15 09-2008 Almir Guilherme Barbassa - Supply Chain for the Pre-salt Development-no Brasil (somente em inglês)

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15 09-2008 Almir Guilherme Barbassa - Supply Chain for the Pre-salt Development-no Brasil (somente em inglês)

  1. 1. Almir G. Barbassa Chief Financial Officer Rio de Janeiro, September 2008 Supply Chain for the Pre-Salt Development 1
  2. 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. 2
  3. 3. CORPORATE ORGANIZATION AND KEY OPERATING RESULTS Exploration & Downstream Gas & Distribution International Biofuels Production (Supply) Energy Petrochemicals Income from Operations(2) Distribution Summary Financials (US$ billion) 3% Downstream 2006 2007 LTM 16% Net Revenues 72.3 87.7 108.6 EBITDA 22.9 25.3 31.8 2006 2007 1H08 Capex 14.9 21.0 24.3 Total Debt (1) 21.3 21.9 25,9 Domestic Cash & Cash Equivalents 12.7 7.0 6.6 E&P Net Debt 8.7 14.9 19.2 Total Equity 44.3 65.2 83.0 81% Total Assets 98.7 129.7 156.9 NOTES: 1 Includes capital leases 2 For tthe year ended December 31, 2007. Excludes losses in gas and energy, corporate results and eliminations 3
  4. 4. INVESTMENT PLAN BY BUSINESS SEGMENT 2008-12 Period 58% 13% US$ 112.4 billion 15.0 65.1 1.5 29.6 97.4 1% 2.6 2.6 4.3 2% 6.7 26% 87% 2% Brasil Internacional 4% 6% E&P RTC G&E Petrochemical Distribution Corporate Biofuel US$ 65.1 billion directed to E&P Exploration: US$ 13.8 billion Production: US$ 51.3 billion Note: Includes International 4
  5. 5. CASH FLOW YEAR ENDED DECEMBER 31 2007 2006 2005 Cash Flow from Operating Activities Net Income $ 13.138 $ 12.826 $ 10.344 Depreciation $ 5.544 $ 3.673 $ 2.926 Other (inc.W.C.) $ 3.982 $ 4.578 $ 1.845 CFFO $ 22.664 $ 21.077 $ 15.115 Net Cash used in Investing Activities Capex and other $ (20.768) $(14.470) $ (10.376) Acquisitions $ (1.551) $(416) Puchase Marketable Seceurities $ (1.707) $ 205 $ 169 Total Investments $ (24.026) $(14.681) $ (10.207) Cash Flow From Financing Activities Amortizations $ (6.670) $(4.167) $ (2.652) Additions to Debt $ 4.542 $ 2.957 $ 2.131 Dividends and other $ (3.860) $ (3.144) $ (2.104) Net from Financing $ (5.988) $ (4.354) $ (2.625) Increase (decrease) in cash and $ (7.350) $ 2.042 $ 2.283 cash equivalents Effect of exchange rate changes on cash and cash equivalents $ 1.649 $ 775 $ 732 5
  6. 6. BALANCED VERTICAL INTEGRATION Upstream Operations Downstream Operations Áreas de Concessão (outubro/2005) Dutos existentes Refinaria Petrobras Terminal aquaviário Other Companies Terminal terrestre Proved Domestic Reserves of 13,92 Billion BOE (SPE) 11 refineries in Brazil Southeast Basins responsible for more than 80% of 2007 domestic throughput of 1,795 k bpd Brazil’s oil production 2007 oil products domestic consumption of 1,725 k bpd 2007 domestic oil average daily Production of 1,792 k bpd 6
  7. 7. PRE SALT PROVINCE Total area of the Province: 112,000 km2 Area under concession: 41,000 km2 (38%) Area not under concession: 71,000 km2 (62%) Area with Petrobras interest: 35,000 km2 (31%) line hinge Well Tested HC Campus Exploratory blocks Pre-salt Reservoirs 7
  8. 8. E&P - RAPIDLY GROWING PRODUCTION PROFILE 7.7% p.y. 4,153 8.7% p.y. 18 3 3,494 515 * 151 285* 643 Natur al Gas - Inter nati onal Oi l and NGL - Inter nati onal 637 . y. 8.3% p Natur al Gas - Br azi l Oi l and NGL - Br azi l 2,298 2,300 2,217 1,810 2,036 2,020 1 01 1 09 1,636 96 1,565 23 85 94 14 2 12 6 1,505 24 16 3 2 .8 12 1,238 35 1 61 27 7 2 73 20 1 68 1,008 1,090 16 44 27 4 2 .4 2 1 885 53 252 2 50 2 65 10 60 11 2 32 9 22 1 Thousand boed 10 45 38 47 1 97 25 17 9 16 3 1. 7 78 1. 7 92 15 2 1 . 6 84 13 4 1 . 5 00 1. 54 0 1. 4 93 1 . 271 1. 3 36 1 . 00 4 1. 1 32 80 9 86 9 7 16 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2012 Target 2015 Forecast * Includes non consolidated production 8
  9. 9. MAIN PROJECTS IN BRAZIL – 2007-2012 Marlim Sul Espadarte Tupi Módulo 3 – Rio de Janeiro EWT Módulo 3 P-56 2.600 Espadarte Mód II Up to 100.000 bpd 100.000 bpd 100.000 bpd 30.000 bpd Tupi 2012 2011 6/jan/07 2009 Pilot System Up to 100.000 bpd Cidade Niterói 2010 Piranema Jabuti (FPSO) 30.000 bpd 2.400 10/oct/07 100.000 bpd Frade 2008 100.000 bpd 2009 2.421 Cidade de Vitória Golfinho Mód. 2 Marlim Sul Módulo 2 P-51 2.374 2.200 100.000 bpd November 2007 180.000 bpd 2008 2.296 Roncador Roncador Jubarte Module 4 P-52 2.191 P-57 180.000 bpd P-62 180.000 bpd November 2007 1.950* Cachalote & Baleia 2011 100.000 bpd 2012 2.000 Franca FPSO Capixaba Parque das 100,000 bpd Conchas 2010 100.000 bpd 1.792 Marlim Leste P-53 2009 1.800 180.000 bpd Roncador 2008 P-54 180.000 bpd November 2007 1.600 2007 2008 2009 2010 2011 2012 Obs.: This curve does not include Tupi’s Pilot System Production * Target may vary +/- 2.5% 9
  10. 10. E&P: UPCOMING UNITS UNITS FIELD CAPACITY STATUS START-UP SHIPYARD FPSO Cidade Oil: 100.000 bpd Modec Jabuti Under construction 2S08 de Niterói* Gas: 3,5 MM m3/dia Sipem - Dubai Oil: 180.000 bpd Nuclep/Brasfels P-51 Marlim Sul Under construction 2S08 Gas: 6MM m3/dia Angra/RJ Oil: 180.000 bpd Quip P-53 Marlim Leste Under construction 2S08 Gas: 6MM m3/dia Rio Grande/RS Cidade São Oil: 35.000 bpd Prosafe Camarupim Under construction 2S08 Mateus* Gas: 10 MM m3/dia Keppels - Cingapura Mauá-Jurong PMXL-1 Mexilhão Gas: 15MM m3/dia Under construction 2009 Niterói/RJ Oil:100.000 bpd Under construction Brasfels -FSTP Keppel & P-56 Marlim Sul 2011 Gas: 6MM m3/dia (P-51 Clone) Technip - Angra/RJ Oil: 180.000 bpd SBM P-57 Jubarte Contracted 2011 Gas: 2MM m3/dia Shipyard N/A Oil:100.000 bpd Mauá-Jurong P-62 Roncador Contracted 2012 Gas: 6MM m3/dia Niterói/RJ Oil: 180.000 bpd Hull contracted. Basic Atlântico Sul P-55 Roncador 2013 Gas: 6MM m3/dia project under revision. Suape/PE - Rio Grande/RS 10 * Leased
  11. 11. The Pre-Salt Supply Chain Challenge 11
  12. 12. CRITICAL RESOURCES CHALLENGES Equipments Human Resources Cost Inflation HOW PETROBRAS IS DEALING Aggressive bidding program for rigs, support vessels and anchor handlers, mainly new built units Long-term contract with service providers Anticipating the renew of current contracts Supporting the expansion of the suppliers installed capacity Training programs for its own employees and for the supply chain workforce 12
  13. 13. NEW RIGS Water Operating Start Up Start Up Start Up Start Up Start Up From 2013 Depth 2007 2008 2009 2010 2011 2012 to 2017 • Pride South Atlantic • O. Yorktown •Petrobras XIV 0-999m 5 • Pride Mexico • Borgny Dolphin • Ocean Concord • Falcon-100 Olinda Star 1000-1999m 18 Ocean Worker • Delba V • Delba VI • Scorpion • Lone Star • Gold Star • Delba VII • Schahin III • Schahin I • Delba VIII • Petrorig II • Norbe VI • Norbe IX + 28 new units ≥ 2000m 5 • Sevan Driller • Delba III •Delba IV • Schahin 1 to be leased • West Taurus • SSV Victoria • Schahin 2 • West Eminence • West Orion • Norbe VIII • Dave Beard • Petroserv • Etesco 8 • Sevan Brasil Total per year 28 6 9 6 2 12 28 Cumulative 6 15 21 23 35 63 Stena Drillmax e Dep Water Millennium are not being considered since they are being negotiated in the Spot Market 13
  14. 14. NEW VESSELS TO BE CONTRACTED LEASED/ BEING LEASED TO BE LEASED TOTAL Large Vessels (VLCC/Tankers) 26 44 70 Supply Vessels 24 122 146 FPSO/SS 6 8 14 Others (jack-ups, TLWP) 3 1 4 Total 59 175 234 Forecasted investments meet Petrobras’ needs regarding exploratory and production development portfolio 14
  15. 15. HUMAN RESOURCES PETROBRAS EMPLOYEES Participants in the 2.468 Number of employees Training Programs 2.101 80.931 68.931 62.266 52.037 53.904 1.213 46.723 48.798 989 1.043 774 2002 2003 2004 2005 2006 2007 2012 2002 2003 2004 2005 2006 2007 22,000 new employees since 2002 and 12,000 more up to 2012 The superior level professionals, who were recently admitted, without the required previous experience, spend up to a year in classrooms before starting to effectively work at the company Forecasted demand for 112.625 workers workers at Petrobras supply chain in Brazil CIVIL CONSTRUCTION & The Brazilian Government, with ENGENEERING MAINTENANCE CONSTRUCTION PROCUREMENT Petrobras support has a specific 5.967 15.020 84.576 7.062 training program to meet this demand 15
  16. 16. BRAZILIAN OIL INDUSTRY MAIN CHALLENGES • Infrastructure Enhancement • Critical Items Supply (imports) • Drilling Equipment • Dynamic Positioning and Brasfels Shipyard at Angra dos Reis. P-51 and P-56 construction sites. Propulsion Systems • Steel Manufacturing Process and Supply • Skilled Work Force for Construction and Operation • Financiability Rio Grande Shipyard under construction. Designed for platforms construction. 16
  17. 17. SUPPLY STRATEGIES FOR GOODS AND SERVICES • Manufacturers •Equipment •Chemicals US$ 5.2 Bi • Distributors •Spare parts • Retailers •Etc. • Seismic • Service •Drilling US$ 23.6 Bi providers •Transport •Etc. • Platform • EPC US$11.0 Bi •Refinery •Shipyards •Revamps •Constructors As per 2007 •Etc. 17
  18. 18. RELEVANT EQUIPMENT DEMAND FOR THE PERIOD 2008 - 2015 Units of Total Amount Items Measurement ( 2008 ~ 2015 ) Structural Steel t 1.252.000 Air Coolers un 721 Mooring Cables km 2.726 Christmas Trees un 3.930 Safety boats un 344 Pumps un 10.264 Lifeboats un 1.978 Well Heads un 3.657 Compressors un 969 Fan Coils un 2.818 Heat Furnaces un 252 Heat Reformers Furnace un 8 Eletric Generator un 439 Crane un 220 Flexible Pipes m 7.200 Diesel Engines un 717 Eletric Motors un 17.035 Reactors un 317 Storage Tanks un 2.824 Process Towers un 732 Eletric Transformers un 1.236 Heat Exchangers un 5.913 Pipe lines t 1.542.266 Turbines un 441 Production Rigs un 36 Pressure Vessels un 4.829 18
  19. 19. MATERIALS AND EQUIPMENT TO BE DEVELOPED IN NEXT YEARS Technological Development • Submarine sensor for measuring oil and grease degree in water; • Signal optical cable for well temperature and pressure monitoring; • Submarine optical connectors; • Intelligent sensor network for natural gas flow measurement; • Internal for piping in the radiation zone of industrial furnaces; • Co-generation system using biomass as fuel; • Submarine sphere valves; • Monitored Cathodic protection system for pipelines. 19
  20. 20. CRITICAL SERVICES - OTHERS Petrobras Vision Area Services • Drilling; • Wokover services; • Flexible lines and umbilical's laying services; • Support to diving; E&P • Support to ROV vehicles; • Support to mooring activities; • Special vessels; • Submarine interconnection services. ACTION Attendance by Specific Demand 20
  21. 21. COMPETITIVE NATIONAL SUPPLY OF GOODS AND SERVICES Suitability of National Supplier Park GOOD AND SERVICES SUPPLY PATH 5. Incentive for settling down imports international companies in Brazil 4. Incentive for association between national and international Increase in companies National Supply Capacity of G&S 3. Incentive for new national entrants imports 2. Develop competition among medium competitive sectors 1. Increase productivity capacity of National highly competitive sectors Industry Current Demand Future Demand 21
  22. 22. NATIONAL INDUSTRY COMPETITIVENESS DIAGNOSIS High Level Competitiveness Sectors CRITICAL EQUIPMENTS (Non Exhaustive) 1 Special Steel (for boilers) and forged steel Pipelines in the range of 14-42 inches 2 1 diameter with longitudinal welding 2 Polished connecting rod with guided 3 centralizer (ongoing action) Polyester Mooring cables; 3 Drilling pipelines and Fiber glass 4 pipelines; 5 Electrical cables for CSP; 4 Control Systems for well control, oil and gas metering systems, drilling activities; Offshore drilling rigs Gravel Packing Drilling bits 6 Production pipelines alloy coatings(13 Cr, Super13 Cr); 5 Pumps API standard 6 Dry Transformers Expansion of Encourage domestic Stimulate R&D in Brazil ACTIONS Production Capacity components production (not a priority) 22 Sources: UFRJ – Economy Institute and Petrobras
  23. 23. NATIONAL INDUSTRY COMPETITIVENESS DIAGNOSIS High Level Competitiveness Sectors 1 2 IMPORTED COMPONENTS (Non Exhaustive) A Christmas Trees: Forged Steel and 3 electronics 4 A Umbilical: Nylon 11, flexible inox tubes and kevlar 5 Flexibles Pipes: External Polymers and some steels B Package Import Bearings and automation B Steel plate and copper 6 Encourage domestic Expansion of components Stimulate R&D in Brazil ACTIONS Production Capacity production (not a priority) 23 Sources: UFRJ – Economy Institute and Petrobras
  24. 24. NATIONAL INDUSTRY COMPETITIVENESS DIAGNOSIS Medium Level Competitiveness Sectors EQUIPAMENTOS CRÍTICOS (Não exaustivo) HCC Reactors (250-300 mm wall width, 40 Kgf/cm2); Boiler works with special alloys (reactors, towers, pressure vessels); 7 7 Boilers (steam generators); Heat exchangers working with H2S traces (ASTM A 387 degree11); Structural packing for refining process towers; 8 8 Moto Compressor and bare compressor 9 9 Large Engines 10 10 Offshore crains 11 Special sphere submarine valves 11 Forged Valves 12 Basic projects and thermal projects 12 Expansion of Technology update / ACTIONS Production Capacity Association with foreign companies 24 Sources: UFRJ – Economy Institute and Petrobras
  25. 25. COMPARATIVE TABLE OF PRICES AND DELIVERY TIME Brazilian Market x International Market Price Delivery Time Products Families (Brazilian market ) (Brazilian market) Pumps Similar Better Valves 10 – 30% more expensive Better Pipes 20 – 40% more expensive Similar Pipes Accessories 30 – 50% more expensive Better Pressure Vessels 30 – 50% more expensive Good Heat Exchanger 30 – 40% more expensive Good Instrumentation 20% more expensive Good Electrical • Panels Similar Better • Cables 10 – 15% more expensive Good Source: ABEMI 25
  26. 26. For more information, visit our website: http://www.petrobras.com.br/ri/english 26

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