Download - Petrobras strategic & business plan 2009 2013 otc 20091

2020 PETROBRAS STRATEGIC & BUSINESS PLAN

PETROBRASStrategic & Business

Plan2009-2013

Opportunities for foreign suppliers

Paulo Sérgio Rodrigues Alonso D.Sc.Materials Engineering Manager

Houston, May 5th 2009OTC 2009

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DISCLOSURE

The presentation may contain forecasts about future events. Such forecasts merelyreflect the expectations of the Company's management. Such terms as "anticipate","believe", "expect", "forecast", "intend", "plan", "project", "seek", "should", along withsimilar or analogous expressions, are used to identify such forecasts. These predictionsevidently involve risks and uncertainties, whether foreseen or not by the Company.Therefore, the future results of operations may differ from current expectations, andreaders must not base their expectations exclusively on the information presentedherein. The Company is not obliged to update the presentation/such forecasts in light ofnew 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 hasdemonstrated by actual production or conclusive formation tests to be economically andlegally producible under existing economic and operating conditions. We use certainterms in this presentation, such as oil and gas resources, that the SEC’s guidelinesstrictly prohibit us from including in filings with the SEC.

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PRESENTATION OUTLINE

Main objectives;

PETROBRAS Overview;

Strategic and Business Plans Highlights:

E&P;

Downstream;

Petrochemical;

Gas and Energy;

Critical Goods and Services and equipment quantities;

PETROBRAS Strategies for purchasing goods and services;

Register Requirements for Foreign Suppliers;

PROMINP – Governmental Program and Local Content;

Conclusions.

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MAIN OBJECTIVES

To provide a broad overview of PETROBRAS main investment programs, included in the Strategic and Business Plan for the period 2008-2012, aiming to expand the basis of selected goods and services foreign suppliers interested to come to Brazil and

register with the Company in order to participate in the projects’ Vendor Lists.

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Petrobras Overview

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A WORLD-CLASS, PUBLIC, INTEGRATED ENERGY COMPANY

2007 (SEC) reserves and production

XOM

RDS

BP

CVXTOT COP

PBR

5,000

10,000

15,000

20,000

25,000

30,000

2,000 2,500 3,000 3,500 4,000 4,500 5,000 5,500

Production (mboe/d)

Reserves (m

m boe

)

Production Target: 2009



STRATEGIC VISION: TO BE ONE OF THE WORLD’S FIVE LARGEST PUBLICLY TRADED OIL PRODUCERS

Among its peers, Petrobras has the:

• 4th largest Proven Reserves;

• 5th largest Oil & Gas Production;

6th largest Refining Capacity;

6th largest Market Value.

Source: Bloomberg and Company Reports (2007 SEC Proven Reserves Data, 9M08 Oil & Gas Production data, 2008 Refining Capacity data and 2008 Market Value data) 6


2007 Total Oil Consumption by Country (mmbo/d)

DOMINANT POSITION IN A LARGE AND GROWING EMERGING MARKET

Source: BP Statistical Review 2008, PFC Energy

Total Oil Consumption mb/d (index)

Brazil is world’s eighth-largest oil consumer

Brazil oil consumption growing at 2.4% p.a.

OECD oil consumption growing at 1% p.a.

100

110

120

130

140

150

160

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Brazil OECD World

20.7 7.9

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HIGH-POTENTIAL PORTFOLIO IN ONE OF THE WORLD’SMOST EXCITING PROVINCES...

Significant light oil and gas discoveries have been made in the Espirito Santo Basin

82% of our total crude production currently comes from Campos Basin

RoncadorMarlimAlbacoraIaraJupiterTupiCarioca

Thunder Horse

AgbamiAkpo

Kizomba

Girassol, Jaz, Rosa

Dalia

Khurais

Kashagan

KurmangaziShah Deniz Azadega

nAnaran

Sakhalin II

Sakhalin I

Development of the Santos Basin sub-salt play will drive our long-term production growth

Circle size indicates estimated reserves

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Strategic and Business Plans highlights

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We will be one of the largest integrated energy companies in the world and the preferred choice among our stakeholders

Vision 2020

Our operations will be notable for:

Strong international presence; World scale prominence in biofuels;Operational excellence in management, technology and human resources;Profitability;Benchmark in social and environmental responsibility;Commitment to sustainable development.

Vision 2020 Characteristics

VISION 2020 AND CHARACTERISTICS

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Business Plan 2009-2013US$ 174.4 billion

25%

2%2%

7%

3%2%

59%

E&P

RTC

G&E

Petrochemicals

Biofuels

Distribution

Corporate

104.6 (*)43.4

11.8

5.6 3.02.8

3.2

(*) US$ 17.0 billion allocated to Exploration

AND A CAREFULLY CRAFTED SPENDING PROGRAMTO SUPPORT THAT VISION

International InvestmentsUS$ 15.9 billion

79%

7%

8%5% 1%

E&P RTCP G&E

Distribution Corporate

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Environment

Renewable Energy

andBio Fuels

Natural Gas

Frontier Areas

Basin Modeling

Heavy Oil

Optimization &

Reliability

Deep and Ultra-deep

Waters

Fuel Innovation

Refining

Climate ChangesTransportatio

n

Enhanced Oil

Recovery

Pre-salt

Total Area:114.000 m2

Building:75.000 m2

137 Laboratories

30 Pilot plants

CENPES

Technological programs

Partnership with over 120 universities and research centers in Brazil, and 70 Institutions abroad

ExpansionCENPES Expansion and Dataprocessing integrated Center: Total Area: 190.000 m2

Building: 114.000 m2

Investments in Technology2009-2013

47%

23%

5%

25%

E&P Downstream

G&E Corp. (Cenpes)

1.90.2

1.0

0.9

US$ 4.0 billion

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E&P Business Segment

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E&P: FOCUSED & DISCIPLINED INVESTMENT

Total Investments

17%

12%

58%

13%

Exploration

Santos Pre-salt

Development

International

Total Investments of US$ 104.6 billion in E&P through 2013, of which US$ 92 billion will be spent in Brazil

Expected Costs of Production*

Prod

uctio

n co

sts

(US$

/bbl

-200

8)

Reserves (bn bbls)1000 2000 3000 4000 5000 6000 7000 8000 9000 100000

20

40

60

80

100

120

140

Deepwater and Ultra-deep water

Produced MENAOther

conventional oil

CO₂

-EO

R EO RA

rctic

Heavy oil and

bitumen

Oil Shales

Gas to liquids

Coal to liquids

Petrobras expected maximum break-even cost

* Source: IEA – Outlook 2008 14


PRE-SALT PROVINCE

MINA GERAIS

SÃO PAULO

PARANÁ

Total area of the Province: 112,000 km2

Area under concession: 41,000 km2 (38%)Area not under concession: 71,000 km2 (62%)Area with Petrobras interest: 35,000 km2 (31%)

RIO DE JANEIRO

ESPIRITO SANTO

Tested wells Campos HCExploratory BlocksPre-Salt reservoirs

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SANTOS BASIN PRE-SALT CLUSTER

Rio de Janeiro50 km

Tupi

Carioca

ParatiIara

GuaraBM-S-21BR 80% BM-S-24

BR 80%

BM-S-10BR 65% BM-S-11

BR 65%

BM-S-9BR 45%

BM-S-8BR 66%

BM-S-22BR 20%

Azulão

Bem-te-vi

Caramba

Major discoveries include: Tupi, Iara, Carioca, Guara, Jupiter, Parati, Bem-te-vi and CarambaMulti-billion barrel reserves potentialGood oil quality: medium-lightSeismic activity and appraisal wells underwayRecoverable resources announced: 5-8 bn boe in Tupi and 3-4 bn boe in Iara Three production systems by 2014: Tupi, Iara and Guara

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MG

RJ

Peroá

Camarupim

Carapó

Canapu

JUB

Catuá

Baleia Azul ABA

OST

ARG

PRBCXR

CHT

NAU

Golfinho

UTG Cacimbas

UTG Sul Capixaba

UPGN Lagoa Parda

Cangoá

Baleia Franca

Terminal Barra do Riacho

Infrastructure in-place

P-34 at Jubarte field, first pre-salt production: excellent results, prod. up to 18 k b/d

FPSO Seillean started in dec/08 as pilot system of Cachalote (CHT) field

FPSO Capixaba will move from Golfinho field to Cachalote/Baleia Franca (BFR) in 1H10

FPSO Pipa II will start in 2H10 as Baleia Azul (BAZ) pilot system

Baleia Azul first definitive production unit by 4Q12

Natural gas production transported via pipeline

Rio Doce

Linhares

Aracruz

Marataizes

Anchieta

Guarapari

Vila Velha

VITÓRIA

Presidente Kennedy

Sul-Norte CapixabaGas pipeline

12 a 24” – 160 km7 a 15 MM m3/d

24” – 66 km25 MM m3/d

ESPÍRITO SANTO PRE-SALT

Sul CapixabaGas pipeline12” – 83 km4,5 MM m3/d

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2,680

2,580

2,430

2,250

2,050

1,855

1400

1600

1800

2000

2200

2400

2600

2800

2008 2009 2010 2011 2012 2013

Parque das Conchas

FPSO Espírito Santo

100,000 bpd

Marlim SulModule 2SS P-51

180,000 bpd24/jan/09

Marlim LesteFPSO Cidade de Niterói

100,000 bpd26/feb/09

Thousand bpd

Marlim Sul

SS P-56Module 3

100,000 bpd

Jubarte FPSO P-57180,000 bpd

MAJOR OIL PROJECTS

Tupi PilotFPSO Cidade de Angra dos Reis

100,000 bpd

Tupi TLDFPSO BW Cidade

de S.Vicente30,000 bpd

FPSO Frade100,000 bpd

Cachalote eBaleia Franca

FPSO Capixaba100,000 bpd

Roncador FPSO P-62Module 4

100,000 bpd

Marlim LesteFPU P-53

180,000 bpd30/nov/08

CachaloteFPSO Seillean

25,000 bpd16/dec/08

Roncador SS P-55Module 3

180,000 bpd

Papa-Terra TLWP P-61 &FPSO P-63150,000 bpd

Guará 1 PilotFPSO

100,000 bpd

Anticipation of Baleia Azul

FPSO Espadarte

100,000 bpd

PN 2009-2013

BadejoFPSO Cidade Rio das Ostras

15.000 bpd31/mar08

Pre-Salt Projects

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CIDADE DO RIO DE JANEIRO FPSO(CAPACITY 100 .000 BPD), PRODUCTION ON 06/01/07 AT ESPADARTE FIELD

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PIRANEMA FPSO (CAPACITY 30 .000 BPD), PRODUCTION ON 10/10/07

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P-52 DECK MATING

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P-52 - BRASFELS SHIPYARD- ANGRA DOS REIS

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P-54 - MAUÁ JURONG SHIPYARD- NITERÓI

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P-54 LEAVING THE SHIPYARD ON 19-Out-2007

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P-54 LEAVING THE SHIPYARD ON 19-Out-2007

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Downstream Business Segment

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DOMESTIC CRUDE THROUGHPUT (THOUSAND BPD)

3,012

2,270

1,7911,779

2008 2009 2010 2011 2012 2013 2020

REPLANRevamp

33 tho. bpd2010

RNE230 tho.

bpd2011

UPB150 tho. bpd

Dez/2012

Premium I300 tho. bpd1st Phase:

20132nd Phase:

2015

Premium II300 tho. bpd1st Phase:

20142nd Phase:

2016

REPARRevamp

25 tho. bpd2011

73%

12%

7%

8%

Refining

Pipelines & TerminalTransport

Ship Transport

Petrochemicals

Downstream InvestmentsUS$ 47.8 billion • Adding values to domestic crude and producing diesel and

gasoline in-line with international standards

• Investment targets Fuel Quality, Conversion and Expansion

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2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

NEW INVESTMENTS

NEW REFINERIES

Start up:end of 2.012

Start up: 1 st quarter 2.011

Start up: 2013 and 2015

Start up 2013 and 2015

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NEW INVESTMENTS - PREMIUM REFINERIES

Premium I – MA Premium II - CE

Capacity 600 mil bpd 300 mil bpd

Operation 2013 e 2015(2 phases)

2013 e 2015(2 phases)

Market GLP, Nafta e QAV (Brasil) e Diesel 10 ppm (Europa)

Feedstock oil basis: Marlim 20

5%

20%11%50%8%

BUNKER 3%

LPG

PETROCHEMICAL NAPHTHA

AVIATION QUEROSENEDIESEL

PETROCHEMICAL COKE

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done present planned

REFINERIES INVESTMENTS

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TERMINALS

26 water terminals, operated by means of monobuoys or buoy arrays

20 onshore terminals.

Os investimentos previstos atendem às necessidades da carteira exploratória e de desenvolvimento da produção da PetrobrasTotal Investments: US$ 3.7 billion between 2009-2013;

Main Projects:Storage extension in Santos and Paranaguá ports;Increase in effluents treatment in São Sebastião (TEBAR), São Fransisco do Sul (TEFRAN), Cabiúnas, Ilha Grande (TEBIG) and

TEDUT Terminals;Implantation of the Program “Adequação de Suprimento de Petróleo” (PASP) and the Plano Diretor de Dutos, in São Paulo State,

through interventions in the OSVAT and OSCAN Systems, and new pier for the São Sebastião Terminal;Improvements in the oil product outflow system in Santos and Paranaguá ports and Madre de Deus Terminal(TEMADRE).

INVESTMENTS IN LOGISTICS – PIPELINES AND TERMINALS

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Petrochemical Business Segment

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COMPERJ

Site: Itaboraí - RJ;

Capacity: 1300 kta ethylene; 700 kta P-Xylene; 881 kta

Propylene; 608 kta Benzene; 157 kta Butadiene

Total Investment: US$ 8.5 billion;

Feedstocks: Heavy crude oil from Campos basin;

Start up: 2012.

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COMPERJ OUTPUTS

ProductsUPB

Production (kta)

1st Generation

Diesel 535

Naphtha 284

Coke 700

Ethylene 1.300

Propylene 881

Benzene 608

Butadiene 157

p-Xylene 700

Sulfur 45

Products UPA

Production (kta)

2nd Generation

Polypropylene(PP) 850

Poliethylene(PE) 800

Styrene 500

Ethylene glicol 600

PTA 500

PET 600

Fuels

(UPB)

Petrochemical Feedstocks

(UPB)

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Itaboraí

COMPERJ MAP LOCATION

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Gas and Energy Business Segment

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G&E INVESTMENTS

3.692

4.528

1,477

926

Projects in Portfolio New Investments Proposed

Projects in Portfolio New Investments Proposed

Natural Gas

US$ 8.2 billion

Energy

US$ 2.4 billion

G&E InvestmentsUS$ 10.6 billion 2009‐2013

US$ million

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MAIN PROJECTS: GAS & ENERGY

US$ million

Main Projects

Gas Pipelines: Gasene, Northeast and Southeast Network, South Section of Gasbol, Urucu-Coari-Manaus and Gasduc III

LNG – Liquefied Natural Gas

Thermo-Electrics: Cubatão, Três Lagoas, Canoas and Termoaçu

Wind Power Generation

G&E in Argentina and Other Countries

Total investments US$ 10.6 billion

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Critical goods and services and equipment quantities

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Production pipelines alloy coatings (13 Cr, Super 13 Cr);

Turbo compressors (6-10 Mw );

Polyester Mooring cables;

Mooring systems;

Drilling pipelines;

Fiber glass pipelines;

Electrical cables for CSP;

Control Systems for well control, oil and gas metering systems, drilling activities;

Offshore drilling rigs;

Gravel packing;

Drilling bits;

Steam generators (25-50 x 106 BTU/d);

Special submarine valves.

E&P CRITICAL EQUIPMENT: OPPORTUNITIES FOR FOREIGN SUPPLIERS

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CRITICAL SERVICES FOR E&P ACTIVITIES: OPPORTUNITIES FOR FOREIGN SUPPLIERS

Drilling;

Workover services;

Flexible lines and umbilicals laying services;

Support to diving;

Support to ROV;

Support to mooring activities;

Special vessels;

Submarine interconnection services.

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CRITICAL EQUIPMENT AND SERVICES FOR REFINING ACTIVITIES: OPPORTUNITIES FOR FOREIGN SUPPLIERS

Equipment

HCC Reactors (250-300 mm wall width, 200 Kgf/cm2);

Boiler works with special alloys (reactors, towers, pressure vessels);

Boilers (steam generators);

Heat exchangers working with H2S traces (ASTM A 387 degree 11);

API pumps;

Structural packing for refining process towers;

Services

Basic Design;

Thermal Projects Design.

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CRITICAL EQUIPMENT FOR G&E ACTIVITIES: OPPORTUNITIES FOR FOREIGN SUPPLIERS

Pipelines in the range of 14-42 inches

diameter with longitudinal welding. Petrobras

standards do not accept helicoidal welding.

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29 RIGS CONTRACTED PLUS 28 TO BE LEASED UP TO 2017, MAKING A TOTAL OF 57 DRILLING RIGS‐ 17 being delivered between 2009 and 2011‐ 12 will be chartered via international bidding, being delivered in 2012 –Meeting Petrobras’ short‐term needs, while the national industry prepares itself for the remaining units‐ 28 will be built in Brazil and operated by Brazilian companies, being delivered between 2013 and 2017

Drilling ships and semi‐submersible drilling platforms

NEW EQUIPMENTS TO BE CONTRACTED

Items Un. TOTALWet Christmas Tree un 500Well Head un 500Flexible Lines km 4.000Manifolds un 30Producing pipes t 42.000Umbilical km 2.200Dry Christmas Tree un 1.700Onshore well head un 1.700

Items Un. TOTALPower Generators un 500Filters un 300Flares un 30

Items Un. TOTALPumps un 8.000Compressors un 700Winch un 450Crane un 200Engines un 1.000Turbines un 350Structure Steel (Hull) t 940.000

Items Un. TOTALReactors un 280Oil and water splitter un 50Storage Tankers un 1.800Turrets un 550

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Petrobras supply strategies for goods and services

45


As per 2008

US$ 7.0 Bi

US$ 25.8 Bi

US$12.4 Bi

• Service providers

• EPC

•Shipyards

•Constructors

• Manufacturers

• Distributors

• Retailers

•Equipment

•Chemicals

•Spare parts

•Etc.

• Seismic

•Drilling

•Transport

•Etc.

• Platform

•Refinery

•Revamps

•Etc.

SUPPLY STRATEGIES FOR GOODS AND SERVICES

46


Up-dated Petrobras

Vendor Register Requirements

47


REGISTER OF GOODS AND SERVICES SUPPLIERS

Requirements, Concepts and Ranking

MANDATORY REQUIREMENTS and

RANKING REQUIREMENTS5 CRITERIA

TECHNICAL

ECONOMICHSE

SOCIAL RESPONSIBILITY

LEGAL

48


Tradition (Main Sales, Reference Letters);

Facilities for Technical Assistance (Automation Systems, Rotating Machinery, etc);

Mandatory Product Certification (API, ASME, ...);

Other Specific Requirements.

REGISTRATION FOR MATERIAL SUPPLIERS

TECHNICAL REQUIREMENTS FOR MATERIALS

Depending on the material or equipment, the supplier must comply with the following requirements:

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REGISTRATION FOR SERVICES SUPPLIERS

Tradition (List of Services Provided – continuity and Reference Letters);

List of Equipment relating to services provided;

Main personnel curricula vitae;

Other specific requirements.

Depending on services criticality, the supplier must comply with the following requirements:

TECHNICAL REQUIREMENTS FOR SERVICES

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SUPPLIERS REGISTRATION

LEGAL REQUIREMENTS

MATERIALS & SERVICES

Brazilian companies:Proof of being legally constituted in Brazil;

Proof of being regular with Brazilian taxes;

See details on registration website.

Foreign companies:Proof of being legally constituted in its home country, issued by a Governmental Authority;

Legal Representative in Brazil (mandatory);

Commercial Representative (is not registered, but only indicated by and linked to the supplier):

Not mandatory (may be the own company);

May be the same or other than the Legal representative.

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ECONOMICAL REQUIREMENTS


Annual Reports with Audited Financial Statements;

Proof that the company is not bankrupt (bank statement or company declaration by its president).

52


MANAGEMENT and SOCIAL RESPONSIBILITY

MATERIALS

ISO-9001 - certification mandatory for suppliers of material & equipment which require technical qualification.

SERVICES

Compliance with some requirements of ISO-9001 for special services.


Petrobras stimulates suppliers to improve Social Responsibility actions.


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HELTH, SAFETY and ENVIRONMENT

SERVICES

ISO-14001 and OSHAS-18001:

Certification is not mandatory;

Petrobras evaluates how does the suppliers implement these standards requirements (0 to 10).

MATERIALS

PETROBRAS requires supplier formal declaration of compliance with legal requirements.Petrobras evaluates how the suppliers implement some standards requirements of ISO 14001 and OSHAS 18001 (not mandatory) (0 to 10).


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General information is obtained at Petrobras website:

www.petrobras.com.br

Options (icons):

English;

Business, Material Channel, Registration Guide.

Corporate registration process must be carried out in Petrobras

headquarters, in Rio de Janeiro.

REGISTER OF SUPPLIERS OF GOODS AND SERVICES

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PROMINP – Governmental Program and Local Content

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PROMINP BRAZILIAN OIL & GAS NATIONAL INDUSTRY MOBILIZATION PROGRAM

MINISTRY OF MINES AND ENERGY (MME) –Program’s promoter and manager

PETROBRAS – Leading operator in Brazil

BRAZILIAN PETROLEUM INSTITUTE (IBP) –Coordinator for the participation of the otheroperators

NATIONAL ORGANIZATION OF THE OILINDUSTRY (ONIP) – Coordinator for theparticipation of class associations (suppliers)

PROMINPONIPIBP

ABDIB

ABIMAQ

ABCE

ABEMI

SINAVAL

BNDES

57


COMPETITIVE NATIONAL SUPPLY OF GOODS AND SERVICES

imports

imports

Current Demand Future Demand

1. Increase productivity capacity of highly competitive sectors

2. Develop competition among medium competitive sectors

3. Incentive for new national entrants

4. Incentive for association between national and international companies

5. Incentive for international companies to establish operations in Brazill

National Industry

PATH

Increase in National Supply

Capacity of G&S

Adequacy of The National Supply Industrial Complex

GOOD AND SERVICES SUPPLY

Source: Promimp, 2008 57


PROMINP

(US$bi)

$ Target National $ Target Total Target LCI

$ Accomplished National$ Accomplished Total Accomplished LCI

GLOBAL LOCAL CONTENT – 4TH QUARTER 2008

58


CONCLUSIONS

Huge Strategic Plan for the period 2009-2013;

Plenty of opportunities for foreign suppliers planning to establishin Brazil and address the Latin America Market;

Strong industrial basis in Brazil, for the Oil and Gas segmentrepresenting today 15% of GDP;

Opportunities shall be focused on critical goods and services notavailable in a competitive basis in local market;

Foreign suppliers must be aware of the specific laws frameworkand Local Content requirements; incentives should be assignedby Government Offices once the intention to manufacture in Brazilis assured;

Partnership with a local supplier operating in the same businessarea should be considered. .

59


PETROLEO BRASILEIRO S.A. PETROBRAS

The Challenge is our Energy

Paulo Sergio Rodrigues Alonso D.Sc.Materials Engineering Manager

[email protected]

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