Biocombustiveis mexico

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Biocombustiveis mexico

  1. 1. José Sergio Gabrielli de Azevedo Petrobras and the CEO and President August, 2007 Biofuels 1
  2. 2. PETROBRAS Cautionary Statement 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. 22
  3. 3. Latin American Share of Oil World Reserves Latin American oil reserves are becoming increasingly important 1984 1994 2004 R/P* = 26,77 R/P* = 41,78 R/P* = 41,84 4,8% 8,0% 8,5% 5,0% 3,8% 3,5% 8,8% 5,1% 13,4% 9,4% 6,4% 7,6% 56,5% 65,1% 61,8% 7,9% 11,7% 12,7% Total Total Total 762 billion barrels 1.017 billion barrels 1.188 billion barrels Middle East Europe & Eurasia Africa North America Pacific Asia Latin America In 20 years, Latin America proven reserves increased from 36.6 billion barrels (1984) to 101 billion. Source: BP Statistical Review of World Energy * Reserves/Production Latin America (years) 3
  4. 4. Net Oil Availability Latin America Russia Mbpd Asia United States OECD(- Mexico) Projected growth in oil production and demand suggests balance and independence of supply from politically unstable regions Source: Internacional Energy Agency Reference Scenario Includes Bitumen and non-conventionals, including synthetic oils. 4
  5. 5. Gas Rich Region with limited infrastructure Proven Reserves as of January 1, 2005 4.3 T m3 Ample gas reserves will allow for: 0.55 T m3 152 Tcf 19.4 Tcf ::: Regional growth in consumption 0.41 T m3 substituting some demand for oil 14.5 Tcf Venezuela Trinidad ::: Higher exports of liquids Mexico 0.33 T m3 Brazil 11.7 Tcf Perú 0.74 T m3 0.74 T m3 26.1 Tcf But: 2005 Gas ::: Will require increasing energy Proven Reserves Bolivia 0.50 T m3 integration and World: 26.1 Tcf 17.7Tcf 179,8 T m3 ::: Substantial investments in South and Central America: Argentina infrastructure covering great 7,02 T m3 distances and environmentally sensitive regions Source: Cambridge Energy Research Associates. 5
  6. 6. Production X Demand X Refining Capacity: Reaching Self-Sufficiency Production/ 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2006 2011F Consumption (%) 3,0 30,5 28,4 32,2 19,5 16,7 56,2 55,3 49,3 70,4 97,6 112,1 Brazil: first major market to shift from import dependency to self sufficiency since first oil from Proj. 2500 North Sea in 1971 began to shift european balance 2000 Production THOUSAND BPD Consumption 1500 Refining 1000 500 0 1954 1960 1970 1980 1990 2000 2006 2011 6
  7. 7. A Track Record of Growth 7.9% p.y. 2015 In Thousand boed 4,556 8,7% p.y. 278 1996 2001 2006 2011 742 3,493 185 2,298 2,217 383 724 2,036 2,020 1,810 551 277 274 1,636 252 250 265 1,565 1,405 232 221 1,238 197 1,090 1,008 179 2. 812 163 152 1540 1684 1778 2. 374 1500 1493 1271 1336 1132 1004 809 869 Oi l and N GL - B r az i l N at ur al Gas - B r az i l 2015 Oi l and N GL - I nt er naci onal N at ur al Gas - I nt er naci onal For eca st 7
  8. 8. Brazil is the 1st country to reap benefits from Ethanol Because program is government regulated there are no benefits from KT but benefits of reduction in CO2 emissions have already materialized; Used up to 10% in petrol, ethanol substitutes lead Alcohol Exports and MTBE as an oxygenate, withour any change in 2005 engines, without harmo to air or groundwater End of regulation 1999 FFV 160000 Beginning of the During this sector deregulation 140000 period, ethanol PROÁLCOOL 120000 utilization Alcohol Vehicles saved 644 10000 million ton. of CO2 80000 emission 60000 1000 BEP Accumulated effective economy: 40000 1 Billion boe ~US$ 52 bi 20000 CNG ETHANOL 0 GASOLINE 1972 1976 1980 1984 1988 1992 1996 2000 2004 Source: MME, BEN 2006
  9. 9. Ethanol Ethanol can be introduced also as a partial or full substitute for petrol: up to 25% (Brazil) partial motor adjustments require participation of automobile industry; up to/over 85% requires flex-fuel vehicles, consumer preference (price/performance). Source:Henry Joseph Jr. ANFAVEA - Volkswagen 9
  10. 10. Demand Overview • A strong increase in the demand for ethanol is expected; • Ethanol as a substitute to Lead and MTBE • This amount of future consume may be levered if new countries adhere the compulsive blend with ethanol. Strong Increase in Demand Renewable Fuels Standard Ethanol Global Demand (Million liters/Year) MTBE Substitution Clean Air Act Lead Substitution Source: F.O. LICHT, 2004 10
  11. 11. Demand Overview A PROMISING MARKET Potential demand Ethanol Country Comment (Billion liters) addition Potential demand considering 3% ethanol addition to Japan 1.7 3% the gasoline formula Expected demand in 2012, according with the US 16.8 - Renewables Fuels Law Potential demand considering 10% ethanol addition China 4.5 10% to the gasoline formula Potential demand considering 5% ethanol addition to EU 7.4 5% the gasoline formula in 2011 India ? 5% Percentage approved only in some regions Potential demand considering 5% ethanol addition to Thailand 0.7 5% the gasoline formula Total: 31.1 billion liters •Only in the US, a 5.7% addition of ethanol the gasoline would translate into a consumption of 30 billion liters of ethanol per year. Souce: EIA/DOE; Comissão Européia; FO Licht; Copersucar 11
  12. 12. O Etanol contribui para a redução do aquecimento global Demand Overview •Biofuels usage can reduce CO2 emissions at a 5:1 rate; •Besides being a cleaner source of energy, sugar cane ethanol produces 8,3 more energy than the fossil energy used in its production process. Ethanol usage in Brazil has decreased the emission of Greenhouse Effect Gases at 13% (1994 data); •Sugar-cane is the most productive among ethanol raw materials and the production of ethanol has limited affect on food supply. Energetic balance - Ethanol Ethanol Productivity 10 7000 6000 8 5000 liters per hectar 6 Energetic ratio 4000 3000 4 2000 2 1000 0 0 sugar-cane sugar- sugar-cane corn - USA wheat - EU Sugar Wheat Beet- Corn - Brazil beet- EU - India cane root Source: World Watch Institute 12
  13. 13. Quais seriam os motivos do diferencial de produtividade brasileira ? Price Reduction Ethanol Engine Relative Performance* Greater production cost 140 reduction when compared 120 110,0% 132,4% 103,3% 20 to gasoline. 100 110,0% 80 18 60 40 16 20 0 14 Power Consumption US$/GJ 2002 12 Gasoline 100% Gasohol 22% Ethanol 100% 10 8 6 4 2 1985 1990 1995 2002 1980 0 Ethanol prices in Brazil Rotterdam regular gasoline price Source: Goldemberg 2004 *Source: Volkswagen (Brazil) - Presentation prepared for review within The Warren Centre for Advanced Engineering at Sydney University 13
  14. 14. Supply Overview – Brazilian Ethanol Exports Brazilian ethanol exports increased sharply in the last three years, resulting in US$ 1.6 billion export revenues in 2006. 1800 4 e 1600 eas cr 3,5 in % 52 US$ Million F.O.B. 1400 3 3 6: Billion Liters 0 1200 -20 03 2,5 20 1000 2 800 1,5 600 1 400 0,5 200 0 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Export Revenues - F.O.B. Exports (secondary axis) Source: Ministry for the Development of Industry and Commerce 14
  15. 15. Supply Overview The potential to expand world production is enormous North and Europe Central America Brazil 37% 35% 9.8% South America Asia 38% 16.2% Current Market Distribution of World Consumption Ethanol global market is 46.5 Billions Liters Ethanol as a Fuel is 30.6 Billions Liters, or 67% of total ethanol production Today the ethanol consumption is 2,6% of gasoline MKT Increasing ethanol to 10% of gasoline will represent 118 Billions Lt 15 15
  16. 16. Supply Overview - Increase in the supply of Biofuels • World Supply of Biomass and Waste reached 1,176 Mtoe in 2004 (10% of total supply); • According to the International Energy Agency Reference Scenario, it will reach 1,645 Mtoe in 2030, an increase of 1.3% p.a., still representing 10% of total supply. Non-Renewables 35 2004 13% 25 Shares (%) 21 Renewables 87% 10 6 2 1 Oil Coal Gas Nuclear Biomass and Hydro Other Waste Renew ables Source: World Energy Outlook 2006 16
  17. 17. But transport sector can still contribute to emission reductions (IEA alternative scenario) Reference Increase in Alternative Increase in Increased use of renewable Demand 2004-2030 (mtoe) Demand 2004-2030 (mtoe) fuels can contribute to reduce projected increase in energy for 45 transport by 7 %, to 15 % if 1,023 adequate policies followed. 659 77 132 42 Bio 2004-2030 Oil Bio Other Oil Bio Other Reference - Alternative 5% Total: 836 mtoe Total: 1,142 mtoe 18% United States 36% OECD Europe OECD Pacific The direct benefits in 4% Other OECD emission reductions would Brazil be equally distributed 9% China India between US, Europe OECD 5% Other Asia and the rest of the world 2% 16% Rest of World 4% 17
  18. 18. Brazil’s Advantages Average production costs are projected to drop by around a third between 2005 and 2030. • Ethanol production costs vary widely across countries, mainly due to climatic factors: crop production costs are much lower in tropical countries. • According to the IEA, costs in Europe and the United States would be significantly higher without crop and ethanol subsidies. Source: World Energy Outlook 2006 18
  19. 19. Diferenças de produtividade na cana de açúcar Latin America offers excellent potential to increase ethanol production •Availability of lands, water and low labor cost also benefit production in Central and South America. Latin America has the largest potential arable land per capita and only uses 13,9% of it. Sugar-Cane Productivity Yield per Hectare Potential Arable Land % of Potential Arable Land actually in use (1.000 ha per capita) 72,41 73 71,13 67,77 69,34 2,2 61,4 55,6 1,7 48,6 1000 Kg/Ha 0,6 13,9 0,2 Asia USA Central South Brazil America America Asia and Europe North Latin Asia and Europe North Latin World Average Pacific America America Pacific America America Source: FAO 19
  20. 20. Diferenças de produtividade na cana de açúcar Latin America’s Advantages • 33% of the world’s internal renewable water resources are concentrated in Latin America; Annual water use by sector Internal renewable water resources Latin America and Brazil Caribbean (m³ per capita – 1997) 18% 9% 35000 33.097 19% 30000 27.673 21% 61% 73% 25000 20000 World 15000 20% 10000 6.984 9% 5000 71% 0 World Latin America and Brazil Caribbean Agriculture Domestic Industrial Source: FAO 20
  21. 21. Ethanol Logistics System in Brazil Ethanol collection, storage and distribution centers are spread out Large scale marine terminals improve through producing efficiency and consuming regions Large storage capacity necessary to regulate supply Primary Base Secondary Base Pipelines reduce Collection Centers transport costs; improve Inland Navigation energy efficiency Railways Road Multi product pipelines 21 21
  22. 22. José Sergio Gabrielli de Azevedo Petrobras and the CEO and President August, 2007 Biofuels 22

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