Helicopter and Logistic in Offshore Pre-salt Layers HeliLogistic Company Strategy in Brazil

HeliLogistic Strategy in Brazil

• General Assumptions

• Petrobras General Information

• Investments – General, Local Content

• Opportunities Upstream and Downstream

• Petrobras Strategies in E&P

• Main Oil and Gas Production Projects

• Pre-salt Challenge and Oil & Gas New Frontier

• Important Issues to Operate in Brazil

• Beginning HeliLogistic Operations in Brazil

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General AssumptionsThis is a preview for an initial strategic plan for HeliLogistic action focused on oil & gas industry and also intended to provide information on the Brazilian market and opportunities in Oil & Gas industry.

To analyze Oil & Gas industry in Brazil, some information are provided to guide possible business assessments, next steps and actions that Helilogistic should take to develop business in Brazil.

Petrobras is revising its 2020 Strategic Plan and 2010-2014 Investment Plan turning it to a new 2011-2015 Investment Plan considering the the subsalt (Petrobras nominated as pre-salt) discoveries and development, which turns out to be a new challenge that will raise opportunities for the oil & gas industry and for foreign direct investments in Brazil.

Important to say that creativity and some risk management could make a difference for the success in the next years to develop oil & gas business in Brazil. 3

PETROBRAS Highlights

Net Operating RevenuesUS$118.3 billion)

-------------------------------------------------------NET INCOMEUS$18.9 billion

-------------------------------------------------------Adjusted EBITDAUS$31.3 billion

-------------------------------------------------------Capital Expenditure

US$29.5 billion-------------------------------------------------------

EXPLORATION 70 rigs (43 offshore)

-------------------------------------------------------RESERVES (SEC CRITERION)

15 billion barrels of oil and gas equivalent (boe SPE)

-------------------------------------------------------PRODUCTIVE WELLS

13,000-------------------------------------------------------

PRODUCTION PLATFORMS112 (77 fixed; 35 floating)

Data referring – 2008

-------------------------------------------------------DAILY PRODUCTION

2,400 thousand barrels per day (boe) of oil and gas

included 420 thousand boe of natural gas-------------------------------------------------------

REFINERIES16

-------------------------------------------------------YIELD FROM REFINERIES1,962 million barrels a day

-------------------------------------------------------PIPELINES23,142 Km

-------------------------------------------------------TANKER FLEET

154 (55 belonging to Petrobras) -------------------------------------------------------

GAS STATIONS6,000

-------------------------------------------------------FERTILIZERS

3 Plants: 235,000 tons of ammonium, 100,000 tons of urea

Petrobras General Information

Source: Petrobras webpage4

Market Value – 06 June 2008 (US$ Billion)

Source:Bloomberg

RepsolConoco Philips

EniTotalChevro

nShell BP

Petrobras

Exxon Mobil

Exxon Petrobras Shell BP Chevron Total ENI Conoco Repsol0

50

100

150

200

250

300

350

400

450

500 468

284259

218 207 204

160 145

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Petrobras

Exxon Mobil Repsol

Chevron

Conoco Philips

EniShell BP Total

5

4º

2º

7º

6º

Source: Evaluate Energy and Company Reports(*) Eni – Refining Throughputs instead of Refining Capacity

ExxonMobil

Shell

BP

ConocoPhillps

Total

Petrobras

Chevron

Eni (*)

6,299

3,953

2,769

2,730

2,598

2,167

2,115

748

ExxonMobil

Petrobras

BP

Total

Chevron

ConocoPhillips

ENI

Shell

14.7

13.9

12.8

11.9

11.7

11.7

10.5

9.8

ExxonMobil

BP

Shell

Chevron

ConocoPhillips

Total

Petrobras

Eni

1,526

1,377

1,193

956

925

845

840

623

ExxonMobil

BP

Shell

Petrobras

Chevron

ConocoPhillips

Total

ENI

22.5

17.6

11.7

11.7

11.2

10.8

10.1

6.5

Publicly Traded Peer Comparison

Proven Reserves (SEC – billion boe) – Dec. 2007 Oil & Gas Production (million boe) - 2007

Reserve Life (years) – Dec. 2007 Refining Capacity (thousand bpd) - 2007

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Investment Plan (2011-2015) has expected investments of US$280 Billion, yearly average of US$56 Billion, in a crucial moment when other majors are reducing or maintaining the investments.

Investment Breakdown (2010-2014) totalling US$ 224.1 Billion:E&P US$ 118.8 Billion (53%)Downstream (RTC) US$ 73.6 Bn (33%)Petrochemicals US$ 5.1 Bn ( 2%)Gas & Energy US$ 17.8 Bn ( 8%)Corporate US$ 0 2.8 Bn (01%)Retail System US$ 0 2.5 Bn (01%)Biofuel US$ 3.5 Bn ( 2%)

65% of the investments is considered as Brazilian content in the total capital spending (95% investments in Brazil, 5% Abroad)

Source: Petrobras Business Plan 2010-2014

Services and Equipment companies have been increasing its market position and developed business opportunities on O&G.Only E&P represents 53% of Petrobras investments

Investments - General, Local Content

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Business Areas Items Unit Total Amount (2008 to 2015

Opportunities Upstream and Downstream

Christmas Trees un 3,658

Pumps un 4,673

Wellheads un 3,658

Towers un 150

UPSTREAM Heat Exchangers un 1,904

Conduction Pipes t 375,529

Flexible Pipes km 4,906

Turbines un 128

Umbilicals km 2,577

SUMMARY OF MAIN EQUIPMENT QUANTITIES UP TO 2015

Gas & Energy Conduction Pipes t 33,742

Pumps un 2,377

Boilers un 18

Furnaces un 82

Reformer Furnaces un 14

DOWNSTREAM Reactors un 159

Towers un 331

Heat Exchanger un 1,742

Conduction Pipes t 142,351

Turbines un 107

Opportunities for foreign and local companies

Source: 2020 Petrobras Strategic & Business Plan (not considering pre-salt investments)

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Opportunities for foreign companies

Critical Equipment and ServicesCRITICAL EQUIPMENT

E&P (not considering pre-salt investments)

• 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

& gas metering systems, drilling activities

• Offshore drilling rigs

• Gravel packing

• Drilling bits

• Steam generators (25-50 x 106

BTU/d)

• Special submarine valves

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

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

• Boilers (steam generators)

• Heat exchangers working with H2S

traces (ASTM A387 degree 11)

• API pumps

• Structural packing for refining process towers

REFINING

Source: 2020 Petrobras Strategic & Business Plan

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E&P

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CRITICAL SERVICES – OPPORTUNITIES FOR FOREIGN SUPPLIERS

REFINING

• Drilling

• Workover services

• Flexible lines and umbilicals laying services

• Support for diving

• Support for ROV´s

• Support to mooring activities

• Special Vessels

• Submarine interconnection services

• Basic Design

• Thermal Projects Design

Source: 2020 Petrobras Strategic & Business Plan

Opportunities for foreign companies

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Conclusions on 2020 Petrobras Strategic & Business Plan

• Opportunities...

... for Manufacturers, Distributors, Retailers in supply of equipment, chemicals, spare parts, etc.

... for Service providers in services supply of seismic, drilling, transport, etc.

... for EPC companies, Shipyards, Constructors for platforms, refineries, revamps, etc.

• Revising of 2010-2014 Investment Plan (new 2011-2015) will consider the new subsalt frontier and to cope with the international crisis – increasing opportunities for companies that could offer packages and project finance – as an example of infrastructure tie-in FDI´s.

• Opportunities will be focused on critical goods and services no available in a competitive basis in local market

• Foreign suppliers must be aware of the specific laws framework and local content requirements – here are another opportunity as incentives could be arranged once the intention to manufacture in Brazil is assured.

• Partnerships with local supplier operating in the same business area should be considered

Source: 2020 Petrobras Strategic & Business Plan

Opportunities for foreign and local companies

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• Increase production and reserves• Strenghtehn expertise in deep

and ultra-deep waters;• Perform on-shore and in shallow water fields focusing

on profitable opportunities;• Implement practices and new technologies in areas

with high exploitation degree in order to optimize recovery factor;

• Develop exploratory efforts in new frontiers in order to assure a sustainable reserve/production ratio.

• Perform with operational excellence and social and environmental responsibility

Petrobras Strategies in E&P

Technological edge and differentiate services to be offered will allow HeliLogistic to be part of Petrobras E&P Strategy. Collaboration with R&D is key

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New frontier: Pre-salt

Big challenge & investments

Initial

Source: 2020 Petrobras Strategic Plan - Rio Oil & Gas Conference, October, 2008

Pre-salt new frontier in Santos Basin

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Source: ANP “The role of ANP in an ever more competitive market”, Brazil Source: Source: ANP - Energy and Power International

Conference, Houston

Offshore and onshore market: New O&G companies arriving in Brazil, new business opportunities

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Thousand bpd

2007 2008 2009 2010 2011 20121600

1700

1800

1900

2000

2100

2200

2300

2400

2500

2600

1792

1950

2191

22962374

2421

Rio de Janeiro FPSO

Espadarte Mod II100,000bpd

Piranema FPSO

30,000bpd

Cidade Vitoria FPSO

Golfinho Mod 2

100,000bpd

Roncador

P-52

180,000bpd

Roncador

P-54 FPSO

180,000bpd

Cidade Niteroi FPSO

100,000bpd

Marlin Sul Mod2

P-51

180,000bpd

Marlin Leste

P-53

180,000bpd

Tupi

EWT

30,000bpd

Frade

100,000bpd

Parque das Conchas

100,000bpd

Tupi

Pilot

100,000bpd

Cachalote

Baleia Branca

FPSO Capixaba

100,000bpd

Jubarte

P-57

180,000bpd

Marlin Sul Mod3 – P-56

100,000bpd

Espadarte

Mod3

100,000bpd

Roncador Mod4 P-54

100,000bpd

Tupi not included in the production

Source: 2020 Petrobras Strategic Plan - Rio Oil & Gas Conference, October, 2008

Main Oil & Gas Production Projects

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Associated Gas

Non Associated Gas

2007 2008 2009 2010 2011 20120.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

24.681

45.7

64.1

71.1 71.3 70.8

Chart Title

FPSOCidade NiteróiJabuti

FPSOCidade NiteróiJabuti

LagostaLagostaFPSO

Espírito Santo

(Conchas)

FPSO Espírito Santo

(Conchas)

Marlim LesteP-53

Marlim LesteP-53

FradeFradeRoncadorP-52

RoncadorP-52

Roncador

P-542007

Roncador

P-542007

Marlim SulModule 2

P-51

Marlim SulModule 2

P-51

Rio de Janeiro

Espadarte Mod II

Rio de Janeiro

Espadarte Mod II Marlim

SulModule 3

- P-56

Marlim Sul

Module 3 - P-56

Espadarte

Module 3

Espadarte

Module 3

Peroá Phase 2

Peroá Phase 2

Urucu Urucu

CanapuCanapu

Mexilhão

Mexilhão

FPSO

Cidade Santos

(Uruguá/ Tambaú)

FPSO

Cidade Santos

(Uruguá/ Tambaú)

FPSO

São Mateus

Camarupim)

FPSO

São Mateus

Camarupim)

Pirapitanga

Pirapitanga

ManatiManati

TupiPilotTupiPilot

Million m3/day

Jubarte

P-57

Jubarte

P-57

Cachalote

and Baleia Franca

FPSO Capixaba

Cachalote

and Baleia Franca

FPSO Capixaba

Roncador

Module 4 P-62

Roncador

Module 4 P-62

Main Gas Production Projects in Brazil

Tupi not included in the production

Non associated gas

Associated gas

Source: 2020 Petrobras Strategic Plan - Rio Oil & Gas Conference, October, 2008

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Source: TN Petroleo Magazine, Nov2008

Pre-salt Challenge and Oil & Gas New Frontiers

New Discoveries and fields in operation

Oil fields

Gas Fields

800km

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The Pre-salt: March 2006: After drilling for one year and three months at an excessive cost of US$240 million (usual costs in Campos Basin is in the order of US$18 million), Petrobras found gas traces in Parati field at 7,600 m deep. This discovery gave motivation for another drilling in the RJS-628A well lately called Tupi field (BM-S-11), located in Santos Basin, 300km from the coast.

In August 2006 Petrobras confirmed proved reserves of 3 billion barrels in Tupi field. Considering Tupi area Petrobras estimates 8 billion boe and another drillings in sequence rise the estimation up to 100 billion boe.

Blocks discovered so far: Parati (BM-S-10), Tupi and Iara (BM-S-11), Bem-te-vi (BM-S-8), Carioca and Guara (BM-S-9), Caramba (BM-S-21), Jupiter (BM-S-24) and two discoveries in the Campos Basin located in Baleias Park (Caxareu and Pirambu).

This discoveries will change the face of oil & gas business in Brazil as the Federal Government is preparing to intervene with new controls for the subsalt and to create another Government company to handle the new subsalt reserves.

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Among the challenges Petrobras and Brazilian Government will face to turn pre-salt discoveries a reality we can cite:

• This is a new geological paradigm with gigantic fields and large volume of accumulations

• The level of investments is proporcional to the amount of oil resources, thus giving level of US$ 600 billion for a volume of 50 billion barrels at a cost of a barrel below the marginal cost of expansion of the industry

• Technological innovations will be the key variable to determine investments required (drilling technology, production systems, monetizing natural gas)

• Potential evolution of production to 5.5 million bpd (3.8 from Petrobras and 1.7 from companies having participation in the pre-salt cluster)

Key issues for investments in pre-salt• Petrobras investment capacity (important role and opportunity for

international companies)• Sector regulation quality and institutional arrangement credibility• Fiscal system atractiveness

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Evaluation•Field delimitation•Area delimitation•Reservoirs flow analysis•Fractured well•Complete testimony•Materials spec’s

Production Development 1A•Concepts and technologies (FPSO’s, wet

completion, etc)•Pilot implementation with “n” modules to

perform the definitive system•CO2 and water injections behaviour•Tests and adaptability•Improving well designs•Anticipate production

Production Development 1B•New technologies and concepts developed

during phase 1A•Use the technological improvements which

are economical feasible

2007 2009 2010 2012 2017

Tupi Pilot Production and Development TimelineThe new investment plan (2009-2013) will turn official

investment horizons for the subsalt

1st Long duration test Tupi

1st Tupi pilot oil

New technologies application

Opportunities

2020

Investments horizon for

pre-salt

2011

Source: Petrobras, Nov200821

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30 RIGS CONTRACTED PLUS 28 TO BE LEASED UP TO 2018, MAKING A TOTAL OF 58 DRILLING RIGS: 23 being delivered between 2009 and 2011; 9 will be chartered via international bidding, being delivered in 2012; 28 will be built in Brazil, being delivered between 2013 and 2018

FIRST 2 FPSO´s TO BE CHARTERED (2013-2014) and ADDITIONAL 8 FPSOS (2015-2016)26

Petrobras iniciates second phase in Santos Basin

By closing the first cycle in the Santos Basin, which included the production fields in the post-salt, deployment and operation of the infrastructure in the pre-salt and the start of commissioning of

gas, Petrobras will invest now in the areas of offshore support to coordinate the logistics between the mainland and platforms. According to general manager of the Unit Operations of Exploration

and Production in the Santos Basin, José Luiz Marcusso will be two new logistic bases - one in Itaguaí (RJ) and another in the Santos Air Base, located in the city of Guaruja (SP ) on the shores of

the port of Santos. 

This new stage will attract suppliers of Petrobras for the future around the logistics base. So far, multinationals such as Halliburton retained a core group of executives focused on customer

relationships in offices that opened in BS, especially in the wake of discoveries in the subsalt. "Some already exploring areas near the airbase, but most waits for the completion of the study

being conducted by Petrobras," says Marcusso. 

Currently, sending supplies by sea to 17 rigs and production systems at seven of the Santos Basin occurs from the city of Macaé (RJ) and Itajai (SC). Air transport, designed to carry people and small parts are made from Jacarepagua (RJ), Mariners (SC) and Itanagar (SP). But the start of commercial production of oil and gas in the pre-salt initiates a new phase of impressive numbers, which would require boosting the performance of all areas. "It will be a very big jump over the decade. In 2020, even without considering the onerous assignment, the current strategic plan has operated points total production of 1.8 million barrels per day Saints, or the portion of Petrobras in the range of

1.100 million, "says Marcusso. In some blocks, the company operates with partners. 

By the end of the year operated production in the Santos Basin will be 130 thousand barrels per day, that volume will increase gradually, and should reach 1 million barrels per day in 2017. In

terms of comparison, the Campos Basin, a major producer, today provides between 1.6 million and 1.7 million barrels a day. 

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Position in Brazilian market

It is quite important to pinpoint HeliLogistic position in the market and analyze all opportunities that could arise: from new contracts to business opportunities like joint ventures, M&A or other creative FDI’s ties. How HeliLogistic will stand on the competition (cooperation between companies, exchange of contracts, subcontracts, etc.)Opportunities and strategies that will speed up the operations

Strains or critical paths on Petrobras actions are opening opportunities for newcomers to supply services or technological collaboration for specific projects. Plansal – Investment Plan for pre-salt development with the first bids for at least 10 FPSO’s will create new opportunities for operations and logistic.

Important Issues to Operate in Brazil

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Improve relationship with Petrobras, oil & gas segment and construction industry in Brazil

Research and Development Center (Petrobras CENPES) have several programs under development extending technological edges and frontiers, as an example the studies to create intermediary logistic platforms. HeliLogistic should take a look on cooperation opportunities. Being in origin of new projects it is a good strategy and benefit the future contracts and specifications (bids with similar spec’s)

Dealing with stakeholders to be better positioned in Petrobras new investments and projects

Governmental agencies, Federal and States governments, Chambers of Commerce, Industrial and Aeronautical Associations are key to keep HeliLogistic profile presented and to be known as new presence in the market.

Important issues to Operate in Brazil

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Considering the market conditions and the correct timing, the official presence of HeliLogistic in Brazil should follow some guidelines:

Integrating HeliLogistic

How the organization will be structured, understanding IT, business and communicating systems and necessities, financial, budget and general HeliLogistic procedures.Hiring and integrating team work, defining milestones, daily business activities and routines.

Beginning HeliLogistic Operations in Brazil

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Establishing business (1 year)

Establish the business plan and dimension the budget for the operation in Brazil, build the initial team (expertise and profile according to company procedures), general resources, planning for bid’s proposals and actions, general strategy.Corporation market conditions in Brazil (Benchmark and Market share).General operation and risk management, size up the business, strengthness and weakness.Take advantage of opportunities in other countries that could be practiced in Brazilian operations.Revise defined milestones, personnel analysis for the team according to provided status and general corporation procedures.

Beginning HeliLogistic operations in Brazil

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Attending the established business and strategic program.Team work organization and interaction with corporation staff in order to organize and to be introduced to current business.Manage troubleshooting and urgent matters on business.Improve relationship with the market and rapport to transmit the better understanding of business singularies in Brazil, Petrobras structure and energy sector.Study Possible joint ventures and due diligence for acquisitions within Brazilian Market.Strategic presence on Chambers of Commerce (USA, UK, Canada, France), Industry Associations, Trade Fairs and Conferences.

Beginning HeliLogistic operations in Brazil

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Beginning HeliLogistic operations in Brazil

As HeliLogistic turns official the appointment of a Country Manager in Brazil, one important duty will be to detach the presence of HeliLogistic in Brazil. Visits to Brasilia, Rio de Janeiro and Sao Paulo to make an official announcement that HeliLogistic will be investing in Brazil in projects beginning with oil & gas segment is key.Taking all the legal procedures to incorporate and import the new helicopters to Brazil already prepared for offshore operations.

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Acknowledgments

The market and data information are from selected presentations and author network information'sComments are based on general ideas from the authorInformation sources:

Petrobras Petrobras 2020 Strategic Plan Petrobras Investment Plan 2010-2014

ANP – National Petroleum Agency Ministry of Mining and Energy Thank you!

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