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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Good afternoon, everyone. Welcome to Petrobras webcast with analysts and investors about the first quarter 2022 results. It's great to have you join us today. [Operator Instructions] You can send us questions by mail at petroinvest@petrobras.com.br. We also inform you that all executives are participating in the event remotely respecting all safety protocols.
Today, we have with us José Mauro Coelho, Petrobras' CEO; Cláudio Mastella, Chief Trading and Logistics Officer; Fernando Borges, Chief Exploration and Production Officer; João Rittershaussen, Chief Production Development Officer; Juliano Dantas; Chief Digital Transformation and Innovation Officer; Rafael Chaves, Chief Institutional Relations and Sustainability Officer; Rodrigo Araujo, Chief Financial Investor Relations Officer; Rodrigo Costa, Chief Refining and Natural Gas Officer; and Salvador Dahan, Chief Governance and Compliance Officer.
To initiate I'll pass the floor to Petrobras' CEO, José Mauro. Please, José Mauro.
Thank you, Carla. Dear shareholders and investors, good morning. I'm very proud to have the privilege to address you for the first time. This privilege comes alongside a keen sense of responsibility towards all those who trust us with their investments. Whether it's more investors seeking higher returns for their retirement accounts, such as thousands of workers who used a portion of their state sponsored funds to buy our shares or large investors who regard Petrobras as a world-class company showcasing a highly successful Brazil.
First and foremost, I would like to recognize all the efforts made by all the company's employees and executives for carrying out the strategies approved by our Board of Directors who were able to bring about a historical recovery of its financial situation as well as its image, reputation and governance, a peerless story in the corporate world search out one of the highest financial debt worldwide. If I'm privileged today to be in charge of a solid and resilient company, this is only thanks to the work you have done.
And therefore, I'd like to praise you all won't see again. Remaining solid and resilient you be key to pave the way for an either better future. We will remain committed and focused on the strategies established in our strategic plan. With a special emphasis in the development of our result assets, where you show deploy 13 of the 15 platforms is slated to the -- to come online so out the next 5 years.
These new units will enable a significant and sustainable growth in oil and natural gas production. We will keep on adjusting our portfolio to focus on assets in which we have competitive advantages and to divest out of lower return assets or assets which do not fit into our strategy. We understand that this investment process besides [ sharp up ] our cash position allows other companies to developing those resources for the benefit of the economy and Brazilian society. We shall also continue to divest assets that we see as noncore for the company and those agreed with the entrusted authority, such as the refineries in natural gas assets.
I must stress that we are not exiting those segments. What we are doing is a natural portfolio adjustment, a [ rebuild ] process for a company our size. These initiatives will result in more competitive, more open, more dynamic and efficient markets. We plan to invest about $7 billion over the next 5 years in the refining and natural gas segments with a focus on safety and energy, operational and environmental efficiency.
Speaking of efficiency, I cannot refrain from emphasizing that this will always be a lever for our operations. Therefore, we cannot stray from the proxy of market prices, a necessary condition for wealth generation to attracting investments and to ensure the supply of the [ fields ], which Brazil needs to import. I want also to emphasize our commitment to energy transition, especially our net-zero ambition in a timeframe aligned to the Paris agreement. We shall continue to be a relevant and [ profitable ] player in the oil and natural gas business, but we shall not overlook society aspirations or a more sustainable energy mix over the long run.
The first quarter results we are presenting today is a strongly demonstration that Petrobras is a company which all our shareholders and Brazilians can be [ brought off ] and [indiscernible] . A stronger Petrobras generates more value in its operations and therefore, higher returns for its shareholders, including, obviously, Brazilian society. Petrobras is to be one of the largest payers of taxes and government pay. Ranking as top taxpayer in various states and municipalities in Brazil.
In the first quarter of 2022 alone, we had paid $70 billion (sic) [ BRL 70 billion ] . Those tax produce more investments, economic development, higher jobs and income generation. You can rest assured that we shall work harder to generate even better results.
Thank you very much for your attention. Wish you all an excellent day.
Thank you, José Mauro. I now pass the floor to the Chief Financial and Investor Relations Officer, Rodrigo Araujo. Please, Rodrigo, go ahead.
Thank you, Carla. Thank you, Jose Mauro. Good afternoon, everyone. Thank you for being with us today and for watching our earnings call. We're very glad to have you with us today and to present our solid operational and financial results for the first quarter of '22. We start with this relevant picture of the first oil of FPSO Guanabara on April 30, the first production system installed in the Mero field. Expected to bring relevant prospects for the company's future, and we're quite happy with the potential results that will come from the new system installed. So we can go ahead.
Next slide, please. We have our usual disclaimer about the future prospects. So starting with safety, you already know that safety is a quite relevant value for Petrobras, and it's always a priority. We continue to be highly focused on reducing our total recordable injuries per million man-hours, and we're very happy to see that the results are below our acceptable limit. Even though we have the ambitions of having 0 fatalities, but unfortunately, we had 2 fatalities in the first quarter of 2022. And that's -- that remind us, unfortunately, why safety needs to be a priority, and we need to be focused on improving our security, our safety metrics over time, and we're quite engaged on doing that.
Next slide, please. Next, please. Talking about our ESG agenda. We have recently disclosed our sustainability report mid-April. And our report is, of course, focused on presenting the top-tier indicators for the market. The GRI, the SASB indicators and the Ipieca indicators as well. So we're focused on having the most relevant metrics for the market and disclosing Petrobras' contribution not only in terms of sustainability of the environment but also the relevant investments that Petrobras does in terms of social responsibility so would present a very thoughtful and comprehensive report disclosing our contributions to the environment and to the society overall.
When we talk about environment, you already know that our strategy is focused on positioning ourselves as a low carbon, low-cost major operator in the offshore industry in the world. We're focused on having a low carbon footprint portfolio, reducing our emissions, mostly Scope 1 and 2 making investments in either upstream or downstream to improve energy efficiency and to reduce the emissions our portfolio. We also have a relevant structure in Brazil that is offering natural gas and electricity that represents a relevant portion of the country's thermal power based plants, and contributes to sustaining a very clean energy matrix in Brazil. We have a very high content of renewables, mostly hydro. So our terminal plants have a very important role in maintaining the stability of the overall system.
We're also investing in exploring new possibilities of less carbon-intensive business and products that we have a very strong presence in terms of reducing the level of [ sulfur ] of our products and developing products that have a lower carbon footprint. We are also promoting R&D focused on low carbon solutions and which have a bio jet fuel, bio bunker, several potential future solutions related to a lower carbon footprint from our own products. And we also have a strong presence in terms of forest -- reforestation and forest conservation that we're going to show following.
Next slide, please. So Petrobras has a strong presence in terms of reforestation and forest conservation. We have a relevant program called [Foreign Language] or Living Forest. There is a partnership between several companies in Brazil with the National Development Bank and Petrobras has a match fund contribution of BRL 100 million for the next 5 years, focused on improving the management of more than 60 million acres of forest in -- sorry go back, please. Back, back. So more than 60 million acres of forest in the Brazilian territory, around 3% of the Brazilian territory. It's a project that involves several partnerships with universities, research institutes and environmental agencies in Brazil, quite relevant project that we're highly focused on alongside with [Foreign Language] the Brazilian Development Bank.
Next, please. In terms of emissions, we continue to be focused on delivering our targets of lower emissions. We have achieved emissions that are below our target or acceptable limit in the first quarter, both in the upstream and the downstream business. And of course, we highlight the levels of CO2 per barrel of oil equivalent from the pre-salt fields. We have Tupi and Búzios with a level of 9.5 kilos of CO2 per barrel of oil equivalent that represents less than the industry that's half the industry's average. We have also improved our energy efficiency in our carbon intensity in the -- in our refining assets we're below the targets. Of course, we're focused on continually improving those targets as we have shown and have achieved favorable results.
We also continue to be focused on achieving our goals in terms of reducing emissions on the 5-year timeframe and also to achieve lower emissions by 2030. We have very ambitious targets in terms of reducing emissions, and we're highly focused on delivering -- having technology and portfolio management as the main tool to deliver our long-term emissions targets.
Next, please. In terms of absolute emissions, we had -- in the fourth quarter of '21, our emissions -- our total emissions, operational emissions have increased given the scenario of higher thermal power plant generation in Brazil, given the low levels of the reservoirs but it has already came down first quarter. So we continue the trajectory of reducing total operational emissions. And of course, we continue strongly delivering lower oil and gas operational emissions as well. We also have relevant targets on those areas to reduce by 30% our operational emissions in the long run, and we continue to be strongly committed on delivering those targets.
Next, please. So we have a very strong carbon capture utilization and storage program, the industry's largest offshore CCUS program, and we continue with our target of reinjecting 40 million tons of CO2, the accumulated reinjection is 32.6 million tons, and we continue developing high technology. And I mentioned HISEP, that is a technology that will provide very good prospects in terms of capturing CO2 in the seabed for future units, and we're focused on finding that kind of portfolio solution and finding new technological solutions that support our strong CCUS capture program.
Next, please. In terms of our social investments, we have provided several relevant donations, not only for COVID-19's impacts in Brazil, but also for environmental and disaster situations that happened in '21 and '22 in several areas where we operate in Brazil. We have very strong social and environment relationship projects, focused on culture, sports, developing new small businesses and developing science and technology in the regions that we operate. We also have programs focused on the natural environment of the areas where we operate and other areas in Brazil as well and projects to mitigate the socioeconomic impacts of our operations.
I highlight also our LPG donation program that we started back in 2021. We expect to donate BRL 300 million of LPG until the end of 2022. We have already started delivering part of those donations in the areas that we operate, and we continue to be a company that is highly focused on a relevant corporate social responsibility.
Next, please. As our CEO has mentioned before, our contribution in terms of tax payments and government take for the Brazilian society is quite substantial. Almost 60% of our operational cash flow returns to the Brazilian society. And we're focused on generating more value and having a very solid strategy so that we continue to be able to create and deliver that value to our shareholders. And of course, the Brazilian society is our largest individual shareholder, and so we're quite responsive in terms of delivering and creating more value.
Next, please. In terms of governance, we continue our continuous improvement agenda for the company's corporate governance. As you know, alongside with our financial recovery trajectory, we have a very solid agenda in terms of revamping the company's reputational and image and also streamlining and improving over time the company's governance. We have a very solid governance. We have made several relevant achievements over time. And we continue to be focused on finding new opportunities to improve the company's governance. And that's, of course, one of our main values for the future. And we have been recognized from -- by several different international institutions and domestic institutions in terms of the quality of our corporate governance, and we expect to continue to do so.
Next, please. Next. So in terms of our operational and financial highlights for the first quarter '22, we had several relevant milestones, and I start by the discovery of relevant oil in the pre-salt area, Alto de Cabo Frio Central. Also, we had started the first oil of FPSO Guanabara that we expect to continue to ramp up over the rest of 2022 and in a matter of fuel in pre-salt of the Santos basin, we expect very good prospects coming from that -- the development of the Mero field.
We also had the environmental preliminary license for the revitalization project of the Marlim field. And we have broken record in terms of reducing the time for construction of wells in Marlim to 35 days. And as you know, we continue to be quite focused on improving our CapEx efficiency and making sure that we deliver the projects on time and on budget and of course, reducing well construction time. It's one of the project improvements that we have made over time, and we continue to be focused on finding new solutions to streamline our CapEx in the upcoming future.
We also had record sales of the 10 PPM, the low sulfur diesel in Brazil, which already accounts for 60 -- almost 60%, 58% of total diesel sales. We have our refineries producing 60 -- running with 65% of pre-salt oil, low sulfur oil that supports our target of delivering high quality and low sulfur and lower carbon footprint products. So the oil from the pre-salt has substantially improved in terms of participation in our refinery throughput.
We finished March with a very high utilization factor, 91%. It's important to highlight that is a utilization factor that is not only sustainable in terms of operations and economic conditions, it's also quite profitable in terms of operating our assets and also with very high safety standards. So we're quite concerned. We're maintaining very high safety standards, and we see very good results in terms of utilization factor, maintaining safety and maintaining the profitability of our refining assets.
We have also continued on the trajectory of opening up the natural gas market in Brazil. So we have provided asset access to the Guamaré natural gas processing unit, and we continue to deliver on our natural gas market opening process and also continue to be focused on opening up the refining market in Brazil, and we have seen relevant steps on that direction, and we'll continue to work in that sense.
In terms of financial results for the quarter, it's important to highlight the recurring EBITDA of $15 billion, our operating cash flow of $10 billion, our free cash flow of $8 billion. So we were able to translate our solid operational performance into solid financial performance as well. We have maintained our leverage pretty close to the optimal range. So our net debt -- our gross debt has continued to stay within the optimal range of $55 billion to $65 billion. We posted a recurring net income of $8.4 billion. And as our CEO has mentioned, we have only in the first quarter of '22 already paid BRL 70 billion in terms of taxes and government take a very relevant contribution to the Brazilian society as well.
By having a strong operational result and solid financial conditions, we were able to announce a solid distribution of dividends that reinforces our commitment with value creation and with the distribution of the value that we create. So we announced BRL 3.72 dividend per ordinary and preferred share for the first quarter of 2022. And we were also able to maintain our leverage when looking at the net debt-to-EBITDA below 1.8x. So it shows that our financial sustainability is well-preserved and we continue to be focused on maintaining our cost and our leverage under control.
Next, please. Talking about the external environment, we have seen higher crude oil prices in the first quarter -- and of course, when compared to the first quarter of 2021 as well. We have seen a slight appreciation of the Brazilian real over the dollar for the average of the period. And we also saw an appreciation of the Brazilian real when we compare the period end FX for the first quarter of 2022 with Q4 '21. It impacted positively our financial result for the quarter. So I would say a noncash impact, but we saw an impact in terms of exchange rate impact for the first quarter of 2022.
Next, please. Of course, the external environment is relevant in terms of the company's financial results. But as you know, we're focused on being able to create and add a lot of value even in scenarios that are much more challenging than the one that we're seeing now. And we have done a very good job in terms of improving our -- the company's operational performance and restructuring the company over the next -- the last 5 to 6 years. And when we think about -- the last time we saw Brent prices above $100 per barrel on the first quarter, we can see that it's the same price but a very different company. We have relevantly reduced our lifting cost by more than half. We have reduced our refining costs in real terms by 30%. G&A by more than 60%. The interest payments, we had more than $8 billion interest payments over the year in the past. Now it's less than $2 billion.
When we look at our gross debt, of course, and we think about the upcoming future, the debt that is scheduled to mature in the next 5 years, in the first quarter of '14 was $58.1 billion. That represents basically our entire debt now, not only the financial debt, but also the leases and the debt that is expected to mature in the next 5 years is less than $17 billion now, that is a much more healthy level of debt. There is a very healthy debt profile as well in terms of maturity with -- which gives us very confidence that the company has a very solid financial situation. And of course, in terms of taxes paid, the company's performance is also very much higher. The company is not only generating more favorable results, but also distributing those results with tax payments, dividend payments and corporate social responsibility as well.
Next, please. In the first quarter of '22, we have a very solid EBITDA, $15 billion, as I mentioned, of recurring EBITDA for the quarter. That's up 35% when we compare it to the fourth quarter of 2021. We had higher crude oil exports, and we had a positive impact of crude oil prices in the quarter. Even though it's a lower sales volume quarter when we compare to the fourth quarter, that is a quarter with a higher seasonality in the domestic market. So it's a lower sales volume in the domestic market. But despite that impact, we have a very solid EBITDA for the Q1 '22. Next, please. When we look at the EBITDA by business segment, our results from the upstream segment have improved substantially by 28% in the quarter. We have a very relevant impact coming from the ramp-up of the platforms that we have installed most recently. So we have a ramp-up of FPSO Carioca in the [indiscernible] and of P-68 in [indiscernible] Sururu. We also had fewer stoppages in the Q1 '22. We had relevant stoppages in the fourth quarter given that we had to postpone some of those stoppages because of the COVID situation in 2020. So we had a relevant impact in Q4 '21.
Of course, when we look at our management system, we're focused on the long run development of our reservoirs. So it's important to have those innovations and to have those stoppages so that we can maximize the return of the reservoirs over the long run, and that's how we manage the definition of interventions. And even though we have a short-term cost increase, it generates a lot of value in the long run.
In terms of the [ RTC ] of the downstream segment, the refining segment, we had higher margins in the domestic market, and that was offset partially by lower sales volumes, as I mentioned. When we compare Q1 with Q4, we have higher sales volumes in Q4 and that offset partially the impact in Q1.
Looking at the Gas & Power segment, we had lower costs with imports of LNG. They had a very relevant impact in Q4. This impact was mitigated in Q1 '22. We're also working on improving the conditions of our commercial contracts. And we have recently hosted an event to detail and explain a little bit more how the Gas & Power segment works. The nature of the contract, the supply distribution in terms of different supply sources in our portfolio. And also how the company's strategy for that segment is designed. And I invite you to look at our website. Those slides are in our website, and I think they're quite relevant to understand in more detail the Gas & Power segment.
Next, please. As I mentioned before, we had a very strong cash generation in the quarter, going from EBITDA to operating cash flow. Apart from income taxes, we see an increase in working capital given the high level of prices that we have now. And we have also prepaid part of our pension liability. I've mentioned this before, but whenever we look at liability management, we look at it in a very broad sense, not only focused on the finance debt, but we also manage the pension liability, and we also look for potential opportunities to settle continued liabilities for whenever we have relevant and favorable terms for the company.
After the investments, we have a free cash flow of $7.9 billion in the quarter. Investments in the first quarter were impacted by the payment of the bidding round, the latest bidding round, the signature bonus for the [ surplus ] of the transfer of right area of Sepia Atapu, almost $1 billion that were paid in the first quarter of 2022, including divestments and the surplus transfer of right agreement, we go to 9.7% free cash flow after divestments. That free cash flow was mainly used to either prepay debt or to maintain the expected service payments for the debt.
The dividend payments from the fourth quarter of 2022 are expected to be made now in May and the dividend payments from the Q1 '22 will also be made in the next month. So we ended the first quarter with a very high cash balance that we don't expect to maintain over time. As you guys know, our optimal level is between $8 billion and $10 billion optimal cash level. We expect to go back to that level over time. And after investments and maintaining our leverage, our expectation is, of course, to continue to distribute the free cash flow that we generate.
It's also important to highlight in the first quarter, we were quite active in terms of open market repurchase transactions. We prepaid almost $1 billion, $0.7 billion in the first quarter, given the volatility that we had. So as I've mentioned a couple of times before, we use those opportunities whenever we had -- we have a higher volatility. We use those opportunities to prepay debt and to reduce our exposure to more expensive debt, managing our liability over time.
Next, please. We continue to maintain our leverage within the optimal range from $55 billion to $65 billion. And as we look at the maturity profile, as I've mentioned before, is a quite healthy maturity profile. We've been able to increase the duration of our debt and to bring that closer to the maturity of the upstream projects, especially after the end of the quarter, we also announced -- by mid-April, we also announced a tender offer repurchase transaction, and we closed that on April 14. So we prepaid around $2 billion, mostly from the bonds maturing in the beginning of the curve, but from bonds maturing between '24 and 2051.
Next, please. When we look at our portfolio management projects, we have important developments in the first quarter of 2022. We started the binding phase for the Gulf of Mexico assets. We have signed Deten Química, Albacora Leste. Those were relevant projects that were signed after we had our latest earnings call, earnings call for the Q4 '21. We have also closed the exploratory blocks in Paraná Basin.
In the first quarter of 2022, we also had relevant cash inflows coming from projects that we signed and closed in the past. We had contingent payments and earn-outs coming from those projects. I mean Carcara, that is now Bacalhau and NTS, the transport, the midstream, the transporting asset that we saw in the past. So we had almost $2 billion of additional cash flow coming from those assets that were sold a couple of years ago. They impacted positively our cash generation in Q1 '22.
Next, please. So overall, we had a very good quarter. Our recurring net income was $8.4 billion. As I mentioned before, the company has -- had a very solid operational performance. We had a positive impact from foreign exchange rate gains, turn on cash, as I mentioned before, but they impacted positively net income. We also had lower gains from asset sales and from impairment reversals that impacted positively Q4 and didn't impact Q1. So that offset a little bit the results for Q1 '22. But again, we had a very, very solid result in Q1 '22.
Next, please. So finally, as I've mentioned before, we have also approved distribution of relevant dividends based on not only the formula, the 60% formula of our dividend policy that results in BRL 1.86 per share for ordinary income on share in preferred share. But also, we have approved extraordinary dividends given the company's substantial cash flow in the first quarter. Of course, we focus on the pillars of our dividend policy, respecting the company's financial sustainability but committing ourselves to distribute the maximum we can from our results and from our cash flow generation.
That was the case in the first quarter of 2022, and we announced those additional dividends for the quarter. We think it's quite important to maintain our focus on creating value on having solid and profitable investments that generate value that we can distribute for our shareholders. And of course, in our group of shareholders, the most relevant individual shareholder is the Brazilian government and the Brazilian society as well.
Next, please. So that's the overall picture of our first quarter 2022. That was a very solid quarter not only in terms of our operational performance, but also we have a very solid cash flow generation. We were able to maintain our leverage and costs under control. And of course, we're able to announce a relevant dividend distribution coming from all the value that we've created and all the cash flow that we generated over the quarter.
Thank you. Thank you for being with us today for our earnings call. I'll pass the floor back to Carla. Thank you, Carla.
Thank you, Rodrigo. We can now move to our Q&A session.
And the first question that we received comes from Frank McGann with Bank of America Merrill Lynch. The first question is for Fernando and João Henrique. Given the strong global demand environment, does the company have any potential to increase output from short-cycle projects?
Okay. Good afternoon, Frank -- [indiscernible] . I can start then Fernando can complement to the experiment. Petrobras remains committed to implement the [ strategic ] plan 2022, 2026, where we approved the CapEx of the upstream 20% higher than the previous plan. This increase is based on our strategy of maximizing developing our portfolio for [indiscernible] deep water assets. Our production development cycle is our long cycle and is based on a long-term resilient press scenario. And you can see no relevant opportunities for short-term production periods. The only opportunities that you have are in future drillings, but is not relevant for the total Petrobras production. And now looking to Fernando to complement.
Well, I can say that Petrobras has [indiscernible] its production growth rate around 20% in the 5 coming years, mainly resulting from the startup of the 15 new FPSOs. In short term, the FPSO Carioca and FPSO Guanabara ramp-up are a very relevant production growth. We have actions related to the start of complementary wells, such as in Roncador Field with 2 new wells that came on stream this first quarter. In addition to the implementation of those 15 new production systems, we have many complementary projects foreseen in our strategic plan. Petrobras constantly monitors the impacts on the oil and gas markets, additional -- and additional opportunity that may arise in the response of the change in the external environment will be analyzed in the context of the strategic plan to 2023, 2027 currently under development. Thank you.
Thank you, João Henrique. Thank you, Fernando. The next question from Frank is for Rodrigo Araujo. Rodrigo, the inflation trends globally become more pronounced. Are there any particular areas where cost trends are particularly troubling?
Thank you, Frank, for the question. As João Henrique has mentioned before in the Portuguese call, out of our 15 units that are coming online within the business plan, we have 12 of them already contracted, and we have a strategy to tackle critical resources in advance and have longer-term contracts for critical resources, such as fuel lines, PLSVs, et cetera. Of course, that some of the suppliers in the supply chain that are mostly impacted by commodities are already discussing with the company at the scenario of the commodities increase, but it's not something that we have seen any impact up to now. And given the company's procurement strategy and the scenario over time, we expect that we can navigate that without major problems. And of course, we don't see and forecast any impacts for the business plan up to now.
João, if you want to add something.
Well, that's exactly, Rodrigo, we have a long-term plan. Our projects are robust even in a scenario of the inflation, and you are good shape for facing all these challenges of the [ Covidian war ] that they are putting a lot of pressure in our suppliers.
Thank you, João Henrique. Thank you, Rodrigo. The next question comes from Vicente Falanga with Bradesco BBI. Vicente also sent us a message that I'm going to read for us.
Congratulations for the excellent financial management and all the best for [indiscernible] in the new endeavor. The first question is for Marcelo. Marcelo, has Petrobras been seeing more opportunities to export its oil to India? What is the company's commercial strategy in case China increased its sale imports from Russia?
Thank you for your question. And sorry for my voice. I'll try to do my best.
Well, as for your question, over the last years, Petrobras has been focusing on market developments for the Brazilian grades of fruit. Yes, we have commercial offices in Asia, Europe and U.S. costly covering and monitoring the market opportunities in order to find the best complex for Petrobras oil production. Petrobras has a very solid and diversified client portfolio distributed in all geographic regions that permit fast reaction to market changes like China buying more [ regional vaccine ].
And this allows the company to take advantage of the [ arbitrage ]. Every [indiscernible] of sale is made considering all the alternatives and ensuring a maximization of results. Petrobras has presence in different markets, the Europe, Americas, China and other regions in Asia. We have no particular dependency on any market.
Regarding the Indian market, in particular, Petrobras has already established a close relationship with the private and state-owned refineries. We do sell regular volumes every time the destination is among the best alternatives for the Brazil rate.
Thank you, Marcelo. The next question comes from Gabriel Barra with Citi. And I'm going to read his message once again. Congratulations on the results and good luck for the new management.
The first question is also for you, Marcelo. We see the company currently trading at prices below the international parity for both gasoline and diesel. Could you explain to us Petrobras' decision-making process in relation to pricing?
Thank you, Gabriel. Will keep on trying to speak as clear as possible. We are -- first, it's important to stress that the building to national parity price could be estimated with market public information. The competitivity of any company may vary a lot depending on its logistics, scale and international markets as well. Regarding our decision-making process, we evaluate our price position compared to international market on a daily basis, but we do not get easily the volatility of the international market [ cost ] or the exchange rate in Brazil. Hence, international prices and action rate at '20 level we adjust for price seeking balance in market.
Thank you, Marcelo. The next question also from Gabriel, is to Salvador. Salvador, could you tell us what additional measures are being studied or taken in addition to those already included in the bylaws in current legislation to strengthen the company's corporate governance?
Thanks, Gabriel. We have several initiatives already ongoing for this in the next few years. I'd like to highlight some of them here. First, we are focusing on applying automation, artificial intelligence and data mining in our internal control environment to secure those critical transactions in terms of integrity, real-time monitoring, early detection and response. We've been working on enhancing and identifying what can be automated in order to avoid human error to avoid delays and so on.
The second I'd like to mention is we are focusing not only on fraud and corruption risks as we originally started the program in the beginning in 2015, but also focusing now on what we call emerging risks in line with our strategic plan and our ESG ambition and commitment. So to foster transparency, integrity and fair competition in the oil, gas, energy market. So we are tackling with data privacy, for example, human rights, due diligence in our supply chain network, enhancing conflict mineral, diversity and inclusion. Now with the war in Ukraine, the sanctions and export controls program are especially important.
And my last comment on the continuous improvement process we have in our corporate governance. So we have an ongoing revision already in place for our policies, procedures by law, et cetera, to secure a strong, a timely and effective decision-making process. This is not something that we started now. Our governance has been enhanced year-over-year. For example, having a diverse Board of Directors composition and actually today, 80%, 8-0, of our Board members are independent. Having a solid eligibility criteria and appointment process, formal delegation of authorities, limited individual decisions, always supported by technical and statutory committees. So there is no single critical decision for Petrobras that is taken by one individual only. Every decision must be taken by a committee level at least.
Of course, having the independence and oversight for the governance and the compliance officer, we have an active board committee structure responsible to prevalidate any relevant subject before Board decisions. So we have People Committee, Investment Committee, Auditors Committee and so on and so forth. So there is no specific action here, but it's important to mention this is a continuous improvement process that every year, we update our rules, our procedures. And it's important to say that we are absolutely engaged and committed to ensure the respect, the value creation and the right balance among our shareholders.
So thanks for your question.
Thank you, Salvador. The next question comes from Lilyanna Yang with HSBC. She is very glad to see Petrobras delivering consistent results. The first question is to Rafael. Rafael, in our view, the tax regime is benign in Brazil. Are you seeing any discussion or proposals by the Brazilian government or Brazilian Congress towards higher government take or a special tax that would capture your windfall profits?
Good afternoon, Carla. Good afternoon, everybody. Thanks for being here with us today. Thanks, Lilyanna, for your comments. I'm very glad as well. Regarding your questions, looking to the actions performed and not only actions but announcements performed by the Brazilian policymakers in charge of economic actions. Recently, we have seen fiscal adjustments moving Brazilian fundamentals to a strong situation, targeting Brazilian local currency appreciation with good effects on reducing inflation and also in some sectors, some tax reductions to attract more investors and more investments in Brazil.
So of course, it is -- this is type of decision that has not to do with Petrobras as a company. But in my view, I do not expect any policymakers increasing their share in our profits. So I have no expectations of increase in tax. Especially if you look to other countries with the energy crisis, every country is trying to, on the other hand, reducing tax rates to relieve this sector. So objectively, I do not expect increase in tax.
Thanks for your questions and for your comments.
Thank you Rafael. The next question comes from Andre [indiscernible] . And it's for João Henrique and Fernando. The business plan stated $8.8 billion for E&P CapEx in 2022, which is an average of $2.2 billion per quarter. What drove the $1.4 billion level of CapEx in the first quarter of 2022? The company still sees the $8.8 billion E&P CapEx for 2022?
Thanks for the question, Andre. Our CapEx outlook for 2022 remains the $8.8 billion. In our planning an increasing level of activity was already planned during the year of 2022. In addition, we had some COVID effects in January, and we have some postponements and the reduction in activities on that month due to the pandemic. However, we see recovery by the end of the year of the spending.
Fernando, any comments?
I would like to complement that the level of investment we increased during -- throughout this year. I could such as Búzios, payments, milestones for Búzios 6 and 8 happens during this year. The interconnection of new wells in Libra for the FPSO Guanabara are some events that you contribute for this increasing level of activity in investments during 2022.
Thank you, Fernando. Thank you João Henrique. The next question comes from Leonard Marcondes with Itau BBA. And it's for Rodrigo Costa and also for Marcelo. Over the last few months, we have seen a new dynamic in the domestic fuel market with big users gaining prominence in imports and playing a major role in guaranteeing that demand is met. In this new context, how does Petrobras evaluate the need for the company to step in to contribute to meeting total demand, either by increasing refinery utilization rates or by importing some cargos?
I start, Rodrigo, and then you can [indiscernible]. Well, thank you, Leonardo, this is not very good now. To answer your question. Yes, it is true that distributors, large and medium sized ones took on the leading roll of imports once played by the trading companies. But I would say that this pandemic is not on months but on years. This change took place oddly due to the competition of these companies. And also due to the scale of operations in the national market and also to the logistics infrastructure, which represented a competitive advantage over the trade economies.
So the distributors diversified their supply and then making responsible for part of the imports that now [indiscernible] were carried out exclusively by Petrobras. Today, we have a more dynamic or competitive market, which is certainly challenging, but also with a great sharing of risks and investments also, which is good for both economic agents and for society.
In this context, we will continue working to meet our contractual commitments and evaluating business opportunities with safety and profitability based on our internal production which may eventually be supplemented by imports. Rodrigo?
Yes. Yes, Marcelo, I think that you cover all the aspects. I had forced Leonardo that we are already operating at the maximum level that we have currently available in our facilities. We must take in account the capacity of each unit process, the safe conditions, as Marcelo said, the logistics restrictions, the profile of the demand. Our company produced more than 60 products and must take in account the restrictions of our clients and the behavior of these markets, the grade of the oils and the profitability of this process. So consider all of these on April, we closed the month around 92%, 9-2% of the utilization factor. And in these current days of May, we are around 92%, 93% of utilization factor.
Thank you, Rodrigo. Thank you, Marcelo. The second question from Leonardo is to João Henrique. João, what progress has been made on the new FPSO projects announced in the last business plan? Should any reprogramming be expected considering the recent high volatility in oil prices and the inflationary pressure on offshore service costs?
Leonardo, we had the [indiscernible] last year at the end of [indiscernible] . And we continue to implement our planning to set up another 14 units until 2026. 11 of them are already under construction in the year on the contracting phase with these 3 units that was 9, 10 and [indiscernible]. For the unit to be scheduled for 2023, the modest lifting activities are completed or in progress. We can say that Búzios 5, Mero 2 and Itapu.
And the Marlim 2 are already complete and in progress for Marlim 1. We are constantly monitoring our project costs and schedule impacts trying to anticipate problems and develop mitigation plans. Until now, we have -- we don't have an [ automatic ] impact in the strategic plan is the last year. And because, as I said, most of them are already contracted. So the forecast for these new units in our point of view is very good. Thank you.
Thank you, João Henrique. The next question is from Conrado Vegner with Safra and it's for you as well. João, considering the contracts for the production systems expected to start in the next 2 years, is there a protection for higher costs in light of the current high inflation rates?
Yes. Petrobras, like we already discussed, Petrobras have a very large mix of quantity. And this help us to deal with these effects. For the new bids, we are discussing with suppliers mechanisms in order to reduce the risks for both parts with the mainly about the Ukraine war. But we see no major impact in the -- for the near future of your contracts. The contracts that are already in place will have mechanisms that -- where we can control the impacts of these events.
Thank you, João Henrique. The next question comes from is Luiz Carvalho with UBS, and he also sends us a message about the results. Congratulations on the results and for excellent dividend distribution. His first question is for Marcelo. Marcelo, on supply, imports and pricing, thinking specifically as usual, several agents in the industry have become more vocal and challenge to find these volumes in the international market and an unfavorable scenario for imports. How is the company seeing in the supply to the country? And how are preparations for an eventual challenge in the supply to the country?
Thank you, Luiz. First, I'd like to do a little disclaimer. We have to highlight that the Brazilian market is served by agents other than Petrobras. In this way our operational planning it takes into account our commercial commitments, which we have always been fulfilling and other opportunities that we commit -- can commit safely and profitably. In other words, we do not have visibility of what the other agents that serve a relevant share of the countries the market are doing as they are doing different movements. They have their own supply and logistics and business models. That's said I can talk about how Petrobras treats itself and seeing these risks.
We see the current scenario with great caution. We were their low diesel inventories in the main storage hubs and high -- very high volatility. We understand that these terms are a result of recent events such as the conflict in Ukraine. To deal with this scenario, we strengthened our -- we have strengthened our trading companies abroad, which operate in the main oil markets, [indiscernible] commercial pressures and maintaining contact with various agents, refiners, traders, customers, owners and service providers.
So we monitor the diesel flows, inventories, fragile demand and many movements. As we can to anticipate risks and adopt short-term and long positions in physical or contract in line with the use of our assets, refineries and logistics to provide resilience and competitiveness to our supply -- to supply our customers. Thank you.
Thank you, Marcelo. The second question from Luiz is to Rafael. Rafael, in the latest strategic plan, Petrobras announced a new governance structure to evaluate potential portfolio diversification. We'd like to ask on how these discussions have advanced? If there is a specific timeline in the market that the market could wait for future announcements or if this is a more timely process?
Okay, Carla. Hi Luiz, yes you should expect formal position on such evaluation by the end of this year after our Board approved our next strategic plan some decision will be taken. And you can expect either this decision can be to keep the focus on oil and gas and also processing the use of oil and gas, of course, with ESG responsible, decarbonizing our operations, social elections and also strong governance, which is what we are doing right now or it can be -- one can expect Petrobras Brasilia investing in a second core of value creation in a new operation aligned with energy transitions.
There are much discussions at place right now, we are looking in a multidiscipline our way. For example, a financial look to be sure that NPV is strong and positive even in resilience of prices. Also a technological look to be sure that we have all the conditions to provide a new business. And also culture and our type of company, which are the attributes and vocations that Petrobras have for big projects. Intense in -- capital intense in technological solutions. So we need to find a business that it must be a good business. And at the same time, Petrobras must be a good owner and a good operator for this business.
So I'm not going to give any spoiler. We need to wait a little bit more -- just to highlight that there are many discussions right now inside Petrobras and we expect by the end of the year, when the strategic plan is approved by the Board, we may have some decisions on this subject.
Thanks for your question.
Thank you, Rafael. The next question comes from Bruno Montanari with Morgan Stanley, and he also sent us a message. It's very good to see the company following its strategic plan and the shareholder remuneration policy. His first question goes to Rodrigo Costa. Rodrigo, on the back of a tight environmental for global fertilizer prices recently. Will Petrobras consider reviewing its strategy to fully exit this business or could some of the prior projects of the company in this area that were made in the past make sense at this point in terms of returns. What is the current strategy for the [indiscernible] plant? Could Petrobras pursue a similar strategy as [indiscernible] in this case, invest more to conclude construction before offering it again to the market?
Bruno, our strategic plan, '22, '26 does not consider any kind of investment in fertilized segment. And this segment doesn't belong to our core business, and that's very clear to us in our strategic plan. In relation to [indiscernible] plan, we have been taking internal steps to close the current sales process and we're trying to learn as soon as possible the new process. Regarding RNEST, we are speaking with our antitrust authorities about our new schedule of the investment process. And as soon as possible, we will have news about this. And we try to synchronize our plans to finish the second train with this new divestment schedule.
Thank you, Rodrigo. The next question comes from Rodolfo Angele with JPMorgan. He also sent us a message. So it's very good to see the results you posted this quarter. From an operations standpoint, everything is going rather well. The company is healthy and generating a lot of cash. Besides the dividend announcement, show the commitment to shareholder value, and it's easy to have a buy rating at the company in this conference. And his question is for Rodrigo. Rodrigo, the company has a large free cash flow and continues to divest. Can you comment about potential use of that cash or dividends?
Thank you for your question Rodolfo , and we had also a similar question from Bruno Varella in the Portuguese call as well. So I'll give you a broader perspective. So first of all, in terms of portfolio management, you know that we've done a very solid job and we still have relevant portfolio management job to do. So we're going to continue focusing our portfolio on the world-class assets that we're the best owner and the ones that we have a higher competitive advantage.
Of course, whenever we look at our cash flow generation, we are going to continue to apply our 60% of free cash flow formula. But given the level of free cash flow that we're generating and the inflows that are -- the additional inflows that are coming, we look at the cash generation, and we focus on, of course, making the investments that are committed. And as you well know, we don't expect to make relevant changes to the short-term investments. Most of our investments for '22 to '24 are already committed and the level of commitment. And this is something that we included in the latest business plan as well.
The level of commitment of CapEx for the first year of the business plan is pretty high, as Fernando and João Henrique had mentioned before. We don't have relevant short-term opportunities to boost CapEx or anything like this. And on the other hand, we didn't have any capital restrictions in the latest business plan. All the projects that are resilient to low price levels and are NPV positive were sanctioned -- were approved. So we didn't have CapEx restrictions, so we don't expect to have additional CapEx in the short term.
Given the prospects of our debt portfolio and the maturity of our debt, we expect to continue to manage our debt, but we don't expect the level to change relevantly. So all the additional cash flow is going to be directed towards dividend distribution. And the way we expect to run this is, of course, applying the 6% formula, as I mentioned. And whenever we decide like we did this quarter on additional dividend distribution, we try to look at a longer timeframe from 12 to 24 months. And we have a very solid risk analysis to evaluate the prospects for the upcoming months. We look at the price scenarios, the leverage scenario and the cash flow generation scenario to see whether we're confident to maintain the company's financial sustainability.
And of course, we look at the framework focusing not only on the 55% to 65% range for the gross debt, but also bringing the cash level closer to the optimal level from $8 billion to $10 billion. So that's how we view this question. But again, as I mentioned, the additional cash flow is going to be directed towards the dividends.
Thank you, Rodrigo. The next question comes from Pedro Soares with BTG Pactual. He also sends us a message. First of all, I would like to congratulate management and the company for the full transformation delivered over the past years. He has a question for Rafael. Rafael, you have mentioned the importance of improving Petrobras' communication with all its stakeholders, including society. So that -- there's a better understanding of fuel pricing dynamics. Could you address this further in order to make it more tangible for us. Does improving communication means having a more active participation with government in order to find solutions to price volatility that are not incurred by Petrobras? Any color in that sense will be welcome.
Thank you, Carla. Thank you, Pedro, for your questions and for your first note regarding our consistency in strategic plan. Explaining our communication is more focused on general public that to follow market prices. Regarding prices, as your question addressed that to follow market price is the best and the only practice that mitigates the risk of undersupply in the markets. And also it's a requirement as Petrobras must comply with the law and the bylaw, so we must follow market price. So we need to explain this for general population, and we sense that it is very important to show that we are practicing the best company practice.
So of course, we are available to discuss technical insights as an experienced operator in energy markets, both in oil and gas and also in refining institution. So we are very open to -- and available to provide the technical insights. But as I said in the previous questions, in my previous answer, we separate our company's view as a company, we are a company listed. So we have a very specific mission. We separate these actions from policymaker decisions and public policy that has not to do with Petrobras. But we are more than happy and provide an insight that policymakers requires.
Thank you, Rafael. The next question comes from Christian Audi with Santander. He also sent us a message. I would like to congratulate you all for the continuous free cash flow generation, which allows the payment of this excellent amount of dividends. His first question is for Rodrigo Araujo. Rodrigo, any updates regarding the sale of your stake at Braskem?
Thank you, Christian. Thank you for the question, and thank you for the message. We continue to be focused on divesting our stake in Braskem. We tried divesting our preferred shares in the beginning of the year and the market conditions were unfavorable. So we continue to monitor market conditions for the best timing to return with the sale of our stake. Of course, we monitor potential other venues of divesting of our interest in Braskem. We don't have anything concrete as of the moment. And we're not conducting any specific M&A transaction, but we continue to have a significant interest in divesting our interest and continue to monitor the market to do that as soon as we can. Thank you for your question.
Thank you, Rodrigo. The second question from Christian is also for you. So Rodrigo, can you give us an update regarding the refinery sales process? What's still feasible for 2022 versus only 2023? Any changes in the format of potential sales?
Thank you, Christian. So I'll give you an overall perspective. So first of all, with respect to the ones that we've already signed, talking about 6 and [indiscernible] we're expecting for the Brazilian antitrust authorities to conclude their analysis and so that we can go on and close those transactions. We're still negotiating for LUBNOR and [indiscernible] . LUBNOR is more advanced. [indiscernible] is a little bit behind.
And with respect to [indiscernible] , the ones that we've already attempted once to divest, we're discussing with the antitrust authorities and monitoring the market to evaluate the best timing to relaunch the process. We don't expect, at least for now, any relevant changes to the format of the divestment. We're mostly waiting on the right timing and more favorable market conditions so that we can relaunch and we expect to relaunch those processes soon. Thank you.
Thank you, Rodrigo. The next question comes from Regis Cardoso with Credit Suisse. He also sent us a message that I'm going to read. Congratulations for the excellent results. They are an equivocal evidence that good professional management can add significant value to the company and to society. His question is for Fernando. Fernando, what are the expectations around timing for the closing of the transaction of 5% [ stake ] purchase option exercised by CNOOC [indiscernible] . Which are the remaining precedent conditions for the closing?
We expect the transition to be closed in July. The effectiveness of this transaction is subject to the approvals of the National Petrol Agency, the Ministry of Paris Energies and the payment to be made by CNOOC. It's good to emphasize that this transaction has an effective date in September 1 of last year because of the agreements. And on the final closing, are the balances and the balances will be done and really closed. How this income of CNOOC is additional 5% in Búzios production sharing contract. Thank you.
Thank you, Fernando. Thank you all. At this time, the Q&A session is over. If you have any further questions, you can send it to our Investor Relations team. Rodrigo will now make his final remarks. Please, Rodrigo.
Thank you, Carla. Thanks, everyone, for being with us today for our first quarter of 2022 earnings call. We're very glad with the company's operational and financial results, and we expect to continue to create a lot of value with sensible and responsible investments and generate a lot of value and distribute the value that we create from our investments. Thank you for taking part of our earnings call, and we'll see you again in the next quarter. Thank you.