Petrobras at a Glance
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Transcript of Petrobras at a Glance
April, 2013
PETROBRASAT A GLANCE
HSBC Latin American Investment Summit
DISCLAIMER
The presentation may contain forward-looking statementsabout future events within the meaning of Section 27A of
We undertake no obligation to publicly update or
FORWARD-LOOKING STATEMENTS
about future events within the meaning of Section 27A ofthe Securities Act of 1933, as amended, and Section 21Eof the Securities Exchange Act of 1934, as amended, thatare not based on historical facts and are not assurances offuture results. Such forward-looking statements merelyreflect the Company’s current views and estimates off t i i t i d t diti
revise any forward-looking statements, whether asa result of new information or future events or forany other reason. Figures for 2013 on areestimates or targets.
future economic circumstances, industry conditions,company performance and financial results. Such termsas "anticipate", "believe", "expect", "forecast", "intend","plan", "project", "seek", "should", along with similar oranalogous expressions, are used to identify such forward-looking statements. Readers are cautioned that these
All forward-looking statements are expresslyqualified in their entirety by this cautionarystatement, and you should not place reliance onany forward-looking statement contained in thispresentation.
statements are only projections and may differ materiallyfrom actual future results or events. Readers are referredto the documents filed by the Company with the SEC,specifically the Company’s most recent Annual Report onForm 20-F, which identify important risk factors that couldcause actual results to differ from those contained in the
NON-SEC COMPLIANT OIL AND GAS RESERVES:
CAUTIONARY STATEMENT FOR US INVESTORS
We present certain data in this presentation, suchas oil and gas resources that we are not permitted
forward-looking statements, including, among otherthings, risks relating to general economic and businessconditions, including crude oil and other commodityprices, refining margins and prevailing exchange rates,uncertainties inherent in making estimates of our oil andgas reserves including recently discovered oil and gas
as oil and gas resources, that we are not permittedto present in documents filed with the UnitedStates Securities and Exchange Commission (SEC)under new Subpart 1200 to Regulation S-K becausesuch terms do not qualify as proved, probable orpossible reserves under Rule 4-10(a) of RegulationS Xg g y g
reserves, international and Brazilian political, economicand social developments, receipt of governmentalapprovals and licenses and our ability to obtain financing.
S-X.
2
Petrobras TodayFully integrated across the hydrocarbon chainExploration and D t i ib i G d P i f l
• 2.4 mm boed production
• 293 production fields
pProduction
• 12 refineries (Brazil)
• 2.0 mm bpd refining capacity
Downstream
• 7,641 service stations
• 38,1% of market share
Distribution
• 9,190 km of gas pipelines in Brazil
• NG Supply: 74 9 million m³/d
Gas and Power
• 24 countries
• 0.7 Bn boe of 1P (SPE)
International
• 3 Biodiesel Plants
• Ethanol: opening new markets
Biofuels
• 293 production fields
• 96% of Brazilian production
• 34% of global DW and UDW production
• Oil products sales in Brazil: 2,285 Kbpd
• Oil products output in Brazil: 1,997 Kbpd
• 20% share of service stations• NG Supply: 74.9 million m³/d
• 3 LNG Regasificationterminals by 2013 with 41 MMm³/d capacity
• 7,028 MW of generation capacity
• 243 th. boed production
• 231 th. bpd refining capacity
• Largest domestic producer of biodiesel
• 3rd producer of ethanol in Brazil
15 73 Billion boe
capacity
2012 Proven Reserves (SPE Criteria) ‐ BrazilAdjusted EBITDA per Segment (US$ bn) (1)
1 3
3.03,2
Onshore8%
Shallow Water (0-300m)
8%
15.73 Billion boe
43.4 42,211
4.10.91.4
3.6 2,0
1.11.3
1.3 1.6
1.1
2.1
Deep Water (300-1,500m)
48%
Ultra-Deep Water(> 1 500 )
19.330.6
‐6.9‐15,0
(> 1,500m)36%
(1) Excludes Corporate and Elimination (2) Adjusted according to average exchange rate (3) IFRS USD 3
2009 2010 2011(3) (3)(2) 2012E&P RTM G&P Distribution International
(3)
OwnershipBroad distribution: government, Brazilian and foreign shareholders
19%
Foreign Shareholders
Non-VotingVoting 35%
35%
16%
Voting Brazilian
GovernmentNon-VotingVoting
35%
47%
12%6%
12%
18%
Brazilian Non-Gov’tShareholders
Non-VotingVoting
• Brazilian government, by law, must maintain control. Does so with 61% of voting shares.
• In BM&FBovespa Petrobras is most actively traded stock by shares and volume
*Includes: Federal Government, BNDES, BNDESPAR, Sov. Wealth Fund
• In BM&FBovespa, Petrobras is most actively traded stock, by shares and volume.
• 2000: ADRs listing on NYSE (PBR and PBR/A)
4
Relative PositionRanked among the leading integrated energy companies
2012 Oil and Gas Production (mm boe/d) 2012 Proven Reserves – SEC (bn boe)
16.8
2012 Oil and Gas Production (mm boe/d) 2012 Proven Reserves SEC (bn boe)
3.23.34.2
25.2
13.3 12.3 11.3 10.88.6
6.85.2
2.6
3.2
2.6 2.31.7 1.6
0.6
Exxon BP Shell BR Chevron Total Conoco ENI StatoilGas Oil
Market Cap (US$ bn) – March 29th, 20132012 Refining Capacity (mm boe/d)
Exxon BP Shell Chevron BR Total ENI Conoco BG
Gás Oil
p ( $ ) ,g p y ( / )
3.7
5.5 404
1.92.12.3 2.22.9
0.90.3
231209
73
114 112134
7782
Note: Peer companies selected above have a majority of capital traded in the public market.
Source: Evaluate Energy (barrels per calendar day, considering company % shareholding and including JVs) and Bloomberg5Note: Peer companies selected above have a majority of capital traded in the public market.
Exxon Shell BP BR Conoco Total Chevron ENI Statoil EXXON CHEVRON SHELL BP TOTAL BR ENI STATOIL CONOCO
Competitive AdvantagesUniquely positioned to integrate upstream and downstream operations
Abundant reserves 300 km away from the market
13
• Leader in deep‐water production, with access to abundant oil reserves
• Dominant position in growing market, far from other refining centers
• Fully developed infrastructure for processing and transfporting gas
Exploration & Production Downstream Gas & Power/ Biofuels/Petrochemicals
• New exploratory frontier, adjacent to existing operations
• Balance and integration between production, refining and demand
g
• Integration accross full energy and hydrocarbon chain in Brazil
6
2013-17 Business and Management Plan Fundamentals
CAPITAL PRIORITY
• Management
PERFORMANCECAPITAL
DISCIPLINE
• Priority for
Financiability Assumptions
• Investment Grade rating Management focused on
reaching physical and
financial targets
• Guarantee the expansion of the business
with solid
oil and natural gas
exploration & production
• Investment Grade rating maintenance• No new equity issuance• Convergence with financial targets
of each project financial indicators
projects in Brazil
Convergence with International Prices (Oil Products)• Divestments in Brazil and, mainly abroadmainly, abroad
7
2013 2017
2013-2017 BMP InvestmentsApproved by Petrobras’ Board of Directors in 03/15/13
2013-2017 PeriodUS$ 236.7 Billion Financiability Assumptions
• Investment Grade Rating maintenance:− Leverage lower than 35%28%
27.4%
− Net Debt/EBITDA lower than 2.5x • No new equity issuance• Convergence with International Prices (Oil
E&P62.3%
(US$ 147.5 bi)
(US$ 64.8 bi)
2 2%
4.2%(US$ 9.9 bi)
Convergence with International Prices (Oil Products)
• Divestments in Brazil and, mainly, abroad1.1%(US$ 2.9 bi)
2.2%(US$ 5.1 bi)
1.0%(US$ 2.3 bi)
1.4%(US$ 3.2 bi)
0.4%(US$ 1.0 bi)
8* Pbio = Petrobras Biofuel │ETM = Engineering, Technology and Materials │Other Areas = Financial, Strategy and Corporate
International ETM* Other Areas*Pbio*E&P DistribuitionDownstream G&E
2013-2017 BMP InvestmentsImplementation x Evaluation
Under Implementation Under EvaluationUnder Implementation
US$ 207.1 Billion
Under Evaluation
US$ 29.6 Billion
+=Total
US$ 236.7 Billion
All E&P projects in Brazil and projects of the remaining segments in phase IV
Projects for the remaining segments, excluding E&P, currently in phase I, II and III.
US$ 207.1 Billion US$ 29.6 BillionUS$ 236.7 Billion770 projects 177 projects947 projects
62 3% 71 2%
1.0%(US$ 0.3 Billion)6.1%
(US$ 1 8 Billion)62.3%(US$ 147.5 Billion) 27.4%
(US$ 64.8 Billion)
71.2%(US$ 147.5 Billion) 20.9%
(US$ 43.2 Billion)
2.9%(US$ 5.9 Billion)
13.5%(US$ 4.0 Billion)
6.4%(US$ 1.9 Billion)
(US$ 1.8 Billion)
1 1%
2.2%(US$ 5.1 Billion)
4.2%(US$ 9.9 Billion)
0.5%(US$ 1.1 Billion)
1.5%(US$ 3.2 Billion)
(US$ 5.9 Billion)
1.0%(US$ 2.3 Billion)
1.4%(US$ 3.2 Billion)
1.1%(US$ 2.9 Billion)
0.4%(US$ 1.0 Billion)
1.1%(US$ 2.3 Billion)
1.4%(US$ 2.9 Billion)
0.5%(US$ 1.0 Bililon)
73.0%(US$ 21.6 Billion)
9Phase I: Opportunity Identification; Phase II: Conceptual Project; Phase III: Basic Project ; Phase IV: Execution
* Pbio = Petrobras Biofuel │ETM = Engineering, Technology and Materials │Other Areas = Financial, Strategy and Corporate
International ETM* Other Areas*Pbio*E&P DistribuitionDownstream G&E
2013-2017 Business and Management Plan : Project Portfolio Management
INVESTMENTS UNDER IMPLEMENTATIONUS$ 147.5 Billion US$ 43.2 Billion US$ 5.9 Billion US$ 3.2 Billion US$ 2.9 Billion US$ 1.1 Billion
Implementation of Projects under Evaluations contingent
$E&P
$Downstream
$Gas & Energy
$International
$Distribution
$Biofuels
US$207 1 bi* on:
Results of Technical-Economical Feasibility studies;
207.1 bi*
studies;
Availability of Resources (financiability);
Competition for available
US$29.6 bi*
INVESTMENTS UNDER EVALUATION
Competition for available resources.-
E&PUS$ 21.6 BillionDownstream
US$ 4.0 BillionGas & Energy
US$ 1.9 BillionInternational
US$ 0.3 BillionDistribution
US$ 1.8 BillionBiofuels
10
INVESTMENTS UNDER EVALUATION
* US$ 207.1 Billion include ETM (US$ 2,3 bi) and Other Areas (US$ 1,0 bi) investments
Programs to Support the 2013-2017 BMP
2013-2017 BMP US$ 236.7 Billion
PROEF
PRC-PoçoProgram to
PROEFProgram to
Increase Operational Efficiency
PROCOPOperating Costs
Optimization Reduce Well CostsEfficiency
UO-BCUO-RIO
Optimization Program
INFRALOG – Logistic Infrastructure Optimization ProgramPRODESIN – Divestment Program
Petrobras Local Content Management – Take advantage of the industry´s capacity to maximize gains to Petrobras
11
PROCOP: Focus on OPEX, operating costs of the Company activities – Manageable Operating Costs.PRC-Poço: Focus on CAPEX dedicated to Wells construction – Investments in Drilling and Completion.
B fi ill d ll d ill l d l f R$ 32 Billi b 2016
PROCOP: Optimization of the Operational Activities Increasing Productivity and Reducing Unit Costs
Economy of R$ 32 Billion in 4 years
Benefits will come gradually and will lead to a total economy of R$ 32 Billion by 2016.
Initiatives Example Exploration & Production: Consumption of
Annual Reduction Targets
Economy of R$ 32 Billion in 4 years Exploration & Production: Consumption ofchemicals and fuels; Productive drilling rig days;Maritime and air transportation; Onshore wellinterventions;
Downstream: C ti f h i l d
4 7 912
Downstream: Consumption of chemicals andcatalyzers; Residual production; ScheduledStoppages routine; excessive lay day at ports; Fleetuse; Delivery Schedule;
T tCosts
Transpetro: Intervention in vessels, terminals, oiland gas pipelines, and tanks;
Gas & Energy: NG consumption to produceammonia; Operating cost for the gas pipelineMa
nage
able
CR$
Billi
on
20142013 20162015
; p g g p pnetwork;
Engineering, Technology and Materials:Supply and inventories of materials; IT costs peruser;
12
20142013 20162015 user;
Corporate e Services: Expenditures withbuildings, trips and transportation; HSEmanagement.* Expenditures for industrial, administrative and support installations
Annual Reduction provided by PROCOPEvolution of Manageable Costs
PRC-Poço: Program to Reduce Well CostsWell Construction is a Relevant Portion in Investments
Other Areas 89.2
236.7
Exploratory and Production
147.5
24.3Infra-structure and Support16.3Exploration
Exploratory and Production Development Well Investments
total US$ 75 billionE&P 147.5
106.9 Production Development
2013-2017 BMP Investments
Brazil E&P Investments
Increase of drilling rigs fleet and logistic resources Increase of drilling rigs fleet and logistic resources• Petrobras currently has 69 floating drilling rigs for well construction and maintenance in Brazil
Well construction represents:• 32% of Petrobras investments in 2013-2017 BMP
13
• 51% of Brazil E&P Investments
Exploration & Production
2013-2017 PeriodUS$ 147.5 Billion
16%(24.3)73%
(106.9)11%11%
(16.3)
Infrastructure and SupportExplorationProduction Development
1414
E&P Investments
P d ti D l tExploration
2013-2017 Period
Production DevelopmentUS$ 106.9 Billion
ExplorationUS$ 24.3 Billion
25%(26.2)
43%24%
6%(1.4)
43%(46.4)
32%(34.3)
70%(17.1)
24%(5.8)
Post-SaltPre-SaltTransfer of Rightsa s e o g ts
15Aside from Exploration and Production Development, E&P infrastructure investments total US$ 16.3 Billion.
Exploratory Success and Increase in ReservesMore than 3 Discoveries per month between January/2012 and February/2013
53 discoveries in the last 14 months (Jan/12 – Feb/13), from which 25 were offshore (15 in Pre-salt)
Brazil Discoveries: 53Discoveries: 53
• Offshore: 25• Onshore: 28 Exploratory Success Ratio: 64% Reserves: 15.7 Billion boe RRR¹: 103% for the 21st consecutive year R/P²: 19.3 years
Pre-Salt
16¹ RRI: Reserves Replacement Ratio² R/P: Reserve / Production
Discoveries: 15, of which 8 pioneersExploratory Success Ratio: 82%Reserves: 300 km in the SE region, 55% of GDP
16
Reserves and Recoverable VolumesRapid growth in reserves from discoveries in deep waters
Deep/Ultra‐Deep Water PhaseOnshore Phase Shallow Water Phase
Proved Reserves – SPE criteria
25000
30000
15.73 bi boePre Salt: Sapinhoá
15000
20000
Roncador
Park of Whales, Mexilhão
Pre Salt: Lula & Cernambi
Milli
on B
oe
10000
15000
Garoupa
Namorado
Marlim
Guaricema
0
5000
Namorado
Carmópolis
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Onshore 0‐300m 300‐1500m > 1500m
* Lula/Cernambi, Iara, Sapinhoá and Whales Park, ranging from 6.7 to 7.9 Billion boe
Pre‐salt’s Recovery Volume* Transfer of Rights
17
Production Curve in Brazil – Oil and LNGPost-Salt, Pre-Salt and Transfer of Rights
2014Roncador IV (P-62)Sapinhoá Norte (Cid Ilhabela)
2016Lula AltoLula CentralLula Sul
2012Baleia Azul(Cid. Anchieta)
2013Sapinhoá Pilot (Cid. São Paulo)Baúna(Cid Itajaí)
2015Iracema Norte (Cid. Itaguaí)
2017Lula Ext. Sul(P-68)Lula Oeste(P 69)
2020Espadarte IIIFlorim
2019JúpiterBonitoFranco Leste
2018NE de Tupi(P-72)Iara NW (P-71)
s bp
d
(Cid. Ilhabela)Iracema Sul(Cid. Mangaratiba)
(P-66)Franco 1 (P-74)CariocaLula Norte (P 67)
(Cid. Itajaí)Lula NE Pilot (Cid. Paraty)Papa-Terra (P-63)Roncador III
(P-69)Franco Sul(P-76)Tartaruga Verde e MestiçaIara Horst 4,200
Deep Waters SergipeSul Pq. BaleiasMarombaEspadarte I
19%
6%
Thou
sand
s (P-67)Franco SW (P-75)
(P-55)Norte Pq. Baleias (P-58)Papa-Terra (P-61)
(P-70)Parque dos DocesFranco NW (P-77)
2 750
CarcaráEntorno de Iara(P-73)
5% 7%30% 35%
31%1%
7%
2,022
2,500 2,750
2,0221,980
(± 2%)
95% 93% 69% 58%44%
4-6% p.y. Growth
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Post-salt Pre-salt (Concession) Transfer of Rights New Discoveries*(*) Includes new opportunities in blocks where discoveries have already been found 18
L l C t t
NEW PRODUCTION UNITS ‐ 2013‐2014New platforms built domestically and abroad will contribute to production
Project Capacity 1st Oil Hull Top Side /Integration
Local ContentBid
Round Commit. Target
Sapinhoá Pilot FPSO Cid. São Paulo 120 kbpd 01/05/2013 Cosco Shipyard
ChinaSchahin/Modec
Brasfels 2 30% 65%FPSO Cid. São Paulo China Brasfels
Baúna and PiracabaFPSO Cid. Itajaí 80 kbpd 02/16/2013 Jurong
CingapuraOdebrecht and Teekay
Cingapura 5 60% 81%
Lula NE Pilot FPSO Cid. Paraty 120 kbpd 05/28/2013 Keppel Shipyard
CingapuraQGOG/SBM
Brasfels 2 30% 65%y g p
Papa-TerraP-63 140 kbpd 07/15/2013 Cosco Shipyard
ChinaQuip
Rio Grande 0 0% 65%
Roncador Module III P-55 180 kbpd 09/30/2013 EAS
BrasilQuip
Rio Grande 0 0% 65%
Parque das BaleiasP-58 180 kbpd 11/30/2013 Queiróz Galvão
Rio GrandeQueiróz Galvão
Rio Grande 0 0% 63%
Papa-TerraP-61
TLWP load out to P-63 12/31/2013 Floatec
BrasfelsFloatecBrasfels 0 0% 65%
Roncador Module IV P-62 180 kbpd Mar/2014 Camargo Corrêa/IESA
EASCamargo Corrêa/IESA
EAS 0 0% 63%
Sapinhoá Norte FPSO Cid. Ilhabela 150 kbpd Sep/2014 QGOG/SBM
ChinaQGOG/SBMSBM/BRASA 2 30% 65%
Lula - Iracema SulFPSO Cid. Mangaratiba 150 kbpd Nov/2014 Cosco Shipyard
China Not define 2 30% 65%
* Note: “FPSO Cid. XX” = Leased / “P‐XX” = Owned 19
PROJECT INSTALLATIONPetrobras has a strong track record of platforms installation per year
2006-2012• Petrobras has installed, on average, 5 platforms per yearfrom 2006 to 2011.
Ramp up of these units was delayed due to limited
2013-2016• Between 2013 and 2016 we expect to install an average of 4units per year.
Petrobras will have around 40 drilling rigs² available during the
Track Record of Project
• Ramp up of these units was delayed due to limitedavailability of drilling rigs2: (2006: 2, 2011: 26)
• Petrobras will have around 40 drilling rigs² available during thenext 5 years.
7 Track Record of Project Installation1’
P‐54180mbpd
Manati8MMm³/d
5SO Cid Sã
5 5 5
SEILLEAN
PPER‐Phase 12.7MMm³/d
FPSO‐CAPIXABA100mbpd
FPSO‐
P‐52180mbpd
FPSO‐CIDADE DE VITÓRIA100mbpd
PPER‐Phase 2Δ5.3MMm³/d
4
FPSO Cid
FPSO Cid São Mateus
Camarupim10MMm³/d
FPSO E.S. PQ DAS CONCHAS
100mbpd
FPSO Cidade deAngra dos Reis
100bpd
FPSO Cidade de
FPSO Capixaba(reallocation)
100bpd
P‐61 & P‐63140mbpd
Cid. Paraty120mbpd
SEILLEANGOLFINHO30mbpd
P‐34 JUBARTE60mbpd
P‐50
FPSO‐PIRANEMA30mbpd
FSO Cid. DeMacaé
FPSO‐Cid. RJ
PRA‐1
FPSO Cid. Rio Das Ostras30mbpd
P‐53 – MLL
FPSO Cid. Niteroi MLL100mbpd
Frade100bpd
P‐51 – MLS
FPSO Cidade deSantos
10MMm³/d
P‐57180mbpd
SS‐11TIRO/SIDON
Mexilhao15MMm³/d
P‐56
2
Cid. Anchieta
1Cid. Itajaí
Cid. São Paulo120mbpd
P‐55180mbpd
1 - Does not include installation of Extended Well Tests / 2 – Over 2,000 meters waterdepth20
180mbpd 100mbpd
2008 2009 2010 2011
180mbpd Mód. 2180bpd
2012 2013
TIRO/SIDON20mbpd
100mbpd 100mbpdj
80mbpd
2006 2007
OPERATIONAL EFFICIENCYPROEF ‐ Program to recover and maintain operational efficiency in Campos Basin
Improve Operational Unit Efficiency Levels
Improve production systems integrity
PROEFGOALS
UO-BCIncrease the reliability to deliver production targets of BP 2012‐16GOALS
UO-RIO Reach Sustainable Levels of Operational Efficiency
Reduce Risk of Loss of Operational Efficiency
production targets of BP 2012 16
Operational Efficiency - E&P Operational Efficiency - UO-BC Operational Efficiency - Without UO-BC Operational Efficiency - UO-RIO
E&P Recent Operational Efficiency (%)
PROEF Targets
9294 95
94 939696
93 92
93 94 94 94
90
95
100
9087
8588
8076
81
8890
92
75
80
85
71 7265
70
2009 2010 2011 2012 2013 2014 2015 2016
E&P Distribution of RevenuesStable concession terms have led to higher income per barrel
Breakdown of realization price per boe produced in Brazil
% share of realization price
p p p
111 112120
US$/boe realization price US$/boe realization price
25%31% 33% 31%
80%
100%
$79
111 112
80
100
13%16% 16%
23%21% 21% 21%
40%
60%
$20 $20
$13
$22
$31 $30
6260
80
17% 14% 13% 15%
22%18% 16% 17%
16% 17% 16%
20%
40%
$
$11 $12$14 $16$7
$11$16 $15
$12
$15$13
20
40
14% 13% 15%
0%
2009 2010 2011 2012
$9 $10 $13 $140
2009 2010 2011 2012
22
Lifting Cost Exploratory costs + DD&A + Others Income Tax Production Tax Net Income
*Others include tax expenses, R&D, SG&A
Brent
22
E&P PROFITABILITYProduction of oil, not gas, generates high realization price
Net Production Income (US$/boe)Net Production Income (US$/boe)
30
35
15
20
25
0
5
10
5
0
2007 2008 2009 2010 2011 2012
Peers Petrobras
*
• Production in Brazil highly concentrated in oil: 86% oil and 14% gas
• Higher net profit per barrel yields better return than its peers• Higher net profit per barrel yields better return than its peers
• Stable regulatory environment allows for capturing the benefits of the increase in oil prices
Peers: BP, CVX, XOM,RDS, TOT * Petrobras PreliminarySource: Evaluate Energy
PROFITABILITYNew E&P projects will continue to generate attractive returns
35.00%
40.00%
45.00%
Key Assumptions:
• 150 000 bpd FPSOs
25.00%
30.00%
35.00% 150,000 bpd FPSOs
• Production of 500 MM barrels
• Ramp‐up in line with industry
• Historic decline rate
10.00%
15.00%
20.00%Historic decline rate
• Oil value = 95% Brent
• Does not include exploration and acquisition costs
.00%
5.00%
60 70 80 90 100 110
Case 1 – US$12/boe Capex / US$5/boe Opex (expected scenario)
US$/ bbl
Case 3 – US$12/boe Capex / US$5/boe Opex without Special Interest (such as Transfer of Rights)
Case 1 US$12/boe Capex / US$5/boe Opex
Case 2 – US$15/boe Capex / US$7/boe Opex
(expected scenario)
• The graph illustrates the cost‐benefit ratio of a standard production development in Brazil, usingassumptions based on previous experiences
24
Pre-Salt Production is a RealityProduction reached 300 thousand barrels of oil per day in Feb/20/2013
Pre-Salt Production Data Technological Challenges SurmountedPre-Salt Production Data Oil Production reached 300 kbpd (of which 249 kbpd
is Petrobras’ stake), 43% in Santos Basin and 57% inCampos Basin;
Technological Challenges Surmounted
High Resolution Seismic: higher exploratory
successp This level was reached with only 17 producing wells, 6
in Santos Basin and 11 in Campos Basin; Level reached only 7 years after discovery:
C B i 11
Geological and numerical modelling: better
production behaviour forecast
R d ti f ll t ti ti f 134• Campos Basin: 11 years• US Gulf of Mexico: 17 years• North Sea: 9 years
Production of 1 million bpd operated by Petrobras will
Reduction of well construction time from 134
days in 2006 to 70 day in 2012: lower costs
Selection of new materials: lower costsProduction of 1 million bpd operated by Petrobras willbe reached by 2017 and the 2.1 million bpd thresholdwill be reached by 2020.
Petrobras Pre-salt production’s share: from 5% in2011 (100 3 kbpd) to 6 9% in 2012 (136 4 kbpd)
Qualification of new systems for production
gathering: higher competitiveness
2011 (100.3 kbpd) to 6.9% in 2012 (136.4 kbpd). Separation of CO2 from natural gas in deep
waters and reinjection: lower emissions and
increase in recovery factor
25
Drilling Rigs AvailabilityNecessity met with imported and domestic units
g Rigs
000m
)
8 9 6 82
Drilling Rigs: Imported vs. Domestic
42 42 42 42 42
Num
ber of Drilling
Water Dep
th > 2.0
1626
40 41 42 4234
2519
8 1723 31
N (W
5 7 816
11 9
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Imported Rigs Brazilian Rigs (Existing) Brazilian Rigs (New)
28 new domestic drilling rigs from 2016 on: Local Content between 55% and 65%
• Mid‐term needs for drilling rigs are now largely satisfied. Future intermediate demand will be limited to specific situations and needs.
• Starting in 2016, Brazilian built rigs expected to begin replacing internationally built fleet as their contracts expire (and subject to total fleet needs).
• If for any reason the domestic rigs are not completed as scheduled, Petrobras has the possibilty of renewing some or all of expiring leases.
26
Downstream InvestmentsProjects Under Implementation
Refining capacity expansion on the Under
2013-2017 HIGHLIGHTSUS$ 43.2 billion
21%(9.2)
Refining capacity expansion on the Under Implementation Portfolio: RNEST (Pernambuco) and COMPERJ 1st Phase (Rio de Janeiro)
11%(4.9)
45%(19.4)
6% 6%(2 8)
9%(3.7)
Refining capacity expansion in design phase: Premium I (Maranhão), Premium II (Ceará) and COMPERJ 2nd Phase (Rio de Janeiro)
6%(2,8)
(2.4)
1%(0.4)
1%(0.3)
Projects Under Evaluation
(2.8)
( )
Diesel and Gasoline Quality Portfolio: REPLAN, RPBC, REGAP, REFAP and RLAM
jUS$ 21.6 billion
16%
2%(0.5)
Fleet expansion: PROMEF – 45Oil and Oil Products transportation vessels
64%(13.8)
(3.5)
3%7%( )
8%(1.7)
CorporateEthanol LogisticsFleet Expansion Petrochemical
Logistics for OilQuality and ConversionOperational ImprovementRefining Capacity Expansion
(0.5)(1.5)
Downstream2012-2016 Investments
2012-2016 Investment Profile Fleet ExpansionRefining Capacity Expansion2012-2016 Investment Profile
on
PetrochemicalFleet Expansion
Logistics for OilQuality and ConversionOperational ImprovementRefining Capacity Expansion
BiofuelsProjects Under Evaluation
US$ b
illio
201620152012 20142013
High utilization factor on the current assets, combining
flexibility to increase margins
2012-2016 INVESTMENT HIGHLIGHTS Projects Under Evaluation
Implementation of projects depends mainly on:
a Alignment of new refineries costs to flexibility to increase margins
End of the first investment cycle in Quality
a. Alignment of new refineries costs to international standards;
b. Regulatory requirements;
c Resources Availability (Financiability);
28
RNEST and 1st Phase of COMPERJ coming online
New refineries under evaluation (Phase I)
c. Resources Availability (Financiability);
d. Competition for financial capacity;
Integration and BalanceConstruction of new refineries intended to meet Brazilian demand
Thous bpd
INTEGRATION BETWEEN OIL PRODUCTION, REFINING CAPACITY AND DOMESTIC MARKET
PREMIUM I(2nd phase)300,000 bpd
Oct/2020
COMPERJ(2nd phase)300 000 bpd
3,3803,472
4,200
PREMIUM II300,000 bpd
Dec/2017
300,000 bpd
Jan/20182,788
1,641
2,320
2,004
2,500
1,393
1,7982,147
1,814
1 323
1,9801,944
2,255 Abreu e LimaRefinery
(RNE)230kbpd
1) Nov/20142) May/2015
2,320
PREMIUM I(1st phase)300,000 bpd
Oct/2017181
1,0361,323
... ... ... ...
2) May/2015
COMPERJ(1st phase)165,000 bpd
Apr/2015
1980 2000 2010 2012 2016 2020*
Oil and NGL Production ‐ Brazil Total crude oil processed – Brazil Oil Products Market (2 scenarios)
Projects Under Implementation Projects Under Evaluation
29* 2020 Total Crude Oil Processed may vary depending on Projects Under Evaluation 29
Seeking convergence with international prices
Parity: Seeking convergence with International Prices9 months: +21.9% in Diesel and +14.9% in Gasoline
Seeking convergence with international prices. In the last 9 months: 4 Diesel price readjustments, totaling +21.9%, and 2 Gasoline readjustments (+14.9%).
Average Brazil Price* x Average USGC Price**
Impo
700
800
900
220240260 2009 2010 2011 2012 20132008
orted Volumes (R
$/bbl
)
500
600
700
140160180200
Losses
Gains
(Thousand bbPr
ices
200
300
400
406080
100120
an/13
an/12
an/10
an/09
an/11
l / d)
ar/13
0
100
02040
ov/08
30(*) considers Diesel, Gasoline, LPG, Jet Fuel and Fuel Oil. (**) USGC price with domestic market prices.
JaJaJaJa Ja
Gasoline ImportsDiesel Imports
ARP USGC (w/ volumes sold in Brazil)ARP Brazil
MaNo
EBITDAGrowing and stable cash flow generation
Adjusted EBITDA Breakdown per Segment (US$ bn)*** Net Income (US$ bn)*j p g ( $ )
3.0 19.2 20.1
Net Income (US$ bn)
4.20 9
1.7
3.62.0
1.1
1.3
1.31.6
1.1
2.2
3.215.5
11.0**
30.5
43.4 42.0
11
0.9 11.0
19.3
‐6.9 2009 2010 2011 2012
2009 2010 2011 2012
‐15.6
31(*) US GAAP (**) IFRS (***) Adjusted according average exchange rate. Excludes Corporate and Elimination.
E&P RTM G&P Distribution International
The image part with relationship ID rId7 was not found in the file.Trade BalanceRapid demand growth in the last 4 years has led to a shift in the trade balance
2009 (thous. bpd)
2012(thous. bpd)
4 100
4,400
4,700
5,000
m³ +24%
+24%Diesel Sales
433548
779
227
705
5492,300
2,600
2,900
3,200
3,500
3,800
4,100
Thou
sand
m
24%
184
433
478
152
2,0001999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
2,800 +65%Gasoline Sales364 346
18
Exports Imports
478397
81
75
Exports Imports Balance
156
1,600
1,900
2,200
2,500
Thou
sand
m³
+3%
+65%Gasoline Sales
‐249
Balance‐231
1,000
1,300
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Oil Oil Products
32
The image part with relationship ID rId7 was not found in the file.Gasoline and Diesel International PricesTaxes account for significant share of pump price in Brazil
Gasoline Retail Prices2012 Average
Diesel Retail Prices2012 Average
Brazil Chile China Japan Germany Brazil Chile China Japan GermanyUSAUSABrazil Chile China Japan Germany Brazil Chile China Japan Germany
Disttribution MarginTaxationRefinery Gate Price Anhydrous Alcohol
USAUSA
The refinery gate price for gasoline is currently 37% of the retail price while for diesel it is 61%
33
Gas & Energy InvestmentsProjects Under ImplementationProjects Under Implementation + Under Evaluation
US$ 5.9 billion32%(1.9)
6%(0 3)
8%(0.8)
20%(2.0)
US$ 9.9 billlion
43%(2 6)
19%(1.1)
(0.3)(0.8)
25%(2.5)
(2.6)
Projects Under EvaluationUS$ 4.0 billion
46%(4.6)
12%(0.5)
3%(0.1)
Conversion of Natural Gas into fertilizers and other gas chemical products: UFN III at Três Lagoas (Mato Grosso do Sul)
2013-2017 HIGHLIGHTS
34%(1.4)
51%(2.0)
UFN III at Três Lagoas (Mato Grosso do Sul)
Natural gas processing and transportation: NGPU Cabiúnas (Rio de Janeiro)
Electric energy generation: Thermal Power Plant Baixada Fluminense (Rio de Janeiro)
34Gas-chemical plantsLNG
NetworkElectric Energy
Janeiro)
LNG Regasification: Bahia Terminal (Bahia)
Units in Design Phase: UFN IV (Espírito Santo) and UFN V (Minas Gerais)
Natural Gas Supply And Demand (Million m³/d)
35
FinancialFinancial Considerations
Financial Planning AssumptionsFinancing analysis only incorporates projects under implementation
Main assumptions for cash flow generation and investment levels
No equity issuance Investment grade maintenance
2013-17 BMP is based on constant currencies from 2013.
Brent prices (US$/bbl) US$ 107 in 2013, declining to US$ 100 in the long term
Average exchange rate (R$/US$) R$ 2.00 in 2013, strengthening to R$ 1.85 in the long term
Leverage Limit: < 35% │ Maximum leverage in 2013 and 2014 (34%), declining after 2015
Net debt / EBITDA Limit : < 2.5x │ Limit will be surpassed in 2013 and will fall below 2.0x after 2015
Oil product prices in Brazil Convergence to international prices
Divestments US$ 9.9 billion
Returns on new E&P projects Pre-salt projects breakeven between US$ 40-45/barrel Big post-salt projects have returns similar to pre-salt’s
37
Operating Cash Flow and Funding Needs
Additional financing needs will be funded exclusively through new debt. No equity issuance is envisaged.
246.910.79.9
39.8
246.9
Free cash flow, before dividends, after 2015.
Annual borrowing needs (2013-2017)$ Billi
on
61.3
g ( )
Gross – US$ 12.3 billion │Net – US$ 4.3 billion
US$
165.0207.1
Net borrowing needs 50% below previous Plan due to:
• 2017 production, versus 2012, leading to higher
Divestments and restructuringsCash utilizationThird-party resources (Debt)
operating cash flows
• Declining downstream investments
• Long-term Brent prices (US$ 100 vs US$ 90 in the
Fontes Usos
38
Third party resources (Debt)Operating cash flow (after dividends)InvestmentsAmortization
g p (previous Plan) and long-term F/X rate (R$ 1.85 vs R$ 1.73)
Leverage
Leverage Net Debt/EBITDA
BMP Target (< 35%)
BMP Target (< 2,5x)
20172016201520142013 20172016201520142013
• Declining leverage, within the Company’s self-imposed limits
• Net Debt/EBITDA surpasses limit at some points in time, during the Plan period
39
Capex and Cash FlowFree cash flow turns positive with completion of downstream projects
50000US$ MM
45,078 43,164
Capex vs. Operating Cash Flow
42,949Approx.
$39 billi
10000
20000
30000
40000
27,888
,$39 billion
0
10000
OCF 2012 Capex 2010 Capex 2011 Capex 2012 Capex 2017
hE&P Downstream Gas & Energy Others
• 2013 ‐2017 Business and Management Plan Assumptions:
• Capex‐ Downstream projects not currently under implementation only proceed supported by cash flows and balance sheet strength
• Operating Cash Flow: Oil production increases by 750 TBPD, generating additional operating cash flow. Import parity would eliminate downstream losses
Capital Structure
Net Debt/EBITDA Net Debt/Net Capitalization1
24% 24%28% 28% 30%
20%
30%
40%
3
4
5Net Debt/EBITDA Net Debt/Net Capitalization
1.66 1.61
2.46 2.42 2.77
-10%
0%
10%
1
2
32
R$ Billion 12/31/12 12/31/11
-20%04Q11 1Q12 2Q12 3Q12 4Q12
Lower operating cash flow and higher capexresulted in net debt increase.
The devaluation of the Real (9%4) also
Short-term Debt 15.3 19.0Long-term Debt 181.0 136.6Total Debt 196.3 155.6( ) C h d C h E i l t 3 48 5 52 5 The devaluation of the Real (9%4) also
increased net debt.(-) Cash and Cash Equivalents 3 48.5 52.5= Net Debt 147.8 103.0
US$ BillionNet Debt 72 3 54 9
1) Net Debt / (Net Debt + Shareholder’s Equity)2) Refers to the adjusted EBITDA which excludes equity income and impairment.3) Includes tradable securities maturing in more than 90 days4) Period-end commercial selling rate for U.S. dollar
Net Debt 72.3 54.9
41
Petrobras RatingsConsolidated investment grade position
A- / A3
BB+ / Ba1BBB- / Baa3
BBB / Baa2
BBB+ / Baa1
Investment grade
B+/ B1
BB- / Ba3
B/ B2
BB / Ba2
BB / Ba1
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
M d S&P Fit h
B/ B2
Moodys S&P Fitch
42
Information:
Investor Relations
+55 21 3224-1510
investors@petrobras [email protected]
www.petrobras.com.br/ir
43