- Supported by an accelerated production ramp-up, Petrobras continues to demonstrate earnings durability despite lower global Brent prices. In 3Q25, EBITDA grew 2.2% YoY, with margins holding steady at approximately 50%.
- Operating cash flow remains robust, averaging approximately USD 39.5B annually over the past five years, comfortably absorbing the recent step-up in capital expenditure. Strong EBITDA-to-operating cash flow conversion continues to support consistent, positive free cash flow across the cycle.
- Debt levels remain manageable with low near-term financing risk. Total liquidity of approximately USD 13.3B fully covers short-term maturities, providing a meaningful buffer. Credit metrics have also remained broadly stable in recent quarters.
- Petrobras’ 2030–2035 USD bonds offer attractive value, with yield-to-worst in the mid-5% to 6% range. This represents a notable yield pickup versus bonds from international oil majors with similar tenor.
- Exploration & Production (E&P): The primary driver of operating income, focused on Brazil’s high-productivity deepwater and ultra-deepwater fields.
- Refining, Transportation & Marketing (RTM): Manages the majority of the country’s refining and fuel distribution infrastructure.
- Gas & Low Carbon Energies (GLCE): Oversees natural gas, power generation, and early-stage renewable projects, reflecting the company’s gradual transition toward a lower-carbon portfolio.
Productive wells + Cost advantage = Operational dominance
Chart 1: Low lifting costs keep total cash cost per barrel low
3Q25 results demonstrate revenue resilience despite softer oil prices
Chart 2: Strong production volume in 2025…
Chart 3: … has supported revenue despite lower oil prices
Strong and efficient cash flow generation
Chart 4: Petrobras converts a high portion of EBITDA to free cash flow despite recent higher CAPEX intensity
Chart 5: While CAPEX increased, operating cash flow remains robust, and free cash flow remains positive
Debt rose modestly, but leverage profile remains manageable
Chart 6: Gross debt rose as of 9M25 due to higher leases rather than financial debt
Table 1: Debt metrics (end ’22 to end-Sep ’25)
|
Metrics |
Dec '22 |
Dec '23 |
Dec '24 |
Jun '25 |
Sep '25 |
|
Gross debt (USD Bn) |
53.8 |
62.6 |
60.3 |
68.1 |
70.7 |
|
Cash (USD Bn) |
12.3 |
17.9 |
8.1 |
9.5 |
11.7 |
|
Net Debt/ LTM EBITDA (x) |
0.6 |
0.9 |
1.3 |
1.5 |
1.5 |
|
Debt/ Capitalisation (%) |
43.5% |
44.2% |
50.4% |
48.0% |
46.9% |
|
LTM EBITDA interest coverage (x) |
28.0 |
23.2 |
18.8 |
18.6 |
18.4 |
|
Free cash flow* interest coverage (x) |
6.8 |
7.5 |
6.0 |
5.0 |
3.4 |
|
Source: Bloomberg, iFAST compilations. Data as of 30 September 2025 *Mandatory dividends subtracted from FCF |
|||||
Credit rating capped by sovereign ceiling, but standalone rating suggests an Investment-Grade caliber
Risk considerations
Table 2: Petrobras’ safeguards against government influence
|
Safeguards |
Description |
|
Legal protection |
A "Reimbursement Clause" which explicitly states that if the government directs the Group to pursue "public interest" goals that differ from market conditions, then the former must reimburse the company for the difference in every fiscal year. |
|
Fair decision-making procedure |
A minority shareholders committee will assess any transactions with the controlling shareholder (the government) that fall outside the ordinary course of business. These transactions will require approval by two-thirds of the Board of Directors. The supermajority approval would therefore require the support of at least some independent or minority-elected directors. |
|
Board Independence and qualification requirements |
Bylaws require that at least 40% of the Board of Directors be composed of independent members, which is higher than the 25% minimum required by the State-Owned Companies Law. Technical experience requirements and integrity background checks are required for executives to prevent political appointees without industry expertise. |
|
Source: Petrobras Bylaws, iFAST compilations |
|
Recommendations
Table 3: Petrobras’ USD fixed rate bonds
|
Issuances |
Ask Price |
Yield to Maturity |
Years to Maturity |
Z-Spread (bps) |
|
99.1 |
5.4% |
4.6 |
190.2 |
|
|
101.3 |
5.3% |
4.9 |
184.1 |
|
|
104.3 |
5.7% |
7.4 |
213.1 |
|
|
100.2 |
6.0% |
8.9 |
224.5 |
|
|
100.0 |
6.9% |
23.1 |
285.8 |
|
|
Sources: Bondsupermart, iFAST Compilations. Data as of 10 February 2026 |
||||
Chart 7: Petrobras' bonds provide attractive yield pickup over peers
Declaration: For specific disclosure, at the time of publication of this report, IFPL (via its connected and associated entities) and the analyst who produced this report hold NIL positions in the abovementioned securities.
All materials and contents found in this site are strictly for general circulation and informational purposes only and should not be considered as an offer, or solicitation, to deal in any of the funds or products found/identified in this site. While iFAST Financial Pte Ltd ("IFPL") has tried to provide accurate and timely information, there may be inadvertent delays, omissions, technical or factual inaccuracies and typographical errors. Any opinion or estimate contained in this report is made on a general basis and neither IFPL nor any of its servants or agents have given any consideration to nor have they or any of them made any investigation of the investment objective, financial situation or particular need of any user or reader, any specific person or group of persons. You should consider carefully if the products you are going to purchase are suitable for your investment objective, investment experience, risk tolerance and other personal circumstances. If you are uncertain about the suitability of the investment product, please seek advice from a financial adviser, before making a decision to purchase the investment product. Past performance is not indicative of future performance. The value of the investment products and the income from them may fall as well as rise. Opinions expressed herein are subject to change without notice. In respect of any matters arising from, or in connection with the said research analyses or research reports, recipients of the report are to contact IFPL at 10 Collyer Quay, #26-01 Ocean Financial Centre Building, Singapore 049315, or by telephone at +65 6557 2853. Where the report contains research analyses or research reports from a foreign research house and if the recipient of such research analyses or research reports is not an accredited investor, expert investor, institutional investor or an ex-accredited investor, IFPL accepts legal responsibility for the contents of such analyses or reports to such persons only to the extent as required by law. Please note that only certain security(ies) herein are available to all investors, while the rest are only available for certain persons to invest in, such as Accredited Investors (as defined in the Securities and Futures Act) or one who invests at least S$200,000 (or its equivalent currency) per transaction. To qualify as an Accredited Investor, one needs to submit a declaration form and certain relevant supporting documents, according to iFAST’s prevailing policies and procedures.
Please read our full disclaimers on the website at ( https://secure.fundsupermart.com/fsmone/policies/328125/investment-account-terms-&-conditions).
iFAST Financial Pte Ltd (IFPL) (registered address: 10 Collyer Quay #26-01 Ocean Financial Centre Singapore 049315, Telephone: 6557 2000) holds the Financial Advisers Licence issued by the Monetary Authority of Singapore ('MAS') to conduct regulated activities of advising on securities, marketing of collective investment schemes and arranging of any contract of insurance in respect of life policies, other than a contract of reinsurance and the Capital Markets Services Licence issued by the MAS to conduct regulated activities of dealing in securities and providing custodial services for securities. While IFPL has made every effort to ensure the independence of the report's contents, IFPL's nature of business is such that IFPL and its connected and associated entities together with their respective directors, officers and staff may be involved in providing dealing or investment-related services in the abovementioned securities, and have taken or may take positions in the securities mentioned in this report, and may also act as the principal for any buy or sell trades.
Please note that only certain bond(s) herein are available to all investors, while the rest are only available for certain persons to invest in, such as Accredited Investors (as defined in the Securities and Futures Act) or one who invests at least S$200,000 (or its equivalent currency) per transaction. To qualify as an Accredited Investor, one needs to submit a declaration form and certain relevant supporting documents, according to FSM's prevailing policies and procedures. Please read our full disclaimers in the website.