Brazil’s state oil firm Petrobras will pay $2.1 billion in dividends for the first quarter after posting a jump in net income due to one-off items.

Petrobras reported a net income of $6.2 billion (35.2 billion Brazilian reals) for the first quarter, up by 48.6% from a year earlier, due to one-off items and more favorable exchange rates.

Without the one-off items, net income dropped by 12.1% year-over-year.

Petrobras’ board of directors approved the payment of interim dividends of $2.1 billion (11.72 billion reals), saying that the proposed payment is in line with the current Shareholder Compensation Policy.

Under the policy, if gross debt is equal to or less than the maximum debt level in the Strategic Plan (currently set at $75 billion), Petrobras must distribute 45% of free cash flow to its shareholders.

“This distribution is consistent with the financial sustainability of the company,” the Brazilian oil giant said.

Higher investments than initial guidance raised concerns among investors that Petrobras could limit shareholder distributions.

Petrobras generated higher cash flows, mainly due to a 5% increase in production volume compared to the previous quarter, chief financial officer Fernando Melgarejo said in a statement.

This production growth was reflected in adjusted EBITDA, which rose 46% compared to the fourth quarter of 2024, Melgarejo added.

Despite the significant slide in oil prices at the start of the second quarter, Petrobras remains committed to executing its current Business Plan, the executive said.

Investments were $4 billion in the first quarter of the year, representing 22% of the annual guidance.

“These investments are focused on pre-salt projects, with emphasis on the Búzios and Atapu fields. We are drilling and connecting more wells and advancing in the construction of new units that will support the growth of our production curve,” Melgarejo said.

“These are projects that generate value for our shareholders and will translate into revenue in the upcoming years.”

Last week, Petrobras announced a new oil discovery in the pre-salt Santos Basin, identifying “high-quality oil without contaminants” at an exploratory well in the Aram block.

By Tsvetana Paraskova for Oilprice.com

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