Oil and Gas Lucas Aristizabal Senior Director

Transcription

1 Oil and Gas Lucas Aristizabal Senior Director São Paulo, April 15, 2015

2 Agenda Oil and Gas - Global Oil and Gas Market - Brazil Oil and Gas Industry - Petrobras Credit Quality - Q&A - Strategic Importance for Country - Rating Triggers - Lava-Jato Implications for PBR.

3 Global Oil and Gas Market Supply & Demand Dynamics D S S 4/3/14 2

4 Global Oil and Gas Market What is Fitch s Outlook for Oil? - Fitch s price deck for 2015 is $50/bbl for WTI crude ($55 Brent), trending upwards toward $75/bbl for WTI ($80 Brent) - Historically, Fitch s price deck has been more conservative than spot market. It is meant for modeling purposes and is not a projection - Long-term oil price reflects supply/demand fundamentals and the marginal cost of production, whereas spot oil prices can be driven by non-fundamental factors such as weather, geopolitical risk, and demand for inflation hedges - Oil market is very sensitive to small variations in supply/demand dynamics. 4/3/14 3

5 Global Oil and Gas Market High Price Volatility 4/15/2015 4

6 Brazil Oil and Gas Market A Net Importer 4/3/14 5

7 Petrobras Credit Quality Strategic Importance for Country - Virtual monopoly position in the supply of liquid fuels for the country - Key for energy security - Strategic promoter of economic activity; developer of oil industry - Government ownership, control and financial support - Extensive direct and indirect outreach into financial institutions 4/3/14 6

8 Petrobras Credit Quality Linkage to Sovereign Rating History BBB+ BBB BBB- BB+ BB BB- B+ B B- Brazil Petrobras Source: Fitch Ratings. 4/3/14 7

9 Brazil Oil and Gas Market Cost of Government Control 4/3/14 8

10 Brazil Oil and Gas Market Cost of Government Control Petrobras Cumulative Downstream Losses (USD Million) Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 Source: Company reports 4/3/14 9

11 Petrobras Credit Quality Above Average Full Cycle Cost (USD/boe) Lifting Costs Production Taxes Production Expenses Gross Interest Expense Total Cash Costs Total Cash Costs ~ Cash Break Even Finding, Development, Acquisition Costs: FD&A, 3 Yr Ave Assumed 15% ROE on FD&A Full Cycle Break Even per boe Full Cycle Oil Price (estimated) /3/14 10

12 Petrobras Credit Quality Solid Liquidity Position Petrobras' Liquidity (USD Million) , Cash BOP EBITDA Interest Taxes Capex Dividends Net Debt Proceeds Other Cash EOP Source: Company Reports. Fitch. 4/3/14 11

13 Petrobras Credit Quality Rating Triggers - Failure to release FS on time and receiving notification of breach of covenants. Also; - Weak financial profile; Total debt to EBTIDA above 5.0x Coupled with - Perception of weakening government support - Preventing price increases - Neglecting access to financing from government control institutions - Holding a bidding round for new block in the short term - Denying requests to waive local content requirements - Incentivizing downstream capex 4/3/14 12

14 Petrobras Credit Quality Lava-Jato Implications for Petrobras Petrobras Production Trend (Mil. Boe) 4,0 3,5 3,0 2,5 2,0 1,5 1,0 Historical No Delays Six Months 12 Months 18 Months 24 Months 30 Months Production Sensitivity (Total Debt to EBITDA) (x) 6,0 5,0 4,0 3,0 2,0 1,0 0,0 Historical No Delay 5,4 Base 18-Month Delay 5,6 4,5 4,0 Boe Barrels of oil equivalent. Source: Petrobras, Fitch. Note: 2014 Historical is LTM ended June Source: Petrobras, Fitch. 4/3/14 13

15 Petrobras UDW Fleet Day Rates Brazilian vs. International Suppliers Sete Brasil Fitch Rated Odebrecht Norbe VI Odebrecht Norbe VIII Odebrecht Norbe IX Odebrecht ODN I Odebrecht ODN II Odebrecht ODN Tay IV Schahin Sertao Petrobras Median 0 Diamond Offshore Drilling Inc. Noble Corp Pacific Drilling Transocean Ltd. QGOG Constellation Ensco International Ocean Rig UDW Inc. Seadrill Group Vantage Drilling Odebrecht Schahin 3/25/15 14

16 Disclaimer Fitch Ratings credit ratings rely on factual information received from issuers and other sources. Fitch Ratings cannot ensure that all such information will be accurate and complete. Further, ratings are inherently forward-looking, embody assumptions and predictions that by their nature cannot be verified as facts, and can be affected by future events or conditions that were not anticipated at the time a rating was issued or affirmed. The information in this presentation is provided as is without any representation or warranty. A Fitch Ratings credit rating is an opinion as to the creditworthiness of a security and does not address the risk of loss due to risks other than credit risk, unless such risk is specifically mentioned. A Fitch Ratings report is not a substitute for information provided to investors by the issuer and its agents in connection with a sale of securities. Ratings may be changed or withdrawn at any time for any reason in the sole discretion of Fitch Ratings. The agency does not provide investment advice of any sort. Ratings are not a recommendation to buy, sell, or hold any security. ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS AND THE TERMS OF USE OF SUCH RATINGS AT 4/3/14 15

17 Q&A 16

18 New York 33 Whitehall Street New York, NY London 30 North Colonnade Canary Wharf London E14 5GN