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Edition 41 - Sharing in Petrobras - March/2014

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- Strategic Plan: horizon 2030 …

- Strategic Plan: horizon 2030
- 2014-2018 Business and Management Plan
- Declaration of commerciality in Transfer of Rights areas
- Libra Consortium
- Capital raising abroad
- 2013 net income was R$ 23.6 billion
- Oil and natural gas output expected to rise 7.5% in 2014
- Record in the pre-salt: 412,000 barrels/day
- Rising output at Cascade and Chinook
- New regasification terminal in Bahia
- Petrobras returns to F1 with Willians Martini Racing
- Cenpes turns 50
- Ultra-low sulfur gasoline launched in Brazil

Published in: Investor Relations

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  • 1. O n February, 2014, our Board of Directors (BoD) approved the 2030 Strategic Plan (2030 SP). By analyzing the business environment worldwide, particularly the aftermath of the 2008 global economic crisis, and the “unconventional” gas (shale gas) and oil (tight oil) production revolution in the US, in addition to Brazilian regulatory framework changes, we made our Major Choices which will guide our business through 2030. O The road to 2030 seems long, but the oil industry takes at least 7 years to implement common projects – from deciding to participate in bids, starting the exploratory phase and producing first oil from mega offshore projects. That is, from now to 2030, on average only two upstream project cycles will have passed. The major choice for 2030 SP was to increase our oil production up to 2020 and sustain it at an average of 4 million barrels of oil per day (bopd) for the 2020-2030 period, becoming one of the five largest integrated energy company in the world. Based on the oil production growth, we outlined our strategies for business segments, particularly expanding Brazilian refining capacity to 3.9 million bopd by 2030. Our international operations will focus on oil and gas exploration in Latin America, Africa and US. Strategic Plan: horizon 2030 HIGHLIGHTS Declaration of commerciality in Transfer of Rights areas We have submitted declarations of commerciality for the Santos Basin’s Franco (volume of 3.058 billion barrels of oil equivalent – boe) and Sul de Tupi (volume of 128 million barrels boe) areas to Brazil’s National Petroleum, Natural Gas and Biofuels Agency (ANP), under the Transfer of Rights Agreement. The proposal contains the new names suggested for these fields of Búzios and Sul de Lula, respectively. Libra Consortium In December, Petrobras and consortium members (Shell, Total, CNPC and CNOOC) executed the exploration agreement for the Santos Basin’sLibraarea.Theworkschedule,whichincludesseismicstudies, well drilling and Long Duration Test and the estimate between US$ 400 and US$ 500 million for 2014 have also been approved. Capital raising abroad In January, we raised € 3.05 billion and £ 600 million in the European market. In March, we raised a total of US$ 8.5 billion in the US market. These transactions are part of the 2014-2018 Business and Management Plan financial planning. 2014-2018 Business and Management Plan A s an extension of the 2030 SP, the BoD also approved the 2014-2018 Business and Management Plan (BMP), totaling US$ 220.6 billion, to be invested over the next 5 years. Our oil production targets in Brazil are 3.2 million barrels per day in 2018 and 4.2 million bpd in 2020. The Pre-Salt will account for 52% of our oil production in 2018. In order to achieve these objectives, Petrobras will invest US$ 153.9 billion in upstream in Brazil, 60% of which will go to the pre-salt and 40% to the post-salt. Another notable achievement is the completion of the Abreu and Lima Refinery in 2014 and of the first refining phase of Comperj in 2016. The funds to finance the Plan will come from operating cash flow (US$ 182.2 billion), use of surplus cash (US$ 9.1 billion), restructuring business models (US$ 9.9 billion) and debt (US$ 60.5 billion gross and US$ 5.6 billion net). More information: www.petrobras.com.br/ir March, 2014 • #41 www.petrobras.com.br/ir SHARING PETROBRAS NEWS
  • 2. Platform P-58 2013 net income was R$ 23.6 billion — O ur net income rose 11% from 2012 due to diesel (20%) and gasoline (11%) price increases in 2013, in- creased production of oil products, cost optimization, gains from sale of assets, lower write-offs of dry wells and lower foreign exchange impact due to hedge accounting. Adjusted EBITDA was R$ 63 billion, up 18% from 2012. Our fourth quarter net income was R$ 6.3 million, up 85% from the third quarter. The result reflects higher oil export volumes, lower write-offs of dry wells, gains from sale of asset BC-10 and tax benefit from the provision of interest on stockholders’ equity. Oil and natural gas output totaled 2,500,000 boe/day in 2013, down 2% from 2012, primarily due to production start-up delays of new systems, natural decline of fields and sale of assets abroad. Fourth quarter domestic output rose 1% from the third quarter. In 2013, five new platforms started- up and four other systems were sent to their permanent sites. Our proven reserves in Brazil reached 16 billion boe, a 1.6% increase from 2012, with a Reserves Replacement Ratio above 100% for 22 years in a row. Average production of oil products refined in Brazil totaled 2,100,000 bpd in 2013, up 6% from 2012, reducing the need to import diesel and gasoline. The Efficiency Increase Program (PROEF) contributed 63,000 bpd in additional oil output. The Divestment Pro- gram (PRODESIN) contributed R$ 8.5 billion to cash during the year. The Operating Expenses Optimization Program (PROCOP) achieved savings of R$ 6.6 bil- lion, exceeding the R$ 3.9 billion target set for 2013. Expenditures in 2013 totaled R$ 104.4 billion, 57% of which on Upstream. In thousand barrels of oil equivalent per day 4Q 13 3Q 13 Variation Total crude oil, NGLs and natural gas production 2,340 2,314 1% Total crude oil and NGLs - Brazil 1,960 1,924 2% Output of oil products 2,105 2,128 -1% Net Exports of crude oil and oil products -378 -425 -11% Refining and marketing operations Brazil – Utilization 95% 96% -1% Domestic crude oil of total feedstock processed 83% 82% 1% Operating performance In thousand barrels of oil equivalent per day 4Q 13 3Q 13 Variation Sales Revenues 35,593 33,955 5% Gross Profit 7,474 7,248 3% Operating Income* 3,091 2,501 24% Net income 2,760 1,484 86% Earnings per share 0.21 0.11 50% Adjusted EBITDA 6,832 5,721 19% Market Value** 92,425 102,753 -10% Capital Expenditures (CAPEX) 15,441 10,991 40% Net debt 94,579 86,542 9% Net debt/Adjusted EBITDA 3.21 2.87 22% Net debt/(net debt + shareholder's equity) 39% 36% 8% Economic and financial figures 163.82% 229.45% 58.57% Dec-03 Dec-05 Dec-07 Dec-09 Dec-11 Dec-13 PBR PBR/A Dow Jones 0 400 800 1200 1600 (Index number = 100 in 12/30/2003) Performance shares (NYSE): PBR and PBR/A * Net Income before financial results, share of profit of equity-accounted investments and income taxes. ** Source: Bloomberg. Period PBR PBR/A DJIA Last 10 years (12/30/03 to12/30/13) 163.82% 229.45% 58.57% Last year 12/30/12 to 12/30/13) -28.32% -21.24% 26.50% Petrobras ADR’s return (NYSE)
  • 3. Platform P-63 Platform P-55 O ur oil output in Brazil is expected to rise 7.5% in 2014. To achieve this, nine platforms were completed in 2013, adding an additional 1,000,000 barrels/day in output capacity. Units P-63 and P-55 started-up at the end of last year and platforms P-58 and P-62 will start-up in the first quarter of 2014, as well as P-61 and TAD (Tender Assisted Drilling). Two other units will also sustain this growth, Cidade de Ilhabela e CidadedeMangaratiba,whicharecurrentlyinthecompletionphase. Both platforms will start-up in the second quarter of this year. Rising output at Cascade and Chinook In March, oil output at the US Gulf of Mexico’s Cascade and Chinook fields reached 40,000 barrels/day. This is a record for these fields, which produce through five wells and are located some 260 km south of the mainland, at a depth of 2,500 meters. Record in the pre-salt: 412,000 barrels/day On February 27, we achieved a one-day pre-salt output record of 412,000 barrels of oil with only 21 production wells, confirming the high productivity of the fields. The record was aided by the start-up of the first well to produce by means of the innovative Buoyancy Supported Risers (BSR) technology on use on FPSO Cidade de São Paulo. Oil and natural gas output expected to rise 7.5% in 2014 — Source: Petrobras Gulf of Mexico Cascade Chinook Following expenditures of R$ 1 billion, operations got underway at our new Regasification Terminal, in Bahia, with a capacity of 14,000,000 m³/day of natural gas. Along with the Pecém (CE) and Baía de Guanabara (RJ) terminals, total capacity has now risen to 41,000,000 m³/day, nearly 1.5x the volume imported from Bolivia, providing greater flexibility and assurances to Brazil’s gas supply. New regasification terminal in Bahia
  • 4. Cenpes turns 50 In December of 2013, we celebrated the 50th anniversary of the Leopoldo Américo Miguez de Mello Research and Development Center (Cenpes). Established to anticipate and foster technological solutions necessary for our business activities, today the center is one of the largest of its kind in the world. Located at an area of 300,000 m² in Rio de Janeiro, the center boasts more than 200 laboratories, besides pilot plants. Cenpes has partnerships with some 100 universities and institutes and our R&D expenditures previously totaled R$ 2.4 billion. Ultra-low sulfur gasoline launched in Brazil The new ultra-low sulfur regular and premium gasoline went on sale in Brazil. The new fuels will reduce emissions of nitrogen oxides by up to 60%, carbon monoxide by up to 45% and hydrocarbons by up to 55% on vehicles built in 2009. Besides improving engine performance and extending useful life. The launch consolidates a new phase in the technological advancement of our fuels, whose quality is now comparable to the world’s most demanding markets. >>>> April 2 Ordinary and Extraordinary Meetings of Shareholders, in Rio de Janeiro >>>> May 12-15 Money Show, in Las Vegas AGENDA NewsletterpublishedbyPetrobras’ExecutiveManagementofInvestorRelations•Executivemanager:TheodoreHelms•Journalist:OrlandoGonçalvesJr.MTb-MA993•Collaboration: IzabelRamos,FernandaBianchini,DanielaUltra,JoséRobertoDarbillyandLuanBarbosa (trainee)• Graphicprojectanddesktoppublishing: EstúdioMatiz. Shareholder Service: Av. República do Chile, 65/Sala 1002 – Centro •Rio de Janeiro – RJ – Brazil •Zip Code: 20031-912 Telephone: +55 21 3224-9916 •Fax: +55 21 2262-3678 •E-mail: acionistas@petrobras.com.br •Site: www.petrobras.com.br/ir Petrobras returns to F1 with Willians Martini Racing We have signed a technology partnership agreement with team Williams Martini Racing and have returned to Formula 1 for the 2014 season. We will work with the team to develop new fuels and lubricants. NEWS PANEL