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Webcast: Results Announcement - 3rd Quarter 2007 (Brazilian Corporate Law)
Webcast: Results Announcement - 3rd Quarter 2007 (Brazilian Corporate Law)
Webcast: Results Announcement - 3rd Quarter 2007 (Brazilian Corporate Law)
Webcast: Results Announcement - 3rd Quarter 2007 (Brazilian Corporate Law)
Webcast: Results Announcement - 3rd Quarter 2007 (Brazilian Corporate Law)
Webcast: Results Announcement - 3rd Quarter 2007 (Brazilian Corporate Law)
Webcast: Results Announcement - 3rd Quarter 2007 (Brazilian Corporate Law)
Webcast: Results Announcement - 3rd Quarter 2007 (Brazilian Corporate Law)
Webcast: Results Announcement - 3rd Quarter 2007 (Brazilian Corporate Law)
Webcast: Results Announcement - 3rd Quarter 2007 (Brazilian Corporate Law)
Webcast: Results Announcement - 3rd Quarter 2007 (Brazilian Corporate Law)
Webcast: Results Announcement - 3rd Quarter 2007 (Brazilian Corporate Law)
Webcast: Results Announcement - 3rd Quarter 2007 (Brazilian Corporate Law)
Webcast: Results Announcement - 3rd Quarter 2007 (Brazilian Corporate Law)
Webcast: Results Announcement - 3rd Quarter 2007 (Brazilian Corporate Law)
Webcast: Results Announcement - 3rd Quarter 2007 (Brazilian Corporate Law)
Webcast: Results Announcement - 3rd Quarter 2007 (Brazilian Corporate Law)
Webcast: Results Announcement - 3rd Quarter 2007 (Brazilian Corporate Law)
Webcast: Results Announcement - 3rd Quarter 2007 (Brazilian Corporate Law)
Webcast: Results Announcement - 3rd Quarter 2007 (Brazilian Corporate Law)
Webcast: Results Announcement - 3rd Quarter 2007 (Brazilian Corporate Law)
Webcast: Results Announcement - 3rd Quarter 2007 (Brazilian Corporate Law)
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Webcast: Results Announcement - 3rd Quarter 2007 (Brazilian Corporate Law)

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  • 1. Conference Call / Webcast Almir Barbassa Results Announcement CFO and Investor 3rd Quarter 2007 Relations Officer (Brazilian Corporate Law) November 13th 2007
  • 2. Disclaimer 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.
  • 3. Tupi Area Caxaréu and Pirambu BMS-9 and BMS-10 Tested Wells BMS-11 (Tupi) 3
  • 4. DOMESTIC OIL AND NGL PRODUCTION • Domestic Oil and NGL production slightly higher Δ = 0.45% 1,789 1,797 compared to the 2Q07; Thous. bpd • Expected growth lower than expected due primarily to scheduled stoppages and delays in the delivery of some production projects; 2Q07 3Q07 4
  • 5. DOMESTIC OIL AND NGL PRODUCTION: MAIN PROJECTS IN 2006 AND 2007 FPSO - Capixaba P - 34 FPSO – Cidade do Rio de Janeiro P - 50 Golfinho Jubarte Espadarte Albacora Leste 100,000 bpd 60,000 bpd 100,000 bpd 180,000 bpd May 06 December 06 January 07 April 06 New Systems Δ +203 thous. bpd Existing Systems* 1,796 1,763 Δ -170 thous. bpd Δ +33 thous. bpd Jan-Sept 2006 Jan-Sept 2007 Unity 9M06 (thous. bpd) 9M07 (thous. bpd) Change P-50 (Albacora Leste) 31 148 117 FPSO-Capixaba (Golfinho) 20 38 18 P-34 (Jubarte) - 40 40 FPSO-Cidade do Rio de Janeiro (Espadarte) - 28 28 Total New Systems 203 * Natural decline and production stoppages 5
  • 6. MAIN OIL PROJECTS IN DE ÓLEO PRINCIPAIS PROJETOS THE 4Q07 PARA O 4T07 Golfinho Module 2 • Capacity: 100 thous. bpd Roncador Module 2 • Capacity : 180 thous. bpd • Wells: • Wells : • 4 Producers •11 Producers • 3 Injectors • 6 Injectors • Moored platform • Platform is being moored at the Roncador Field • Fist Oil: Nov. 2007 • Fist Oil: Dec. 2007 • 2 wells in 2007 • 1 well in 2007 FPSO Cidade de Vitória • Production peak: 1H08 P-54 • Production peak: 2H08 • Capacity: 180 thous. bpd Roncador Module 1A Phase 2 • Wells: • 18 Producers • 11 Injectors • 2 gas lift manifolds • 1 self-supported rigid riser • Moored platform • First oil: Nov. 2007 P-52 • 2 wells in 2007 • Production peak: 2H08 6
  • 7. MAIN OIL PROJECTS IN 2008 Marlim Sul Module 2 Marlim Leste • Capcity: 180 thous. bpd • Capacity : 180 mil bpd • Wells: • 10 Producers • Well: • 9 Injectors • 14 Producers • 7 Injectors • First Oil: Jun. 2008 • First Oil: Dec. 2008 P-51 P-53 Jabuti 11.1% 2,000 Thous. bpd • Capacity: 100 thous. bpd 1,800 • Wells : • 8 Producers • First Oil: Dec. 2008 FPSO Cidade de Niterói 2007E 2008E • New projects will add 460 thousand barrels/day of capacity; • These projects, along with those that will come online in the end of 2007, will contribute to reach the 2 million target in 2008. 7
  • 8. MAIN GAS PROJECTS IN THE 4Q07 AND 2008 Peroá Fase 2 Installed Capacity Phase 1: • 3 million m3/d of gas • 3 producing wells in operation Additional capacity in Phase 2: • 5 million m3/d of gas • 3 new producing wells • Fist gas in Phase 2: Nov. 2007 Peroá Platform Camarupim • Capacity: 10 million m3/d of gas • Wells: • 3 producers • First gas: Dec. 2008 FPSO Cidade de São Mateus 8
  • 9. REFINING IN BRAZIL AND SALES IN THE DOMESTIC MARKET Thous. bpd % 89 90 1,9 50 90 91 89 79 85 78 78 77 80 78 1,781 1,796 1,806 1,8 0 0 1,765 1,753 1,746 1,711 1,709 70 1,696 1,646 1,6 50 60 1,50 0 50 3 Q0 6 4 Q0 6 1Q0 7 2 Q0 7 3 Q0 7 D o mest i c o il p r o d uct s p r o d uct io n Oil p r o d uct s sales vo lume Pr imar y p r o cessed inst alled cap acit y - B r az il ( %) D o mest ic cr ud e o il as % o f t o t al • Strong increase in the sales volume as a result of economic growth and seasonability. However the increase in the domestic production was not enough to attend such demand, making it necessary to increase the import of oil products. 9
  • 10. DOWNSTREAM- CONVERSION PROJECTS (COKING UNITS) Objective: • Increase production of light oil products instead of fuel oil. • Allow the processing of heavy oil from Campos Basin with no additional production of fuel oil. • Profitability increase. • New delayed coking projects will allow the additional production of 47 thousand barrels/day of REDUC diesel, while decreasing the fuel oil production by Status: Work in progress 61 thousand barrels/day. Startup: 2008 Increase in National Oil Processing due to coker projects (2008-2020 average) Capacity: 31.5 thous. bpd REVAP Project Increase Status: Work in progress REDUC – Coke 9,000 bbl/d Startup : 2009 REVAP – Coke 8,000 bbl/d Capacity : 31.5 thous. bpd REPAR - Coke 14,000 bbl/d REPAR Status : Work in progress Startup : 2010 Capacity: 31.5 thous. bpd 10
  • 11. RESULTS DRIVERS – MARGINS 7 4 .9 WTI Cracking USGC 6 8 .8 $10.5 Aver. 3Q06 Aver. -41% Aver.3Q 30,00 5 9 .7 2Q07 07 5 7 .8 $11.8 6 4 .4 US$/barrel 25,00 $8.5/bbl $14.9/bbl $8.8/bbl 20,00 5 7 .0 4 8 .7 15,00 10,00 4 7 .8 5,00 0,00 Mar-06 Jun-06 Set-06 Dez-07 Mar-07 Jun-07 Set-07 4T06 1T07 2T07 3T07 Brent (average) Average Sales Price • Compared to the 2Q07, international refining margins declined substantially; • During 3Q07 there was a substantive increase in oil prices, improving E&P results. This increase, however, together with stability in oil product prices (in Reais), was responsible for the sharp decrease in refining margins. Source: Petrobras 11
  • 12. AVERAGE REALIZATION PRICE - ARP 3Q06 2Q07 3Q07 100 Aver. Aver. Aver. 81.1 85.6 82.4 80 72.3 81.1 78.2 74.9 69.5 60 68.7 40 20 Dec-05 Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 A R P B r asi l ( U S$/ b b l) A ver ag e B r ent Pr i ce ( U S$/ b b l ) A R P U SA ( U S$/ b b l w/ sales vo l. i n B r asi l ) • Petrobras continuously monitors international price trends in order to maintain its pricing aligned in the medium / long term. 12
  • 13. INCOME STATEMENT 3Q07 VS 2Q07 2Q07 3Q07 44,469 6.4% Net Revenues 41,798 27,264 11.3% GOGS 24,489 R$ million 13,061 -8.0% EBITDA 14,190 10,272 Operational Profit -10.9% 11,535 5,528 Net Incom e -18.7% 6,800 • Net Revenues increased compared to the previous quarter mainly due to higher sales volumes of oil products; • Costs negatively affected by higher expenditure with oil and oil products imports; • Operational and net results were impacted not only by the decrease of refining margins, but also by higher expenses (next slide). 13
  • 14. OPERATIONAL EXPENSES ANALYSIS 3Q07 VS 2Q07 2Q07 3Q07 1,635 Sales Expenses 13.3% 1,443 General and 1,555 R$ million Administrative 1,498 3.8% 453 Exploratory Costs 391 15.9% Pension and Health 1,147 Plan 452 153.8% 1,404 Others 1,239 13.3% • Operational Expenses were particularly affected by the increase of expenditures with the Pension Plan (Petros). Such expenses (R$ 695 million) were due to commitments related to the Petros Agreement and are not recurrent; • The increase in sales expenses was a result of substantially higher sales volumes. 14
  • 15. LIFTING COSTS INCLUDING GOVERNMENT PARTICIPATION 74.9 30 68.8 80 40 37.75 37.92 34.12 35.03 59.7 57.8 20.13 60 30 20 17.59 17.95 16.25 22.29 23.26 R$/barrel US$/barrel 18.92 20.58 40 12.48 10.35 10.62 20 9.04 10 20 10 7.24 7.20 7.33 7.65 15.46 15.20 14.45 14.66 0 0 4Q06 1Q07 2Q07 3Q07 0 4Q06 1Q07 2Q07 3Q07 Lifting Cost (US$) Gov. Take (US$) Brent Lifting Cost (R$) Gov. Take (R$) • Government take and lifting costs highly correlated to Brent prices 15
  • 16. CHANGE IN QUARTER REVENUES (3Q07 VS 2Q07) Exploration & Production – Operating Profit Change– R$ million 1,789 Domestic Production of Oil, NGL and Condensate (thous. bpd) 1,797 986 637 420 1.527 44 11.436 10.024 2Q07 Oper. Profit Price Effect on Volume Effect on Avrg Cost Effect Volume Effect on Oper. Exp. 3Q07 Oper. Profit Net Revenue Net Revenue on COGS COGS • Better E&P result is due to higher oil prices and slightly higher production. 16
  • 17. CHANGE IN QUARTER REVENUES (3Q07 VS 2Q07) Downstream – Change in Operating Profit – R$ million 916 1.936 338 3.358 776 7 1.893 2Q07 Oper. Price Effect on Volume Effect Avrg Cost Volume Effect Oper. Exp. 3Q07 Oper. Profit Net Revenue on Net Effect on on COGS Profit Revenue COGS • Despite the increase in sales volume, the Downstream result was directly affected by lower refining margins. There was a strong increase in acquisition prices for oil and oil products and imported volumes, with stable ARP in Reais. 17
  • 18. NET INCOME CHANGE – R$ million (3Q07 VS 2Q07) 1,789 Domestic Oil, NGL and Condensate – thousand bpd 1,797 2,671 2,775 6,800 1,159 184 389 214 5,528 2Q07 Net Revenues COGS Oper. Exp. Fin. Exp and Taxes Minority Inter. 3Q07 Net Income Non Oper. and Particip. in Income Equity Income • Despite the elevated operating revenues in the quarter, which increased due to economic growth and seasonality, the high costs of the downstream segment led to lower refining margins, which, together with the increase of expenditures with the pension plan Petros, resulted in a net income below the previous quarter. 18
  • 19. INVESTMENTS R$ million Jan-Sep 2007 % 2006 % % • Direct Investments 26,060 87 20,264 90 29 Exploration and Production 14,295 48 11,404 51 25 Downstream 4,607 15 2,800 13 65 Gas and Energy 1,057 4 1,203 5 (12) International 4,867 16 3,923 17 24 Distribution 702 2 477 2 47 Corporate 532 2 457 2 16 • Special Purpose Companies (SPC) 4,205 14 2,072 9 103 • Ventures under Negotiation 341 1 300 1 14 • Structured Projects - - 1 - - Exploration and Production - - 1 - (100) Total Investments 30,606 100 22,637 100 35 • By 09.30.2007, total capital spending reached R$ 30,606 million, representing an increase of 35% over the year to date amount for the similar period in 2006. 19
  • 20. LEVERAGE Petrobras’ Leverage Ratio 24% R$ million 09/30/2007 06/30/2007 (1) Short Term debt 10,519 10,720 (1) 20% 19% Long Term Debt 28,230 29,100 18% 18% 17% 16% 17% Total Debt 38,749 39,820 Cash and Cash Equivalents 14,216 17,854 (2) Dec-05 Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 Net Debt 24,533 21,966 Net Debt/Net Capitalization • 12% increase in net debt during the quarter as a consequence of the reduction of cash/cash equivalents in long term bonds (R$2,909 million), to counterbalance the liabilities with Petros. (1) Inclui endividamento contraído através de contratos de Leasing (R$ 1.631 milhões em 30.09.2007 e R$ 1.980 milhões em 30.06.2007). (2) Endividamento Total – Disponibilidades 20
  • 21. SHAREHOLDER’S RETURN 120% Total Shareholder's Return 111.5% 15.8% 100% 91.5% 85.2% 5.8% 80% 6.0% 60% 79.2% 50.5% 95.7% 85.7% 43.6% 6.0% 40% 7.5% 44.5% 39.5% 30.2% 31.5% 20% 28.0% 36.1% 22.8% 0% 2003 2004 2005 2006 9M 07 Shares Increase Dividends Amex Oil Index (*) Source: Bloomberg (PBR) * includes dividends for comparison 21
  • 22. QUESTION AND ANSWER SESSION Visit our website: www.petrobras.com.br/ri For more information contact: Petróleo Brasileiro S.A – PETROBRAS Investor Relations Department E-mail: petroinvest@petrobras.com.br Av. República do Chile, 65 – 22o floor 20031-912 – Rio de Janeiro, RJ (55-21) 3224-1510 / 3224-9947 22

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