Webcast about the 2nd Quarter Results 2011 - IFRS
 

Webcast about the 2nd Quarter Results 2011 - IFRS

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Webcast about the 2nd Quarter Results 2011 - IFRS Webcast about the 2nd Quarter Results 2011 - IFRS Presentation Transcript

  • Results Announcement 2nd Quarter 2011  (IFRS) Conference Call/Webcast Almir Guilherme Barbassa  CFO and Investor Relations Officer August 17th, 2011 1
  • DISCLAIMERFORWARD-LOOKING STATEMENTS:DISCLAIMERThe presentation may contain forward-looking statements We undertake no obligation to publicly update orabout future events within the meaning of Section 27A of revise any forward-looking statements, whether asthe Securities Act of 1933, as amended, and Section 21E a result of new information or future events or forof the Securities Exchange Act of 1934, as amended, that any other reason. Figures for 2011 on areare not based on historical facts and are not assurances of estimates or targets.future results. Such forward-looking statements merelyreflect the Company’s current views and estimates offuture economic circumstances, industry conditions, All forward-looking statements are expresslycompany performance and financial results. Such terms qualified in their entirety by this cautionaryas "anticipate", "believe", "expect", "forecast", "intend", statement, and you should not place reliance on"plan", "project", "seek", "should", along with similar or any forward-looking statement contained in thisanalogous expressions, are used to identify such forward- presentation.looking statements. Readers are cautioned that thesestatements are only projections and may differ materiallyfrom actual future results or events. Readers are referred NON-SEC COMPLIANT OIL AND GAS RESERVES:to the documents filed by the Company with the SEC, CAUTIONARY STATEMENT FOR US INVESTORSspecifically the Company’s most recent Annual Report onForm 20-F, which identify important risk factors that could We present certain data in this presentation, suchcause actual results to differ from those contained in the as oil and gas resources, that we are not permittedforward-looking statements, including, among other to present in documents filed with the Unitedthings, risks relating to general economic and business States Securities and Exchange Commission (SEC)conditions, including crude oil and other commodity under new Subpart 1200 to Regulation S-K becauseprices, refining margins and prevailing exchange rates, such terms do not qualify as proved, probable oruncertainties inherent in making estimates of our oil and possible reserves under Rule 4-10(a) of Regulationgas reserves including recently discovered oil and gas S-X.reserves, international and Brazilian political, economicand social developments, receipt of governmentalapprovals and licenses and our ability to obtain financing. 2
  • 2Q11 HIGHLIGHTS o Net income totaled R$ 10.9 billion in 2Q11, in line with  the  1Q11.  In  2Q11,  it  went  up  32%  when compared with the same period last year.  o Second‐quarter  domestic  sales  volume  increased  by  7%  and  9%  over  1Q11  and  2Q10,  respectively.  In the first half, sales moved up 8% Y‐O‐Y. o Lula  Pilot  underlined  the  high  productivity  of  the  pre‐salt  discoveries:  output  from  the  corresponding well averaged 36,322 boed in May. o Three  new  extended  well  tests  (EWTs)  were  implemented:  Lula  Northeast  (Santos  Basin),   Aruanã and Brava (Campos Basin). o Upgrade of Petrobras’ foreign currency rating from Baa1 to A3 (Moody’s). The upgrade also  applied to debt of subsidiaries guaranteed by Petrobras. Lula Pilot Aruanã EWT Lula NE EWT 3
  • MAIN INDICATORS  ∆%  2Q11 1Q11 (2Q11 x  2Q10 1Q11) EBITDA (R$/million) 16.139 16.093 ‐ 15.927 OPERATING INCOME¹ (R$/million) 12.047 12.536 ‐4% 12.303 NET INCOME² (R$/million) 10.942 10.985 ‐ 8.295 AVG. REALIZATION PRICE ‐ ARP (R$/bbl) 167,15 163,72 +2% 158,72 AVG. REALIZATION PRICE ‐ ARP  (US$/bbl) 104,54 98,31 +6% 88,46 Brent (US$/bbl) 117,36 104,97 +12% 78,30 Average dollar sell price (R$) 1,60 1,67 ‐4% 1,79 Production (thousand bbl/day) 2.598 2.627 ‐1% 2.587 Domestic sales  (thousand bbl/day) 2.498 2.344 +7% 2.283 ¹ Income before financial result, profit sharing and taxes ² Net income attributable to Petrobras shareholders 4
  • OIL AND GAS PRODUCTION – 1H11 vs. 1H10Expectations of accelerated output in the second half Total Production  Domestic Production  (daily average)  (daily average)  +2% +2% 2,568 2,613 2,379 2,322 246 ‐5% 234 +7% 324 348 (thousand bpd) (thousand bpd) 2,322 +2% 2,379 +2% 1,998 2,031 1H10 1H11 1H10 1H11 Brazil International Oil Natural Gaso 1H11 output influenced by scheduled maintenance.o Higher production in 2H11, with start‐up of P‐56 (Marlim Sul), 100 thousand bpd of capacity, and  additional production from P‐57.o International  production  declined  due  to  the  initial  collection  of  tax  oil  in  Nigeria  (Agbami  field)  and the termination of the E&P agreements in Ecuador. 5
  • PRODUCTION Historically, Petrobras’ production has grown through expanding to new frontiersThousand bpd rs  yea  30 st  e  la  th  in  p .y. 1 0% Deep and ultra‐deep  Pre‐salt Onshore  Shallow water Deep water water 6
  • SANTOS BASIN PRE‐SALT UPDATEAccelerated drilling campaign High exploration success ratio (all  wells have found oil occurrences) High productivity in producing wells LULA NE EWT ‘ LULA  PILOT 30 wells drilled up to July 2011  30 wells drilled up to July 2011  (26 exploratory) (26 exploratory) Up to 15 wells scheduled for  Up to 15 wells scheduled for  drilling in 2011 drilling in 2011 9 rigs in operation (July 2011)  9 rigs in operation (July 2011)  and another 5 scheduled for  and another 5 scheduled for  start‐up by year‐end start‐up by year‐end Wells undergoing drilling, completion or appraisal 7 7
  • DEVELOPMENT OF PRE‐SALTAll first‐phase units under construction or being contracted Already contracted (start‐up in Already contracted (start‐up in  3 FPSOs in operation 2012 and 2013) 2014) Phase 0 Phase 1a Phase 1b Acquisition of information Production > 1 MM bbl in 2017 Significant production increase 2008/2013 2013/2017 After 2017 • Appraisal wells • Guará Pilot • Accelerated innovation  • Extended well tests • Lula NE Pilot • Intensive use of new  • Lula Pilot • Guará N technologies specifically  developed for pre‐salt  • Cernambi S  conditions  • 8 definitive production  systems (replicant) • 4 production units in the  Transfer of Rights area In operation (only 4 Being contracted (conversion  years after discovery) in the Inhaúma shipyard) Under construction (hulls being built  in the Rio Grande shipyard) 8
  • LOCAL  CONTENTFlexibility in concession agreements Minimum and maximum limits by block: Round 0 No local content required  Rounds 7,  In deep water, between 37% and 55% in the  9 and 10 exploration phase, and between 55% and 65% in  the production development phase. Maximum limit Rounds 1  Minimum exploration limit:  37% 50% in the exploratory phase  Transfer of  Minimum production development limit: to 4 70% in the production development phase Rights   • Up to 2016: 55% Concession • 2017‐2018: 58% Minimum limit by block • After 2019: 65% Rounds 5  Between 30% and 70% in the exploration and  and 6 production development phases  2011‐2015 Projects 2011 2012 2013 2014 2015 Marlim Sul Guará Piloto 2 Lula NE Guará (Norte) Lula 3 Central SS P-56 FPSO Cid. São Paulo FPSO Cid. de Paraty FPSO FPSO Baleia Azul Parque das Baleias Cernambi Lula 4 Alto FPSO FPSO P-58 FPSO FPSO Papa-Terra BALEIA AZUL ESP/MARIMBÁ Roncador P-61 &FPSO P-63 FPSO FPSO SS P-55 Roncador SIRI Maromba Tiro/Sidon 2 jacket and FPSO FPSO P-62 FPSO FPSO Aruana Franco 1 FPSO P-62 FPSO Lower local content requirements in the ANP’s initial concession rounds give local industry time to adapt. Concession and Transfer of Rights agreements envisage withdrawal clauses due to non‐compatible responses  (price, deadline and technology) from the local market in comparison with international parameters. 9
  • DEVELOPMENT OF NATIONAL INDUSTRYDetailing of needs into critical categories permits long‐term strategy NATIONAL MARKET  CATEGORY FPSO cost AVAILABILITY  1 Process equipment ▲▲ 2 Turbomachinery ▲▲▲ 3 Mechanical equipment  ▲ 4 Electrical equipment ▲▲ 5 Instrumentation/automation ▲ 6 Ship structure and systems ▲▲▲ 7 Pipeline and valves ▲ 8 Security  9 Telecommunications  10 Ventilation and AC (VAC) ▲ 11 Engineering services  12 Architecture  13 Commissioning services ▲Proportional  share of FPSO cost Extensive experience of contracting FPSOs combined with operational scale and equipment standardization will help create an internationally competitive offshore industry. 10
  • AVERAGE REALIZATION PRICE (ARP)Volatile international pricesUS$/bbl US$/bbl Average  Average  Average  2Q10 1Q11 2Q11 180 120 117 160 105 100 109 140 122,62 108,84 86 78 94 120 80 75 76 77 68 80 100 88,46 104,54 59 73 74 72 98,31 60 70 80 64 85,55 60 40 49 40 20 20 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 US ARP Petrobras ARP Petrobras (average) Brent o Downward  trajectory  of  U.S.  ARP  at  the  end  of  2Q11  due  to  greater  uncertainties  in  relation to global oil demand. o Reduction of the spread between Petrobras oil price and Brent price (2Q11:US$8.39/bbl;  1Q11:US$ 10.93/bbl). 11
  • LIFTING COSTCosts pressured by higher oil prices R$/barrel 187.78 US$/barrel 117.36 175.30 104.97 147.02 140.16 86.48 35.00 134.51 55.14 78.30 76.86 30.48 50.66 43.91 42.72 43.47 25.58 24.50 24.67 34.21 21.88 31.66 19.10  26.37 24.26 26.13 14.07 15.29 14.71 10.6 11.38 13.12 17.54 18.46 17.34 19.00  20.93 9.79 10.29 2Q10 3Q10 4Q10 1Q11 2Q11 2Q10 3Q10 4Q10 1Q11 2Q11 BrentGovernment  Lifting cost2Q11 vs. 1Q11: Takeo Higher expenses due to well interventions and preventive maintenance contributed to the upturn.o Increase in government take reflects higher oil reference price. 12
  • PRODUCTION AND SALE OF OIL PRODUCTSAdaptation of refining facilities to supply domestic market needs  Production Sales +9 % 2,043 +5 % 1,873 1,874 1,786(thousand barrels/day) 423 568 426 528 233 83 250 102 460 343 392 392 767 826 852 932 1H10 1H11 1H10 1H11 Diesel+Jet Fuel Gasoline Fuel Oil Othero Operational improvements: o Installed capacity use of 92%, with domestic oil accounting for 81%. o Higher output of middle distillates and gasoline, with lower production of fuel oil.  13
  • NATURAL GASGrowing demand met by increased domestic supply Sales Supply +9 % +12% 47 59 43 53 1 2 8 Million m3/d 7 26 Million m3/d 25 36 39 32 26 1H10 1H11 1H10 1H11 Local Imported Bolivian Imported GNL Non‐Thermal Thermalo Continuous increase in non‐thermal consumption due to greater industrial demand.o Expectations  of  reduced  thermal  demand  in  2H11  due  to  high  water levels  in  hydropower  plant  reservoirs. * Sales  do not consider  internal  transference (Refining, Fertilizers Plants and own TPPs )  neither BR sales  14
  • OPERATING INCOME 2Q11 vs. 1Q11 (CONSOLIDATED)Higher import volume and prices affected operating income (R$ million) 6,669 (6,630) 12,536 (375) (153) 12,047 1Q11                  Sales Revenue COGS Expenses Other Expenses 2Q11                  Operating Income Operating Incomeo Domestic  sales volume climbed by 7% while exports grew by 8%.o Higher imports of oil and oil products to supply domestic demand.o Increased exploratory and drilling expenses (2Q11/1Q11: +R$257 million) and higher provisions for the adjustment of  inventories to market value (2Q11/1Q11: +R$119 million).   15
  • NET INCOME 2Q11 vs. 1Q11 (CONSOLIDATED)Stable net income in the quarter (R$ Million) 873 ‐111 ‐57 ‐259 10,942 10,985 ‐489 1Q11             Operating Income Financial Result Interest in  Taxes Minority Interest 2Q11             Net Income Investments Net Incomeo Increase in the financial result (2Q11: +R$2.9bn) due to the appreciation of the Real (2Q11/1Q11: +4%) and financial  investments (cash and cash equivalents adjusted*1Q11: R$62.9bn vs.  2Q11: R$59.5bn).o Minority interest from the positive exchange variation on the debt of the SPEs. * Including cash and cash equivalents  plus tradeable securities (maturing in more than 90 days) 16
  • EXPLORATION AND PRODUCTION: OPERATING INCOME 2Q11 vs. 1Q11Increase in operating income  due to higher international oil prices (R$ million) 3,107 ‐857 ‐65 28 ‐338 16,017 14,142 1Q11                  Price Effect on  Cost Effect on COGS Volume Effect on  Volume Effect on  Operat. Expenses 2Q11               Operating Income Revenue Revenues COGS Operating Income o Higher domestic and export sales prices (1Q11: US$94.04 / 2Q11: US$108.97), pushed by the upturn in    heavy crude prices. o Increased in lifting cost and higher government take, in line with international prices. o Higher exploratory and drilling expenses (2Q11/1Q11: + R$ 178 mi). 17
  • DOWNSTREAM:  OPERATING INCOME 2Q11 vs 1Q11Higher costs impacted the operating income (R$ million) 1Q11 Price Effect  Cost Effect  Volume Effect       Volume Effect  Operat.  2Q11 Operat.  on Revenues on COGS on Revenues on COGS Expenses Operat.  Income Income o Higher oil  and oil  product  export  prices  and higher  prices of  products sold in the  local  market  whose  prices  are  linked to international prices in the short term. o Cost increase outpaces revenue upturn, reflecting higher oil, diesel and gasoline import volumes and prices. o Increase in refining costs due to higher expenses from scheduled stoppages and materials.  18
  • GAS & POWER, INTERNATIONAL and DISTRIBUTION (2Q11 vs. 1Q11) (R$ Million) 2Q11 VS. 1Q11 Gas & Power Operating Income: R$ 1,131  R$ 745  o Higher industrial demand supplied by increased gas output in Brazil o Higher  margins  of  energy  sales,  due  to  thermoelectric  generation to  export,  non occurred in 1Q11 International 2Q11 VS. 1Q11 Operating Income: R$ 649  R$ 903 o Reduced output from the Agbami field in Nigeria due to the lower production  quota allocated to Petrobras 2Q11 VS. 1Q11 Distribution Operating Income: R$ 336  R$ 559 o Increase of 6% sales volumes in line with the seasonal upturn in demand with  narrower sales margins  19
  • INVESTMENTS 1H10 investments influenced by the completion of major projects  1H2010 1H2011 0,8 0,3 0,7 0,2 0,4 0,6 E&P* 2,5 1,9 RTM* 1,8 3,8 Gas&Power* 16,0 International 14,8 Biofuels 12,3 14,0 Distribution* Corporate o Around  40%  of  our  investments  are  pegged  to  the  U.S.  dollar.  Given  the  appreciation  of  the  Real  against the Dollar (10%), the Company spends less Reais on a given investments in Dollars.  o Reduction in 2011 investment guidance from R$93.7 billion to R$84.7 billion*Includes projects developed by SPCs 20
  • LEVERAGE AND LIQUIDITYSolid balance sheet with high liquidity  Net Debt/EBITDA Net Debt/Net Cap. 5,5 35% 40% 4,5 3,5 16% 17% 17% 17% 20% 2,5 1.55 1.03 1.07 1,5 0.96 1.03 0% 0,5 ‐0,5 ‐20% 2Q10 3Q10 4Q10 1Q11 2Q11 o Stable  leverage,  with  maintenance  of  high cash position. o Upgrade of Petrobras’ foreign‐currency  risk rating from Baa1 to A3 (Moodys). 21
  • Information:Investor Relations+55 21 3224-1510petroinvest@petrobras.com.br 22 22