Edition 28 - Sharing in Petrobras - number 3/2008


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Edition 28 - Sharing in Petrobras - number 3/2008

  1. 1. Investor Relations • Year VII • nº 28 Petrobras em Ações Sharing in Petrobras HIGHLIGHTS Fitch upgrades Petrobras’ risk rating Major light oil and gas I Fitch Ratings has upgraded the foreign currency rating of Petrobras and of its PfiCo (Petrobras International Finance Co.) subsidiary field in the pre-salt layer T from BBB- to BBB. This risk rating upgrade is the outcome of the improvements made to the he consortium formed by Petrobras (80% and operator) and company’s operating and financial performance Galp Energia (20%) to explore block BM-S-24 in ultradeep San- and of its significant reserve volume, strategic tos basin waters completed the drilling of the well position, and greater transparency with the market, in addition to its improved corporate known as Jupiter, which confirmed the existence of a major natural governance practices. gas and light oil field in the pre-salt layer. This confirms the discovery an- nounced in January 2008. Light oil in shallow waters I Petrobras discovered light oil in shallow The Jupiter well is located 290 km off the Santos Basin waters, above the salt layer, coast of the state of Rio de Janeiro and 37 km 200 km off the coast of the state of São Paulo. to the east of the Tupi area, at a depth of 2,187 The recent discovery is at a mere 247 meters between the seabed and the water line. The oil meters from the water line. The final depth that was found is light and has a specific gravity that was reached was 5,773 meters below the of 36º API. The discovery is of a medium size, with recoverable oil estimated at some 150 sea level. Ocean million barrels of oil and natural gas. The drilling of this well proved the continuity of natural gas and Post-Salt Investments in the Northeast light oil and high carbon gas content r I Petrobras is studying deploying three new refineries in Northeastern Brazil. In Maranhão, the eservoirs. Several oil samples were recovered Salt Premium refinery is planned to have processing and are currently under analysis at Petrobras’ capacity for 600,000 barrels of oil per day (bpd), Pre-Salt Research Center in order for the components’ and its first phase is expected to go online in 2013. In Ceará, another smaller Premium refinery relative percentages to be bettercharac- is foreseen to be able to process 300,000 bpd in terized. When in production, the 2014, and 150,000 bpd in its first phase. Meanwhile, in Rio Grande do Norte, another unit preliminarily identified carbon gas slated to go online in 2010 will have a plant to will not be released to the atmos- produce gasoline and improve derivatives such as aviation fuel, diesel, and LPG. phere, rather re-injected and made a relevant contribution to increase the oil recovery factor in these reservoirs. Twenty years in the Amazon The Jupiter discovery proved a significant thickness of porous reservoirs. I Petrobras is celebrating 20 years of production It will be possible to estimate the oil and gas volumes after the fluid sam- in Urucu (AM). In addition to maintaining its production level, future investments to be made ples recovered from this well are analyzed and new wells drilled. The con- in the region will be aimed at improving the sortium, in which Petrobras is the majority stakeholder and operator, company’s operations in the Amazon even more. The company’s performance in Urucu ratifies will give continuity to the drilling activities and make the in- Petrobras’ commitment to environmental vestments that are required both to check the dimensions of the new field preservation, in accordance with its premises of and to determine reservoir characteristics. social and environmental responsibility. New drilling units I Petrobras will charter 12 drilling units for use in ultradeep waters, at depths ranging from 2,400 to 3,000 meters. The investments that have been foreseen are part of the company’s Record Dow Jones Petrobras exploratory and production development profit at Index Biocombustível: portfolio and include actions planned to ensure Petrobras renewed integrated vision growth in oil and natural gas production. PAGE 3 PAGE 4 PAGE 4
  2. 2. PROFITABILITY Results of the second quarter 2008 T he higher international oil prices fell 7%. In the quarter, the total oil and quarter of 2008. The usage of the installed and the readjustments made to natural gas production grew 4% com- capacity abroad decreased 26% in the the gasoline and diesel fuel prices pared to the second quarter of 2007. The period. in the domestic market jacked-up the production of derivatives in Brazil in- Sales in the domestic market re- average oil and derivative prices. This in- creased 1% in the first half of 2008 over a mained heated in the period, up by crease, alongside higher sales, allowed year earlier, while the usage of the in- 8% compared to a year earlier. So far as Petrobras’ net consolidated profit stalled capacity grew four percentage the external market is concerned, exports to be increased, topping out at a half- points, to 93%. International produc- rose 2% over the previous year, while in- yearly record of R$15.708 billion. tion was down 39% on account of sched- ternational sales were down 7% in the The net operating revenue also surged uled shutdowns at refineries in Argentina same period. 26% over the previous year’s mark, to and the US and of the sale of the refiner- The company’s extraction costs, in reais R$101.462 billion. ies in Bolivia (2007). The decrease was and without government take, increased Driven by the 10% and 15% hikes in partially compensated for by the produc- 6% compared the first half of 2007. In- gasoline and diesel fuel prices, respec- tion of the refinery in Japan in the second cluding government take, the cost in reais tively, in may, and by the adjustments rose 37% in the same period. The com- made to the remaining derivatives the pany’s net indebtedness decreased company markets, the average derivative 3% compared to the first quarter of 2008 price was up 11% in reais (34% in US$) in because of the cash flow generated during the first half of 2008 compared to the first the period. half of 2007. The Brent oil price, however, Petrobras has had a significant went up even more (73% in US$) in the market value rally since 2007, driven period. As a result, the refining margins by the gas and light oil discoveries in the were compressed, keeping pace with the pre-salt region, by the production growth global trend. perspectives, and by the steeper interna- The domestic oil and natural tional oil prices. In this half-year, the com- gas production rose 4% in the half- pany’s market value topped at R$457 bil- year, while international oil production lion, 87% more than a year ago. Petrobras ADRs versus DOW JONES and Amex Oil Indexes Economic and Financial Figures RESULTS & RETROSPECTIVE 1,900 1,796% PBR (ADR ON) In US$ million 2008 2007 Variation (%) 1,630% PBRA (ADR PN) 1,700 Sales of products and services 40,940 26,513 54 244% Amex Oil 1,500 36% Dow Jones Net operating revenues 33,495 20,564 63 1,300 Gross profit 12,249 8,214 49 1,100 Net income 6,215 4,334 43 900 Earnings per share 0.71 0.49 45 700 Earnings per ADS 1.42 0.98 45 500 Net cash provided by operating activities 6,464 7,215 -10 300 Capital Expenditures 6,067 5,193 17 100 Net debt 19,204 11,035 74 (100) Debt to equity ratio 47% 50% (3) pp Jun-07 Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Sep-03 Sep-04 Sep-05 Sep-06 Sep-07 Mar-08 Jun-08 Jun-03 Jun-04 Jun-05 Jun-06 Real Increase in Stock Price* Operating Performance 900% 847.5% I Ibovespa In thousand barrels of oil equivalent per day 2008 2007 Variation (%) 800% I Petrobras PN Total crude oil, NGLs and natural gas 700% I Petrobras ON production 2,389 2,303 4 600% 555.4% 500% 417.8% Total oil products production 2,039 2,074 (2) 400% 364.2% Net Exports of crude oil and oil products 62 23 (170) 300% 200% 186.4% Refining and marketing operations 99.4% 100% 57.1% 35,5% Brazil – Utilization 95% 89% 6 pp 0% -15,9% International – Utilization 64% 85% (21) pp -100% 10 Years 5 Years 1 Year Domestic crude oil of total * Monthly changes discounted for inflation in accordance with IGPM-DI Index feedstock processed 77% 78% (1) pp
  3. 3. PROFITABILITY Petrobras sets historical profit P etrobras’ profit in the first half of tions. The company’s operating ex- company had the third biggest profit, 2008 set a historical record: penses decreased 6% in the first half of in Dollars, among Latin American R$15.7 billion, a 44% increase 2008, a fact that drove the company’s and American publicly traded corpo- over the previous year. Only taking the cash generation, which topped at rations. second quarter 2008 into account, R$32.7 billion and ensured resources New production units went online the result was R$8.8 billion, up for the investments plan – which rose in 2007, while others will start produc- 29% compared to april/july 2007, and to a record volume of R$20.9 ing later this year. In 2007, five new the biggest mark in history for that billion – and allowed reductions in the platforms kicked-off operations, and period. level of indebtedness. three more will start operating this Four factors stood-out in the at- Petrobras’ market value has had a year. One of them is the P-51, the first tainment of these results: higher prominent growth rate since 2007, platform built entirely in Brazil. medium oil and derivatives sales prices, reaching R$457 billion in the first These new units will underpin Petro- increased oil production, increased de- half of 2008 – 87% more than bras’ growth expectations and help it rivatives sales volumes, and cost reduc- a year earlier. In the third quarter, the fulfill its Strategic Plan. INTERNATIONALIZATION NEW FRONTIERS Operation expansion Light oil discoveries in in the US and in Africa ultradeep waters P T etrobras participated in a discovery in ultradeep he Iara consortium formed by Petrobras (65%), BG waters in the Gulf of Mexico and kicked-off the pro- Group (25%), and Galp Energia (10%) to explore a duction process at the water line off the coast of well in ultradeep waters in the Santos Basin Nigeria. proved the existence of a light oil field in the pre- Via its Petrobras America Inc. subsidiary, in salt reservoir, with specific gravity around 30º API. Houston, USA, the company discovered hydrocarbons in Block BM-S-11 is composed of two exploratory areas. the Central Gulf of Mexico. The Stones 3 well was drilled in The bigger one, called Tupi, and this smaller area in the the Walker Ridge quadrant. Petrobras holds 25% stakes in original block, known as Iara, some 230 km off the coast the consortium. of Rio de Janeiro and at a depth of 2,230 meters. The well is located at a depth of 2,286 meters from the The discovery was proved via a light oil water line. Drilling and assessment activities are currently be- sampling made by means of a cable ing planned to determine the size and to define whether or test in reservoirs located at a not this new discovery is commercial. depth of nearly 5,600 meters. The results confirm the potential for significant oil re- After well completion, the serves in this area of the Gulf of Mexico, in which Petrobras consortium will give con- also operates the Cascade and Chinook fields, where it is de- tinuity to the activities veloping production and building facilities. The company and investments that will pioneer using FPSO (Floating Production, Storage and are required to check Offloading) platforms there. Production is expected to go the size of the field and online in 2010. the oil reservoir’s char- Off the Western coast of Africa, in Nigeria, Petrobras acteristics. started producing light oil (specific gravity between 45 and Petrobras also made a 48 API) in the Agbami field, at a depth of approximately new light oil discovery 1,400 meters from the water line. This field is capable of pro- (27º API) in the Espírito ducing 250,000 bpd and will have an FPSO-type platform Santo Basin, in the Golfinho operating in it. Production is expected to peak field, 60 km away from the city of in the second half of 2009 and will represent Vitória and at 1,374 m from the water 13% of Petrobras’ total volume abroad. line. The first estimates indicate a potential of 150 million barrels of recoverable oil. This discovery opens new exploratory perspectives for the area. The fact there is already infrastructure installed in the Golfinho field favors the company, which holds the full concession and can quickly incorporate such volumes to its reserves.
  4. 4. SUSTAINABILITY Dow Jones Index renewed for the third year in a row P etrobras has renewed, for the third guide their investments. This index is year running, its listing on the very relevant, particularly since only 20 Dow Jones Sustainability Index 9 oil and gas sector corporations are list- (DJSI), the world’s most important sus- ed on it. tainability index. Obtained in early sep- Remaining listed shows the efforts tember, this result consolidates tors of upwards of 2,500 companies Petrobras has made, in the past few Petrobras as one of Brazil’s eight most operating in 57 sectors the world over. years, in the environmental area, in sustainable corporations. Being assessed by and listed on this making its accounting processes trans- The index assesses economic, envi- index are factors socially and environ- parent, in divulging information, and in ronmental, and social performance fac- mentally responsible investors use to its corporate governance practices. NEWS BOARD Petrobras among the top five energy leaders Petrobras’ According to studies carried out by Goldman Sachs, Petrobras is first platform among the world’s top five energy sector leaders, and is the second turns 40 biggest company in Latin America. The financial consultancy’s report The first oil platform built by analyzed and considered specific criteria, such as return on capital, position Petrobras, the P-I, has turned in the industry, in addition to corporate governance and socioenvironmental 40 years old. It is still in activity, responsibility issues. It also highlights Petrobras’ strong growth perspectives providing support to other platforms. after the pre-salt discovery and predicts one of the biggest growths in Built in 1968, the P-I is in operation in the sector in the upcoming decade. So far as governance and shallow waters off the coast of socioenvironmental responsibility is concerned, the company’s system is Rio Grande do Norte, and its historical ranked among the best. mark is having drilled around 243,000 meters all over the Brazilian coast. Petrobras is the highlight among sustainable websites Petrobras’ Investor Relations portal was the highlight in the second Studies of the most sustainable websites of @ companies listed on the Ibovespa, ac- Petrobras cording to Spanish consultancy firm Man- Biocombustível agement & Excellence. The highlight was the fact that the IR area uses its web- The vision of an site (www.petrobras.com.br) as an im- energy company portant communications tool to dissem- inate sustainable practices. The study Petrobras created its Petrobras Bio- analyzes the communication power of the combustível subsidiary aiming to develop companies’ websites. activities in the biofuels segment. With it, it enhances its commitment to the environ- ment, to sustainable growth, and rein- forces the vision of an integrated energy Distribution asset takeover in Chile company, contributing to slashing global warming. By creating the new company, Petro- I n agreement with Petrobras’ business enhancement process, an agreement was signed for the takeover the retail, industrial, and aviation markets, in addition to service stations and other participations. bras seeks to concentrate all of its biofuel of distribution and logistics This takeover consolidates the company’s production-related projects in one place. In- companies in Chile. The presence in the Latin American fuel vestments in the order of $1.5 billion are companies belonged to distribution segment, where it already foreseen through 2012. With an eye out for Exxon Mobil, with partici- operates in Argentina, Colombia, the international market, considering the pation in Esso Chile Paraguay and Uruguay, in importance of biofuels in the world’s geopo- Petrolera, among other addition to in Brazil, via a litical scenario, the company’s objective is associated Chilean com- network of some 1,000 to become the biodiesel production leader panies. The agreement service stations. and boost its share in the ethanol business. covers fuel businesses in Newssheet edited by Petrobras' Investor Relations Department • Executive Manager: Theodore Helms • Editor: Cláudio Paula (RJ-21059-JP) • Writer: Orlando Gonçalves Jr. • Colaboration: Ana Paula Carvalho, Alexandre Cunha and Luciana Guilliod • Contact: Petrobras' Shareholders Department • Phones: (55-21) 3224-1540/4914 • Fax: (55-21) 2262-3678 • Address: Av. República do Chile, 65 / 2202-B • Centro – Rio de Janeiro – RJ – Brazil – 20031-912 • E-mail: acionistas@petrobras.com.br • Design: Estúdio Matiz Depositary Bank: JPMorgan Chase Bank • JPMorgan Depositary Receipts • 4 New York Plaza, 13th Fl. • New York, NY 10004 • +1 (866) JPM-ADRS (576-2377) Visit our website at www.petrobras.com.br/ir/english