Good morning, ladies and gentlemen. Welcome to Petrobras conference call with analysts and investors for the presentation concerning the second quarter of 2016 results. [Operator Instructions] Present here with us today are Mr. Ivan de Souza Monteiro, Petrobras' CFO and Investor Relations Officer; Mrs. Solange da Silva Guedes, Chief Exploration and Production Officer; Mr. Jorge Celestino Ramos, Chief Refining and Natural Gas Officer; Mr. Hugo Repsold Júnior, Chief Human Resources, HSE and Services Officer; Mr. Roberto Moro, Chief Technology and Production Development Officer; Mr. Joao Adalberto Elek Junior, Chief Governance Risk and Compliance Officer; Mr. Nelson Luiz Costa Silva, Chief Strategy, Organization and Management System Officer, and other executives of the company. I would like to remind you that this meeting is being recorded, and please be mindful of slide number 2, which contains a notice to shareholders and investors. The words believe, expect and similar ones related to projections and targets are mere forecasts based on the expectations of executives regarding the future of Petrobras. To begin, we will hear Mrs. Isabela Carneiro da Rocha, Executive Manager of Investor Relations, who will start the presentation related to the second quarter 2016 results. After that, we will then answer the questions from participants. Mrs. Isabella, you may take the floor.

Good morning or good afternoon, everyone. I would like to thank you all for participating, and I would like to start by presenting our second quarter results, highlighting a change in terms of elaborating more of each business segments, so as to help you understand and model the company better related to transparency. These improvements took into account the quarterly results breakdown per segment with more information and better results per segment and also the results for Brazil and abroad in addition to data related to imports of products, sales volume, downstream and distribution. And also the tables - the Excel tables and spreadsheets are available on the website for Investor Relations. To start the presentation, we will start by highlighting the exchange rate environment in the first quarter with BRL3.51 lower than in the first quarter but yet higher when we compare the same period of the year before. In terms of Brent, there was an increase in the second quarter vis-à-vis the first quarter amounting to $46 per barrel on average and lower when compared to the first period of the year before. Now looking at the gross results, we start with BRL22.2 billion increase, and the main factors that impacted this increase was mainly the higher production of oil and gas, 7% higher from Petrobras and as a consequence, there was a 14% increase in the number of exports of crude oil and oil products associated to lower costs of import of gas or LNG because of higher domestic production and higher demand. And by the same token, there was a reduction in the sales of gasoline even though the total sales increased reductions in gasoline and also power because of lower power generation and increased expenses with production taxes and imports because of imports in the…

[Operator Instructions] Mr. Luiz Carvalho from UBS has the first question.

Good afternoon and thank you. I have two questions. First, I would like to hear from Ivan a little bit about the regulatory costs. I've had some conversations with the industry, both upstream and downstream, and we've seen a big disposition in terms of changes on the regulatory front, both for pre-salt, local oil and oil and gas. So how is the company communicating with the regulators concerning changes in regulatory measures? I just want to understand better, what is the current status of Petrobras communications with the government, whether there is an improvement in the relationship or whether we can anticipate changes? And the second question is that I want to understand whether there is any initial understanding in terms of the basic assumptions related - to who should pay whom? Who should collect from whom? And whether you could give me some timing expectation. And my last question, well, Nelson probably talked about it but it Nelson can give me an overview of what could be expected of your next business plan. What can we expect to generate in terms of leverage, asset sales, pricing policy? Please elaborate more on this regard.

Good afternoon, and thank you for your questions. Now speaking about regulatory aspects, the company is clearly defining the regulatory issue to make it easier for us to make interactions and to promote sales of assets. We are communicating more clearly with all stakeholders. Things are stable and we want the regulatory measures to allow us to make decisions in the best possible environment. I think this is really important because if that does not occur, investors will ask for higher remuneration rates just to cover for additional risks. And that happens when you don't have a stable regulation environment. But I'll give the floor to Solange because you mentioned 4 or 5 topics, and I'm sure that she can probably elaborate better on these topics than myself.

We are - maybe I think in terms of your perception related to the regulatory environment, that's due to a very strong effort of the company in terms of communicating with the regulatory agencies or the government trying to solve issues, like you mentioned repetro, which is something that is mentioned by everyone. All of our - all of the industry's investment decisions consider the hypothesis of a non-existence of repetro anymore. So this is what is being considered now by the association. We, from the industry, are talking to the government and communicating them about our adjustment issues, so that we can initiate some tender offerings or some other kind of model that is also very competitive for next year. All of these are very important regulatory aspects like Ivan mentioned. And they may bring about further investments or also increase the degree of confidence of current investments. You also talked about the transfer of rights. We will repeat the same practice or the same answer that we mentioned in our last meeting, and I said that both ourselves and the other part, we are finalizing or concluding our evaluations that we'll then produce the technical and economic report that will follow. But then you also asked us about the basic assumptions that may have been discussed. Well, yes, we did talked about it. We talk about our vision with the Public Prosecutor's Office and the government, but we are now evaluating different opinions on both sides. And each area, we use these assumptions in the most robust possible way in order to address the issues with our consulting representation.

Do you have any idea of timing? Could you expect something coming still this year or next year?

No. This is a very innovative process. It's a contract negotiation of which a very large magnitude and also very complex. Therefore, it's difficult for me to give you any idea of timeline.

It's Ivan again. Officer Nelson is now leaving at an important meeting but tomorrow, all of the officers will be together in the third phase of the review of the plan so he's not here at the moment, but we would rather that all information related to the main metrics of the company can be discussed after the conclusion of this work, because tomorrow, we will have another meeting. Thank you very much.

Christian Audi from Santander has a question.

My question has to do with CapEx. Very, very positive progress in terms of lowering CapEx for incentive purposes, so we would like to better understand the levels that were posted in the second quarter around BRL11 billion. So is this the new level that we might consider for the next two quarters or not? Is there any trend that might take place in the second half of the year? And secondly, could you elaborate more on what leads to this drop of reduction in the process for E&P, so that would help us with our vision for the future? The second question is more related to the sale or disposal of assets and yes the Brookfield. What about the sale of these assets? Are you waiting for any regulatory process to have the process concluded? And I wonder if you can confirm about CapEx and disposal of assets. So are you going to go back to this or unless you find a partner to the project.

Christian, thank you. Ivan speaking. I'm going to talk a little bit about CapEx. In the flow projection, we had an amount in the budget, which is higher than what we are actually performing. We believe there is a slight recovery in the second half of the year vis-à-vis the first half of the year performance. But clearly, we'll be performing investment-wise below the CapEx initially expected. And because we're concentrating and focusing most CapEx in production, Solange is going to make some comments.

Christian, good morning. Solange speaking. Most of the difference that you mentioned or that we posted here, like Ivan said, we have an outlook to improve the numbers in the budget in the second half of the year. And perhaps, there's a significant share that might not be recovered this year, and this is most precisely related to the performance of contracted projects, mid- to long-term projects, which will not have a significant impact in 2016. And I would say that there won't be an impact in our outlook for 2017 either. So we are considering if CapEx - or there is this perception of an impact in production, but it doesn't happen actually precisely because our short-term output is very much related to the availability of critical resources, and it is fully available in order to deliver.

Christian, coming back to the point about the sale of assets, the discussion with Brookfield is okay. We don't have any problems, any regulatory issue that prevents us from moving forward in our discussions. All operators are usually submitted to regulatory authorities, but there is no impediment. We only have natural conversations about big and complex fields. As to your question about Comperj, Jorge Celestino is going to answer your question.

Christian, good afternoon. For Comperj, what we're doing is the following. In the business plan and based on diesel demand, in our portfolio, this project doesn't make so much sense. However, we keep on pursuing and talking to partners. In order to look for a partner to go on this venture, that's precisely what we're doing right now.

Thank you. My last follow-up question, Ivan, going back to the strategic plan. Do you already have an outlook of when you expect to announce the plan or not?

The answer is yes. We'll be announcing this plan within the schedule set by [indiscernible] and this will happen in September.

Bruno Montanari from Morgan Stanley has a question.

Thank you for taking my question. Good afternoon. First of all, I'd like to congratulate the team for making our lives easier with a new release and the new charts and tables. Thank you. The first question is to Ivan about the bonus buyback strategy to improve the debt profile. In your cash position, I saw the numbers, but Ivan, how much would the company be willing to do more to further reduce payments for 2019? What about the equation, extend the debt versus increasing the debt service on a temporary basis? Secondly, Solange, the production phase is very interesting, the ramp-up of these new units. Do you have a range about the numbers for production in December this year? And Solange, you've been working extensively to renew the rig contract. Do you think you'll achieve the ideal number, or should we still decrease the fleet, particularly for deepwater? And in a more positive scenario, what do you still need to see in order to add more rigs to Petrobras' fleet? Thank you.

Bruno, thank you very much for your questions. The operation precisely has the goal that you mentioned to de-concentrate maturities, we had increasing maturity from 2015 to 2020. I have to admit we are very happy with the first response of the market vis-à-vis the first operation. Demand was greater than $20 million, we contracted $6.75 million. And because of the performance of the bond was excellent, we had a new operation of $3 million. If you check the curve, it is very positive, very strongly particularly over the last 45 days. At the end of the day, you improve and enhance the scenario of Brazil as a whole, the country, the economy and Petrobras. So by and large, we believe that we have the right amount according to our expectation. And the outlook in the future, we'll be watching closely new opportunities. I have to tell you that we've had a lot of spontaneous offerings now in terms of ideas and new possible operations. But whenever we make decisions, we disclose it to the market, and we are very happy with what we've achieved so far. We don't intend to go for new operations right now, but we'll be careful and keep an eye on new opportunities. Solange is going to add to the comment.

Thank you, Bruno. As we said before in the first quarter and now in the second quarter, according to our schedule, our output has increased just as we had previously announced very strongly, particularly in Q2. We are working very close to the downstream and upstream areas involving several aspects of our operations and to maximize the company's results. So we've been concentrating our schedule maintenance in the first quarter. And now with the new events of the second quarter, I would say that I wouldn't give you a range, Bruno, but maybe some periods and a couple of days in which we will be around 2,300,000 barrels per day by year-end. But we don't have any significant stoppages and all systems will be interconnected. In terms of rig contract, we did and we are strongly focusing to optimize our expenses with this kind of service. We have idle resources due to the reduction of the business plan and successive optimization of well construction. It's something very - well, the response is very good from our project team, and we have an ideal approach. And like you said, what we actually have to do is to go for incremental reduction of our expenditure in terms of the number of rigs available in the fleet, 2,000 meters and also by daily rate. So we are doing this and as we speak, the performance is very positive. Conditions are very positive for the kind of work. In terms of additional rigs to the fleet, this depends on how our strategies will be in the business plan. We don't feel any immediate need to add any rigs to the fleet, but it will depend on announcements in September related to the business plan.

Perfect. Thank you.

Diego Mendes from Itaú BBA has a question.

Good morning. I also have two questions. The first question has to do with the refining facility. Maintenance involves 85% and in the past, the rate was higher, considering the domestic market, there was also a difference. Could you give us some color about the behavior going forward? And also in the same question, we can see an increased percentage of domestic oil processed at the refineries possibly due to pre-salt production which had better oil. What about going forward? Most growth of production comes from pre-salt in the industry. Do you believe we will have 100% domestic oil at refineries, or is there any constraint, not technological but in terms of equipment in order not to use 100% of our oil? The second question is about production. There is a little table that is showed in the presentation to journalists, showing the number of wells already connected to each one of the platforms of pre-salt installed this year. Could you tell us the maximum of each one of the platforms, the maximum number of wells to get to the estimated date of ramp-up?

Thank you. Celestino is going to answer the question and then Solange will answer.

Good afternoon, Diego. With regards to the utilization factor of the refining facility, our planning model when fully integrated, naturally considering constraints for maintenance stoppage of our assets, both refining and other assets and also economic assets and factors. So the higher profitability of the complex and this takes into account imports of crude oil, imports of oil products, exports of crude oil and exports of oil products. So this is the look and feel of the refineries running in this model and with the best economic value possible. So if we look at the utilization factor, comparing previous years with the current year, this was below not only due to stoppages at refineries but also out of market reasons because the market is smaller, particularly the diesel market and diesel is the product that provides the higher profitability to refineries. $15 a barrel oil, so once we deplete the capacity of the diesel market, you begin to have options to export crude oil and import some oil products. So we have more stoppages. It is true, if you compare January to July 2016 and the same period in 2015, we had the plan, general stoppage or lower feedstock at [indiscernible]. We also had stoppages that - and also at [indiscernible]. But on a global basis, the concept of stoppage was not as strong as the problems in the economic factor, so that's the first point. The second point about 100% domestic oil, the answer is probably not. Due to the hardware at refineries, that's the first point. So you always need more - lighter oil to have adequate conditions in our refineries. But also for lubricant production in the industry for [indiscernible] that are to lubricant structures, trains, and we will always have some imports of this type of crude oil to be used in the refining complex.

Diego, Solange speaking. Good afternoon. With regards to your question about wells, we have different productivities. We don't have a fixed number for each one of the plants. I don't have information right now of these wells. But by and large, and as we discussed previously with all of you, when we explained what we did in order to reduce our investment with the long-term impact for our new plants, we shared before with you that we are in the process of two pumps, an average 4 to 8 wells in the platform, depending on where they are. It does not apply to all platforms, but 5 or 6 wells becomes our forecast for the first wave. And the remaining wells of the project have a gap, a ramp-up process and will come later on at a second wave that might even happen a year later. We don't have a basic rule for each one of these units, Diego.

Okay. Just a follow-up question about the drop in CapEx this year. Is this mostly related to this change in the well interconnection strategy or due to any delay in the construction of the platforms that will start up after 2017?

Well, this year, we are reporting results of the first quarter of 2016, and it was not affected yet by the strategy. What I mentioned about the first and second waves, this is within the framework of that discussion, the previous announcement of the business plan 2015-'19 where they had a strong investment reduction for E&P without the impact on production. That was the explanation of the apparent result, explaining why you reduced CapEx from 2015-'19 without lowering production in 2020. This is not related to investments in the first half of 2016.

Luana Siegfried from Raymond James has a question.

I have a very brief question about the sales volume, sale of oil products in Brazil. This volume is lagging behind levels of 2012 and 2014 where we had a peak. I would like to better understand to what extent in terms of barrels per day Petrobras will be comfortable with the future and possible increased demand of oil products in Brazil?

Thank you, Luana. Celestino is going to answer your question.

We've been running our facilities with utilization factors of 84 and 85 or 2 million or 2.5 million barrels or 1.9 million, 1 million or 2 million. For the second half - usually in the second half, the numbers are stronger. Our projections do not show that the market will have a dramatic drop or effect our operations. It is our understanding that we even have a trend for the second half of the year, a trend to improve the fuel market. So we are pretty comfortable with our operation. We are very competitive, both share and price-wise. So that's not a concern or something that is on our radar, based on the projections we currently have.

Just adding to my question. What about the other way around? I understand economic scenario is still idle, but if we assume improvement in the economy and improved oil product use, what will - how would you feel comfortable? 2.5 million barrels of oil or what about oil products?

This market is very dynamic. We already had 2.5 million, 2.6 million, so we do have assets, not only refinery but logistics assets in Brazil that have already supported these levels in the market. In this horizon or in our analysis, '17, '21 for the next business plan, we'll be discussing this again, 2017 onwards. But there are no big changes that may have an impact on facilities, at least according to what we have already planned, the complex maintenance or improvement in a couple of assets. So we don't understand or we don't believe that market changes may really affect our refining and logistics activities.

Mr. Caio Carvalhal from Brasil Plural has the next question.

In fact, I would like to go back to something that has been mentioned before related to changes in regulatory aspects. And in particular, I think that something is very critical for the entire industry in Petrobras, which has to do with the gas regulatory framework, and the pipeline of [indiscernible] of Southeast. And for Brookfield, there is nothing pending in that regard in the sales process. But about that topic, I would like to ask 2 things. What about the other asset in the logistics change of Petrobras and NGL and TPT, those thermological power plants? What I understand is that the company does not - once you're getting into further divestment while you wait for the regulatory process, but there are some issues that are really important because they can also impact not only the approval by the regulatory agencies, but also the appreciation of assets. Does the company take that into consideration? I know that it is also a matter of time because of the balance sheet. So the sooner the sale starts, the better, but there is also the issue of having a more stable and robust regulatory framework because the framework - the regulatory framework could also happen even before the divestment. How do you understand these regulatory framework issues? And I know also that there are issues related to timing. In the IBG conference a few weeks ago, this debate brought about anxieties in the market. I think you do not have a definition, I know, but whether you have some idea of timing of when that would be tendered or what would be the impact that, that would have in the government in terms of designing the regulatory framework. And the second question addressed to Solange speaking about production and comparing it with your last half year, and I was quite concerned with the production in the past, but in the second quarter, things were like a one-off situation when compared to what happened in the first quarter of this year and when we monitor production in 2016, it's pretty much in keeping with the guidance. Can you give us an idea related to production or E&P in 2017? Many foreign analysts were questioning the production in Brazil because it pointed to a significant growth in production for - from Brazil in 2017. I know that your strategic plan is still underway and you may not have any specific answer to give me, but what about the systems that are coming in? Can we expect a one-digit growth or a high-digit growth for 2017? Or whether we believe that this will be a stabilization year looking for further growth in the future?

Good afternoon. Thank you Caio. Your question was very good, and I think we have a very good example to give you just to put away your fear. I mean, we do not sell anything without looking at the value of the asset. The company motivates and we have been doing that. We motivate competitiveness in all of our processes. And as you said it correctly, several of these markets, the Petrobras is the single operating company and strictly, there is a debate about the regulation and the company has been very forward in terms of that process. We - I'll give the floor to my colleague, who will talk a little bit more about the regulatory framework. But I would like to talk about the process of the BR Distribuidora with the market was not very welcoming, not even abroad or domestically, and then we started publicly thinking about selling minority stakes, but the proposal that we received for BR Distribuidora were not in keeping with what we wanted. We - it didn't reach the level that we were looking for, so now we are discussing a shared control of BR. But timing will not pressure the loss of market cap. We have to be very careful, especially when it comes to any divestment in Petrobras. And we did some operations and that's why we are operating in such a way, not to put pressure in the company. We do not want to sell any asset at a value that is not aligned with the current value. And that should not affect our evaluation process. Now I'll give the floor to Jorge.

In terms of the gas regulatory framework, this has to do with the South pipeline. I think we talked about changes that have to be done to the regulatory framework, so there is the government, there are the agencies for the industry. This is a topic that has to be discussed in depth. It's not an easy task to do it, it's not an easy topic. And I know that, that during your presentation at IBP that Petrobras will play a crucial role in discussing those models, given the fact that most assets belong to Petrobras. We understand that the model where you look for divestment and the search for partnerships for partners - maybe it's not aligned with the way that the thing was modeled, but we need to also probably look at other agents.

Are there other agents in the market not only for gas molecules, but are there other stakeholders looking for participation in this area? Do they - are they looking for a higher stake in this area? Well, what about the government stake in terms of taxes and everything else? I think the debate is very serious. Now about timing for that model, do you have anything to say?

Caio, I was pleased to hear your reference to the fact that you've recognized the enormous efforts that we are undertaking. We - as we said before there was - that result was a one-off result, and we have, and we do have still a good outlook in terms of reaching our target so that's why we speak out of a very sound base. We indeed have to go through the first cycle, which is strategic planning in terms of the restructuring. And we will work on it and report the numbers in September. But there's another concept that has to be well understood in your evaluations and that is about the E&P segment, because this segment focuses on the results that are set up much before it's calculated. I mean, any change in investments today does not have an immediate impact now in 2016 or even in 2017. These investments have long-term returns. The business structure is - it's hard to maneuver quickly because it's a different industry. And so after all, we made important adjustments last, last year in 2015, and we are now evaluating the impact for 2017. And although the major decisions of 2017 are already aligned, I mean, they've been taken, and this is what we have to do, especially when you make some very strong adjustments as we did in 2016. But Caio, we do not reveal all the final numbers because there are still some decisions being made. And so we will probably be able to tell you more by the end of September when we meet again.

Mr. Andre Natal from Crédit Suisse has the next question.

My first question has to do with the market share you're losing, given the current Brent prices in Mexico, and this is for downstream and also the entry of third parties in the imports. You've been able to maneuver well in terms of third-party participation. And you're operating at a lower utilization level and eventually you may, at the same time, lose share. So my question is how far this can go or maybe this could reopen a debate about lower prices or maybe low prices not to stimulate such a delicate position in volumetric terms, this is my first question. The second question may be addressed to Director Jorge Celestino. It has to do about the Comperj disposal of assets. You did some - you already did something in 2014 and now 5.3 billion. And one of the generating factors of that write-off, in addition to some others related to CartaCapital, et cetera, had to do with the postponement of the project to 2023. So given the fact that this already happened, so currently we do not expect to conduct a major margin review, we were taken by surprise when you had another write-off or another sale of their project. What generated that write-off? Is that probably related to costs of OPGM or costs of CapEx to build a refinery? And maybe, you guess, that's why you have a BPL of 0, even negative. Is that true or any of that is not true, if you not see any good value to the project. So my question is what other business model you want to use, given the fact that the project is posting negative productivity, close to 0? And the next question addressed to Solange, if you can tell me a bit about the new platforms for 2017.

Thank you, this is Ivan. Okay, 2 questions addressed to officer Jorge and the others to Roberto.

In terms of paid off of market share and profitability with impact in the utilization factor of the refinery, I would say that we've been conducting constant analysis, and our projections are not representing any cause of concern. We are very comfortable with the situation and the profitability of the integrated operation of Petrobras. We were able to bring about good profitable levels. We've also been able to increase the stake of domestic oil in the entire oil basket. Therefore, I'll say that in the horizon of our planning, this has not bothered us. We are very comfortable with that operation.

Please, I just want to understand, what is the criteria you look at when you make your judgment, whether you look at a comfortable processing level? I mean - or 50% which may not be feasible. What is the criteria taken into account for that decision?

In fact, Andre, our model is the one that brings the best profitable margins to the company. Petrobras is an integrated company and, as such, it tries to integrate its markets to its assets and crude oil production. And this has to make the best economic sense to the company and its shareholders. Therefore, we do not have a physical metric or using a certain factor. If we find in 50% a best profitable margin than 60%, that's what we would do. So our business model aims at achieving the best profitability possible to the company, so this is what we've been using. In terms of impairment of Comperj, our reading of this or our prediction or our forecast indicates that the long-term demand changes and so do long-term margins. All of our forecasts and our product portfolio indicates that we have - we would have to postpone or delay that undertaking. And to that end, we did the impairment of the asset, but we are still looking for partners because there are opportunities and this project can make sense to some partners. Therefore, we're still looking for prospective partners.

Now it's Roberto Moro. In terms of transfer of rights, as of last year, we've been working to improve the execution plan of the project. We encountered a very poor landscape in 2015, and therefore, we made improvements to our execution plan, we made contractual adjustments or even we chose the buyback of shares. There are some instances where when some of the contracts were nonperforming, and so we reviewed the contracts, we are now receiving equipment from these new contracts. We were able to escalate the phases of project, from one phase to integration, and it is - everything is within the margins that we allocated for the project.

[indiscernible] from Bradesco has the next question.

I would just like to talk about the distributing company in the north of the country. Do you think that this will be an impediment for other investments? And whether you could talk about increases in trade receivables. So my question is about how do you see the impact of this in a large client?

Filipe, we had a hard time understanding your question, but I'll try to answer the best possible way. Any obligation agreed by in the past, our contracts foresee that any time there is any change in stakes control, we have to be accommodating to accommodate for that change. And this could be a factor of debt acceleration. So any operation that implies any changes of control or stakeholding, and I don't think that this will occur, but this could also decelerate the debt. The debt consists of 2 components: One component has been contracted, which is the contract for debt; and there is another contract that has been continuously delayed in terms of its payment.

Felipe Santos from JPMorgan has a question.

My question is for Solange. Solange, is there any constraint in the wells productivity at pre-salt? Is this the maximum level you assume you'll get? And what is the ideal limit you're working with, within this possibility range?

Felipe, Solange speaking. Well productivity or yield takes 2 aspects into account. First, the reservoir from which the output comes in terms of the right capacity or the volume to be flown at a high speed. And the second question has to do with the well engineering. You have to design a well and that's a very complex engineering work. So I would say that up to now, our capacity to put together engineering and our best reservoir, our projection is that we might have 50,000 barrels per well. These are very special circumstances in which we need to put together high yield and also the right materials, diameters, facilities which enable us to resist environmental factors and promote the right outflow with the right speed.

Thank you. So up to 50,000, is this the average or the standard? And if you reach such a high level, 35 million per day, if you get to 50,000 which is so high, do you already work with the assumption of having higher platforms compared to what you currently have?

Felipe, I would just like to highlight that the statement that I made is basically due to the capacity - the production capacity of our reservoir. So if you consider the same engineering of Campos Basin pre-salt for instance, we wouldn't have this result. So I highlight again that these opportunities are not found everywhere. Including pre-salt, it may vary a lot from a case-by-case basis. And that's why, as mentioned before, the number aparts to be implemented, but only in exceptional areas, I wouldn't say larger units, but maybe fewer wells in the unit. Maybe that will be more profitable in our cost effectiveness. But if we analyze it well, I would say that we would be working with fewer wells and having midsized systems, many systems working fast for production purposes. But we're very mindful that we are specifically talking about one well.

[Indiscernible] from HSBC has a question.

I have a couple of questions. The first question is about the business plan and the transfer of rights. Wouldn't it make sense to revise the production plan for the barrels or the transfer of right regime? If I understood it correctly, possibly Petrobras is not going to build before building starts to significant contribute in the cash flow. According to the current plan in 3 production platforms and the transfer of rights expected for next year. The second question has to do with the local content. Could you quantify the penalties related to A&P? And what about the number of plants that have already been audited? Could you give us some color about interpretation about what is compliance, local content? To what extent can you have waivers to prevent penalties. And my third question is about disposal of assets. You had this announced for Carcará. It was not, if I'm not mistaken, in the original plan of $15 million, so what about the outlook of sales of assets after the announcements for Carcará, in terms of achieving the goal or exceeding the goal or any delay? Or wouldn't that make a lot of difference for investors and the idea would be considering 2016 at CapEx for the sale of assets?

Good afternoon. The transfer of rights, well we're still at a preliminary conversation stage. You mentioned many complex possibilities, but we don't have a final statement to say right now. As to the local content, what the company has to share right now is that after so many processes, many audits have already taken place for exploratory blocks, 2005, 2007 and all the waivers filed by Petrobras at EA&P apply to all cases. And we have no response or further comment on it. As to the investment plan, you particularly focused on Carcará. You're right, it has always been part of our plan, it was never announced, but it was included in our investment plan in 2015, and we are working with this asset in this process for a while. There are several projects that are underway and it was part of it, and we were successful in this investment. And it's still part of our goal announced by our CFO.

Perfect. Just to clarify about the barrels of the transfer of rights. If we only focus on the operation and the transfer of rights without taking into account the final price, what about the flexibility of the startup of Búzios, is it really flexible?

Lillian, these discussions are only getting started. They are too preliminary. We are only considering the contractual aspects to address the discussion. We don't have anything else to share.

Pedro Medeiros from Citigroup has a question.

I have a couple of questions. The first question is about the earnings of the second quarter and with the gradual comparison and realization price of the domestic oil in E&P. Could you comment more about it? We saw a lot of improvement in the difference of the realization price in domestic oil. Is this related to the scenario and volatility of oil prices? Or would it be something more structural with different prices, Brent prices, realization prices due to the interaction and the level of use by different refineries in the country or the increase in the quality - average quality of oil and the increased share of pre-salt? Second question, Ivan, could you elaborate more about the stage and restrictions to conclude the deal with Chinese banks to release the credit agreement involving $10 million that you announced in the past as a potential balance? And my third question is, Solange, could you give us more color about the possibility of having disposal of assets upstream domestically that might be equivalent in order of magnitude with the sale of Carcará field. And my last question about Carcará. I don't know if you can disclose it, but I would like to understand if this excess price of $1.5 billion to $2.5 billion announced in the press release, is this a binary range depending on contingencies or chances are the deal will be at an intermediate level?

Pedro, thank you. Jorge Celestino is going to answer the first question, and I'll come back for the Chinese question and Solange is going to talk about Carcará.

When it comes to the realization price for oil prices, basically, it is Brent. Brent in the third quarter or in the second quarter was much higher compared to the first quarter. Think about the average numbers. January at $33; $39, March; $42 in April; $47 in June - and in May; and $48 in June. So the difference is basically Brent.

Jorge, just as a follow-on comment, my question is more related to the difference for Brent price because in 2013, '14 and '15, the average was pretty flat, $11 difference of the realization price. And both in Q1 and Q2, it was between $5 to $7. Is this a new level, a new range? Or is that a conjuncture that was affecting the result this quarter?

Well, there is an effect. If you consider lighter oils on the list when you use lighter oils. And by the way, in Brazil, if we consider we increase the share of domestic oil - and this is lighter oil, at the end of the day, there is also an impact on spread.

So probably we'll have lower spreads, lower than the average of the last 3 years going forward?

Well, not really. It will depend on what we have on the refineries and it would also depend on the market conditions and also on Brent. Basically, that's it.

Pedro, with regards to the negotiation, we have 3 discussions underway with the Chinese banks. The China Development Bank, about $10 million, another with $1 billion and an additional $1 billion in another negotiation and also $2 billion in another operation. All these deals are properly underway. With the China Development Bank, it is a challenge actually. We have 2 contracts in effect, $10 million in 2009 and $5 million in 2015. For 2016, the contract has export volume and the discussion with the Chinese Development Bank is precisely about how we are going to create the necessary conditions so the commercial or volume of exports really meet our expectation.

The format?

Well, we have information on oil prices in the market, and we offer this oil to the 3 companies and 1 company leads the Chinese consortium. If the proposal is accepted, we offer the oil. And if it refuses, we sell by the market price. We are having intense negotiations with this model in order to have better performance compared to what happened in the contract of 2009. That's why we haven't reached an agreement yet. For the next 2 banks, one had disbursement and the other, we are still working to make happen in the second half of the year. About Carcará, Solange is going to answer your question.

Good afternoon, Pedro. Our evaluation about Carcará and perhaps other assets of the same size, this highlights something that we frequently share in the sense that, particularly, for downstream or better speaking, upstream, these numbers stem from a very well-qualified assessment of our portfolio. And when we see in our portfolio an opportunity to improve the company performance by optimizing our operations and considering improved cash flow, then we select this divestment asset. We might have all kinds of opportunities, but we really focus is on the improvement of our portfolio in general. With regards to the range of $1.5 billion to $2.5 billion, particularly for the sale of Carcará, this is related to some event. The sale has an amount related to it and conditions are related to events that will happen in the future, and we don't have a specific deadline on these.

This concludes the question-and-answer session. Thank you very much. We give the floor back to Ivan de Souza Monteiro for the final remarks.

Thank you all for joining us today. And the IR Department will be here to take any additional questions you may have.