Post on 25-Jul-2015
2 2
The presentation may contain forecasts about future events. Such forecasts merely reflect the expectations of the Company's management. Such terms as "anticipate", "believe", "expect", "forecast", "intend", "plan", "project", "seek", "should", along with similar or analogous expressions, are used to identify such forecasts. These predictions evidently involve risks and uncertainties, whether foreseen or not by the Company. Therefore, the future results of operations may differ from current expectations, and readers must not base their expectations exclusively on the information presented herein. The Company is not obliged to update the presentation/such forecasts in light of new information or future developments.
Cautionary Statement for US investors
The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this presentation, such as oil and gas resources, that the SEC’s guidelines strictly prohibit us from including in filings with the SEC.
Disclosure
3 3
Petrobras will be an integrated energy company with a strong international presence and a
leading force in Latin America, working with a focus on
profitability and social and environmental responsibility.
Vision 2015
5 5
Drivers Business StrategiesE&P• Focus on light oil and natural gas
production and reserve growthDownstream• Expand conversion capacity and improve
quality of refined products• Increase bio-refining capacity, biomass,
petrochemical and fertilizers businesses• Promote Brazilian biodiesel production and
export ethanolDistribution• Increase market-share in Brazil for oil
products and biofuelsGas & Energy• Develop and establish a profitable and
reliable natural gas market including LNGInternational• Expand E&P in Gulf of Mexico and Africa• Undertake investments in refining
conversion capacity and quality
Develop market and monetize natural gas reserves in Brazil
Reduce dependence on light oil and oil product imports
Improve oil product quality in Brazil and abroad
Reduce carbon intensity of operations and products
Drivers & Strategies
Exploit competitive advantage from deep water exploration technology abroad
Assure future demand and add value to heavy oil exports
6 6
Energy
Industry
Imported OilProducts
ImportedOil
Imported Gas
International OilProduction
LNG
H - Bio
DomesticNatural GasProduction
Biodiesel Oil Productssold in Brazil
InternationalSales
OtherRenewables
Infrastructure
Petrochemical Plants
Brazilian OilProduction
Throughputin Brazil
InternationalRefining
Integration of the Company's Activities
Ethanol
8 8
At current levelsCosts
2006 – 62.002007 – 55.002008 – 40.00
2009-2011 – 35.00
Brent for funding (US$/bbl)
Linked to international market
pricesDomestic sales prices
23.00Robustness Brent (US$/bbl)
4.2GDP – World (% p.a.) –PPP*
3.7GDP – Latin America (% p.a.) – PPP
2.50FX rate (R$/US$)4.0GDP – Brazil (% p.a.)
2007-2011Assumptions
* PPP – purchase power parity
FundamentalsMacroeconomic assumptions
• Market developments indicate an appreciation of the FX rate (R$/US$).
• Petrobras robustness Brent price below the low end of market’s forecast band.
• Costs are projected at current levels, with no adjustment for future price reductions.
• Petrobras products prices follow international prices in the medium term.
• Natural gas prices to accompany international differentials to oil products.
99
Fundamentals Brent prices 2006-2015 forecasts
2004
-201
0Fo
reca
sted
Ban
d
US$
/bbl
5429
3856
62
42 38 38 39 41 42 43 44
0
20
40
60
80
100
120
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Max. and Min. BP 2004-2010 (US$ nominal)Petrobras (US$ nominal - as of 2008 US$ 35 in current value)Max. and Min. BP 2007-2011
2007
-201
1Fo
reca
sted
Ban
d
• Supply and demand tight equilibrium → high volatility in medium and long terms;• Petrobras assumes conservative values for Brent prices → low end of market’s
forecast band.
Brent prices 2006-2015 forecasts
10 10
0
50
100
150
200
250
300
350
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
F&D Costs - 3 years average Oil price (Brent)Source : Costs – PFC Energy – Companies average: Exxon, BP, Shell, Total, Chevron, COP, Eni, Repsol, Petrobras
Prices – Platt´s
Fundamentals Cost escalation
• Crude oil escalation → high industry services cost and reduction of lag to oil prices.
Evolution of E&P Industry Costs and Oil Prices
11 11
315 368237 282
777935
128
211
201 224
10897
0
500
1000
1500
2000
2500
2005 2011
LPG Gasoline A NaphtaDiesel* + Jet Fuel Fuel Oil Coke + Others
Thou
sand
bpd 1,766
2,1173.1% p.a.
*Includes Biodiesel (2%)
Fundamentals Domestic oil products market
Oil products demand
• Increasing demand for middle distillates.
12 12
Fundamentals Domestic natural gas market
Mill
ion
m3 /d
ay
48.4
7.124.8
38.6
13.5
34.0
up to 71.0
up to 30.0
up to 20.0
0
20
40
60
80
100
120
140
Consumed in 2005 Maximum Demand2011(*)
Potential Supply 2011
Thermoplants Industry OtherNational Production Bolivian Imports LNG
* Considers maximal dispatch for every thermoelectric power plant
121.0
17.7% p.a.
121.0
45.4
Natural gas market
14 14
Note: Includes International
31.0
12.41.0
1.0
49.3
23.07.5
3.32.31.8
E&P Downstream G&EPetrochemical Distribution Corporate
9%4%
3% 26%
56%
3%
Business Plan 2007-2011US$ 87.1 billion
86%
14%
Brazil International
US$ 12.1 bi
US$ 75.0 bi
Investment Plan
49,3
23,0
7,53,32,21,8
15 15
New Projects17,412
Cost Increase7,792
FX Rate Appreciation
4,189
Business Model Change
2,957
Other517
Scope Change1,824
BP 2006-1052,430
• New projects represent 50% and cost increase 23% of the additional Capexin relation to the previous Plan.
• New exploration projects in Brazil
• Production development Jabuti, ESS-164
• HBIO, RPBC modernization• Ethanol exports• New vessels • Northeast and southeast LNG• New projects in E&P and
refining abroad
• Exploration and development projects
• Offshore production• Diesel and gasoline quality and
conversion portfolio• Fleet renovation and expansion
program
US$ Million
Investment Plan
17 17
54,3% 53,1% 51,5% 50,5%
43,8%40,5% 39,7%
34,3%30,0% 29,7%
25,0%20,3%
12,9%
0,0%
10,0%
20,0%
30,0%
40,0%
50,0%
60,0%
Petr
obras
She
ll
T
otal
CNOOC
Stat
oil
BP
Exx
onMob
il
L
ukoil
Chev
ron
Conoco
Phillips
Reps
ol-YPF
Petr
oChina
Sinop
ec
Undeveloped Reserves / Total Reserves* (2005)
• Strong investments in production will optimize the development of Petrobras’ proven reserves, aiming light oil production and a minimum reserve/production ratio of 15 years.
• Petrobras had a 55% success ratio for our exploration wells during 2005, with 38 wells classified as discovery or producing wells.
* Source: Evaluate Energy
E&P Investments
17
PETROBRAS
181818
(154) (326) (508) (697)(154)
(172)(181)
(189)(201)
(217)
(897)
(1.400)
(900)
(400)
100
600
1.100
1.600
2.100
2.600
2005 2006 2007 2008 2009 2010 2011
Total Production Accumulated Decline Annual Decline
2,0612,195
2,368 2,374
1,6841,880
1,979
E&P InvestmentsBrazilian production curve
1,114Accumulated
Natural Decline
690
Net Increase
+
1,804
Gross Increase
Thou
s. b
pd
PETROBRAS
191919
2 , 3 7 42 , 8 1 2
5 5 1
7 2 4
7 4 2
1 8 5
2 7 8
3 8 3
2 0 1 5
F o r e c a s t
1 , 6 8 4 1 , 8 8 01 , 5 4 0 1 , 4 9 3
2 5 0 2 6 5 2 7 4
2 8 9
1 3 3
1 6 1 1 6 81 6 3
8 5
1 0 1
9 49 6
2 0 0 3 2 0 0 4 2 0 0 5 T a r g e t 2 0 0 6
O i l a n d N G L - B r a z i l N a t u r a l G a s - B r a z i l
O i l a n d N G L - I n t e r n a c i o n a l N a t u r a l G a s - I n t e r n a c i o n a l
2,036 2,020 2,217 2,403
3,493
4,556Thousand boed
7.8% p.a.
7.5% p.a.
T a r g e t 2 0 1 1
E&P InvestmentsProduction targets – Oil & NGL and Natural Gas
PETROBRAS
202020
2,374
2,195
2,0611,979
1,880
1,684
2,368
1,400
1,600
1,800
2,000
2,200
2,400
2,600
2005 2006 2007 2008 2009 2010 2011
Parque dasConchas*** 100.000 bpd
2011
Parque dasConchas*** 100.000 bpd
2011
Albacora LesteP-50
180,000 bpdApril/2006
Albacora LesteP-50
180,000 bpdApril/2006
JubarteFase 1P-34
60,000 bpdOct/2006
JubarteFase 1P-34
60,000 bpdOct/2006
Marlim LesteP-53*
180,000 bpd2009
Marlim LesteP-53*
180,000 bpd2009
FPSO CapixabaGolfinho Mod. 1
100,000 bpdMay 2006
FPSO CapixabaGolfinho Mod. 1
100,000 bpdMay 2006
Frade100,000 bpd
2009
Frade100,000 bpd
2009
RoncadorP-52
180,000 bpd2007
RoncadorP-52
180,000 bpd2007
RoncadorP-54
180,000 bpd2007
RoncadorP-54
180,000 bpd2007
Marlim SulModule 2
P-51180,000 bpd
2008
Marlim SulModule 2
P-51180,000 bpd
2008
Piranema20.000 bpdOct 2006
Piranema20.000 bpdOct 2006
JubartePhase 2
P-57180,000 bpd
2010
JubartePhase 2
P-57180,000 bpd
2010
Rio de JaneiroEspadarte Mod II
100,000 bpd2007
Rio de JaneiroEspadarte Mod II
100,000 bpd2007
ESS-130Golfinho Mod III ****
(FPSO)100,000 bpd
2008
ESS-130Golfinho Mod III ****
(FPSO)100,000 bpd
2008
PostponedCidade de VitóriaGolfinho Mod. 2
100,000 bpd2007
Cidade de VitóriaGolfinho Mod. 2
100,000 bpd2007
New
* In the previous plan, P-53 was scheduled to 2008** In the previous plan, P-55 was scheduled to 2010*** Abalone, Ostra, Argonauta and Nautilus (former BC10): Petrobras share 35%**** In the previous plan, Golfinho Mod. 3 was scheduled to 2010
RoncadorP-55**
180.000 bpd2011
RoncadorP-55**
180.000 bpd2011
Thous. bpd
Antecipated
E&P InvestmentsMain Brazilian Oil & NGL production projects
PETROBRAS
212121
• To sustain production growth, 15 large projects will be implemented between 2011 to 2015. The highlights are:
2,812
2,374
2100
2200
2300
2400
2500
2600
2700
2800
2900
2011 2015
• Marlim Sul P-56• Roncador P-55• Papa-Terra Mód. 1 e 2• Marlim Sul Mód. 4• Roncador Mód. 4• Cachalote and Baleia Franca• Baleia Azul
E&P Investments2011-2015 main Brazilian projects
Oil Production in Brazil (Thous. bbl)
PETROBRAS
222222
3.36
4.28
5.73
6.32
5.60
2003 2004 2005 1Q06 2011 Target
US$/bbl
• New lifting costs targets adjusted to new industry levels, partially offset by the increased production gains.
E&P InvestmentsOil and Gas Lifting Costs
23 23
E&P InvestmentsPetrobras CAPEX vs. Peers CAPEX
Mur
phy
Oil:
27,
75
Shel
l Can
ada:
26,
86
Sunc
or: 2
1,65 Pe
tro-
Can
ada:
14,
17
Con
ocoP
hilli
ps: 1
2,5
Mar
atho
n O
il: 1
2,31
Che
vron
: 11,
32
Impe
rial
Oil:
10,
2 1
Petr
ochi
na: 1
0,2
Sino
pec:
10,
02
Stat
oil:
9,89
Exxo
n M
obil:
9,5
4
Tota
l: 9,
41
Petr
obra
s*: 8
,56
BP:
7,0
3CN
OO
C: 1
3,19
0
5
10
15
20
25
30
Global Oils E&P CAPEX to production 2005-2008E AverageSource: Merrill Lynch estimates based on available data for the companies.
* CAPEX and production over 2006-2011
• Per barrel CAPEX* for Petrobras (2006-2011) of US$ 8.56 vs. Global Oils average (2005-08) of US$ 13.74 (ex-PBR).
E&P CAPEX to production 2005-2008E Average (US$/bbl)
24 24• Petrobras CAPEX aims an unique production CAGR among the sector.
E&P InvestmentsProduction CAGR: Petrobras vs. Peers
Production CAGR for the planed period
Petr
obra
s (2
006-
11):
7,8
%
Petr
obra
s (2
011-
15):
6,9
%
Stat
oil (
2006
-07)
: 6,0
%
Luko
il (2
005-
14):
4,7%
Exxo
nMob
il (2
006-
10):
4,0%
BP
(200
5-10
): 4
,0%
Tota
l (20
06-1
0): 4
,0%
Eni (
2006
-09)
: 4,0
%
Che
vron
(200
5-10
): 3
,0%
Eni (
2009
-12)
: 3,0
%
Con
ocoP
hilli
ps (2
007-
11):
3,0%
Rep
sol (
2004
-09)
: 2,6
%
RD
She
ll (2
005-
09):
1,0
%
Petr
obra
s (2
006-
15):
7,5
%
0,0%
1,0%
2,0%
3,0%
4,0%
5,0%
6,0%
7,0%
8,0%
9,0%
CAGR for the planed periodSource: Company reports Obs.: Please note that data for different companies is available for different time period.
PETROBRAS
262626
61%
13%
12%
14%
RefiningPipelines & Terminals TransportShip TransportPetrochemical
US$ 14.2
US$ 3.2
US$ 3.0
US$ 2.8
19%
12%
8%
19%
6%
26%
5%
5%
Gasoline Quality Diesel QualityInfraestructure Maintenance ExpansionHSE ConversionOthers Special
US$ 2.7
US$
0.9
US$ 3.7
US$ 1.1
US$ 1.7US$ 2.7
US$ 0.7US$ 0.7
US$ 23.1 billion in the downstream segment… ...of which US$ 14.2 billion in refining
• Aggregating value to our heavy oil and producing diesel and gasoline according to international standards.
Downstream Investments
PETROBRAS
272727
In Thous. bpd(*) National imports and private refineries(**) Biodiesel portion not included
International Production383
Brazilian Production2,374
383 584+
1,710
Imports309
584
Throughput inBrazil 1,877
Oil products consumptionin Brazil (**) 2,099
Oil 167
Oil Products (*)142
International oil sales967
80
• In 2011 international sales will amount to 967 Thous. bpd.
Downstream InvestmentsLiquid products flow
PETROBRAS
282828
Nitrogenated Fertilizers Unit III
PTA Pernambuco
Fafen BA
Acrylic Complex /SAP
Rio de Janeiro Petrochemical Complex
Main Projects Basic Petrochemical Unit:- 150.000 bbl/d of Marlim Oil;- Products: Diesel, LPG, Ethylene, Propylene, PX, Benzene and Coke.
Petrochemical Integrated Complex:- Polypropylene;- Polyethylene; - PTA; - Ethylene glycol; - PET; - Styrene;- Phenol.
Downstream InvestmentsPetrochemical investments
• Investments of US$ 3.3 billion in Petrochemicals;
• Reducing the Brazilian deficit and adding value to Downstream production.
PETROBRAS
292929
FuelsFuels
Basic Basic petrochemicalspetrochemicals
PolypropylenePolypropylenePolyethylenePolyethylene
StyreneStyrene PTAPTAPhenolPhenol
Ethylene GlycolEthylene Glycol
EthyleneEthylenePP--XyleneXylene
BenzeneBenzene
PropylenePropylene
Basic Basic Petrochemicals Petrochemicals Production UnitProduction Unit
Basic Basic Petrochemicals Petrochemicals Production UnitProduction Unit
Marlim oil
150,000 bbl/d
FuelsFuels
Basic Basic petrochemicalspetrochemicals
PolypropylenePolypropylenePolyethylenePolyethylene
StyreneStyrene PTAPTAPhenolPhenol
Ethylene GlycolEthylene Glycol
EthyleneEthylenePP--XyleneXylene
BenzeneBenzene
PropylenePropylene
Downstream InvestmentsIntegrated Petrochemical Complex
PETROBRAS
303030
• Increase in refining costs due to FX rate appreciation and higher refining complexity as new conversion units come on stream each year.
2.90
1.901.90
1.381.14
2003 2004 2005 1Q 06 Target 2011
US$/bbl
Downstream InvestmentsRefining Costs
PETROBRAS
323232
New products offered by Petrobras’ service stations as of 2006
Expand domestic market-share and client portfolio.
US$ 2.2 billion investments in Distribution.
Offer excellence in service and products.
Increase product and service sales, expanding the company’s activities.
Internationalize and add value to Petrobras’ brand and consolidate it as customer’s favorite.
Lead the Brazilian market for oil products and bio-fuels.
Distribution Investments
PETROBRAS
343434
Natural Gas Investments
Over 75% of Petrobras’ current natural gas production is associated gas
Investments to develop production of non-associated gas
Lack of infrastructure to develop Brazilian market
Risk of gas supply failure due to abnormalities
Total investment (Petrobras and partners) in Brazilian natural gas chain
adds up to US$ 22.1 billion
LNG to provide flexibility to mitigate such risk
Challenges Business Plan 2007-2011 Targets
PETROBRAS
353535
Northeast Gas Pipeline NetworkUS$ 6.5 billion investments between
2007-2011
Extension of Gasbol Southern Segment (LNG distribution)
Gasbel ExtensionSoutheast Gas Pipeline NetworkNG infra-structure maintenanceUrucu-Coari-Manaus Gas PipelineGasene – Northern SegmentLNG – Liquefied Natural Gas
Main Projects
• Natural gas prices to accompany international differentials to oil products.
ConstructionCurrentUnder evaluationGASBOL
Natural Gas Investments
PETROBRAS
363636
7070.6
65.2
49.4
34.1
27.5
0
10
20
30
40
50
60
70
80
2006 2007 2008 2009 2010 2011
AlbacoraLeste(P-50)2006 Golfinho Mod 1
2006
Jubarte(P-34)2006
Manati2006
Piranema2006
UrucuNatural gas
sales2007
GolfinhoMod 22007
Roncador(P-54)2007
Peroá-CangoaPhase 2
2007Roncador
(P-52)2007
CavaloMarinho
2010
Marlim Leste(P-53)2009
Mexilhão2009
Marlim SulMod 2(P-51)2008
Frade2009
Roncador(P-55)2011
Jubarte Fase 2(P-57)2010
SPS252009
AlbacoraComplemental
2007
NG
associated
NG
non associated
Peroá-CangoaPhase 1
2006
EspadarteMod. 22007
ESS1642008
Canapu2008
ESS1302008
Tambaú/Uruguá2010
RJS6332010
Parque dasConchas
2011
Million m3/day
Natural Gas InvestmentsDelivery Curve
37 37
Oil Natural Gas Renewables
Investments of US$ 0.7 billion in renewable energy and biofuels
Total avoided GHG emissions of 3.93 (M Tons of CO2 Equivalent)
Availability of 855,000 m3/year of biodiesel
Processing 425,000 m3/year of vegetable oil (H-BIO)
240 MW installed capacity of power generation from renewable sources
3.5 million m3 ethanol exports
Carbon intensity reduction of operations and products
PETROBRAS
393939
Core Areas:
• Refining
• Add value to Brazilian heavy oil exports
• E&P: West Africa (Nigeria and Angola) & Gulf of Mexico:
• Apply deep water and deep well drilling technology.
• Latin America:
• Leadership as an integrated energy company
70,2%
24,8%
1,7%0,8%
1,7%
0,8%
E&P
Refining andMarketing Petrochemical
Gas & Energy
Distribution
Corporate
Total CAPEX: US$ 12.1 billion
168 163
38396
185
94
2004 2005 2011 Target
Oil and NGL Natural Gas
568
262 259
Thous. boed
Targets
International Investments
PETROBRAS
414141
Sensitivity to Brent in 2007-2011(annual average)Every US$ 5.00 Brent price change will result in:
• 3 pp change in ROCE;
• US$ 3.5 billion change in the operational cash generation;
• 10 pp change in leverage.
1.5
8.6x
28
4.4
2.9
15
2006-2010Average
1.5
13.7x
25
3.5
3.1
16
2007-2011 Average
Oper. Cash Flow before interest and taxes / interest
Free Operating Cash Flow (US$ billion)
Cash Balance (end of the year) (US$ billion)
Net Debt/ Net Debt + Shareholders’ Equity (Leverage) (%)
Long Term Funding (US$ billion per year)
Return on Capital Employed (ROCE) (%)
Indicators
Financial TargetsMain Financial Indicators
42 42
Sources
(*)86.7
12.6
2004-2010Financing
Cash Flow
(US$ 99.3 billion)
87.1
12.2
2004-2010Debt Amortization
Capex
(US$ 99.3 billion)
• Accrued Economic Profit (2006-2015): US$ 83.4 billion (US$ 53.9 until 2011).
Uses
Financial TargetsSources & Uses
PETROBRAS
444444
• Oil & LGN production and refining throughput growth will maintain a balance between E&P and Downstream segments and making vertical integration options possible, given the importance of these activities both domestically and abroad.
2.013
2.757
3.554
1.9082.376
3.201
0500
1.0001.5002.0002.5003.0003.5004.000
2006 2011 2015
Total Oil and LGN Production (Thous. bpd) Total Throughput (Thous. bpd)
Final CommentsOil and NGL Production x Refining Throughput (Thous. bpd)
45 45
Final CommentsVertical Integration Comparison
Majors Average *
2,735
3,176
4,793
4,329
1,630
1,579
National Oil Companies Average **
Petrobras2,296
2,114
Product Sales (thous. bpd)
Refining (thous. bpd)Production (thous. boed)
* Majors: BP, Exxon, Total, Royal Dutch Shell, Chevron, Conoco and Repsol-YPF ** NOIC: PEMEX, PDVSA, Saudi Amraco, KPC, Pertamina and Sonatrach
*** 2004 figures, except for Petrobras (2005)Source: PIW Intelligence and Petrobras
2,217
3,400Year 2011
2011: New Refinery will add 200
thous. bpd capacity2010:
Pasadena Refinery revamp concluded – processing 70
thous. bpd of heavy oil