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FIXED INCOME PRESENTATIONJanuary, 2011                                            1
DISCLAIMERFORWARD-LOOKING STATEMENTS:DISCLAIMERThe presentation may contain forward-looking statements about          We u...
SUMMARY TERMS       • Issuer: Petrobras International Finance Company (PifCo)       • Guarantor: Petróleo Brasileiro S.A (...
Strategic andOperational  Overview                4
FULLY INTEGRATED ACROSS THE HYDROCARBON   CHAIN               Adjusted EBITDA US$ 32.9 Billion1 (LTM2)                    ...
A WORLD-CLASS INTEGRATED ENERGY COMPANY                       2009 Oil & Gas Production (mm boe/d)                        ...
COMPARISON WITH OTHER SIMILAR RATEDCOMPANIES                          2009 Production (mm boe/d)                          ...
LONG HISTORY OF TECHNOLOGICAL AND  OPERATIONAL LEADERSHIP IN DEEPWATER                          1977                      ...
GROWING PRODUCTION FULLY SUPPORTED BY   DISCOVERIES                                                                   Petr...
DEVELOPING TRADITIONAL POST-SALT HORIZONS,WHILE TRANSITIONING TO PRE-SALT                                                 ...
5 BILLION BOE BASE IN CONTIGUOUS AND ADJACENTFIELDS, INCREASING SCALE AND REPEATABILITY                                   ...
BRAZIL AS A LARGE AND GROWING EMERGING    MARKET         2009 Total Oil Consumption by Country (mmbo/d)      18.710       ...
DOMINANT POSITION IN THE BRAZILIAN MARKETENHANCES CREDIT QUALITY                      Upstream Operations                 ...
90% OF DOWNSTREAM CAPEX FOR EXPANSION,QUALITY AND OPERATIONAL IMPROVEMENT          Total RTM Investment                   ...
MATCHING INTERNATIONAL PRICES WITH REDUCEDVOLATILITYUS$/bbl             115                                               ...
PETROBRAS IS A NET EXPORTER IN VOLUMEAND VALUEThous bpd               9M09                                                ...
Business Planand Financial  Strategy                17
BUSINESS PLAN 2010-14: INCREASED INVESTMENTFOR INTEGRATED OPERATIONS IN BRAZIL                                            ...
PROJECTED FUNDING NEEDS FOR 2010-2014  BUSINESS PLAN                     PROJECTED Operating Cash Flow                    ...
INCREASING INVESTMENTS LEADING TO AN ORGANIC GROWTH                                                        Sources (US$ mi...
CASH FLOW SUPPORTS MAINTENANCE PLUS GROWTH                                                                                ...
CONSTRUCTION IN PROGRESS:INCREASE IN NET DEBT DUE TO EXPANSION         Construction and Installations in Progress(1)US$ Mi...
GROWING AND STABLE CASH FLOW GENERATION        Adjusted EBITDA (US$ bn) and EBITDA Margin (%)                           Ad...
PETROBRAS’ FINANCIAL PLANNING BASED ON MAINTAINING INVESTMENT GRADE RATINGS WITH PRUDENT LEVERAGE                         ...
A HIGH-QUALITY DEBT PORTFOLIO                         Total Indebtedness (US$ 66,945 million as of September 30, 2010)    ...
Conclusions              26
CONCLUSIONS/FINAL REMARKS/DEBT STRATEGYFINAL REMARKS / DEBT STRATEGY     Petrobras: A mega-capital integrated oil company ...
Appendix           28
SECONDARY OFFERING INCREASED CAPITAL BASE BY $70.5  BILLION THROUGH COMBINATION OF OIL RIGHTS AND CASH          US$ 70,515...
CAPITAL STRUCTURE AND CREDIT METRICS                                                                             1H       ...
BRAZILIAN ECONOMY:  Growing with stability and fiscal responsibility                                         GDP Growth (%...
SHAREHOLDER STRUCTURE                    Capital Ownership as of 12/31/2010 (# of shares, millions) Million               ...
Information:Investor Relations+55 21 3224-1510petroinvest@petrobras.com.br                               33               ...
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Fixed income iq 2011 v9

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Fixed income iq 2011 v9

  1. 1. FIXED INCOME PRESENTATIONJanuary, 2011 1
  2. 2. DISCLAIMERFORWARD-LOOKING STATEMENTS:DISCLAIMERThe presentation may contain forward-looking statements about We undertake no obligation to publicly update or revisefuture events within the meaning of Section 27A of the Securities any forward-looking statements, whether as a result ofAct of 1933, as amended, and Section 21E of the Securities new information or future events or for any other reason.Exchange Act of 1934, as amended, that are not based on Figures for 2010 on are estimates or targets.historical facts and are not assurances of future results. Suchforward-looking statements merely reflect the Company’s currentviews and estimates of future economic circumstances, industry All forward-looking statements are expressly qualified inconditions, company performance and financial results. Such their entirety by this cautionary statement, and you shouldterms as "anticipate", "believe", "expect", "forecast", "intend", not place reliance on any forward-looking statement"plan", "project", "seek", "should", along with similar or analogous contained in this presentation.expressions, are used to identify such forward-looking statements.Readers are cautioned that these statements are only projectionsand may differ materially from actual future results or events. NON-SEC COMPLIANT OIL AND GAS RESERVES:Readers are referred to the documents filed by the Company withthe SEC, specifically the Company’s most recent Annual Report on CAUTIONARY STATEMENT FOR US INVESTORSForm 20-F, which identify important risk factors that could cause We present certain data in this presentation, such as oilactual results to differ from those contained in the forward-looking and gas resources, that we are not permitted to present instatements, including, among other things, risks relating to general documents filed with the United States Securities andeconomic and business conditions, including crude oil and other Exchange Commission (SEC) under new Subpart 1200 tocommodity prices, refining margins and prevailing exchange rates, Regulation S-K because such terms do not qualify asuncertainties inherent in making estimates of our oil and gas proved, probable or possible reserves under Rule 4-10(a)reserves including recently discovered oil and gas reserves, of Regulation S-X.international and Brazilian political, economic and socialdevelopments, receipt of governmental approvals and licenses andour ability to obtain financing. 2
  3. 3. SUMMARY TERMS • Issuer: Petrobras International Finance Company (PifCo) • Guarantor: Petróleo Brasileiro S.A (Petrobras) • Size: Benchmark Size • Tenor: 5, 10 and 30 years • Ranking: Senior unsecured • Ratings: Baa1 (Moody’s); BBB- (S&P); BBB (Fitch) • Form of offering: SEC Registered • Listing: NYSE • Law: NY Law • Book Runners: BTG Pactual, Citi, HSBC, Itaú, JPMorgan, Santander 3
  4. 4. Strategic andOperational Overview 4
  5. 5. FULLY INTEGRATED ACROSS THE HYDROCARBON CHAIN Adjusted EBITDA US$ 32.9 Billion1 (LTM2) 2010 Proven Reserves (SPE) RTM 15.986 billion boe 12% G&P Shallow Water 4% (0-300m) Distribution Deep Water 9% (300-1,500m) 3% 50% International Onshore 5% 9% E&P 76% Ultra-Deep Water (>1,500m) 32% Our Main Segments: Key Statistics and Market Positions (2009) Exploration and RTM (incl. Distribution Gas and Power International Biofuels Production Petrochemicals)• 15.3 Bn boe of 1P • 11 refineries • 7,221 service stations • 13,996 km (8,698 mi) • 26 countries • 3 new Biodiesel(SEC)(4) • 1.9 mm bbld refining • 19.2% share of of pipelines • 0.7 Bn boe of 1P Plants• 2.1 mm boed production capacity service stations • Participation in 20 of (SEC)(4) • Ethanol: Opening• 576 concession areas • 11.2 mty materials • 38.6% share of the 27 gas discos in • 228 thous. boed new markets nominal capacity (3) distribution volume Brazil production • Responsible for 10%• 318 production fields • 92% share of • 5,966 MW of • 276 thous. bbl/d of Brazilian ethanol• 98.5% of Brazilian installed capacity generation capacity refining capacity exportsproduction• 20% of global DW and • Petrochemicals, Gas &UDW production Power activitiesNotes: (1) Includes Corporate and Elimination; (2) LTM as of 9/30/10; (3) Through Braskem and Quattor; (4) 2010 figures 5
  6. 6. A WORLD-CLASS INTEGRATED ENERGY COMPANY 2009 Oil & Gas Production (mm boe/d) 2009 Proven Reserves – SEC (bln boe) 3.9 3.9 23.0 3.2 18.0 2.7 2.6(1) 2.5 2.2 13.9 12.7(2) 11.3 1.7 10.3 10.1 6.4 0.6 5.2 BP XOM RDS CVX COP TOT ENI BG XOM BP RDS CVX COP TOT ENI STL Oil Gas Oil Gas 2009 Refining Capacity (mm boe/d) Market Cap (US$ bn) - December 31th, 2010 369 6.3 237 209 3.6 184 2.9 2.7 138 2.6 126 2.2 2.2 100 67 0.7 44 0.3 XOM RDS COP BP TOT CVX ENI STL XOM PBR RDS CVX BP TOT COP ENI STLSource: PFC Energy WRMS (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; (1) 2010 average of 11 months; (2) 2010 6
  7. 7. COMPARISON WITH OTHER SIMILAR RATEDCOMPANIES 2009 Production (mm boe/d) 2009 Proven Reserves – SEC (bln boe) 2,525 12.1 604 639 2.7 408 405 2.3 1.4 1.7 132 0.3 Murphy Hess Marathon Anadarko Devon Murphy Hess Marathon Anadarko Devon Baa3/BBB Baa2/BBB Baa1/BBB+ Ba1/BBB- Baa1/BBB+ Baa1/BBB- Baa3/BBB Baa2/BBB Baa1/BBB+ Ba1/BBB- Baa1/BBB+ Baa1/BBB- 2009 Refining Capacity (mm boe/d) Market Cap (US$ bn) – December 31th, 2010 237.0 2,223 1,188 39.4 35.8 268 27.7 30.2 201 14.3 N/A N/A Murphy Hess Marathon Anadarko Devon Murphy Hess Marathon Anadarko Devon Baa3/BBB Baa2/BBB Baa1/BBB+ Ba1/BBB- Baa1/BBB+ Baa1/BBB- Baa3/BBB Baa2/BBB Baa1/BBB+ Ba1/BBB- Baa1/BBB+ Baa1/BBB- Source: Company’s websites Note: Peer companies selected above have a majority of capital traded in the public market. 7
  8. 8. LONG HISTORY OF TECHNOLOGICAL AND OPERATIONAL LEADERSHIP IN DEEPWATER 1977 Enchova 410ft 1988 125m Marimbá 1,610ft 491m 1994 Marlim 3,370ft 1997 2009 1,027m Marlim Sul 2003 Lula 5,600ft Roncador 7,125ft 1,707m 6,180ft 2,172m 1,884m Deepwater Production Offshore Production Facilities 2009 Gross Global Operated¹ Petrobras 45 Anadarko Other Shell 15 3% 10% PBR StatoilHydro 15 20% BG ExxonMobil 13 4% BP 12 Total Chevron 12 7% Anadarko 10 ExxonMobil Total 9 Chevron 13% 7% CNOOC 8 ConocoPhillips 8 ENI/Agip 5 Statoil Shell Others 100 12% 12% BP 0 20 40 60 80 100 12% FPSO Semi Spar TLP Other Petrobras operates 20% of global deepwater productionSource: PFC EnergyNote: (1) These 15 operators account for 98% of global deepwater production in 2009. Minimum water depth is 1,000 feet (about 300 meters) 8
  9. 9. GROWING PRODUCTION FULLY SUPPORTED BY DISCOVERIES Petrobras Total Production (000 b/d) 5,382 4.5% p.y. 120 203 3,907 1,109 128 2,217 2,579 176 623 1,809 99 96 15 1 22 16 3 3,950 35 326 252 274 2,980 1,500 1,684 2,003 1,078 241 Pre-Salt (1) ... ... 2002 2005 2010 2014 2020 Oil Production - Brazil Gas Production - Brazil Oil Production - International Gas Production - International Petrobras Total Reserves (bln boe) - SPE Criteria Up to 5,000 • 18th consecutive years of fully Higher Estimates 9,800 replacing the production (229% in 2010) Lower estimates • R/P ratio 18.4 years (SPE Criteria) 8,200 29,000-31,000 14,913 15,986 12,131 Proven Reserves 2002 Proven Reserves 2005 Proven Reserves 2010 Potential Recoverable (Lula, Transfer of Rights Total Resource Base Cernambi, Iara, Guará and WhalesNotes: (1) 2010 average of 11 months for gas production and international oil production Park) 9
  10. 10. DEVELOPING TRADITIONAL POST-SALT HORIZONS,WHILE TRANSITIONING TO PRE-SALT Main Projects Scheduled E&P Brazil Investments (2010-2014) 2,980 (2010-2014)Pre-Salt: US$ 33.0 billion Post-Salt: US$ 75.2 billion 2,003 Uruguá 15% Tambaú 3% 13% Mexilhão Production (million boe/d) Tupi Pilot 18% Cachalote. 4 EWT 2 EWT Baleia Franca Pre-salt Pre-salt Tupi NE EWT FPSO Tupi NE Espadarte Pilot 84% 67% Guará EWT 4 EWT P55 3 EWT P-62 Pre-salt Roncador Pre-salt Roncador Tiro Pilot P-56 P-58 Tiro / Sidon Guará Pilot Marlim Sul Whales Park P-57 P-63 Aruanã EWT Aruanã EWT Guaiamá Exploration Development Infrastructure Jubarte Papa-Terra 2010 2011 2012 2013 2014 Pre-salt Post-Salt Natural Gas Extended Well Test 10
  11. 11. 5 BILLION BOE BASE IN CONTIGUOUS AND ADJACENTFIELDS, INCREASING SCALE AND REPEATABILITY Transfer of Righs Aquisition Volume 5.0 billion boe Concession 3,865 km2 in 7 blocks Area Average Price US$ 8.51 / boe Initial Value US$ 42.5 billion / R$ 74.8 billion 40 years, extendable for Duration additional 5 years. 4 year exploration period DeGolyer and MacNaughton Report Forecast - Accumulated Cash Flow from Franco’s field (2C) * assumptions for Franco (largest field): 110,000 (US$ MM) • 2C Contingent Resource 90,000 • Total Potential Oil and Condensate Quantities: 70,000 1,632 MM boe 50,000 • Total Potential Sales-Gas Quantities: Beginning of Positive 1,664 Bn ft3 30,000 Production Cash Flow • Brent Price: US$ 79.23 bbl 10,000 • Gas Price: US$ 4.27 thousand ft3 (10,000) t 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 • 3 FPSOs, with 150 thousand BOPD processing t+ t+ t+ t+ t+ t+ t+ t+ t+ t+ t+ t+ t+ t+ t+ t+ capacity * Nominal values 11
  12. 12. BRAZIL AS A LARGE AND GROWING EMERGING MARKET 2009 Total Oil Consumption by Country (mmbo/d) 18.710 8.63 9 8 7 6 4.40  Brazil is world’s tenth-largest oil 5 4 3.18 consumer. 2.79 2.70 2.61 3 2.42 2.36 2.33 2.20 1.94 1.94 1.83 1.74 1.61 1.58 2 1- Russian … Mexico Iran France United Kingdom US Japan South Korea China Italy Germany India Brazil 2020 Brazil 2014 Brazil 2009 Canada Saudi Arabia * * Total Oil Consumption mb/d (index) 130 125  Brazil oil consumption growing at 120 Brazil 2.38% p.a; 115 US  OECD oil consumption growing at - 110 OECD 0.04% p.a. 105 World 100 95 1999 2001 2003 2005 2007 2009Source: BP Statistical Review 2010, PFC EnergyNote: * Estimates for 2014 and 2020 1212
  13. 13. DOMINANT POSITION IN THE BRAZILIAN MARKETENHANCES CREDIT QUALITY Upstream Operations Downstream Operations Existing Pipelines Refineries Petrobras Marine Terminal Other Companies In Land Terminal Dominant Position Growing Market Logistical Synergies Stable Cash Flows • Leadership in all segments of • Strong organic demand in one • Main oil producing basins and • Diversified cash flows with the value chain of the fastest growing global refining located in S.E. Brazil, several growth drivers • Market position ensures markets near GDP centers • Reduced volatility of cash economies of scale and • Attractive domestic market • Logistical infrastructure fully flows due to ability to efficient business model opportunities for upstream, developed smoothen prices fluctuations downstream and other energy in the domestic market segments 13
  14. 14. 90% OF DOWNSTREAM CAPEX FOR EXPANSION,QUALITY AND OPERATIONAL IMPROVEMENT Total RTM Investment First 2 Refineries Planned to Replace Projected Imports $73.6 billion (2010-2014) Brazil projected imports by Throughput Output 2014 with no additional Total Investment: US$ 73.6 billion (451 TBPD) refining capacity 3% 1% 52 Others 6% 104 Medium 47 Coke 11% 9% 47 25-28 api 42 Jet fuel 16 18 LPG 50% 29% Heavy 69 Nafta 150 20 api 29% 291 Heavy 230Additional Capacity Quality and Conversion 62% 14-18 api DieselOperational Improvement Fleet ExpansionLogistics for Oil International • Mainly products Brazil imports • No additional gasoline production● Quality and Conversion ● Additional Capacity – Removal of sulfur (regulatory) and to ● New refineries economical, despite higher costs: process more heavy Brazilian crude – Avoided logistical costs of US$ 8.0 /bbl● Operational improvement – Tax benefit of US$ 10,000 per bbl/day of capacity – Logistics, higher safety standards, more – Capture light/heavy differential stringent environment regulations 14
  15. 15. MATCHING INTERNATIONAL PRICES WITH REDUCEDVOLATILITYUS$/bbl 115 R$/bbl 120 101 100 220 Avg. Avg. 3Q09 3Q10 80 75 76 78 77 170 59 68 152.34 158.17 60 55 120 44 64 70 73 74 49 40 72 132.87 144.47 48 70 20 32 20 3Q084Q08 4Q07 1Q08 1Q09 2Q09 3Q09 2Q08 3Q08 4Q09 1Q10 4Q08 1Q09 2Q09 3Q09 2Q10 3Q10 ARP USA 4Q09 1Q10 Petrobras Oil Price 2Q10 3Q10 Average Realization Price - USA ARP Petrobras Brent Average Realization Price - Petrobras● Pricing policy stabilizes cash flows● Historically, Brazil prices below international prices only during periods of sharply rising international prices 15
  16. 16. PETROBRAS IS A NET EXPORTER IN VOLUMEAND VALUEThous bpd 9M09 9M10 714 Oil Oil Products 712 667 562 196 231 157 336 483 152 516 405 331 45 Export Import Net Export Export Import Net Export Financial Volume (US$ Million) US$ 119 ● Petrobras is a net exporter both in volume and US$ 1,795 14,480 14,599 value 10.640 8.845 ● In 2010, net exports declined due to substantial demand growth due to economic recovery ● Production growth is expected to continue exceeding Brazilian consumption growth 9M09 9M10 Import Export 16
  17. 17. Business Planand Financial Strategy 17
  18. 18. BUSINESS PLAN 2010-14: INCREASED INVESTMENTFOR INTEGRATED OPERATIONS IN BRAZIL Total Capital Investment Plan Petrobras’ Corporate Strategy to 2020 2010-2014 Integrated Growth, Profitability and US$ 224.1 billion Sustainability 1% 2%1%2% Oil & gas production growth in a sustainable 8% International manner that will approximately double our E&P 5% production in the next Downstream 10 years G&E Focus in oil, oil products, petrochemicals, gas & Petrochemicals 53% energy, biofuels, refining and distribution with an Distribution integrated and sustainable business model 33% Biofuels Corporate Brazil Consolidate leadership in the Brazilian market of 95% natural gas, electricity generation and gas chemicals E&P Distribution RTM Biofuels G&P CorporateBe recognized as a benchmark among integrated energy companies Petrochemicals 18
  19. 19. PROJECTED FUNDING NEEDS FOR 2010-2014 BUSINESS PLAN PROJECTED Operating Cash Flow (2010 – 2014) Principal Assumptions Cash FX Rate (R$/US$) 1.78 US$ 11 billion Amortization 2010 – 76 US$ 38 billion Funding 2011 – 78(debt + equity) Brent for Funding (US$/bbl) 2012– 82 US$ 96 billion 2013 – 82 2014 – 82 OCF Investments Projected Investments (US$ bn) 224(after dividends) US$ 224 billion Projected Net Cash Flow (After US$ 155 billion 155 dividends) (US$ bn) Net Total Capt. (US$ bn) 58* Leverage Up to 35% Average Realization Price (R$ barrel) 163 * Including Capitalization and excluding amortization of US$38 billion ● $26.6 billion of equity and $13 billion of debt raised during 2010 ● $56 billion of debt still to be contracted, of which $29 billion(1) are amortizations ● 2011-2015 Business Plan Update expected late Q1’11/early 2Q’11 Notes: (1) Considers 2010 amortization according to 2010-14 Strategic Plan with FX rate of R$ 1.87/US$ 19
  20. 20. INCREASING INVESTMENTS LEADING TO AN ORGANIC GROWTH Sources (US$ million)1 51,403 42,832 34,213 27,472 27,886 17,912 5,993 17,825 5,222 22,664 28,220 24,920 25,548 21,077 -3,252 -1,617 2006 2007 2008 2009 LTM 2 OCF Net Debt Capitalization Uses (US$ million)1 51,403 42,846 6,416 34,621 7,712 26,179 4,747 18,030 1,551 416 3,860 44,987 3,144 29,874 35,134 20,768 14,470 2006 2007 2008 2009 LTM2 CAPEX Dividends AcquisitionNotes: (1) In USGAAP; (2) LTM as of 9/30/10 20
  21. 21. CASH FLOW SUPPORTS MAINTENANCE PLUS GROWTH Assumptions to Maintain Existing Capacities: US$ MM • $12 per barrel to replace 830MM BBL´s of production • $1.5 bn. - Exploration 50,000 44,525 • $1.5 bn. - Refinery maintenance 45,000 • $1.5 bn. - Gas & Power maintenance 40,000 35,134 • $1.5 bn. - Other Maintenance 35,000 30,000 25,548 25,000 20,000 16,000 15,000 10,000 5,000 - OCF LTM (1) Capex 2009 Capex 2010 (2) Maintenance Capex (Est.) E&P Downstream Gas & Energy OthersNotes: (1) LTM as of 9/30/10; (2) Based on 9M10 Results Annualized 21
  22. 22. CONSTRUCTION IN PROGRESS:INCREASE IN NET DEBT DUE TO EXPANSION Construction and Installations in Progress(1)US$ Million70,000 63,92960,00050,000 38,73540,000 30,53730,000 19,73820,000 15,865 US$ Million Net Debt10,000 0 45,000 40,963 2005 2006 2007 2008 2009 40,000 35,000 30,000 25,000 20,624 20,000 14,908 15,000 11,306 10,000 8,650 5,000 0 2005 2006 2007 2008 2009 22
  23. 23. GROWING AND STABLE CASH FLOW GENERATION Adjusted EBITDA (US$ bn) and EBITDA Margin (%) Adjusted EBITDA Breakdown per Segment (US$ bn) 1 31.5% 1.9 28.9% 28.8% 0.2 26.3% 1.4 1.4 1.3 1.1 32.9 0.5 0.9 4.4 31.1 0.8 1.1 29.0 5.2 25.3 11.0 35.4 28.8 25.0 19.3 -0.8 -1.6 -0.2 2 2007 2008 2009 LTM 2007 2008 2009 LTM 2 E&P RTM Distribuition G&P InternationalNote: (1) Breakdown excludes eliminations and corporate; (2) LTM as of 9/30/10 23
  24. 24. PETROBRAS’ FINANCIAL PLANNING BASED ON MAINTAINING INVESTMENT GRADE RATINGS WITH PRUDENT LEVERAGE Net Debt / Capitalization (%) 40% 34% 35% 30% 32% 28% 28% 30% 25% 20% 16% 10% Net Debt / Capitalization: 0% 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 25% - 35% 3.0 Net Debt / EBITDA 2.5x 2.5 2.0 1.5 1.4 1.5 1.2 1.0 1.0 1.0 1.0 0.5 Limit established for Net 0.0 Debt / EBITDA: (1) 2T09 3T09 4T09 1T10 2T10 3T10 2.5x Debt levels in accordance to the targets established by the CompanyNotes: (1) Annualized EBITDA 24
  25. 25. A HIGH-QUALITY DEBT PORTFOLIO Total Indebtedness (US$ 66,945 million as of September 30, 2010) By Maturity By Category By Currency By Rate Real YenST Financing Financial 17% 3% 19% Institutions Intl Capital Floating 32% Markets 43% 25% Real Indexed to Dollar Export Credit 28% 7% Dollar Other LT Financing 52% Fixed BNDES 2% 81% 57% 34% 74% Long-term debt maturity profile 9% 6% 5% 4% 2% 2011 2012 2013 2014 2015 After 2016 25
  26. 26. Conclusions 26
  27. 27. CONCLUSIONS/FINAL REMARKS/DEBT STRATEGYFINAL REMARKS / DEBT STRATEGY Petrobras: A mega-capital integrated oil company with a rich resource base and a lucrative portfolio of opportunities • An integrated business model that generates stable and growing cash flows • A total commitment to maintaining an investment grade rating, based on conservative leverage ratios and high liquidity • In 2010 conducted largest secondary equity offering ever ($70 billion) to maintain targeted leverage ratios • A tradition of carefully raising debt capital to support growth from a broad and diversified funding base • The issuance of three benchmark size tranches in this transaction will be Petrobras’ only USD jumbo deal in 2011 • No additional USD issuance, with the possible exception of limited re-openings in the second half of the year, subject to favorable market conditions • Additional financing needs to be met from cash on hand, non-USD capital markets, and traditional sources of commercial banks, development banks, and ECA´s. 27
  28. 28. Appendix 28
  29. 29. SECONDARY OFFERING INCREASED CAPITAL BASE BY $70.5 BILLION THROUGH COMBINATION OF OIL RIGHTS AND CASH US$ 70,515 million: Public Offering US$ 67.5 billion: 3Q10 US$ 39.8 billion : LFTs US$ 39.8 Billion: LFTs US$ 43.9 Billion to acquire rights US$ 27.7 billion : Cash US$ 4.1 Billion: Cash to 5 billion barrels US$ 21,402 billion : Cash US$ 26.6 billion US$ 6,298 billion : LFTs (1) Retained as cash and equivalents US$ 3.0 billion : 4Q10 (GreenShoe) Before Public Offering After Public Offering US$ Billion 06/30/2010 09/30/2010 Cash and Cash Equivalents(Adjusted by LFT) 12.9 33.8 Net Debt 51.6 33.1 Net Debt / Net Capitalization 34% 16% Net Debt/Ebitda (2) 1.56X 1.03XNotes: (1) Government securities with a maturity greater than 90 days; (2) Annualized EBITDA 29
  30. 30. CAPITAL STRUCTURE AND CREDIT METRICS 1H (Million US$) 12.31.2008 12.31.2009 09.30.2010 Cash and Cash Equivalents 6,499 16,169 27,451 Total Debt 27,123 57,132 66,945 Net Debt 20,624 40,963 39,494 Shareholders Equity 61,909 94,058 174,580 Net Debt / Net Capitalization 25% 30% 18% Net Debt / Market Capital 21% 21% 18% Net Debt / Boe Production (USD/boe) 23.5 44.4 42.2 Net Debt / Proved Reserves (USD/boe) 1.37 2.76 2.66 * Reserves/Production (Years, SPE Criteria) 17.22 16.13 15.87 * (1) 2008 2009 LTM Net Income 18,879 15,504 18,431 EBITDA 31,083 28,982 32,887 Net Debt/EBITDA 0.66 1.41 1.20Notes: *Based on 2009 Proved Reserves; (1) LTM as of 9/30/10 30
  31. 31. BRAZILIAN ECONOMY: Growing with stability and fiscal responsibility GDP Growth (%) Forecast Trade Balance (US$ Billion) Forecast 9 8 7.6 Exports Imports 238 250 234 219 7 211 6 5.7 5.7 198 197 5.1 4.5 200 180 4.5 173 5 4.0 161 154 4 3.2 150 138 130 119 121 3 97 91 2 1.2 100 63 74 1 0 50 -1 -2 -1.2 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 International Reserves (US$ billion) Nominal Fiscal Deficit/GDP (%) 20 Brazilian Debt (as % of GDP) 60 400 52.1 50.0 47.7 Net Debt/GDP (%) 46.6 44.2 50 289 39.9 41.4 40.1 300 15 239 40 207 200 180 10 30 86 5.1 20 100 53 54 3.3 3.5 3.3 49 5 2.7 2.6 2.6 1.9 10 0 0 0 2003 2004 2005 2006 2007 2008 2009 2010 2003 2004 2005 2006 2007 2008 2009 Nov- 10Source: Brazilian Central Bank – 01.04.2011 31
  32. 32. SHAREHOLDER STRUCTURE Capital Ownership as of 12/31/2010 (# of shares, millions) Million ON % PN % Total % Brazilian Federal Government 3,991 53.6% 66 1% 4,057 31.1% BNDES / BNDESPar 398 5.4% 1,344 24.0% 1,742 13.4% Sovereign Fund 344 4.6% 162 2.9% 506 3.9% ADR Level3 1,521 20.4% 1,444 25.8% 2,964 22.7% Foreigners ( Nº 2689 C.M.N. Resolution ) 387 5.2% 747 13.3% 1,134 8.7% Others 801 11% 1,840 32.8% 2,641 20.2% Total 7,442 100% 5,602 100% 13,044 100% 32
  33. 33. Information:Investor Relations+55 21 3224-1510petroinvest@petrobras.com.br 33 33

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