"Biofuels "

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"Biofuels "

  1. 1. What is driving growth in transport fuels? Alternative Energy Conference Biofuels Sillas Oliva Filho Alcohol and Oxygenate Trading Manager
  2. 2. Petrobras in Numbers proven reserves: 16 Refineries with a capacity of 2,125 14.9 billions of boe (SEC) millions bpd oil and gas production:* 2,217 million boe/day Vessels: 50 owned and 75 tcp Oil rings in operation: 97 Refine, Transportation, Pipelines: 30.343 km E&P Trading Gross Revenue 6,154 gas US$ 72 billions stations in Brazil (33% of retail market) Petrochemicals Retailing ethylene production: 2,4 727 gas stations in millions ton/year Argentina Gas & Energy 25% of retail market in Bolívia and 14% in Argentina gas sales: 45,000 m3/day Thermoelectric: 9 – 3.2 GW *Brazil and abroad
  3. 3. Strategic Planning for Biofuels Petrobras Mission Operate in a safe and profitable manner in the oil, gas and energy industry in Brazil and abroad, with social and environmental responsibility, providing products and services that meet client's needs. Business Strategy Diversify the business portfolio (emphasizing petrochemicals, logistics and commercial operations of new energy products), anchored in the synergy of downstream assets and capabilities; Develop, coordinate and implement activities related to energy efficiency and renewable energy at Petrobras companies and to final consumers. Selective entry into renewable energy projects. Corporate Target for Carbon Credits Carbon credits generated in renewable energy projects 1,200 million CO2 by 2010.
  4. 4. Business Strategy Renewable Energy Investments will go towards the following priority sources energy: Biomass energy Photo voltaic Bio-diesel production Main targets for 2010 EMBRAER – E100 Availability or 169 MW Produce 8,200 bpd of biodiesel
  5. 5. Brazilian Experience Fuel Ethanol Program Evolution Ethanol Program of Program Gasohol and Emission Renewable Implanted Ethanol Cars Controls Gasohol and Hydrogen (BLENDS) (2nd oil shock) (PROCONVE) Flex fuel Cars Program for oil imports reduction Environmental Benefits 70’s 80´S 90´S 00´S Future
  6. 6. Why did ethanol become a fuel in Brazil? First car operating 100% ethanol Fiat 147 – 1979 Brazil was an oil importer; Looking for fuel diversification; An alternative and internal solution;
  7. 7. Brazilian Energetic Matrix - 2004 Renewable Sources 43.9% Wood Sugarcane 13.5% Other renewable 13.2% sources 2.7% Hydroelectricity 14.4% Uranium 1.5% Petroleum and derivatives 39.1% Coal 6.7% Natural gas 8.9% 100% = 213.4 millions [toe] Source: Brazilian Energy Balance (2005)
  8. 8. INTEGRATED SUGAR & ETHANOL PRODUCTION INTEGRATED SUGAR & ETHANOL PRODUCTION Process Heat & Sugar Cogeneration Production Bagasse Primary Juice Transport, Juice Sugarcane Cleaning & Crushing Treatment Secondary + Filter Juice Hydrous Distillation Fermentation Ethanol Anhydrous Molasses Ethanol Dehydration Source: UNICA
  9. 9. Ethanol: Learning Curve More than 400 types of Sugar-Cane Trend (Anhydrous Ethanol Prices) Trend (Rotterdam Gasoline Prices) Prof. Goldemberg, Coelho, Nastari and Lucon - USP
  10. 10. Why FFV in Brazil? FFV changed fuel market: Consumer want to decide the fuel at the gas station Fuel price is one the most important factor Consumer is aware of pollution and renewable fuels Today cars manufacturer is producing 80% of FFV in Brazil
  11. 11. Jan-03 Feb-03 Mar-03 Apr-03 E May-03 Jun-03 thanol Jul-03 Aug-03 Sep-03 G Oct-03 asoline Nov-03 Dec-03 Jan-04 Feb-04 F FV T Mar-04 Apr-04 May-04 LIGH VEH Jun-04 Jul-04 Aug-04 Sep-04 Oct-04 Nov-04 Dec-04 Jan-05 Feb-05 Mar-05 ICLES TOTAL SALES Apr-05 May-05 Jun-05 Jul-05 Aug-05 Sep-05 Oct-05 Nov-05 Dec-05 Jan-06 Feb-06 Mar-06 0 units 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 110,000 120,000 130,000 140,000 150,000
  12. 12. LIGHT VEHICLES FLEET (thousand units) 20,000 CNG vehicles FFV since 2003 335 1,108 44 18,000 807 439 626 1,004 288 764 782 810 143 734 843 16,000 57 686 18 1,996 1,820 632 2,230 1,678 9 597 2,449 546 2,712 14,000 5 2,972 499 3,221 3,471 12,000 3,716 10,000 8,000 14,439 14,680 14,431 14,075 13,506 12,755 6,000 11,399 12,019 10,463 9,088 4,000 2,000 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Gasoline Ethanol Diesel Oil CNG FFV
  13. 13. jan/04 feb mar apr may jun FFV jul aug sep oct nov dec Gasoline jan/05 feb mar apr may jun Diesel Oil jul Light Vehicles Sales aug sep oct nov dec Ethanol jan/06 feb mar 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
  14. 14. A New Opportunity for Business Ethanol global market – 46.5 Billions Liters North and Central Europe America 9.8% 37% Brazil 35% South America Asia 38% 16.2% How much the production can be increased to attend the demand with social responsibility?
  15. 15. Main Production Areas in Brazil North East Region - 11% Production 1% 1% 2% 2% 5% 5% 4% 5% 3% 2% 61% 1% Mid South Region - 89% Production 8% Source: Brazilian Government
  16. 16. Potential Land for Sugar Cane Withouth Irrigation High Medium Low Unusable CTC - UNICAMP
  17. 17. Land use in Brazil Area Type (Mha) • Total country 851 • Native Amazon Forest 370 • Secondary Amazon Forest and Others 180 • Native Forests 6 • Pasture 197 • Temporary Cultures 59 • Permanent Cultures 7,6 • Available land 263 • Available land with low impact (*) 90 Source: FAO, 2002 and EMBRAPA (*)
  18. 18. Ethanol Logistic to Export New Ethanol Pipeline (800 km) New Water Way for Ethanol Ethanol Export 8.0 Million m3 in 2012 Marine Terminal Rio de Janeiro Marine Terminal São Paulo
  19. 19. Sustainable Energy CO2 CO2 Capture Emission Ethanol Ethanol Production Use Guarantee of Guarantee of social social Ethanol Ethanol responsibility responsibility
  20. 20. Facts about Ethanol Market in 2005 Ethanol global market is 46.5 Billions Liters Ethanol as a Fuel is 30.6 Billions Liters Ethanol as a Fuel is 67% of total ethanol production Today the ethanol consumption is 2.6% of gasoline MKT 10% of ethanol in gasoline will represent 118 Billions Lt 1 Ton Sugar Cane ~ = 1.2 boe SUGAR 153 KG 608 x 103 KCAL BAGASSE (50% UMIDADE) 276 KG 598 x 103 KCAL LEAVES (*) (15% HUMIDY) 512 x 103 KCAL 165 KG 1 Ton-Field 1 boe 1718 x 103 KCAL 1718 x 103 KCAL 1,386 x 103 KCAL
  21. 21. Ethanol as a Fuel around the World Why Ethanol Market is now an alternative? Reduction of the oil dependence Energy diversification Agribusiness development MTBE and lead replacement Kyoto Protocol Carbon Credit Opportunities
  22. 22. Ethanol as a Fuel - New Market Guarantee of Supply • Reliable and stable supply Contracts: • Development of price mechanism • Infrastructure development International Ethanol Prices: • On line information International Future Market (international commodity)
  23. 23. Conclusion Petrobras, as an integrated energy Petrobras, as an integrated energy company, can have an important role in the company, can have an important role in the development of this market and contribute development of this market and contribute to develop friendly and environmental to develop friendly and environmental solutions. solutions.
  24. 24. Sillas Oliva Filho sillas@petrobras.com.br Ethanol and Oxygenate Manager

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