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Edition 25 - Sharing in Petrobras - number 4/2007

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  • 1. Investor Relations • Year VII • nº 25 Petrobras em Ações Sharing in Petrobras Discovery of Brazil’s HIGHLIGHTS Three-time winner at Bovespa ■ In December, Petrobras was awarded for the third time in a row, at the São Paulo Stock Market (Bovespa), the “Publicly-Traded Company – The new oil province Most Traded”. The award is the acknowledgement P of the increasing liquidity of the company’s shares etrobras announced in November the discovery of the and shows the Company’s continuous effort to Brazilian new oil province, oil province, equivalent to the enhance its shareholders base, which presented world’s most important ones, extending through the Espírito Santo, an increase of 52,385 new participants in the past Campos and Santos basins, in the so-called pre-salt area (explored for the two years. For this purpose, Petrobras has given equal treatment to all of its investors and carried first time). It is 800 km long and 200 km wide, and is located in out initiatives focused on the access of small and water depths between 2 and 3 thousand meters. midsize investors to its issued bonds. The volume that was discovered in the Tupi accumulation alone, which represents a small portion of the new frontier, may increase by Petrobras’ market value 50% Brazil’s current oil and gas reserves, amounting nowadays ■ The strong increase of the oil international prices and the Company’s operational and financial to 14 billion barrels. The area is operated by the Company, in partnership performance favored the good performance of with the British group BG and the Portuguese company Galp Energia. Petrobras’ shares in the first nine months of 2007. Light oil (of high commercial value) was found, as well as a large amount Its market value reached US$ 155 billion at of associated natural gas. the end of the third quarter of this year, which is 77% higher than the corresponding period in 2006. More discoveries and new exploratory frontiers The shares surpassed BOVESPA’s performance in At the end of 2007, more discoveries were announced. One of them the last quarter. In December 12, 2007, the market was in the Xerelete field, in the Campos Basin, where studies indicate that value amounted to US$ 232 billion. the total area may reach an approximate volume of 1,4 billion Sales Record barrels of equivalent oil. In addition, gas and light oil were discovered ■ In August and September 2007, Petrobras in Camarupim, in the Espírito Santo Basin. has broken two more sales records. In August, Regarding its performance growth, Petrobras won the right to explore 57,4 million barrels were commercialized, a historical record in the Brazilian market. In in new frontiers. In the United States, it was the highest bidder in the September, the sales reached 54,5 million barrels, auction for 26 blocks in the Gulf of Mexico, in partnership, with investment a monthly record, when compared to the same amounting to US$ 108,1 million. These new blocks will be incorporated period in the last five years. The results to the Company’s exploratory project portfolio, which totals 338 blocks, demonstrate the Company’s integrated effort to 200 of which directly operated by Petrobras. In Brazil, it was the top bidder meet the demands of the Brazilian market. for 27 blocks offered in auction, on its own or in partnership, with an Biodiesel acquisition investment of US$142 million. ■ In December, Petrobras and its subsidiary Thus, Petrobras enhance its portfolio in areas of Refap S.A signed agreements for the acquisition of exploration and production in order to achieve the 380 million liters of biodiesel from the 15 producing objectives defined in its Strategic Plan. units that won the auctions held by the National Petroleum, Gas and Biofuels Agency (NPA). This acquisition refers to the 2% biodiesel addition to the diesel fuel to be commercialized by fuel distributors in the first half of 2008, deliveries beginning as of January 1st, 2008. Global Notes ■ In November, Petrobras, through its subsidiary Petrobras International Finance Co. (PIFCo), concluded the issuance of US$ 1 billion of senior unsecured Global Notes in the international capital market, due on March 1st, 2018. This issuance Refining in Renewal Progress is aligned with the strategies to access the long-term both sides of in Bovespa’s in capital market, refinance prepayment of maturing the world CSI (ISE) fuels debts and reduce the cost of capital. PAGE 3 PAGE 4 PAGE 4
  • 2. PROFITABILITY Results for the third quarter of 2007 P etrobras’ Net Operating Revenues Processed crude in overseas overseas business opportunities in off- presented an increase of 17% in refineries increased 93% in relation shore operations. relation to jan-sep/2006. The oper- to jan-sep/2006, due to the opera- The net balance between crude oil ating cash generation measured by tions of Pasadena refinery (USA) and and oil product exports and imports EBITDA was superior to US$ 18 billion, the upturn of Argentinean refining increased 10% in the first nine months guaranteeing the resources for signifi- capacity, offset by the sale of the of 2007. In this period, investments cant increase of the investment vol- Bolivian refineries in June 2007. The reached US$ 14 billion, representing a ume. These investments, fundamental total by-product production pre- growth of 46% over the same period for the expansion of the oil and gas sented an 8% growth in the first of the previous year. production, reached US$ 14 billion in nine months of the year, due to the The domestic unit lifting cost, in the first nine months of 2007, repre- increase of the international produc- Reais, including government participa- senting a growth of 46% over the tion, which was 147% higher in the tion increased by 3% due to the impact same period in 2006. same period. The domestic production of the appreciation of the Real. Excluding The net profit, 3% higher than the remained flat. Domestic unit refining government participation, it increased by same period last year, reflects the appre- cost, in dollar, moved up 20% in rela- 16%, pushed by higher operating expen- ciation of the Real on the net assets in tion to the period of jan-sep/2006, due ses due to the heating up of the industry dollar. to increased operating expenses, as and the increase of the workforce needed The domestic oil production well as the increased number of sched- for the new projects. increased by 2% over jan-sep/2006, uled stoppages. The total indebtedness of the due to the operational start-up of Domestic sales volume moved up 3% Petrobras System was 2% higher in platforms, which added approximate- in relation to jan-sep/2006. International relation to 06/30/2007, due to the ly 200 thousand barrels/day, more sales increased 33%, when compared prepayment of debts and the apprecia- than offsetting the natural decline in to the same period of the previous year, tion of the Real. The net debt increased production. The international produc- due to the inclusion of the operations of 18% caused by the reduction in cash tion fell 16% in this period, due to the the USA refinery and the distributors due to major investments, prepayment exclusion of the Venezuelan produc- acquired from Shell in Paraguay, of debts and investments in long-term tion as of April 2007. Uruguay and Colombia, and the new securities. Petrobras ADRs versus DOW JONES and Amex Oil Indexes Economic and Financial Figures RESULTS & RETROSPECTIVE Jan-Sep 1189.2% (PBR/ADR ON) In US$ million 2007 2006 Variation (%) 1111.5% (PBRA/ADR PN) Sales of products and services 79,983 69,267 15.5 1,550 1,450 219.9% (Amex Oil) 1,350 60.3% (Dow Jones) Net operating revenues 62,411 53,327 17.0 1,250 1,150 Gross profit 23,664 21,870 8.2 1,050 950 Net income 10,326 10,040 2.8 850 750 Earnings per share 2.35 2.29 2.6 650 550 Net cash provided by operating activities 15,919 15,438 3.1 450 350 250 Capital Expenditures 14,005 9,598 45.9 150 50 Net debt 12,978 8,937 45.2 Dec-02 Feb-03 Apr-03 Jun-03 Aug-03 Oct-03 Dec-03 Feb-04 Apr-04 Jun-04 Aug-04 Oct-04 Dec-04 Feb-05 Apr-05 Jun-05 Aug-05 Oct-05 Dec-05 Feb-06 Apr-06 Jun-06 Aug-06 Oct-06 Dec-06 Feb-07 Apr-07 Jun-07 Aug-07 Oct-07 Nov-07 Debt to equity ratio 50% 52% -2 pp Real Increase in Stock Price* Operating Performance Jan-Sep ■ Ibovespa In thousand barrels of oil equivalent 2007 2006 Variation (%) 800% ■ Petrobras PN Average daily crude oil 700% 679.2% and gas production 2,306 2,285 0.9 ■ Petrobras ON 600% Oil product production 2,046 1,888 8.4 500% 419.4% Net imports 89 81 10 400% 385.2% 372.4% 332.8% Refining and marketing operations 300% Brasil – Utilization 90% 90% – 200% 164.2% 100% Refining and marketing operations 40.9% 48.9% 58.7% International – Utilization 85% 79% + 6 pp 0% 10 Years 5 Years 1 Year Domestic crude oil of total * Monthly changes discounted for inflation in accordance with IGP-DI index feedstock processed 78% 80% -2 pp
  • 3. TECHNOLOGY REFINING Production is increased by new platforms T he first phase of operation of the Submarine Centrifuge Pumping System (BCSS), with Petrobras technology, installed in the Campos Basin, was successfully completed at the end of 2007. The system increases producer field productivity and makes commercial production viable in fields previously considered unviable. In October, Petrobras started the In both sides production in the Piranema field, in Sergipe. The new platform is the result of the world of a joint project of the Company and the Norwegian company Sevan I n November, Petrobras acquired Production, with investment of 87,5% interest in the Japanese approximately US$ 1,2 billion. It is a refinery Nansei Sekiyu Kabushiki floating unit of the FPSO kind (which Kaisha (NSS), by approximately US$ 50 produces, stores and transfers oil) Sevan Piranema million. Besides Petrobras, Tonen and has unprecedented technical General and Sumitomo are also share- characteristics: round hull, and more holders of the company. versatility and stability, ensuring day in 2008. Platform P-54 has also The refinery has capacity to process more safety to the operations. The started operating. Designed to pro- 100 thousand bpd of light crude oil field will initially produce 10 thou- duce 180 thousand barrels per day, it and produces high quality byproducts. sand barrels of light oil per day and it will produce 460 thousand barrels/ day It has also a storage terminal with may reach 30 thousand barrels per at peak production. capacity of 9,6 million barrels, and day in 2008. The agreement for the construc- three piers to receive vessels of up to In November, the platform FPSO tion of the hull for platform P-55 was 97 thousand deadweight tonnage Cidade de Vitória was put online in signed by Petrobras in October. The (dwt). The terminal will also facilitate the Campos Basin, with a production total cost will amount to US$ 392,6 the commercialization of biofuels in of 20 thousand barrels per day of light million. Another agreement was also Japan and will complement the current oil. In 2008, the production should signed for the construction of the trading of crude oil and byproducts in be of 80 thousand barrels/day. P-56 semi submersible platform. The the region. The business – aligned Platform P-52 started production total value will reach US$ 1 billion and with the Company’s Strategic tests by lifting 20 thousand barrels/ 200 million. These two new platforms Plan – is an important milestone for day and full capacity of 180 mil barrels/ will be installed in the Campos Basin. Petrobras, which will enter in refining operations in Asia for the first time. In Brazil, the construction works for the Abreu e Lima Refinery, in Pernam- New investments PETROCHEMICAL B buco, were started in the second half etween October and November, Petrobras carried out actions to incre- of the year. This project register the ment its performance in petrochemicals. At the end of October, the resumption by Petrobras of the down- acquisition of Suzano Petroquímica’s share control was concluded. stream industry’s expansion in Brazil. Suzano Petroquímica will remain a distinct legal entity, maintaining its opera- The total investment amounts to tions, personnel and agreements, and will use the Nova Petroquímica brand US$ 4,05 billion and the opening until the integration is completed. is foreseen for the second half of In November, Petrobras and Unipar (União de Indústrias Petroquímicas) 2010. Thousands of direct and indi- concluded the negotiations to establish a company – 60% Unipar and 40% rect jobs will be generated during the Petrobras – which will be the second largest Brazilian petrochemical group. construction works and at the begin- Unipar is one of Brazil’s most traditional corporate groups and it has per- ning of the operations. formed in the segment for more than 35 five years. The new unit, which will use heavy In November as well, Petrobras signed an investment agreement with the crude and will have the capacity for Odebrecht Group that foresees the increase of the Company’s participation in processing 200 thousand barrels Braskem’s total capital from 6.8% to 25%, consolidating the largest Brazilian per day, will be the first one to petrochemical group. process 100% of heavy crude and These actions integrate Petrobras’ strategy, started with Ipiranga’s acquisi- produce low sulfur by-products. tion, to restructure the petrochemical sector with companies, which are capable to face the multinational competitiveness.
  • 4. NEWS BOARD SUSTAINABILITY Progress in fuels etrobras has started a new stage of the try’s most expressive agribusiness residue. P bioethanol research project, produced from agribusiness residues. So, the Company As a result of this research, Petrobras has already applied for two patents – with one enters the second generation of biofuels, of them, it reached the milestone of one holds a pioneering position and contributes to thousand patent applications made by the reinforce Brazil’s natural vocation for renew- company. able energies. By 2009, with an investment of US$ 4,9 After the lab test stage, the project, billion*, Petrobras will supply diesel with 50 developed jointly with Brazilian universities, ppm of sulfur for heavy vehicles, which will will progress to the pilot scale test phase at adopt the new technology to comply with the only unit of its kind in Brazil, in Rio de the requirements of the Vehicle Air Pollution Janeiro. The system uses the sugarcane Control Program (Proconve), created by the bagasse as main base, as this is the coun- National Environment Council (Conama). Renewal in Excellence in the Amazon Bovespa’s CSI P etrobras announced the (ISE) implementation of the Center for Environmental Excellence in the Amazon (Ceap), which will contribute to reduce the risks of oil F or the second consecutive year, Petrobras’ participation in the São Paulo Stock Market – Bovespa’s industry interventions and to foment researches. The investment Corporate Sustainability Index (CSI) of US$ 260 million, up to 2012, has been renewed, due to its high reinforces the socio-environmental level of commitment to sustainabili- Awards responsibility commitment, which ty and social responsibility. The is essential for sustainable activities O n the second half of 2007, Petrobras won several national and international awards, which in the area. The Center for Environmental Defense (CDA – Sul) Company’s ordinary and preferred shares will have the weights of 11.12% and 13.88%, respectively, acknowledged its performance and its was also inaugurated in Itajaí (SC). totaling 25%, the CSI’s biggest indi- governance process. The Investors’ area vidual weight. won two Aberje local awards, the most important award of the Brazilian cor- Petrobras’ participation has also porate communication, with investors’ Exports to been renewed in the Dow Jones Sustainability Index (DJSI), the world’s relation projects. Through the Downstream area, Europe and Asia most important index in the area. the Company won for the first time the In November, Petrobras exported These renewals represent a major 2007 National Quality Award (PNQ), 9 million liters of ethanol to the achievement and are the outcome Brazil’s main award directed to organi- European market via the Port of of the Company’s efforts to reach its zations that achieved the excellence in Suape in Pernambuco. strategic objectives of growing with their management and result practices. The product was acquired from a profitability and social and environ- Petrobras University was granted pool of mills in the area. This was mental responsibility. the Corporate University Best in Class the first operation of its kind 2007 award, in the United States, which performed by the Company, acknowledges the world’s best corpo- which also signeda memorandum rate universities. of understanding with Samsung Also in the USA, the Company was Corp., in December, to carry out awarded the Carolita Kallaur award for studies for the ethanol its (and its contractor’s) high level of production. Its purpose is to performance in maritime installation meet the future demand of the operating safety. South Korean market, which will And the Ibero-American Quality introduce ethanol in its energy Award, in Colombia, made the Company matrix in 2009 to comply with the first of the oil sector in that country its commitment with the to receive this international recognition. Kyoto Protocol. Newssheet edited by Petrobras' Investor Relations Department • Executive Manager: Theodore Helms • Editor: Cláudio Paula (RJ-21059-JP) • Writer: Orlando Gonçalves Jr. • Colaboration: Ana Paula Carvalho and Fábio Rocha • Contact: Petrobras' Shareholders Department • Phones: (55-21) 3224-1540/4914 • 0800 282-1540 • Fax: (55-21) 2262-3678 • Address: Av. República do Chile, 65 / 2202-B • Centro – Rio de Janeiro – RJ – Brazil – 20031-912 • E-mail: acionistas@petrobras.com.br • Design: Estúdio Matiz Depositary Bank: JPMorgan Chase Bank • JPMorgan Depositary Receipts • 4 New York Plaza, 13th Fl. • New York, NY 10004 • +1 (866) JPM-ADRS (576-2377) Visit our website at www.petrobras.com.br/ri/english