Refining, transportation & marketing (rtc), and petrochemicals

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Refining, transportation & marketing (rtc), and petrochemicals

  1. 1. Refining, Transportation & Marketing  (RTM), and Petrochemicals (RTM) and Petrochemicals Paulo Roberto Costa Downstream Director 26th October, 2011 , 1
  2. 2. DISCLAIMER This presentation may contain forward-looking Cautionary statement for U.S. investors: y statements. Such statements reflect only the expectations of the Companys management The United States Securities and Exchange regarding the future conditions of the economy, Commission permits oil and gas companies, the industry, the performance and financial in their filings with the SEC, to disclose results of the Company, among other factors. proved reserves that a company has Such terms as "anticipate", "believe", "expect", demonstrated by actual production or "forecast", "intend", "plan", "project", "seek", conclusive formation tests to be economically "should", along with similar expressions, are and legally viable under existing economic used to identify such statements. These and operating conditions. We use certain predictions evidently involve risks and terms in this presentation, such as uncertainties, whether foreseen or not by the discoveries, that the SEC’s guidelines strictly Company. Consequently, these statements do prohibit us from including in filings with the not represent assurance of future results of the SEC. Company. Therefore, the Companys future results of operations may differ from current expectations, and readers must not base their expectations solely on the information presented herein. The Company is not obliged to update the presentation and forward-looking statements p g in light of new information or future developments. Amounts informed for the year 2011 and upcoming years are either estimates or targets. 2
  3. 3. BUSINESS MODELOperating as an integrated balanced oil company, dominant in Brazil Exploration & Production • Focus on production in deep and ultra‐deep waters; • Licensed blocks guarantee access to reserves and economies of scale; • New exploratory frontier, adjacent to existing operations. Downstream D • Dominant position in a growing market, far from other refining  centers; •Balance and integration between production, refining and demand. Gas and Power • Gas infrastructure develeped for processand and transfer of gas; Gas infrastructure develeped for processand and transfer of gas; • Complete flexibility to consume domestic and imported gas. Biofuels • High productivitiy of Brazilian ethanol; • Large areas of available unused agricultural land; • Large consumer market, with fleet and distribution in place. Large consumer market, with fleet and distribution in place. 3
  4. 4. RESERVES AND RECOVERABLE VOLUMESRapid growth in reserves from discoveries in deep waters  Proved Reserves  – SPE criteriaMillion boe 30.000 25.000 20.000 Pre‐salt: Lula  and Cernambi 15,28 Bi boe 15.000 15 000 Whales Park Park,  Mexilhão  Roncador 10.000 Marlim 5.000 Namorado Guaricema Garoupa p Carmópolis 0 Onshore 0‐300 m 300‐1500 m > 1500 m Pre‐salts Recoverable Volume * Transfer of Rights * Lula/Cernambi, Iara, Guará and Whales Park, ranging from 8.1 to 9.6 Billion boe 4
  5. 5. PRODUCTIONPetrobras history is to grow production by expanding into new frontiers 2.004 2000 8,2% p.y. in the last  30 years 8,2% p.y. in the last  30 years Deep and ultra‐deep water 1600 Shallow Water Onshore 1.271 1200 1.601 653 749 Mil bpd 800 42 400 400 292 181 189 75 211 230 214 0 106 1980 1990 2000 2010 • 123 offshore units (45 floating e 78 fixed) 123 offshore units (45 floating e 78 fixed) • 25 new units installed in the last 5 years P‐56 FPSO Cidade de  Angra dos Reis P‐57 FPSO Cidade de  Santos FPSO Cidade de Santos 5
  6. 6. PRODUCTIONWith access to abundant reserves, Petrobras can more than double production 6,418 142 246 1.120 1 120 3,993 125 180 + 35 Systems 2,575 2 575 2,772 618 2,386 2,516 +10 Post‐Salt Projects 93 96 96 141 +8 Pre‐Salt Projects 4,910 99’000 boe/day 132 144 435 111 317 334 +1 Transfer of Rights 321 3,070 845 Transfer of Rights Added Capacity 1.971 2.004 2.100  13 1.855 Oil: 2,300,000 bpd Pre-Salt 1,148 543 2008 2009 2010 2011 2015 2020 Oil Production‐ Brazil Natural Gas Production ‐ Brazil Oil Production ‐ International Natural Gas Production ‐ International • Pre‐salt and Transfer of Rights will represent 69% of the additional capacity up to 2020; • Pre‐Salt participation in the total production will enhance from the current 2% to 18% in 2015 and 40.5% in  2020. Note: Does not include Non‐Consolidated International Production. 6
  7. 7. MONETIZING THE RESERVESBrazilian market is an attractive and sustainable way to monetize part of Petrobras reserves Growth A GROWING MARKET IN BRAZIL CREATES DOWNSTREAM OPPORTUNITIES… OPPORTUNITIES… 27.1 Petroleum Consumption 25.0 (per capita) 21.7 16.0 15.3 14.8 12.6 12.4 10.7 4.5 4.6 3.7 2.3 1.4 0.6 0.8 1.0 0.3 US Japan OECD OECD1 Brazil China India 1980 2000 2009 Source: BP Statistical Review Note: 1. Includes France, Germany, Italy and the UK 18 Margins and Refining Profile Allocation Distance PRODUCTS Sustainable New refineries will produce higher value‐added oil products Productivity of existing refineries  Productivity of existing refineries – 2020 Productivity of new refineries  Productivity of new refineries – 2020 65% Competitive 43% 38% 36% 21% 21% 50% 19% Advantage 4% 15% 10% 4% 9% 7% 15% 15% 11% • Lead-Times 5% 6% 4% • Tanks Medium Distillated Light Others Medium Distillated Light Others • Inventories • Ships Diesel Gasoline Naphtha Fuel Oil Jet Fuel LPG Special Intermediary • Increase in global demand for medium‐distillated products tends to lead to an increase in price versus the  Crude freight gasoline price. Product freight 8 40 Return and Risks Downstream profitability… D t fit bilit Downstream Net Profit Margin (%) 1 Adjusted EBITDA Breakdown per Segment (US$ bn) Competitors Range 7 1 0.2 PBR 1.4 6 1.1 5 1 0.9 1 0.5 0.8 1.1 4 5.2 3 11.0 2 1 1 0 35.4 -1 25.0 -2 6 19.3 -3 06 07 08 09 10 Source: Reuters Knowledge TO COME Net Profit Margin = Net Profit / Total Revenue -0.8 -1.6 Competitors: XOM (US), XOM (non-US), CVX, RDS, COP -0.2 2007 2008 2009 1S09 1S10 E&P Downstream Distribuition G&E International 50 7
  8. 8. Growth Potential 8
  9. 9. During recent years, the Demand growth in Brazil has increasedits’ speed when compared with GDP growth … GDP and Demand growth rates (yearly) 11-20 GDP Forecast 11-20 Demand Forecast 12 Historical Demand 10 Historical GDP 8 6 5,5 55 4,1 4 2 3,8 4,5 0 Lower Higher ‐2 GDP GDP ‐4 4 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011* Percentage points (p.p.) of Demand growth above GDP growth 4 Forecast 2 Historical p.p. difference Historical average p.p. difference 0 ‐2 -0,3 0,3 10 -1,0 ‐4 Lower Higher GDP GDP ‐6 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011* 9
  10. 10. JET FUEL MARKETA sharp growth in the air transportation industry has been observed in recent years Number of passengers carried - air transportation (thousand) Seats / Km available10.000 13.000 9.000 12.000 +12%a.a. 12% 8.000 11.000 +12%a.a. 10.000 7.000 9.000 6.000 8.000 5.000 5 000 7.000 4.000 6.000 jan 07 jan 08 jan 09 jan 10 jan 11 jan 12 jan 07 jan 08 jan 09 jan 10 jan 11 jan 12 In 2010, for the first time in our history, the number of travels interstate by p plane exceeded the travels by bus ySource: ANAC 10
  11. 11. AIR TRANSPORTATION The significant reduction in the airline tickets prices associated with the expansion of income in Brazil led to an accelerated growth in the sectorof income in Brazil led to an accelerated growth in the sector Yield Revenue R$ (deflated by IPCA) Economic indicator that expresses the unit revenue earned by airlines per each paying passenger per kilometer in Brazil 1,1 R$ 2011 1,0 0,9 0,8 0,7 -62% 0,6 0,5 05 0,4 0,3 0,2 02 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012Source: ANAC http://www2.anac.gov.br/estatistica/tarifasaereas/ 11
  12. 12. CONCENTRATED TRANSPORT MATRIX The Brazilian transportation matrix strongly depends on trucks Russia 81% 8% 11%Canada 46% 43% 11%Australia 43% 53% 4% USA 43% 32% 25% China 37% 50% 13% Brazil 25% 58% 17% Average Trucks Fleet Age (y) Trains Trucks Maritime and Others Brazil Spain USA Germany EnglandSources: Plano Nacional de Logística e Transportes 2010 (PNLT), Ministério dos Transportes,Anuário do transporte de carga and Eurostat - 2007 12
  13. 13. DIESEL DEMANDThe diesel demand has also increased sharply ... not only based on recovery of the industrial ... but also due to agricultural activity growth in activity, ... Brazil over time Index - Industrial Output145 180140 170 +52%135 160 132130 150125 140120 130115 120110 110 GDP105 100 Agriculture GDP 104100 90 04 00 01 02 03 05 06 07 08 09 10 1Q0 1Q0 1Q0 1Q0 1Q0 1Q0 1Q0 1Q0 1Q0 1Q0 1Q1 jan 2008 jan 2009 jan 2010 jan 2011 The cargo transportation matrix in Brazil is highly dependent upon trucks, with the th growth i economic activity boosting diesel demand. th in i ti it b ti di ld d 13
  14. 14. MIDDLE DISTILLATE DEMAND EVOLUTIONStrong diesel and jet fuel consumption growth in Brazil have been observed following the economic growth… Diesel Sales (2006 to 2011/jun) 4,1% 8,7% +9% 5,5% Jan‐Jun 10 Jan‐Jun 11 • The 1S2011 sales exceeded expected growth, keeping a faster faster- 2006 2007 2008 2009 2010 Jan‐Jun 11 than-GDP growth. Jet Sales (2006 to 2011/jun) 13,4% +17% 9,7% Jan‐Jun 10 Jan‐Jun 11 • The same higher-than-GDP acceleration was verified during first semester 2011. 2006 2007 2008 2009 2010 Jan‐Jun 11 14
  15. 15. HIGH GROWTH POTENTIALLow per capita consumption supports demand growth in developing countries Total Oil Consumption Per capita consumption (Index =100 in 2002) Barrels per year 27,1130 25,0 1980125 22,3 2000 2010120115 16,0 15,3 14,8110 12,8 12,4 12 8 12 4105 9,9100 4,5 4 9 4,9 95 3,7 1,4 2,5 90 0,6 2002 2003 2004 2005 2006 2007 2008 2009 2010 OECD US Brazil World OEDC Source: BP Statistical Review 2011 15
  16. 16. POTENTIAL INCREASE OF OIL PRODUCTS CONSUMPTIONBrazil still has a low motorization rate Licenses for new vehicles 17,4 18,0 2000 2010 11,8Million of units 2015 6,0 5,0 50 4,0 40 3,7 3,2 3,5 3,0 2,6 2,7 2,7 2,2 2,1 1,5 0,8 United States United States Japan Germany France Italy China Brazil India Number of vehicles per 1000 habitants Number of vehicles per 1000 habitants 814 688 2010 592 545 599 2015 208 153 47 16 United States Japan Germany France Italy China Brazil India 16
  17. 17. GROWTH DEMANDEconomic growth and improved living standards will lead to a significant increase in oil products demand in Brazilproducts demand in Brazil Others Fuel oil (GDP: 4,1% p.y.) Gasoline +3,8% Middle destilates p.y. 3.095 2.643 928 2.147 792 1.814 1 814 128 1.776 696 124 567 Thousand bpd 602 593 507 98 d 189 108 402 315 314 1.472 1.219 951 708 761 2000 2005 2010 2015 2020 Sourse: Petrobras (Plano Estratégico 2020) 17
  18. 18. DOWNSTREAM EXPANSIONReduced dependence on imports of oil products Increase in import levels will lead to higher ... and to high levels of exposure to’000 bpd 000 logistical costs... g international supp y te at o a supply Net Imports as a percentage of total demand (%)* 2006 2007 2008 2009 2010 2011E USA Brazil (2010) France Germany China Japan Spain Mexico Indonesia Brazil (2020)** ( ) * Source: IEA – 2010 World Energy Statistics ** Without considering Capacity Expansion 18
  19. 19. REGIONAL GROWTHIn the last decade the growth has been and will be higher in the North, Northeast and Mid‐west regions of BrazilMid t i f B il Demand 2001-2010 Demand 2010-2015 763 3,1% 4,9% 968 763 579 1,4% 1.384 3,9% 1.675 1.384 1.224 19
  20. 20. … increasing the need for new capacities in these regions Market in 2010 k Market in 2015 k 299 552 968 763 -464 -416 Capacity Demand Deficit Capacity Demand Deficit 1.652 1.675 1.466 1.384 82 -23 Capacity Demand Superavit Capacity Demand Deficit • Increase in demand in the Central‐West, Northeast, and North explains the concentration of investments in the  Northeast; • Tax incentives combined with environmental restrictions also contribute to the concentration in the region. 20
  21. 21. INTEGRATION AND BALANCEConstruction of new refineries intended to meet Brazilian demandThous bpd PREMIUM I (2nd phase) 4,9105000 300,000 bpd (2019)4000 COMPERJ (2nd phase) 165,000 bpd 3,327 3,070 3,217 (2018)3000 2,643 3,095 COMPERJ PREMIUM II 2,147 (1st phase) 2,2052,536 2,004 300,000 bpd 1,814 1,798 165,000 bpd2000 1,641 (2017) (2013) 1,393 1,323 1,036 Abreu e Lima Abreu e Lima PREMIUM I PREMIUM I1000 Refinery (RNE) (1st phase) 230,000 bpd 300,000 bpd 181 (2012) (2016) 0 ... ... ... ... 1980 2000 2010 2015 2020 Oil and NGL Production ‐ Brazil Total crude oil processed – Brazil Oil Products Market (2 scenarios) • No new refineries built since 1980 • Demand now exceeds refining capacity, with demand growing 20% last two years and growing  21
  22. 22. Refining Profile and Margins 22
  23. 23. REFINING MARGINS Conservative assumptions compared to historical data and consultants’ forecast Crack 321* and 2011 - 2020 average forecast Light-Heavy* and 2011 - 2020 average forecast (US$/bbl) (US$/bbl) Consultants Range Consultants Range 50 PBR Range 50 80 PBR Range 45 45 70 40 60 35 30 50 25 40 20 30 Avg 27 15 Avg 2010,6 , 10 5 10 0 0 jan 06 jan 07 jan 08 jan 09 jan 10 jan 11 jan 12 * (Unleaded USG*2 + N2 Diesel USG)/3 - Brent * (Unleaded USG + N2 Diesel USG)/2 – Fuel Oil 3% USG The forecasts indicate an average Crack 321 Spread of US$ 8 5/ bbl and an 8,5/ average Light-Heavy differential of US$ 21,8 / bbl between 2011-2020. Consultants’ forecasts include: Cera (3 Scenarios), Pira (3 Scenarios) and Woodmackenzie 23
  24. 24. REFINING MARGINS Margins can have large amplitude according to the type of processed oil and product  yields i ld $/bbl (US$ of 2010) PBR Downstream Margin USG LLS Cracking NWE Brent Topping USG Maya Coking 30 NWE Brent Cracking 25 20 19 -8 15 11 10 +6 6 5 0 USG LLS PBR USG Cracking Downstream Maya g y -5 5 Margin Coking 2002 2003 2004 2005 2006 2007 2008 2009 2010Source: Margens internacionais - PIRA 24
  25. 25. PETROBRAS X MAYA COKINGComparison shows that the effect of the different  oil processed and the average produtivity explain the deviation of our margins in relation to Maya Coking explain the deviation of our margins in relation to Maya Coking Petrobras vs. Maya Coking (average 2002-2010) 19 US$/bbl 2010  $/bbl 3 5 11 Maya Coking Raw material  Produtivity Petrobras  Margin cost effect effect Margin 25
  26. 26. CONVERSIONNew refineries will have significant higher conversion than existing refineries , allowing less costs of raw material l t f t i l Convertion Capacity/ Destilation Capacity Average Cost of Oil (2020) 70 Coker 68% (US$/bbl) 65% 64% FCC 60 HCC -5,8 50 31% 26% -2,3 40 37% 10% 65% 30 20 38% 36% 27% 10 Brent Existent PREMIUM 0 Refineries Existing RNE COMPERJ PREMIUM Refineries (2010) 26
  27. 27. PRODUCTSNew refineries will produce higher value‐added oil products Productivity of existing refineries – 2020 Productivity of new refineries – 2020 65% 43% 50% 36% 38% 21% 21% 19% 4% 15% 10% 4% 9% 7% 15% 15% 11% 5% 6% 4% Medium Distillated Light Others Medium Distillated Light Others Diesel Gasoline Naphtha Fuel Oil Jet Fuel LPG Special Intermediary • Increase in global demand for medium‐distillated products tends to lead to an increase in price versus the  gasoline price. li i 27
  28. 28. PRICES OF DISTILLATESIn recent years, we have been approximating to the import parity Distillates had a prize in the last 8 years of US$/bbl in relation to the U S Gulf prices, U.S. prices similar to cost freight + internalization US$/bbl (actual value) 8,0 8,0 90,0 93,9 Average 2002-2010 88,1 87,3 85,8 82,0 82 0 2 USGC US PBR USGC US PBR Diesel Jet Fuel … and these are the products that the new refineries will be focus 28
  29. 29. RESOURCE OPTIMIZATION AT PREMIUM REFINERIES  Economies of scale and new implementation Lower refining costs due to design strategies to reduce Capex, including: quality and scale • Design competition based on the lowest final cost Current downstream cost (US$ / bbl in 2010) • Selection of UOP ‐ international company with extensive  refining experience refining experience Age (years) • Single design integrating all the refinery on‐site and off‐site • Designer involved from conceptual design to technical  assistance in the start up • Scale economies (RPRE: 300kbpd modules) • Ma im m standardi ation of eq ipments specification Maximum standardization of equipments specification • Scheduling the construction stage allowing long‐term planning  for equipment suppliers • Reuse of the executive project allowing the incorporation of  lessons learned Scale (’000 bpd) 29
  30. 30. FACTORS THAT WILL IMPACT THE COST OF THE PREMIUM REFINERIESProject under development already allows us to evaluate some optimizations RPRE Scope Optimized RNEST Expected Effects (projetct under development) weight/capac. Units of Diesel HDT 6 reactors 1 reactors 80% less Less Interconnections weight/capac. Units of Diesel HDT 2 forno 1 forno 60% less Less Interconnections Less: interconnection / L i t ti platforms of access / Coke Units 6 tambours 4 tambours instruments / valves etc. 55 tankes 70 tankes Tankage Not available for 230 kbpd for 600 kbpd 100+ bridges of Elimination of the Pipelines Pipe-rack bridges and increased 100m productivity Cable-rack Less excavation, less Electric System Underground impact on rainfall in the p Interconnection structure (aerial) ( i l) construction 30 30
  31. 31. Market Location 31
  32. 32. LOGISTICSDistance from the Brazilian coast to refining centers is at least 5.000 miles, or 16 to 33 days of travelda s of tra el Distance in miles / days of travel 5.400 16 days 5.500 16 days 8.000 11.200 24 days 33 days Processing in Brazil implies: • Lower Lead-Times • Reduced Tankage needs •L Lower Inventories I t i • Reduced need for ships Crude 32
  33. 33. LOGISTICSThese distances have relevant freight costs to reach the different markets Freight cost ($/bbl) 2,8 28 4,9 5,4 2,8 28 7,7 4,1 , Processing in Brazil implies: • Lower Lead-Times • Reduced Tankage needs •L Lower Inventories I t i Crude • Reduced need for ships Products 33
  34. 34. GLOBAL REFININGRegions with fast growth continue to invest in refining Adding  Refining Capacity (2011‐2016) 3.204 New Refineries Thousand bpd Expansion 1.997 1.755 736 703 437 153 Asia Middle East North Latin Europe Ex URSS Africa America America • Small refineries and with low complexity being closed in stagnant markets • New large‐scale refineries, high complexity, adapted to process heavy oil in growing markets Source: Pira, Petrobras, 2011 34
  35. 35. Risk and Return 35
  36. 36. Profitability New refining projects have return rate above the cost of capitalReturn rate (%) 18 Key Assumptions: 16 • Refinery with trains of 300 k bpd 14 • Refining scheme with HCC, Coque and  12 HDT 10 •Refining costs in line with the current  refineries  that has the same scale 8 • Integrated Analysis 6 • P d ti f th d Production for the domestic market ti k t 4 • Does not include tax benefits in the  operation of the asset 2 0 13 14 15 16 17 18 19 20 21 22 23 Margin  Case 1 – Capex US$ 30.000/bpd US$/bbl Case 2 – C C 2 Capex US$ 40.000/bpd S$ 0 000/b d Expected Scenario  Case 3 ‐ Capex US$ 50.000/bpd 36
  37. 37. RISK MITIGATIONThe expansion of refining also allows us to mitigate risks from upstream, as in 2009,   y f f gbeyond the benefit of the integration Adjusted EBITDA by Segment (US$ bi) 48 2 1 40 2 35 1 2 1 0 33 1 2 1 1 4 1 11 41 35 31 19 -2 0 2008 2009 2010 2011* International Downstream Distribution E&P G&E Note: (*) Calculated by the average exchange rates and considering the 12 months ended 30/06/11 37
  38. 38. BUSINESS INTEGRATIONPetrobras will increase the importance in the industry through growing the oil production and expanding the Downstreamproduction and expanding the Downstream Oil Production 6 2020 5 4 3 2010 2 1 1980 0 0 1 2 3 4 5 6 Refining Capacity For other companies, capacity in 2010. 38
  39. 39. SUPPORTTING UPSTREAM OPERATIONSThis integrated performance can be verified in Capex of "downstream" dedicated to support upstream operationssupport upstream operations Capex for Fleet Expansion for Fleet Capex for Logistics for Oil for Logistics for  Oil US$ 4,4 billion US$ 3,5 billion Pre‐Salt Plangás Projects Others 21% 30% 51% 70% 28% Supply Oil 39
  40. 40. FLEXIBILITYThe existence of a flexible domestic refining capacity mitigates the risk  of fluctuations in the demand  SALES PRODUCTION k bpd 1.873 1.985 1.786 +5% +7% Oil Products 1H10 1H11 1H10 1H11 SALES PRODUCTION SALES PRODUCTION +9% +6% +16% +14% 812 734 413 392 747 692 357 343 GasolineDiesel l 1H10 1H11 1H10 1H11 1H10 1H11 1H10 1H11(*) Vendas do Abastecimento, não incluem as eliminações com a BR 40
  41. 41. Final Remarks 41
  42. 42. NEW REFINERIES, FUEL QUALITY AND MODERNIZATION SUM UP TO 74% OF RTM INVESTMENTS US$70.6 billion • Refining Capacity Expansion: Abreu e Lima  4.5% 4.9% 1.0% 1.1% Refinery, Premium I and II, and Comperj; R fi P i I d II d C j 0.8% 15.2% • Quality and Conversion: Modernization,  13.9% , y ; conversion, and hydrodesulfurization; • Operating improvement: maintenance and  optimization, HSEE, and R&D; 26.4% 23.9% • Fleet Expansion • Logistics for Oil: oil supply for refineries and  infrastructure for oil exports. Refining Capacity Expansion Quality and Conversion Operating improvement Fleet Expansion Logistics for  Oil Petrochemical Investments amount to US$3.8 billion International 42
  43. 43. DECREASING INVESTMENTS IN QUALITY US$16 billion in 2011‐15 Reduction in sulfur level 7.0 US$ 16 billion 5.9 4.9 4.5 Avg. Sulfur Level – Diesel (ppm) -15%p.y. py 3.2 2.3 1.1 1.0 1.0 <250 0.1 0.2 5 6 7 8 9 10 11 12 13 14 15 43
  44. 44. QUALITY INVESTMENTSNew units in existing refineries are being built Gasoline Quality Diesel Quality: 2015 and 2011 2012 2013 2014 2015 2011 2012 2013 2014 beyond 1000 Trnasition 50 ppm Diesel S-1800 ppm Diesel S-500 REDUC RECAP REPLAN Gasoline Diesel and Gasoline Gasoline Diesel S-50 REFAP Gasoline REPAR Diesel S-10 Gasoline REVAP Gasoline RECAP REGAP REFAP REDUC REPAR Diesel and Diesel Diesel Diesel REGAP Diesel Gasoline Gasoline RLAM REPLAN RPBC RPBC Diesel Diesel Diesel Gasoline REGAP RLAM Revamp Gasoline HDT g y … reassuring Petrobras’ commitment with sustainability and sulfur  emission reduction over time. 44
  45. 45. HYDROREFINING INVESTMENTSCatch up phase to meet international standards for quality productsHydrorefining Capacity relative to Distillation Capacity 100 95% 86% 80 74% (2020) 67% 70% 69% 70% 15% 59% (2015) 60 40 36% 23% (current) 20 23% 0 Adding value to domestic crude oil by producing diesel and gasoline in‐line with international standards. Underinvested over the past years requires catching up with hydrorefining capacity (for removal of sulfur)  45
  46. 46. PETROCHEMICAL STRATEGY PETROCHEMICAL  AREA Operate in the petrochemical sector in activities that are integrated manner  with the other businesses of the Petrobras system  Increase petrochemicals and biopolymers production preferably through capital stock in Brazil  and abroad and abroad • Operate in an integrated manner with the other business of Petrobras, in the  production of basic and second‐generation petrochemicals and biopolymers; • Focus on developing assets in Brazil; • Develop COMPERJ seeking partnerships; 46
  47. 47. FINAL REMARKSAdding value in Refining, Transportation and Marketing (RTC) and Petrochemicals Preserving our unique position in the Brazilian market as the best way to monetize  our crude reserves our crude reserves Shifting the refining system towards middle distillates production while increasing  fuel quality standards q y Reducing import levels through refining capacity expansion and domestic crude  processing maximization Optimizing capital allocation through new refining modules concept and  implementation strategy Creating efficient and reliable infrastructure to get the best value of crude oil  export operations Mitigate risks and use the flexibilities in  the existing refining  facilities to optimize  the product portfolio 47
  48. 48. Information: Investor Relations +55 21 3224-1510petroinvest@petrobras.com.br www.petrobras.com.br/ir 48 48

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