2013 Results, 2030 Strategic Plan and Business Plan

Transcription

1 Maria das Graças Silva Foster CEO 2013 Results, 2030 Strategic Plan and Business Plan Conference Call/Webcast February 26th, 2014

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 in making 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 2014 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. 2

3 4th Quarter and 2013 Year End Results

4 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 RRR Brazil: 131% (above 100% for the 22 years in a row) Proven Reserves Billion boe Reserves/Production = 20 years Offshore wells drilled: Post-salt (14) + Pre-salt (17) International 4% 15% Natural Gas R$ 17.3 billion invested in exploration in 2013 Brazil 96% 85% Oil + NGL Main Discoveries in Brazil 2013 Campos Basin Post-salt Mandarim Espírito Santo Santos Basin Pre-salt Sul de Tupi / Florim / Sagitário Iara Extensão 4 / Entorno de Iara Iguaçu Mirim / Franco Leste Iara Alto Ângulo / Jupiter Bracuhy Success Ratio in Brazil Pre-salt: 100% Post-salt Arjuna Potiguar Sergipe - Alagoas 59% 64% 75% Post-salt Pitú *RRR: Reserves Replacement Ratio Post-salt Farfan 1 / Muriú 1 / Moita Bonita

5 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 Natural decline during the last 12 months below expected range of 10-11%. Thousand bpd : 1,980 kbpd 2013: 1,931 kbpd Q12 Avg. 2,066 2Q12 Avg. 1,970 3Q12 Avg. 1,904 4Q12 Avg. 1,980 1Q13 Avg. 1,910 2Q13 Avg. 1,931 3Q13 Avg. 1,924 4Q13 Avg. 1, Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec % Main factors that impacted production in 2013: 1,980 1,931 P-63/Papa-Terra: changes in the subsea layout, postponing 1 st oil (Jul/13 to Nov/13). Cid. de São Paulo/Sapinhoá and Cid. de Paraty/Lula NE: unavailability of the monobuoys (China), as well as difficulties during installation, delaying the ramp-up of the systems (BSR1 Jul/13 to Feb/14). P-55/Roncador Module III: delay in system delivery, postponement of 1 st oil (Sep/13 to Dec/13). P-58/Parque das Baleias: delay in system delivery, postponement of 1 st oil (Nov/13 to Mar/14). EWT-Franco: cancelled due to delay in receiving authorization from ANP (FPSO Dynamic Producer) Limited availability of PLSVs (Pipe-Laying Support Vessels) impacted the pace of interconnection of wells, due to the delayed decision of contracting abroad (should have been contracted by the end of 2011, but were contracted from Apr/2013). 5

6 Sales (2,383 kbpd) and Oil Products Output (2,124 kbpd) in Brazil Oil products sales increased by 4% in Higher increase in production (6%), especially diesel (+8.6%) and gasoline (+12.1%) reduced oil products import needs. Oil Products Sales in Brazil Oil Products Output Thousand bbl/d Others Fuel Oil Jet Fuel Naphtha LPG Gasoline 2, % % 2, Thousand bbl/d Others Fuel Oil Jet Fuel Naphtha LPG Gasoline 1, % % 2, Diesel % 984 Diesel % Gasoline (+3.5%): increase in automotive fleet, competitive price relative to ethanol and increase of the anhydrous ethanol content in Type C gasoline. Diesel (+5.0%): increase in retail activities, higher thermal consumption, higher grain harvest and an increase in diesel light vehicle fleet. Fuel Oil (+16.7%): increased consumption at thermoelectric plants for electricity generation and higher demand from suppliers of natural gas to thermal power plants. Better performance due to the start-up of new quality and conversion units since 2012, optimization of refining processes and elimination of logistical bottlenecks. Utilization of refineries reached 97%, higher than 94% in 2012, with a 82% share of domestic crude oil processed. 6

7 Jan/12 Feb/12 Mar/12 Apr/12 May/12 Jun/12 Jul/12 Aug/12 Sep/12 Oct/12 Nov/12 Dec/12 Jan/13 Feb/13 Mar/13 Apr/13 May/13 Jun/13 Jul/13 Aug/13 Sep/13 Oct/13 Nov/13 Dec/13 Prices (R$/bbl) 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 throughout the year. Average Realization Price Brazil* x Average Realization Price US Gulf** Average Sales Price USGC Average Sales Price Brazil July 16 th Jun 25 th Adjustments Losses Jan 30 th Mar 6 th Adjustments Nov 30 th Adjustments Imported Volumes (kbpd) Gasoline Imports Diesel Imports *Considers Diesel, Gasoline, LPG, Jet Fuel and Fuel Oil ** Considers Brazilian market volumes for the above mentioned products. 7

8 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 Bolivia. DEMAND SUPPLY million m³/day +15% +15% Non-thermoelectric Thermoelectric Fertilizers* 39,3 11, % ,0 40, % +73% Domestic Bolivia LNG * Other internal uses in Petrobras 2013 x 2012 Higher thermoelectric demand due to lower rainfall. Thermoelectric generation using natural gas was 6 GW/average in 2013, 58% above the 3.8 GW/average in In 2013 and 2012, we met 100% of ONS s demands (National Operator of the Electric System). 8

9 Results of Structuring Programs in 2013 PROCOP, PRODESIN and PROEF PROCOP 2013 Operating Costs Optimization Program Optimization of operational activities generated greater productivity levels and reduced unit costs above expectations PRODESIN 2013 Divestment Program Conclusion of 21 divestments since Oct/2012, totalling US$ 10.7 billion, with US$ 3.4 billion in 2012 and US$ 7.3 billion in PROEF 2013 Program to Increase Operational Efficiency Gain of +63 kbpd in production, with +21 kbpd in UO-BC and +42 kbpd in UO-RIO, due to the higher level of operational efficiency. Avoided Costs: R$ 6.6 billion Actual Transactions: US$ 7.3 billion UO-BC: +7.5 p.p. R$ billion % 6.6 US$ billion % 7.3 Operational Efficiency (%) +7.5 p.p Without PROEF With PROEF 2013 Target 2013 Real The gains exceeded targets and were obtained through energy integration, workforce productivity, maritime transportation and inventories. R$ billion Financial Restructuring* Assets Cash contribution: R$ 8.5 billion % UO-RIO: +2.5 p.p. Operational Effriciency (%) +2,5 p.p * * Petrobras and BR financial assets. 2013* Without PROEF With PROEF 9

10 R$ Billion 2013 Investments: R$ Billion Investments totaled R$ billion, 24% above 2012, including Libra s signing fee (R$ 6 billion). Annual Investment Investment by Segment +24% 1.1% 1.1% 0.3% % 6% E&P Downstream International 29% 57% Gas & Energy Corporate Distribution Biofuels Physical and financial monitoring of 158 individualized projects, which represent 73% of investments (S-Curves): average physical realization of 91% and financial realization of 101%. 10

11 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 May/2013 contributed to an increase of 11% in the year s net income. R$ billion % +11% 2013 x 2012 Results Highlights Higher oil products prices (mainly diesel and gasoline since 2H12 and throughout 2013); Higher throughput in our refineries, reducing imported oil products share in the sales mix; Asset sales gains of PRODESIN Divestment Program Lower dry and sub-commercial wells expenses; Extension of hedge accounting since May/2013; Operating Income Net Income Lower crude oil exports due to lower production levels, as well as higher domestic crude oil share in throughput; Persistence of domestic oil products price differentials relative to international prices due to the currency devaluation; Lower finance income due to the sales of government bonds (NTN-B) and readjustment of judicial deposits in 2012; and Higher finance expense due to higher debt. 11

12 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 expenses. R$ billion % Operating Income Net Income EBITDA +6% +11% 2013 x 2012 EBITDA Higher oil products prices (mainly diesel and gasoline since 2H12 and throughout 2013); Higher throughput in our refineries, reducing imported oil products share in the sales mix; Asset sales gains of PRODESIN Program of Divestitures Lower dry and sub-commercial wells expenses; Lower crude oil exports due to lower production levels, as well as higher domestic crude oil share in throughput; Persistence of domestic oil products price differentials relative to international prices due to the currency devaluation 12

13 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$ Billion R$ -9.7 billion (-41%) +130 kbpd 3.3 Structuring Programs +100 kbpd kbpd 13.9 Structuring Programs Gains are equivalent of exports results of +293 kbpd of crude oil 2013 Net Income PROCOP Operating Costs Optimization Program PRODESIN Divestment Program PROEF Program to Increase Operational Efficiency Of UO-BC and UO-RIO 2013 Net Income Without Structuring Programs 13

14 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-Poço (R$ 0.7 billion) and Procop (R$ 4.3 billion) enabled a 47% higher cash position. R$ Billion R$ billion (+47%) Cash Position 2013 PRODESIN* Divestment Program INFRALOG Integrated Management of Logistcs Projects PRC Poço Program to Reduce Well Costs PROCOP** Operating Costs Optimization Program Cash Position without Structuring Programs *Sales Value + Avoided CAPEX. **Gain with Income Tax discounted Avoided CAPEX was not considered in PRC-SUB in

15 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%. 4,5 3,5 2,5 1,5 31% 31% 2.77 Net Debt /Adjusted EBITDA 1 Net Debt / Net Capitalization % Q12 1Q13 2Q13 3Q13 4Q13 36% % % 40% 30% 20% 10% 0% -10% R$ Billion 12/31/12 12/31/13 Short-term Debt Long-term Debt Total Debt (-) Cash and Cash Equivalents = Net Debt US$ Billion 1) Refers to the adjusted EBITDA which excludes equity income and impairment. 2) Net Debt / (Net Debt + Shareholder s Equity) 3) Includes tradable securities maturing in more than 90 days Net Debt

16 Targets for 2014 Higher oil and oil products production, operational efficiency and cost optimization will drive 2014 results Oil Production (kbpd) 7.5% +/- 1p.p. Máximo Meta Mínimo PROEF (Operational Efficiency %) 75.4 UO-BC p.p. Oil Products Output (kbpd) +1% 2,124 2, UO-RIO ,931 p.p. +7% Others Gasoline Diesel Investments (R$ billion) PROCOP 2014 Target (R$ billion) % % E&P Brasil 64% E&P Brasil % % Target 2013 Real

17 2030 Strategic Plan

18 Agenda (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 Strategies Exploration and Production Refining, Transportation, Marketing and Petrochemical (RTMP) Distribution Gas, Energy and Gas-Chemical Biofuels International 6. Challenges of the Corporate Segments 7. Mission, Vision 2030 e Corporate Drivers 18

19 Petrobras Strategic Plan: Recent History Main Drivers for the Revision of 2013 Planning 2030 Vision 2007 Last Offshore Areas Bid 2008 Shale Gas Beginning of US Shale Gas production growth 2008 World Economic Crisis Brent drops to US$ 34,00/bbl 2010 Law : Transfer of Rights Law : PPSA Law : PSA 2013 Libra Auction (Oct) First PSA Auction 2013 Tight Oil production reaches 2.3 MMbpd Pre-Salt s Discovery: Lula (Jul) 2008 First Oil: Pre-Salt Jubarte EWT (Sep) 2009 First Oil Santos Pre-Salt: Lula EWT (May) 2011 Libra s discovery 2014 Pre-salt s production 2013 record: 407 kbpd (Feb) Pre-salt: 300 kbpd only 7 years after discovery* *GOM=17 years, Campos B.=11 years, North Sea=9 years 2020 Strategic Plan Created in: 2007 Drivers: pre-salt s discovery and growth of oil products market in Brazil. 13 year horizon: strategies defined to 2020, based on 2007 s exploratory potential, not considering future bid rounds. Created in: Strategic Plan Drivers: changes in regulatory framework in Brazil new Transfer of Rights and Production Sharing Agreement Regimes, growth in US shale gas and tight oil production and 2008 world economic crisis. 17 year horizon: growth in oil production beyond 2020 demands, on top of the 2013 exploratory potential, the incorporation of areas acquired in the new bids (concession and PSA) 19

20 Petrobras Strategic Plan: WORLD Business Environment 2007 x year when 2020 Strategic Plan was developed year when 2030 Strategic Plan was developed Positive perspective for the world economy. High growth rates ( expected GDP: 5% p.a. Source: IMF, Oct/2007) Strong growth for the Chinese economy resulting in high commodity prices (China s economic growth : 9.8% p.a. Source: IMF, Oct/2013) Strong oil demand growth. (1.8% p.a Source: IEA, Nov/2007) Projections for oil prices increased every year, due to demand growth and the views on depletion in non-opec production. (Average projected price for the period: US$ 55/bbl in 2007 and US$ 75/bbl in 2008 Source: Pira, 2007 and 2008) 2008 world economic crisis reduces world economic growth expectations. (Expected world GDP for = 3.6% p.a. Source: Global Insight, 2013) Uncertainties surrounding the pace of China s economic growth and impacts on prices. (China s economic growth : % p.a. Source: EIU and Global Insight, 2013) Slow-down in oil demand growth (0.7% p.a Source: IEA, Nov/2013) Oil price stable with perspectives of a small decrease in the mid-term (non-conventionals production growth in US, Irak and Brazil). ( projected price: US$ 100/bbl. Source: Pira, 2013) Great enthusiasm with biofuels. 5 Non-conventionals revolution: 2030 production: tight oil 5.8 MMbpd and shale gas bn m³ (Source: IEA, 2013) Perspective of growth in US dependency on oil and gas imports (growth in LNG imports) Perspective for US self-sufficiency in Gas by 2019 and reduction of oil imports needs from 7.9 to 3.6 MMbpd in 2030 (Source: IEA, 2013) 20

21 Petrobras Strategic Plan: BRAZIL Business Environment 2007 x year when 2020 Strategic Plan was developed year when 2030 Strategic Plan was developed Perspectives of oil production growth in Brazil due to the Pre-salt s discoveries. Questions on the existence and feasibility of technologies for Pre-salt production. Examples: salt movements; H 2 S content; CO 2 treatment and reinjection. 1 Deeper knowledge on the Pre-salt, with successive production records. We already have 10 production units operating in the Pre-salt layer. Experience in the Pre-salt exploration and production and in the reservoir performance led us to the cost optimization phase. E&P activities in Brazil were regulated solely by the concession framework. Critical resources were mapped to attract foreign suppliers to Brazil. There were uncertainties surrounding the naval industry s capacity to meet Post-salt + Pre-Salt s demands. Perspectives on oil products demand growth for the period was 2.8% p.a.: - A 4.1% p.a. fleet growth was expected, alongside wealth creation; - Biodiesel requirements evolving to B5 in 2010 up to Great expectation on strong ethanol expansion, with the announcement of 100 new projects (Source: Consultoria Ideia/2007) Three regulatory frameworks Oil and Gas business with three frameworks: Concession, Transfer of Rights and Production Sharing Agreement Local Content Policy is a reality. National industry presses ahead with its learning curve, especially in the naval segment, with perspectives of competitiveness. Perspective on oil products demand growth for the period of 2.5% p.a. and 2.2% p.a. for For growth amounted to 4.5% p.a. and fleet growth to 7.4% p.a. - A 5.8% fleet growth is expected for the period and 4.2% for Perspective on the evolution of biodiesel requirements from the current B5 to B8 up to 2010 and B10 up to 2023, flat up to 2030 Lower expectation for ethanol expansion, focused on the recovery of agricultural productivity. Ethanol demand growth of 5.4% p.a. in the period, being met, up to 2016, by spare capacity. 21

22 World Liquids Demand (MM bpd) New Projects Total 23.1 MM bpd World Oil Supply x Demand: Economic feasibility of future oil production Supply challenges Demand Projection and Expected Decline of World Oil Production Current Production MM bpd 78.4 MM bpd Production Volume from New Projects with production start up from 2013 on according to WoodMackenzie Production volumes from new projects (thousand barrels per day) Brazil Venezuela Latin Am. Others West Africa North Africa Africa Others EUA (Onshore) Canadá Oil Sands EUA (Golfo do México) México Canadá EUA (Alasca) Iraq Iran Saudi Arabia Middle East Others China Australia Asia Others North Sea Russia and East Europe Caspian Europe Others Tight Oil Contribution (382 Mbpd) Latam Africa North Am Middle East Asia Europe + FSU Total 23.1 MM bpd Source: Wood Mackenzie Data - Global Oil Supply Tool (May/2013), developed by Petrobras, save for Brazil data, for which the source is Petrobras internal estimates (Jul/2013). 22

23 World Liquids Demand (MM bpd) World Oil Supply x Demand: Economic feasibility of future oil production Projects In operation New Projects Supply challenges Demand Projection and Expected Decline of World Oil Production Challenges for New Oil Production Projects around MM bpd Each country has specific challenges to sustain or grow production in the 2030 horizon: USA: In America, tight oil sweet spots will be more quickly explored by 2020, increasing project costs in the next decade. Uncertainties surrounding environmental restrictions persist. Brazil: Focus on deep waters, for which the frequency of bid rounds, opportunities and obligations will be the variables that companies will consider when evaluating their participation in bids or consortia. Canada: High production costs lead to marginal producer status, demanding a continuous search of efficiency gains Current Production Russia: Current production in advance phase of decline, demanding substantial investment in the development of new fields, both in mature areas and new production frontiers. Iraq: sustain production increase through solving internal conflicts. Common Challenge: Individual projects management reducing Capex and Opex. Source: Petrobras development, based on World Energy Outlook/IEA 2013; World Oil Outlook/OPEC 2013; CERA 2013; WoodMakcenzie

24 Henry Hub Nat. Gas Prices in US$/MM Btu (2014 US$) 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 the average of long term s projections. Oil prices in US$/bbl ( ) Henry Hub Natural Gas Prices in US$/MMBtu Projections* Petrobras US$ 107/bbl US$ 105/bbl US$ 100/bbl US$ 95/bbl US$/MMBtu 4.00 US$/MMBtu 4.60 US$/MMBtu 5.88 US$/MMBtu * Projections: AIE (Nov/2013), PIRA (May/2013), WoodMackenzie (March/2013), IHS (Jul/2013), AEO (April/2013). * Projections: IEA/DOE (June/2012), PIRA (Jan/2013) and CERA (Oct/20123), Barclays Capital (Nov/2012) 24

25 Brazil s Sedimentary Basins: Areas Granted to Petrobras in 2007 and 2013 In 2007, Petrobras held the rights to an exploratory area 84% larger than 2013 s. Areas Granted to be Explored by Petrobras in Brazil 2007: 140 thousand km² 2013: 76 thousand km² Note: 2013 position does not include Libra and Bids 11 and 12 State Limits Sedimentary Basin Petrobras 100% Petrobras and Partners 25

26 Petrobras Strategy: Choices of an Integrated Energy Company E&P E&P To produce on average 4.0 million barrels of oil per day in the period, under Petrobras ownership in Brazil and abroad, acquiring exploration rights to meet this objective RTMP DISTRIBUTION To supply the Brazilian oil products market, reaching a refining capacity of 3.9 million bpd, to match domestic market demand To maintain the leadership in the domestic market for fuels, increasing the value added and the preference for Petrobras brand NATURAL GAS, ENERGY and GAS-CHEMICAL BIOFUELS To add value to the businesses of the natural gas chain, ensuring the monetization of the gas from the Pre-salt and Brazil s land basins. To keep the growth in biofuels, ethanol and biodiesel, alongside the domestic market for gasoline and diesel Perform E&P activities, focusing on oil and gas exploration in Latin America, Africa and USA INTERNATIONAL 26

27 Exploration and Production To produce on average 4.0 million barrels of oil per day in the period, under Petrobras ownership in Brazil and abroad, acquiring exploration rights to meet this objective 27

28 Million bpd Oil and NGL production scenarios in Brazil Petrobras and Estimators: 2013, 2020 to 2035 In 2035, according to estimators, Brazil s oil production will range from 4.7 to 6.6 million barrels of oil per day. International Energy Agency places Brazil as the 6th largest oil producer in Brazil s Average Oil Production : 5.2 million bpd Petrobras Vision* Estimator Brazil s Oil Production Average Brazil s Oil Production Petrobras - Brazil* 5.2 million bpd Outside SP 2030 horizon 2. DOE 5.0 million bpd 6,6 million bpd 3. WoodMackenzie 4.9 million bpd 5,4 million bpd 4. CERA 4.4 million bpd 4,7 million bpd 5. AIE 5.4 million bpd in ,0 million bpd Average 2035 Source: Petrobras Dec/2013 E&P-CORP * Brazil s production according to Petrobras s view and reasoning, considering different paces for the bid rounds put forward by the Government (Petrobras view today, 2013, up to 2030). Source: AIE 2013, DOE 2013, WoodMackenzie 2013, IHS - CERA 2013 (The use of this content was authorized in advance by IHS. Any further use or redistribution of this content is strictly prohibited without a written permission by IHS. All rights reserved). 28

29 Million bpd 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 abroad, maximizing profitability. Average Oil Production in Brazil* Petrobras + Third Parties + Government : 5.2 million bpd Petrobras Average Production in Brazil* and Abroad : 3.0 million bpd 4,2 Petrobras Average Production in Brazil* and Abroad : 4.0 million bpd Petrobras Average Production in Brazil* : 3.7 million bpd Petrobras Average Production in Brazil* : 2.9 million bpd Average * Brazil s production according to Petrobras s view and reasoning, considering different paces for the bid rounds put forward by the Government (Petrobras view today, 2013, up to 2030). Source: Petrobras Dec/2013 E&P-CORP 29

30 Strategies E&P Segment E&P: Discover and appropriate reserves in Brazil, keeping a reserve to production ratio above 12 years Develop exploratory efforts in Brazil s sedimentary basins, selectively and sharing risks Develop exploratory efforts for natural gas in Brazil s sedimentary land basins Maximize, with profitability, oil and gas recovery in Brazil s concessions under production Develop Pre-salt s Area production in Brazil 30

31 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

32 Million bpd 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 : 5.2 million bpd 3.7 Average Oil Products Demand in Brazil : 3.4 million bpd * Brazil s production according to Petrobras s view and reasoning, considering different paces for the bid rounds put forward by the Government (Petrobras view today, 2013, up to 2030). 32

33 Million bpd 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 : 5.2 million bpd Petrobras Average Oil Production in Brazil : 2.9 million bpd Petrobras Average Oil Production in Brazil : 3.7 million bpd Average Oil Products Demand in Brazil : 3.4 million bpd 3.7 * Brazil s production according to Petrobras s view and reasoning, considering different paces for the bid rounds put forward by the Government (Petrobras view today, 2013, up to 2030). 33

34 million bpd 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 Volumes Self-sufficiency: Oil production = oil products consumption Petrobras Average Oil Production in Brazil : 2.9 million bpd Oil Products Self-sufficiency: Total throughput = Total demand Average Oil Production in Brazil* Petrobras+Third Parties+ Government : 5.2 million bpd Petrobras Average Oil Production in Brazil : 3.7 million bpd Average Demand for Oil Products in Brazil : 3.4 million bpd * PROMEGA Increase in Capacity by 195 kbpd OBS: Additional throughput capacity from PROMEGA (by/2016): +165 kbpd (existing refineries) + 30 kbpd (RNEST). PROMEGA: Its goal is to increase diesel, jet fuel and gasoline production from the existing refineries, based on the increase in the capacity and efficiency of the processing units * Brazil s production according to Petrobras s view and reasoning, considering different paces for the bid rounds put forward by the Government (Petrobras view today, 2013, up to 2030). 34

35 Distribution To maintain the leadership in the domestic market for fuels, increasing the value added and the preference for Petrobras brand 35

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 products market will grow 74% during this period. million m³ % 38% 38% % 36% 37% Others Brazil s Oil Products Retail Market BR Distribuidora Share (million m³/year and %) BR Distribuidora % 30% 20% 10% % 2020 Average Market-Share BR Distribuidora Regional Growth ( ) North +3.4%a.a. Center-West +3.3%a.a. South +3.6%a.a. Southeast +2.6%a.a. Northeast +4.0%a.a. 36

37 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 Brazil s land basins. 37

38 Natural Gas Supply and Demand Balance: (million m³/day) The natural gas imports and transportation infrastructure already installed is enough to meet Petrobras demand until 2030* Supply Domestic Supply of NG¹ Bolivia Imports Average Supply E&P New BIDs Supply E&P Flexible Inflexible Demand Thermoelectric Demand Petrobras + Third Parties NG Distributors Demand Average To be contracted Flexible Inflexible Demand 2013 LNG Regasification TRBA Pecém Baía de Average ** Average ** Guanabara Average Petrobras Demand: Fertilizers + Refineries Average Total Total ¹ Includes NG from Partners and Third Parties. ** Supply expects the renovation of the GSA with YPFB (Bolivia) and does not consider the need of a 4 th LNG terminal. * Excludes natural gas production outflow and processing infrastructure. Fertilizers under Evaluation Fertilizers Refining 38

39 Biofuels To keep the growth in biofuels, ethanol and biodiesel, alongside the domestic market for gasoline and diesel 39

40 Participation in the Biofuels Market: Increase of Ethanol and Biofuel production, following the growth of the gasoline and diesel domestic market. 2,000 1,500 1, Gasoline Type A and Ethanol Market ¹ (thous. bpd) , ¹ Consists of Gasoline Type A, anhydrous ethanol and hydrous ethanol. 1, Gasoline Type A and Ethanol 1,501 Market 822 Ethanol Market Average ,000 1,500 1,000 1, ² Domestic market only 1, Diesel and Biodiesel ² (thous. bpd) 1, , ,618 Diesel and Biodiesel Market Biodiesel Market 152 Average Participation of PBIO in Ethanol Production (thous. bpd) PBIO Ethanol + Partners 60 Average PBIO Ethanol 40 Participation of PBIO in Biodiesel Production (thous. bpd) Average PBIO Biodiesel + Partners PBIO Biodiesel 40

41 International Area Perform E&P activities, focusing on oil and gas exploration in Latin America, Africa and USA 41

42 International Oil and Gas Production: 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 Bolivia to Brazil and on non-conventionals in Argentina and USA. thousand boed Petrobras Average International Oil and Natural Gas Production : 479 kboe Petrobras Average International Oil and Natural Gas Production : 229 kboe Petrobras Average International Oil Production : 267 kbpd Petrobras Average International Oil Production : 123 kbpd Average

43 Challenges of the Corporate Segments Human Resources (HR) Social Responsibility (SR) Health, Safety, Environment and Energy Efficiency (HSEE) Technology 43

44 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 Petrobras Social Responsibility Challenges (SR) To ensure the alignment and integration of social responsibility in the decision making processes and in the management of the business Health, Safety, Environment and Energy Efficiency Challenges (HSEE) To consolidate HSEE issues as a principle of the Company s operations and permanent commitment from the workforce Technolgy Challenges To keep the technological system recognized for providing technologies for the sustainable growth of the Company 44

45 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 environmental responsibility, providing products suited to the needs of its clients and contributing to the development of Brazil and the countries where it operates. To be one of the five largest integrated energy companies in the world¹ and the preferred one by its stakeholders. Corporate Drivers Integrated Growth Profitability Social and Environmental Responsibility ¹ Metric: one of the five largest oil producers among all companies, with or without shares in stock exchanges. (Source for calculation: Petroleum Intelligence Weekly PIW - Annual Report ) 45

46 Business and Management Plan

47 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). State Limit Sedimentary Basin 100% Petrobras Petrobras and Partners PAD IARA EXT-4(RJS-706) SAGITÁRIO(SPS-98) FLORIM(RJS-704) TANGO(CES-161) PITU(RNS-158) PAD FARFAN-1(SES-176D PAD MURIÚ-1(SES-175D) PAD MOITA BONITA(SES-178) PAD TAMBUATÁ SANTONIANO(GLF-35) SÃO BERNARDO(ESS-216) ARJUNA(ESS-211) RIO PURUS(CXR-1DA) EXT DE FORNO(AB-125) EXT DE BRAVA (VD-19) MANDARIM(MLS-105) BENEDITO(BP-8) FRANCO NORDESTE(RJS-724) FRANCO LESTE(RJS-723) FRANCO SUL(RJS-700) ENTORNO DE IARA-1(RJS-711) IARA ALTO ÂNGULO(RJS-715) JÚPITER BRACUHI(RJS-713) NE TUPI-2(RJS-721) SUL DE TUPI(RJS-698)) Brazil Discoveries: 46 Offshore: 24 Onshore: 22 Exploratory Success Ratio: 75% Reserves: 16.0 Billion boe RRR¹: 131% > 100% for the 21 st consecutive year R/P²: 20.0 years Pre-Salt Discoveries: 14, of which 5 were pioneers wells Exploratory Success Ratio: 100% Reserves: 300 km of SE region, 55% of GDP ¹ RRR: Reserves Replacement Ratio ² R/P: Reserve / Production 47

48 BMP: Petrobras Oil and NGL Production Curve in Brazil 2014 Growth: 7.5% ± 1p.a. Oil and NGL production operate by Petrobras in 2020 will be 4.9 million of bpd. Versão 20/02 22:00 48

49 BMP: Petrobras Oil, NGL and Natural Gas Production Curve in Brazil 2014 Growth: 7.5% ± 1p.a. Versão 20/02 22:00 49

50 BMP: Petrobras Oil and NGL Production Curve in Brazil Oi and NGL production (million bpd) 9 Production Units Concluded 1 st Oil Forecast 1 st Oil Forecast Sapinhoá Pilot (Cid. São Paulo) Baúna (Cid. Itajaí) Lula NE Pilot (Cid. Paraty) Papa-Terra (P-63) Roncador III (P-55) Norte Pq. Baleias (P-58) Roncador IV (P-62) Papa-Terra (P-61) Papa-Terra (TAD) Norte Pq. Baleias (P-58) 1 st Quarter Roncador IV (P-62) 2º Quarter Papa-Terra (P-61 + TAD ) 2 nd Quarter Sapinhoá Norte (Cid. Ilhabela) 3 rd Quarter Iracema Sul (Cid. Mangaratiba) 4 th Quarter Iracema Norte (Cid. Itaguaí) 3 rd Quarter Lula Alto Lula Central Lula Sul (P-66) Búzios I (P-74) Lapa Lula Norte (P-67) Búzios II (P-75) Lula Ext. Sul e ToR Sul de Lula (P-68) Lula Oeste (P-69) Búzios III (P-76) Iara Horst (P-70) Tartaruga Verde and Mestiça Búzios IV (P-77) NE de Tupi (P-72) Deep Water ES Iara NW (P-71) Marlim I Revitalization Deep Water I SE Sul Pq. Baleias Maromba I Carcará Entorno de Iara (P-73) Júpiter Búzios V Espadarte III Deep Water II SE Marlim II Revitalization Libra Florim 2014 Growth: 7.5% ± 1p.a. Production Units in operation Production Units Delivered in Production Units not bid as of Feb/

51 Production Units Delivered, under Construction and under Bidding 1,000 kbpd 300 kbpd Additional Installed Capacity Operated by Petrobras P kbpd 1,000 kbpd 900 kbpd 1,050 kbpd P-73 TAD P-62 Cid. Mangaratiba Cid. Itaguaí P-75 P-67 P-77 P-71 P-61 Cid. Caraguatatuba P-70 Cid. Ilhabela P-72 P-58 Under Bidding Process: P-76 P-55 P-63 Cid. Paraty Cid. Itajaí Cid. São Paulo 2013 Tartaruga Verde and Mestiça Deep Water ES Marlim I Revitalization Deep Water I SE Maromba I Sul do Pq. das Baleias Carcará P-74 P-66 Cid. Maricá Cid. Saquarema P-69 P-68 PU under bidding: Tartaruga Verde and Mestiça kbpd PU to be bid: Deep Water ES Marlim I Revitalization Deep Water I SE Maromba I Sul do Pq. das Baleias Carcará kbpd 51

52 PLSVs under Operation and Construction 19 New PLSVs to support the Oil Curve Current Fleet = 11 PLSVs + 8 throughout PLSVs of 550t (The Netherlands) 1 PLSVs of 300t (Suape) Sunrise 270t Kommandor t North Ocean t Sapura Diamante 550t 1 PLSVs of 300t (The Netherlands) 1 PLSVs of 550t (The Netherlands) Deep Constructor 125t Normand7 340t Lay Vessel t Sapura Topázio 550t P-58 Skandi Vitória 300t Seven Mar 340t Polar Onyx 275t Seven Waves 550t 2 PLSVs of 550t (The Netherlands) Skandi Niterói 270t Seven Seas 430t Coral do Atlântico 550t Estrela do Mar 550t 2 PLSVs of 650t (The Netherlands) McDermott Agile 200t Seven Condor 230t 1 PLSVs of 300t (Suape) PLSV: Pipe Laying Support Vessel 2014 Seven Phoenix 340t

53 Million bpd 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. PROMEGA Capacity Expansion of 195 kbpd RNEST 1 st Phase 4 th Quarter RNEST 2 nd Phase 2 nd Quarter Comperj 1 st Phase Premium I 1 st Phase Premium II PROMEGA additional refining capacity (by Dec/2016): +165 kbpd (current refineries) + 30 kbpd (RNEST). PROMEGA targets are to increase diesel, jet fuel and gasoline production of our refineries, based on capacity and efficiency increase of processing units. 53

54 mai-04 nov-04 mai-05 nov-05 mai-06 nov-06 mai-07 nov-07 mai-08 nov-08 mai-09 nov-09 mai-10 nov-10 mai-11 nov-11 mai-12 nov-12 mai-13 nov-13 mai-14 nov-14 mai-15 nov-15 mai-16 nov-16 mai-17 nov-17 mai-18 nov-18 mai-19 nov-19 mai-20 nov-20 mai-21 nov-21 jan-10 jul-10 jan-11 jul-11 jan-12 jul-12 jan-13 jul-13 jan-14 jul-14 jan-15 jul-15 jan-16 jul-16 jan-17 jul-17 jan-18 jul-18 jan-19 jul-19 jan-20 jul-20 jan-21 jul-21 (%) US$ MM abr-05 out-05 abr-06 out-06 abr-07 out-07 abr-08 out-08 abr-09 out-09 abr-10 out-10 abr-11 out-11 abr-12 out-12 abr-13 out-13 abr-14 out-14 abr-15 out-15 abr-16 out-16 abr-17 out-17 abr-18 out-18 abr-19 out-19 abr-20 out-20 abr-05 out-05 abr-06 out-06 abr-07 out-07 abr-08 out-08 abr-09 out-09 abr-10 out-10 abr-11 out-11 abr-12 out-12 abr-13 out-13 abr-14 out-14 abr-15 out-15 abr-16 out-16 abr-17 out-17 abr-18 out-18 abr-19 out-19 abr-20 out-20 (%) US$ MM RNEST and COMPERJ Refineries Physical and Financial Monitoring RNEST Start-up: 4 th Quarter Physical Monitoring S-Curve IMPLEMENTION MILESTONES 1 - Start-up - ETA (Mar/2014) 2 - Start-up - ETDI (Sep/2014) 3 - Start-up UDA 11 (Oct/2014) 4 - Start-up UCR 21 (Nov/2014) 5 - Start-up HDT Diesel 31 (Nov/2014) BMP PNG Projetado Planned 2014 BMP 13-17: 87% Accomplished: 84% Financial Monitoring S-Curve BMP PNG 13-17: US$ US$ MM MM Projetado: Planned US$ MM US$ MM BMP 13-17: 15,246 Million Accomplished: 14,841 Million feb/14 PNG BMP PNG BMP Realizado Accomplished Projetado Planned PNG BMP Realizado Accomplished Projetado Planned COMPERJ Start-up: Physical Monitoring S-Curve IMPLEMENTATION MILESTONES 1 - Start-up ETA (Jun/2015) 2 - Start-up - ETDI (Jun/2015) 3 - Start-up - UDAV (Ago/2016) 4 - Start-up - UCR (Ago/2016) 5 - Start-up - HCC (Ago/2016) BMP PNG Projetado Planned 2016 BMP 13-17: 67% Accomplished: 66% Financial Monitoring S-Curve PNG 13-17: US$ BMP MM US$ MM Projetado: US$ Planned MM US$ MM BMP 13-17: 7,882 Million Accomplished: 7,573 Million feb/14 PNG BMP PNG BMP Realizado Accomplished Projetado Planned PNG BMP Realizado Accomplished Projetado Planned 54

55 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. 7.5 Installed Capacity of 5.0 Thermoelectric Generation (GW) , % , New TP Current Capacity Thermoelectric Power Plant projects: TP Baixada Fluminense Feb/2014 TP Azulão 2017 TP Bahia II 2020 TP Sudeste VI % NG Distributor Demand (million m³/d) Infrastructure projects of NG: Delivery gates along GASBOL and NE and SE Network Ammonia and Urea Market Supply (million ton/year) % Ammonia Urea Fertilizers projects: Ammonium Sulfate Feb/2014 UNF III (MS) 4 th Quarter UNF V (MG)

56 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 in Argentina and the USA. kboed Growth rate: 8.9 % p.a Growth rate: 8.7 % p.a Petrobras International Oil and Natural Gas Production Petrobras International Oil Production 56

57 Business and Management Plan Fundamentals PERFORMANCE CAPITAL DISCIPLINE PRIORITY Financiability Assumptions Investment Grade rating maintenance No new equity issuance Convergence with International Prices (Oil Products) Partnerships and Business Models Restructuring Management focused on reaching physical and financial targets of each project Guarantee the expansion of the business with solid financial indicators Priority for oil and natural gas exploration & production projects in Brazil

58 BMP Investments Approved by the Board of Directors of Petrobras on 02/25/2014 BMP US$ billion Financiability Assumptions (70%) E&P Downstream Gas and Energy International Biofuels Distribution Other Areas (18%) 10.1 (5%) 9.7 (4%) 2,3 (1.0%) (1.2%) (1%) 1.0 (0.4%) Engineering, Technology and Materials Investment Grade Rating maintenance: Return of the debt ratios and leverage to their limits within 24 months 2 Leverage lower than 35% Net Debt/Ebitda lower than 2.5x No new equity issuance Convergence with International Prices (Oil Products) Partnerships and Business Models Restructuring 1) Financial Area, Strategy and Corporate-Services 2) Material Fact of 11/29/

59 BMP Investments: US$ Billion Portfolio of Projects Under Implementation, Bidding Process and Evaluation Total Investments US$ Billion Portfolio of Projects Under Implementation + Under Bidding Process US$ Billion Portfolio of Projects Under Evaluation US$ 13.8 Billion (70%) 38.7 (18%) 10,1 (5%) 9,7 (4%) 2,3 (1,0%) 2,2 (1%) 1,0 (0,4%) 2,7 (1,2%) = Under Implementation Projects being executed (construction) Projects already bid Resources required for studies of Projects Under Evaluation Under Bidding Process E&P projects in Brazil Premium I Refinery Premium II Refinery + Projects under Studies in Phase I, II or III (except E&P in Brazil) Oil Production 2020: 4.2 million bpd No impact in Oil Production 2020 E&P Downstream Gas and Energy International Biofuels Distribution Engineering, Technology and Materials Other Areas 1 1) Financial Area, Strategy and Corporate-Services ¹ Includes E&P projects in Brazil that must pass through bidding process of their units, as well as Premium I and Premium II refineries that bidding process will be done in

60 Petrobras Investments in Exploration and Production: US$ billion Total E&P US$ bilhões Production Development + Exploration US$ billion 18,0 (12%) 23,4 (15%) 53,9 (40%) 82,0 (60%) 112,5 (73%) Exploration Production Development Infrastructure and Support Post-Salt Pre-Salt Pre-Salt (Concession) Transfer of Rights PSA (Libra) E&P Petrobras US$ Billion (77%) + E&P Partners US$ 44.8 Billion (23%) = Total with Partners US$ Billion (100%) 60

61 Petrobras Investments: US$ 58.5 billion Downstream Gas, Energy and Gas-Chemical International Downstream US$ 38.7 billion Refining Capacity Expansion Operational Improvement Quality and Conversion Logistics for Oil Fleet Expansion Petrochemical Logistics for Ethanol Distribution Corporate 1,4 3% 5,5 14% 3,3 9% 0,4 1% 1,4 4% 9,4 24% 0,3 1% 0,3 1% 16,8 43% Projects Under Implementation RNEST (Pernambuco) COMPERJ 1st phase (Rio de Janeiro) PROMEF 45 Vessels to transport Oil and Oil Products Projects Under Bidding Process Premium I 1st phase (Maranhão) Premium II (Ceará) Gas, Energy and Gas-Chemical US$ 10.1 billion Energy Network Regas - LNG 6,1 61% 0,1 1% 1,3 13% 2,6 25% Projects Under Implementation UNF III (Mato Grosso do Sul) UNF V (Minas Gerais) Rote 2: Gas pipeline and NGPU Rote 3: Gas pipeline and NGPU Gas-Chemical Operational Units (Nitrogenous) International US$ 9.7 billion Exploration & Production Refining & Marketing Distribution Gas & Energy Corporate Petrochemical 9,0 92% 0,05 0,5% 0,6 6% 0,01 0,1% 0,05 0,5% 0,1 0,7% Projects Under Implementation E&P USA Saint Malo E&P USA Cascade and Chinook E&P USA Lucius E&P Argentina Medanito and Entre Lomas E&P Bolivia San Alberto and San Antonio E&P Nigeria Egina Projects under implementation, under evaluation and under bidding were included.. 61

62 BMP: Investment and Operating Costs Management BMP US$ Billion PROEF Program to Increase Operational Efficiency UO-BC UO-RIO PROCOP Operating Costs Optimization Program PRC-Poço Program to Reduce Well Costs PRC-Sub Program to Reduce Subsea Facilities Costs INFRALOG Logistic Infrastructure Optimization Program Local Content Management Take advantage of the industry s capacity to maximize gains to Petrobras Health, Safety, Environment and Energy Efficiency PROCOP: Focus on OPEX, operating costs of the Company activities Manageable Operating Costs.. PRC-Poço: Focus on CAPEX dedicated to Wells construction Investments in Drilling and Completion. PRC Sub: Focus on CAPEX dedicated to subsea systems construction. 62

63 Logistic Cost in Downstream (R$/bbl): Lifting Cost (R$/boe): Refining Cost (R$ thous./uedc *): BMP Incorporates operational efficiency gains from PROCOP 34,8 32, Costs reduction between 2013 and 2016 with potential savings of R$ 37.5 billion in nominal values -5.9% p.a. -7.2% p.a ,3 Without PROCOP 24,2 With PROCOP Gains from PROCOP reduce Lifting Cost: Optimization of routine processes and resources used in the production of oil & gas. Excellence level in the management of materials and spares. Adequacy of overhead. 10,50 10, % p.a % p.a ,83 Without PROCOP 10,11 With PROCOP Gains from PROCOP reduce Logistic Cost: Reduction in shipping costs: simplification of customs procedures; optimization of fuel consumption; and implementation of new management tools. Optimization of inventory levels of oil and oil products. Reduction of stored water in the logistics system. 1,177 1, % p.a % p.a. 1,240 1,013 Without PROCOP With PROCOP Gains from PROCOP reduce Refining Cost: Integrating common and interdependent activities among refineries. Optimized use of support resources. Optimization in the consumption of energy, catalyzers and chemicals * UEDC = Utilized Equivalent Distillation Capacity period: projected with nominal values. 63

64 BMP: Financiability Analysis US$ billion Total Investment US$ billion Projects Under Implementation + Projects Under Bidding Process US$ billion Projects Under Evaluation US$ 13.8 billion (70%) 38.7 (18%) 10.1 (5%) 9.7 (4%) 2,3 (1.0%) 2.2 (1%) 1,0 (0.4%) = 2.7 (1.2%) Under Implementation Projects being executed (construction) Projects already bid Resources required for studies of Projects Under Evaluation Under Bidding Process E&P projects in Brazil Premium I Refinery Premium II Refinery + Projects under Studies in Phase I, II or III (except E&P in Brazil) Oil Production 2020: 4.2 million bpd No impact in Oil Production 2020 E&P Downstream Gas and Energy International Biofuels Distribution Engineering, Technology and Materials Other Areas 1 Financiability US$ billion Low maturity of projects: not considered in the financiability analysis 2 1) Financial Area, Strategy and Corporate-Services 2) As occurred in 2012 ( BMP ) and in 2013 ( BMP). ¹ Includes E&P projects in Brazil that must pass through bidding process of their units, as well as Premium I and Premium II refineries that bidding process will be done in

65 E&P and Dowstream Share Evolution in the Business and Management Plan Portfolio of Projects for Financiability Evaluation Portfolio of Projects for Financiability Evaluation E&P share in Petrobras investments has been increasing in the last five Business and Management Plan Investment US$ Billion US$ Billion US$ Billion US$ Billion US$ Billion 70% E&P 48% 52% 56% 62% Downstream 35% 33% 30% 27% Other Areas* 17% 15% 14% 11% 18% 12% BMP BMP BMP Total Capex BMP Total Capex BMP Total Capex * Gas and Energy, International, BR Distribuidora, PBio, Engineering Technology and Materials (ETM) and Corporate and Services Area 65

66 BMP: Financial Planning Assumptions Financing analysis only incorporates projects under Implementation + Bidding = US$ Billion No equity issuance Investment grade maintenance Main Assumptions for Cash Flow Generation and Investment Levels BMP is based on constant currencies from Brent Prices (US$/bbl) Average Exchange Rate (R$/US$) US$ 105 in 2014, declining to US$ 100 by 2017 and to US$ 95 in the long term R$ 2.23 in 2014, strengthening to R$ 1.92 in the long term Leverage Limit: < 35% Declining leverage (although limit surpassed in 2014) Net Debt/ EBITDA Oil Product Prices in Brazil Limit: < 2.5x Limit will be surpassed in 2014 and will fall below 2.5x from 2015 and below 2.0x in the end of period Convergence of prices in Brazil to international benchmarks, according to diesel and gasoline price policy appreciated by the Board of Directors on November 29 th,

67 US$ Billion bilhão BMP: Operating Cash Flow and Funding Needs , ,8 Additional funding needs will be funded exclusively through new debt. No equity issuance is envisaged Free cash flow, before dividends, from 2015 on. 165, , Annual borrowing needs Gross US$ 12.1 billion Net US$ 1.1 billion Net borrowing needs below previous BMP due to: Fontes Sources Usos Uses Business Model Restructuring Cash Utilization Third-party resources (Debt) Operating Cash Flow (After Dividends) and Divestments Amortization Investments Higher oil production. Expansion of refining capacity, reducing oil products imports. Business model restructuring, which decreases cash needs throughout the BMP. 67

68 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 68