1

José Sergio Gabrielli de AzevedoPetrobras CEOMay 25th,  2011

BRAZIL AS THE NEW HOTSPOT 

The presentation may contain forecasts about future events. Such forecasts merely reflect the expectations of the Company's management. Such terms as "anticipate", "believe", "expect", "forecast", "intend", "plan", "project", "seek", "should", along with similar or analogous expressions, are used to identify such forecasts. These predictions evidently involve risks and uncertainties, whether foreseen or not by the Company. Therefore, the future results of operations may differ from current expectations, and readers must not base their expectations exclusively on the information presented herein. The Company is not obliged to update the presentation/such forecasts in light of new information or future developments.

The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this presentation, such as oil and gas resources, that the SEC’s guidelines strictly prohibit us from including in filings with the SEC.

CAUTIONARY STATEMENT FOR US INVESTORS

DISCLAIMER

2

GROWING PRODUCTION FULLY SUPPORTED BY DISCOVERIES

2 ,0 0 4 1,6 8 4 1,50 0 2 7 4 3 3 4

6 2 3

1. 10 9

2 5 2

176

2 0 3

14 416 33 59 6

10 112 8

12 0

2 2

2002 2005 2010 2014 2020Oil Production - Brazil Gas Production - Brazil Oil Production - International Gas Production - International

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

1,809 2,2172,583

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

...

3,9502,980

3

8,63

4,403,02 2,47 3,18 2,70 2,61 2,42 1,93 2,33 2,20 1,94 1,83 1,74 1,61 1,58

0,670,42

0,090,99 0,07

0,03

‐123456789

10

US

China

Japan

Brazil 20

20

Brazil 20

14

India

Russian Fede

ration

Saud

i Arabia

Germany

Brazil 20

09

South Ko

rea

Canada

Mexico

France

Iran

United Kingdo

m

Italy

2009 Total Oil Consumption by Country (mmbo/d) 

BRAZIL AS A LARGE AND GROWING EMERGING MARKET

Source: BP Statistical Review 2010, PFC EnergyNote: * Petrobras Estimates for 2014 and 2020 ** Petrobras figures for 2009

Brazil is world’s tenth‐largest oil consumer.

Brazil oil consumption growing at 2.38% p.y.;

OECD oil consumption growing at ‐0.04% p.y.

18.7

Total Oil Consumption mb/d (index) 

4

95

100

105

110

115

120

125

130

1999 2001 2003 2005 2007 2009

Brazil

US

OECD

World

**

Above 3mmbo/d Between 2‐3 mmbo/d

Oil Products (Includes blend of Ethanol and Biodiesel)Hydrated EthanolBiodiesel Note: Brazil is the only country in the world that uses Hydrated Ethanol as a substitute of gasoline

*

4

MORE OIL FROM FEWER PRODUCERS

IEA World Energy Outlook 2010 5

MAIN FLOWS - LONG COURSE (OIL and OIL PRODUCTS)

WAF: West Africa (Nigeria)

AG: Persian Gulf (Saudi Arabia and Iraq)             

Far East: (Singapore and China)

Caribe : Saint Lucia and Dutch West Indies Source: Petrobras 2010

USA

WAFAGCaribbean

Far East

Import

International trades

Export

Argentina

IndiaAfrica – Med.

Europe

Chile

6

B.CamposAngra dos Reis

São Francisco do Sul

São Sebastião

MAIN FLOWS ‐ COASTAL NAVIGATION 

LPG

Clean and dirtyproducts

Petroleum

Santos

Rio de Janeiro Macaé

Manaus

Salvador

Vila do Conde

São Luis Fortaleza

Paranaguá

Suape

Belém

Porto Alegre

Aratu

Coari

Source: Petrobras 2010 7

OILFIELDS DISCOVERED/DEFINED IN 1984-2009 IN THE SOUTHEASTERN OFFSHORE BASINS

8

INTEGRATED VALUE CHAIN

Our main lines: Key Statistics and market position (2010)

Exploration and Production

• 15.3 Bn boe of 1P(SPE)

• 2.3 mm boedproduction

•98.5%  of Brazilian production

• 20% of deepwater production

RTM (incl. Petrochemicals)

• 12 refineries

• 2.0 mm bbl/d refining capacity

• 11.2 mm t/ynominal petrochemical capacity2)

Retail

• 7,306  service stations

•38.8% market share

Gas and Power

• 14,246 km of pipelines

•Participation in 20 of 27 discos of gas in Brazil

• 5,944 MW of Electricity Generation capacity

International

• 25 countries

• 0.7 Bn boe of 1P(SPE)

• 245 mil boed of production 

• 281 mil bbl/d refining capacity

•Petrochemical, Gas and Power activities

Biofuels

• 3 new biodiesel plants

• Ethanol: new markets

• Responsible for 10% of Brazilian ethanol exports.

E&PRTMG&PPetroquímica

53%

33%

2%1%2%8%

1%

Business Plan 2010‐2014US$ 224.1 Bn

MarketingBiofuelsCorporative Brasil

95%

Internacional5%

Opportunities: Economic GrowthGeopolitical stabilityHydrocarbon potentialBiofuels

Challenges:Critical resources (goods and services, human resources)FinancingEnergy Integration

9

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%

10

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 11

PRE-SALT SUSTAINABILITY

EnvironmentalEnvironmental

FinancialFinancial

SocialSocial

Ex: Commitment to giveenvironmental friendly destinationto the carbon dioxide producedfrom Pre‐Salt reservoirs, ...

Ex:• Lula Pilot breakeven in the US$ 35‐45/bbl oil price range.• Consortia sanctioned procurementof 13 FPSOs

Create jobs and income

Reinforce internal market

Strengthen Brazilian economy

Local  content

Expanded supply capacity

New suppliers

Lower prices

More equipment availability

Increased flexibility

12

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

The local content is part of National Petroleum Agency evaluation

13

PRODUCTIVE DEVELOPMENT POLICY

TechnologicalSupply Chain Stimulation

Increasing Demanding

Phase I Phase II Phase III

• Industry Reactivation

• Shipyard Consolidation

• Supply network  establishment

• Professional Qualification

• Research and Technological Development

• Productive chain consolidation

Local ContentInternational 

competitive level> Local Content

14

Fiscal stimulus packages in the supply chain for naval industry

Fund for Vessels Construction (FGCN ‐ Fundo Garantidor da Construção 

Naval)

Offshore Naval Industry 

Competitiveness

Industry Consolidation

o Decree nº 6.704/2009: Federal Excise Tax (Imposto sobre Productos Industrializados—IPI) suspension for goods to naval industry

o Law nº. 11774/2008: PIS/PASEP e COFINS percentage reduction to zero on  equipments destined to naval construction.

o Fund for Vessels Construction ‐ Law nº. 11.786/2008, with recourses of R$ 5 billon.

Legal Outline Technological Outline

Ricino – Rede de Inovação para 

Competitividade da Indústria 

Naval e Off‐Shore

CiasResearch Institutes

Government

STRATEGIC VIEW OF NAVAL SUPPLY CHAIN: DEVELOPMENT AND SUSTAINABILITY

15

Source: 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

16

* 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

2003 2004 2005 2006 2007 2008 2009

Average Fleet Size DWT (average contracted) Stopovers Cargo shipped

SHIPPING EVOLUTION

Source: Petrobras (AB‐LO/TM/IETM)

8.1 8 8.410.1

11.513.5 14.6

110 110 116130

148

175 1785,823

5,267 5,411

7,050 7,4417,657 7,808127.4 123.3

132.8

146.7157.6

167.6 169.1

Number of ships

Million of tons

Numbers

Million of tons

17

2

2.6

1.31.1

0.70.5

0.70.6

0.30.3

0

0,5

1

1,5

2

2,5

3

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010*

19 0 04 9 0 0 6 5 0 0 7 5 0 0

12 5 0 0 14 0 0 019 0 0 0

4 0 0 0 04 2 0 0 0

4 6 6 6 1

5 6 112

0

10000

20000

30000

40000

50000

60000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010*

Source: Sinaval

30 x

Direct Labor

Source: Sinaval

*Position in Oct/2010 **Merchant Maritime Fund

MMF** disbursements in R$ billion

2 x

BRAZILIAN SHIPBUILDING INDUSTRY IN NUMBERS

18

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/dayValue: US$ 1.2 billionDelivered 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.

LOCAL CONTENT

19

NEW VESSELS AND PURCHASE OF NEW EQUIPMENTSPetrobras critical resources demand will drive Brazilian and international industry

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 (1);

+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 – building and freighting 7 rigs in Brazil.

By 2013

79

44

287

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)

423 479 568

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 long term demand (2020) will be adjusted according new evaluation for demand. 20

23LH

Line Handling

112PSV

Platform Supply Vessel

6SV

Supply Vessel

36UT / P

Fast SupplyVessel

27RSV / DSV/ 

SESV/PLSV/OCV/WSSV(SPECIAL VESSELS)

Type of Ship Qtd

AHTS

Anchor Handling Tug Sypply66

TS

Tug Supply1

OSRV

Oil Recovery16

• 146 ships until 2017 (AHTS, PSV, OSRV)• 40 already bidden

• 60 ships until 2014 (UT, LH, P)• 31 already bidden

Ships Procurement (NEW BUILDING)

SUPPLY AND SPECIAL VESSEL (DEC, 2010)

Fleet in Operation = 287 vessels

21

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

22

CREATED IN 2004 THE PROMEF WAS DEVELOPED WITH 3 ASSUMPTIONS:

3. Offer to shipyards the proper conditions to conquer their competitiveness 

2. Achieve the minimum local content (65% ‐ 1st phase, 70% 2nd phase)

1. Build ships in Brazil. 

0

5

10

15

20

2011 2012 2013 2014 2015

Suezmax Aframax Panamax Products Suezmax DP Aframax DP Products GLP Bunker

Promef 1 ‐ 23 tankers Promef 2 – 26 tankers

US$ 4.2 Billion

2010‐14

5

10

18

12

4

8 ProductsPromef 2 ‐>To be Hired

Conclusion Schedule

Note: Other investments PromefWaterway - Tietê-Paraná And Dockdues

23

28,000 CBMLPG Carrier

212,000 CBMLPG Carrier

218,000 DWTProduct Carrier DPP

440,000 to 45,000 DWTProduct Carrier DPP

440,000 to 45,000 DWTProduct Carrier CPP

160,000 to 80,000 DWTProduct Carrier DPP

EBN 2Jan 2013 until

Dec 2017

560,000 to 80,000 DWT Product Carrier CPP

37,000 CBMLPG Carrier

6GT < 2,000 tonsBUNKER

230,000 DWTProduct Carrier CPP

230,000 DWTProduct Carrier DPP

340,000 to 45,000 DWTProduct Carrier CPP

EBN 1Jan 2011 until

Dec 2014

340,000 to 45,000 DWTProduct Carrier DPP

DELIVERYNumber of ShipsSIZESHIPTYPE

EBN1 and EBN2: 39 SHIPS

24

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

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

25

50 THEMATIC NETWORKS WITH 80 INSTITUTIONS50 THEMATIC NETWORKS WITH 80 INSTITUTIONS

ANPANP

TechnicalTechnicalScientificScientific

CommitteeCommitteePartnerPartner

institutioninstitution 11PartnerPartner

institutioninstitution 55

PartnerPartnerinstitutioninstitution 22 PartnerPartner

institutioninstitution 33

PartnerPartnerinstitutioninstitution 44

MCTMCTFINEPFINEPCNPqCNPq

-- PhysicalPhysical and and HumanHuman InfrastructureInfrastructure-- HumanHuman ResourcesResources TrainingTraining-- R & D R & D ProjectsProjects-- TechnologyTechnology ServicesServices

UNIVERSITIESUNIVERSITIES

INCUBATORSINCUBATORS

RESEARCH RESEARCH INSTITUTESINSTITUTES

SUPPLIERSSUPPLIERS

CENPESCENPES(manager)(manager)

STRATEGIC PARTNERSHIPS

26

LONG TERM HR CHALLENGES

2010 2011 2012 2013 2014 2015 2016200920082007

146 Supply BoatsNew Stationary Production UnitsPromef IIFreight 19 vesselsRefinery Premium IIRefinery Premium IComperj and RNEST replanningNew projects

Business Plan 2008 – 201228 Drilling Rigs

212,638New Demands

BP 2010-14

78,402Qualified

Professionals

27

There are tremendous opportunities for oil and gas equipment suppliers and 

service companies in Brazil

Thank you.