Petrobras at a Glance

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Petrobras at a Glance

  1. 1. PETROBRAS AT A GLANCE December, 2011 1
  2. 2. DISCLAIMERFORWARD-LOOKING STATEMENTS:DISCLAIMERThe presentation may contain forward-looking statements We undertake no obligation to publicly update orabout f b future events within the meaning of Section 27A of h h f f 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 th C fl t the Company’s current views and estimates of ’ t i d ti t ffuture 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 expressions, forward- presentation. t tilooking 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,specifically the Company’s most recent Annual Report on Company s CAUTIONARY STATEMENT FOR US INVESTORSForm 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,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
  3. 3. Overview 3
  4. 4. PETROBRAS HISTORY Becoming a major , publicly traded oil company through organic growth  Incorporated in 1953 as government Brazilian Government (directly and monopoly for all hydrocarbon activities. indirectly), owns 48% of Petrobras, and Little or no reserves, production or maintains control with 64% of voting refining. shares. A history of organic, operated, self funded Independent financial structure, with growth. Transition from a refiner of investment grade foreign currency ratings imported crude to integrated self notched above the sovereign. sufficiency. End of monopoly and opening of oil sector Listing on NYSE and SEC registration in to international participants Petrobras participants. 2000. 2000 Full quarterly disclosure in IFRS and status as an operator, without privileged U.S. GAAP. Market cap year‐end 2010 of position. USD 237 billion. 1953 1974 1984 1995‐8 1995‐ 2000 2006‐ 2006‐7 2010Incorporation in 1953  Discovery of  shallow  water offshore fields Discovery of mega  Elimination of as government  Listing on NYSE,  Brazil achieves  USD 70 bn fields in  fields in Monopoly,  Monopoly,monopoly l with market cap  self  sufficiency  capitalization  and  Reserves: deepwater  creation of oil Reserves:  Campos Basin. law. Full  of $ 31 billion in oil production acquisition of   800 million BOE16.8 million boe deregulation by  rights to produce 5  Last refinery  2002. 1st Investment  Discovery of   bn BOEProduction:  Production: completed ‘81 grade rating Santos Pre‐salt 2 6 Thous BPD*2.6 Thous. BPD 177 Thous. BPD Production: Production: 2MM  Production: 2MM Production: 1  MM BPD oil  BPD oil in BrazilRefining Cap: 41  Refining Cap:  823  Thous. BDP 467 Thous.BPD in Brazil in ‘98Thous. BDP** 1954  4
  5. 5. OWNERSHIPBroad distribution among government, Brazilian, and foreign  shareholders Foreign Shareholders 21% Non-Voting 30% 32% 36% 39% Voting 45% 18% Brazilian Non-Gov’t 20% Shareholders 25% 23% 21% Non-Voting N V ti Voting 55% 61% 48% Brazilian Gov’t * 45% 41% 40% Non-Voting Voting Oct/1992 Jul/2000 After Aug/00 After Jul/01 Dec/2009 Dec/2010 offering offering o Brazilian government by law must maintain control Does so with 64% of voting shares government, law, control. shares. o Petrobras is the most actively traded ADR on NYSE in three years, and among all stocks, the 8th most actively traded stock. On Bovespa, Petrobras most actively traded stock, by shares and by volume. *Includes: Republic, BNDES, BNDESPAR, Sov. Wealth Fund 5
  6. 6. BUSINESS MODELOperating as an integrated balanced oil company, dominant in Brazil Exploration & Production • Focus on production in deep and ultra‐deep waters; • Licensed blocks guarantee access to reserves and economies of scale; • New exploratory frontier, adjacent to existing operations. Downstream D • Dominant position in a growing market, far from other refining  centers; •Balance and integration between production, refining and demand. Gas and Power • Gas infrastructure develeped for processand and transfer of gas; Gas infrastructure develeped for processand and transfer of gas; • Complete flexibility to consume domestic and imported gas. Biofuels • High productivitiy of Brazilian ethanol; • Large areas of available unused agricultural land; • Large consumer market, with fleet and distribution in place. Large consumer market, with fleet and distribution in place. 6
  7. 7. LOGISTICAL ADVANTAGESUniquely positioned to integrate upstream and downstream operations Upstream Operations Upstream Operations Downstream 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 Leadership in all segments of  • Strong organic demand in one Strong organic demand in one  • Main oil producing basins and Main oil producing basins and  • Diversified cash flows with 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  d t d th in the domestic market i th d ti k t segments 7
  8. 8. BUSINESS SEGMENTSFully integrated across the hydrocarbon chain, dominated by Brazilian production  Adjusted EBITDA US$ 32.6 Billion1 (2010) 2010 Proven Reserves (SPE) RTM 15.986 billion boe 10% G&P Shallow W t Sh ll Water 4% (0-300m) Distribution Deep Water 3% 9% (300-1,500m) International 50% 6% Onshore 9% E&P 77% Ultra-Deep Water ( 1,500m) (>1,500m) 32% Our Main Segments: Key Statistics and Market Positions (2010) Exploration and  RTM (incl.  Distribution Gas and Power Gas and Power International Biofuels Production Petrochemicals)• 15.3 Bn boe of 1P(SPE) • 12 refineries (Brazil) • 7,306 service stations • 9,239 km of pipelines • 25 countries  • 3 new Biodiesel • 2.3 mm boed production •38.8% share of  • Participation in 20 of  • 0.7 Bn boe of 1P(SPE) Plants •2.0 mm bbld refining •98.5% of Brazilian  98 5% f B ili distribution volume distribution volume the 27 gas discos in  the 27 gas discos in • 245 thous. boed  h b d • Ethanol: Opening Ethanol: Opening  capacityproduction Brazil production  new markets• 20% of global DW and  • 11.2 mty materials  • 5,943 MW of  • 281 thous. bbl/d  • Responsible for 10% UDW production nominal capacity (2) generation capacity refining capacity  of Brazilian ethanol  exports •Petrochemicals, Gas &  •Petrochemicals Gas & Power activitiesNotes: (1) Includes Corporate and Elimination; (2) Through Braskem and Quattor 8
  9. 9. COMPARATIVE POSITIONRanked among  the leading integrated energy companies 2010 Oil and Gas Production (mm boe/d) 2010 Proven Reserves – SEC (bln boe) 4.4 44 24,8 3.8 3.3 2.8 17,8 2.6 2.4 24 2.1 14,2 12,7 1.8 10,7 10,6 8,3 6,8 5,4 0.6 XOM  BP RDS CVX BR TOT COP ENI BG XOM  BP RDS BR TOT CVX COP ENI STL Oil Gas Oil Gas 2010 Refining Capacity (mm boe/d) 6.3 Market Cap (US$ bn) – November 21th, 2011 369 3.9 2.7 2.7 2.6 215 2.3 2.2 190 166 132 115 91 83 77 0.7 0.3 * * * * XOM  RDS BP COP TOT BR CVX ENI STL XOM RDS CVX PBR BP TOT COP ENI STLSource: 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 9
  10. 10. WORLD OIL DEMAND Replacing production  with new discoveries will be a major challenge GLOBAL LIQUIDS DEMAND SCENARIO (MM bpd)110 110 Projects under Projects under development,100 development and prospective and new p prospective p 100 discoveries 90 90 OPEP 80 Project 80 Project Decline Decline Non-OPEP 70 70 60 60 50 50 40 40 30 30 20 20 2000 2005 2010 2015 2020 2000 2005 2010 2015 2020 • To meet growing  world demand  while replacing existing productionadditional capacity  of 38 MMbpd  will be needed by 2020 • Demand must be met by a combination of factors:   • New discoveries • Alternatives energy sources • I Increase of energy efficiency f ffi i Source: WoodMackenzie 10
  11. 11. BRAZIL LEADERSHIP IN RECENT DISCOVERIESDeep‐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 Brasil 38% 62% Other Outros 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 additional capacity from the supply chain • Expansion of the oil and gas chain in Brazil is in line with this perspective Petrobras expects to double its proved reserves until 2020, keeping the discovery cost around US$2/boe Source: PFC Energy 11
  12. 12. COMPETIVE ADVANTAGEReserves in ultra‐deep water in Brazil benefit from comparatively low break‐even Expected Costs of Production 140 Deepwater and  D t d uction costs (US$/bbl‐2008) 120 Ultra‐deep water 100 Oil  Gas to  Coal to  80 Arctic Shales liquids liquids CO₂ ‐ EOR 60 EOR Heavy oil  and  bitumen 40 Produ Other  20 Produced MENA convention Petrobras expected  al oil maximum break‐even cost 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000 Reserves (bn bbls) Source: IEA – Outlook 2008 12
  13. 13. DEEPWATER LEADERSHIPA history of developing technology and know‐how in Brazilian waters 1977 Enchova 410ft 1988 125m Marimbá 1,610ft 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 2010 Gross Global Operated¹  Petrobras 45 Shell 15 StatoilHydro 15 ExxonMobil 13 BP 12 Chevron 12 Anadarko 10 Total 9 CNOOC 8 ConocoPhillips C Philli 8 ENI/Agip 5 Others 100 0 20 40 60 80 100 FPSO Semi Spar TLP OtherSource:  PFC Energy   Note:  (1)  These 15 operators account for 98% of global deepwater production in 2010. Minimum water depth is 1,000 feet (about 300 meters) 13
  14. 14. OIL PRODUCTIONWith access to abundant reserves, Petrobras can more than double production 6,418 142 246 1.120 1 120 3,993 125 180 + 35 Systems 2,575 2 575 2,772 618 2,386 2,516 +10 Post‐Salt Projects 93 96 96 141 +8 Pre‐Salt Projects 4,910 99’000 boe/day 132 144 435 111 317 334 +1 Transfer of Rights 321 3,070 845 Transfer of Rights Added Capacity 1.971 2.004 2.100  13 1.855 Oil: 2,300,000 bpd Pre-Salt 1,148 543 2008 2009 2010 2011 2015 2020 Oil Production‐ Brazil Natural Gas Production ‐ Brazil Oil Production ‐ International Natural Gas Production ‐ International • Pre‐salt and Transfer of Rights will represent 69% of the additional capacity up to 2020; • Pre‐Salt participation in the total production will enhance from the current 2% to 18% in 2015 and 40.5% in  2020. Note: Does not include Non‐Consolidated International Production. 14
  15. 15. GROWING MARKETBrazil is the world’s seventh largest oil consumer and growing fast 2010 TOTAL OIL CONSUMPTION (MM BPD) 2010 TOTAL OIL CONSUMPTION* (MM BPD) *Includes ethanol and biodiesel  >3 MM bpd 2-3 MM bpd <2 MM bpd 19,15 9,06 4,45 3,32 3,20 2,81 2,60 2,44 , 2,38 2,28 1,99 1 99 1,80 1,74 1,59 PER CAPITA OIL CONSUMPTION Barrels per year 27,1 27 1 1980 25,0 22,3 2000 16,0 2010 14,8 15,3 12,8 12,4 9,9 99 4,9 3,7 4,5 1,4 2,5 0,6 OECDSources: BP Statistical Review / Petrobras estimates 15
  16. 16. GLOBAL REFININGRegions with fast growth continue to invest in refining 3.204 Adding  Refining Capacity (2011‐2016) Thousand bpd 1.997 1.755 1 755 736 703 437 153 Asia Middle East North America Latin America Europe Ex‐USSR Africa Expansion New Refineries New Refineries • 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 16
  17. 17. PRODUCT PRICING Free market follows international prices in the long term 2002-2011 Average Realization Price ‐ USA 160 US$/bbl Average Realization Price ‐ Brazil 140 120 100 80 60 40 20 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 • Petrobras policy lags the international oil market when prices increase or decrease, leading  to more stable cash flows • I N In November, 10% increase in gasoline, 2% increase in diesel prices b 10% i i li 2% i i di l i 17
  18. 18. Exploration & Production Exploration & Production 18
  19. 19. E&P STRATEGYSustainable development of hydrocarbon reserves Increase oil and gas reserves and production, in a sustainable manner, and be  recognized for its excellence in E&P operations, placing the Company among the world’s  five largest oil producers 2011‐15 Business Plan Highlights: • 65% of Capex allocated to production development. • 19 large projects, adding capacity of 2.3 million bpd. 19 large projects, adding capacity of 2.3 million bpd. • Drilling of more than 1,000 offshore wells, of these 40% is exploratory and 60% is production  development. development • In 2020, the pre‐salt production will correspond to 40.5% of the oil production in Brazil. 19
  20. 20. RESERVES AND RECOVERABLE VOLUMESRapid growth in reserves from discoveries in deep waters  Proved Reserves  – SPE criteriaMillion boe 30.000 25.000 20.000 Pre‐salt: Lula  and Cernambi 15,28 Bi boe 15.000 15 000 Whales Park Park,  Mexilhão  Roncador 10.000 Marlim 5.000 Namorado Guaricema Garoupa p Carmópolis 0 Onshore 0‐300 m 300‐1500 m > 1500 m Pre‐salts Recoverable Volume * Transfer of Rights * Lula/Cernambi, Iara, Guará and Whales Park, ranging from 8.1 to 9.6 Billion boe 20
  21. 21. RESERVE PROFILEProved reserves consist largely of offshore oil that is relatively heavy Proven Reserves as of Dec/2010 (SPE/ANP) (15.28 billion boe) Oil + Condensate < 22º API 84% (heavy) 22 – 31 º API (intermediate) 45% 11% 5% 34% Associated Gas 15% 6% Non‐Associated Gas Gas > 31 º API (light) ( g ) 39% 61% Undeveloped Developed Proven Reserves Proven Reserves 21
  22. 22. BRAZILIAN BASINSOffshore brazil is a vast area, still underexplored USA t 22
  23. 23. PRODUCTION Petrobras history is to grow production by expanding into new frontiersThousand bpd2500 Deep water Shallow water 2.004 Onshore20001500 1.271 16011000 749 653 42 500 181 400 292 189 75 230 214 106 211 0 1980 1990 2000 2010 Deep and ultra‐deep  Pre‐salt Onshore  Shallow water Deep water water 23
  24. 24. OFFSHORE GEOLOGYProducing from pre‐salt reservoirs will drive future investment Campos Basin Santos Basin West East Post- Post-salt turbidites: current productionAlbian carbonates Pre-salt carbonates: Pre-salt carbonates Supergiants oil fields Near-term prod ction Near term production increase Mid and long-term production increase long term prod ctionGeological cross section in Santos Basin used to explain petroleum systems of Santos and Campos basins 24
  25. 25. E&P FOCUSMaintain and expand traditional areas, while transitioning to new reservoirs E&P portfolio has around 3,000 projects1 1 • Maintain production: • Implement full development of the main production  Tertiary and Upper  Tertiary and Upper concessions.  Cretaceous • Decrease decline in existing fields. Turbidites • Operational maintenance in existing Production Systems. • Continuous exploration effort.2 Albian carbonates Salt Pre‐salt carbonates 2 • Explore, appraise and start production mostly in existing 3 Campos Santos 4 Production Systems (inside existing ring fences). 3 • Explore, appraise and start production mostly in existing  Production Systems (inside existing ring fences).4 • Explore & appraise. Extended Well Tests in main discoveries. Start production of pilot projects.  Declare commerciality. Reduction of the project implementation  time: equipments standardization,  y p j p q p arrival of new drilling rigs, replicante FPSOs. 25
  26. 26. E&P INVESTMENTS IN BRAZIL– 2011‐15 BUSINESS PLANPre‐salt now more than half of development spending next five years Pre‐Salt Post‐Salt US$ 53.4 Billion US$ 64.3 Billion 2% Tranfer 13% 12% of g Rights 21% 22% 21% 54% 57% Exploration Development Infrastrutucre and support • Annual investments of more than US$ 4 billion in exploration • 23% of the pre‐salt investments are in the transfer of rights areas p g 26
  27. 27. 66 OFFSHORE EXPLORATORY WELLS EXPECTED IN 2012 Fozdo F dd Foz do Tacutu Amazonas Amazonas Pará- Pará- 4 Maranhão Maranhão Barreirinhas Barreirinhas Mar Mediterrâneo Ceará Ceará 3 Marajó Amazonas Potiguar Potiguar Solimões Parnaíba Alto Tapajós Jatobá Paraíba-Pernambuco Paraíba Pernambuco Paraíba-Pernambuco Paraíba Pernambuco Acre Tucano Sergipe/Alagoas Sergipe/Alagoas 9 Parecis Bananal Jacuipe Jacuipe p Camamu Camamu C S. Francisco Almada Almada Jequitinhonha Jequitinhonha 5 Cumuruxatiba Cumuruxatiba Pantanal Mucuri Mucuri Espírito Santo Espírito Santo Paraná 11 Brazilian Sedimentary  Campos Campos 16 Basins B i Santos Santos 18 500km Pelotas Pelotas Mar Vermelho lh 27
  28. 28. MAIN PROJECTS NG Projects  Pre‐Salt and Transfer of  Large projects sustain production increases Rights Projects Post‐Salt Projects P S l P j Lula Pilot EWTs FPSO BW Cidade  Angra dos Reis 100.000 bpd p  Juruá GNA Lula NE Franco 1  F 1 FPSO Cidade de  Transfer of Rights  Cachalote and Mexilhão Paraty FPSO P‐74   Baleia Franca  Jaqueta Guará Pilot 2 120.000 bpd 150.000 bpd FPSO Capixaba HG FPSO Cidade  de  Guará (North)  100.000 bpd São Paulo FPSO  Cidade de  FPSO P‐67  Parque das Baleias Tambaú  Tambaú 120.000 bpd 120.000 bpd Ilhabela Replicant 2 Replicant 2 FPSO P 58 FPSO P‐58 FPSO Cidade de   Uruguá 180.000 bpd 150.000 bpd 150.000 bpd  FPSO Cidade de  Santos Lula Central Santos NG Baleia Azul Cernambi South FPSO Cidade  de Mil bpd 35.000 bpd Papa‐Terra  FPSO Cidade de  Marlim Sul Anchieta TLWP P‐61 & Mangaratiba 3.070 100.000 bpd  module 3 module 3 FPSO P‐63 150.000 bpd 150 000 bpd  Jubarte3000 FPSO P‐57 SS P‐56 (FPSO Espadarte  150.000 bpd 100.000 bpd reallocation) 180.000 bpd FPSO P‐662500 Replicant 1 2.100  Baleia Azul 150.000 bpd 2.004  Roncador  Roncador FPSO Lula Alto Roncador Roncador 2000 module 3 Módule 4   60.000 bpd  EWTs Lula NE  e  SS P‐55 Maromba FPSO P‐62  Tiro Pilot Cernambi 180.000 bpd FPSO  180.000 bpd1500 SS‐11 FPSO BW Cidade  100.000 bpd Atlantic Zephir São Vicente Tiro/Sidon Siri 30.000 bpd 30.000 bpd FPSO Cidade   de  Aruanã Jaqueta e FPSO ESP/Marimbá1000 Itajaí FPSO  FPSO 50.000 bpd FPSO   EWT Guará EWT Carioca  80.000 bpd 100.000 bpd 40.000 bpd 500 FPSO Dynamic Producer 30.000 bpd  FPSO Dynamic  Producer 30.000 bpd 4 EWTs Pre‐salt 3 EWTs Pre‐salt 5 EWTs Pre‐salt 5 EWTs Pre‐salt 0 2010 2011 2012 2013 2014 2015 28
  29. 29. NEW PRODUCTION UNITS  2012Production capacity growth above 400 thousand bpd during the period Capacity Development Project (thousd. bpd) Petrobras  % Forecast Tambaú Natural Gas 100% PBR 1Q 2012 Pilot Baleia Azul (Pre salt) Baleia Azul  (Pre‐salt)   100  100 100% PBR 100% PBR 3Q 2012 3Q 2012 Tiro Sidon 80  100% PBR 3Q2012 Roncador mod. 3  SS P‐55  180  100% PBR 4Q 2012 Pilot Guará  (Pre‐salt) 120  45% PBR 4Q 2012  Additional Total Capacity ‐ Petrobras: 414 thousand bpd o 8 ultra deepwater rigs have arrived during 2011. 15 more contracted to arrive by end of 2012. o Additional rigs will accelerate ramp‐up of new systems. 29
  30. 30. P‐58 New UnitsNew Units in Campos FPSO FPSO Espadarte FPSO Espadarte Basin: 2011-15 B i 2011 15 2011 P‐56 – 100.000 bpd 2015 2014 2012 2013 2011 2012 P‐62 P‐55 – 180.000 bpd FPSO Espadarte – 100.000 bpd P‐55 2013 P‐58 – 150.000 bpd P‐61 – 150.000 bpd P‐62 – 180.000 bpd P‐63 150.000 bpd P 63 – 150 000 bpd FPSO (Marimbá) – 40.000 bpd FPSO (Aruana) – 100.000 bpd FPSO P‐56 2014 FPSO FPSO (Baleia Azul)  – 60.000 bpd 2015 FPSO (Maromba) – 100.000 bpdFPSO P‐61 P‐63 30
  31. 31. PRODUCTION SYSTEMS7 new systems until 2015, having already hired six 2010 Lula Pilot FPSO Cidade Angra dos Reis – 100.000 bpd The 1st production well in Lula Pilot reached  36,000 boed (28,000 bpd of oil), being the  36,000 boed (28,000 bpd of oil), being the most prolific well from Petrobras 2012 Guará  Pilot Guará Pilot FPSO Cidade de São Paulo – 120.000 bpd 2013 Lula Northeast FPSO Cidade Paraty – 120.000 bpd 2014 Guará North FPSO – 150.000 bpd Cernambi  FPSO – 150.000 bpd 2015 Lula Central Franco – Transfer of FPSO – 150.000 bpd Rights Lula High FPSO – 150.000 bpd FPSO – 150.000 bpd 31
  32. 32. VARREDURA PROJECTTechnological development and exploratory optimization in existing concessions Varredura Project Discoveries in Pre‐salt  Descobertas do Pr é-sal na Bacia de Campos Campos Basin 2009/10  2009/10 (VARREDURA) (Varredura) • Additional recoverable volume from discoveries: • Post‐salt: Marimbá, Marlim Sul and Pampo: 1,105 MM boe; • Pre‐salt: Barracuda, Caratinga, Marlim, Marlim Leste, Albacora and Albacora Leste: 1,130 MM boe*. • Well productivity exceeds 20,000 bpd 67 exploratory wells will be drilled between 2011 and 2015 in production areas in  Campos basin *No volumes have been announced regarding the Marlim Leste and Albacora Leste discoveries.  32
  33. 33. PRE‐SALT ACTIVITY E&P results confirming the potential of the area CAMPOS BASIN  Jubarte: 14,000 bpd (ESS‐103)  Baleia Franca: 25,000 bpd (BRF‐1 + BRF‐6)  Brava: 7,000 bpd (MRL‐199D)  Carimbé: 21,000 bpd (CRT‐43)  Tracajá: 20,000 bpd (MLL‐70) TOTAL (Nov/11):  87,000 bpd PRE‐SALT  CLUSTER  IN  SANTOS  BASIN  EWT Carioca NE: 24,000 bpd (SPS‐74)  EWT L l NE 14 000 b d (RJS 662A) EWT Lula NE: 14,000 bpd (RJS‐662A)  Lula  Pilot: 53,000 bpd (RJS‐660 + RJS‐646) TOTAL (Nov/11):  91,000 bpd INTENSIFYING  DEVELOPMENT CAMPAIGN IN THE PRE‐ SALT  SANTOS BASIN   34  wells  drilled through Oct 11 (27 Exploratory), with an additional 5 new wells by year end 2011  Lula Pilot: 1st well ‐ 28 thous. bpd, 2nd well ‐ 25 thous.  bpd and 3rd  well to start producing at the end of Nov.  The number of rigs in the area will double by the end of 2012 ( currently 10 rigs operating) Average  production in all Pre‐salt wells  approximately  20,000 bpd , with no evidence of decline 33
  34. 34. NEW TECHNOLOGIESPetrobras is implementing cutting‐edge technologies OIL/WATER SUBSEA  RAW WATER SEPARATION INJECTION ‐ Resolves limitations from growing Resolves limitations ‐ Increases production in existing in existing water production systems ‐ Separates water and oil under the  ‐ 3 subsea systems for pumping raw  sea, reinjecting water and relieving  water (with little treatment) to  the size of the surface equipment  h i f h f i pressurize the reservoir, increasing  i h i i i on the platform recovery factor without increasing  ‐ Field:  Marlim (Nov/2011) surface systems. Pioneer in the  world in such water depth ‐ Field: Albacora (Dec/2011) 34
  35. 35. PRODUCTION BEHAVIORReservoirs and equipments set production over time bbl/d Natural decline of reservoir * Potential1 Possible causes: ‐ decrease in reservoir pressure Production1 ‐ increase jn water production Potential2 * Assuming 100% efficiency of the  Production2 equipment installed Actual production, a combination of: ‐ Natural decline of the reservoir and  ‐ Equipment efficiency - problems with lift; hydrate formation in the collection line; compression failures; t1 t2 power outages; Time equipment failures; scheduled and unscheduled maintenance etc... o 2011 production decline in some fields above historical rates was due to reduced equipment efficiency, not geology.   o On average, reservoir decline was below expected. 35
  36. 36. PRODUCTION ‐ 2011Production below target mostly explained by unplanned maintenance Production loss  due to operational causes  – effect on annual production  25.000 Unprogrammed Stoppages 20.000 Programmed Stoppages Unplanned maintenance   l d i and additional time for  15.000 planned maintenance in the  (thousd. bpd) 9M11 lowered production  9M11 lowered production 10.000 by an average of 44  5.000 thousand bpd in the year 0 1Q 2Q 3Q Other factors that reduced production relative to targets o Delays in the completion and connection of wells, due to the late arrival of new rigs from international shipyards. o Logistical and market restrictions reduced production of natural gas, in turn reducing oil production by 20 thousand. Bpd during 9M11 (Uruguá: 10 thousd. bpd; Lula: 10 thousd. bpd) 36
  37. 37. LIFTING COSTSCosts pressured by a combination of factors during first nine months of 2011 R$/barril $ US$/barril $ 117.36 113.46 187.78 186.07 175.30 104.97 147.02 86.48 55.14 54.11 35.00 134.51 50.66 76.86 31.25 30.48 42.72 43.47 24.67 24 67 25.58 25 58 34.21 31.80 21.88 31.66 17.88 19.10  24.26 26.13 15.29 14.07 18.46 19.00  20.93 22.31 13.12 13.37 17.34 10.60 10.29 11.38 3Q10 4Q10 1Q11 2Q11 3Q11 3Q10 4Q10 1Q11 2Q11 3Q11 Brent Government take Lifting costo In 3Q11 lifting costs increased by provisioning for 2011 Collective Bargaining Agreement, under negotiation.o Increasing lifting cost trend in 2011 as a result of start‐up of new production systems, increase in planned and unplanned stoppages and higher oil prices affecting service and energy costs. 37
  38. 38. E&P PROFITABILITY IN BRAZIL Profitability of oil Production in Brazil fully exposed to oil prices Brent vs. E&P Net income per Barrel l E&P Net Income ($/boe) E&P Net Income ($/boe) 25 20Net income per Barrel (US$) 15 10 5 Peer Range Peers Petrobras 0 2005 2006 2007 2008 2009 2010 Brent (Average in dollars) E&P ROCE 60% 50% • E&P profitability strongly correlated to oil price • Production in Brazil: 86% oil and 14% gas 40% • Higher net profit per barrel yields better return  g p p y 30% than its peers 20% • Stable regulatory environment allows for  Peers Peer Range capturing the benefits of the increase in oil prices 10% Petrobras 0% 2005 2006 2007 2008 2009 2010 Source: PFC Energy Peers: BP, CVX, XOM,RDS, TOT 38
  39. 39. PROFITABILITYNew E&P projects generate attractive returns 45,0% 40,0% Key Assumptions: 35,0% • 150,000 bpd FPSOs 30,0% • Production of 500 MM barrels 25,0% • Ramp‐up in line with industry in line with industry • Historic decline rate 20,0% • Oil value = 95% Brent 15,0% • Does not include exploration and  10,0% acquisition costs 5,0% 0,0% 60 70 80 90 100 110 US$/ bbl Case 1 – US$12/boe Capex / US$5/boe Opex (expected scenario) Case 2 – US$15/boe Capex / US$7/boe Opex Case 2 US$15/boe Capex / US$7/boe Opex Case 3 – US$12/boe Capex / US$5/boe Opex without Special Interest (such as Transfer of Rights) • The graph ill h h illustrates the cost‐benefit ratio of a standard production h b fi i f d d d i development in Brazil, using assumptions based on previous experiences 39
  40. 40. DISTRIBUTION OF UPSTREAM REVENUESIn higher oil price environment, net income per BOE benefits from concession terms Distribution of the Realization Price of a Barrel of Domestically Produced Oil $ per Barrel Realization Price % Share of Realization Price$90,00 100,0%$70,00 80,0% 60,0%$50,00 40,0%$30,00 20,0%$10,00 0,0% 2003 2004 2005 2006 2007 2008 2009 2010 1S11 2003 2004 2005 2006 2007 2008 2009 2010 1S11$(10,00) ( ) -20,0% Lifting Other COGS DD&A Income Tax Other SG&A Net Income R&D Exploratory Costs Government Take 40
  41. 41. WHAT IS PRE‐SALT? Located in a remote area, up to 300 km offshore  Water depths that can exceed 2,000 meters  Corcovado Total depth from 5,000 to 7,000 meters Post‐Salt Layer Focus up to 2006 Salt layer more than 2,000  meters thick. t thi k Large Oil Carbonatic Pre‐Salt Layer Reservoirs New Exploratory Frontier 41
  42. 42. PRE‐SALT Pre‐salt represent a large and relativly unexplored area 42
  43. 43. SANTOS PRE‐SALT MASTER PLAN HIGHLIGHTSFrom 2006 to 2010...  Infraestructure Pipeline Tupi‐Mexilhão Tupi Mexilhão nitive Systems FPSOs/ Defin Piloto de Lula (AR) EWTs FPSOs/E Tupi (CSV) Guará (DP) W Polaris W Polaris  Cajun (SS76) Cajun (SS76) Deepwater Expedition Clipper  (NS28) Ocean Valor (SS77) (NS20)* New Rigs (NS21) W Taurus (SS68) W Orion (SS78) Paul Wolf  Louisiana  Victoria (SS70) W Emminence  Dave Beard (SS71) (SS53) (SS51) Stena (NS25)* (SS69) Goldstar (SS73) Goldstar (SS73) Júpiter Discoveries Pré‐Sal/Parati Carioca Iara Iracema Bem‐Te‐Vi Franco Caramba Tupi Guará ... 2006 2007 2008 2009 2010 * Sondas que não estão mais sob contrato com a Petrobras ou consórcios operados pela Cia. 43
  44. 44. SANTOS PRE‐SALT MASTER PLAN HIGHLIGHTS... 2011 and onwards  ROTA 2 ROTA 3 frastructure Inf Lula stems Alto Guará  Definitive Sys Norte N t FPSOs/ Piloto  Piloto Lula  Lula Guará NE Central Cernambi  Sul Franco 1 Lula NE (CSV) Os/EWTs Cernambi  (CSV / 2S 2011) 4 EWTs 3 EWTs 5 EWTs 5 EWTs FPSO Carioca  (DP / 2S 2011) Vitoria 10000  Vitoria 10000 New Rigs s (NS‐30) Drilling Rigs to be contracted 7 drilling rigs + 3 rigs (includes up to 28 rigs to be constructed in Brazil) ... 2011 2012 2013 2014 2015 2016 44

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