Brazil’s state-controlled oil producer Petroleo Brasileiro SA reported a surprise net loss of 2.6 billion reais ($470 million) after reaching a tax agreement with the government in early results under Chief Executive Magda Chambriard.

Despite the loss, the company approved dividends of 13.6 billion reais ($2.45 billion) for the second quarter. Analysts had expected $2.7 billion, according to an average of seven forecasts reviewed by Bloomberg. Petrobras said it would use part of a capital reserve for extraordinary dividends not paid in 2023 to make the second-quarter dividend payment, it said in a statement.

The payouts and a tax agreement Petrobras announced in June will help the state, its biggest shareholder, cover a budget deficit that is weighing on Brazilian financial markets. Rio de Janeiro-based Petrobras is under pressure to accelerate its investments to spur economic growth while making payouts to the state, its biggest shareholder.

Net profit was hit by the tax agreement and a weaker exchange rate, the company said. Petrobras also sold fuel at a discount to international benchmarks to protect consumers from short-term fluctuations in oil markets. In July, Petrobras raised gasoline prices for the first time in nearly a year in response to higher oil prices and a weakening local currency. The move was interpreted as a sign that the new CEO is less vulnerable to political pressure than her predecessor.

Petrobras reported adjusted earnings before exceptional items of R$49.74 billion, compared with a consensus of R$66.47 billion tracked by Bloomberg. The company attributed the decline to weaker gasoline and diesel margins and imports. Petrobras’ oil production in the quarter was impacted by scheduled maintenance shutdowns and natural declines in mature fields, partially offset by the expansion of new offshore facilities.

Other oil majors reported mixed results for the quarter due to lower refining margins, even though crude prices averaged about $85 a barrel from April to June. Chevron Corp. and TotalEnergies SE reported lower-than-expected earnings, while Exxon Mobil Corp. beat estimates after a major acquisition boosted its production.

Petrobras also reduced its capital spending estimate for 2024 to $13.5 billion to $14.5 billion, it said in a statement on Thursday. The revision still represents an increase of up to 15 percent from the previous year and will not affect production growth targets, it said.

Since taking over as head of the oil giant in late May, Chambriard has made it clear that she supports President Luiz Inácio Lula da Silva’s goal of generating economic growth through increased investment in refineries, natural gas and fertilizer plants, while pledging to generate solid profits and ensure good governance.

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