigo Araujo Alves. Rodrigo, you may start, please.
Thank you. Thank you, Carla. Hello, everyone. Good morning. It's a pleasure to be here with you for the first time as Petrobras' Chief Financial and Investor Relations Officer, and I hope everyone is safe in doing well.
So first of all, let me start next slide, please. Next one. Let me start with safety, which is, of course, a fundamental value for our company. And we've been very proud with the results we've achieved over time. And it's important that for the first quarter of 2021, we have a total recordable injuries per million man-hours of 0.62, which is within the maximum acceptable limit that we have of 0.7. And of course, with respect to safety, we always have a 0 fatalities ambition. And unfortunately, we had 1 fatality during the first quarter. But our ambition is always to have 0 fatalities.
With respect to the recent actions that we developed to support the Brazilian society in incumbent against COVID-19 Pandemic, we've engaged in the donation of intubation medication to the Ministry of Health in a joint action with other Brazilian companies, and we've also acquired mini oxygen units and -- to supply public hospitals and donated oxygen cylinders in an action that was involved the amount above $15 million. And we have also changed for certain platforms, the boarding schedule in order to reduce the turnover and reduce the risk of contagion within our employees. Some of them have already returned to the original schedule, but some of them are still working on a different schedule to support lower in contagion.
With respect to the emissions in the first quarter, we have with -- in terms of E&P carbon intensity, we have reached 16 kilograms of CO2 per boe and in terms of refining, we had 39.9. They're both within the acceptable maximum limit for the year that we defined as our 2021 target.
And in terms of absolute GHG emissions in the first quarter, we've emitted 15.4 million tons of carbon dioxide equivalent. And we are a little bit above our annual target, but we expect that we can recover throughout the year.
Next slide, please. So now I'm going to talk a little bit about our financial results in the first quarter. We had a very strong quarter with solid operational and financial performance. Our recurring EBITDA achieved a 34% growth in the quarter with 55% recurring EBITDA margin. And we also posted a very strong cash generation of $7.2 billion. And when we reduced by the investments that we made in the first quarter, we have a positive free cash flow of $5.6 billion. And of course, it's important that this free cash flow is supporting our trajectory to reduce our debt and to improve our balance sheet. So basically, when we compare annually, we have reduced already $18.3 billion year-on-year and the quarterly reduction of $4.6 billion. And it's also good to note that we've reduced additional $3.2 billion after the end of the quarter to April 2021. So we're highly focused on our deleveraging trajectory.
In the first quarter, we repurchased bonds in the amount of $1.4 billion, and we prepaid bilateral debt in the amount of $0.3 billion as well. We had a cash flow from our divestment proceedings that we've closed during the quarter of $200 million. And of course, it's important to note that we've increased our natural gas and oil production in the first quarter, 3%. And even more important is to point out that we had almost 70% of participation of our pre-salt layer production, which, of course, adds more value to our portfolio. So this was a very important result for the first quarter. And we also had record sales of our S-10 [ ppm ] low sulfur diesel.
With respect to production, it's good to mention as well that we had inventories made during first quarter. So there's around 27 million barrels that were not realized as exports in the first quarter. So we already have an important improvement coming out for the second quarter with respect to exports that are ongoing by the end of the first quarter.
When we look at the external environment, we had an important improvement in Brent prices, 38% during the quarter. And of course, our performance was positively affected by the improvement on Brent prices. And we also had, in terms of the average exchange rate during the quarter, an improvement from 5.4% to 5.47%. So this was almost flat during the quarter. But when we look at the end-of-period exchange rate, and this is important because there's a relevant impact in our earnings for the first quarter due to the foreign exchange -- noncash foreign exchange losses. There was a depreciation of the Brazilian real from BRL 5.2 to BRL 5.7 per dollar, so a 10% depreciation that affected our earnings for the first quarter. Next slide, please. As I mentioned before, we are highly focused on reducing our debt, and we experienced a $4.6 billion reduction in the first quarter and additional $3.2 million until the end of April. But when we look at the monetization profile, it's also interesting to note that we have a very solid liquidity at this point. And the profile of the schedule of amortization of our debt is very comfortable. We've increased the average maturity of our debt to a point very close to 12 years. So we're at 11.84 years at this point.
The average cost of our debt had a marginal increase from 5.9% to 6%. But as we look at the portfolio and the schedule of amortization of our debt, we're very comfortable with the current situation. Of course, we are continually monitoring opportunities to reduce the cost of our debt and to increase the maturity of our debt, but we're comfortable with our amortization profile.
And it's also important to note that alongside we've our $12.5 billion in cash. That, of course, that's been reduced after the end of the quarter with the prepayments that we made after the end of the first quarter. We also have $8.3 billion in revolving credit lines that give us enough support in terms of liquidity even during challenging times like what we had in 2020.
Next slide, please. Looking at the recurring EBITDA in the quarter, as I mentioned before, we've had a very strong quarter, and it's interesting to know that our recurring EBITDA indicates that we had an increase of 34%, supported by the increase in Brent prices, as I mentioned before, but it was in terms of both financial results and operational results, a very strong quarter. We had a very strong operational position in the quarter as well. And it's good to mention of course, that we had also lower operating expenses in the first quarter. So our cost resilience is also supporting the improvement in our performance.
When we look at the adjusted EBITDA Q-on-Q, it's basically flat, a little bit of increase from 8.8% to 8.9%. But when we look at the recurring EBITDA, it points out that we had a quarter with less noise and very good financial operational performance.
Next, please. We are looking at our segment performance, of course, E&P was strongly impacted by the positive increase in Brent prices. So we had Brent appreciation. And also, we have an increase in our production in the first quarter, especially because we had stoppages in the fourth quarter of 2020. With respect to our RTC segment, we see a very important improvement -- a very important improvement in performance during the quarter which, of course, was highly affected by the inventory turnover effect, especially coming from the increase in Brent prices. So we had higher realization prices, and we have lower costs that were made in prior periods. So when we removed the inventory turnover effect, when we look at replacement cost, EBITDA, we had a 7% decrease in the quarter. Especially due to the seasonality and, of course, to the lower levels at the end of the period, given the restrictions that are still remaining with the pandemic.
With respect to the Gas and Power segment, we had a 24% decrease, which was mainly affected by lower margins in the generation of energy and in the commercialization of natural gas, especially given the increase in the cost of importing LNG, especially JKM LNG has increased substantially in the first quarter. So this affected the performance of our Gas and Power segment.
Next, please. As I mentioned before, when we look at the cash generation for the period, we had a very strong operational cash flow, $7.2 billion. This -- our operational cash flow was positively affected by tax credits by the decision of removing VAT from the calculation basis of PIS/COFINS. So we had tax credits in the first quarter, which were almost offset by prepayments that we made to our pension plan in order to support our divestment of refineries. So we prepaid certain obligations that we had with our pension plan in order to streamline the process of divesting our refineries.
And as I mentioned, when we look at the financing part, we paid around $2.6 billion when we include leasings and interest payments, and we also had net payments of $3 billion in terms of financing. A substantial part of these payments were prepayments, so it's -- we had a strong free cash flow of $5.6 billion, supporting our deleveraging efforts. And it's also good to notice that we had a $0.2 billion inflow of cash from our divestment procedures.
Next, please. I've already mentioned before, but we are continually focused on liability management and capital optimization. So we've repurchased bonds after the end of the quarter. We had a tender offer of about $2.5 billion. And we also have the extension of the maturity of revolving credit lines of around $2 billion to 2026, which supports our liquidity and helps us to reduce the optimal level of cash that we remain in our balance sheet.
And looking at liability management from a broader perspective, we also settled tax contingencies during the quarter. This is very important for us. We're continually monitoring opportunities to settle tax liabilities and all kinds of contingent liabilities in terms that are favorable for the company. So we've paid around BRL 500 million, a little bit less than $100 billion to reduce liabilities of BRL 1.5 billion in the first quarter. And we are also recovering around BRL 0.2 billion in judicial deposits that we had. So it was a very relevant transaction and a very good transaction in terms of liability management that we were able to realize in the first quarter.
Next, please. In terms of portfolio management, our portfolio management agenda is continuing very strongly, and we're trying to implement as fast as we can, our M&A processes. We had already closed -- we had already signed 6 transactions in 2021, and we have closed 7 transactions, of course, the most relevant is the [ RLAM ] Refinery, and -- that we signed in the first quarter of 2021. So up until May 11, we have already signed $2.5 billion in transactions, and we had cash inflows of around $500 million.
Next, please. This is a general picture of our portfolio. We have around 50 transactions ongoing and of course, we are highly focused on expediting our M&A transactions. And we have signed relevant procedures with -- I highlight you the NTS, which is the Natural Gas Transportation company that we sold the remaining 10% that we had. We closed this before May 2021. So this is the general picture.
Next, please. And finally, we've respected our net income to our earnings in the first quarter, we had a recurring net income of 0.2 billion compared to $5.4 billion in the fourth quarter of 2020. And this is basically due to the impact of the devaluation of the Brazilian real. As you know, we have our debt indexed to U.S. dollars, and we look at the fewer than foreign exchange rate to mark our debt by the end of the period. So we had a negative foreign exchange loss in the first quarter, noncash, of course, but this impacted substantially our recurring net income.
So this is the general picture of our financial highlights of the first quarter. And now I'll give the word back to you, Carla. Thank you.
Thank you, Rodrigo. We can move now to the Q&A session. And the first question that we received comes from Frank McGann with Bank of America Merrill Lynch. And it's for you, Rodrigo. The new deadlines for refinery sale, though giving more time to complete the sales still seem to be challenging in terms of time. How does the company see the process to sell the refineries advancing? What are the key challenges? Would contracts include any guarantee in terms of pricing or returns that could be provided by Petrobras.
Frank, thank you for your question. First of all, in terms of the general picture of our M&A process, it's good to highlight that they continue normally, and we're going through the pretty fine gates that you already know that occurred in our M&A activity. But of course, you know that especially for refining assets, these involve complex transactions that, of course, have several steps, both from our side and from the buyer side. And of course, with the regulators as well. But we are highly focused on complying with the deadlines that were established by the Brazilian antitrust body. And in the first quarter, we've signed the sale of [ RLAM ] our refinery. So we're focused on complying with the deadlines of the antibody -- antitrust body in Brazil.
And in terms of guarantees and returns, we don't expect to provide those. Of course, each transaction has its own SPA, its own contract, but this is a more of a general picture.
Thank you, Rodrigo. The second question from Frank, it's for Ardenghy. So Ardenghy, in recent months, there seems to be a more focused effort globally to deal with climate change that could at least on the margin speed, energy transition. To date, understandably, Petrobras has focused on maximizing its own privileged hydrocarbons asset base. Over the medium to long term, what are the options? If any, the company could be studying to possibly adjust the strategy to meet long-term challenges.
And I'll divide the answer in 2 parts. First, what we have accomplished over the years. And it's true that Petrobras has been very focused on recovering and -- the financial side but also we have done a lot in terms of carbon performance because carbon performance is key to the future of any oil and gas company. It's what we call the double resilience, not just have a good project, a profitable project, but also a low-carbon project that we can market our products in the world, in the future. And in this particular area, looking at the past, we have done a lot already. The carbon -- the so-called carbon intensity for the exploration and production of Petrobras has been very -- improving over the years. We have reduced the amount of carbon greenhouse gases produced by barrel in more than 47% from 2009 to 2020. So that's a good number.
And also in the presalt that is today, the key project for Petrobras. We have today, the third largest carbon capture project in the world. Last year, we have been able to capture and put back to the reservoir 7 million tons of CO2. This is 18% of the world projects in a global scale. So this is what we have done. Also, it's worth to mention the low sulfur diesel in our refining plants. We have already mentioned this in our press release that the increase of the sales of low sulfur diesel is very important for Petrobras and has been improving over the year. That's very important to Brazil, as you know, Brazil is very diesel prone. We are a country that is very high in terms of consuming diesel, especially for transportation and public transportation in our urban areas. So reducing the amount of sulfur in our diesel brings a lot of benefit for society. But looking at the future because, as I said, any transition is speed up, and we have to be prepared. So we are very focused on technology.
Petrobras, as you know, very technology-driven company. So we see opportunities in projects like the or electric in our platforms. If we can receive the necessary authorization from the authorities to put this kind of systems in our platform, we are going to be able to reduce in 20%, our greenhouse emissions in our offshore projects in ultradeep water, especially in the presalt. The HISEP that is a technology developed by Petrobras, in which we are able to capture the gas leaving their reservoir and separating the gas and returning back to the reservoir, the CO2, that's also very, very important.
And also the renewable fuels that we are also waiting for the authorities here in Brazil to authorize us to produce the renewable diesel in our refining plants. And as a side effect of this production, the aviation biokerosene for -- as a jet fuel. And -- so those are the areas in which we are seeing the progress. So we are very much focused on progressing and improving our carbon efficiency over the next year.
The next question comes from Gavin Wiley with Scotiabank. And it's for Rodrigo. Rodrigo, do you expect higher dividends to shareholders to remain a priority for Petrobras. Staying consistent with plans to distribute $30 billion to $35 billion over the period of 2021 to 2025? Will the new Board look to review the various aspects of Petrobra's dividend policy, in particular do you back any amendments to the 60% payout of free cash flow once gross debt plus capitalized leases moves below to $60 billion?
First of all, we will stay consistent both with our dividend policy and with our expected dividend payments. Of course, our focus now is on achieving our debt target of $60 billion to 2022. So we're moving as fast as we can to achieve our debt target and you can see that, as I mentioned during the quarter, we're using basically all the free cash flow that we have to reduce our debt. Given the challenges is still imposed by the pandemic, of course, that we're still running on a higher cash level than what we think it's optimal. But our focus of the free cash flow at this point is to reduce our leverage.
And of course, we want to improve our -- the level of our dividend payments. And once we reach our $60 billion debt target, our current dividend policy gives us enough flexibility to evaluate the timing and how to better implement our additional dividend payments in order to also ensure that we are -- we have a financial sustainability, both in terms of our short term, medium-term and long term. So it's important, of course, to preserve our financial stability as well. So this is what we had in terms of targets and prospects.
The second question also from Gavin is to [indiscernible], the 5-year plan outlines the majority of capital spending will be allocated to upstream, pre-salt developments and has deemphasized exploration. Do you expect any changes to capital allocations relatively to what has been outlined in the current 2021, 2025 plan? Do you believe the upstream production growth or exploration should be accelerated?
Our expectation is to follow the premises of the plan present to the market in 2020. The discussions for the next 5-year plan are ongoing. And we hope that we approve this premises in the next strategic plan. But we expect no major changes in this direction.
I would like to make a complement to this answer to Gavin. We have allocated for this 5-year plan, $6.5 billion in exploration, and we have 46.5 billion allocated upstream area. We think that these 6.5 is a huge amount of money allocated to exploration. We have to look out that we do this exploration partnership with other companies. And we are focusing on the equatorial margin and first result could increase our appetite to deploy more efforts in the coming years. If you look to the development plan, we have, as already mentioned, 13 production units to come. We have the priority -- preferential rights, [indiscernible] 2 areas that already has an expert of H1. [indiscernible] come on strong in the second half of this year. And the production increase in this year is a result of the ramp-up of P-70 in Atapu area. And in these 2 areas, we have room for another production units. So we are doing, I think, a good speed on -- even production development and exploration.
Now the next question comes from Christian Audi with Santander and it's for Rodrigo. Rodrigo, uses of cash. So with your continued strong cash flow generation and already lower debt, how could you prioritize the use of your cash between paying down debt versus increasing CapEx versus paying dividends?
Well, in terms of -- if we can talk about a financial framework, it's important to see that the first dollar from the cash flow of our operations and of our M&A activity is, of course, directed to the payment of our commitments and the CapEx that is already committed in our business plan. Then, of course, that the second dollar is to reduce debt. So as I mentioned before, we're highly focused on achieving our $60 billion debt target as fast as we can, our 2022 $60 billion debt target. If we look at the general picture for 2021, we are very close to achieving our annual target of $67 billion. And of course, when we reach the $60 billion target, our current dividend policy gives us enough flexibility to evaluate the timing and the best way to implement our policy and pay additional dividends, of course, making sure that it is sustainable in terms of our financial ability for short, medium and long term.
With respect to future CapEx, of course, we are now focused on executing our '21, '25 business plan. And as you know, we annually review our business plan, as mentioned before. But of course, our CapEx, we'll always be focused on value-generating assets, optimizing our portfolio in terms of maximizing returns and efficiently allocating capital. So that we maximize our returns. So this is the general framework that we have.
The next question is for Fernando Borges. It's about production outlook. So could you just touch on potential start-up schedule and maintenance schedule for the FPSO for the rest of the year? And how it could impact production?
We had a very busy maintenance work in the last quarter of 2020, just because of the COVID pandemic. And we postponed at maximum of the intervention, which brings more people to our units, but we had them to do them. And now for this year, we see a steady level of maintenance not causing any special decrease in production. So finally, we have come back to the normal in the speed of maintenance, the rate of maintenance of our production units. That's...
Thank you, Fernando. The next question comes from Lilyanna Yang with HSBC. And it's for Rodrigo. Rodrigo, how do you see Petrobras' current strategy plan? And what key issues pertaining to the plan? Do you foresee this new administration should review or improve? Could you please share your top 3 priorities for this year? Do you believe that Petrobras should raise CapEx towards $15 billion as opposed to the current $10 billion given the current levels of operating cash flow?
First of all, with respect to our business plan. We have a very solid business plan in place. And of course, our focus will remain on the efficiency of our capital allocation and portfolio management in order to maximize our returns so this is a top priority for us, and we're going to be continually focused on maximizing returns for our portfolio management.
We have, as you know, a significant challenge of reducing our leverage, reducing our debt levels in order to be closer to what our peer companies have and this, of course, brings a lot of resilience, both to our future plans and to our portfolio as well.
Another important message that we have is our focus on resilient projects. So resiliency is a key word and as I did mention before, not only financial resilience, but financial and environmental resilience is a main topic for us as well.
As I mentioned before, and our -- we have this annual process of reviewing our business plan. But we don't expect to see any major changes in terms of the general guidance. Our capital allocation will be focused on maximizing returns and on having an effective portfolio management policy. Again, focused on the dual resilience of being resilient for lower Brent prices as we experienced last year. All the companies had a major experience in terms of realizing the resilience scenarios that they had. And of course, focusing on our environmental resilience as well.
Talking about the top 3 priorities. I would say that, of course, for 2021, our main priority is to ensure that our projects are on schedule. They support our cash flow generation, they support the cash flow of our operations. So our committed CapEx and making sure that the projects are on schedule for 2021 is very important for us. I would say also that our priority is to ensure that we are able to move as fast as we can with our portfolio management agenda, which is also important, both to improve the returns in our portfolio and to reduce our leverage as well. And of course, I've mentioned before, reducing our debt is definitely very important for us in order to give us a solid financial position to support the additional dividend payments that would come from our dividend policy, which, as I mentioned before, gives us enough flexibility to analyze the timing, the best way to implement, considering the need to support our financial stability as well.
The second question from Liliana is also for you. So what are your thoughts about the privitization of refining assets in Brazil? Is it necessary for Petrobras to sell the assets that are in the company's divestment plan in the coming 2 years? Or 3 to 5-year agenda for divestment is a more welcome one?
Well, first of all, with respect to the refining assets, as I mentioned before, we have a committed schedule with the Brazilian antitrust body. So we're very focused on complying with that schedule. And of course, that improving the number of players in the Brazilian refining market is good for the market, good for the Brazilian society and good for Petrobras as well. So we have an important output that comes from our divestments. So we're focused on complying with the deadlines that we agreed with the Brazilian Audit Court -- with the Brazilian antibody sorry.
With respect to the should the divestment to the portfolio management plan as a whole and to the 3- to 5-year agenda. Of course, we are always trying to anticipate those process and to streamline them, looking for opportunities that we have in the market. So we're focused on doing things as fast as we can, but we're comfortable with the plan that we have in place now.
We also received questions from Luis Cavallo with UBS. And the first question is for [ Marcelo ]. So [ Marcelo ], the company has been successfully in keeping with the international priority. And somehow, the results of refining have been solid. Would it make sense to think of a deadline of 24, 48 or even 72 hours for implementation of adjustments looking forward? What could change in the pricing policy?
Our internal pricing policy went through some learning process in the previous years. With the period with a very low volatility and another was very high volatility, even with daily adjustments. Today, we are at an intermediate level where, so my view, provides a balance with international markets allowing us to compete efficiently and flexibly without immediately passing on the volatility of international prices. Or the exchange rate to the domestic market. So the adjustments up or down without a defined frequency. And [indiscernible] on the business day prior to the implementation, with wide visibility on the prices of products, by location and mode. And this information is immediately published on Petrobras' website.
The second question also from Luis Cavallo. It's for Rodrigo. So Rodrigo, the [ RDT ] stock price reached on Wednesday, the level above the price of the last to follow-on. In your view, would this be a trigger to unlock the sale of the remaining 37.5% stake? Otherwise, can you give more color on the rationale of the process?
As you know, we've announced, and it's, of course, in our 2021, 2025 business plan, our intention to divest of our remaining stake in BR Distribuidora. What we're doing now is evaluating the timing of the transaction in order that we can maximize the value of the transaction for us. So this is basically where we are now.
We received questions from Bruno Montanari with Morgan Stanley, and they are both for you. So the first does the company still intend to implement the enhanced dividend policy, distributing 60% of free cash flow once the optimal capital structure is achieved?
[Technical Difficulty] We're, of course, currently focused on reaching our debt target of $60 billion for the year of 2022. And we've been using all the free cash flow that we have to reduce debt. We know that given the scenarios imposed by the pandemic, we're still running on a higher cash level than we think it's optimal. But we think that it's necessary at this point. But we definitely want to improve our level of dividend payments. And as I mentioned before, our existing dividend policy gives us enough flexibility to evaluate the timing to implement the policy and to ensure, of course, we maintain our short, medium and long-term financial sustainability.
So the second question also for you, Rodrigo, is about the agreement with [indiscernible] So the company was recently granted an extension in the deadlines to sell refineries and also material gas assets. If Petrobras is not able to meet the new deadlines, could it be subject to any sort of fines from [indiscernible]. In the case of [indiscernible] refinery, wholesale process had to be restarted. How to expedite the procedures in order to meet the new deadline?
I've mentioned before that in general terms, our M&A, our portfolio management process are pretty normally ongoing through the gates that we have defined to our amature M&A activity. Of course, as I mentioned, that the refining transactions are complex transactions that involve activities from our side, from the buyer side, from the regulators. And of course, as I mentioned, we're highly focused on meeting the deadlines that were established by the Brazilian antitrust body. So this is where we are in terms of the general picture of the processes. Specifically with respect to HIPPA, we're still evaluating how to start and evaluating what we do with respect to the process, keeping our failed attempt in the first time.
We received questions from Rodo orangely with JPMorgan. The first question is for Fernando Borges. So Fernando, presalt lifting costs seem to have stabilized at very interest levels, below $3 per barrel. Is there room for further improvements? What is the expect trend here? [Technical Difficulty]
On a more broad view Rodo, I could say, if you look back 5 years, we have a lifting cost of $9 per barrel of equivalent oil, the whole Petrobras. Today, we are in $5.2. In our strategic plan for the next 5 years, we hold on $5.2. Even with the decline of the fields and increase of the cost of the assets we have to manage. If you put a big eye on per salt, in the previous 5 years, we had $4.3 per barrel. Today, we are around $3 per barrel but in the next 5 years, we have a project of $3.8, $4 per barrel and go stand with that. So that's the whole view of lifting cost. And so the whole Petrobras, we could focus on [indiscernible] 5 and presalt something around $4 per barrel.
The next question is from [ Hodos ] [indiscernible] This is about the Búzios development. So can you give us an update on how things are moving along? Will all the new FPSOs had 225,000 barrels per day of capacity?
Currently, we have 4 FPSOs in production in Búzios field and have already hired 3 FPSOs [indiscernible] P-78. We have planned to start [indiscernible] units in 2022, 2024 and 2025. And the capacity of these units will be 150 [indiscernible] 225,000 barrels per day to [indiscernible] 180 million to 78 million. We have already 2 new units on the [indiscernible] P-79 and P-80, with the 180 [indiscernible] 125,000 barrels per day and another 2 units are on planning, in the studying phase. This unity will be protected probably in the EPC format. And the idea is to have this unit with the production capacity of 225,000 barrels per day.
On the end of the development phase of Búzios field, we expect total production around 2 million barrels per day, [indiscernible] barrels per day.
Now have questions from Bruno Morin with Goldman Sachs. And the question is Rodrigo. Rodrigo, has there been any change recently to the offers previously made for assets for sale?
Well, we haven't seen any changes to offers previously made for assets. What we see, of course, is usual negotiation process that is part of any M&A transactions going through the gates that exist in our M&A activity process. And of course, what I can say is that we're focused on moving as fast as we can in our M&A transactions, but we haven't seen any specific changes.
The next question comes from Andre Sheng with Itaú beda, and it's for you. So amidst the recent volatility in the fuel price environment. How has the sale of the refineries being involved? And how the new management team see this topic? It's reasonable to assume that the sale [indiscernible] could still happen this year and closing signings could come through next year?
Well, as I mentioned before, we are focused on complying with the deadlines that were established by the Brazilian antitrust body and including [indiscernible] , of course. So this is what we can say for now. We don't see any disturbance in the process at this point. But of course, we remain focused on complying with the deadlines. And as I mentioned before, with respect to [indiscernible] , we're still reevaluating the process given our first field [indiscernible].
The second question from Andre is to Fernando Borges. so Fernando, the agreement over the ToR surplus with the Chinese NOC was expected to occur during the second half of 2020. How has this been evolving? When should we expect to see a final agreement?
Andre, the negotiations are going well. It's a complex 1 because we have filled with [indiscernible] installed and we have room for more egg, ones up to 80 units. So it complies in compensation sold, the single going very well, we expect next September to finalize this, and it's going to be opportunity for Petrobras to receive the compensation and starting sharing the production with the 2 partners.
The next question is from Isentia Langa with Bradesco BBI. It's for Rodrigo. Rodrigo, do you believe the sale of [indiscernible] is positive for Petrobras from the perspective of capital reallocation?
Well, as I mentioned before, that BR Distribuidora is one of the assets that we intend to divest from the remaining stake in our business plan. So yes, we do believe that is positive in terms of capital allocation. And what we're doing now is evaluating the timing in order to maximize the value of the transaction for us.
So next question also from Isentia this for [ Mastella ]. So [ Mastella ] what in your view is an optimum price policy for [indiscernible]. Do you believe that the government will push for a stabilization fund?
Trying to answer your question. We do believe it's the one we are currently practicing the best one. But of course, we [indiscernible] that to the business environment, taking into account our options and also our competitors, options of course, inform the best in profitability. It's important to say that we do -- we try not to press on so the customers in rental market volatilities, but we maintain the alignment to prices in the international market. This is very important to ensure that the market continues supply without risk of shortages. I -- not only Petrobras, but there's several actors responsible today for serving different [indiscernible] regions. In addition to Petrobras today, we have distributors in quarters, other refiners doing this job. The same balance -- this competition balance is responsible for price reductions when the supply grows in the international market, it has occurred throughout 2020.
Important to say that fuel prices by Petrobras are not the only component of the price felt by end consumers. We have to add the federal taxes, state taxes, cost of acquisition, mandatory mix now, I diesel and ethanol, [indiscernible] gasoline. On top of that, gross margins for distribution companies and [indiscernible] stations. So we do our part trying not to press on volatility, but it's very, very important for us and for the other factors in this market to keep on -- keeping on -- making our prices, make it internal market. It's very important for the workings of this market.
Thank you, [ Mastella ]. The next question comes from Regis Cardoso with Crédit Suisse, and it's for Fernando Borges. Fernando, Petrobras recently declared interest in both [indiscernible] and Atapu areas. Does it make sense to participate in the auction with a consortium? Is there any synergy in replicating in Atapu in the new surplus volumes auction, the same consortium of the construction contract and for Sapinhoá, would it make sense to enter in the bidding process alone?
Bidding strategies, some seem that any company used to open. But Petrobras has a policy. [indiscernible] that is go with partnership in how our new activities in the ultradeep waters or exploration. So we are confident that open to share the risks and the profits of our activities even always listed partners. That's the one component of our strategic plan.
We have one last question from Barbara Halberstadt with JPMorgan. And it's for Mastella. Mastella, it would be great to get some additional color on the dynamic for the export market after the first quarter of 2021.
Thank you, Barbara, for the question. I'd like to share our crystal ball related to the future scenario. Well, what we have seen in first quarter this year, some weaker premiums. But since then, the market fundamentals, in our view, have improved significantly. So China demand is picking up. And we are getting some strong support for premiums [indiscernible]. Vaccines rollout in several places, also improved market sentiment. And in our view, this provides a path for the recovery of the oil demand. So we do see some improvement in the premiums for our oil -- crude oils over the next quarters.
Thank you, Mastella. We also have one more question from Barber to Rodrigo. It's about liability management. So Rodrigo, what do you expect in terms of liability management for the rest of the year?
Well, first of all, as I mentioned, we, of course, we are highly focused on reaching our debt targets, both the $67 billion for 2021 and $60 billion for 2022. But we are, of course, always looking for opportunities to reduce the cost and to increase the maturity of our debt profile for the remaining portion of the debt that we'll still carry after we achieved our targets. So we're continually focused on this.
And when we think about liability management in a broader perspective, as I mentioned during the presentation, we are continually looking for opportunities to settle liabilities that we have in general -- contingent liabilities in general. Whenever we find opportunities to settle them in favorable terms for the company, we are, of course, always looking for opportunities to do this. So this is how we view liability management as a whole.
At this time, we conclude our Q&A session. If you have any further questions, you can send it to our Investor Relations team. Rodrigo will now make his final remarks. So please, Rodrigo.
Well, thank you. Thank you, everyone, for your time today for being here with us for our earnings call of the first quarter of 2021. As I mentioned before, we had a very strong quarter, both in terms of operational and financial performance. And we are highly focused on executing our strategy in delivering our '21-'25 business plan. So thank you for being here today, and feel free to contact our IR team with whatever questions you still have. Thank you very much.