Webcast - Pre-salt and Strategic Areas - 2009


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Webcast - Pre-salt and Strategic Areas - 2009

  1. 1. Conference Call / Webcast New E&P Regulatory Model Pre-salt and Strategic Areas José Sergio Gabrielli CEO 1
  2. 2. DISCLAIMER The presentation may contain forecasts CAUTIONARY STATEMENT about future events. Such forecasts merely FOR US INVESTORS reflect the expectations of the Company's management. Such terms as "anticipate", The United States Securities and Exchange "believe", "expect", "forecast", "intend", Commission permits oil and gas companies, "plan", "project", "seek", "should", along with in their filings with the SEC, to disclose only similar or analogous expressions, are used proved reserves that a company has to identify such forecasts. These predictions demonstrated by actual production or evidently involve risks and uncertainties, conclusive formation tests to be whether foreseen or not by the Company. Therefore, the future results of operations economically and legally producible under may differ from current expectations, and existing economic and operating conditions. readers must not base their expectations We use certain terms in this exclusively on the information presented presentation, such as oil and gas herein. The Company is not obliged to resources, that the SEC’s guidelines update the presentation/such forecasts strictly prohibit us from including in in light of new information or future filings with the SEC developments 2
  3. 3. THE PRE-SALT REGION The big blue area represents the expected Pre-salt location, with great potential for oil presence Currently, there is a production acceleration program in Jubarte (Whales’ Park) and an extended well test in Tupi (Santos Basin) • Total Area: 149,000 km2 • Area Under Concession: 41,772 km2 (28%) • Area Not Under Concession: 107,228 km² (72%) • Area With Petrobras Interest: 35,739 km2 (24%) 3
  4. 4. NEW REGULATORY FRAMEWORK Transfer of Rights with Pre-salt Compensation Up to 5 billion boe and Strategic Petrobras 100% Areas Production Sharing Petrobras Operator Agreement Other Companies Through Bidding Process Current Concession Other Areas Model There will be no regulatory changes in the areas under concession, including the pre-salt area already granted 4
  5. 5. PRODUCTION SHARING AGREEMENTS Production sharing agreements Petrobras will operate all blocks under this regime, with a minimum stake of 30% Consortium between Petrobras, Petro-sal and the winning bidder will be managed by the Operational Committee Petrobras will be able to participate in the bidding process to increase its stake The winning bidder will be the Companies company that offers the highest percentage of “profit oil” for the Profit Brazilian Government Oil Petrobras will have to follow Government the same percentage offered by the winning bidder The Brazilian Government will not assume the risks of the activities, Cost except when it decides to invest Oil directly Prior to contracting, the Government will evaluate the potential of the areas and may contract Petrobras directly 5 Graphs are showing only hypothetical values
  6. 6. OPERATOR’S ROLE AND INDUSTRY PRACTICES OPERATOR Responsible for conducting exploration and production activities providing critical resources: technology (usage and development), human resources and equipments Access to strategical information Production and costs control Technological access and development PETROBRAS: defined as the exclusive operator of all areas under the production sharing agreements 6
  7. 7. AGENT’S ROLE OF PROCUCTION SHARING AGREEMENTS NATIONAL ENERGY POLICY COUNCIL - CNPE Bidding schedule and national content Blocks for exclusive contracts and blocks for bidding Technical and economical parameters of the contracts Definition changes (increase) for the areas called pre-salt Definições Técnicas Areas to be classified as strategic National Petroleum Agency - ANP Promote bids, regulate and supervise Analyze and approve production sharing agreements Approve the contracts of Unitization Adapt and standardize the applicable rules under different regimes Advising Ministry of Mines and Energy in blocks ring fences delimitation PETRO-SAL Will reduce information asymmetry between the Brazilian Government and oil companies, aiming to reduce cost oil Will not assume risks nor invest Contract management of production sharing agreements Will not execute E&P activities 7
  8. 8. E&P TRANSFER OF RIGHTS WITH COMPENSATION Government may transfer to Petrobras, for compensation, without bidding, the rights to explore and produce oil in the pre-salt areas not under concession. These areas may or may not be contiguous Transfer of rights limited to a maximum produced of 5 billion boe. Petrobras will be the owner of produced volumes Oil values shall be determined by technical reports prepared by qualified third parties contracted by the government (ANP) and Petrobras, taking into account best industry practices The transaction includes a clause of reappraisal of reserves value with a maximum deadline of 24 months If the value of appraisal rises, Petrobras will pay the difference to the Government. If price falls, the contrary will happen Royalties will be paid by Petrobras and distributed according to the Law nº 9.478/97. No special participation payment is expected 8
  9. 9. PETROBRAS’ INCREASE IN CAPITAL At the same time of the “transfer of rights”, the Company will have an increase in capital, which shall be approved by the Extraordinary Shareholders Meeting : Granting of shareholders’ right to exercise their preemptive rights to subscribe for additional shares Increase in capital will follow the current proportion of the different classes of shares All common shareholders will have voting rights Petrobras will receive cash from Petrobras’ increase in minority capital shareholders Petrobras will pay Appraisal of (to be approved by the the transfer of reserves in R$ ESM) rights with compensation to the federal govt Result: Increase of Petrobras’ financial capacity to invest, specially in the pre-salt area If minority shareholders do not exercise their rights in full, the Brazilian Government may enhance its participation in Petrobras’ capital and results Graphs are showing only hypothetical values 9 9
  10. 10. PETROBRAS’ CHALLENGES BUSINESS PLAN Ambitious Business Plan 2009-2013 Huge increase of E&P portfolio stimulating the integration of the different areas: Upgrading the Company management model Critical resources management (financial, technological, human resources, equipments and services contracts ) NEW REGULATORY FRAMEWORK BRINGS NEW CHALLENGES Petrobras is an integrated company and CAPEX will increase in all business areas Accounting, tax and financial management (CAPEX growth, cash management and different E&P regimes) Hiring and training workforce Internal controls strengthening with different parties in production sharing agreements (ANP, CNPE, Petro-sal) 10
  11. 11. For more information: Investor Relations www.petrobras.com.br/ri +55 21 3224-1510 petroinvest@petrobras.com.br 11