08.10.2009 Presentation of President José Sergio Gabrielli de Azevedo about “LP Gas and Future...
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1 LP Gas and Future Market Perspectives José Sergio Gabrielli de Azevedo CEO. October, 8th 2009
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Transcript of 08.10.2009 Presentation of President José Sergio Gabrielli de Azevedo about “LP Gas and Future...
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LP Gas and Future Market PerspectivesJosé Sergio Gabrielli de AzevedoCEO. October, 8th 2009
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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.
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.
CAUTIONARY STATEMENT FOR US INVESTORS
DISCLAIMER
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GLOBAL OIL DEMAND SCENARIOS
MEDIUM/LONG-TERM OIL MARKET OUTLOOK REMAINS VERY STRONG
Natural decline
Actual decline
Global liquids demand scenarios
EIA/DOE High Demand ScenarioIEA Reference Scenario
EIA/DOE Low Demand Scenario
2030 | 66 – 85 mm2020 | 42 – 51 mm
Additional RequiredCapacity (b/d)
Existing production
Source: IEA World Energy Outlook 2008, EIA International Energy Outlook 2009
• The global crisis impacted down the perspectives for demand growth, but in medium/long-term oil market outlook remains very strong
• Global oil production capacity will be challenged to meet projected demand growth
4
2,111,2 10,6
18,1
28,133,9
62
72,3
0
20
40
60
80
Mill
ion
Tons
Oceania Africa CIS MiddleEast
LatinAmerica
Europe NorthAmerica
Asia
31,0%
24,3%
6,1%
5,5%
21,0%
12,1%
Mexico Brazil VenezuelaCaribbean Argentina Others
WORLD LP GAS DEMAND
Source: Purvin & Gertz
5
PRE-SALT POTENTIAL
• Total Area: 149,000 km2• Area Under Concession: 41,772 km2 (28%)• Area Not Under Concession: 107,228 km² (72%)• Area With Petrobras Interest: 35,739 km2 (24%)
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20,000
25,000
30,000
Santos and Campos BasinsPre-Salt
(Tupi, Iara, Guará and Whale’sPark)**
mi boe ~ 25-30 bn boe
Proven Reserves* + Santos and Campos Basins
Pre-Salt (Tupi, Iara, Guará and Whale’s Park)**
5,000
10,000
15,000
2008 ProvenReserves*
14,093
0
ANNOUNCED RECOVERABLE VOLUMES IN SANTOS AND CAMPOS BASINS PRE-SALT
*SPE Criteria
** include Petrobras and Partners
Higher estimates+5,400
Lower estimates10,600
Santos Pre-Salt announced recoverable volumes, can almost double Brazilian reserves.
7
Thou
s. b
pd
208 215 230 257326 332 367 419250 220 255 24684 89 118 179738 771
9011224119 109
112
150
182 208274
4002,301 2,400
3,655
5,729
1,7921,855
2,680
3,920
2007 2008 2013E 2020E
Others
Fuel Oil
Diesel
Jet Fuel
Naphta
Gasoline
LPG
Oil Production - Brazil
Oil and Natural Gas
1,906 1,9442,257
2,876
7,5% p.y.
REPLANRevamp33 thous.
bpd2010
RNE230
thousbpd2011
REPARRevamp25 thous
bpd2011
UPB150 thous
bpdDec/2012
Premium I(600 thous bpd) e
Premium II (300 thousbpd)
1st phase: 20132nd phase: 2015
Clara CamarãoRefinery2010
PRODUCTION INCREASE FOLLOWED BY HIGHER DOMESTIC OIL PRODUCT DEMAND
8
LP GAS COMSUMPTION IN BRAZIL
0
2
4
6
8
10
12
14
16
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
Thou
s.
Industrial Residential Others
LP Gas Consumption (Thous. M3)
Source: ESTRATÉGIA / EMN & ANP
After 2009 – Business Plan 2020 estimates
Business Plan 2020
Domestic LPG production in 2008: 6,71 million tonsLPG Brazilian market grew 5,4% from 2004 to 2008, representing an average variation of 1,08% p.y. Present in all Brazilian municipalities47 million homes are attended monthly.
Business Plan 2020
9 Source: Petrobras
LP GAS IMPORTS
0
0,5
1
1,5
2
2,5
3
Impo
rtaç
ão (m
ilhão
ton
/ ano
)
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Importação Brasileira de GLPLPG IMPORTS (million ton/year)
Imports Origins (%)
Africa; 40%
Americas; 35% Europe; 13%
Middle East; 12%
Middle East Europe Africa Americas
• From 2000 to 2005 LPG import fell due to Natural Gas substitution and deregulation on LPG prices at the end-user;
• Imports started to grow from 2005 to 2008 due to higher domestic residential and industrial demand
Imports coming mainly from America and Africa (2008)
10
0
0,5
1
1,5
2
2,5
3
Mill
ion
Tons
p.y
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Source: Petrobras.
* Data does not consider LPG production comming from pre-salt projects
FUTURE IMPORT ESTIMATES
• From 2009 to 2016 - LPG imports will fall due to PLANGAS and new refineries (Premium 1, Premium 2, RNEST);
• Imports started to grow from 2017 on – no significant increment in new production, despite of market increasing in a pace of 1,7% per year
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PETROBRAS – INFRASTRUCTURE
RefineryNGPUOff Land Terminal
ShipLPG Pipeline
Terminal in Land3rd party off land terminal
Cabotage
Import
PETROBRAS INFRASTRUCTUREPetrobras Refineries
Petrobras Natural GasProducing Units(NGPU)
LPG Pipelines andTerminals
Petrobras Participation
10 refineries1 shale oil processing unitProduction:4,2 million tons/year
5 NGPUs2 In Construction*
Production: 0,9 million tons/year
7 onshore terminals2 offshore terminals in
construction11 offshore terminals 5 pipelines serving LPG, Total extention:1.550 km
REFAP S.A
33 % Refinery of Rio Grande
70% Petrobras / 30% Repsol
Production 0,4 million tons/year
NORTH
NEMIDDLE WEST
SE
S
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PETROBRAS A VERTICAL INTEGRATED COMPANY
Production
ImportD
eale
r
Final consumer domestic
Final consumer bulk
ABCDD
istr
ibut
or
Storage
Petrobras is present in the entire supply chain
13
LP GAS AND NATURAL GAS PARTICIPATION IN RESIDENTIAL MARKET
LPG Residential Market(thous. m3/y)
9.000
9.500
10.000
10.500
11.000
11.500
12.000
2008
2010
2012
2014
2016
2018
2020
Natural Gas Residential Market(thous. M3/y)*
0
50.000
100.000
150.000
200.000
250.000
300.000
350.000
400.000
450.000
2008 2010 2012 2014 2016 2018 2020
* Energetic equivalence between LPG and NG: 1,63m3 of LPG = 880m3 of NG
+1,7% p.y+5,4%p.y
Residential Natural Gas market grows significantly more than LPGresidential market
14
LP GAS INDUSTRY CONSUMPTION
0
200
400
600
800
1000
1200
1400
1600
1991 1993 1995 1997 1999 2001 2003 2005 2007
OtherMetallurgyCeramic
thousand m3
• Strong replacement of LPG for Natural Gas, especially in the white ceramic industry in Santa Catarina and São Paulo States
0
100
200
300
400
500
600
700
2000 2008
OthersSanta CatarinaSão Paulo
LPG in ceramics
Industrial LPG Consumption
Sourse: ESTRATÉGIA/EMN
The strong shift of LPG in steel and ceramic segments is partially offset by a small increase in the consumption of chemicals and foods.
thousand m3
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PERSPECTIVES FOR LP GAS DOMESTIC MARKET
FINAL REMARKSFINAL REMARKSDifficulties:• Use of wood as a substitute product
• Displacement by the entry of Natural Gas / LNG
• Informality in retail sector
Opportunities:• Modernization of 18 plants for bottling system (improvement of productivity and costs)
• Growth of internal production with reduction of LPG imports
