The document discusses the evolution and current state of Brazil's petroleum sector, highlighting its significant reserves and the impact of pre-salt discoveries on production. It outlines the regulatory framework, local content policies, and ongoing bidding rounds by the National Agency of Petroleum, Natural Gas, and Biofuels (ANP) to encourage domestic and foreign investment. Furthermore, it emphasizes the need for local infrastructure and services, projecting substantial opportunities for suppliers in the oil and gas industry.

1. Pre-salt,
Local Content Policy &
25 min
Local Content Policy &
New bidding rounds
Magda Chambriard
Director general
May 7, 2013

2. Summary
Brazil and Petroleum Sector Evolution1
3
Current Scenario and Perspectives2
Local Content4
ANP Bidding-rounds5
Final Comments6
Pre-salt3

3. Summary
Brazil and Petroleum Sector Evolution1
3
Current Scenario and Perspectives2
Local Content4
ANP Bidding-rounds5
Final Comments6
Pre-salt3

4. Brazil
Area: 8,502,728 km²
Population: 196 million
GDP: US$ 2.3 trillion
World’s seventh largest economy
Political, Economical and RegulatoryPolitical, Economical and Regulatory
stability
Over US$ 377 billion in International
Reserves
Investment grade (Moody’s, Fitch and
Standard and Poors)
Oil, Natural Gas and Biofuels
regulated under the same
institutional environment (ANP)

5. 41
53
40
50
60
Apparent consumption of diesel oil
(million m3 per year)
Brazilian market
in fuel numbers
26
20
25
30
Apparent consumption of gasoline
(million m3 per year)
0
2
4
11
20
31
0
10
20
30
40
1945 1955 1965 1975 1985 1995 2005 2012
1
2
6
14
7
14
17
0
5
10
15
20
1945 1955 1965 1975 1985 1995 2005 2012

6. Crude oil production (bbl/d)
Crude Oil Production
1 500 000
1 750 000
2 000 000
2 250 000
ANP
Pre-salt
discovery
x 3
0
250 000
500 000
750 000
1 000 000
1 250 000
1 500 000
1945 1955 1965 1975 1985 1995 2005 2012 2013
Pre-salt
283 M bbl/d
(feb/13)
Garoupa
Campos Basin
ANP
creation

7. 12
14
15
12
14
16
18
Proven Reserves
of Crude Oil
Proven Reserves of Crude Oil (billion bbl)
1 1 1
1
3
5
6
8
0
2
4
6
8
10
12
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2012

8. Creation of Petrobras
Creation of ANP Royalties
Discussion
The resuming of
ANP bidding rounds
Pre-salt discoveries:
new paradigm
Creation of
Inter-ministerial Group
MP 592/12 & Law 12734/12
1953 1995 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Pre-salt – new regulatory framework:
Higher potential
Petrobras Capitalization
Blocks in the
Pre-salt cluster
ANP has invested in G&G surveys
to increase knowledge of the Brazilian sedimentary basins.
Constitutional
Amendment
Nº 9/95

9. Summary
Brazil and Petroleum Sector Evolution1
3
Current Scenario and Perspectives2
Local Content4
ANP Bidding-rounds5
Final Comments6
Pre-salt3

10. Proven Reserves
Oil – ~15.3 billion bbl
Gas – ~459.3 billion m3
Near future: x2
Production
Oil and NGL – 2.2 million bbl/day
Current scenario
and perspectives
(2012)
25
30
35
40
Proven Reserves (Bboe)
Imports/Exports Balance
Oil – 237.9 thousand bbl/day
Gas – 35.8 million m3/day
Oil and NGL – 2.2 million bbl/day
Gas – 70.7 million m3/day
Near future: x2
39 national companies
38 foreign companies
Petroleum Natural Gas
0
5
10
15
20
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Near
future

11. “One country,
three systems…”
7.5 million km2 - 4.2 % under concession
Onerous
assignment:
7 blocks
~ 2% of sedimentary areas:
Production Sharing Regime
1st Pre-salt Bidding Round
Other areas:
Concession Regime
11th and 12th Rounds

12. Jubarte
Oil: 38.6 M bbl/d
Gas: 1.2 MM m3/d
Baleia Azul
Oil: 72.2 M bbl/d
Gas: 2.4 MM m3/d
Voador
Oil: 3.1 M bbl/d
Gas: 74 M m3/d
Marlim
Oil: 2.5 M bbl/d
Trilha
Oil: 384 bbl/d
Gas: 12 M m /d
Pre-salt Production
(February 2013)
Oil: 283 M bbl/d; Gas: 9.4 MM m³/d
Lula
Oil: 94.2 M bbl/d
Gas: 3.8 MM m3/d
Sapinhoá
Oil: 24.5 M bbl/d
Gas: 922 M m3/d
Oil: 2.5 M bbl/d
Gas: 60.5 M m3/d
Marlim Leste
Oil: 31.2 M bbl/d
Gas: 496 M m3/d
Barracuda
Oil: 894 bbl/d
Gas: 13.6 M m3/d
Caratinga
Oil: 14 M bbl/d
Gas: 214 M m3/d
Linguado
Oil: 610 bbl/d
Gas: 82 M m3/d
Gas: 12 M m3/d
Pampo
Oil: 654 bbl/d
Gas: 38 M m3/d

13. Oil fields in production
Top 10 (february 13)
297
244
170
200
300
Oil production (M bbl/d)
140
115
95 94
75 72 68
0
100
Pre-salt

14. Pre-salt Production
Platforms up to 2013
Pre-salt shall be responsible for 40-50% of oil production in 10 years.
Cidade de Anchieta –Baleia Azul Cidade de Angra dos Reis – Lula Cidade de São Paulo – Sapinhoá
Cidade de Paraty – Lula (may/13) P-58 – Parque das Baleias (nov/13) – Pre e pos-salt
Source: Petrobras Business Plan

15. Summary
Brazil and Petroleum Sector Evolution1
3
Current Scenario and Perspectives2
Local Content4
ANP Bidding-rounds5
Final Comments6
Pre-salt3

16. Next decade, the demand for goods and services
should reach U$ 400 billion
Opportunities for suppliers
in the petroleum sector
Shell
OGX
Queiroz Galvão
BP
35
Petrobras Investments in E&P in Brazil
Average values in the 5- year period Business Plan (US$ Billion)*
*Based on information from the Petrobras Business Plan
BP
Statoil
Chevron
BG
Petrogal
Others
6 7
9
13
18
22
24
26
30
0
5
10
15
20
25
30
2005 2006 2007 2008 2009 2010 2011 2012 Valor Médio
(2013-2017)
Average
values
(2013-2017)

17. Local Content Commitments
in Concession Agreements
40
50
60
70
80
90
100
Average Local Content
ContentOfferings(%)
0
10
20
30
40
1 2 3 4 5 6 7 8 9 10
E xploration Development
Bid Round
LocalContent
Pre-salt
According to O&G reserves forecast, Brazil shall need to invest heavily in
infrastructure (platforms, supply boats, pipelines, ports, shipyards, steel etc.).

18. Petrobras – already auctioned
28 drilling rigs
7 in PE, 6 in BA, 6 in ES, 6 in RJ and 3 in RS
Naval industry
OSX Shipyard
6 modules (OGX)
4 hulls (OGX)
Jurong Shipyard
(under construction)
6 rigs
Atlântico Sul
Shipyard
7 rigs
P-62
São Roque Shipyard
P-59
P60
6 rigs
Source: Adapted from the 4th balance of PAC 2, 2012
Brasfels
Shipyard
P-57 (Jubarte)
P-56 (Marlim Sul)
P-61
6 rigs
Rio Grande
Shipyard
P-55 – modules and topside
8 replicants – hulls
3 rigs
Rio Grande Harbor
Shipyard
P-63
P-58
Action completed/operation
Running
Auctioned
Provided
Inhaúma
Shipyard
Conversion of 4 FPSOs
(P-74, P-75, P-76 and P-77)
Onerous Assignment
OSX Shipyard
(under construction)
4 hulls (OGX)
5 drillships (BR)
7 WHP (OGX)

19. Naval Industry with LC
Platforms, drilling rigs, supply boats
Mauá Shipyard – RJ (P-50)BrasFels Shipyard – RJ (P-52)
Sea Brasil – STX - RJ Atlântico Sul Shipyard - PE
Mauá Shipyard – RJ (P-50)BrasFels Shipyard – RJ (P-52)
Rio Grande Shipyard - RS

20. Policies for Competitiveness
REPETRO: Tax Incentive for Temporary Admissions
o To boost the building of drilling rigs, vessels and oil
platforms in Brazilian shipyards;
o One of the biggest federal tax incentives of Brazil;
o US$ 26 billion in tax exemption from 2001 to 2010;
o Federal Government is willing to expand REPETRO
benefits to other levels of local oil & gas supply chain;
REPORTO: Tax Incentive for Ports Infrastructure (MP 353/2012)
oTo boost the modernization and expansion of ports and
railways;
oTax exemption of US$103.5 million (2012) and US$136.7
million (2013);
Update of Local Content Regulation
o Resolution ANP nº 36/2007 – update the methodology of
measurement LC – Publication in May;
o Resolution ANP nº 39/2007 – deeply detailing the activities
that fit on each line of the Investment Reports –
Public Consultation in July.

21. Prioritization of Sectors Related to
Exploration and Development
Relevancyofthedemand
Higher
Priority matrix
Subsea
Equipment
Subsea
Services
(instalation)
Modules
and
Topsides
Drilling and OSVs
Source: Public policies for socio-economic development through investments in offshore E&P - Bain & Company, 2012
Courtesy: IBP / Bain & Company
Relevancyofthedemand
Lower
Lower Higher
Socio-Economic
Attractiveness
(HT)
Drilling and
completion
(HT)
OSVs

22. Investimentos Locais
Concessionários
3rd part certification
Investimentos Locais
Aquisições de bens e serviços locaisANP – fiscaliza e audita os contratos
3rd part certification

23. Local Content in numbers
3rd part certification
Activity area Certificates
Geology and Geophysics 2128
Drilling Rigs 622
Logistic and Operational Support 6257
Well Drilling, Completion and Assessment 9092
Basic Engineering and Detailing 623
Management, Construction, Assembly and Commissioning 431
Electrical, Control, Instruments and Measurement Systems 1186
Telecommunication Systems 51
2009-2012
23,042 certificates
Local Content:
R$ 16,3 billion
Telecommunication Systems 51
Oil and Gas Pipelines and Storage Tanks 441
Transfer Pumps 53
Compression Units 58
Electric Power Generation Units 129
Steam Generation and Injection Units 25
Water Treatment and Injection Units 169
Underwater Equipments and Control 262
Monobuoys and Mooring System 0
Oil Processing and Treatment System 55
Natural Gas Processing and Treatment System 5
Ship Building 75
Operational Safety 684
Civil Works and Utilities 697

24. o 60-70% of Local Content
o Highest technology
o Brazil can become an exporter
40%
Local Content – Investments declaredSubsea Technology
60%
Drilling rings Others

25. GovernGovern
Innovate to compete
Competing for growth
Brazilian Program for
Competitiveness
Increase LC and productivity of
the O&G industry
Fostering innovation and technological
development in the supply chain;
NOCNOC
R&D
centers
R&D
centers
TrainningTrainningServicesServices
IOCIOC
IndustryIndustry
Extending qualification (with a focus on
engineering);
Promoting the internationalization of
Brazilian companies, attracting foreign
investment and encouraging technological
transference;
Competitiveness
Develop productive and technological
poles according regional characteristics.

26. Summary
Brazil and Petroleum Sector Evolution1
3
Current Scenario and Perspectives2
Local Content4
ANP Bidding-rounds5
Final Comments6
Pre-salt3

27. The 11th Bidding Round
Basin State Area (km2)
Foz do Amazonas AP 44,500
Pará-Maranhão PA, MA 4,616
Barreirinhas MA 13,074
Ceará CE 7,388
Potiguar CE, RN 7,326
289 blocks in 11 states
Pernambuco-Paraíba PE, PB 6,291
Espírito-Santo ES 4,330
Parnaíba MA, PI 59,764
Sergipe-Alagoas AL 733
Recôncavo BA 475
Tucano Sul BA 6,455
Potiguar RN 588
Espírito-Santo ES 179
Total area: 155,718 km2 or 60,123 sq. miles
Evaluation of the offers: Signature
Bonus, Local Content and Minimum
Work Program (MWP)

28. Equatorial Margin
Shallow and deep-water areas – 75.6 M km2:
Opportunities for oil companies and suppliers
Equatorial Margin
Foz do Amazonas
Pará-Maranhão
Potiguar
Ceará
Barreirinhas

29. 12th Bidding Round
(30 and 31/10/13)
Natural Gas onshore
Parnaíba Basin
“Gaviões” Park
Opportunities for electric power generation
Acre Basin
Parecis Basin
Teles Pires River
São Francisco Basin
Buritizeiro County
Paraná Basin
Barra Bonita field Recôncavo Basin
Pending approval from CNPE
Sergipe-Alagoas Basin

30. 1st Pre-salt Bidding Round
(28 and 29/11/13)
Production sharing regime
Signature Bonus, MWP and LC
Defined in Tender Protocol
% OF PROFIT OIL% OF PROFIT OIL
?% BID PARAMETER
The winner best offer!
Petrobras as operator with
at least 30% participation.

31. Summary
Brazil and Petroleum Sector Evolution1
3
Current Scenario and Perspectives2
Local Content4
ANP Bidding-rounds5
Final Comments6
Pre-salt3

32. Final comments
Brazil is resuming bidding-rounds for O&G exploration and production,
reaffirming the LC policy;
The Country is aware of the scale of its opportunities, therefore it tries
to use the O&G sector to boost the industrial development, using the
Local Content policy;
This means Brazil has not only opportunities for O&G companies, but
also opportunities for suppliers, mainly for those that are willing to
establish themselves in Brazil;
The resuming of Brazilian bidding rounds, opening the Equatorial
Margin, the pre-salt and the search for gas onshore in enormous basins
can give a good idea of the size of the country’s potential;
Foreign expertise and investments are welcome (as long as in
compliance with Brazilian main goals for the sector).

33. National Agency of Petroleum, Natural Gas and Biofuels – ANP
Av. Rio Branco, 65 – Centro – Rio de Janeiro – Brasil
12º to 22º andar
Phone: +55 (21) 2112-8100Phone: +55 (21) 2112-8100
www.anp.gov.br

34. A importância do conhecimento
das bacias sedimentares brasileiras
As aquisições sísmicas realizadas pelas
EAD´s a partir da flexibilização do
monopólio foram fundamentais para a
descoberta do Pré-Sal.
Sísmica
pré-1998
Sísmica
até 2002
Sísmica atual

35. Investimentos Locais Declarados
– Fase de Exploração
BID
Investimentos Declarados
Total (bilhões R$) Local (bilhões R$)
BID 01 4,82 2,95
BID 02 15,66 11,64
BID 03 7,66 5,79
BID 04 4,18 3,42
Do Bid 1 ao Bid 10 cerca de
R$70 bilhões de
investimentos na fase de
exploração. R$45 bilhões
declarados como conteúdo
BID
Investimentos Declarados
Total (bilhões R$) Local (bilhões R$)
BID 07 10,84 5,48
BID 09 7,90 3,89
BID 10 0,52 0,45
Total 19,26 9,81
BID 04 4,18 3,42
BID 05 4,76 2,96
BID 06 11,95 8,25
Total 49,04 35,02
declarados como conteúdo
local.
Sendo R$9,8 bilhões em
investimento local
declarado dentro das regras
com exigência da
certificação de CL.

36. Why invest in Brazil?
26
56
58
354
Paper and Cellulose
Automotive
Mining
Oil and Gas
Investments
2012-2015
Source: BNDES. Study: Visão do Desenvolvimento nº 100 – April, 2012
7
11
14
21
25
25
0 50 100 150 200 250 300 350 400
Aerospace
Industrial Health
Textile
Steel
Electronics
Chemical
R$ billion
Oil and Gas: 63%