2014 Global Energy Conference – Credit Suisse
 

2014 Global Energy Conference – Credit Suisse

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Rudimar Lorenzatto (Exploration & Production) ...

Rudimar Lorenzatto (Exploration & Production)

AGENDA
• BUSINESS AND MANAGEMENT PLAN 2014-2018
• PRODUCTION UPDATE-RAMPING UP NEW SYSTEMS-MAINTAINING EXISTING SYSTEMS
• PER BOE ANALYSIS
• PRE-SALT UPDATE
• NEW UNITS

June, 2014

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2014 Global Energy Conference – Credit Suisse 2014 Global Energy Conference – Credit Suisse Presentation Transcript

  • Rudimar Lorenzatto Exploration & Production June, 2014 2014 Global Energy Conference – Credit Suisse
  • DISCLAIMER 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.
  • AGENDA • BUSINESS AND MANAGEMENT PLAN 2014-2018 • PRODUCTION UPDATE - RAMPING UP NEW SYSTEMS - MAINTAINING EXISTING SYSTEMS • PER BOE ANALYSIS • PRE-SALT UPDATE • NEW UNITS • CONCLUSION
  • Business and Management Plan 2014-2018
  • 5 Investments in Exploration & Production: US$ 153.9 billion Downstream 38.7 (17.5%) Gas & Energy 10.1 (4.6%) International 9.7 (4.4%) Distribution 2.7 (1.2%) Biofuels 2.3 (1.0%) Engineering, Technology & Materials 2.2 (1.0%) Other Areas 1.0 (0.5%) 2014-18 BMP Total Investment US$ 220.6 billion Exploration & Production 153.9 (69.8%) Production Development 112.5 (73%) Infrastructure: 18.0 (12%) Exploration: 23.4 (15%)Pre-salt Concession Transfer of Rights Production Sharing Post-salt Exp + R&D 82.0 (60%) 53.9 (40%)
  • 6 Projects Under Implementation, Bidding Process and Evaluation 2014-18 BMP Total Investment US$ 220.6 billion Downstream 38.7 (17.5%) Gas & Energy 10.1 (4.6%) International 9.7 (4.4%) Distribution 2.7 (1.2%) Biofuels 2.3 (1.0%) Engineering, Technology & Materials 2.2 (1.0%) Other Areas 1.0 (0.5%) Exploration & Production 153.9 (69.8%) Under Implementation (US$ 175.9 billion) • Projects being executed (construction) • Projects already bid • Resources required for studies of Projects Under Evaluation Under Bidding Process¹ (US$ 30.9 billion) • E&P projects in Brazil Represent around 200 th. bpd of production in 2018 and 900 th. bpd in 2020. Projects under Studies in Phase I, II or III (except E&P in Brazil) Portfolio of Projects Under Implementation + Under Bidding Process US$ 206.8 Billion Portfolio of Projects Under Evaluation US$ 13.8 Billion ¹ Includes E&P projects in Brazil which will stil go through bidding process of their units, as well as Premium I and Premium II refineries, which will have the bidding process carried out throughout 2014 ² Source: IHS CERA Regional Downstream Capital Costs Indexes - 2011 Oil Production 2020: 4.2 million bpd No impact in Oil Production 2020
  • 7 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.
  • 8 1.9 3,2 4.2 2013 2014 2015 2016 2017 2018 2019 2020 New systems ensure future growth Growth in 2014: 7.5% ± 1p.p. Piloto Sapinhoá (Cid. São Paulo) Baúna (Cid. Itajaí) Piloto Lula NE (Cid. Paraty) Papa-Terra (P-63) Roncador III (P-55) Norte Pq. Baleias (P-58) Iracema Sul (C. Mangaratiba) Roncador IV (P-62) Sapinhoá Norte (Cid. Ilhabela) Papa-Terra (P-61+TAD) Florim Lula Alto Lula Central JúpiterLula Sul (P-66) Búzios I (P-74) Lapa Lula Norte (P-67) Búzios II (P-75) Lula Ext. Sul e CO Sul de Lula (P-68) Lula Oeste (P-69) Búzios III (P-76) Tartaruga Verde e 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 ES Águas Profundas Carcará Espadarte III SE Águas Profundas I Búzios V Revitalização Marlim I SE Águas Profundas II Libra Revitalização Marlim II Iracema Norte (Cid. Itaguaí) On Stream Built Ordered Under Bidding +640kbpd +660kbpd +150kbpd +1000kbpd +900kbpd +1050kbpd Capacity added per year 3 MM bbl
  • Ramping Up New Systems
  • 10 FPSO Cid. São Paulo (Sapinhoá) 2,200 1,900 1,950 1,850 2,150 2,050 2,000 2,100 Feb-14 1,9261,923 Jan-14 Mar-14 2,0142,009 Sep-13 2,022 1,979 Aug-13 1,951 1,908 Jul-13 1,929 1,888 Jun-13 2,021 1,955 1,920 Jan-13 1,994 1,965 1,979 May-13 1,925 1,892 Apr-13 1,974 1,924 Mar-13 1,890 1,846 Fev-13 1,988 1,917 Dec-13 2,027 1,964 Nov-13 2,009 1,957 Oct-13 1,994 1,960 Th. bpd 1Q13 Average 1,910 2Q13 Average 1,931 4Q13 Average 1,960 1Q14 Average 1,922 3Q13 Average 1,924 P-58 (Parque das Baleias) P-55 (Roncador) P-63 (Papa-Terra) Nov 12thFPSO Cid. Paraty (Lula NE Pilot) FPSO Cidade de Itajaí (Baúna) Feb 16th Jan 5th Mar 17th Dec 31st Capacity: 120 th. bpd (45% Petrobras) 2013 – 10 th. bpd 1Q14 – 20 th. bpd Capacity: 80 th. bpd (100% Petrobras) 2013 – 36 th. bpd 1Q14 – 72 th. bpd Capacity: 120 th. bpd (65% Petrobras) 2013 – 10 th. bpd 1Q14 – 30 th. bpd Capacity: 140 th. bpd (62.5% Petrobras) 2013 – 1 th. bpd 1Q14 – 9 th. bpd Capacity: 180 th. bpd (100% Petrobras) 1Q14 – 8 th. bpd Capacity: 180 th. bpd (100% Petrobras) 1Q14 – 2 th. bpd Production Operated by PetrobrasPetrobras Production Jun 6th » Main factors that impacted production in the 1Q14:  Demobilization of FPSO Brasil (integrity) and complete stoppage of Marlim P-20 for 103 days (fire).  Limited availability of PLSVs, due to the delayed decision of contracting abroad (2010 → 2012), after failed attempts to contract them in Brazil, impacting the pace of interconnection of wells.  Delays in the delivery of the platforms by the shipyards and bigger than expected scope for off-shore activities.  Longer time for the execution of innovative projects, such as the BSRs (monobuoys) and systems P-63/P-61/TAD. 2013: 1,931 th. bpd Production in the 1Q14 was 1,922 kbpd, in line with projections
  • 11 2Q14 3Q14 4Q14 2014 Average: 2,075 th. bpd ± 1% Factors that support production growth: » New systems: P-62 (May 12th), P-61/TAD (3Q14), FPSO Cidade de Ilhabela (3Q14) and FPSO Cidade de Mangaratiba (4Q14). » Connection of 65 production wells in 2014, of which 20 have already been connected by 05/09/2014. » PLSV fleet increase: 11 vessels in 1Q14, 13 vessels in 2Q14, 16 vessels in 3Q14 and 19 vessels in 4Q13. » PLSV productivity increase: from 99 km / PLSV / year in 1Q13 to 129 km / PLSV / year in 1Q14 (+30%). Th. bpd 2,400 2,600 2,500 2,300 2,200 2,100 2,000 1,900 1,800 0 jul-14 may-14 aug-14 jun-14 apr-14 oct-14 dez-14 nov-14 sep-14 mar-14 1,926 feb-14 1,923 jan-14 1,917 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 1,979 may-13 1,892 apr-13 1,924 mar-13 1,846 feb-13 1,920 jan-13 1,965 2Q13 Average 1.931 3Q13 Average 1.924 4Q13 Average 1.960 2013 Average: 1,931 th. bpd 1Q13 Average 1.910 1Q14 Average 1.922 P-62 Realized FPSO Cid. São Paulo FPSO Cid. Paraty FPSO Cidade de Itajaí Jan 5th P-55 P-63 Cid. Ilhabela Cid. Mangaratiba 4th Quarter 3rd Quarter 3rd Quarter 3rd Quarter P-61 TAD P-58 May 12th Jun 6th Feb 16th Nov 12th Dec 31st Mar 17th 3rd Quarter Production growth target of 7.5% (± 1 p.p.) maintained
  • 12 Our critical resources needs are fulfilled 1) Rigs above 2000m 2) PLSV = Pipe Laying Support Vessel Current fleet: 55 Current fleet: 40 Current fleet: 11 New Production Units New UDW Drilling Rigs¹ above 2000m New PLSVs² 5 1 7 6 9 2 5 5 6 13 19 28 30 35 2014 2015 2016 2017 2018 2019 2020 2 7 5 8 5 1 2 9 14 22 27 28 2014 2015 2016 2017 2018 2019 2020 8 9 2 8 8 17 19 19 19 19 2014 2015 2016 2017 2018 2019 2020 Sete Brasil drilling rigs will largely replace the internationally built rigs
  • 13 Production Wells Expected to be Connected in 2014 New Production Wells in 2014 New Injection Wells in 2014 18 49 59 64 17 22 28 Connected Completed Drilled Total 3 Connected Completed Drilled Total In 2014, up to April, 20 wells connections were done with 30% more efficiency (km/PLSV/year) than in the last year.
  • 15 Buoyancy Supported Risers Dimensions: 33ft x 130ft x 170ft A pioneer concept for subsea systems: a giant buoy to support rigid risers. • Which fields? – Sapinhoá Field (FPSO Cid. de São Paulo) – Lula NE Field (FPSO Cid. de Paraty) • Operational status: – All 4 buoyancies are installed. • Time for installation: – 1st buoy: 164 days – 2nd buoy: 55 days • The Results: – In 2013: more 17 mil bpd – In 2014: more 19,5 mil bpd
  • Maintaining Existing Systems
  • 18 Main Operational Units Vitória ES MG Rio de Janeiro RJ PR São Paulo SP 100 km Curitiba SC Campos Basin Santos Basin Parque das Baleias Cangoá Peroá CanapuGolfinho Camarupim Carapó RoncadorAlbacora Marlim Barracuda Garoupa Carapicu Xerelete Papa-Terra Maromba Carataí Pampo Iara Libra Ent. Iara Búzios Jupiter Peroba Sul de Lula Lula Iracema Parati Lapa Sagitário Florim Bem-te-vi/Carcará Caramba Sapinhoá S. Guará Merluza Guaiamá Piracucá Baúna Piracaba Tubarão Estrela do Mar Coral Caravela Cavalo Marinho Mexilhão Carapiá Pirapitanga Tambaú Tambuatá UO-SUL 1 production units 71 kbpd UO-BS 8 production units 142 kbpd UO-BC 34 production units 372 kbpd UO-ES 7 production units 287 kbpd UO-RIO 17 production units 840 kbpd
  • 19 Program to Increase Operational Efficiency (PROEF) 488 455 452 442 418 389 390 389 355 382 428 413 408 405 374 357 370 312 335 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 Apr/14 With PROEF Without PROEF 920 871 887 871 881 839 807 910 851 840 841 811 824 775 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 Apr/14 With PROEF Without PROEF Oil + NGL Production (kbpd) Oil + NGL Production (kbpd) 73 68 71 76 76 74 75 77 77 81 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 Apr/14 92 91 89 94 91 93 92 94 95 96 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 Apr/14 Operational Efficiency(%) Operational Efficiency(%) UO-BC Recovering wells and subsea systems. Total Expenditure* US$ 1,897 mm NPV* US$ 1,080 mm Production gain: +43 kbpd in the 1Q14. UO-RIO Integrity improvement and optimization in the usage of resources. Total Expenditure* US$ 3.2 mm NPV* US$ 1,340 mm Production gain +15 kbpd in the 1Q14. * By February 2014
  • 20 Legacy Oil – accounts for 80% of the production target for 2014 0 0.5 1 1.5 2 2.5 2012 2013 2014 OILPOTENTIAL(MMBPD) Reservoirs potential decline rate SOURCE LARGE FIELDS SMALL FIELDS Onshore 5,3% 6,2% Deep waters 12,0% 19,8% Shallow waters 7,5% 12,1% Decline Rates - CERA CERA: Cambridge Energy Research Associates Authors: Jackson/Eastwwod, 01/2012 Deep waters = water depth > 300m Large fields = reserves > 500 mm bbl Decline rate 1Q14 x 1Q13 10% The control over the reservoirs decline rate ensures the oil production forecast for the year 
  • 21 Average FX (R$/US$) 1.67 1.96 2.16 2.37 2.36 % of costs in US$ 18 18 32 35 35 Oil production (th. bpd) 2,022 1,980 1,931 1,922 2,088 Pre-salt production (th. bpd) 100 138 249 299 324 Days of workovers (PROEF) 1,402 2,966 3,479 872 3,711 Higher productivity guaranteed the maintenance of lifting cost 19 20.93 22.31 22.47 22.57 26.39 30.79 28.33 29.49 31.25 34.28 32.66 33.14 32.65 11.38 13.12 13.37 12.49 12.91 13.28 15.24 13.8 14.76 15.02 14.96 14.33 14.15 14.62 0 5 10 15 20 25 30 35 40 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2014E BRL/boe USD/boe More operational activities with constant oil production; Stabilized unitary costs with a downward trend → increase in productivity and cost reduction 2011 Average: R$ 21.19 /boe 2012 Average: R$ 26.97 /boe 2013 Average: R$ 31.94 /boe 2011 Average: R$ 21.19 /boe 2012 Average: R$ 26.97 /boe 2013 Average: R$ 31.94 /boe 1Q 2014: R$ 33.14 /boe 1Q 2014: R$ 33.14 /boe +9% +7% -1% +27% +18% +1%
  • 22 The 2014-18 BMP counts with the gains of PROCOP Costs reduction between 2013 and 2016, with nominal values of R$ 37,5 billion Ligting Cost (R$/boe) • Optimization of routine processes and resources used in the production of oil & gas. • Excellence level in the management of materials and spares. • Adequacy of overhead. 34.8 27.3 32.7 24.2 -5,9% a.a. -7,2% a.a. 2014 2018
  • Pre-salt Update
  • 24 Rio de Janeiro MG 100 km MG 100 km The Pre-Salt Province RJ São Paulo Curitiba * Comerciality declaration of Lula (6,5 bi boe), Lula–Iracema (1,8 bi boe), Sapinhoá (2,1 bi boe) e Lapa (459 mi boe) Average Water Depth: 2,100 m Distance from the coast: 300 km Salt thickness: 2 km Reservoir average depth: 5 km Recoverable Volumes · Lula: 6.5 bi boe · Lula – Iracema area: 1.8 bi boe · Sapinhoá: 2.1 bi boe · Transfer of Rights: 5.0 bi boe Total: 15.4 bi boe Remaining areas 103.4 mil km² 69% Areas under concession 45.6 mil km² 31% 87% Petrobras and associates 13% Consortium without Petrobras Campos Basin 7,000 km2 (1.7 million acres) Santos Basin Pre-Salt 15,000 km2 (3.7 million acres) 650 US GoM blocks Concession Transfer of Rights Production Sharing
  • 25 Rio de Janeiro MGMG The Pre-Salt Province RJ São Paulo Curitiba FPSO Capixaba 1 p. well P-48 1 p. well P-53 3 p. wells FPSO Cid. Angra dos Reis 4 p. wells FPSO Cid. Paraty 2 p. wells FPSO Dynamic Producer 1 p. well FPSO Cid. Niterói 1 p. well FPSO Cid. São Vicente 1 p. well Concession Transfer of Rights Production Sharing P-58 1 p. well FPSO Cid. Anchieta 5 p; wells FPSO Cid. São Paulo 2 p. wells  9 production units + 2 EWT  22 production wells (10 PPSBS, 5 BC/RJ e 7 BC/ES)
  • 26 Pre-Salt Production Highlights Lula Nordeste Pilot on stream since June 2013 with only 1 production well Campos Basin Santos Basin 136 86 47 18 208 3 16 42 119 169 301 385 2008 2009 2010 2011 2012 2013 April 2014 165 83 72 24 203 8 Monthly Production Average (kbpd) Daily Production Record 470 kbpd in May 11st 2014 Cumulative production Aug/08 to Apr/14 378 million bbl 9.0 14.8 Lula Petrobras E&P Lifting Cost 2013 (US$/boe) 34 36 36 BAZ-04 (Baleia Azul) LL-02 (Lula Pilot) SPS-77 (Sapinhoá Pilot) High Productivity Wells (kbpd - peak) 411
  • 27 Pre-salt Drilling Activity in the Santos Basin Pre-salt Cluster 2 2 3 7 10 10 21 22 Active Rigs 2 3 4 4 6 9 10 12 6 15 21 2 3 4 5 7 15 25 33 2006 2007 2008 2009 2010 2011 2012 2013 Development Exploration 23 injection wells 21 production wells 50 exploratory wells 55% Reduction of drilling time from 134 to 60 days (2006-2013)* Drilling + completion record (2013): 109 days 100% Exploratory success in the pre-salt province in 2013 >90% Exploratory success in the pre-salt province since 2006 * dryhole
  • 28 168 125 98 98 78 2010 2011 2012 2013 2014 Duration (days/well) 158 102 89 86 64 2010 2011 2012 2013 2014 Duration (days/well) Drilling Completion (including WCT) Wells Construction in Santos Pre-salt – Total Duration -11% p.a. -15% p.a.
  • 29 Libra Concession Transfer of Rights Production Sharing Libra L1 L3 L2 L4 L5 L6 L7 L8 L9 L10 L11 L12 Unique Characteristics • Very thick Pre-salt reservoirs • Good reservoir quality (porosity / permeability) • Light Oil (~ 27° API) The Libra partnership offers a vast array of opportunities • Very strong oil companies • Integrated Project Team • Openness to new ideas 40% 20% 20% 10% 10%
  • New Units
  • FPSO Cidade de Ilhabela - Sapinhoá Norte • Sail away by Jul/2014 • 1st oil: 2H 2014 • 150 kbpd oil • 6 MM m³/d gas • 8p + 7i wells
  • FPSO Cidade de Mangaratiba - Iracema Sul • Sail away by Aug/2014 • 1st oil: 2H 2014 • 150 kppd oil • 8 MM m³/d gas • 8p + 7i wells
  • P-66 - Lula Sul (Replicant) • 1st oil: 2016 • The first of 8 new build FPSOs (Replicants)
  • P-74 – Búzios I • 1st oil: 2016 • The first of 4 Converted FPSOs
  • Conclusion
  • 39 • To achieve our 7,5% (+-1%) growth in production in 2014, we are counting on: – Arrival of 8 PLSV, making a total of 19 PLSVs (12 to pre-salt) by the end of 2014 – Out off the 10 new units planed for 2013-2014, 7 are already producing, one is in its final stage (P-61) and the other 2 are almost done (92% and 93%). – The BSR technology are now field proof with all the buoy installed. – Highly productivity of the pre-salt fields (the last wells are producing 30- 35 kbpd). • The decline rate of our fields are slightly better then the market benchmarks. • PROEF is bringing great results by reducing the decline rate of our existing fields and also by improving the efficiency of our production systems. • PROCOP is proving very important for the upstream department of Petrobras because is decreasing the lifting cost. • The Pre-salt production is increasing in a sustainable manner and is showing the high productivity of its fields (average production of 410 kbpd in April). CONCLUSION
  • 40 • Petrobras is a businesses driven company and our focus now is the increase of production. Our board is directly involved in this matter. • We are getting more efficient in drilling and completing wells the Pre-salt layer, with an average duration reduction of 13% yearly from 2012 to 2014, a remarkable outcome, since it accounts for 51% of our E&P investments. • We are all very excited about Libra and committed to deliver a great project achieving production and cost targets. CONCLUSION
  • THANK YOU! INFORMATION Investor Relations +55 21 3224-1510 petroinvest@petrobras.com.br www.petrobras.com.br/ir