2013 Results, Maria das Graas Silva Foster 2030 Strategic Plan and CEO 2014-2018 Business Plan Conference Call/Webcast February 26th, 2014
4th Quarter and 2013 Year End Results
Exploratory Activity Proven Reserves totaled 16.6 Bi boe. RRR* in Brazil above 100% for 22 years in a row. Highlights for new exploratory frontiers - Sergipe-Alagoas and Potiguar. Highlights in Brazil 2013 Proven Reserves 2013 RRR…
Petrobras Oil and NGL Production in Brazil in 2013: 1,931 kbpd Oil and NGL production in Brazil reached 1,931 kpbd in 2013, down by 2.5% from 2012. Natural decline during the last 12 months below expected range of 10-11%. Thousand…
Sales (2,383 kbpd) and Oil Products Output (2,124 kbpd) in Brazil Oil products sales increased by 4% in 2013. Higher increase in production (6%), especially diesel (+8.6%) and gasoline (+12.1%) reduced oil products import needs. Oil…
Oil Products Price - Brazil vs International In 2013 we had 3 price increases in diesel and 2 in gasoline, totaling 20% and 11% increases respectively. The Real devaluation contributed significantly to the non-convergence of prices…
Natural Gas Supply and Demand Higher demand for Natural Gas due to increase in thermoelectric demand Higher thermoelectric demand (+52%) due to the lower rainfall in the period, met mainly by LNG imports and natural gas from…
Results of Structuring Programs in 2013 PROCOP, PRODESIN and PROEF PROCOP 2013 PRODESIN 2013 PROEF 2013 Operating Costs Optimization Program Divestment Program Program to Increase Operational Efficiency Optimization of operational…
2013 Investments: R 104.4 Billion Investments totaled R 104.4 billion, 24% above 2012, including Libras signing fee (R 6 billion). Annual Investment Investment by Segment 1.1% +24% 1.1% 0.3% 104.4 6% 5% 84.1 E&P R…
2013 Results Increase of 6% in Operating Income and 11% in Net Income Operating Income increase in 2013 due to, mainly, readjustments in the price of oil products and asset sales (PRODESIN). The extension of hedge accounting since…
2013 Results EBITDA of R 63.0 Billion in 2013, 18% higher than 2012 In 2013, EBITDA was 18% higher than that of 2012 due to, mainly, adjustments of oil products price, asset sales of PRODESIN and lower dry and sub-commercial wells…
2013 Net Income: Without Structuring Programs Structuring Programs: positive outcome of R 9.7 Billion in Net Income PROCOP (R 4.3 Billion), PRODESIN (R 3.3 Billion) and PROEF (R 2.1 Billion) increased Net Income by 41%. R -9.7…
Cash in 2013: Structuring Programs Structuring Programs : R 14.7 billion more in cash Positive impact on cash: Structuring programs PRODESIN (R 8.9 billion), INFRALOG (R 0.8 billion), PRC-Poo (R 0.7 billion) and Procop (R 4.3 billion)…
Debt Ratios Net Debt/EBITDA reached 3.52 in 2013 (2.77 in 2012), due to an increase in indebtedness as a result of new borrowings and the effect of the Real devaluation against the Dollar on net debt. Leverage was 39%. 1 Net Debt…
Targets for 2014 Higher oil and oil products production, operational efficiency and cost optimization will drive 2014 results Oil Production (kbpd) PROEF Oil Products Output (kbpd) (Operational Efficiency %) +1% 7.5% +/- 1p.p.…
2030 Strategic Plan
Agenda 1. 2007 (2020 Strategic Plan) x 2013 (2030 Strategic Plan) Context: Reasons for Revising the Plan 2. Changes in Business Environments 3. Supply x Demand x Prices 4. Petrobras Views on Opportunities in Brazil 5. Big Choices and…
Petrobras Strategic Plan: Recent History Main Drivers for the Revision of 2013 Planning 2030 Vision 2010 2007 2008 2013 Law 12.276: Transfer of Rights Last Offshore Shale Gas Beginning of US Libra Auction (Oct) Law 12.304: PPSA…
Petrobras Strategic Plan: WORLD Business Environment 2007 x 2013 2007 year when 2020 Strategic Plan was developed 2013 - year when 2030 Strategic Plan was developed Positive perspective for the world economy. High 2008 world economic…
Petrobras Strategic Plan: BRAZIL Business Environment 2007 x 2013 2007 year when 2020 Strategic Plan was developed 2013 - year when 2030 Strategic Plan was developed Perspectives of oil production growth in Brazil due to the Pre-salts…
World Oil Supply x Demand: 2013-2020 Economic feasibility of future oil production 2020 Production Volume from New Projects with production start up Supply challenges from 2013 on according to WoodMackenzie Demand Projection and…
World Oil Supply x Demand: 2013-2030 Economic feasibility of future oil production Supply challenges Demand Projection and Expected Decline of Challenges for New Oil Production Projects around 2030 World Oil Production 120 Each…
2030 Strategic Plan Assumptions Brent and Henry Hub Natural Gas Prices Petrobras assumptions on Brent price within the most conservative range of market projections. Petrobras projection for Henry Hub natural gas prices is close to…
Brazils Sedimentary Basins: Areas Granted to Petrobras in 2007 and 2013 In 2007, Petrobras held the rights to an exploratory area 84% larger than 2013s. Areas Granted to be Explored by Petrobras in Brazil 2007: 140 thousand…
Petrobras Strategy: Choices of an Integrated Energy Company To produce on average 4.0 million barrels of oil per day in the 2020-2030 period, under E&P Petrobras ownership in Brazil and abroad, acquiring exploration rights to meet…
Exploration and Production To produce on average 4.0 million barrels of oil per day in the 2020- 2030 period, under Petrobras ownership in Brazil and abroad, acquiring exploration rights to meet this objective 27
Oil and NGL production scenarios in Brazil Petrobras and Estimators: 2013, 2020 to 2035 In 2035, according to estimators, Brazils oil production will range from 4.7 to 6.6 million barrels of oil per day. International Energy Agency…
Petrobras Big Choice for the E&P segment 4 million bpd average production: 2020 to 2030, Brazil and Abroad Petrobras chooses to be a company with a potential production capacity of 4 million bpd in its activities in Brazil* and…
Strategies E&P Segment E&P: 2013-2030 Discover and appropriate reserves in Brazil, keeping a reserve to production ratio 1 above 12 years Develop exploratory efforts in Brazils sedimentary basins, selectively and sharing 2…
Refining, Transportation, Marketing and Petrochemical (RTMP) To supply the Brazilian oil products market, reaching a refining capacity of 3.9 million bpd, to match domestic market demand 31
Brazil: Oil and NGL production x Oil Products Demand From 2013 base, oil products market to grow 20% by 2020 (2.7% p.a.) and 47% by 2030 (2.3% p.a.). Average Oil Production in Brazil* Petrobras + Third Parties + Government…
Brazil: Oil and NGL production x Oil Products Demand From 2013 base, oil products market to grow 20% by 2020 (2.7% p.a.) and 47% by 2030 (2.3% p.a.). Average Oil Production in Brazil* Petrobras + Third Parties + Government…
Brazil: Oil and NGL Production x Oil Products Demand Refining Expansion Aligned with the Domestic Market Growth Petrobras processing capacity is expected to reach 3.9 million barrels per day by 2030. Oil Products Self-sufficiency:…
Strategies Refiing, Transportation, Marketing and Petrochemical Segment (RTMP) Supply the Brazilian oil products market, through the expansion of the refining 1 system, considering partnerships in the already planned refineries and…
Distribution To maintain the leadership in the domestic market for fuels, increasing the value added and the preference for Petrobras brand 36
Oil Products Distribution Markets and Petrobras Market Share Maintenance of Participation in a Growing Market Petrobras will grow organically its market share to 38% by 2030 with an investment program in Logistics. The Brazilian oil…
Strategies Distribution Segment Lead the Brazilian oil products and biofuels distribution market, sustaining its 1 participation in the market 2 Expand the sales in market segments that provide higher added value 3 Increase…
Natural Gas, Energy and Gas-Chemical To add value to the businesses of the natural gas chain, ensuring the monetization of the gas from the Pre-salt and Brazils land basins. 39
Natural Gas Supply and Demand Balance: 2013 - 2030 (million m/day) The natural gas imports and transportation infrastructure already installed is enough to meet Petrobras demand until 2030*. Supply Demand Domestic Supply of NG…
Strategies Gas & Energy and Gas-Chemical Segment 1 Add value to the use of natural gas in the monetization of Petrobras reserves 2 Ensure flexibility and reliability in the supply of natural gas Consolidate the business of…
Biofuels To keep the growth in biofuels, ethanol and biodiesel, alongside the domestic market for gasoline and diesel 42
Participation in the Biofuels Market: 2013 - 2030 Increase of Ethanol and Biofuel production, following the growth of the gasoline and diesel domestic market. Gasoline Type A and Ethanol Market Diesel and Biodiesel Gasoline…
Strategies Biofuels Segment Maintain growth in biofuels, ethanol and biodiesel, in line with the domestic market 1 of gasoline and diesel, in an integrated way within the Petrobras System 44
International Area Perform E&P activities, focusing on oil and gas exploration in Latin America, Africa and USA 45
International Oil and Gas Production: 2013 - 2030 Investment through participation in exploratory opportunities in Latin America, Africa and the U.S., especially from 2019 onwards. Act on the conservation of the natural gas supply from…
Strategies International Segment Invest in overseas exploration to discover and appropriate reserves, adding 1 volumes to Petrobras Monetize natural gas reserves abroad, complementing Petrobras supply of natural 2 gas in…
Challenges of the Corporate Segments Human Resources (HR) Social Responsibility (SR) Health, Safety, Environment and Energy Efficiency (HSEE) Technology 48
Challenges of the Corporate Segments Human Resources Challenges (HR) To have an innovative and flexible human resource program, taking as a base the appreciation of the employees and their contribution to the sustainability of…
Mission, Vision 2030 and Corporate Drivers Mission Vision 2030 To perform in the oil and gas industry in an ethic, safe and profitable way, with social and To be one of the five largest integrated energy environmental…
2014-2018 Business and Management Plan
Exploratory Success and Reserves Increase 46 discoveries in the last 14 months (Jan/13 Feb/14), of which 24 were offshore (15 in Pre-salt). TANGO(CES-161) PITU(RNS-158) Brazil Discoveries: 46 Offshore: 24 Onshore: 22 PAD…
2014-2018 BMP: Petrobras Oil and NGL Production Curve in Brazil 2014 Growth: Oil and NGL production operate by Petrobras in 2020 will be 7.5% 1p.a. 4.9 million of bpd. Verso 20/02 53 20/02 22:00 22:00
2014-2018 BMP: Petrobras Oil, NGL and Natural Gas Production Curve in Brazil 2014 Growth: 7.5% 1p.a. Verso 20/02 54 20/02 22:00 22:00
2014-2018 BMP: Petrobras Oil and NGL Production Curve in Brazil Oi and NGL production (million bpd) 9 Production Units 1st Oil Forecast 1st Oil Forecast Concluded 2014 - 2015 2016 - 2020 Lula Alto Lula Ext. Sul NE de Tupi Espadarte…
Production Units Delivered, under Construction and under Bidding Additional Installed Capacity Operated by Petrobras P-67 1,000 kbpd 300 kbpd 150 kbpd 1,000 kbpd 900 kbpd 1,050 kbpd P-73 TAD P-75 P-77 Cid. Mangaratiba P-67 Cid.…
19 New PLSVs to support the Oil Curve Current Fleet = 11 PLSVs + 8 throughout 2014 +9 +2 3 PLSVs of 550t 1 PLSVs of 300t (The Netherlands) (Suape) PLSVs under Operation and Construction Sunrise 270t Kommandor 3000 135t North Ocean…
Brazil: Oil and NGL Production x Oil Products Demand Refining Expansion Aligned with Domestic Market Growth Petrobras refining capacity should reach 3.3 million bpd in 2020, aligned with domestic market growth. Million bpd…
Natural Gas, Energy and Gas-Chemical Monetization of Natural Gas reserves by increasing the capacity of thermoelectric generation and of nitrogenous fertilizers, as well as the NG distributor demand. +20% Thermoelectric Power Plant…
International: Oil and Natural Gas Production Production growth by participation in exploratory opportunities in Latin America, Africa and the USA. Maintenance of Bolivian gas supply to Brazil and minority operation in non-conventional…
2014-18 Business and Management Plan Fundamentals PRIORITY CAPITAL PERFORMANCE DISCIPLINE Financiability Assumptions Investment Grade rating maintenance Management Priority for focused on Guarantee the expansion of oil and No…
2014-2018 BMP Investments Approved by the Board of Directors of Petrobras on 02/25/2014 BMP 2014-2018 US 220.6 billion Financiability Assumptions 38.7 (18%) Investment Grade Rating maintenance: 10.1 (5%) Return of the debt ratios…
2014-2018 BMP Investments: US 220.6 Billion Portfolio of Projects Under Implementation, Bidding Process and Evaluation Portfolio of Projects Portfolio of Projects Total Investments Under Implementation + Under Bidding Process Under…
Petrobras Investments in Exploration and Production: US 153.9 billion Total E&P Production Development + Exploration US 153.9 bilhes US 135.9 billion 18,0 23,4 (12%) (15%) 53,9 (40%) 82,0 (60%) 112,5 (73%) Pre-Salt…
Petrobras Investments: US 58.5 billion Downstream Gas, Energy and Gas-Chemical International 0,4 0,3 0,3 Downstream 1% 1% 1% 1,4 Projects Under Implementation Projects Under Bidding Process US 38.7 billion 3,3 9% 4% RNEST…
2014-2018 BMP: Investment and Operating Costs Management 2014-2018 BMP US 220.6 Billion PRC-Poo PROEF Program to Reduce Well Program to Increase Costs PROCOP Operational Efficiency Operating Costs Optimization Program…
2014-2018 BMP Incorporates operational efficiency gains from PROCOP Costs reduction between 2013 and 2016 with potential savings of R 37.5 billion in nominal values 34,8 32,7 -5.9% p.a. Gains from PROCOP reduce Lifting Cost:…
2014-2018 BMP: Financiability Analysis US 206.8 billion Projects Under Implementation + Projects Total Investment Under Bidding Process Projects Under Evaluation US 220.6 billion US 206.8 billion US 13.8 billion Under Implementation…
E&P and Dowstream Share Evolution in the Business and Management Plan Portfolio of Projects for Financiability Evaluation E&P share in Petrobras investments has been increasing in the last five Business and Management Plan…
2014-2018 BMP: Financial Planning Assumptions Financing analysis only incorporates projects under Implementation + Bidding = US 206.8 Billion No equity issuance Investment grade maintenance Main Assumptions for Cash Flow Generation…
2014-2018 BMP: Operating Cash Flow and Funding Needs 261.7 261.7 9.9 39,8 9.1 54.9 61,3 Additional funding needs will be funded exclusively through new 60.5 debt. No equity issuance is envisaged Free cash flow, before dividends,…
2014-2018 BMP: Leverage and Net Debt/EBITDA Leverage Net Debt/EBITDA Declining leverage, within maximum limit of 35% from 2015 on Net Debt/EBITDA comply with the limit from 2015 on 73
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