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2013 Results, 2030 Strategic Plan and 2014-25018 Business Plan
 

2013 Results, 2030 Strategic Plan and 2014-25018 Business Plan

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Maria das Graças Silva Foster

Maria das Graças Silva Foster
CEO
Conference Call/Webcast
February 26th, 2014

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    2013 Results, 2030 Strategic Plan and 2014-25018 Business Plan 2013 Results, 2030 Strategic Plan and 2014-25018 Business Plan Presentation Transcript

    • 2013 Results, 2030 Strategic Plan and 2014-2018 Business Plan Maria das Graças Silva Foster CEO Conference Call/Webcast February 26th, 2014
    • 22 FORWARD-LOOKING STATEMENTS: DISCLAIMER The presentation may contain forward-looking statements about future events within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are not based on historical facts and are not assurances of future results. Such forward-looking statements merely reflect the Company’s current views and estimates of future economic circumstances, industry conditions, company performance and financial results. Such terms as "anticipate", "believe", "expect", "forecast", "intend", "plan", "project", "seek", "should", along with similar or analogous expressions, are used to identify such forward-looking statements. Readers are cautioned that these statements are only projections and may differ materially from actual future results or events. Readers are referred to the documents filed by the Company with the SEC, specifically the Company’s most recent Annual Report on Form 20-F, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements, including, among other things, risks relating to general economic and business conditions, including crude oil and other commodity prices, refining margins and prevailing exchange rates, uncertainties inherent in making estimates of our oil and gas reserves including recently discovered oil and gas reserves, international and Brazilian political, economic and social developments, receipt of governmental approvals and licenses and our ability to obtain financing. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information or future events or for any other reason. Figures for 2014 on are estimates or targets. All forward-looking statements are expressly qualified in their entirety by this cautionary statement, and you should not place reliance on any forward-looking statement contained in this presentation. NON-SEC COMPLIANT OIL AND GAS RESERVES: CAUTIONARY STATEMENT FOR US INVESTORS We present certain data in this presentation, such as oil and gas resources, that we are not permitted to present in documents filed with the United States Securities and Exchange Commission (SEC) under new Subpart 1200 to Regulation S-K because such terms do not qualify as proved, probable or possible reserves under Rule 4-10(a) of Regulation S-X. DISCLAIMER
    • 4th Quarter and 2013 Year End Results
    • 44 Main Discoveries in Brazil 2013  RRR Brazil: 131% (above 100% for the 22 years in a row)  Reserves/Production = 20 years  Offshore wells drilled: Post-salt (14) + Pre-salt (17)  R$ 17.3 billion invested in exploration in 2013 Proven Reserves totaled 16.6 Bi boe. RRR* in Brazil above 100% for 22 years in a row. Highlights for new exploratory frontiers - Sergipe-Alagoas and Potiguar. Espírito Santo Post-salt Arjuna Campos Basin Post-salt Mandarim Santos Basin Pre-salt Sul de Tupi / Florim / Sagitário Iara Extensão 4 / Entorno de Iara Iguaçu Mirim / Franco Leste Iara Alto Ângulo / Jupiter Bracuhy Potiguar Post-salt Pitú Sergipe - Alagoas Post-salt Farfan 1 / Muriú 1 / Moita Bonita 1 Highlights in Brazil – 2013 Exploratory Activity 16.6 Billion boe Proven Reserves 2013 4%International 96% 2013 Brazil Oil + NGL Natural Gas 2013 85% 15% 59% 64% 75% 2011 2012 2013 Pre-salt: 100% Success Ratio in Brazil *RRR: Reserves Replacement Ratio
    • 55 Oil and NGL production in Brazil reached 1,931 kpbd in 2013, down by 2.5% from 2012. Natural decline during the last 12 months below expected range of 10-11%. 1,980 -2.5% 2012 1,931 2013 Petrobras Oil and NGL Production in Brazil in 2013: 1,931 kbpd Main factors that impacted production in 2013: P-63/Papa-Terra: changes in the subsea layout, postponing 1st oil (Jul/13 to Nov/13). Cid. de São Paulo/Sapinhoá and Cid. de Paraty/Lula NE: unavailability of the monobuoys (China), as well as difficulties during installation, delaying the ramp-up of the systems (BSR1 Jul/13 to Feb/14). P-55/Roncador Module III: delay in system delivery, postponement of 1st oil (Sep/13 to Dec/13). P-58/Parque das Baleias: delay in system delivery, postponement of 1st oil (Nov/13 to Mar/14). EWT-Franco: cancelled due to the lack of obtaining the necessary authorizations as originally planned. Limited availability of PLSVs (Pipe-Laying Support Vessels) impacted the pace of interconnection of wells, due to the delayed decision of contracting abroad (should have been contracted by the end of 2011, but were contracted from Apr/2013). 1.961 Mar-12 1.993 Feb-12 2.098 Jan-12 2.110 1.850 50 Dec-13 1.964 Nov-13 1.957 Oct-13 1.960 Sep-13 1.979 Aug-13 1.908 Jul-13 1.888 Jun-13 2.150 May-13 1.892 Apr-13 1.900 1.950 2.050 1.924 Mar-13 1.846 Feb-13 1.920 Jan-13 1.965 Dec-12 2.032 Nov-12 1.968 2.100 1.940 Sep-12 1.843 Aug-12 1.928 Jul-12 1.940 2.200 1.979 2.250 2.000 2.300 Jun-12 1.960 May-12 1.989 Apr-12 Oct-12 Thousand bpd 2013: 1,931 kbpd2012: 1,980 kbpd 1Q12 Avg. 2,066 2Q12 Avg. 1,970 3Q12 Avg. 1,904 4Q12 Avg. 1,980 1Q13 Avg. 1,910 2Q13 Avg. 1,931 3Q13 Avg. 1,924 4Q13 Avg. 1,960
    • 66 Oil products sales increased by 4% in 2013. Higher increase in production (6%), especially diesel (+8.6%) and gasoline (+12.1%) reduced oil products import needs. Sales (2,383 kbpd) and Oil Products Output (2,124 kbpd) in Brazil Oil Products Sales in Brazil Oil Products Output 937 984 106106 9884 590 LPG Jet Fuel Naphtha Fuel Oil 2,383 2013 Others +4% Gasoline Diesel 231 171 203 2012 2,285 570 224 165 199 Thousand bbl/d +3.5% +5.0% 782 850 137 90 106 96 93 2013 Others 196 Naphtha LPG Fuel Oil 2,124 438 238 143 1,997 491 255 2012 206 Gasoline Diesel Jet Fuel +6%  Better performance due to the start-up of new quality and conversion units since 2012, optimization of refining processes and elimination of logistical bottlenecks. Utilization of refineries reached 97%, higher than 94% in 2012, with a 82% share of domestic crude oil processed. +12.1% +8.6% Thousand bbl/d  Gasoline (+3.5%): increase in automotive fleet, competitive price relative to ethanol and increase of the anhydrous ethanol content in Type C gasoline .  Diesel (+5.0%): increase in retail activities, higher thermal consumption, higher grain harvest and an increase in diesel light vehicle fleet.  Fuel Oil (+16.7%): increased consumption at thermoelectric plants for electricity generation and higher demand from suppliers of natural gas to thermal power plants.
    • 77 Average Realization Price Brazil* x Average Realization Price US Gulf** *Considers Diesel, Gasoline, LPG, Jet Fuel and Fuel Oil ** Considers Brazilian market volumes for the above mentioned products. In 2013 we had 3 price increases in diesel and 2 in gasoline, totaling 20% and 11% increases respectively. The Real devaluation contributed significantly to the non-convergence of prices throughout the year. Oil Products Price - Brazil vs International Dec/13 Nov/13 Oct/13 Sep/13 Aug/13 Jul/13 Jun/13 May/13 Apr/13 Mar/13 Feb/13 Jan/13 Dec/12 Nov/12 Oct/12 Sep/12 Aug/12 Jul/12 Jun/12 May/12 Apr/12 Mar/12 Feb/12 Jan/12 Prices(R$/bbl) 2012 2013 Average Sales Price USGC Jun 25th Adjustments July 16th Average Sales Price Brazil Adjustments Jan 30th Mar 6th Nov 30th Adjustments Losses Gasoline Imports Diesel Imports ImportedVolumes(kbpd)
    • 88 million m³/day Domestic Bolivia LNG SUPPLYDEMAND 40,2 37,0 11,7 39,3 Higher thermoelectric demand (+52%) due to the lower rainfall in the period, met mainly by LNG imports and natural gas from Bolivia. +15% 85.9 2013 14.5 30.5 40.8 2012 74.9 8.4 27.0 39.539.3 23.0 20132012 12.1 34.9 11.9 74.5 85.4 38.6 +15% +52% 2013 x 2012  Higher thermoelectric demand due to lower rainfall.  Thermoelectric generation using natural gas was 6 GW/average in 2013, 58% above the 3.8 GW/average in 2012.  In 2013 and 2012, we met 100% of ONS’s demands (National Operator of the Electric System). +13% +73% Natural Gas Supply and Demand Higher demand for Natural Gas due to increase in thermoelectric demand Non-thermoelectric Thermoelectric Fertilizers* * Other internal uses in Petrobras
    • 99 PROCOP 2013 Operating Costs OptimizationProgram PRODESIN 2013 Divestment Program PROEF 2013 Program to Increase Operational Efficiency Optimization of operational activities generated greater productivity levels and reduced unit costs above expectations Gain of +63 kbpd in production, with +21 kbpd in UO-BC and +42 kbpd in UO-RIO, due to the higher level of operational efficiency. UO-BC: +7.5 p.p. UO-RIO: +2.5 p.p. +68% 2013 Real 6.6 2013 Target 3.9 +115% 2013 7.3 2012 3.4 +2,5 p.p. With PROEF 92.4 Without PROEF 89.8 Results of Structuring Programs in 2013 PROCOP, PRODESIN and PROEF Actual Transactions: US$ 7.3 billion Cash contribution: R$ 8.5 billion Avoided Costs: R$ 6.6 billion Operational Efficiency (%) +7.5 p.p. With PROEF 75.4 Without PROEF 67.9 Assets Financial Restructuring* 2013* 8.5 8.2 0.3 2012* 6.4 0.6 5.8 +34% * Petrobras and BR financial assets. Operational Effriciency (%) The gains exceeded targets and were obtained through energy integration, workforce productivity, maritime transportation and inventories. R$ billion R$ billion US$ billion Conclusion of 21 divestments since Oct/2012, totalling US$ 10.7 billion, with US$ 3.4 billion in 2012 and US$ 7.3 billion in 2013.
    • 1010 Investments totaled R$ 104.4 billion, 24% above 2012, including Libra’s signing fee (R$ 6 billion). R$Billion Annual Investment +24% 2013 104.4 2012 84.1 29% 6% 5% 57% Gas & Energy Corporate Biofuels Distribution International Downstream E&P 1.1% 1.1% 0.3% Investment by Segment Physical and financial monitoring of 158 individualized projects, which represent 73% of investments (S-Curves): average physical realization of 91% and financial realization of 101%. 2013 Investments: R$ 104.4 Billion
    • 1111 2013 Results Increase of 6% in Operating Income and 11% in Net Income Operating Income increase in 2013 due to, mainly, readjustments in the price of oil products and asset sales (PRODESIN). The extension of hedge accounting since May/2013 contributed to an increase of 11% in the year’s net income. 23.6 +11% +6% 34.4 21.2 32.4 R$ billion 2012 2013 2013 x 2012 Results Highlights  Higher oil products prices (mainly diesel and gasoline since 2H12 and throughout 2013);  Higher throughput in our refineries, reducing imported oil products share in the sales mix;  Asset sales gains of PRODESIN – Divestment Program  Lower dry and sub-commercial wells expenses;  Extension of hedge accounting since May/2013;  Lower crude oil exports due to lower production levels, as well as higher domestic crude oil share in throughput;  Persistence of domestic oil products price differentials relative to international prices due to the currency devaluation;  Lower finance income due to the sales of government bonds (NTN-B) and readjustment of judicial deposits in 2012; and  Higher finance expense due to higher debt. Operating Income Net Income
    • 1212 2013 Results EBITDA of R$ 63.0 Billion in 2013, 18% higher than 2012 In 2013, EBITDA was 18% higher than that of 2012 due to, mainly, adjustments of oil products price, asset sales of PRODESIN and lower dry and sub-commercial wells expenses. 63.0 21.2 34.4 53.4 +18% +11% 23.6 +6%32.4 2012 2013 2013 x 2012 EBITDA  Higher oil products prices (mainly diesel and gasoline since 2H12 and throughout 2013);  Higher throughput in our refineries, reducing imported oil products share in the sales mix;  Asset sales gains of PRODESIN – Program of Divestitures  Lower dry and sub-commercial wells expenses;  Lower crude oil exports due to lower production levels, as well as higher domestic crude oil share in throughput;  Persistence of domestic oil products price differentials relative to international prices due to the currency devaluation R$ billion Operating Income Net Income EBITDA
    • 1313 2013 Net Income: Without Structuring Programs Structuring Programs: positive outcome of R$ 9.7 Billion in Net Income PROCOP (R$ 4.3 Billion), PRODESIN (R$ 3.3 Billion) and PROEF (R$ 2.1 Billion) increased Net Income by 41%. Divestment ProgramOperating Costs Optimization Program Program to Increase Operational Efficiency Of UO-BC and UO-RIO R$ Billion Structuring Programs Gains are equivalent of exports results of +293 kbpd of crude oil Structuring Programs +63 kbpd +100 kbpd +130 kbpd 2013 Net Income Without Structuring Programs 13.9 PROEF R$ -9.7 billion (-41%) PRODESIN 3.3 PROCOP 23.6 2013 Net Income 2.1 4.3
    • 1414 Cash in 2013: Structuring Programs Structuring Programs : R$ 14.7 billion more in cash Positive impact on cash: Structuring programs PRODESIN (R$ 8.9 billion), INFRALOG (R$ 0.8 billion), PRC-Poço (R$ 0.7 billion) and Procop (R$ 4.3 billion) enabled a 47% higher cash position. Avoided CAPEX was not considered in PRC-SUB in 2013 *Sales Value + Avoided CAPEX. **Gain with Income Tax discounted R$ Billion Cash Position 2013 46.3 0.8 PRODESIN* 8.9 4.3 PRC Poço R$ +14.7 billion (+47%) Cash Position without Structuring Programs PROCOP** 31.6 INFRALOG 0.7 Divestment Program Integrated Management of Logistcs Projects Program to Reduce Well Costs Operating Costs Optimization Program
    • 1515 R$ Billion 12/31/12 12/31/13 Short-term Debt 15.3 18.8 Long-term Debt 181.0 249.0 Total Debt 196.3 267.8 (-) Cash and Cash Equivalents 3 48.5 46.3 = Net Debt 147.8 221.6 US$ Billion Net Debt 72.3 94.6 2.77 2.32 2.57 3.05 3.52 31% 31% 34% 36% 39% -10% 0% 10% 20% 30% 40% 50% 1,5 2,5 3,5 4,5 4Q12 1Q13 2Q13 3Q13 4Q13 Net Debt /Adjusted EBITDA Net Debt / Net Capitalization21 Debt Ratios Net Debt/EBITDA reached 3.52 in 2013 (2.77 in 2012), due to an increase in indebtedness as a result of new borrowings and the effect of the Real devaluation against the Dollar on net debt. Leverage was 39%. 1) Refers to the adjusted EBITDA which excludes equity income and impairment. 2) Net Debt / (Net Debt + Shareholder’s Equity) 3) Includes tradable securities maturing in more than 90 days
    • 1616 Targets for 2014 Higher oil and oil products production, operational efficiency and cost optimization will drive 2014 results PROCOP – 2014 Target (R$ billion)Investments (R$ billion) Oil Products Output (kbpd) 850 908 +1% 2014 2,148 480 760 2013 2,124 491 783 Diesel Gasoline Others +11% +68% 2014 7.3 2013 Real 6.6 2103 Target 3.9 Oil Production (kbpd) -9% 2014 94.6 2013 104.4 57% E&P Brasil 64% E&P Brasil UO-BC +5.6 p.p. 2014 81.0 2013 75.4 20142013 1,931 UO-RIO +0.7 p.p. 2014 93.1 2013 92.4 PROEF (Operational Efficiency %) Máximo Meta Mínimo 7.5% +/- 1p.p. +7%
    • 2030 Strategic Plan
    • 18 Agenda 1. 2007 (2020 Strategic Plan) x 2013 (2030 Strategic Plan) Context: Reasons for Revising the Plan 2. Changes in Business Environments 3. Supply x Demand x Prices 4. Petrobras’ Views on Opportunities in Brazil 5. Big Choices and Petrobras’ Strategies • Exploration and Production • Refining, Transportation, Marketing and Petrochemical (RTMP) • Distribution • Gas, Energy and Gas-Chemical • Biofuels • International 6. Challenges of the Corporate Segments 7. Mission, Vision 2030 e Corporate Drivers
    • 19 2030 Strategic Plan • Created in: 2013 • Drivers: changes in regulatory framework in Brazil – new Transfer of Rights and Production Sharing Agreement Regimes, growth in US shale gas and tight oil production and 2008 world economic crisis. • 17 year horizon: growth in oil production beyond 2020 demands, on top of the 2013 exploratory potential, the incorporation of areas acquired in the new bids (concession and PSA) Petrobras Strategic Plan: Recent History Main Drivers for the Revision of 2013 Planning 2030 Vision 2005 2006 2006 Pre-Salt’s Discovery: Lula (Jul) 2008 First Oil: Pre-Salt Jubarte EWT (Sep) 2009 First Oil – Santos Pre-Salt: Lula EWT (May) 2014 Pre-salt’sproduction record:407 kbpd (Feb) 2011 Libra’s discovery 2013 Pre-salt: 300 kbpd only 7 years after discovery* 2007 2008 2009 2010 2011 2012 2013 2014 2020 Strategic Plan • Created in: 2007 • Drivers: pre-salt’s discovery and growth of oil products market in Brazil. • 13 year horizon: strategies defined to 2020, based on 2007’s exploratory potential, not considering future bid rounds. 2013 Libra Auction (Oct) First PSA Auction 2007 Last Offshore Areas Bid 2010 Law 12.276: Transfer of Rights Law 12.304: PPSA Law 12.351: PSA *GOM=17 years, Campos B.=11 years, North Sea=9 years 2008 Shale Gas – Beginning of US Shale Gas production growth 2008 World Economic Crisis Brent drops to US$ 34,00/bbl 2013 Tight Oil – production reaches2.3 MMbpd
    • 20 2007 – year when 2020 Strategic Plan was developed 2013 - year when 2030 Strategic Plan was developed Positive perspective for the world economy. High growth rates (2008-2012 expected GDP: 5% p.a. – Source: IMF, Oct/2007) 2008 world economic crisis reduces world economic growth expectations. (Expected world GDP for 2014-2030 = 3.6% p.a. – Source: Global Insight, 2013) Strong growth for the Chinese economy resulting in high commodity prices (China’s economic growth 2000-2013: 9.8% p.a. – Source: IMF, Oct/2013) Uncertainties surrounding the pace of China’s economic growth and impacts on prices. (China’s economic growth 2014-2030: 4.8 – 6.5% p.a. – Source: EIU and Global Insight, 2013) Strong oil demand growth. (1.8% p.a. 2003-2007 – Source: IEA, Nov/2007) Slow-down in oil demand growth (0.7% p.a. 2013-2030 – Source: IEA, Nov/2013) Projections for oil prices increased every year, due to demand growth and the views on depletion in non-OPEC production. (Average projected price for the 2007-2020 period: US$ 55/bbl in 2007 and US$ 75/bbl in 2008 – Source: Pira, 2007 and 2008) Oil price stable with perspectives of a small decrease in the mid-term (non-conventionals production growth in US, Irak and Brazil). (2013-2030 projected price: US$ 100/bbl. Source: Pira, 2013) Great enthusiasm with biofuels. Non-conventionals revolution: 2030 production: tight oil – 5.8 MMbpd and shale gas - 745 bn m³ (Source: IEA, 2013) Perspective of growth in US dependency on oil and gas imports (growth in LNG imports). Perspective for US self-sufficiency in Gas by 2019 and reduction of oil imports needs from 7.9 to 3.6 MMbpd in 2030 (Source: IEA, 2013) 1 2 3 4 5 6 Petrobras’ Strategic Plan: WORLD – Business Environment 2007 x 2013 20
    • 21 2007 – year when 2020 Strategic Plan was developed 2013 - year when 2030 Strategic Plan was developed Perspectives of oil production growth in Brazil due to the Pre-salt’s discoveries. Questions on the existence and feasibility of technologies for Pre-salt production. Examples: salt movements; H2S content; CO2 treatment and reinjection. Deeperknowledgeon the Pre-salt,with successive productionrecords.We alreadyhave 10 productionunits operatingin the Pre-saltlayer. Experience in the Pre-salt exploration and production and in the reservoir performance led us to the cost optimization phase. E&P activities in Brazil were regulated solely by the concession framework. Threeregulatoryframeworks–Oil and Gas businesswith three frameworks: Concession,Transferof Rightsand ProductionSharing Agreement Criticalresourcesweremappedto attractforeignsuppliersto Brazil. Therewereuncertaintiessurroundingthe navalindustry’scapacity to meetPost-salt+ Pre-Salt’sdemands. LocalContentPolicyis a reality.Nationalindustrypresses aheadwith its learningcurve,especially in the navalsegment,with perspectives of competitiveness. Perspectives on oil products demand growth for the 2007-2011 period was 2.8% p.a.: - A 4.1% p.a. fleet growth was expected, alongside wealth creation; - Biodiesel requirements evolving to B5 in 2010 up to 2020. Perspective on oil products demand growth for the 2014-2018 period of 2.5% p.a. and 2.2% p.a. for 2019-2030 - For 2007-2011 growth amounted to 4.5% p.a. and fleet growth to 7.4% p.a. - A 5.8% fleet growth is expected for the 2014-2018 period and 4.2% for 2019- 2030. - Perspective on the evolution of biodiesel requirements from the current B5 to B8 up to 2010 and B10 up to 2023, flat up to 2030 Greatexpectationonstrongethanolexpansion,with the announcementof100newprojects(Source:ConsultoriaIdeia/2007) Lowerexpectationfor ethanolexpansion,focusedon the recoveryof agriculturalproductivity.Ethanoldemandgrowth of 5.4% p.a. in the 2014- 2030period,beingmet, up to 2016,by spare capacity. Petrobras’ Strategic Plan: BRAZIL – Business Environment 2007 x 2013 1 2 3 4 5 21
    • 22 50 60 70 80 90 100 110 120 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 Demand Projection and Expected Decline of World Oil Production Supply challenges NewProjects Current Production 2020 Total23.1MMbpd 101.5 MM bpd 78.4 MM bpd WorldLiquidsDemand(MMbpd) World Oil Supply x Demand: 2013-2020 Economic feasibility of future oil production 224 514 1.558 1.593 1.118 453 824 1.012 231 1.209 1.358 29 365 486 938 960 1.032 977 814 2.069 1.233 1.377 2.727 0 500 1000 1500 2000 2500 3000 3500 Europe Others Caspian Russia and East Europe North Sea Asia Others Australia China Middle East Others Saudi Arabia Iran Iraq EUA (Alasca) Canadá México EUA (Golfo do México) Canadá Oil Sands EUA (Onshore) Africa Others North Africa West Africa Latin Am. Others Venezuela Brazil Production volumes from new projects (thousand barrels per day) Latam 5.337 Africa 3.859 North Am. 3.810 Middle East 3.809 Asia 2.394 Europe + FSU 3.888 Total 23.1 MM bpd Source: Wood Mackenzie Data - Global Oil Supply Tool (May/2013), developed by Petrobras, save for Brazil data, for which the source is Petrobras’ internal estimates (Jul/2013). Tight Oil Contribution (382 Mbpd) 2020 Production Volume from New Projects with production start up from 2013 on according to WoodMackenzie
    • 23 50 60 70 80 90 100 110 120 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 Current Production Challenges for New Oil Production Projects around 2030 • Each country has specific challenges to sustain or grow production in the 2030 horizon: –USA: In America, tight oil sweet spots will be more quickly explored by 2020, increasing project costs in the next decade. Uncertainties surrounding environmental restrictions persist. –Brazil: Focus on deep waters, for which the frequency of bid rounds, opportunities and obligations will be the variables that companies will consider when evaluating their participation in bids or consortia. –Canada: High production costs lead to marginal producer status, demanding a continuous search of efficiency gains –Russia: Current production in advance phase of decline, demanding substantial investment in the development of new fields, both in mature areas and new production frontiers. –Iraq: sustain production increase through solving internal conflicts. • Common Challenge: Individual projects management reducing Capex and Opex. 50.8MMbpd NewProjects ProjectsInoperation Source: Petrobras development, based on World Energy Outlook/IEA 2013; World Oil Outlook/OPEC 2013; CERA 2013; WoodMakcenzie 2013. World Oil Supply x Demand: 2013-2030 Economic feasibility of future oil production Demand Projection and Expected Decline of World Oil Production Supply challenges WorldLiquidsDemand(MMbpd)
    • 24 2030 Strategic Plan Assumptions Brent and Henry Hub Natural Gas Prices Petrobras’assumptions on Brent price within the most conservative range of market projections. Petrobras’projection for Henry Hub natural gas prices is close to the average of long term’s projections. 2013 2014 2015-2017 2018-2030 US$ 107/bbl US$ 105/bbl US$ 100/bbl US$ 95/bbl Oil prices in US$/bbl (2010 – 2030) * Projections: AIE (Nov/2013), PIRA (May/2013) , WoodMackenzie (March/2013), IHS (Jul/2013), AEO (April/2013). 0 1 2 3 4 5 6 7 8 9 10 11 12 2003 2006 2009 2012 2015 2018 2021 2024 2027 2030 HenryHubNat.GasPricesinUS$/MMBtu (2014US$) * Projections: IEA/DOE (June/2012), PIRA (Jan/2013) and CERA (Oct/20123), Barclays Capital (Nov/2012) Henry Hub Natural Gas Prices in US$/MMBtu Petrobras 2013 2014 2015-2017 2018-2030 3.51 US$/MMBtu 4.00 US$/MMBtu 4.60 US$/MMBtu 5.88 US$/MMBtu Projections*
    • 25 Brazil’s Sedimentary Basins: Areas Granted to Petrobras in 2007 and 2013 Areas Granted to be Explored by Petrobras in Brazil 2007: 140 thousand km² 2013: 76 thousand km² In 2007, Petrobras held the rights to an exploratory area 84% larger than 2013’s. Note: 2013 position does not include Libra and Bids 11 and 12 State Limits Sedimentary Basin Petrobras 100% Petrobras and Partners
    • 26 INTERNATIONAL DISTRIBUTION NATURAL GAS, ENERGY and GAS-CHEMICAL BIOFUELS To produce on average 4.0 million barrels of oil per day in the 2020-2030 period, under Petrobras’ ownership in Brazil and abroad, acquiring exploration rights to meet this objective To maintain the leadership in the domestic market for fuels, increasing the value added and the preference for Petrobras’ brand To add value to the businesses of the natural gas chain, ensuring the monetization of the gas from the Pre-salt and Brazil’s land basins. To keep the growth in biofuels, ethanol and biodiesel, alongside the domestic market for gasoline and diesel RTMP To supply the Brazilian oil products market, reaching a refining capacity of 3.9 million bpd, to match domestic market demand Perform E&P activities, focusing on oil and gas exploration in Latin America, Africa and USA E&P E&P Petrobras’ Strategy: Choices of an Integrated Energy Company
    • 27 Exploration and Production To produce on average 4.0 million barrels of oil per day in the 2020- 2030 period, under Petrobras’ ownership in Brazil and abroad, acquiring exploration rights to meet this objective
    • 28 Source: Petrobras – Dec/2013 – E&P-CORP Oil and NGL production scenarios in Brazil Petrobras and Estimators: 2013, 2020 to 2035 2020-2030 Average Millionbpd Brazil’s Average Oil Production 2020-2030: 5.2 million bpd Petrobras Vision* In 2035, according to estimators, Brazil’s oil production will range from 4.7 to 6.6 million barrels of oil per day. International Energy Agency places Brazil as the 6th largest oil producer in 2035. Source: AIE 2013, DOE 2013, WoodMackenzie 2013, IHS - CERA 2013 (The use of this content was authorized in advance by IHS. Any further use or redistribution of this content is strictly prohibited without a written permission by IHS. All rights reserved). Estimator Brazil’s Oil Production 2020-2030 Average Brazil’s Oil Production 2035 1. Petrobras - Brazil* 5.2 million bpd Outside SP 2030 horizon 2. DOE 5.0 million bpd 6,6 million bpd 3. WoodMackenzie 4.9 million bpd 5,4 million bpd 4. CERA 4.4 million bpd 4,7 million bpd 5. AIE 5.4 million bpd in 2025 6,0 million bpd 2035 1. 2. 3. 4. * Brazil’s production according to Petrobras’s view and reasoning, considering different paces for the bid rounds put forward by the Government (Petrobras’ view today, 2013, up to 2030).
    • 29 4,2 Petrobras Big Choice for the E&P segment 4 million bpd average production: 2020 to 2030, Brazil and Abroad Petrobras chooses to be a company with a potential production capacity of 4 million bpd in its activities in Brazil* and abroad, maximizing profitability. Petrobras Average Production in Brazil* and Abroad 2020-2030: 4.0 million bpd Average 2020-2030 Millionbpd Petrobras Average Production in Brazil* 2020-2030: 3.7 million bpd Average Oil Production in Brazil* Petrobras + Third Parties + Government 2020-2030: 5.2 million bpd Petrobras Average Production in Brazil* and Abroad 2013-2020: 3.0 million bpd Petrobras Average Production in Brazil* 2013-2020: 2.9 million bpd Source: Petrobras – Dec/2013 – E&P-CORP * Brazil’s production according to Petrobras’s view and reasoning, considering different paces for the bid rounds put forward by the Government (Petrobras’ view today, 2013, up to 2030).
    • 30 Discover and appropriate reserves in Brazil, keeping a reserve to production ratio above 12 years Develop exploratory efforts for natural gas in Brazil’s sedimentary land basins Maximize, with profitability, oil and gas recovery in Brazil’s concessions under production Develop Pre-salt’s Area production in Brazil 1 2 3 4 Develop exploratory efforts in Brazil’s sedimentary basins, selectively and sharing risks 5 Strategies – E&P Segment E&P: 2013-2030
    • 31 Refining, Transportation, Marketing and Petrochemical (RTMP) To supply the Brazilian oil products market, reaching a refining capacity of 3.9 million bpd, to match domestic market demand
    • 32 Brazil: Oil and NGL production x Oil Products Demand From 2013 base, oil products market to grow 20% by 2020 (2.7% p.a.) and 47% by 2030 (2.3% p.a.). Millionbpd 3.7 Average Oil Products Demand in Brazil 2020-2030: 3.4 million bpd Average Oil Production in Brazil* Petrobras + Third Parties + Government 2020-2030: 5.2 million bpd * Brazil’s production according to Petrobras’s view and reasoning, considering different paces for the bid rounds put forward by the Government (Petrobras’ view today, 2013, up to 2030).
    • 33 Brazil: Oil and NGL production x Oil Products Demand From 2013 base, oil products market to grow 20% by 2020 (2.7% p.a.) and 47% by 2030 (2.3% p.a.). Millionbpd 3.7 Petrobras Average Oil Production in Brazil 2013-2020: 2.9 million bpd Petrobras Average Oil Production in Brazil 2020-2030: 3.7 million bpd Average Oil Production in Brazil* Petrobras + Third Parties + Government 2020-2030: 5.2 million bpd Average Oil Products Demand in Brazil 2020-2030: 3.4 million bpd * Brazil’s production according to Petrobras’s view and reasoning, considering different paces for the bid rounds put forward by the Government (Petrobras’ view today, 2013, up to 2030).
    • 34 Brazil: Oil and NGL Production x Oil Products Demand Refining Expansion Aligned with the Domestic Market Growth OBS: Additional throughput capacity from PROMEGA (by/2016): +165 kbpd (existing refineries) + 30 kbpd (RNEST). PROMEGA: Its goal is to increase diesel, jet fuel and gasoline production from the existing refineries, based on the increase in the capacity and efficiency of the processing units millionbpd PROMEGA Increase in Capacity by 195 kbpd Average Oil Production in Brazil* Petrobras+Third Parties+ Government 2020- 2030: 5.2 million bpd Average Demand for Oil Products in Brazil 2020-2030: 3.4 million bpd Oil Products Self-sufficiency: Total throughput = Total demand Petrobras Average Oil Production in Brazil 2020-2030: 3.7 million bpd Volumes Self-sufficiency: Oil production = oil products consumption Petrobras Average Oil Production in Brazil 2013-2020: 2.9 million bpd Petrobras’ processing capacity is expected to reach 3.9 million barrels per day by 2030. * * Brazil’s production according to Petrobras’s view and reasoning, considering different paces for the bid rounds put forward by the Government (Petrobras’ view today, 2013, up to 2030).  
    • 35 Strategies – Refiing, Transportation, Marketing and Petrochemical Segment (RTMP) Ensure the best value alternative for the commercialization of the oil that exceeds the economic absorption capacity of domestic refining 1 2 Supply the Brazilian oil products market, through the expansion of the refining system, considering partnerships in the already planned refineries and imports to complement domestic supply Maintain performance in Petrochemical through partnerships, in an integrated way with the other businesses within Petrobras System 3
    • 36 Distribution To maintain the leadership in the domestic market for fuels, increasing the value added and the preference for Petrobras’ brand
    • 37 Oil Products Distribution Markets and Petrobras Market Share Maintenance of Participation in a Growing Market Petrobras will grow organically its market share to 38% by 2030 with an investment program in Logistics. The Brazilian oil products market will grow 74% during this period. 79 82 95 101 119 38%38%37%36%37% 0 100 200 300 400 0% 10% 20% 30% 40% Average 2020- 2030 191 73 2020 163 62 2018 151 56 2014 129 47 2013 126 47 Brazil’s Oil Products Retail Market BR Distribuidora Share (million m³/year and %) Market-Share BR DistribuidoraBR DistribuidoraOthers Regional Growth (2013-2030) North +3.4%a.a. Northeast +4.0%a.a. Center-West +3.3%a.a. Southeast +2.6%a.a. South +3.6%a.a. million m³ %
    • 38 Lead the Brazilian oil products and biofuels distribution market, sustaining its participation in the market Strategies – Distribution Segment 1 Expand the sales in market segments that provide higher added value2 Increase logistic capacity to meet, in a optimized way, the growth of target-markets3 Make Petrobras’ brand the preferred one among its stakeholders, offering products and services quality excellence 4
    • 39 Natural Gas, Energy and Gas-Chemical To add value to the businesses of the natural gas chain, ensuring the monetization of the gas from the Pre-salt and Brazil’s land basins.
    • 40 Natural Gas Supply and Demand Balance: 2013 - 2030 (million m³/day) Supply Demand LNG Regasification Thermoelectric Demand Petrobras + Third Parties 42 12 35 2014 47 12 35 2013 45 12 33 Average 2020-2030 50 11 35 2020 49 11 35 2018 47 Inflexible Flexible To be contracted NG Distributors Demand 57 5249 4139 20142013 Average 2020-2030 20202018 Demand Petrobras Demand: Fertilizers + Refineries 5 55 33 3 1127 21 2014 16 13 2013 12 9 Average 2020-2030 35 27 2020 28 22 2018 Refining Fertilizers Fertilizers under Evaluation 96 124 129 14398 146 157 168118 105 Total 77777 Average 2020-2030 41 20 14 2020 41 20 14 2018 41 20 14 2014 41 20 14 2013 27 20 Baía de Guanabara Pecém TRBA Bolivia Imports 2020 24 6 2013 30 24 6 Average 2020-2030 30 24 6 30 24 6 2018 30 24 6 2014 30 Inflexible Flexible Domestic Supply of NG¹ 8 47 2013 41 41 Average 2020-2030 97 89 2020 86 86 2018 75 75 2014 47 Supply E&P Supply E&P New BIDs Total ¹ Includes NG from Partners and Third Parties. ** Supply expects the renovation of the GSA with YPFB (Bolivia) and does not consider the need of a 4th LNG terminal. ** ** The natural gas imports and transportation infrastructure already installed is enough to meet Petrobras’ demand until 2030*. * Excludes natural gas production outflowand processing infrastructure.
    • 41 Add value to the use of natural gas in the monetization of Petrobras’ reserves Ensure flexibility and reliability in the supply of natural gas Consolidate the business of electric energy, working on power generation, in an integrated way, and on commercialization Participate in chemical processing activities, adding value to the Natural Gas, prioritizing nitrogenous fertilizers 1 2 3 4 Strategies – Gas & Energy and Gas-Chemical Segment
    • 42 Biofuels To keep the growth in biofuels, ethanol and biodiesel, alongside the domestic market for gasoline and diesel
    • 4343 Participation in the Biofuels Market: 2013 - 2030 Increase of Ethanol and Biofuel production, following the growth of the gasoline and diesel domestic market. 986934 822 642559 422395 1,501 2020 1,275 2018 1,175 20142013 2,000 1,500 1,000 500 0 Average 2020-2030 Gasoline Type A and Ethanol Market ¹ (thous. bpd) ¹ Consists of Gasoline Type A, anhydrous ethanol and hydrous ethanol. Ethanol Market Gasoline Type A and Ethanol Market PBIO Ethanol PBIO Ethanol + Partners 119 92 61 2218 60 43 26 0 40 80 120 Average 2020-2030 202020182014 9 2013 8 Participation of PBIO in Ethanol Production (thous. bpd) 1521071005450 2,000 1,500 1,000 500 0 Average 2020-2030 1,618 2020 1,380 2018 1,289 2014 1,083 2013 1,054 Diesel and Biodiesel ² (thous. bpd) Biodiesel Market Diesel and Biodiesel Market ² Domestic market only 36 25 18 1110 32 23 16 98 0 10 20 30 40 201820142013 2020 Average 2020-2030 PBIO Biodiesel PBIO Biodiesel + Partners Participation of PBIO in Biodiesel Production (thous. bpd)
    • 44 Maintain growth in biofuels, ethanol and biodiesel, in line with the domestic market of gasoline and diesel, in an integrated way within the Petrobras’ System Strategies – Biofuels Segment 1
    • 45 International Area Perform E&P activities, focusing on oil and gas exploration in Latin America, Africa and USA
    • 46 International Oil and Gas Production: 2013 - 2030 thousand boed Investment through participation in exploratory opportunities in Latin America, Africa and the U.S., especially from 2019 onwards. Act on the conservation of the natural gas supply from Bolivia to Brazil and on non-conventionals in Argentina and USA. Petrobras’ Average International Oil and Natural Gas Production 2013-2020: 229 kboe Petrobras’ Average International Oil Production 2013-2020: 123 kbpd Average 2020-2030 Petrobras Average International Oil and Natural Gas Production 2020-2030: 479 kboe Petrobras’ Average International Oil Production 2020-2030: 267 kbpd
    • 47 Invest in overseas exploration to discover and appropriate reserves, adding volumes to Petrobras 1 2 Strategies – International Segment Monetize natural gas reserves abroad, complementing Petrobras’ supply of natural gas in Brazil Maintain operational integrity and optimize the management and efficiency of the refining and distribution assets abroad 3
    • 48 Challenges of the Corporate Segments Human Resources (HR) Social Responsibility (SR) Health, Safety, Environment and Energy Efficiency (HSEE) Technology
    • 49 To have an innovative and flexible human resource program, taking as a base the appreciation of the employees and their contribution to the sustainability of Petrobras Social Responsibility Challenges (SR) Human Resources Challenges (HR) Challenges of the Corporate Segments To ensure the alignment and integration of social responsibility in the decision making processes and in the management of the business Technolgy Challenges Health, Safety, Environment and Energy Efficiency Challenges (HSEE) To keep the technological system recognized for providing technologies for the sustainable growth of the Company To consolidate HSEE issues as a principle of the Company’s operations and permanent commitment from the workforce
    • 50 Mission, Vision 2030 and Corporate Drivers To be one of the five largest integrated energy companies in the world¹ and the preferred one by its stakeholders. ¹ Metric: one of the five largest oil producers among all companies, with or without shares in stock exchanges. (Source for calculation: Petroleum IntelligenceWeekly – PIW - Annual Report ) Integrated Growth Corporate Drivers Profitability Social and Environmental Responsibility Mission To perform in the oil and gas industry in an ethic, safe and profitable way, with social and environmental responsibility, providing products suited to the needs of its clients and contributing to the development of Brazil and the countries where it operates. Vision 2030
    • 2014-2018 Business and Management Plan
    • 52 Exploratory Success and Reserves Increase Brazil  Discoveries: 46 • Offshore: 24 • Onshore: 22  Exploratory Success Ratio: 75%  Reserves: 16.0 Billion boe  RRR¹: 131% > 100% for the 21st consecutive year  R/P²: 20.0 years Pre-Salt  Discoveries: 14, of which 5 were pioneers wells  Exploratory Success Ratio: 100%  Reserves: 300 km of SE region, 55% of GDP 52 ¹ RRR: Reserves Replacement Ratio ² R/P: Reserve / Production TANGO(CES-161) PITU(RNS-158) PAD FARFAN-1(SES-176D PAD MURIÚ-1(SES-175D) PAD MOITA BONITA(SES-178) SÃO BERNARDO(ESS-216) ARJUNA(ESS-211) RIO PURUS(CXR-1DA) PAD TAMBUATÁ SANTONIANO(GLF-35) EXT DE FORNO(AB-125) EXT DE BRAVA (VD-19) MANDARIM(MLS-105) BENEDITO(BP-8) FRANCONORDESTE(RJS-724) FRANCOLESTE(RJS-723) FRANCOSUL(RJS-700) FLORIM(RJS-704) IARA ALTO ÂNGULO(RJS-715) ENTORNO DE IARA-1(RJS-711) PAD IARA EXT-4(RJS-706) NE TUPI-2(RJS-721) JÚPITER BRACUHI(RJS-713) SUL DE TUPI(RJS-698)) SAGITÁRIO(SPS-98) 46 discoveries in the last 14 months (Jan/13 – Feb/14), of which 24 were offshore (15 in Pre-salt). State Limit Sedimentary Basin 100% Petrobras Petrobras and Partners
    • 53 Versão 20/02 22:00 53Versão 20/02 22:00 2014 Growth: 7.5% ± 1p.a. 2014-2018 BMP: Petrobras Oil and NGL Production Curve in Brazil Oil and NGL production operate by Petrobras in 2020 will be 4.9 million of bpd.
    • 54 Versão 20/02 22:00 54Versão 20/02 22:00 2014 Growth: 7.5% ± 1p.a. 2014-2018 BMP: Petrobras Oil, NGL and Natural Gas Production Curve in Brazil
    • 5555 • Norte Pq. Baleias (P-58) 1st Quarter  Sapinhoá Pilot (Cid. São Paulo)  Baúna (Cid. Itajaí) • Iracema Sul (Cid. Mangaratiba) • Roncador IV (P-62) 2º Quarter • Sapinhoá Norte (Cid. Ilhabela) • Papa-Terra (P-61 + TAD ) 2nd Quarter • Florim • Júpiter• Lula Alto • Lula Central • Lula Sul (P-66) • Búzios I (P-74) • Lapa • Lula Norte (P-67) • Búzios II (P-75) • Lula Ext. Sul e ToR Sul de Lula (P-68) • Lula Oeste (P-69) • Búzios III (P-76) •Tartaruga Verde and Mestiça • Maromba I • Iara Horst (P-70) • Búzios IV (P-77) • Entorno de Iara (P-73) • NE de Tupi (P-72) • Iara NW (P-71) • Sul Pq. Baleias • Deep Water ES • Carcará • Búzios V • Espadarte III  Production Units in operation • Deep Water I SE • Marlim I •Revitalization • Deep Water II SE • Libra • MarlimII Revitalization Lula NE Pilot (Cid. Paraty)  Papa-Terra (P-63)  Roncador III (P-55) --- Production Units not bid as of Feb/2014 1st Oil Forecast 3rd Quarter 4th Quarter • Iracema Norte (Cid. Itaguaí) 3rd Quarter 1st Oil Forecast9 Production Units Concluded • Norte Pq. Baleias (P-58) • Roncador IV (P-62) • Papa-Terra (P-61) • Papa-Terra (TAD) • Production Units Delivered in 2013 2014 Growth: 7.5% ± 1p.a. 2014-2018 BMP: Petrobras Oil and NGL Production Curve in Brazil Oi and NGL production (million bpd) 2014 - 2015 2016 - 2020
    • 5656 ProductionUnitsDelivered,underConstructionandunderBidding 2014 2015 2016 2017 20182013 1,000 kbpd 300 kbpd Additional Installed Capacity Operated by Petrobras 150 kbpd 1,000 kbpd 900 kbpd 1,050 kbpd Cid. Ilhabela Cid. Mangaratiba P-75 P-67 P-74 P-66 P-68 P-69 P-76 P-77 P-72 P-71 P-73 P-67 Cid. Itaguaí Cid. Maricá Cid. Saquarema Cid. Caraguatatuba Cid. São Paulo Cid. Itajaí Cid. Paraty P-63 P-55 P-61 P-58 P-62 TAD PU to be bid: • Deep Water ES • Marlim I Revitalization • Deep Water I SE • Maromba I • Sul do Pq. das Baleias • Carcará + 600 kbpd PU under bidding: •Tartaruga Verde and Mestiça + 150 kbpd P-70 Under Bidding Process: • Tartaruga Verde and Mestiça • Deep Water ES • Marlim I Revitalization • Deep Water I SE • Maromba I • Sul do Pq. das Baleias • Carcará
    • 5757 PLSVsunderOperationandConstruction 2014 20162014 Current Fleet = 11 PLSVs + 2 19 New PLSVs to support the Oil Curve + 8 throughout 2014 + 9 P-58 2017 Sunrise 270t Deep Constructor 125t Skandi Vitória 300t Skandi Niterói 270t Kommandor 3000 135t Normand7 340t Seven Mar 340t Seven Seas 430t Seven Condor 230t Seven Phoenix 340t McDermott Agile 200t North Ocean 102 210t Polar Onyx 275t Coral do Atlântico 550t Estrela do Mar 550t Lay Vessel 105 300t Seven Waves 550t 1 PLSVs of 300t (The Netherlands) Sapura Diamante 550t Sapura Topázio 550t 3 PLSVs of 550t (The Netherlands) 2 PLSVs of 650t (The Netherlands) 1 PLSVs of 300t (Suape) 1 PLSVs of 550t (The Netherlands) 1 PLSVs of 300t (Suape) 2 PLSVs of 550t (The Netherlands) PLSV: Pipe Laying Support Vessel
    • 5858 Brazil: Oil and NGL Production x Oil Products Demand Refining Expansion Aligned with Domestic Market Growth RNEST 1st Phase 4th Quarter RNEST 2nd Phase 2nd Quarter Comperj 1st Phase Premium I 1st Phase Premium II PROMEGA additional refining capacity (by Dec/2016): +165 kbpd (current refineries) + 30 kbpd (RNEST). PROMEGA targets are to increase diesel, jet fuel and gasoline production of our refineries, based on capacity and efficiency increase of processing units. Millionbpd PROMEGA Capacity Expansion of 195 kbpd Petrobras’ refining capacity should reach 3.3 million bpd in 2020, aligned with domestic market growth.
    • 5959 RNEST and COMPERJ Refineries Physical and Financial Monitoring PNG 13-17 2016 Projetado 2016 0 10 20 30 40 50 60 70 80 90 100 110 mai-04 nov-04 mai-05 nov-05 mai-06 nov-06 mai-07 nov-07 mai-08 nov-08 mai-09 nov-09 mai-10 nov-10 mai-11 nov-11 mai-12 nov-12 mai-13 nov-13 mai-14 nov-14 mai-15 nov-15 mai-16 nov-16 mai-17 nov-17 mai-18 nov-18 mai-19 nov-19 mai-20 nov-20 mai-21 nov-21 PNG 12-16 PNG 13-17 Realizado Projetado Physical Monitoring – S-Curve (%) RNEST Start-up: 4th Quarter PNG 13-17 2014 Projetado 2014 0 10 20 30 40 50 60 70 80 90 100 110 abr-05 out-05 abr-06 out-06 abr-07 out-07 abr-08 out-08 abr-09 out-09 abr-10 out-10 abr-11 out-11 abr-12 out-12 abr-13 out-13 abr-14 out-14 abr-15 out-15 abr-16 out-16 abr-17 out-17 abr-18 out-18 abr-19 out-19 abr-20 out-20 PNG 12-16 PNG 13-17 Realizado Projetado Physical Monitoring – S-Curve BMP 13-17: 87% Accomplished: 84% PNG 13-17: US$ 13.457 MM Projetado: US$ 13.596 MM 0 2.000 4.000 6.000 8.000 10.000 12.000 14.000 16.000 jan-10 jul-10 jan-11 jul-11 jan-12 jul-12 jan-13 jul-13 jan-14 jul-14 jan-15 jul-15 jan-16 jul-16 jan-17 jul-17 jan-18 jul-18 jan-19 jul-19 jan-20 jul-20 jan-21 jul-21 US$MM PNG 13-17 Realizado Projetado (%) Financial Monitoring – S-Curve Financial Monitoring – S-Curve BMP 13-17: 7,882 Million Accomplished: 7,573 Million PNG 13-17: US$ 18.515 MM Projetado: US$ 18.579 MM 0 2000 4000 6000 8000 10000 12000 14000 16000 18000 20000 abr-05 out-05 abr-06 out-06 abr-07 out-07 abr-08 out-08 abr-09 out-09 abr-10 out-10 abr-11 out-11 abr-12 out-12 abr-13 out-13 abr-14 out-14 abr-15 out-15 abr-16 out-16 abr-17 out-17 abr-18 out-18 abr-19 out-19 abr-20 out-20 US$MM PNG 13-17 Realizado Projetado IMPLEMENTIONMILESTONES 1 - Start-up - ETA (Mar/2014) 2 - Start-up - ETDI (Sep/2014) 3 - Start-up UDA 11 (Oct/2014) 4 - Start-up UCR 21 (Nov/2014) 5 - Start-up HDT Diesel 31 (Nov/2014) IMPLEMENTATIONMILESTONES 1 - Start-up – ETA (Jun/2015) 2 - Start-up - ETDI (Jun/2015) 3 - Start-up - UDAV (Ago/2016) 4 - Start-up - UCR (Ago/2016) 5 - Start-up - HCC (Ago/2016) BMP 13-17: 15,246 Million Accomplished: 14,841 Million BMP 13-17: 67% Accomplished: 66% feb/14 COMPERJ Start-up: 2016 feb/14 BMP 12-16 BMP 13-17 Accomplished Planned BMP 13-17 Accomplished Planned BMP 12-16 BMP 13-17 Accomplished Planned BMP 13-17 Accomplished Planned BMP 13-17 2016 Planned 2016 Planned 2014 BMP 13-17 2014 BMP 13-17 US$ 18.515 MM Planned US$ 13.596 MM BMP 13-17 US$ 13.457 MM Planned US$ 18.579 MM
    • 6060 Natural Gas, Energy and Gas-Chemical 7.5 5.0 2.5 0.0 +20% 2020 7,2 6.0 1.2 2018 6.8 6.0 0.8 2014 6,3 6.0 0.3 2013 6.0 6.0 Installed Capacity of Thermoelectric Generation (GW) Current Capacity New TP 5249 4139 0 20 40 60 +33% 2020201820142013 NG Distributor Demand (million m³/d) 0.7 2018 4.5 3.0 1.5 0.0 +169% 2020 3.5 2.8 1.8 1.6 3.5 2.7 0.8 2014 0.2 2013 1.3 1.1 0.2 Ammonia and Urea Market Supply (million ton/year) Ammonia Urea Thermoelectric Power Plant projects: TP Baixada Fluminense Feb/2014 TP Azulão 2017 TP Bahia II 2020 TP Sudeste VI 2020 Fertilizers projects: Ammonium Sulfate Feb/2014 UNF III (MS) 4th Quarter - 2014 UNF V (MG) 2017 Infrastructure projects of NG: Delivery gates along GASBOL and NE and SE Network Monetization of Natural Gas reserves by increasing the capacity of thermoelectric generation and of nitrogenous fertilizers, as well as the NG distributor demand.
    • 6161 International: Oil and Natural Gas Production Production growth by participation in exploratory opportunities in Latin America, Africa and the USA. Maintenance of Bolivian gas supply to Brazil and minority operation in non-conventional in Argentina and the USA. 294 253 177 152140 92 202020192017 201820162014 2015 Petrobras International Oil and Natural Gas Production Petrobras International Oil Production kboed 2014-2020 Growth rate: 8.9 % p.a. 2014-2020 Growth rate: 8.7 % p.a.
    • 6262 • Management focused on reaching physical and financial targets of each project PERFORMANCE • Guarantee the expansion of the business with solid financial indicators CAPITAL DISCIPLINE • Priority for oil and natural gas exploration & production projects in Brazil PRIORITY 2014 2018 Financiability Assumptions • Investment Grade rating maintenance • No new equity issuance • Convergence with International Prices (Oil Products) • Partnerships and Business Models Restructuring 2014-18 Business and Management Plan Fundamentals
    • 6363 BMP 2014-2018 US$ 220.6 billion 2014-2018 BMP Investments Approved by the Board of Directors of Petrobras on 02/25/2014 • Investment Grade Rating maintenance: − Return of the debt ratios and leverage to their limits within 24 months2 − Leverage lower than 35% − Net Debt/Ebitda lower than 2.5x • No new equity issuance • Convergence with International Prices (Oil Products) • Partnerships and Business Models Restructuring Financiability Assumptions 38.7 (18%) 153.9 (70%) Distribution Biofuels Downstream Other Areas 1International Gas and Energy Engineering, Technology and Materials E&P 2.2 (1%) 1.0 (0.4%) 2.7 (1.2%) 2,3 (1.0%) 9.7 (4%) 10.1 (5%) 1) Financial Area, Strategy and Corporate-Services 2) Material Fact of 11/29/2013
    • 6464 2014-2018 BMP Investments: US$ 220.6 Billion Portfolio of Projects Under Implementation, Bidding Process and Evaluation Under Implementation • Projects being executed (construction) • Projects already bid • Resources required for studies of Projects Under Evaluation = 38.7 (18%) 153.9 (70%) 2,2 (1%) 1,0 (0,4%) 2,7 (1,2%) 2,3 (1,0%) 9,7 (4%) 10,1 (5%) Total Investments US$ 220.6 Billion Portfolio of Projects Under Evaluation US$ 13.8 Billion Under Bidding Process •E&P projects in Brazil •Premium I Refinery •Premium II Refinery • Projects under Studies in Phase I, II or III (except E&P in Brazil) Oil Production 2020: 4.2 million bpd No impact in Oil Production 2020 + Portfolio of Projects Under Implementation + Under Bidding Process US$ 206.8 Billion 1) Financial Area, Strategy and Corporate-Services Distribution Biofuels Downstream Other Areas 1International Gas and Energy Engineering, Technology and Materials E&P ¹ Includes E&P projects in Brazil that must pass through bidding process of their units, as well as Premium I and Premium II refineries that bidding process will be done in 2014.
    • 6565 112,5 (73%) 18,0 (12%) 23,4 (15%) Petrobras Investments in Exploration and Production: US$ 153.9 billion Total E&P US$ 153.9 bilhões Production DevelopmentExploration Infrastructure and Support E&P Petrobras US$ 153.9 Billion (77%) =+ E&P Partners US$ 44.8 Billion (23%) Total with Partners US$ 198.7 Billion (100%) Pre-SaltPost-Salt Production Development + Exploration US$ 135.9 billion Pre-Salt (Concession) Transfer of Rights PSA (Libra) 53,9 (40%) 82,0 (60%)
    • 6666 9,0 92% 0,05 0,5% 0,6 6% 0,01 0,1% 0,05 0,5% 0,1 0,7% Projects Under Implementation  RNEST (Pernambuco)  COMPERJ 1st phase (Rio de Janeiro)  PROMEF – 45 Vessels to transport Oil and Oil Products Projects Under Bidding Process Premium I – 1st phase (Maranhão) Premium II (Ceará) Projects Under Implementation  UNF III (Mato Grosso do Sul)  UNF V (Minas Gerais)  Rote 2: Gas pipeline and NGPU  Rote 3: Gas pipeline and NGPU Downstream Gas, Energy and Gas-Chemical International Projects Under Implementation  E&P USA – Saint Malo  E&P USA – Cascade and Chinook  E&P USA – Lucius  E&P Argentina – Medanito and Entre Lomas  E&P Bolivia – San Alberto and San Antonio  E&P Nigeria – Egina US$ 38.7 billion US$ 10.1 billion US$ 9.7 billion Petrobras Investments: US$ 58.5 billion Downstream – Gas, Energy and Gas-Chemical – International Logistics for Ethanol Corporate Petrochemical Fleet Expansion Logistics for Oil Quality and Conversion Operational Improvement Refining Capacity Expansion Distribution Gas-Chemical Operational Units (Nitrogenous) Regas - LNG Network Energy Distribution Corporate Gas & Energy Refining & Marketing Exploration & Production Petrochemical 1,3 13% 2,6 25% 6,1 61% 0,1 1% 16,8 43% 9,4 24% 5,5 14% 1,4 3% 3,3 9% 1,4 4% 0,4 1% 0,3 1% 0,3 1% Projects under implementation, under evaluation and under bidding were included. .
    • 6767 2014-2018 BMP: Investment and Operating Costs Management 2014-2018 BMP US$ 220.6 Billion PRC-Poço Program to Reduce Well Costs PRC-Sub Program to Reduce Subsea Facilities Costs PROEF Program to Increase Operational Efficiency UO-BC UO-RIO PROCOP Operating Costs Optimization Program INFRALOG – Logistic Infrastructure Optimization Program Local Content Management– Take advantage of the industry´s capacity to maximize gains to Petrobras Health, Safety, Environment and Energy Efficiency PROCOP: Focus on OPEX, operating costs of the Company activities – Manageable Operating Costs.. PRC-Poço: Focus on CAPEX dedicated to Wells construction – Investments in Drilling and Completion. PRC Sub: Focus on CAPEX dedicated to subsea systems construction.
    • 6868 2014-2018 BMP Incorporates operational efficiency gains from PROCOP * UEDC = Utilized Equivalent Distillation Capacity 2014-18 period: projected with nominal values. LiftingCost (R$/boe): 27,3 34,8 24,2 32,7 20182014 -7.2% p.a. -5.9% p.a. 10,83 10,11 10,50 10,06 20182014 +0.12% p.a. +0.78% p.a. 1,177 2018 1,013 1,240 2014 1,029 -0.40% p.a. +1.32% p.a. Costs reduction between 2013 and 2016 with potential savings of R$ 37.5 billion in nominal values LogisticCostinDownstream (R$/bbl): RefiningCost (R$thous./UEDC*): Without PROCOP With PROCOP Without PROCOP With PROCOP Without PROCOP With PROCOP Gains from PROCOP reduce Logistic Cost:  Reduction in shipping costs: simplification of customs procedures; optimization of fuel consumption; and implementation of new management tools.  Optimization of inventory levels of oil and oil products.  Reduction of stored water in the logistics system. Gains from PROCOP reduce Lifting Cost:  Optimization of routine processes and resources used in the production of oil & gas.  Excellence level in the management of materials and spares.  Adequacy of overhead. Gains from PROCOP reduce Refining Cost:  Integrating common and interdependent activities among refineries.  Optimized use of support resources.  Optimization in the consumption of energy, catalyzers and chemicals.
    • 6969 2014-2018 BMP: Financiability Analysis– US$ 206.8 billion Under Implementation • Projects being executed (construction) • Projects already bid • Resources required for studies of Projects Under Evaluation = Total Investment US$ 220.6 billion Projects Under Evaluation US$ 13.8 billion • Projects under Studies in Phase I, II or III (except E&P in Brazil) Oil Production 2020: 4.2 million bpd No impact in Oil Production 2020 + Projects Under Implementation + Projects Under Bidding Process US$ 206.8 billion Financiability US$ 206.8 billion 1) Financial Area, Strategy and Corporate-Services 2) As occurred in 2012 (2012-2016 BMP ) and in 2013 (2013-2017 BMP). Low maturity of projects: not considered in the financiability analysis2 153.9 (70%) 38.7 (18%) 2.2 (1%) 1,0 (0.4%) 2.7 (1.2%) 2,3 (1.0%) 9.7 (4%) 10.1 (5%) Distribution Biofuels Downstream Other Areas 1International Gas and Energy Engineering, Technology and Materials E&P Under Bidding Process •E&P projects in Brazil •Premium I Refinery •Premium II Refinery ¹ Includes E&P projects in Brazil that must pass through bidding process of their units, as well as Premium I and Premium II refineries that bidding process will be done in 2014.
    • 70 E&P and Dowstream Share Evolution in the Business and Management Plan Portfolio of Projects for Financiability Evaluation * Gas and Energy, International, BR Distribuidora, PBio , Engineering Technology and Materials (ETM) and Corporate and Services Area 2014-2018 BMP Total Capex 2012-2016 BMP Total Capex 2013-2017 BMP Total Capex 2010-2014 BMP 2011-2015 BMP E&P Downstream Other Areas* PortfolioofProjectsfor FinanciabilityEvaluation US$ 224.0 BillionInvestment US$ 224.7 Billion US$ 236.5 Billion US$ 236.7 Billion US$ 220.6 Billion E&P share in Petrobras investments has been increasing in the last five Business and Management Plan 48% 35% 17% 52% 33% 11% 15% 18% 27% 62% 14% 30% 56% 70% 12%
    • 7171 2014-2018 BMP: Financial Planning Assumptions Financing analysis only incorporates projects under Implementation + Bidding = US$ 206.8 Billion Main Assumptions for Cash Flow Generation and Investment Levels 2014-2018 BMP is based on constant currencies from 2014. Brent Prices (US$/bbl) US$ 105 in 2014, declining to US$ 100 by 2017 and to US$ 95 in the long term Average Exchange Rate (R$/US$) R$ 2.23 in 2014, strengthening to R$ 1.92 in the long term Leverage Limit: < 35% │ Declining leverage (although limit surpassed in 2014) Net Debt/ EBITDA Limit: < 2.5x │ Limit will be surpassed in 2014 and will fall below 2.5x from 2015 and below 2.0x in the end of period Oil Product Prices in Brazil Convergence of prices in Brazil to international benchmarks, according to diesel and gasoline price policy appreciated by the Board of Directors on November 29th, 2013. No equity issuance Investment grade maintenance
    • 7272 2014-2018 BMP: Operating Cash Flow and Funding Needs 61,3 165,0 Operating Cash Flow (After Dividends) and Divestments Third-party resources (Debt) Cash Utilization Business Model Restructuring 207,1 39,8 Amortization Investments Annual borrowing needs 2014-2018 Gross – US$ 12.1 billion │Net – US$ 1.1 billion  Additional funding needs will be funded exclusively through new debt. No equity issuance is envisaged  Free cash flow, before dividends, from 2015 on.  Net borrowing needs below previous BMP due to: • Higher oil production. • Expansion of refining capacity, reducing oil products imports. • Business model restructuring, which decreases cash needs throughout the BMP. 182.2 60.5 9.1 9.9 206.8 54.9 261.7 261.7 Fontes Usos US$bilhão Sources Uses US$Billion
    • 7373 2014-2018 BMP: Leverage and Net Debt/EBITDA  Declining leverage, within maximum limit of 35% from 2015 on  Net Debt/EBITDA comply with the limit from 2015 on Leverage Net Debt/EBITDA
    • 74 2014 – 2018 Business and Management Plan The End