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  1. 1. Brazil as a predominant global player of the future Paulo Roberto Costa Downstream Director 1
  2. 2. DISCLAIMER   This presentation may contain forward-looking Cautionary statement for U.S. investors: 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 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. COMPARATIVE  POSITION  Ranked  among    the  leading  integrated  energy  companies   2010  Oil  and  Gas  ProducPon  (mm  boe/d)   2010  Proven  Reserves  –  SEC  (bln  boe)   4.4 24,8 3.8 3.3 2.8 17,8 2.6 2.4 2.1 14,2 12,7 1.8 10,7 10,6 8,3 6,8 5,4 0.6 2010  Refining  Capacity  (mm  boe/d)   Market  Cap  (US$  bn)  -­‐  August  22nd,  2011   * * * *Source: Evaluate Energy (barrels per calendar day, considering company % shareholding and including JVs) and BloombergNotes: Peer companies selected above have a majority of capital traded in the public market; * 2009 3
  4. 4. WORLD  OIL  DEMAND  Replacing  produc5on    with  new  discoveries  will  be  a  major  challenge   GLOBAL LIQUIDS DEMAND SCENARIO (MM bpd) Projects under Projects under development, development and prospective and new prospective discoveries OPEP Project Project Decline OPEP Decline Non-OPEP •  To  meet  growing    world  demand    while  replacing  exis4ng  produc4on  addi4onal  capacity   of  38  MMbpd    will  be  needed  by  2020   •   Demand  must  be  met  by  a  combina4on  of  factors:       •  New  discoveries   •   Alterna4ves  energy  sources   •   Increase  of  energy  efficiency   Source:  WoodMackenzie   4
  5. 5. BRAZIL  LEADERSHIP  IN  RECENT  DISCOVERIES  Deep-­‐water  discoveries  in  Brazil  represent  1/3  of  the  worldwide  discoveries  in  the  last  5  years   New  Discoveries  2005-­‐2010   (33,989  million  bbl)   Deep-­‐Water   Discoveries   Brazil Other Other Discoveries Deep-Waters •   In  the  last  5  years,  more  than  50%  of  the  new  discoveries  (worldwide)  were  made  in  deep  waters   •   The  development  of  these  reserves  will  demand  addiPonal  capacity  from  the  supply  chain   •   Expansion  of  the  oil  and  gas  chain  in  Brazil  is  in  line  with  this  perspecPve   Petrobras  expects  to  double  its  proved  reserves  unPl  2020,  keeping  the  discovery  cost  around  US$2/boe   Source:  PFC  Energy   5
  6. 6. RESERVES  AND  RECOVERABLE  VOLUMES   Rapid  growth  in  reserves  from  discoveries  in  deep  waters     Proved  Reserves    –    SPE  criteria  Million  boe   30,000   25,000   20,000   Pre-­‐salt:  Lula  and   Cernambi 15,28  Bi  boe Parque  das  Baleias,   15,000   Mexilhão     Roncador   10,000   Marlim   5,000   Namorado   Guaricema   Garoupa   Carmópolis   0   Onshore   0-­‐300  m   300-­‐1500  m   >  1500  m   Pre-­‐salts  Recoverable  Volume  *   Transfer  of  Rights   *  Lula/Cernambi,  Iara,  Guará  and  Parque  das  Baleias,  ranging  from  8.1  to  9.6  Billion  boe   6
  7. 7. DEEPWATER  LEADERSHIP   A  history  of  developing  technology  and  know-­‐how  in  Brazilian  waters   1977   Enchova   410f   1988   125m   Marimbá   1,610f   491m   1994   Marlim   3,370f   1997   2009   1,027m   Marlim  Sul   2003   Lula   5,600f   Roncador   7,125f   1,707m   6,180f   1,884m   2,172m   Deepwater  ProducPon   Offshore  ProducPon  FaciliPes   2010  Gross  Global  Operated¹    Source:    PFC  Energy      Note:    (1)    These  15  operators  account  for  98%  of  global  deepwater  produc4on  in  2010.  Minimum  water  depth  is  1,000  feet  (about  300  meters)   7
  8. 8. PRODUCTION  Petrobras  history  is  to  grow  produc5on  by  expanding  into  new  fron5ers   Deep  and  ultra-­‐deep   Pre-­‐salt   Onshore     Shallow  water   Deep  water   water   8
  9. 9. PRODUCTION   With  broad  access  to  new  reserves,  Petrobras  can  more  than  double  its  produc5on  in   the  next  decade   6,418   3,993   +  35  Systems   2,575   2,772   2,386   2,516   +10  Post-­‐Salt  Projects   +8  Pre-­‐Salt  Projects   4,910  ’000  boe/day   +1  Transfer  of  Rights   845   3,070   Transfer of Rights Added  Capacity   13   Oil:  2,300,000  bpd   Pre-Salt 1,148   543   •   Pre-­‐salt  and  Transfer  of  Rights  will  represent  69%  of  the  addiPonal  capacity  up  to  2020;   •   Pre-­‐Salt  parPcipaPon  in  the  total  producPon  will  enhance  from  the  current  2%  to  18%  in  2015  and  40.5%  in   2020.   Note:  Does  not  include  Non-­‐Consolidated  InternaPonal  ProducPon.   9
  10. 10. VARREDURA  PROJECT:  TECHNOLOGICAL  DEVELOPMENT  AND  EXPLORATORY  OPTIMIZATION   Varredura  Project   Discoveries  in  Pre-­‐salt   Descobertas do Pr é-sal Campos  Bde Campos na Bacia asin  2009/10   2009/10 (VARREDURA) (Varredura)   •   AddiPonal  recoverable  volume  from  discoveries:   •    Post-­‐salt:   Marimbá,   Marlim   Sul   and   Pampo:   1,105  MM  boe;     •    Pre-­‐salt:   Barracuda,   CaraPnga,   Marlim,   Marlim   Leste,   Albacora   and   Albacora   Leste:   1,130   MM   boe*.     •   Well  producPvity  exceeds  20,000  bpd   67  exploratory  wells  will  be  drilled  between  2011  and  2015  in  producPon  areas  in   Campos  basin   *No  volumes  have  been  announced  regarding  the  Marlim  Leste  and  Albacora  Leste  discoveries.     10
  11. 11. NEW  VESSELS  AND  EQUIPMENTS  Resources  required  for  produc5on  growth   Delivery  Plan  (to  be  contracted)   Current  SituaPon   Accumulated  Value          CriPcal  Resources   (Dec/10)    By  2013    By  2015    By  2020   Drilling  Rigs  Water  Depth  Above    2.000  m   15   39   37  (1)   65  (2)   Supply  and  Special  Vessel   287   423   479   568   ProducPon  Plauorms  SS  e  FPSO   44   54   61   94   Others  (Jacket  and  TLWP)   78   80   81   83   Produc4on     Supply  Vessel   Drilling  Rigs   Pladorm    (FPSO)   Drilling  Rigs  Under  Contract   Water  Depth   2006   2008   2010   2011   2012   2013   Up  to  1,000  meters   6   11   11   1,000  to  2,000  meters   19   19   21   +2   +1   +1   Over  2,000  meters   2   3   15   +10   +13   +1  (1)  Two  rigs  reallocated  from  internaPonal  operaPons,  expire  in  2015,  so  it  is  not  considered  in  the  2020  accumulated  value  (2)  The  demand  for  long-­‐term    will  be  adjusted  as  new  demand  assessments    are  made.   11
  12. 12. 2ND  INVESTMENT  CYCLE:  MONETIZATION  OF  THE  PRE-­‐SALT  RESERVES   1st  Investment  Cycle   COMPLETED   LNG LNG Acquisition TPPs Pecém BGUA UFN III (Sep/14) Cubatão UFN V (Sep/15) TPP Bicomb. Conversion Sulfato de Amônio (May/13) Termoaçu ARLA 32 (out/11) UFN IV (Jun/17) % of Total Investments Gasduc III Gasbel II Regás Bahia Gasene (Jan/14) Pilar-Ipojuca New NG TPPs Cacimbas-Vitória Japeri-Reduc Gastau Catu-Pilar Gascav Gaspal II Gascar UPGN Cabiúnas – Atalaia-Itaporanga Gasan II Route 2 Pre-Salt Urucu-Manaus (Aug/14) Ecomps + Delivery Spots + Network Maintainance Adaptation of the Gas Pipelines Network (US$ 3.34 bi) TPP Commitments (US$ 0.94 bi) New TPPs run on Natural Gas (US$ 1.82 bi) Renewable Energy: Wind Power and Biomass (US$ 0.02 bi) LNG regasification (US$ 0.74 bi) Natural Gas Liquefaction (US$ 0.10 bi) Chemical Transformation of NG (US$ 5.85 bi) 12 12
  13. 13.    2011-­‐2015  INVESTMENTS      Investment  level  similar  to  the  previous  Plan,  with  more  focus  in  E&P   2010-­‐14  Business  Plan   2011-­‐15  Business  Plan   US$224 billion US$224.7 billion 2.9 2.4 3.5 4.1 17.8 2.4 13.2 3.1 5.1 3.8 118.8 (*)   73.6 70.6 127.5 RTM E&P Gas, Energy & Gas Chemicals Petrochemicals (*)  US$22.8  billion  in  Explora4on   Distribution Biofuels •    5%   of   investments   will   be   made   overseas,   87%   Corporate of  which  in  E&P.   •   Obs:  HSEE  (US$  4.2  bi),  IT  (US$  2.7  bi),  Technology  (US$   4.6   bi),   LogisPcs   (US$   17.4   bi)   and   Maintenance   &   Infrastructure  (US$  20.6  bi)   13
  14. 14. Downstream Challenges 14
  15. 15.  HIGH  GROWTH  POTENTIAL  Low  per  capita  consump5on  supports  demand  growth  in  developing  countries   Total Oil Consumption (Índex=100 in 2002) Per capita consumption * * * OCDE * * * * Source: BP Statistical Review 2011 15
  16. 16. POTENTIAL  INCREASE  OF  OIL  PRODUCTS  CONSUMPTION  Brazil  s5ll  has  a  low  motoriza5on  rate   Licenses  for  new  vehicles  Million  of  units   Number  of  vehicles  per  1000  habitants   16
  17. 17. During recent years, the Demand growth in Brazil has increasedits’ speed when compared with GDP growth GDP and Demand growth rates (yearly) *   * *   * * * * * Lower Higher GDP GDP *   *   *   *   *   *   *   *   *   *   *   *   Percentage points (p.p.) of GDP growth above Demand growth * * * *   Lower Higher GDP GDP *   *   *   *   *   *   *   *   *   *   *   *   *   17
  18. 18. A sharp growth in the air transportation industry has been observed in recent years Number of passengers carried - air transportation (thousand) Seats / Km available *p.y. *p.y. * * * * * * * * * * * * It was possible by the increase in the number of people having access to air transportation due to higher income and stronger BRL leading to cheaper flight rates.* Source: ANAC 18
  19. 19. The 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 Output * * * * * * * * * * * * * * * * * * * The cargo transportation matrix in Brazil is highly dependent upon trucks, with the growth in economic activity boosting diesel demand. 19
  20. 20. DIESEL  AND  JET  FUEL  CONSUMPTION  Strong  diesel  and  jet  fuel  consump5on  growth  in  Brazil  have  been  observed  following  the  economic  growthDiesel Sales (2006 to 2011/jun) 4,1%   8,7%   *   5,5%   *   *   •  The 1S2011 sales exceeded expected growth, keeping a faster- *   *   *   *   *   *   than-GDP growth. Jet Sales (2006 to 2011/jun) 13,4%   *   9,7%   *   *   •  The same higher-than-GDP acceleration was verified during first semester 2011. *   *   *   *   *   *   20
  21. 21. …  increasing  the  need  for  new  capaciPes  in  the  North,  Northeast  and  Mid-­‐west  regions   Market  in  2010   Market  in  2015   * * * * Capacity Demand Deficit Capacity Demand Deficit * * * Capacity Demand Superavit Capacity Demand Deficit •  Increase  in  demand  in  the  Central-­‐West,  Northeast,  and  North  explains  the  concentraPon  of  investments  in  the   Northeast;   •  Tax  incenPves  combined  with  environmental  restricPons  also  contribute  to  the  concentraPon  in  the  region.   21
  22. 22. DOWNSTREAM  EXPANSION
Reduced  dependence  on  imports  of  oil  products   Increase in import levels will lead to higher ... and to high levels of exposure to’000 bpd logistical costs... international supply Net Imports as a percentage of total demand (%)* *   *   *   *   *   2011E   USA Brazil (2010) France Germany China Japan Spain Mexico Indonesia Brazil (2020)** * Source: IEA – 2010 World Energy Statistics ** Without considering Capacity Expansion 22
  23. 23. GLOBAL  REFINING  Regions  with  fast  growth  con5nue  to  invest  in  refining   Adding    Refining  Capacity  (2011-­‐2016)   Thousand bpd •   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 23
  24. 24. PRODUCTION,  DOWNSTREAM  AND  DEMAND  IN  BRAZIL  Construc5on  of  new  refineries  to  meet  local  market  demand   PREMIUM  I  ,000  bpd   (2nd  phase)   COMPERJ   300,000  bpd   5,000   (1st  phase)   165,000  bpd   (2019)   (2013)   COMPERJ   (2nd  phase)   Abreu  e  Lima   4,000    Refinery  (RNE)   165,000  bpd   (2018)   230,000  bpd     (2012)   3,327   PREMIUM  II   3,000   2,643   300,000  bpd   3,095   4,910   (2017)   2,536   PREMIUM  I   2,000   (1st  phase)   3,070   3,217   300,000  bpd   2,147   (2016)   2,205   2,208   2,100   2,004   1,971   1,933   1,811   1,798   1,792   1,000   0   2009     2010   2011   2015   2020   Oil  and  NGL  Produc4on  –  Brazil   Total  crude  oil  processed  –  Brazil   Oil  Products  Market  (2  scenarios)   •   Highlights:  Abreu  e  Lima,  1st  phase  of  COMPERJ,  and  1st  phase  of  Premium  I.   24
  25. 25. PRODUCTS  New  refineries  will  produce  higher  value-­‐added  oil  products   ProducPvity  of  exisPng  refineries  –  2020   ProducPvity  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  Dis4llated   Light   Others   Medium  Dis4llated   Light   Others   Diesel   Gasoline   Naphtha   Fuel  Oil   Jet  Fuel   LPG   Special   Intermediary   •   Increase  in  global  demand  for  medium-­‐disPllated  products  tends  to  lead  to  an  increase  in  price  versus  the   gasoline  price.   25
  26. 26. More  RestricPve  specificaPon  on  Diesel  brings  challenges  to  lots  of  players      Besides  Petrobras,  success  of  a  cleaner  fuel  depends  on  other  stakeholders   ANP Distribuitors •  Set possible uses for Diesel •  Logistics Investiment to transport off-road until the end of 2012. and store different diesel grades PETROBRAS •  Replace high sulphur fuel production for cleaner one Engine Manufacturer Retails •  Produce engines able to use •  Investments at service stations in cleaner diesel (10 ppm) order to manage sales of different diesel grades Petrobras is investing over US$ 12 billion on the next 5 years building treatment units capable of producing a clear diesel and adjusting logistics related to diesel movement. 26
  27. 27. New units in existing refineries are being built as part of the product quality investments …   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 … reassuring Petrobras’ commitment with sustainability and sulfur emission reduction over time. 27
  28. 28. HYDROREFINING  INVESTMENTS  Catch  up  phase  to  meet  interna5onal  standards  for  quality  products   Hydrorefining  Capacity     rela4ve  to  Dis4lla4on  Capacity   74%  (2020)   59%  (2015)   23%  (current)   23%   "  Adding  value  to  domesPc  crude  oil  by  producing  diesel  and  gasoline  in-­‐line  with  internaPonal  standards.   "  Underinvested  over  the  past  years  requires  catching  up  with  hydrorefining  capacity  (for  removal  of  sulfur)     28
  29. 29. Biofuels’ Future Role 29
  30. 30. PRIMARY  ENERGY  DEMAND  BY  FUEL  TYPE   Mundo   World 2010* Brasil   Brazil 12,975 (MM TEP) 268,4 (MM TEP) Brazil is a leader in the use of renewable sources of energy. At 46%, renewable energy demand in Brazil is more than three times higher than the world average of 14% Source: U.S. Energy Information Administration/2008 (EIA) Source: Ministério de Minas e Energia (MME) 30
  31. 31. PRIMARY  ENERGY  DEMAND  BY  FUEL  TYPE   World Mundo   2030 Brasil   Brazil 17,237 (MM TEP) 557 (MM TEP) Brazil’s primary energy demand will double until 2030, and the share of renewables will remain in 46%. In order to meet the challenge of supplying Brazilian energy demand growth, Petrobras is investing in ethanol, biodiesel plants and wind farms in the Northeast Source: Petrobras Strategy / EPE 31
  32. 32. PETROBRAS  BIOFUEL  INVESTMENTS  Priority  for  ethanol  in  partnership  with  private  companies   INVESTMENTS / 2011- 2015 US$ 4.1 billion 7% 14% 0.3 Ethanol 0.6 Ethanol Logistics 1.9 47% Biodiesel 1.3 R&D 32% Ethanol supply (million m³) Biodiesel supply (thousand m³) Market-­‐share  Pbio+Partners:   Market  Share  Pbio+Partners:   5.6 •   2011:  5.3%   •   2011:  28%   •   2015:  12%   •   2015:  26%   273% 855 735 16% 1.5 2011* 2015 2011* 2015 Pbio  +  Partners   Pbio  +  Partners   32
  33. 33. BIODIESEL AND  ETHANOL  PLANTS  OF  PETROBRAS    Belém  Project-­‐  Belém  Project  -­‐PA   Portugal                                     (Implementa4on)   (Implementa4on)   Quixadá-­‐CE                     (Petrobras)    Pará  Projest-­‐PA   Guamaré-­‐RN                     (Implementa4on)   (Experimental)   Guarani  -­‐   Moçambique   (Sena)   Bioóleo  (Crusher)   Candeias-­‐BA                     (Petrobras)   Boa  Vista-­‐GO                               (Petrobras-­‐  São  Mar4nho)   Montes  Claros-­‐MG   (Petrobras)   Biodiesel => 5 plants running Biodiesel PBIO Bambuí-­‐MG                   2 under implementation (Petrobras-­‐Total)   Guarani-­‐SP   Biodiesel Partnership Marialva-­‐PR                     Biodiesel PBIO (Implementation) (Petrobras-­‐BS  Bios)   Ethanol => Biodiesel Partnership (Implementation) 10 mills running Ethanol Partnership Passo  Fundo-­‐RS                     (Petrobras-­‐BS  Bios)   Crusher Partnership 33
  34. 34. RECENTLY,  LOGUM  LOGÍSTICA  WAS  CREATED  A  Broad  Logis5c  System  For  Mul5modal  Transport  And  Storage  Of  Ethanol   LOGUM’s Plan and shareholders 10% 20% 10% 20% 20% 20% Main Features When completed, the system will   1,300 Km of pipelines integrate the main ethanol-producing   Waterway terminals regions in the states of São Paulo,   Total storage capacity: 800 thousand m3 Minas Gerais, Goiás and Mato Grosso     Total flow capacity (2020): 21 million m3 Source: Logum Logística; AB-CR/PP/ICP 34
  35. 35. EVOLUTION  OF  ETHANOL  AND  GASOLINE  DEMANDS   Demand – Scenario “FdH”Thousand m3 Gasoline C The demand for ethanol has grown much more rapidly than gasoline • CAGR Gasoline C (2000-2011) = 4% Hydrous Ethanol • CAGR Hydrous Ethanol (2000-2011) = 8% Year Participation of the fleet 4,7% Light vehicles The significant growth of the fleet of flex- fuel vehicles associated with the shortage 84,3% of ethanol in the market since early 2010 resulted in the shift in demand from ethanol to gasoline 0,1% 10,8% Year Source: Petrobras Strategy 35
  36. 36. BIOFUELS  SUMMARY   •  Petrobras’ investments aim to increase local biofuels production as well as implement Brazilian logistics system in order to ensure security of long term energy supply •  As the main supplier of ethanol to the local market, the sucroenergy industry in Brazil has an important challenge in the following years. Based on that, this industry should consider new investments in order to supply the huge demand of the domestic market in the medium and long term 36
  37. 37. FINAL  REMARKS  •  Brazil offers an inspiring set of business opportunities in E&P, Downstream, Biofuels and others. Petrobras will be well positioned in them•  The expected increase in Brazilian reserves and production will give a signifficant contribution to the world’s new barrels in this decade•  Petrobras will continue to be a relevant offshore player•  Brazilian demand keeps with a good growth prospect, requiring refining expansion. Petrobras will keep its’ position as the main supplier•  Biofuels will continue to deserve attention and investments in production and logistics systems 37
  38. 38. Thank you! 38

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