Mitsubishi UFJ Securities “Brazil Day”
Conference - 2008




                                         1
DISCLAIMER



         The presentation may contain forecasts about future events. Such forecasts merely reflect the
     ...
CORPORATE ORGANIZATION AND KEY OPERATING RESULTS




Exploration &                 Downstream                             ...
CORPORATE STRATEGY


                                     Commitment to sustainable development

           Integrated    ...
BALANCED VERTICAL INTEGRATION

Upstream Operations                                          Downstream Operations




 Áre...
TRADED VOLUME 2003 - 2008

                                                                                               ...
DIVIDEND POLICY

  US$                                             US GAAP
  14.000                                       ...
UPSTREAM OVERVIEW




                    8
LONG-TERM RECORD OF INCREASING RESERVES

       PROVEN RESERVES BY CATEGORY                WORLDWIDE PROVED RESERVES OF PE...
E&P - RAPIDLY GROWING PRODUCTION PROFILE

                                                                                ...
MAIN PROJECTS IN BRAZIL – 2007-2012


                                                                                    ...
130

                                                                                                                     ...
MAIN DISCOVERIES - 2002/2007


                               ~ 13.0 billion boe
                                       (2...
EARTH DEVELOPMENT


 Earth
 108
 122
 130
 152 Planet as today
 164 Million years ago




                         0      ...
PRE SALT PROVINCE




                          line
                    hinge



                                 Well Te...
RECENT OIL/GAS DISCOVERIES 2006-2007 - CLUSTER BLOCKS




                                                                ...
TUPI AND NEIGHBOURING BLOCKS

  Blocks            Consortium
                                                          Wel...
EXTENDED WELL TEST -TUPI

 FPSO – Leased*                         1st Oil: March/2009




                                ...
TUPI PILOT SYSTEM* - PRODUCTION UNIT




                                                                                 ...
NEW RIGS

       Water           Operating         Start Up              Start Up            Start Up        Start Up     ...
CONTRACTING OF 10 FPSOs FOR THE PRE-SALT AREA

                                                   10 new FPSO-type oil-pro...
DOWNSTREAM
OVERVIEW




             22
REFINING INFRASTRUCTURE

  DOWNSTREAM REFINING CAPACITY                                              Refineries           ...
TOTAL DOWNSTREAM INVESTMENT: US$ 29.6 BILLION



          20%
                                 29%


 8%

   8%
         ...
NET EXPORTS OF OIL AND OIL PRODUCTS

 Exports (‘000s barrels/day)                                Imports (‘000s barrels/da...
REFINING EXPANSION - INTERNATIONAL

                                      REFINERY IN THE USA
                            ...
GAS AND ENERGY
OVERVIEW




                 27
INCREASING DEMAND FOR NATURAL GAS

                                                                                       ...
NATURAL GAS SUPPLY VS. DEMAND


Million cu.m/day


                                          Average Demand               ...
GAS & POWER OPERATIONAL PERFORMANCE

                 Completed Actions                      Creating flexibility in the p...
RENEWABLES




             31
RENEWABLE ENERGY AND BIOFUELS (2008-2012)
   US$ 1.5 BILLION INVESTMENTS                                  2008-2012 INVEST...
RAW MATERIAL COMPARISON


                                                                                                ...
PETROBRAS INVESTMENTS TO EXPORT ETHANOL

                                                                        Ethanol c...
$
    FINANCIAL
    CONSIDERATIONS




                     35
INVESTMENT PLAN BY BUSINESS SEGMENT

                                                                      2008-12 Period
...
PETROBRAS’ BUSINESS PLAN



   Indexes                     2007-2011 Plan      2008-2012 Plan
   FX rate (R$/US$)         ...
STRONG RETURNS HAVE ENABLED COMPANY TO GROW WITHOUT INCREASING DEBT

                               Historical ROCE
      ...
PETROBRAS SCENARIO


                               Perspective of a high
                               increase in produ...
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18 11-2008 Mitsubishi UFJ Securities - Brazil Day Conference 2008 no Japão (somente inglês)

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18 11-2008 Mitsubishi UFJ Securities - Brazil Day Conference 2008 no Japão (somente inglês)

  1. 1. Mitsubishi UFJ Securities “Brazil Day” Conference - 2008 1
  2. 2. DISCLAIMER The presentation may contain forecasts about future events. Such forecasts merely reflect the expectations of the Company's management. Such terms as "anticipate", "believe", "expect", "forecast", "intend", "plan", "project", "seek", "should", along with similar or analogous expressions, are used to identify such forecasts. These predictions evidently involve risks and uncertainties, whether foreseen or not by the Company. Therefore, the future results of operations may differ from current expectations, and readers must not base their expectations exclusively on the information presented herein. The Company is not obliged to update the presentation/such forecasts in light of new information or future developments. CAUTIONARY STATEMENT FOR US INVESTORS The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this presentation, such as oil and gas resources, that the SEC’s guidelines strictly prohibit us from including in filings with the SEC. 2
  3. 3. CORPORATE ORGANIZATION AND KEY OPERATING RESULTS Exploration & Downstream Gas & Distribution International Biofuels Production (Supply) Energy Petrochemicals Income from Operations(2) Distribution Summary Financials (US$ billion) 3% Downstream 2005 2006 2007 LTM (6/30/2008) Net Revenues 56.3 72.3 87.7 108.6 16% EBITDA 17.6 22.9 25.3 31.8 2005 2006 2007 1H08 Capex 10.4 14.9 21.0 24.3 Total Debt(1) 21.2 21.3 21.9 25,9 Cash & Cash 9.9 12.7 7.0 6.6 Domestic Equivalents E&P Net Debt 11.3 8.7 14.9 19.2 Total Equity 32.9 44.3 65.2 83.0 81% Total Assets 78.6 98.7 129.7 156.9 NOTES: 1 Includes capital leases 2 For tthe year ended December 31, 2007. Excludes losses in gas and energy, corporate results and eliminations 3
  4. 4. CORPORATE STRATEGY Commitment to sustainable development Integrated Social and Environmental Profitability Growth Responsibility Expand operations in target markets for oil, oil products, petrochemicals, gas and energy, biofuels and distribution, being a world benchmark as an integrated energy company Expand To grow To expand Develop and lead operations in Operate on a global production and integrated the Brazilian natural petrochemicals in basis in biofuels oil and gas operations in gas market and Brazil and South commercialization and reserves refining, operate on an America on an logistics, leading the sustainably, commercialization, integrated basis in integrated basis domestic production of being recognized logistics and the gas and electric with the biodiesel and for excellence in distribution with a energy markets with PETROBRAS expanding E&P operations focus on the Atlantic a focus on South Group’s other participation in the Basin America businesses ethanol segment Operational, management, technological and human resources excellence Downstream E&P Distribution Gas & Energy Petrochemicals Biofuels (RTC) 4
  5. 5. BALANCED VERTICAL INTEGRATION Upstream Operations Downstream Operations Áreas de Concessão (outubro/2005) Existing Pipelines Refineries Petrobras Terminal aquaviário Other Companies Terminal terrestre Proved Domestic Reserves of 13.92 Billion BOE (SPE) 11 refineries in Brazil Southeast Basins responsible for more than 80% of 2007 domestic throughput of 1,795 k bpd Brazil’s oil production 2007 oil products domestic consumption of 1,725 k bpd 2007 domestic oil average daily Production of 1,792 k bpd 5
  6. 6. TRADED VOLUME 2003 - 2008 $2,034 2000 Turnover NYSE & Bovespa (daily average US$ MM) 1800 1600 $998 1400 Nyse PBR Daily Average (US$ MM) 1200 PBR/A $992 1000 $382 800 $431 600 $101 $483 $201 Bov espa 400 $227 PETR3 $56 PETR4 $219 $552 200 $99 $111 $25,0 $304 $60 $132 0 2003 2004 2005 2006 2007 2008 YTD PETR4 (Bovespa) PETR3 (Bovespa) PBR/A (Nyse) PBR (Nyse) Source: Bloomberg 6
  7. 7. DIVIDEND POLICY US$ US GAAP 14.000 50% 12.000 40% 10.000 34% 30% 30% 29% 29% 30% 8.000 28% 6.000 20% 4.000 10% 2.000 - 0% 2002 2003 2004 2005 2006 2007 Net Income Dividend Dividend as % of Net Income According to the Brazilian Corporate Law, shareholders are entitled to a mandatory dividend of 25% of the annual net income. In the last years, Petrobras has been paying an average of 30% * Net Income and Dividends based on provisioned dividends and US GAAP. 7
  8. 8. UPSTREAM OVERVIEW 8
  9. 9. LONG-TERM RECORD OF INCREASING RESERVES PROVEN RESERVES BY CATEGORY WORLDWIDE PROVED RESERVES OF PETROBRAS (SPE) OIL VS. GAS BY DEPTH (Reviewed and Certified by DeGolyer and MacNaughton 6% 11% since 2001) 9% 10% BILLION BBLS 23% 85% 56% Non-Assoc. Gas Onshore Assoc. Gas Offshore (0-300m) Oil and Condensate Offshore (300-1500m) Offshore (>1500m) BY LOCATION BY GRAVITY 14.5 14.9 14.9 15.0 15.0 12.1 10.4 10.7 8% 26% 74% 92% 2000 2001 2002 2003 2004 2005 2006 2007 Brazil > 31o API Light International < 31o API Note: SPE (Society of Petroleum Engineers) method and includes Heavy/Intermediate both Brazilian and international reserves. 9
  10. 10. E&P - RAPIDLY GROWING PRODUCTION PROFILE 7.7% p.y. 4,153 8.7% p.y. 18 3 3,494 515 * 151 285* 643 Natur al Gas - Inter nati onal Oi l and NGL - Inter nati onal 637 . y. 8.3% p Natur al Gas - Br azi l Oi l and NGL - Br azi l 2,298 2,300 2,217 1,810 2,036 2,020 1 01 1 09 1,636 96 1,565 23 85 94 14 2 12 6 1,505 24 16 3 2 .8 12 1,238 35 1 61 27 7 2 73 20 1 68 1,008 1,090 16 44 27 4 2 .4 2 1 885 53 252 2 50 2 65 10 60 11 2 32 9 22 1 Thousand boed 10 45 38 47 1 97 25 17 9 16 3 1. 7 78 1. 7 92 15 2 1 . 6 84 13 4 1 . 5 00 1. 54 0 1. 4 93 1 . 271 1. 3 36 1 . 00 4 1. 1 32 80 9 86 9 7 16 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2012 Target 2015 Forecast * Includes non consolidated production 10
  11. 11. MAIN PROJECTS IN BRAZIL – 2007-2012 Marlim Sul Espadarte Tupi Módulo 3 – Rio de Janeiro EWT Módulo 3 P-56 2.600 Espadarte Mód II Up to 100.000 bpd 100.000 bpd 100.000 bpd 30.000 bpd Tupi 2012 2011 6/jan/07 2009 Pilot System Up to 100.000 bpd Cidade Niterói 2010 Piranema Jabuti (FPSO) 30.000 bpd 2.400 10/oct/07 100.000 bpd Frade 2008 100.000 bpd 2009 2.421 Cidade de Vitória Golfinho Mód. 2 Marlim Sul Módulo 2 P-51 2.374 2.200 100.000 bpd November 2007 180.000 bpd 2008 2.296 Roncador Roncador Jubarte Module 4 P-52 2.191 P-57 180.000 bpd P-62 180.000 bpd November 2007 1.950* Cachalote & Baleia 2011 100.000 bpd 2012 2.000 Franca FPSO Capixaba Parque das 100,000 bpd Conchas 2010 100.000 bpd 1.792 Marlim Leste P-53 2009 1.800 180.000 bpd Roncador 2008 P-54 180.000 bpd November 2007 1.600 2007 2008 2009 2010 2011 2012 Obs.: This curve does not include Tupi’s Pilot System Production * Target may vary +/- 2.5% 11
  12. 12. 130 121.0 110 96.9 90 72.5 65.1 70 54.4 38.2 US$/boe 50 24.8 24.4 28.8 31.1 30 24.9 14.7 17.7 19.4 21.2 10.7 16.2 10 6.6 7.0 8.5 9.0 11.1 11.7 3.3 4.0 5.1 6.4 9.9 3.3 3.4 4.3 5.7 6.6 7.7 8.7 3.0 -10 2001 2002 2003 2004 2005 2006 2007 1Q08 2Q08 Lifting Cost Production Tax Brent 12
  13. 13. MAIN DISCOVERIES - 2002/2007 ~ 13.0 billion boe (2002-2007) Proven Reserves: 3.80 B boe Prob.&Poss. Res: 4.50 B boe Under Evaluation (2007) : 4.70 B boe Sergipe-Alagoas Light Oil Espirito Santo Light Oil & Natural Gas Campos Producible Heavy Oil & Light Oil Santos Light Oil & Natural Gas 13
  14. 14. EARTH DEVELOPMENT Earth 108 122 130 152 Planet as today 164 Million years ago 0 4960 Miles SINBPA/Petrobras - Scotese 14
  15. 15. PRE SALT PROVINCE line hinge Well Tested HC Campus Exploratory blocks Pre-salt Reservoirs 15
  16. 16. RECENT OIL/GAS DISCOVERIES 2006-2007 - CLUSTER BLOCKS Production to date: 7 bi boe Actual Production: 1.6 MMboepd Producing Wells: 542 Area: 7,000 km2 Pre-salt Cluster: Discovered fields before 1984 15.000 km2 Discovered fields between 1985/2001 Tupi: 5 to 8 bi boe Discovered fields between 2002/2007 Iara: 3 to 4 bi boe Cluster Blocks 16
  17. 17. TUPI AND NEIGHBOURING BLOCKS Blocks Consortium Wells Drilled BMS-8 BR (66%), SH (20% e PTG (14%) BMS-9 BR (45%), BG (30%) e RPS (25%) BMS-10 BR (65%), BG (25%) e PAX (10%) BMS-11 BR (65%), BG (25%) e PTG (10%) BMS-21 BR (80%), PTG (20%) BMS-22 EXX (40%), HES (40%) e BR (20%) BM-S-42 BMS-24 BR (80%), PTG (20%) BMS-50 BR (60%), BG (20%) e RPS (20%) Evaluation Plans approved by ANP BM-S-42 Parati – 1-RJS-617 Tupi – 1-RJS-628 Yara BM-S-10 Carioca – 1-SPS-50 Psrati Caramba – 1-SPS-51 BM-S-11 Guará – 1-SPS-55 Tupi BM-S-24 Jupiter Evaluation Plans being BM-S-8 Bem-te-Vi BM-S-9 Carioca prepared/under negotiation BM-S-21 Bem-Te-Vi – 1-SPS-52 Caramba Júpiter – 1-RJS-652 BM-S-17 Iara – 1-RJS-656 17
  18. 18. EXTENDED WELL TEST -TUPI FPSO – Leased* 1st Oil: March/2009 Capacity Water Depth 2,170 m Capacity to Process Oil 30,000 bpd Oil Range 28 – 42 º API Wells 1 Oil Production Flare Capacity 1000 thous. m3 Riser to Export Gas 1 * Leased from BW Offshore 18
  19. 19. TUPI PILOT SYSTEM* - PRODUCTION UNIT Capacity Water Depth 2,145 m Capacity to Process Oil 100,000 bpd Capacity of Gas Compression 4 million m3 /d Water Injection 100 mil bpd Water Production 60 mil bpd Oil degree 20 – 30 º API 5 oil production (+4 extra) Wells 2 water injection (+3 extra) 1 gas injection (+1 extra) 1st Oil: Dec./2010 * Leased from Modec 19
  20. 20. NEW RIGS Water Operating Start Up Start Up Start Up Start Up Start Up From 2013 Depth 2007 2008 2009 2010 2011 2012 to 2017 • Pride South Atlantic • O. Yorktown •Petrobras XIV 0-999m 5 • Pride Mexico • Borgny Dolphin • Ocean Concord • Falcon-100 Olinda Star 1000-1999m 18 Ocean Worker • Delba V • Delba VI • Scorpion • Lone Star • Gold Star • Delba VII • Schahin III • Schahin I • Delba VIII • Petrorig II • Norbe VI • Norbe IX + 28 new units ≥ 2000m 5 • Sevan Driller • Delba III •Delba IV • Schahin 1 to be leased • West Taurus • SSV Victoria • Schahin 2 • West Eminence • West Orion • Norbe VIII • Dave Beard • Petroserv • Etesco 8 • Sevan Brasil Total per year 28 6 9 6 2 12 28 Cumulative 6 15 21 23 35 63 Stena Drillmax e Dep Water Millennium are not being considered since they are being negotiated in the Spot Market 20
  21. 21. CONTRACTING OF 10 FPSOs FOR THE PRE-SALT AREA 10 new FPSO-type oil-production platforms for the Pre-Salt areas in the Santos Basin. First two FPSOs to be chartered: • Oil Production Capacity: 100,000 bpd; • Gas Compression: 5 million m3; • Employed as Pilot Units in new Blocks; • Start-up between 2013 and 2014. Eight additional FPSOs belonging to Petrobras: • Construction of the hulls at the dry dock of the Rio After the 10 FPSOs are deployed, Grande Shipyard, in Rio Grande do Sul; major technological innovations • Dry dock leased by Petrobras for a 10 years term; will be introduced for the subsequent • Topside production modules to be defined in the future; production development phases in • Oil Production Capacity: 120,000 bpd; the pre salt. • Gas Compression: 5 million m3; • Start-up in 2015 and 2016. 21
  22. 22. DOWNSTREAM OVERVIEW 22
  23. 23. REFINING INFRASTRUCTURE DOWNSTREAM REFINING CAPACITY Refineries Capacity (Mbpd) Troughput (Mbpd) (thousands barrels/day) Paulínia - Replan (SP) 365 348 Landulpho Alves - Rlam (BA) 323 261 (*) According to ownership acknowledged by the ANP (National Oil Agency) Duque de Caxias -Reduc (RJ) 242 243 (**) Only includes refineries with equity holding equal to or above 50% Henrique Lage - Revap (SP) 251 236 Alberto Pasqualini - Refap (RS) 189 148 Pres. Getúlio Vargas - Repar (PR) 189 169 Pres. Bernardes - RPBC (SP) 170 153 Gabriel Passos - Regap (MG) 151 132 Manaus - Reman (AM) 46 41 Capuava - Recap (SP) 53 42 Fortaleza - Lubnor (CE) 7 6 TOTAL BRAZIL 1.986 1.779 Pasadena - Estados Unidos 100 91 Ricardo Eliçabe - Argentina 31 29 San Lorenzo - Argentina 50 47 Okinawa – Japan 100 19 TOTAL INTERNATIONAL 281 186 (*) (**) TOTAL 2.267 1.965 23
  24. 24. TOTAL DOWNSTREAM INVESTMENT: US$ 29.6 BILLION 20% 29% 8% 8% 13% New Refining Units (2008 – 2012) 4% 10 18% 8 5 Quality (8,619) Conversion (3,938) 3 3 Expansion(5,353) HSE (1,083) Delayed Coking HDT - NK Destilates HDT HDS Gasoline Catalytic Transportation (2,270) Reforming Pipelines (2,264) Others (6,112) *HDS: Hidrodessulfurização ˚HDT: Hidrotratamento 24
  25. 25. NET EXPORTS OF OIL AND OIL PRODUCTS Exports (‘000s barrels/day) Imports (‘000s barrels/day) 615 595 581 523 559 538 141 446 246 262 109 488 409 424 446 148 260 118 213 105 94 334 228 454 125 353 450 335 352 370 390 233 263 319 181 209 2003 2004 2005 2006 2007 2012 2003 2004 2005 2006 2007 2012 Oil Oil Products • Surplus in Liquides; • Deficit in Trade Balance 25
  26. 26. REFINING EXPANSION - INTERNATIONAL REFINERY IN THE USA Petrobras has acquired 50% of the Pasadena Refinery System Inc. (PRSI), located in Texas, USA; Capacity of 100,000 bbl/day, will be upgraded to handle up to 70,000 bbl/day of heavy oil and feedstock; REFINERY IN JAPAN Petrobras signed the purchase document of 87.5% interest in the Japanese Company Nansei Sekiyu Kabushiki Kaisha (NSS) ACQUISITION INCLUDES: a refinery with capacity of 100 thousand bpd, that process light crude oil and high quality products, a crude oil and products terminal with storage capacity of 9.6 million barrels, three piers with capacity to receive product vessels of up to 97 thousand deadweight tonnage (dwt), a mono buoy for Very Large Crude vessels (VLCC) of up to 280 thousand dwt. The use of terminal capacity is planned to boost the commercialization of biofuels in Japan and other Asian markets and complement current trading of crude oil and products into Asian market of approximately 100,000 bpd. 26
  27. 27. GAS AND ENERGY OVERVIEW 27
  28. 28. INCREASING DEMAND FOR NATURAL GAS 13,4% Participation of the natural gas in 10% 9.4% the Brazilian energy matrix Gasbol Campos 4.7% Basin Source: MME, BEN 2006 2.0% 1970 1980 1989 1990 1998 1999 2000 2002 2004 2006 2007 2012* In 16 years, natural gas participation in the energy matrix increased 370%, boosted by the ramp up of Campos Basin production and Gasbol pipeline *Forecast 28
  29. 29. NATURAL GAS SUPPLY VS. DEMAND Million cu.m/day Average Demand Average Supply 160 140 Termeletric 134 134 Bolivia LNG 120 Industrial 31,1 43,9 Other Uses* 100 30,0 80 48,3 42,1 60 17,5 E&P 40 16,1 5,5 10,9 48,0 72,9 20 1,9 1,7 9,4 0,5 0,9 25,3 0 12,5 1998 2000 2007 2012 2012 •Other uses: vehicle, residential / commercial, refineries e fertilizer plants •Source: Petrobras and MME 29
  30. 30. GAS & POWER OPERATIONAL PERFORMANCE Completed Actions Creating flexibility in the portfolio Next Steps… Increase gas supply from E&P More gas available to be sold or to be used in Increase LNG regasification capacity thermo generation New gas pipelines in operation Reduction in contractual penalties Completing gas infra-structure New contracts with the distribution Better prices and margins companies Higher dispatch in the thermo power plants to Increasing domestic production New regulatory framework in the electric sector guarantee the security of the electric system Energy sold in the last auctions Recovery of fixed costs More contracts sold in energy auctions Gas-fired thermo generation growing importance in Brazil 52.000 50.000 Petrobras Thermo generation (oil + gas) 48.000 MW avergae Third-parties Thermo generation (oil + gas) Coal 46.000 Wind 44.000 Nuclear Hydro 42.000 40.000 jan/07 jun/07 jan/08 jun/08 Source: ONS (Brazilian Energy System) 30
  31. 31. RENEWABLES 31
  32. 32. RENEWABLE ENERGY AND BIOFUELS (2008-2012) US$ 1.5 BILLION INVESTMENTS 2008-2012 INVESTMENTS 2012 TARGET 4% Biodiesel Plants Availability of 938 Thousand m3/year 29% H-Bio (Bio-Refining) 21% Vegetable oil Processing Ethanol pipelines 1.6 million m³/year Ethanol Vessel 46% Export of 4.7 billion m³/year of Ethanol Aeolic Energy Biofuels Solar Energy Installed Capacity of Pipelines and Ethanol Pipelines Generation of Electric Others Other Sources of Power from 365 MW H-Bio Renewable Energy Renewable Sources LIGNOCELLULOSIS Begun operation of the First Ethanol Lignocellulosis Pilot Plant, in Brazil Guamaré Biodiesel Plant The pilot phase is focused on the optimization of the production process of the bio ethanol (second generation fuel which diminishes environmental impacts) Semi- Industrial bio ethanol plant: Forecast 2010 Total avoided GHG emissions: 3.93 MM tons CO2 equivalent 32
  33. 33. RAW MATERIAL COMPARISON AREA Today the ethanol consumption is 2,6% TYPE (LAND USE IN BRAZIL) (MMHA) of gasoline MKT Increasing ethanol to Total country 851 10% of gasoline will represent 118 Billion Native Amazon Forest 370 Lt (more than 2 million barrels per day) 180 Secondary Amazon Forest and Others Native Forests 6 Pasture 197 Temporary Crops 59 Permanent Crops 7,6 Available land 263 Available land with low impact (*) 90 Quantity of Energy out/ Raw Material Production / ha (kg) Ethanol/ ha Energy in SUGAR CANE 85,000 7.080 liter 8,3 CORN 10,000 4.000 liter 1,3 - 1,8 Source: FAO, 2002 and EMBRAPA (*) 33
  34. 34. PETROBRAS INVESTMENTS TO EXPORT ETHANOL Ethanol collection, storage and distribution New Ethanol centers are spread out Pipeline through producing and (1.150 Km) consuming regions New Pipeline Large scale (1412 km) marine New Water Way Replan – Ilha Dágua Pipeline Current flow terminals for Ethanol Tietê-Paraná Water way improve Senador Canedo -São Sebastião Pipeline efficiency Replan – Brasília Pipeline (OSBRA) Replan – Guararema Pipeline Existing Pipeline Future Pipeline New Ethanol Existing Terminal Pipeline (919Km) Future Terminal Exportation Large storage capacity necessary Rio de Janeiro to regulate supply São Paulo Marine Terminal Pipelines reduce Marine Terminal transport costs; improve energy efficiency Target: Export 4.75 MM cu.m/year in 2012 34
  35. 35. $ FINANCIAL CONSIDERATIONS 35
  36. 36. INVESTMENT PLAN BY BUSINESS SEGMENT 2008-12 Period 58% 13% US$ 112.4 billion 15.0 65.19 1.13 29,22 97.4 1% 2.25 2.25 4,5 6.74 2% 26% 87% 2% Brasil Internacional 4% 6% E&P RTC G&E Petrochemical Distribution Corporate Biofuel US$ 65.1 billion directed to E&P Exploration: US$ 13.8 billion Production: US$ 51.3 billion Note: Includes International 36
  37. 37. PETROBRAS’ BUSINESS PLAN Indexes 2007-2011 Plan 2008-2012 Plan FX rate (R$/US$) 2.50 2.18 2008 – 55.00 Brent for Funding 2008 – 40.00 2009 – 50.00 (US$/bbl) 2009-2011 – 35.00 2010 – 45.00 2011-2012 – 35.00 Projected Net Cash Flow 86.7 104.4 (Including Dividends) Projected Investments for 83.5 112.4 2008-2012 Net Debt/ Net Debt + Shareholders’ Equity 25 20 (Leverage) (%) Return on Capital 16 14 Employed (ROCE) (%) (*) PPP – purchase power parity 37
  38. 38. STRONG RETURNS HAVE ENABLED COMPANY TO GROW WITHOUT INCREASING DEBT Historical ROCE U.S. GAAP Consolidated Cash Flows 25,0% 74.3 BN 2003-2007 20,0% 15,0% Inc. Debt Dividends 10,0% 5,0% 0,0% 2003 2004 2005 2006 2007 CFFO (including W.C.) Capex Operating Income and Assets by Segment - 2007 (US GAAP – US$ Millions) E&P Downstream Gas & Distri- Int’l (Brazil) (Brazil) Energy bution Net Op. Inc. 14,072 2,785 (834) 446 (815) Sources Uses PP&E (inc. Dep.) 48,529 14,480 10,615 1,838 7,596 O/w Construction 13,558 9,371 6,023 291 1,144 in Progress Source: Petrobras and Bloomberg 38
  39. 39. PETROBRAS SCENARIO Perspective of a high increase in production and reserves Pro-active performance to overcome present Activities Integration challenges of the oil and gas industry High volume of investments 39
  40. 40. 40
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