petrobras at glance
TRANSCRIPT
1
June, 2011
PETROBRAS AT A GLANCE
2
DISCLAIMER
FORWARD-LOOKING STATEMENTS:
DISCLAIMER
The presentation may contain forward-looking statements about future events within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are not based on historical facts and are not assurances of future results. Such forward-looking statements merely reflect the Company’s current views and estimates of future economic circumstances, industry conditions,company performance and financial results. Such terms as "anticipate", "believe", "expect", "forecast", "intend", "plan", "project", "seek", "should", along with similar or analogous expressions, are used to identify such forward-looking statements. Readers are cautioned that these statements are only projections and may differ materially from actual future results or events. Readers are referred to the documents filed by the Company with the SEC, specifically the Company’s most recent Annual Report on Form 20-F, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements, including, among other things, risks relating to general economic and business conditions, including crude oil and other commodity prices, refining margins and prevailing exchange rates, uncertainties inherent inmaking estimates of our oil and gas reserves including recently discovered oil and gas reserves, international and Brazilian political, economic and social developments, receipt of governmental approvals and licenses and our ability to obtain financing.
We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information or future events or for any other reason. Figures for 2010 on are estimates or targets.
All forward-looking statements are expressly qualified in their entirety by this cautionary statement, and you should not place reliance on any forward-looking statement contained in this presentation.
NON-SEC COMPLIANT OIL AND GAS RESERVES:
CAUTIONARY STATEMENT FOR US INVESTORS
We present certain data in this presentation, such as oil and gas resources, that we are not permitted to present in documents filed with the United States Securities and Exchange Commission (SEC) under new Subpart 1200 to Regulation S-K because such terms do not qualify as proved, probable or possible reserves under Rule 4-10(a) of Regulation S-X.
3
Incorporated in 1953 as government monopoly for all hydrocarbon activities. Little or no reserves, production or refining.
A history of organic, operated, self funded growth. Transition from a refiner of imported crude to integrated self sufficiency.
End of monopoly and opening of oil sector to international participants. Petrobras status as an operator, without privileged position.
Brazilian Government (directly and indirectly), owns 48% of Petrobras, and maintains control with 54% of voting shares.
Independent financial structure, with investment grade foreign currency ratings notched above the sovereign.
Listing on NYSE and SEC registration in 2000. Full quarterly disclosure in IFRS and U.S. GAAP. Market cap year-end 2010 of USD 237 billion.
PETROBRAS: AN INVESTMENT GRADE, PUBLICLY TRADED, MAJOR INTERNATIONAL OIL COMPANY
Incorporation in 1953 as government monopoly:
Reserves: 16.8 million boe
Production: 2.6 Thous. BPD*
Refining Cap: 41 Thous. BDP*
Discovery of shallow water offshore fields
Reserves:800 million BOE
Production:177 Thous. BPD
Refining Cap: 823 Thous. BDP
Discovery of mega fields in deepwater Campos Basin.
Last refinery completed ‘81
Production:467 Thous.BPD
Elimination of Monopoly, creation of oil law. Full deregulation by 2002.
Production:1 MM BPD oil in Brazil in ‘98
Brazil achieves self sufficiency in oil production
Discovery of Santos Pre-salt
19531953 19741974 19841984 19951995--88Listing on NYSE, with market cap of $ 31 billion
1st Investment grade rating
20002000 20102010USD 70 bncapitalization and acquisition of rights to produce 5 bn BOE
Production: 2MM BPD oil in Brazil
20062006--77
* 1954
4
o Brazilian government, by law, must maintain control. Does so with 64% of voting shares.
o Petrobras is the most actively traded ADR on NYSE in three years, and among all stocks, the 8th most actively traded stock. On Bovespa, Petrobras most actively traded stock, by shares and by volume.
Oct/1992 Jul/2000 After Aug/00offering
After Jul/01offering
Dec/2009 Dec/2010
SHAREHOLDINGS EVENLY DISTRIBUTED BETWEEN GOVERNMENT, AND BRAZILIAN AND FOREIGN OWNERS
Brazilian Non-Gov’tShareholders
Non-VotingVoting
Foreign ShareholdersNon-VotingVoting
Brazilian Gov’t *Non-VotingVoting
48%
20%
32%
40%
21%
39%
41%
23%
36%
45%
25%
30%
61%
18%
21%
55%
45%
*Includes: Republic, BNDES, BNDESPAR, Sov. Wealth Fund
5
FULLY INTEGRATED ACROSS THE HYDROCARBON CHAIN
Our Main Segments: Key Statistics and Market Positions (2010)
Adjusted EBITDA US$ 32.6 Billion1 (2010)
Exploration and Production
• 15.3 Bn boe of 1P(SPE)
• 2.3 mm boedproduction
•98.5% of Brazilian production
• 20% of global DW and UDW production
RTM (incl. Petrochemicals)
• 12 refineries (Brazil)
•2.0 mm bbld refining capacity
• 11.2 mty materials nominal capacity (2)
Distribution
• 7,306 service stations
•38.8% share of distribution volume
Gas and Power
• 9,239 km of pipelines
• Participation in 20 of the 27 gas discos in Brazil
• 5,943 MW of generation capacity
International
• 25 countries
• 0.7 Bn boe of 1P(SPE)
• 245 thous. boedproduction
• 281 thous. bbl/d refining capacity
•Petrochemicals, Gas & Power activities
RTM10% G&P
4%Distribution3%International6%
E&P77%
Biofuels
• 3 new Biodiesel Plants
• Ethanol: Opening new markets
• Responsible for 10% of Brazilian ethanol exports
Notes: (1) Includes Corporate and Elimination; (2) Through Braskem and Quattor
2010 Proven Reserves (SPE)15.986 billion boe
Shallow Water(0-300m)9%
Ultra-Deep Water(>1,500m)32%
Deep Water(300-1,500m)
50%Onshore9%
6
6,3
3,9
2,7 2,7 2,62,3
0,70,3
2,2
XOM RDS BP COP TOT BR CVX ENI STL
A WORLD‐CLASS INTEGRATED ENERGY COMPANY
2010 Refining Capacity (mm boe/d)
2010 Proven Reserves – SEC (bln boe)
Notes: Peer companies selected above have a majority of capital traded in the public market; * 2009Source: Evaluate Energy (barrels per calendar day, considering company % shareholding and including JVs) and Bloomberg
387
217 205 198
132 126100 90 77
XOM RDS PBR CVX BP TOT COP ENI STL
Market Cap (US$ bn) ‐ June 15th, 2011
XOM BP RDS CVX BR TOT COP ENI BG
Oil Gas
2010 Oil & Gas Production (mm boe/d)4.4
3.8
3.3
2.82.6
2.42.1
1.8
0.6
XOM BP RDS BR TOT CVX COP ENI STL
Oil Gas
24,8
17,8
14,212,7
10,7
8,36,8
5,4
10,6
* * **
7
LONG HISTORY OF TECHNOLOGICAL AND OPERATIONAL LEADERSHIP IN DEEPWATER
Deepwater Production2009 Gross Global Operated¹
Offshore Production Facilities
100
5
8
8
9
10
12
12
13
15
15
45
0 20 40 60 80 100
Others
ENI/Agip
ConocoPhillips
CNOOC
Total
Anadarko
Chevron
BP
ExxonMobil
StatoilHydro
Shell
Petrobras
FPSO Semi Spar TLP OtherPetrobras operates 20% of global deepwater production
1977Enchova410ft125m
1988Marimbá1,610ft491m
1994Marlim3,370ft1,027m
1997Marlim Sul5,600ft1,707m
2003Roncador6,180ft1,884m
2009Lula
7,125ft2,172m
Source: PFC EnergyNote: (1) These 15 operators account for 98% of global deepwater production in 2009. Minimum water depth is 1,000 feet (about 300 meters)
PBR20%
ExxonMobil13%
Shell12%BP
12%
Statoil12%
Chevron7%
Total7%
BG4%
Anadarko3%
Other10%
8
1.500 1.684 2.004
2.9803.950
274334
623
1.109
2 5 2
176
203
14 416 33 5
9 610 1
128
120
2 2
2002 2005 2010 2014 2020Oil Production - Brazil Gas Production - Brazil Oil Production - International Gas Production - International
GROWING PRODUCTION FULLY SUPPORTED BY DISCOVERIES
Pre‐Salt
Petrobras Total Production (000 b/d)
241
12,131
Proven Reserves 2002
14,913
Proven Reserves 2005
15,986
Proven Reserves 2010
5,000
Transfer of Rights
29,000‐31,000
Total Resource Base
HigherEstimates9,600
Lower estimates8,100
• 18th consecutive years of fully replacing the production (229% in 2010)
• R/P ratio 18.4 years (SPE Criteria)
1,078
1,8092,217
2,583
5,382
3,907
4.5% p.y. 7.6% CAGR
... ...
Potential Recoverable (Lula, Cernambi, Iara, Guará and
Whales Park)
Petrobras Total Reserves (bln boe) ‐ SPE Criteria
9
8.63
4.40
3.182.79 2.70 2.61 2.42 2.36 2.33 2.20 1.94 1.94 1.83 1.74 1.61 1.58
‐
12
3
45
6
7
89
10
US
China
Japa
n
India
Brazil 2
020
Russian
Fed
eration
Saud
i Arabia
German
y
Brazil 2
014
South Korea
Cana
da
Brazil 2
009
Mex
ico
Fran
ce
Iran
United Kingd
om Italy
2009 Total Oil Consumption by Country (mmb/d)
BRAZIL AS A LARGE AND GROWING EMERGING MARKET
Source: BP Statistical Review 2010, PFC EnergyNote: * Estimates for 2014 and 2020
Brazil is world’s tenth‐largest oil consumer.
Brazil oil consumption growing at 2.38% p.a;
OECD oil consumption growing at ‐0.04% p.a.
18.7
Total Oil Consumption mb/d (index)
9
95
100
105
110
115
120
125
130
1999 2001 2003 2005 2007 2009
Brazil US OECD World
* *
10
DOMINANT POSITION IN THE BRAZILIAN MARKET ENHANCES CREDIT QUALITY
Upstream Operations Downstream Operations
Logistical Synergies Stable Cash FlowsGrowing MarketDominant Position
•Leadership in all segments of the value chain
•Market position ensures economies of scale and efficient business model
•Strong organic demand in one of the fastest growing global markets
•Attractive domestic market opportunities for upstream, downstream and other energy segments
•Main oil producing basins and refining located in S.E. Brazil, near GDP centers
•Logistical infrastructure fully developed
•Diversified cash flows with several growth drivers
•Reduced volatility of cash flows due to ability to smoothen prices fluctuations in the domestic market
PetrobrasOther Companies
Existing PipelinesRefineriesMarine Terminal In Land Terminal
11
PRE‐SALT SUPERGIANTS DISCOVERIES:LOGISTICAL SYNERGIES
Logistical SynergiesLogistical Synergies:Analogy with the U.S.
Logistical Synergies:Logistical Synergies:Pre‐salt giant oil fields discovered close
to the market
Source of the base map: Google
12
20
70
120
170
220
1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11
ARP USA ARP Petrobras
R$/bbl
o Oil price volatility in the quarter (Brent went from US$ 86,48 in the 4Q10 to US$ 104,97 in the 1Q11) due to geopolitical issues in North Africa, especially in Libya.
AVERAGE REALIZATION PRICE
94
747370
3249
6472
80
105
867778
44
5968
75 76
20
40
60
80
100
120
1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11
Petrobras Oil Price (Average) Brent (US$/bbl)
US$/bbl
1Q11 AVERAGEARP Petrobras: 163.58ARP USA: 180.54
2010 AVERAGEARP Petrobras: 158.26ARP USA: 150.67
13
OPERATING RESULTS – BRAZILIAN REFINING
Thous. Barrels/day %Crude Oil Processed Oil Products Production Utilization Factor and
Brazilian Oil Throughput
(*) Utilization Factor reached 92.1% in March/2011
(*)
682 727
73 92353
390
239244
418424
0
300
600
900
1.200
1.500
1.800
2.100
1Q10 1Q11
Diesel Jet Fuel Gasoline
Fuel Oil Others
6.5%
6.4%
1,7651,877
1,397 1,520
341332
1,7381,852
-
200
400
600
800
1.000
1.200
1.400
1.600
1.800
2.000
1Q10 1Q11
Imported Oil ProcessedBrazilian Oil Processed
86.2
89.8
80.482.1
60
65
70
75
80
85
90
95
100
1Q10 1Q11
Utilization Factor - Brazil
Brazilian Oil Throughput
Thous. Barrels/day
o Increase in crude oil processed in the 1Q11 due to revamps and refining expansions during 2010. Schedule stoppages in the 1Q10 also contributed to the increase.
14
Business Plan and Financial Strategy
15
53%
33%
2%1%2%8%
1%
E&P
RTM
G&P
Petrochemicals
Petrobras Corporate Strategy to 2020
Brazil95%
International5%
US$ 224.1 billion
Total Capital Investment Plan2010‐2014
Focus in oil, oil products, petrochemicals, gas &
energy, biofuels, refining and distribution with an
integrated and sustainable business model
Oil & gas production growth in a sustainable manner
that will approximately double our production in the
next 10 years
Integrated Growth, Profitability and Sustainability
Be recognized as a benchmark among integrated energy companies
Consolidate leadership in the Brazilian market of
natural gas, electricity generation and gas chemicals
BUSINESS PLAN 2010‐14: INCREASED INVESTMENT FOR INTEGRATED OPERATIONS IN BRAZIL
Distribution
Biofuels
Corporate
16
PROJECTED FUNDING NEEDS FOR 2010‐2014 BUSINESS PLAN
● $26.6 billion of equity and $13 billion of debt raised during 2010
● $56 billion of debt still to be contracted, of which $29 (1) are amortizations
● 2011‐2015 Business Plan Update expected late Q1’11/early 2Q’11
PROJECTED Operating Cash Flow(2010 – 2014)
OCF(after dividends)US$ 155 billion
Funding(debt + equity)US$ 96 billion
InvestmentsUS$ 224 billion
CashUS$ 11 billion Amortization
US$ 38 billion
* Including Capitalization and excluding amortization of US$38 billion
Principal Assumptions
FX Rate (R$/US$) 1.78
Brent for Funding (US$/bbl)
2010 – 76
2011 – 78
2012– 82
2013 – 82
2014 – 82
Projected Investments (US$ bn) 224
Projected Net Cash Flow (After dividends) (US$ bn)
155
Net Total Capt. (US$ bn) 58*
Leverage Up to 35%
Average Realization Price (R$ barrel) 163
Notes: (1) Considers 2010 amortization according to 2010‐14 Strategic Plan with FX rate of R$ 1.87/US$
17
21.077 22.664 28.220 24.920 28.495
‐5.032
17.9125.9935.222
‐3.252
27.472
2006 2007 2008 2009 2010
OCF Net Debt Capitalization
14.47020.768
29.87435.134
45.078
6.780
3.860
7.712
3.144
4.747
1.551
416
2006 2007 2008 2009 2010CAPEX Dividends Aquisition
17,82527,886 34,213
18,03026,179
34,621
42,846
42,832
50,935
USGAAP
51,858
INCREASING INVESTMENTS LEADING TO AN ORGANIC GROWTH
Sources (US$ million)
Uses (US$ million) 1
18
-5.000
10.00015.00020.00025.00030.00035.00040.00045.00050.000
OCF 2010 Capex 2009 Capex 2010 MaintenanceCapex (Est.)
E&P Downstream Gas & Energy Others
US$ MM
35,134
45,078
16,000
CASH FLOW SUPPORTS MAINTENANCE PLUS GROWTH
28,495
Assumptions to Maintain Existing Capacities:• $12 per barrel to replace 830MMBBL´s of production
• $1.5 bn. ‐ Exploration • $1.5 bn. ‐ Refinery maintenance•$1.5 bn. ‐ Gas & Power maintenance• $1.5 bn. ‐ Other Maintenance
19
GROWING AND STABLE CASH FLOW GENERATION
Adjusted EBITDA (US$ bn) and EBITDA Margin (%) Adjusted EBITDA Breakdown per Segment (US$ bn)*
25.3
31.1
29.0
32.6
28.9%26.3%
31.5%
2007 2008 2009 2010
25.0
35.4
19.3
30,5
5.2
-1.6
11.0
1.3
0.8
1.4
1.1
-0.8‐0.2
0.9
2.2
0.5
0.2
1.1 4.2
1.7
2007 2008 2009 2010
E&P RTM Distribuition G&P International
27.2%
Note: (*) Calculated using the average exchange rate
20
Net Debt / Capitalization (%)
Debt levels in accordance to the targets established by the Company
Net Debt / Capitalization:
25% ‐ 35%
25%
35%
2.5x
Limit established for Net
Debt / EBITDA:
2.5x
1
28%30%
32%34%
16% 17% 17%
0%
10%
20%
30%
40%
3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11
1,01,2
1,4 1,5
1,0 1,0 1,0
0,0
0,5
1,0
1,5
2,0
2,5
3,0
3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11
Net Debt/ EBITDA
PETROBRAS’ FINANCIAL PLANNING BASED ON MAINTAINING INVESTMENT GRADE RATINGS WITH PRUDENT LEVERAGE
21
PETROBRAS Exploration and Production:A Growth Perspective
PETROBRAS Exploration and Production:A Growth Perspective
22
20
30
40
50
60
70
80
90
100
110
120
2000 2005 2010 2015 2020 2025 2030
(Em
MM
bpd
)
Source: IEA World Energy Outlook 2010, EIA International Energy Outlook 2010
WORLD DEMAND FOR OIL
GLOBAL LIQUIDS DEMAND
Existing production
Challenges ofsupply
2020
2030
43
65
48
78
MM bpd
MM bpd
o Perspectives: investments in oil production will be necessary
• Incorporation of new discoveries
• Alternatives energy source
• Increase of energy efficiency
Capacity additionrequired
Project decline in the production
23
MORE OIL FROM FEWER PRODUCERS
IEA World Energy Outlook 2010
24
RESERVES IN ULTRA‐DEEP WATER CAN BE DEVELOPED AT A RELATIVELY LOW COST
Source: IEA – Outlook 2008
Expected Costs of Production
Prod
uction
costs (U
S$/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 MENA
Other convention
al oil
CO₂‐
EOR
EOR Arctic
Heavy oil and
bitumen
Oil Shales
Gas to liquids
Coal to liquids
Petrobras expected maximum break‐even cost
25
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
5500
600020
00
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Source: PFC Energy and Company reports
OIL AND GAS PRODUCTION TARGETS: SUPERMAJORS AND PETROBRAS
ExxonMobil: Production growth rate ~3-4% in 2010; ~2-3% p.y. up to 2013
BP: Production growth rate ~1-2% p.y. up to 2015
Shell: ~3.5 MM boe/d in 2012 and ~3.7 MM boe/d in 2014
Petrobras: 3.9 MM boe/d in 2014 and 5.4 MM boe/d in 2020
thou
sand
boe
/d
Chevron: production growth rate ~1% p.y. between 2010-2014 and 4.5% p.y. between 2014-2017
Petrobras has the highest growth rate target of the industry
26
OILFIELDS DISCOVERED/DEFINED IN 1984‐2009 IN THE SOUTHEASTERN OFFSHORE BASINS
27
Statecontrolled
Exploration risk contractsPrivate oil companies competing with Petrobras
E&P Petrobras monopoly in
Brazil
CONTINUOUS AND SUSTAINABLE GROWTH:PROVEN RESERVES
E&P Petrobras monopoly in Brazil E&P open market in BrazilBrazilian Oil & Gas Brazilian Oil & Gas regulatory frameworkregulatory framework
San
tos
Basi
n: P
re-s
alt s
uper
gian
ts
State owned (100%)Petrobras ownershipPetrobras ownership
LULATechnological jumpsTechnological jumps
Campos Basin
28
CONTINUOUS AND SUSTAINABLE GROWTH:DOMESTIC OIL PRODUCTION HISTORY AND TARGETS
ONSHORE OFFSHORE ≤ 300m OFFSHORE > 300m Targets
-
500
1.000
1.500
2.000
2.500
3.000
3.500
4.000
4.500
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2005
2005
2006
2007
2008
2009
2014
2020
Year
Thou
sand
s bp
d 2,980
3,950
220653
1,971
1,271
Growth rate: 10% per year in the last 30 yearsGrowth rate: 10% per year in the last 30 years
7%7%
29
OVERVIEW OF DOMESTIC E&P
Reserves (at December 31, 2010)
• Proven reserves of 15.283 billion boe (SPE)
• Reserve life of 19,2 years
• Reserve Replacement of 240%
Production (2010)• 2,004 thousand bpd oil
Exploratory Area (2009)• 137.1 thousand km²
(Petrobras + Partners)• 194.8 thousand km²
(Other Companies)Total: 331.9 thousand km².
Exploratory Contracts 107 118 225 182 407
Evaluation Plans 15 18 33 0 33
Production 283 35 318 38 356
405 171 796Total 576 220
Concessions (Jan., 2010)
Total Brazil100%
W.I Parnerships TotalOther
Companies
Petrobras Concessions
PetrobrasOther Companies
30
PROVEN RESERVE PROFILE
15% 6%
34%45%
Oil + Condensate
Proven Reserves as of Dec/2010 (SPE/ANP)(15.28 billion boe)
DevelopedProven Reserves
UndevelopedProven Reserves
< 22º API(heavy)
Gas > 31 º API (light)
22 – 31 º API(intermediate)
84%
5%11%
39% 61%
Associated Gas
Non-Associated Gas
31
2,302 2,385
245 242
OIL AND GAS PRODUCTION – 1Q11 VS 1Q10
341
2,0441,985
317
2,3022,627
1Q10 1Q11
2,547 2,385
(tho
usbp
d)
1Q10 1Q11
Total Production (daily average) Brazilian Production (daily average)
Brazil
International
Oil and NGL
Natural Gas
o Increase in production due to ramp‐up of installed units in 2010 in Campos Basin, Lula Pilot, and EWTs of Tiro, Sidon and Guará;
o Start‐up of new wells in Akpo and Agbami (Nigeria) partially offset by decline of mature fields in Argentina and Colombia;
o Investments in infrastructure and new NG production units contributed to a supply growth of 8% when compared 1Q11 VS 1Q10.
4%
‐1%
+3%
3%
8%
+4%
32
P‐57180 th bpd
2 million m3/d gas
Cidade de Angra dos Reis100 th. bpd
5 million m3/d gas
Guará EWT30 th. bpd
PRODUCTION GROWTH
2,1002,004
2010 2011E
Brazilian production
Aruanã EWT
P‐56Marlim Sul
Main assumptions for reaching 2011 production target
o Forecast of 60 new offshore wells, which will add to the annual daily average:
i) 120 th. barrels from development wells in existing platforms (Caratinga, Marlim Sul, MarlimLeste and Roncador concessions)
ii) 55 th barrels from P‐57
iii) 30 th. barrels from P‐56 (start‐up in July/2011)iv) 30 th. barrels from Campos Basin (Marlim, Albacora and Aruanã EWT)
v) 30 th. barrels from Santos Pre‐salt
Main new projects2010
Main new projects2011
SS‐11 (Tiro EWT)30 th. bpd
Uruguá‐Tambaú35 th. bpd
10 million m3/d gas
Lula NE EWT
Mexilhão
Carioca NE EWT
Cernambi (Iracema) EWT
+/‐ 2.5%
(th. bpd
)
33
2.980
2.004
1200
1600
2000
2400
2800
2010 2011 2012 2013 2014
Cernambi (Iracema) EWT
15.000 bpd
Cernambi (Iracema) EWT
15.000 bpd
Guará EWTDynamic Producer
30.000 bpd
Guará EWTDynamic Producer
30.000 bpd
Th. bpd
Tupi PilotCidade de Angra dos
Reis100.000 bpd
Tupi PilotCidade de Angra dos
Reis100.000 bpd
Cachalote andBaleia Franca
FPSO Capixaba100.000 bpd
Cachalote andBaleia Franca
FPSO Capixaba100.000 bpd
Marlim SulSS P-56Module 3
100.000 bpd
Marlim SulSS P-56Module 3
100.000 bpd
JubarteFPSO P-57180.000 bpd
JubarteFPSO P-57180.000 bpd
Baleia AzulFPSO Cid. de
Anchieta100.000 bpd
Baleia AzulFPSO Cid. de
Anchieta100.000 bpd
RoncadorSS P-55Module 3
180.000 bpd
RoncadorSS P-55Module 3
180.000 bpd
Papa-Terra TLWP P-61 &FPSO P-63150.000 bpd
Papa-Terra TLWP P-61 &FPSO P-63150.000 bpd
Guará Pilot FPSO120.000 bpd
Guará Pilot FPSO120.000 bpd
Pre‐salt
Whales ParkFPSO P-58180.000 bpd
Whales ParkFPSO P-58180.000 bpd
Lula NE Pilot FPSO
120.000 bpd
Lula NE Pilot FPSO
120.000 bpd
Tiro/SidonFPSO
100.000 bpd
Tiro/SidonFPSO
100.000 bpd
Aruanã EWTCidade Rio das Ostras
15.000 bpd
Aruanã EWTCidade Rio das Ostras
15.000 bpd
Tiro EWTSS-11
30.000 bpd
Tiro EWTSS-11
30.000 bpd
MexilhãoMexilhão
AruanãFPSO
100.000 bpd
AruanãFPSO
100.000 bpd
GuaiamáFPSO
100.000 bpd
GuaiamáFPSO
100.000 bpd
Uruguá/TambaúFPSO Cidade de
Santos35.000bpd
Uruguá/TambaúFPSO Cidade de
Santos35.000bpd
Natural Gas
MAIN PROJECTS SCHEDULED FOR 2010‐2014
Intermediate/Heavy Oil
4 EWTPre-salt4 EWTPre-salt
3 EWTPre-salt3 EWTPre-salt
2 EWTPre-salt2 EWTPre-salt
EWT = Extended Well Test
Juruá/AraracangaJuruá/Araracanga
CanapuCanapu
Carimbé EWTP-48
24.000 bpd
Carimbé EWTP-48
24.000 bpd
CernambiFPSO
150.000 bpd
CernambiFPSO
150.000 bpd
Guará NorteFPSO
150.000 bpd
Guará NorteFPSO
150.000 bpd
RoncadorFPSO P-62 (Mod. 4)
100.000 bpd
RoncadorFPSO P-62 (Mod. 4)
100.000 bpdLula NE EWT30.000 bpd
Lula NE EWT30.000 bpd
Carioca EWT15.000 bpd
Carioca EWT15.000 bpd
Carioca NE EWT15.000 bpd
Carioca NE EWT15.000 bpd
34
DISTRIBUTION OF UPSTREAM REVENUES
Distribution of the Realization Price of a Barrel of Domestically Produced Oil
$ per Barrel Realization Price % Share of Realization Price
Net Income
Other COGS DD&A
R&D
Income TaxLiftingSG&A Exploratory Costs
OtherGovernment Take
-10
0
10
20
30
40
50
60
70
80
2001 2002 2003 2004 2005 2006 2007 2008 2009 9M10
-20%
0%
20%
40%
60%
80%
100%
2001 2002 2003 2004 2005 2006 2007 2008 2009 9M10
35
175.30
147.02
134.51137.23 140.16
LIFTING COST IN BRAZIL
16.95
26.87
17.54
26.37
18.46
24.26
17.34
26.13
19.00
31.66
1Q10 2Q10 3Q10 4Q10 1Q11
50.6643.82 43.91 42.72 43.47
104.97
86.48
76.8678.3076.24
9.40
14.33
9.79
14.71
10.60
14.07
10.29
15.29
11.38
19.10
1Q10 2Q10 3Q10 4Q10 1Q11
30.48
23.73 24.50 24.67 25.58
o 1Q11 vs. 4Q10 Comparison:
o Lifting cost increased due to higher expenses with well intervention and scheduled stoppages;o Higher government take due to higher reference oil price.
R$/barrel US$/barrel
Lifting CostBrent Government Take
36
New Horizons, New Frontiers,
New Technologies
37
PRE‐SALT JOINT VENTURES
EXX (40%), HES (40%) e BR (20%)
Blocks ConsortiumBMS-8
BMS-9
BMS-10BMS-11
BMS-21BMS-22
BMS-24
BR (66%), SH (20%) e PTG (14%)
BR (45%), BG (30%) e RPS (25%)
BR (65%), BG (25%) e PAX (10%)BR (65%), BG (25%) e PTG (10%)
BR (80%), PTG (20%)
BR (80%), PTG (20%)
Blocks ConsortiumBC-60 BR (100%)
JubarteCachaloteBalia FrancaBaleia AzulBaleia Anã
Shore Distance = 300 kmTotal Area = 15.000 km2
Shore Distance = 60 kmTotal Area = 3.000 km2
• 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%)
1.1‐2 bi boer
JUBARTEESS-103 CHL-4
BFR-1
BAZ-1
1-2 Bi boer
BMBM‐‐SS‐‐1111(Tupi)(Tupi)
8,3 bi boer
(Cernambie Lula)
38
South CernambiSouth South CernambiCernambi
South GuaráSouth South GuarGuaráá
Iara HorstIaraIara HorstHorst
Northeast Carioca
Northeast Northeast CariocaCarioca
South LulaSouth LulaSouth Lula
IG1 Lula PilotIG1 Lula PilotIG1 Lula Pilot
Under Concession
Transfer of Rights
2010 Accomplishments
38
PRE‐SALT ‐ SANTOS BASIN
** Wells Petrobras: Drilling or completion or test.
• 9 rigs currently operating in the Pre‐Salt Cluster (1 ANP), up to 3 new rigs to arrive.
• 4 new wells with drilling concluded, up to 20 additional wells to be drilled.
• Start‐up of Northeast Lula Early Production System (BM‐S‐11): first semester 2011.
• Start‐up of Northeast Carioca Extended Well Test (BM‐S‐9): mid 2011.
• Production start‐up of South Cernambi Early Production System (BM‐S‐11): late 2011.
• Transfer of rights to produce 5 billion boe in specific areas of the pre‐salt that are not under concession.
• Start up of FPSO Cidade de Angra dos Reis in Lula (Pilot Project).
• Start up of Guara Extended Well Test.
• 8 more wells drilled, taking Santos Basin Pre‐Salt total to 20 wells drilled.
2011 Activities
Libra (ANP)Libra (ANP)Libra (ANP)
North GuaráNorth North GuarGuaráá
P7 Lula PilotP7 Lula PilotP7 Lula Pilot
39
‘
SANTOS BASIN PRE‐SALT UPDATE
o Approval of chartering of 2 new FPSOs for the Guará‐Norte and Cernambi projects;
o New discovery of good quality oil in the pre‐salt reservoirs of block BM‐S‐9, informally known as Carioca Nordeste;
o Discovery of a new accumulation of good quality oil in Parati (BM‐S‐10), named Macunaíma;
o 8 new drilled wells in 2011, taking Santos Basin Pre‐Salt total to 28 wells drilled;
o PLANSAL Revision;
o Start up of Lula Nordeste EWT;
o Restart of Guará EWT;
o The current fleet of drilling rigs (6) will increase to 11 by the and of the year.
40
BIDs 2 and 3: Acquisition of Santos Basin Pre‐Salt blocks
PRE‐SALT ACCOMPLISHMENTS TIMELINE
20002000 2002 2003 2004 20052005 2006200620012001 20072007 20082008
20092009
Largest seismic acquisition andinterpretation in the world
1st wildcatwell: Parati
Next exploratory results: Carioca, Tupi (5 to 8 Bi boe ) and
Iara (3 to 4 Bi boe)
20102010
Information gathering• Appraisal well• Analyze reservoir flow• High resolution seismic, reservoir coring, well testing, …• Small scale production (EWTs)• Material analysis vs. CO2
2017> 1 M bopd
1st phase of definitive development• Use of consolidated or rapidly‐consolidating technologies to achieve production targets• Generate cash‐flow to support Phase 1b• First 2 FPSOs to be chartered (2013‐2014):‐ Oil Production: 120,000 bpd‐ Gas Compression: 5 M m³/d
• Additional 8 FPSOs (2015‐2016)• Process plant under study:‐ Oil Production: 150,000 bpd‐ Gas Compression: 5.5 M m³/d‐Water‐Alternating‐Gas injection capability
2nd phase of definitive development
• Significant production increase• Innovation acceleration• Massive use of new technologies specially tailored for Pre‐Salt conditions
PHASE 1b
1.8 MM bopd
2020
Lula Pilot• 100.000 bopd and 5 M m³/d gas• CO2 separation and reinjection • Wells: 3 injectors and 5 producers
Tupi Extended Well Test
... ...20132013...
PHASE 1a
PHASE 0
41
18%26%
56%Gathering Completion + Drilling Units
CAPEX DISTRIBUTION:PRE‐SALT VS. CAMPOS BASIN
33.3%
33.3%
33.3%
Gathering Completion + Drilling Units
PrePre--salt salt CAPEX DISTRIBUTIONCAPEX DISTRIBUTION
Deepwater Projects in Campos Basin*Deepwater Projects in Campos Basin*CAPEX DISTRIBUTIONCAPEX DISTRIBUTION
* Generic example, considering that these rates can change among the different existing projects in Campos Basin
o Additional drilling and completion cost in the pre-salt compared with an generic deepwater project in Campos basin can be partially or fully offset by higher quality and quantity of oil that is expected in the pre-salt area.
42
5 BILLION BOE BASE IN CONTIGUOUS AND ADJACENT FIELDS, INCREASING SCALE AND REPEATABILITY
Transfer of Righs Aquisition
Volume 5,0 billion boe
ConcessionArea
3,865 km2 in 7 blocks
Average Price US$ 8,51 / boe
Initial Value US$ 42.5 billion / R$ 74.8 billion
Duration40 years, extendable for additional 5 years. 4 year
exploration period
• 2C Contingent Resource
• Total Potential Oil and Condensate Quantities:
1,632 MM boe
• Total Potential Sales‐Gas Quantities:
1,664 Bn ft3
• Brent Price: US$ 79.23 bbl
• Gas Price: US$ 4.27 thousand ft3
• 3 FPSOs, with 150 thousand BOPD processing capacity
D&M Assumptions for Franco:*
(10,000)
10,000
30,000
50,000
70,000
90,000
110,000
tt+
2t+
4t+
6t+
8t+1
0t+1
2t+1
4t+1
6t+1
8t+2
0t+2
2t+2
4t+2
6t+2
8t+3
0t+3
2
Beginning of Production
Positive Cash Flow
* Nominal values
Forecast ‐ Accumulated Cash Flow from Franco’s field (2C)(US$ MM)
43
There will be no regulatory changes in the areas under concession, including the pre‐salt area already granted
Petrobras 100%
Petrobras Operator
Other companies trough Bidding Process
Transfer of Rights with compensation
Production Sharing
AgreementPre-salt
andStrategic Areas
NEW REGULATORY MODEL
Other AreasCurrent
Concession Model
44
PRODUCTION SHARING AGREEMENTS
Profit Oil
Cost Oil
Companies
Government
Production sharing agreements
o Petrobras will operate all blocks under this regime, with a minimum stake of 30%
o Consortium between Petrobras, Petro-sal and the winning bidder will be managed by the Operational Committee
o Petrobras will be able to participate in the bidding process to increase its stake
o The winning bidder will be the company that offers the highest percentage of “profit oil” for the Brazilian Government
o Petrobras will have to follow the same percentage offered by the winning bidder
o The Brazilian Government will not assume the risks of the activities, except when it decides to invest directly
o Prior to contracting, the Government may evaluate the potential of the areas and may contract Petrobras directly
Graphs are showing only hypothetical values
45
CAMPOS AND SANTOS BASINS:CURRENT & FUTURE PRODUCTION
Albian carbonates
Campos BasinCampos Basin Santos BasinSantos Basin
Pre-salt carbonatesPre-salt carbonates:Supergiants oil fields
PostPost--salt salt turbiditesturbidites::current productioncurrent production
EastWest
Geological cross section in Santos Basin used to explain petroleum systems of Santos and Campos basins
Near-term production increase Mid and long-term production increase
46
DOMESTIC OILFIELDS DISCOVERED IN 2009/2010:ALBIAN CARBONATES IN CAMPOS BASIN
DiscoveryDiscovery BlockBlock Oil GravityOil Gravity((ººAPI)API)
Recoverable VolumeRecoverable Volume(MM bbl)(MM bbl)
Aruanã BM‐C‐36 exploratory block 28 280
Jurará Marlim Sul ring fence 27350
Muçuã Marlim Sul ring fence 27
Jabuti Marlim Leste ring fence 28 345
Pampo Pampo ring fence 20 25
Carimbé Caratinga ring fence 29 105
TOTALTOTAL 1.1051.105
PostPost--salt salt AlbianAlbian carbonatescarbonates
47
DOMESTIC OILFIELDS DISCOVERED IN 2009/2010:PRE‐SALT CARBONATES IN CAMPOS BASIN
PrePre--salt carbonatessalt carbonates
‐‐Marlim Leste ring fenceTracajá
29Caratinga ring fenceCarimbé
light oil
light oil
29
28
Oil GravityOil Gravity((ººAPI)API)
350Albacora Leste ring fenceAlbacora
showsAlbacora Leste ring fenceCREALB
Recoverable VolumeRecoverable Volume(MM bbl)(MM bbl)
1,130 (at least)1,130 (at least)TOTALTOTAL
380Marlim ring fenceBrava
360
40Barracuda ring fenceBarracuda
BlockBlockDiscoveryDiscovery
48
NEW TECHNOLOGIES TO INCREASE RECOVERY FACTOR
TLWP
Subsea ChristmasTree.
“Piggy-back”(Marimbá; Barracuda)
SBMS - SubseaMultiphase Pumping
System(Marlim)
RWI – RawWater Injection
(Albacora)
Oil WaterSubsea
Separation(Marlim)
Multifractured Well(Bonito)
4D Seismic(Marlim; Marlim Sul;
Albacora)VASPS
CAISSON
Vertical Annular Separation and Pumping System
(Congro; Malhado; Corvina)
ESP in a skid on the sea-bed(Espadarte-Fase III)
(Papa-terra)
(Parque dos Temperos; )
Bonito
2009 2010 2011 2012
49
1.90.2
0.9
29%
25%
46%
HSE IT R&D
Petrobras Investments in HSE, IT and R&D (2010‐14)
US$ 11.4 Billion
INVESTING IN TECHNOLOGY PARTNERSHIPS
Petrobras´s partnerships with 120 universities and research centers has created one of the greatest concentrations of energy research in the world
Expansion of CENPES makes it one of the largest research center in the world
In the Technological Park of the Rio de Janeiro Federal University, four R&D centers for major equipment and services suppliers is currently under construction :
Others companies are schedule to come to Brazil to develop technological centers:
•TenarisConfab
• Vallourec & Mannesman
•Weatherford
•Wellstream
• FMC Technologies
• Usiminas
• Schlumberger
• Baker Hughes
• Cameron• General Electric• Halliburton • IBM• Technip
50
PETROBRAS E&P STRATEGY:CURRENT & FUTURE PRODUCTION
Tertiary and Upper CretaceousTurbidites
Albian carbonates
Salt
Pre-salt carbonates
SantosCampos
E&P portfolio has around 3,000 projectsE&P portfolio has around 3,000 projects
1• Maintain production:
• Implement full development of the main production concessions.
• Decrease decline in existing fields.• Operational maintenance in existing Production Systems.• Continuous exploration effort.
1
2
2 • Explore, appraise and start production mostly in existing Production Systems (inside existing ring fences).
3
3 • Explore, appraise and start production mostly in existing Production Systems (inside existing ring fences).
4
4 • Explore & appraise. Extended Well Tests in main discoveries. Start production of pilot projects. Declare commerciality. Reduction of the project implementation time: equipments standardization, arrival of new drilling rigs, replicante FPSOs.
51
INTERNATIONAL
52
2009 ‐ Brazil ‐ Production: • Oil and LNG: 1.971 thous. bpd• Natural Gas: 317 thous. bpd • Oil Products: 1.823 thous. bpd‐ Proven Reserves: 14,2 million boe(SPE Criteria)‐ Distribution market share: 38.6% ‐ Ethanol Exportation: 362.000 m³
2009 ‐ Brazil ‐ Production: • Oil and LNG: 1.971 thous. bpd• Natural Gas: 317 thous. bpd • Oil Products: 1.823 thous. bpd‐ Proven Reserves: 14,2 million boe(SPE Criteria)‐ Distribution market share: 38.6% ‐ Ethanol Exportation: 362.000 m³
52
53
INTERNATIONAL STRATEGY:REDUCED ALLOCATION OF CAPEX, WITH FOCUS ON UPSTREAM
o Ramp up of existing developments, stable production in long term
o Reduced investment and production a reflection of greater opportunities in Brazil
o Development focus: Gulf of Mexico, West Coast of Africa and Latin America
o Exploration focus: Atlantic Project, West coast of Africa, aligned with domestic E&P
o Reduced emphasis on refining
o Reduced emphasis on LNG, alignment with domestic Gas and Power segment
RTCP615 5%
E&P10,330 90%
CORPORATE123 1%G&E
186 2%
DISTRIBUTION221 2%
INTERNATIONAL PRODUCTION OF OIL AND GASINTERNATIONAL PRODUCTION OF OIL AND GASBP 2010 BP 2010 -- 20142014
INVESTMENTS 2010INVESTMENTS 2010--2014: 2014: US$ 11.5 biUS$ 11.5 bi
Thousand bpd
239 304
146 176 20393 128 120
0
200
400
600
800
2010 2014 2020
Oil and NGL Natural Gas BP 2009-2013 Target
323
632BP 2009-2013
Target
- 49%
54
CASCADE ‐ CHINOOK DEVELOPMENT
Cascade
Chinook
FPSOShuttleTanker
FSHR
Tree
Control Umbilical Power
Umbilical
Flow line
Gas Export Pipeline
Manifold
FIRST OIL:2011Petrobras America operated fields - Water Depth ~ 2,500 meters (8,200 feet).
US regulators approved Petrobras plans to bring first FPSO (*) to the US Gulf of Mexico.
Technologies new to US Gulf of Mexico, including disconnectableturret buoy, allowing the vessel to move offsite during hurricanes, and transportation via shuttle tanker.
(*) FPSO – Floating, Production, Storage and Offloading facility. Petrobras has an extensive experience in the use of FPSO with fifteen units currently under operation offshore Brazil.
Source: Petrobras America inc
55
6 blocks (1 in production)Operator in prolific Block 18 with 30% stake (First oil: 2010)
INTERNATIONAL – WEST AFRICA
AGBAMI (PB 13%, Operator: Chevron):First oil: July 2008 / Peak:232,000 bpd in 2009 (total)
AKPO (PB 20% - Operator: Total):First oil: March 09 / Peak:175,000 bpd in 2009 (total)
6 blocks (1 in production)Operator in prolific Block 18 with 30% stake (First oil: 2010)
Petrobras Stake in Akpoand Agbami: 64,000 bpd by end of 2009.
Proven Reserves (SEC -2008): 131,3 MM boe(% Petrobras)
56
Drilling Rigs and Critical Resources
57
USING CONTRACTS AND LEASES TO SECURE NEEDED DRILLING ASSETS
195622672166TOTAL
0101042500‐3000 m WD
0204092000‐2500 m WD
1718181500‐2000 m WD
1101121131000‐1500 m WD
292929500‐1000 m WD
429434443Floating rigs
425251Jack‐up rigs
831936944Offshore, by water depth (WD)
112513311222Onshore
OwnedLeasedOwnedLeasedOwnedLeased
200820092010
On December 31
Drilling Units
58
DRILLING RIGS UNDER CONSTRUCTION AVAILABLE IN THE MARKET
Updated: Oct/2010
59
CONSTRUCTION CYCLES (SHIPS AND SEMI‐SUBMERSIBLE)
Sondas Flutuantes por ano de entregaAtualizado em 09/12/2010 - Fonte: ODS-Petrodata
1 1
10 11
1620
14
24 5
18
25
97
4 35
2 1 26
1311
9
1 1 2 3 2
8
22 23
3
35
13
6
0
5
10
15
20
25
30
35
40
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
Qua
nt d
e So
ndas
Entregue Em construção/OrdenadaDelivered Under Construction
Drilling Rigs (per year of delivery)12/09/2010 – Source: ODS Pedrodata
Num
bero
fRig
s
60
PETROBRAS “BACKLOG”– FLOATING RIGS (SEMI‐SUBMERSIBLE AND DRILLING SHIP)
World
47%53%
Petrobras Other Operators
Brazil
91%
9%
Petrobras Other Operators
Source: ODS-Petrodata 12/09/2010
61
PETROBRAS“BACKLOG”– DRILLING RIGS ABOVE 2,280M (7,500’)
World
48%52%
Petrobras Other Operators
Brazil
9%
91%
Petrobras Other Operators
Source: ODS-Petrodata 12/09/2010
62
DRILLING RIGS
Up to 900m (3000´) From 900 to 1500m (5000´)
From 1501 to 2286m (7500´) Over 2286m
Petrobras fleet (units operating by year)
o Approval for procurement/charter of the first round of 7 rigs to beconstructed in Brazil:
o Deliveries beginning in 2015
o Local content specification of 65%
o 14 rigs scheduled for 2011: 12 to operate in a water depth equal orgreater than 2.000 m, with the fleettotaling 60 units;
o Bidding process for 28 units still under way;
o 7 rigs to start‐up in 2012
12
6
16
11
63
NEW VESSELS AND PURCHASE OF NEW EQUIPMENTS
26 rigs contracted, 28 more to be built by 2020:26 rigs contracted, 28 more to be built by 2020:o Until 2013: 13 rigs contracted before 2008 and 1 rig relocated from international operations*;
+12 new rigs contracted in 2008 , through international bidding;o 2013-2020: Bidding process in progress, to contract 28 rigs to be built in Brazil. EAS won the
bid for the first package - construction and chartering of seven drilling rigs to be built in Brazil
By 2013
79
44
254
15
Current Situation(Dec/10)
Others (Jacket and TLWP)
Production Platforms SS e FPSO
Supply and Special Vessel
Drilling Rigs Water Depth Above 2.000 m
Critical ResourcesDelivery Plan (to be contracted)
Accumulated Value
By 2015 By 2020
34 32 (1) 53 (2)
465 491 504
53 63 84
81 83 85
Production
Platform (FPSO)Drilling RigsSupply Vessel
(1) The rig reallocated from international operations, expire in 2015, so it is not considered in the 2020 accumulated value
(2) The demand for long-term (2020) will be adjusted as new demand assessments are made.
64
To mitigate the risks and keep the project attractive for all players:
• New company to act directly in the business Sete Brasil S.A. (“Sete BR”) will take the risks and the up sides;
• Sete BR an autonomy company Should have the capital offered in a stock exchange. Petrobras will have a minority interest (up to 10%) and will not have any control or veto;
• Tax and financial efficiency Company with international presence for tax optimization and attractive sources of financing and guaranteed by FGCN;
• Mitigating the main risks Attract the major players, specially the “newcomers” (capital investors).
• Portfolio concept For investors and operators;
• Stable return with additional gains over time;
• Stabilization funds
SETE BRASIL – MAIN OBJECTIVES
Avoid rights of regress against any investor
Increase the interest in participating in the project
Expand services supply
Generate competitiveness
rates of charter for Petrobras
Not consolidate debt and investments in the balance of the
operators
Economical Feasibility of the Project
65
DETAIL OF THE COMPLET STRUCTURE: 7 RIGS
EAS – 7 drilling rigs
Petrobras
5%
FIP ‐ Fundo de Investimento em Participações
Brazilian Financial Investors
95%
Local Holding Company– Sete Brasil
Subsidiary1
Subsidiary 2
Subsidiary 3
Subsidiary 4
Subsidiary 5
Subsidiary 6
Subsidiary 7
Shareholders
Class A85%85% 85% 85% 85% 85% 85%
External Holding Company – Sete International
Shareholder1
Shareholder2
Shareholder 4
Shareholder 5
Shareholders
Class B
15% 15% 15% 15% 15% 15% 15%
Shareholder3
PNBV PNBV
•Class B shareholders will be the operators of the rigs. Initially PNBV will own 15% of each subsidiary and then will sell 5 of them to other operators.
66Source: Sinaval
0
10
20
30
40
50
60
70
80
Eisa
Bras
Fels
RioNa
ve
Enav
i‐Ren
ave
Mau
áST
X Bra
silAl
iança
Supe
rpes
aSR
DCa
ssind
úSã
o Migu
el
MAc
Laur
en O
il
Wils
on, S
ons
NAviS
hip
Detro
itTW
BIta
jaí
Rio Gr
ande
Atlân
tico S
ulIna
ce
Rio M
agua
ri
180
Rio de Janeiro
Source: Sinaval - April 2010
São PauloSanta Catarina
Rio Grande do SulPernanbuco
Ceará
Pará
SHIPYARD PROFILE INDUSTRY
National Shipyards ‐> 269 projects under construction
• Including:• * 14 Production Platforms• 2 Jack‐ups• 26 PROMEF 1• 23 PROMEF 2 • 39 ships regarding EBN1 and EBN2
Steel(thou
sand
tons / year)
Brazilian shipbuilding capacity
Source: Sinaval 2010 and Petrobras
66
* P-55; P-56 ;P-58 P-61 ;P-62; P-63; P-66; P-67; P-68; P-69; P-70; P-71; P-72; P-73
67
o P‐57 was delivered in 32 months, two months ahead of schedule and under competitive costs as compared to international prices. Reduction in construction time and cost;
o 2 Jack‐ups under construction (P‐59 and P‐60) in São Roque (BA)
o Inclusion of 900 new suppliers per year in Petrobras' Corporate Vendor List;o 13 new shipyards currently under construction, raising the total number to 50*;
o Index of local content rose from 57% in 2003 to 74% in 2010.
Recently built platform:P‐57: BrasFels – RJ
Capacity: 180 thous. boe/day Value: US$ 1.2 billion Delivered two months ahead of schedule
8 FPSOs (Pre‐salt ‐ P‐66; P‐67; P‐68; P‐69; P‐70; P‐71; P‐72; P‐73 ): Ecovix – Rio Grande (RS)
P‐56 and P‐61: Brasfels (RJ)P‐62: Jurong (ES)
P‐63: QUIP (RS)
FPSO Cidade de Paraty: Brasfels (RJ)FPSO Cidade de São Paulo: Brasfels (RJ)
Under Construction:
Under Construction:
Platforms Procurement
Under Construction:
LOCAL CONTENT
P‐55: Estaleiro Atlântico Sul – PE (hull) /QUIP‐ RS (modules)
P‐58: Estaleiro Rio Grande –RS , UTC Engenharia S/A – RJ e EBE – RJ.
*Source: Sinaval – Executive Summary ‐2011, Jan. 67
68
Local Content
69
LOCAL CONTENT PARTICIPATION 2010‐2014
Capex in Brazil (US$ billion)
Brazilian Content0 %
40 %
60 %
80 %
100 %
20 %
E&P(53%)
Gas & Energy (82%)
Distribution and Biofuels (100%)
Downstream and
Corporate (80%)
Business unitInvestmentsin Brazil
Purchased inBrazilian
Market
Braziliancontent
(%)
E&P 108.2 57.8 53%
RTM and Petrochem 78.6 62.8 80%
Gas & Energy 17.6 14.4 82%
Distribution 2.3 2.3 100%
Biofuels 2.3 2.3 100%
Corporate 3.3 2.6 80%
Total 212.3 142.2 67%
+US$ 46.4 billion from Partners
National Industry
Increase in National Supply
Capacity of G&S
1. Increase productivity capacity of highly competitive sectors2. Develop competition among medium competitive sectors
3. Incentive for new national entrants4. Incentive for association between national and international companies
5. Incentive for international companies to establish operations in Brazil
PATH
Brazilian suppliers expected to provide nearly 70% of total needBrazilian suppliers expected to provide nearly 70% of total needss
70
Strategic Subjects
Prominp Projects Portfolio
CHALLENGEMaximize Local
Content
STRATEGIC SUBJECTS
Sustainability Competitiveness
Safety, Environmentand Health
Industry Performance
Tax Policy
Financing Regulation
Foster micro and small companies
Industrial Policy
IndustrialCapacity
ProfessionalQualification
Technological Qualification
Qualification
E&P MT Downstream GP&Pipelines O&G IND Environment Technology
71
Critical Resources Supply
Critical Resources Demand
INVESTMENTS PORTFOLIO( set of projects )
Critical Resources
DESIGN
Critical Resources
CONSTRUCTION
&
ASSEMBLY
Critical Resources
MATERIALS
&
EQUIPMENT
Critical Resources
DESIGN
Critical Resources
CONSTRUCTION
&
ASSEMBLY
Critical Resources
MATERIALS
&
EQUIPMENT
INDUSTRYCAPACITY
Gaps
Gaps
Gaps
NATIONAL INDUSTRY DIAGNOSIS METHODOLOGY
72
Import
ACTION ROUTESGOODS AND SERVICES SUPPLY
Current Demand Future Demand
National Industry
Import
Expansion of Capacity of National
Supply of Goods
and Services
1. Expand production capacity of high competitiveness sectors
2. Developing the competitiveness of middle competitiveness sectors
3. Encourage the development of new national entrants
4. Encourage association of domestic and foreign companies
NATIONAL COMPETITIVE SUPPLY OF GOODS & SERVICESADEQUACY OF NATIONAL SUPPLIER ESTATE
5. Encourage the installation of foreign companies in Brazil
73
LOCAL CONTENT3RD QUARTER ‐ 2010
PROMINP
(US$bi)
$ Target National $ Target Total Target LCI
$ Accomplished National$ Accomplished Total Accomplished LCI
3,0
3,4 5,
3 6,1
11,0 15
,0 17,4 22
,4
21,5
22,5 25
,3
5,2 5,7 8,
4 10,2
17,2 22
,7 25,9
32,7
31,4
32,2 35
,9
3,5 4,6 6,
7 9,2
15,0 18
,9 23,5
22,2
6,2 7,4 9,
6 12,4
19,9 25
,0 31,2
29,8
69,8% 70,6%75,4% 75,6% 75,4% 74,3%
57,3%59,7% 63,1% 59,9%
64,0% 66,0% 67,2% 68,5% 68,4%
57,0%62,2%
70,0%74,3%
0,00
10,00
20,00
30,00
40,00
50,00
60,00
70,00
80,00
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130%
20%
40%
60%
80%
100%+ 22.9 US$ Bi
+ 926.000 New Jobs
74
DEMANDS OF HUMAN RESOURCES –BUSINESS PLAN 2010‐2014
2010 2011 2012 2013 2014 2015 2016200920082007
212,638PN 2010-14
207,643PN 2009-13
Business plan 2008 - 201228 Probes146 Support boatsNew production platformsPromef II19 charter vesselsPremium I RefinaryPremium II RefineryReplanning Comperj and RNESTNew projects
75
PETROBRAS BUSINESS PLAN 2010‐2014HUMAN RESOURCES DEMAND
PROFESSIONALS REQUIRED FOR O&G PORTFOLIO IMPLEMENTATION
189189 PROFESSIONALS CATEGORIES
212.638 Qualified professionals212.638 Qualified professionals
ENGINEERINGENGINEERING414141
4%4%8.6748.674
CONSTRUCTION & ASSEMBLYCONSTRUCTION & ASSEMBLY
909090
79%79%168.197168.197
GRADUATEGRADUATE 242424
45%45%3.8803.880
HIGH SCHOOLHIGH SCHOOL 141414
44%44%3.8063.806
HIGH SCHOOLHIGH SCHOOL 272727
21%21%34.82734.827
BASICBASIC 212121
71%71%118.654118.654
CIVIL CONSTRUCTIONCIVIL CONSTRUCTION
777
9%9%20.20020.200
BASICBASIC 777
100%100%20.20020.200
OPERATIONS MAINTENAINCEOPERATIONS MAINTENAINCE
515151
7%7%15.56715.567
BASICBASIC 121212
25%25%3.9093.909
HIGH SCHOOLHIGH SCHOOL 191919
49%49%7.6907.690
GRADUATEGRADUATE 191919
7.5537.5534%4%
TECHNICIANTECHNICIAN 222
1%1%2.1032.103
TECHNICIAN TECHNICIAN 333
11%11%988988
TECHNICIANTECHNICIAN 111
22%22%3.3933.393
INSPECTORSINSPECTORS 212121
3%3%5.0605.060
GRADUATEGRADUATE 111111
4%4%575575
76
DOWNSTREAM
DELIVERING VALUE THROUGH THE CYCLE
77
FROM A DOWNSTREAM COMPANY, PETROBRAS BECAME AN INTEGRATED AND BALANCED COMPANY
Petrobras has a unique in its downstream business since it is almost the sole operator in its fast growing domestic market. Brazilian market has a continental scale in size.
2,7943,196
3,9502,3562,260
2,980
1,9331,791
1,971
1,0361,393
181
2009 2014E 2020E
kbpd
110%
132%
ThroughputProduction Oil Product Demand
124%
1980
13%
Production as a % of refining
Oil Production and the Brazilian market demand currently exceed refining capacity
By 2014, exports are projected to reach nearly 1 million bpd, even as refining capacity is expanded to process Brazilian production to meet demand
78
403
769937
826
452338
1,187
1,155
1,016
0
1000
2000
3000
BRAZILIAN DEMAND AND REFINING CAPACITYSTRONG BRAZILIAN GDP GROWTH PROJECTED TO INCREASE DEMAND 3.4% P.Y.Thousand bpd
1,933
PREMIUM I(1ª phase)
300 thou. bpd(2014)
2,356
1,831
2,260REPLANRevamp
U200+PAM33 thous. bpd
(2010)
COMPERJ(1º phase)
165 thous. bpd(2013)
RNE230 thous. bpd
(2013)
2020
...
3,196
2,794
2009 20142010Gasoline Diesel Others
PREMIUM I(2ª fase)
300 thous. bpd
(2016)
...
COMPERJ(2º phase)
165 thous. bpd(2018)
Throughput
Clara Camarão
2010
PREMIUM II300 thous.
bpd(2017)
Domestic production will represent 91% of refinery throughput by 2020.
Comperj’s first phase is now a new refinery.
The Brazilian investment program, focused on increasing conversion, aims to reduce fuel oil production and reduce middle distillates deficit.
79
MOST OF THE INVESTMENTS UNTIL 2014 ARE ALREADY MATURED WHILE MOST INVESTMENTS AFTER 2014 ARE STILL IN PHASE I
22%
73%
8% 18%
7%
4%11%
1%
54%
2%
(2010-14) (2015-20)
No Phase
Phase IV
Phase III
Phase II
Phase I
80
IN THIS DECADE DOWNSTREAM WILL ENTER A NEW INVESTMENT CYCLEIN THE 60'S AND 70'S PETROBRAS DEVELOPED ITS REFINING STRUCTURE
Note: Downstream includes RTC + petrochemical + Biofuels
54%
43%
17%
23%
14%
37%
10-1400-0990-9980-8970-7960-69
% Downstream investment / total investments
New Downstream investment Cycle
Quality improvement
Growing demand
Sustainability
Moderate economic growth leading to refining overcapacity
Energetic substitution (ethanol, gas...) and energy savings
Investments to develop upstream
Refining structure development
81
733 841 796
410414 439
203219 208
505578 525
1Q10 4Q10 1Q11
OIL PRODUCTS NATURAL GAS
OIL PRODUCTS AND NATURAL GAS SALES IN DOMESTIC MARKET
Thou
s. bpd
1.8512.052 1.968
DIESEL
GASOLINE
LPG
OTHERS
o Domestic oil products sales increased 6% in the 1Q11 vs 1Q10 comparison, due to the Brazilian economy growth;
o Jet Fuel sales increased 18% in the 1Q11 vs. 1Q10;
o Natural Gas sales increased 13% (1Q11 vs 1Q10), due to industrial and power generation demand.
Thermal
Non thermal227 238 245
46125
30
1Q10 4Q10 1Q11
257
363
291
82
Jan-Set 09 Jan-Set 10
Jan-Set 09 Jan-Set 10
2006 2007 2008 2009 Jan-Set 10
STRONG DIESEL AND JET CONSUMPTION GROWTH IN BRAZIL HAS BEEN OBSERVED IN SPITE OF GLOBAL CRISIS
Diesel Sales (2006 to 2010)9,6%
• Fast recovery in diesel demand is taking place in 2010.
15,4%
• Jet demand was resilient to the global crisis.• World cup and Olympic Games in Brazil will boost the market.
Jet Sales (2006 to 2010)
2006 2007 2008 2009 Jan-Set 10
9,0%
5,6%
3,7%
83
41
36
24
22
21
16
11
10
8
5
3
Mexico
Spain
Japan
China (including Hong Kong)
Germany
France
Brazil (Fast Growth)
Brazil (Modest Growth)
Indonesia
Brazil Today
United States
2020 If not expanded
WITHOUT REFINING EXPANSION, BRAZIL WOULD REACH UP TO 41% OF NET EXTERNAL DEPENDENCY.
There are no countries with net imports representing more than 24% of total demand, among the main oil consumers.
There are no countries with net imports representing more than 24% of total demand, among the main oil consumers.
Data Source: IEA (2008). Only countries with at least 1 MM bpd of consumption were included, consideringLPG, Gasoline, Biofuels, Jet Fuels, Diesel/Gasoil and Fuel Oil.
Net Imports as a percentage of total country Demand (%)
The associated costs would face an expressive rise and physical constraints would be an issue.
The associated costs would face an expressive rise and physical constraints would be an issue.
84
Return on Capital Employed
-15%-10%
-5%0%5%
10%15%20%25%30%35%
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Integrated Oil Companies Independent Upstream Independent Refiners
INTEGRATED OIL COMPANIES HAVE REACHED BETTER RETURNS
ROCE
Integrated Companies: BP, Shell, Exxon, Conoco, Chevron, Total, ENI, Luke Oil and Repsol
Upstream Players: Apache, Anadarko, Devon, EnCana, Nexen and Talisman
Refiners: Valero, Reliance Industries, PKN Orlen, Sunoco and Tesoro
Source: PFC Energy
84
85
50%
60%
70%
80%
90%
100%
2003 2004 2005 2006 2007 2008 2009
China World Brasil United States
REFINERY UTILIZATION – LATIN AMERICA, BRAZIL, CHINA AND WORLD
Source: Pira and Brazil's National Petroleum Agency (ANP)
Integration and synergies in Petrobras operations lead to higher refinery utilization rates.
In addition, high refinery utilization rates in Brazil have been supported by our growing domestic market.
85
86
169k bpd of gasoline HDT capacity in 6 new HDT units
Lower Sulfur in DieselLower Sulfur in Diesel
REMAN
REPLAN
REGAP
RPCC
RLAM
REDUC
REVAP
RPBC
RECAP
REPAR
REFAP
2010 2011 2012 2013 2014
Diesel S-1800Diesel S-500
Diesel S-50Diesel S-10
INVESTMENTS ARE BEING MADE TO UPDATE AND IMPROVE PRODUCTION QUALITY IN CURRENT REFINERIES…
REFAP
REPAR
REPLAN
REGAP
REDUC
REVAP
RLAM
RPBC
20102010 20122012 20142014
Gasoline 1.000 ppm
Gasoline 50 ppm
Treating investments will allow Brazil to have diesel in metropolitan areas containing a maximum sulphurcontent of 50/10 parts per million, significantly lower than current levels in 2010.
Lower Sulfur in GasolineLower Sulfur in Gasoline
669k bpd of diesel HDT capacity in 12 new HDT units
87
…PETROBRAS HYDROREFINING IS PHASED‐OUT AND IT IS CATCHING UP
64%
85%
48%
63%58%
84%
35%
12%
0
20
40
60
80
100
Hydrorefining Capacity relative to Distillation Capacity
24%
24% (current)
59% (2014)
71% (2020)
Adding values to our domestic crude through producing diesel and gasoline in‐line with international standards.
We are catching up our hydrorefining capacity since it was underinvested over the past years.
88
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
THE AVERAGE INVESTMENT IN QUALITY AND CONVERSION IN 2015‐2020 WILL BE REDUCED BY 76% COMPARED TO 2010‐2014
Average = 4,3 billions / year Average = 1,0 billion / year
Total = 21,5 bilion Total = 6,2 bilion
By 2013, the investment cycle in quality and conversion will be concluded at our actual refining system, leading to a
significant investment reduction.
76%
89
PETROBRAS’ DOMESTIC REFINING GREENFIELDS CAPACITY ADDITIONS
Diesel (64%), LPG (3%), Naphtha (6%), Bunker (16%), Coke (11%)
Diesel (53%), LPG (6%), Naphtha(1%), Jet (28%),OC (4%), Coke (8%)
(230 kbpd)
(600 kbpd) (300 kbpd)
(330 kbpd)
(Premium I & II)
Diesel 10 ppm (60%), LPG (4%), Naphtha (14%), Jet (12%), OC +
Bunker (10%)
Numbers in kbpd are capacities
89
Existing pipelinesRefineriesOnshore TerminalsOffshore Terminals
Terminals and PipelinesOperated by Transpetro
90
Refinery prepared to process ultra-heavy oil, ...
SOME SPECIFIC FACTORS CONTRIBUTES FOR RNEST TO HAVE AN ESTIMATED COST HIGHER THAN THE EXPANSION PLAN
90
Average API 2010
APIRNEST
-38%
1
2010Average
RNEST
... with high diesel yield on its product mix ...
2
39%
70%
Solomon Indice2010 Average
RNEST
... by having high complexity3
Additionaly, simultaneous processing prediction of immiscible synthetic and ultra-heavy crude required two separate trains of 115 kbpd, increasing project costs.
4
7,7
9,6
26
17
5 It is Important to take into account RNEST context, $ 4.2 billion investment in infrastructure and outsite, 20% of the total.
16
91
RECENT ACQUISITION OF 30% IN REFAP IS ALIGNED TO THE STRATEGY OF INTEGRATING THE REFINING SYSTEM AND OIL PRODUCTION IN BRAZIL
10,8
2,9
20102001
+272%
68040
350
Adjusted Value
DividendsInventory
130
Debt
500
Value
The $350 million operation included inventories and dividends
The capacity and complexity are now much bigger than in 2001, when the stake was sold …
190
130
20102001
+46%
US$ MM
.. and the USGC crack spreads have also increased a lot since then
6,9
2,0
2001 2010
We also expect important synergies to come from the integration of Refap with Petrobras’ refining and logistics systems and an increase in domestic crude processing in Refap, from today’s 43% to up to 93%.
Capacity (kbdp) Nelson Index
US$/bbl
92
DOWNSTREAM SUPPLY CHAIN: INTEGRATING THROUGH TARGETED INVESTMENTS
Investment decisions in this segment are based on the need to:
o Secure a natural hedge between petrochemical and refining cycles
o Diversify into higher value-added products
o Maintain flexibility and access to competitive feedstock
o Develop cost leadership
o Improve competitiveness
BRK Petrochemical Investmentsi) The incorporation of a holding company which will hold
100% of Braskem common stocks
ii) Capital contribution in BRK to be paid in cash by Petrobras (R$ 2,5billion) and Odebrecht (R$ 1 billion)
iii) Capital increase at Braskem through a private subscription (between R$4,5 and R$ 5 billion)
iv) Acquisition by Braskem of the stock in Quattor held by Unipar
v) Acquisition by Braskem of 100% of the stock in UniparComercial and 33% of the stock in Polibutenos
vi) Merger by Braskem of Petrobras stake at Quattor
vii) Stock tender offer for the indirect sale of the controlling interest in Quattor Petroquímica SA
93
DOWNSTREAM
COMPERJ: CONTRIBUTING TO THE PETROBRAS VALUE CHAIN
Products Production(kta)
Polypropylene 850Polyethylene 800Styrene 500Ethylene glycol 600PTA 500PET 600
BASICS
ProductsProduction
(kta)
Fuels
Diesel 535
Naphtha 284
Coke 700
Petrochemicals
Ethylene 1,300Propylene 881Benzene 608Butadiene 157p‐Xylene 700Sulphur 45
o Expand the domestic petrochemical market
o Utilize Marlim crude as feedstock
o Capture synergies from existing regional infrastructure
o Improve the balance within the commercial value chain for oil, oil products and petrochemicals
Comperj will:
94
BIOFUELS
95
EthanolIncrease of Petrobras participation in Brazil's ethanol industry and bioenergy; investments focus on developing a new generation of biofuels and cogeneration power:• Acquisition of 45.7% of Guarani, the 4th largest processor of sugar cane in the country, and agreement to reach a stake of up to 49%;• Acquisition of 40.4% of Usina Total; • Strategic partnership with Grupo São Martinho, creating a new company, called Nova Fronteira (49% BR).
StrategyAct globally, on biofuels production, with relevant participation in biodiesel and ethanol bussiness
BIO DIESEL
ETHANOL
INVESTMENTS 2010-2014:US$ 3.5 Billion
2.0
0.4
0.4
0.7
Ethanol Biodiesel R&D Logistics
Thou
s. m
³/yea
r
Ethanol Exports
1,055
449
2010 2014
+135%2.600
886
2010 2014
+193%
747
507
2010 2014
+47%
Ethanol Production Production Capacity of Biodiesel in Brazil
BIOFUEL TARGETS AND INVESTMENTS 2010‐2014CONTINUED EXPANSION AND INTEGRATION WITH OIL PRODUCTS
96
GAS & POWER
97
NG PipelineFertilizerThermo Power PlantLNG Terminal
15%
32%
30%
23%
LNG
Electrical Energy
Chemical Gas Facilities
Pipeline Network
Gas and Power Total Investment: US$ 17.8 billion
• Complete natural gas transport and processing infrastructure
• Consolidate investments in power generation• Invest in LNG • Increase flexibility by converting natural gas to
fertilizers
INSTALLATION OF NATURAL GAS TRANSPORT AND PROCESSING INFRASTRUCTURE IN BRAZIL
• 5th largest country in the world in total area (8.5 mln km²)• More than 9,000 km of coast
98
NATURAL GAS BASED FERTILIZERS:FERTILIZER PLANTS TO TAKE ADVANTAGE OF AVAILABLE GAS AND INFRASTRUCTURE
8441,076
2,104
807
298274
2010 2014 2015Ammonia Urea
+160%
Th. t
on/y
ear
1,374
2,911
1,118
UFN III (sep/14)Ammonia:
81th. ton/yearUrea:
1.210 th. ton/year
UFN IV (dec/15)
Urea 763 th. ton/year
Ammonia Plant(Dec/14)
519 th. ton/year
•Manage total demand for gas by transforming natural gas into fertilizers needed by Brazilian agriculture (substituting demand that is currently imported)
• In 2009, Brazil imported:
• 2.1 million ton of urea, 65% of total domestic demand;
• 424 thousand ton of methanol, 65% of total domestic demand;
• 320 thousand ton of ammonia, 687% of total domestic demand.
• New Fertilizer units will allow to increase urea, methanol and ammonia production, meeting domestic demand
Electronic model of ammonia and urea plants
99
FINANCIAL CONSIDERATIONS
100
CAPITAL STRUCTURE AND CREDIT METRICS
1H(Million US$) 12.31.2008 12.31.2009 12.31.2010
Cash and Cash Equivalents 6.499 16.169 17.633
Total Debt 27.123 57.132 69.431
Net Debt 20.624 40.963 36.701
Shareholders Equity 61.909 94.058 181.494
Net Debt / Net Capitalization 25% 30% 17%
Net Debt/ Market Capital 21% 21% 16%
Net Debt / Boe Production (USD/boe) 23,5 44,4 38,9
Net Debt / Proved Reserves (USD/boe) 1,37 2,76 2,30
Reserves/Production (Years, SPE Criteria) 17,22 16,13 16,96
2008 2009 2010
Net Income 18.879 15.504 19.184
EBITDA 31.083 28.982 32.626
Net Debt/EBITDA 0,66 1,41 1,12
*
*
Notes: *Based on 2009 Proved Reserves
101
2%
6%4% 5%
9%
74%
2011 2012 2013 2014 2015 After 2016
A HIGH‐QUALITY DEBT PORTFOLIO
Total Indebtedness (US$ 69,431 million as of December 31, 2010)
By Category By Currency
By Maturity
By Maturity By Rate
Fixed57%
Floating43%
LT Financing87%
ST Financing13%
BNDES33%
Financial Institutions
29%Intl Capital Markets21%
Export Credit10%
Other7%
Dollar46%
Real27%
Yen3%
Real Indexed to Dollar24%
102
SUCCESSFUL EFFORTS TO RAISE CAPITAL FROM LONG TERM SOURCES
US$ 26.6 billion from the Capitalization + US$ 9.6 billion of loans
1.47
26.6
7.49 0.61
Bilateral Loans
Project Finance
GIEK
6.5
10
13.3
22.75
(US$
bilion
)
Market Capital Bond Issuance
China Development Bank
BNDES
U S Eximbank
Others
(1)
(1) R$ 25 billions converted by FX tax in 07.30.09(2) US$ 3 billion has been disbursed in 2009 and US$ 4 billion in 2010 (3) Still not disbursed
US$ 34.8 billion were raised with an average life of 10.6 years
(2)
(3)
US$ 6 billion issuance of 5, 10 and 30 year notes in the international capital markets:
6.806% 5.401%3.950%Yield to Investors
US$ 1.0 billionUS$ 2.5 billionUS$ 2.5 billionAmount
2041 Notes 2021 Notes2016 NotesGlobal Notes
Equity
20102009
January, 2011
103
75,42663,929
38,73530,537
19,73815,865
0
10000
20000
30000
40000
50000
60000
70000
80000
2005 2006 2007 2008 2009 2010
US$ Million
36,701
11,3068,650
14,90820,624
40,963
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
2005 2006 2007 2008 2009 2010
US$ Million
Construction and Installations in ProgressConstruction and Installations in Progress
Net DebtNet Debt
CONSTRUCTION IN PROGRESS:INCREASE IN NET DEBT RELATED TO EXPANSION
104
Largest Shares Offerings (US$ billion)
70.0
24.4 22.5 22.1 22.0 20.2 19.7 19.4 19.3 19.3 17.6
FO(2010)
FO(2007)
IPO(2008)
FO(2009)
FO(2007)
FO(2009)
FO(2009)(2009)
FO(2010)
IPO(2008)
FO
Source: Petrobras, Bloomberg and Thompson
IPO(2006)
ACCESS TO CAPITAL ON A WORLD AND HISTORIC SCALE
Largest Bond Issues(US$ billion)
16.013.5
9.5 8.0 6.3 6.0 6.0 6.0 6.0 5.5 5.1
RBS LloydsBank
AgriculturalBank ofChina
ICBC Barclays Visa Inc HSBC Fortis Bank ofAmerica
Citigroup Inc Roche
HoldingsPfizer Kraft
FoodsBerkshireHathaway
LloydsBank
ConocoPhillips
ING Bank
The DowChemicalCompany
Anheuser-Busch
NBC
**
* *
*Related to acquisitions
o Excluding the offers related to acquisitions or capital raising and government debt raising program, Petrobras deal was the largest debt issuance for a corporation in the "ordinary course" of business
(2009) (2009) (2010) (2010) (2009) (2011) (2009) (2009) (2009) (2009) (2010)
o Petrobras had the largest share offering in history
105
2005 2006 2007 2008 2009 2010
NysePBR
PBR/A
BovespaPETR3PETR4
Turnover NYSE & Bovespa (Daily Average Turnover)
(US$ MM)
PETR4 (Bovespa) PBR/A (Nyse)PETR3 (Bovespa) PBR (Nyse)
(% category and US$MM)
1,308
1,930
992
483
219
Turnover 2010/2005 = 619%
o Turnover of PBR 3 times the volume of PBRA on the NYSE
o Turnover of PN 5 times the volume of the ON
o Probable explanation: Cultural. Brazilians familiar with PN´s and would not pay premium for ON´s
PETROBRAS IS ONE OF THE MOST LIQUID STOCK IN VALUE TRADED ON BOTH THE BOVESPA AND NYSE
31%
6% 5%6%
5% 6%7%
25% 21%20%
20% 19%19%
43% 47% 43%50% 52% 47%
26% 23%27% 27%25%
2005 2006 2007 2008 2009 2010
NysePBR
PBR/A
BovespaPETR3PETR4
1,359
106
o Brazilian Corporate Law requires a minimum annual distributions equal to 25% of net income
o Dividends paid each year based on prior years income
o In 2009, Petrobras paid the dividends related to the 2008 results as well as a portion of the dividends (interest on capital) related to the 2009 results
* Dividends includes the Interest on own Capital (IOC)
2006
0.8
2007 2008 2009
0.70.9
1.2
2006 2007 2008 2009
2.9 3.0
4.33.5
US$
Net Income per ADR
US$ US$
Dividends per ADR Price per ADR (Max-Min)
HISTORICAL DIVIDEND PAYMENT
2006 2007 2008 2009
26.717.5
58.8
21.1
75.2
14.9
53.0
23.031.9
48.9
2010
3.9
20102010
1.4
107
GDP Growth (%)
1,1
5,7
3,24,0
6,15,2
‐0,6
7,5
4,04,2
‐2
‐1
0
1
2
3
4
5
6
7
8
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Forecast
BRAZILIAN ECONOMY:GROWING WITH STABILITY AND FISCAL RESPONSIBILITY
Source: Brazilian Central Bank – 01.04.2011
Trade Balance (US$ Billion)
97119
138161
198
154
238
202
219 234211
182
130
173
121
917463
0
50
100
150
200
250
2004 2005 2006 2007 2008 2009 2010 2011 2012
Exports Imports
Forecast
Brazilian Debt (as % of GDP)
40,247,750,052,1
46,6 44,239,9 41,4
2,63,3
1,92,63,53,3
2,7
5,1
0
5
10
15
20
2003
2004
2005
2006
2007
2008
2009
2010
0
10
20
30
40
50
60
Net Deb
t/GDP (%
)
Nom
inal Fiscal D
eficit/G
DP (%
)International Reserves (US$ billion)
207239
289
180
86545349
0
100
200
300
400
2003
2004
2005
2006
2007
2008
2009
2010
