Petrobras At A Glance

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Petrobras At A Glance

  1. 1. PETROBRAS AT A GLANCE October, 2011 1
  2. 2. DISCLAIMERFORWARD-LOOKING STATEMENTS:DISCLAIMERThe presentation may contain forward-looking statements We undertake no obligation to publicly update orabout future events within the meaning of Section 27A of 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 the Company’s current views and estimates offuture 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- presentation.looking 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 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, 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 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 2000 2006-7 2010Incorporation in 1953 Discovery of shallow water offshore fields Discovery of mega Elimination ofas government Listing on NYSE, Brazil achieves USD 70 bn fields in Monopoly,monopoly with market cap self sufficiency capitalization and Reserves: deepwater creation of oilReserves: 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-salt2.6 Thous. BPD* 177 Thous. BPD Production: 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 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. 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 • 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; • 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. 6
  7. 7. LOGISTICAL ADVANTAGESUniquely positioned to integrate upstream and downstream operations 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 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 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) 32% Our Main Segments: Key Statistics and Market Positions (2010) Exploration and RTM (incl. Distribution 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 distribution volume the 27 gas discos in • 245 thous. boed • 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 & 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 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 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) – September 28nd, 2011 350 3.9 2.7 2.7 196 184 2.6 2.2 2.3 147 115 103 87 70 68 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 100 prospective and new discoveries 90 90 OPEP 80 Project 80 Project Decline Decline 70 Non-OPEP 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 • Increase of energy efficiency 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$2/boe Source: PFC Energy 11
  12. 12. COMPETIVE ADVANTAGEReserves in ultra-deep water in Brazil benefit from comparatively low break-even Expected Costs of Production 140 Deepwater and Production costs (US$/bbl-2008) 120 Ultra-deep water 100 Oil Gas to Coal to 80 Shales liquids liquids Arctic CO₂ - EOR 60 EOR Heavy oil and bitumen 40 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 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 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 3,993 125 180 + 35 Systems 2,575 2,772 618 2,386 2,516 +10 Post-Salt Projects 93 96 96 141 +8 Pre-Salt Projects 4,910 99 144’000 boe/day 111 132 435 317 334 +1 Transfer of Rights 321 3,070 845 Transfer of Rights Added Capacity 1.855 1.971 2.004 2.100 13 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 Total Oil Consumption per Country* – 2010 (MM bpd) Above 3 MM bpd Between 2-3 MM bpd Under 2 MM bpd 19,15 9.1  While OECD oil consumption 4.5 decreasing 0.04% p.a., Brazil 3.3 3.2 2.8 2.6 2.4 2.4 2.3 consumption grew 2.1%. 2.0 1.8 1.7 1.6  In last two year, Brazilian consumption grew 20% EUA India Russia Canada United Kingdom Saudi Arabia South Corea Brazil Mexico Iran Japan German France China Total Oil Consumption 230 (Índex 1999 = 100)* Including Ethanol + Biodiesel Brazil 210 EUA 190 World OECD 170 India 150 China 130 110 90 1999 2001 2003 2005 2007 2009Source: BP Statistical Review 2011 15
  16. 16. HIGH GROWTH POTENTIALLow per capita consumption supports demand growth in developing countries 30 25 1980 2000 2010 per capita - barrels per year 20 15 10 5 0 USA Japan OECD Brazil China India Source: BP e US Census Bureau 16
  17. 17. POTENTIAL INCREASE OF OIL PRODUCTS CONSUMPTIONBrazil still has a low motorization rate Licenses for new vehicles 17,4 18,0 2000 2010 11,8Million of units 2015 6,0 5,0 4,0 3,7 3,2 3,5 3,0 2,6 2,7 2,7 2,2 2,1 1,5 0,8 United States Japan Germany France Italy China Brazil India Number of vehicles per 1000 habitants 814 688 2010 592 545 599 2015 208 153 47 16 United States Japan Germany France Italy China Brazil India 17
  18. 18. GLOBAL REFININGRegions with fast growth continue to invest in refining 3.204 Adding Refining Capacity (2011-2016) Thousand bpd 1.997 1.755 736 703 437 153 Asia Middle East North America Latin America Europe Ex-USSR Africa Expansion 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 18
  19. 19. Exploration & Production 19
  20. 20. 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. • Drilling of more than 1,000 offshore wells, of these 40% is exploratory and 60% is production development. • In 2020, the pre-salt production will correspond to 40.5% of the oil production in Brazil. 20
  21. 21. 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 Whales Park, 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 Whales Park, ranging from 8.1 to 9.6 Billion boe 21
  22. 22. 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) Undeveloped 39% 61% Developed Proven Reserves Proven Reserves 22
  23. 23. BRAZILIAN BASINSOffshore brazil is a vast area, still underexplored USA t 23
  24. 24. 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 24
  25. 25. OFFSHORE GEOLOGYProducing from pre-salt reservoirs will drive future investment Campos Basin Santos Basin West East Post-salt turbidites: current productionAlbian carbonates Pre-salt carbonates: Pre-salt carbonates Supergiants oil fields Near-term production increase Mid and long-term production increaseGeological cross section in Santos Basin used to explain petroleum systems of Santos and Campos basins 25
  26. 26. E&P FOCUSMaintain and expand traditional areas, while transitioning to new reservoirsE&P portfolio has around 3,000 projects1 1 • Maintain production: • Implement full development of the main production 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 existing3 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, arrival of new drilling rigs, replicante FPSOs. 26
  27. 27. 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 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 27
  28. 28. MAIN PROJECTS NG Projects Pre-Salt and Transfer of Large projects sustain production increases Rights Projects Post-Salt Projects Lula Pilot EWTs FPSO BW Cidade Angra dos Reis 100.000 bpd  Juruá GNA Lula NE Franco 1 FPSO Cidade de Transfer of Rights  Cachalote and Mexilhão Paraty FPSO  Baleia Franca Jaqueta Guará Pilot 2 120.000 bpd 150.000 bpd FPSO Capixaba HG FPSO Cidade de 100.000 bpd São Paulo Guará (North) FPSO P-67 Parque das Baleias Tambaú 120.000 bpd FPSO Replicant 2 FPSO P-58 FPSO Cidade de  Uruguá 180.000 bpd 150.000 bpd 150.000 bpd  FPSO Cidade de Santos BMS-9 our11 Santos NG Baleia Azul FPSO Cidade de Cernambi SouthMil bpd 35.000 bpd Papa-Terra FPSO Marlim Sul Anchieta TLWP P-61 & 150.000 bpd 3.070 100.000 bpd  module 3 FPSO P-63  Jubarte (FPSO Espadarte3000 FPSO P-57 SS P-56 150.000 bpd 100.000 bpd reallocation) 180.000 bpd FPSO P-662500 Replicant 1 2.100 Baleia Azul 150.000 bpd 2.004 Roncador FPSO BMS-9 or 11 Roncador2000 module 3 Módule 4 60.000 bpd  EWTs Lula NE e SS P-55 FPSO P-62 Maromba  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 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. P-34 P-57 Installed UnitsInstalled units in the Campos Basin since 2004 FPSO Espírito Santo 2004 P-43 – 150.000 bpd 2010 2009 2008 2007 2006 2005 2004 FPSO Marlim Sul– 100.000 bpd 2005 P-48 – 150.000 bpd FPSO Frade P-54 2006 P-50 – 180.000 bpd P-52 P-34 – 60.000 bpd P-50 2007 P-52 – 180.000 bpd FPSO Cid. Niteroi P-54 – 180.000 bpd P-43 FPSO Espadarte – 100.000 bpd P-53 2008 P-48 FPSO Marlim Sul P-53 – 180.000 bpd P-51 2009 FPSO Espadarte P-51 – 180.000 bpd FPSO Frade – 100.000 bpd FPSO Cid. Niteroi – 100.000 bpd FPSO Espírito Santo – 100.000 bpd 2010 P-57 – 180.000 bpd 29
  30. 30. P-58 New UnitsNew Units em Campos FPSO FPSO Espadarte Basin: 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 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 most prolific well from Petrobras 2013 Lula Northeast FPSO Cidade Paraty – 120.000 bpd Piloto de Guará FPSO Cidade de São Paulo – 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 indo Pr é-sal Descobertas Pre-salt Campos Basin 2009/10 na Bacia de Campos 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 PRODUCTIONAppraisal stage production from Pre-salt already making significant contribution CAMPOS BASIN (PRE-SALT)  Baleia Franca: 19,800 bopd  Brava: 6,900 bopd  Carimbé: 23,100 bopd  Tracajá: 19,800 bopd  TOTAL: 69,600 bopd SANTOS BASIN (PRE-SALT)  EWT Guará: 15,300 bopd  EWT Lula NE: 14,400 bopd  Lula Pilot: 28,300 bopd  TOTAL: 58,000 bopd TOTAL PRODUCTION (JUL/11): 127,600 bopd 33
  34. 34. NATURAL GAS PRODUCTIONStart up of Plangas and Pre-salt projects will substantially increase capacity Amazon Basin Manaus Coari Jurua Urucu Santos Basin UTGCA Mexilhão Urugua UGN RPBC PMLZ-1 LulaMillion m3 100 95 2011-15 Non-Associated Natural Gas 80 75 2015-20 • Mexilhão – 15MM m3/day Associated Natural Gas from Pre-salt 60 55 • Uruguá-Tambaú – 10 MM m3/day • Juruá – 2 MM m3/day Natural gas production from 42 Pre-salt in Santos Basin must 40 Associated Natural Gas overcome 20 MM m3/day 20 Increasing production in the Campos and Santos Basin 0 2010 2011 2015 2020 34
  35. 35. NEW TECHNOLOGIESApplications enhance recovery, while slowing decline and increasing production Technological Solution Technology Status Subsea BCS In Operation Subsea Pumping Model In Operation (Jubarte e Golfinho) Subsea Pumping Systems Skid BCS Prototype in TLD ESP 23 (Oct/11) Subsea Muliphase Pump BMSHA Prototype in Barracuda (Dec/11) Gas/Liquid Subsea VASPS Prototype Tested in P-08 (2011) Separation Oil/Water Subsea SSAO Prototype in Marlim (End of 2011) Separation Raw water injection SRWI Prototype in Albacora (End of 2011) Subsea electric transmission and Under qualification Prototype scheduled to 2015 distribution VASPS Underwater Electric Raw water injection Oil/Water Subsea Pump in Skid Separation 35
  36. 36. NEW TECHNOLOGIES - HIGHLIGHTPetrobras is implementing cutting-edge technologies OIL/WATER SUBSEA RAW WATER SEPARATION INJECTION - Resolves limitations from growing - Increases production 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 pressurize the reservoir, increasing 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) 36
  37. 37. LIFTING COSTSCosts pressured by higher oil prices R$/barrel 187.78 US$/barrel 117.36 175.30 104.97 147.02 140.16 86.48 35.00 134.51 55.14 78.30 76.86 30.48 50.66 43.91 42.72 43.47 25.58 24.50 24.67 34.21 21.88 31.66 19.10 26.37 24.26 26.13 14.07 15.29 14.71 10.6 11.38 13.12 17.54 18.46 17.34 19.00 20.93 9.79 10.29 2Q10 3Q10 4Q10 1Q11 2Q11 2Q10 3Q10 4Q10 1Q11 2Q11 Brent Government Lifting cost2Q11 vs. 1Q11: Takeo Higher expenses due to well interventions and preventive maintenance contributed to the upturn.o Increase in government take reflects higher oil reference price. 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 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 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 • 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 3 – US$12/boe Capex / US$5/boe Opex without Special Interest (such as Transfer of Rights) • The graph illustrates the cost-benefit ratio of a standard production 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. PRE-SALTPre-salt represent a large and relativly unexplored area 41
  42. 42. SANTOS PRE-SALT MASTER PLAN HIGHLIGHTSFrom 2006 to 2010... Infraestructure Pipeline Tupi-Mexilhão Definitive Systems FPSOs/ Piloto de Lula (AR) FPSOs/EWTs Tupi (CSV) Guará (DP) W Polaris Cajun (SS76) Deepwater Expedition Clipper (NS28) Ocean Valor (SS77) (NS20)* New Rigs (NS21) W Taurus (SS68) W Orion (SS78) Paul Wolf Victoria (SS70) Louisiana W Emminence (SS53) (SS51) Stena (NS25)* Dave Beard (SS71) (SS69) 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. 42
  43. 43. SANTOS PRE-SALT MASTER PLAN HIGHLIGHTS... 2011 and onwards ROTA 2 ROTA 3 Infrastructure Replic. Definitive Systems 1 Piloto Guará Guará Norte FPSOs/ Replic. Replic. 2 3 Piloto Lula Cernambi NE Sul C.O. Replic. 1 4 Lula NE (CSV) FPSOs/EWTs Cernambi (CSV / 2S 2011) 4 EWTs 3 EWTs 5 EWTs 5 EWTs Carioca (DP / 2S 2011) Vitoria 10000 New Rigs (NS-30) Drilling Rigs to be contracted 7 drilling rigs + 3 sondas (includes up to 28 rigs to be constructed in Brazil) ... 2011 2012 2013 2014 2015 2016 43
  44. 44. DEVELOPMENT OF PRE-SALTAll first-phase units under construction or being contracted 1st already contracted and Already contracted 3 FPSOs in operation 2nd being negotiated (start-up in 2012 and 2013) (start-up in 2014) Phase 0 Phase 1a Phase 1b Acquisition of information Production > 1 MM bbl in 2017 Significant production increase 2008/2013 2013/2017 After 2017 • Appraisal wells • Guará Pilot • Accelerated innovation • Extended well tests • Lula NE Pilot • Intensive use of new • Lula Pilot • Guará N technologies specifically developed for pre-salt • Cernambi S conditions • 8 definitive production systems (replicant) • 4 production units in the Transfer of Rights area In operation (only 4 Hulls already contracted years after discovery) (conversion in the Inhaúma shipyard) Under construction (hulls being built in the Rio Grande shipyard) + topsides under bid 44
  45. 45. SANTOS BASIN PRE-SALT UPDATEDrilling campaign continues to accelerate  High exploration success ratio (all wells have found oil occurrences)  High productivity in producing wells LULA NE EWT „ LULA PILOT  30 wells drilled up to July 2011 (26 exploratory)  Up to 15 wells scheduled for drilling in 2011  9 rigs in operation (July 2011) and another 5 scheduled for start-up by year-end Wells undergoing drilling, completion or appraisal 45 45
  46. 46. CAPITAL COSTS: PRE-SALT VS. CAMPOSSimilar equipment and processes: Principal difference is drilling and completion Pre-salt CAPEX DISTRIBUTION 27% 20% 53% Gathering Completion + Drilling Units Deepwater Projects in Campos Basin* CAPEX DISTRIBUTION 33.3% 33.3% o Additional drilling and completion cost in the pre-salt compared with an generic deepwater project in Campos basin can be partially or fully offset by higher quality and quantity of oil that is 33.3% expected in the pre-salt area. Gathering Completion + Drilling Units* Generic example, considering that these rates can change among the different existing projects in Campos Basin 46
  47. 47. PRE-SALT RESULTSReduced drilling time and exceptional reservoir behavior lead to growing optimism Average drilling time of the wells completed during the year (versus combined average time for 2006/7) Results obtained during EWTs  Constant production 5 wells  Restriction due to gas burning limitation 4 wells  Good behavior of the reservoirs 5 wells  Good lateral communication 6 wells  No issues regarding flow guarantee EWT Schedule 4 1 4 1 5 5 4 3 3 2011 2012 2013 2014 2015 TLD - Pré-Sal e and Transfer of EWT – Pre-Salt Cessão Onerosa TLD - Outras áreas EWT – Other areas Rights 47
  48. 48. SANTOS PRE-SALT ECONOMICSIncreasing knowledge lowers expected investment, increasing NPV for Master Plan 200% -45% 150% Investment 100% -32% 50% 100% 81% 55% 0% PLANSAL 2008 (2008-2030) PLANSAL 2009 (2008-2030) PLANSAL 2010 (2008-2030) 200% Net Present Value 150% 100% 152% 118% 50% 100% 0% PLANSAL 2008 (2008-2030) PLANSAL 2009 (2008-2030) PLANSAL 2010 (2008-2030) 48
  49. 49. NATURAL GAS FLOWRoute 1 in operation, Route 2 under construction andRoute 3 in study to identify the best alternative Route 2 Route 3 FLNG Route 1 (3 options) PROJECTS ROUTE 1 Year Adequacy UTGCA May/2013 Pipeline PMXL-UTGCA 2010 Pipeline Lula-Mexilhão Feb/2011 PROJECTS ROUTE 2 Year Pipeline Iracema-Cabiúnas Aug/2014 Expansion of Processing TECAB Aug/2014 ROUTE 3: Solution pipeline + processing/ Gas FSO Jan/2016
  50. 50. LOGISTICS AND INFRASTRUCTURE Macae 50Logistics solutions already in place to meet the Contrataçã ofleet of rigs and FPSOs in operation Porto do Rio Contrataçã Contratação o Angra dos Reis Up to 2 new (2011/Fluidos) Aeroporto de Cabo centers of Frio diesel, up to 3 fluid centers, Central Fluido e Salmoura Central de Central passenger Passageiros Central Diesel Fluido e Salmoura (2014) center Central Diesel Central Fluido e Salmoura INFRASTRUCTURE Status Jacarepaguá Airport Operating Itanhaem Airport Operating Cabo Frio Airport Operating Rio Port Operating Macaé Port Operating 50 km Fluids Center 1 Operating Instalações fora de escala 5050
  51. 51. DECLARATION OF COMMERCIALITYDeadlines for the declaration of commerciality influences development plans 2011 2012 2013 2014 2015 2016 BM-S-8 Bem-Te-Vi (12/31/2012) BM-S-9 Carioca (11/11/2011) Guará (12/31/2012) BM-S-10 Parati (04/12/2012) BM-S-11 Iara (12/31/2013) BM-S-21 Caramba (04/30/2015) BM-S-24 Júpiter (02/28/2016) 51

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