PERSPECTIVES FOR THE BRAZILIAN REFINING INDUSTRY

Transcription

1 PERSPECTIVES FOR THE BRAZILIAN REFINING INDUSTRY Jorge Celestino Refining & Natural Gas Executive Director

2 Transformations facing the oil industry Changes in the competitive scenario: shale oil/gas Portfolio optimization Asset sales Lower capex and opex Capital and financial discipline

3 Global Refining Capacity Evolution of Global Refining Capacity (kbpd) 90,570 91,342 92,109 93,233 95,065 96,774 97,220 Crude Distillation Capacity Closures (cumulative) 31% 3% 9% 27% 7% 23% 33% 4% 10% 24% 6% 23% North Am. South & Central Am. Europe & Eurasia Middle East Africa Pacific Asia Source: BP Statistical Review 2016 Between almost 7 Million bpd refining capacity closures in whole world and 1.1 Million bpd presents closures risk; Europe leads rationalization (Source: IHS Energy April 2016). Drivers for Majors Company rationalization: World economics crisis and lower oil products demand, Export refinery in Middle East and Asia, Portfolio optimization to reduce Downstream exposure and focus in Upstream. 3

4 Brazilian Oil Products Supply Chain Production Distribution Retail Consumers 3 Petroleum Refiners (1 hegemonic producer) 40,809 (66% with flag) Petrochemicals Ethanol plants Biodiesel plants Formulators 187 Liquid Fuel Distributors Service Station 380 Jobbers (transporter retail reseller) Diesel, Fuel Oil, Lubes Light and Heavy Vehicles Industry Agriculture Large Consumers 156 Trading Companies Logistic Players Long-haul Cabotage Pipeline Rail Road nd 41 Brazilian fuel supply chain: producers, distributors, retailers and logistic players Storage

5 Brazilian Downstream has market value advantage Downstream in Brazil : long in crude oil, short in oil products and far from the main markets Privileged geographic position to spreads Downstream total spread formation logics Crude Oil Oil Products Δ Dead freight PE = Export Parity PI = Import Parity PI Crude Oil Price PE Δ Δ International Cracking spread Δ Δ PI Oil Product price at Refinery gate PE Refining Margin realized Buy Crude Oil near export parity + Buy Oil Products near import parity

6 Brazilian oil products market Free competition Third parties Imports Brazilian Oil Law (Art. 65): creates Transpetro Portaria ANP nº 251, : regulates Open Access Increasing Imports (thousand m³ ) Diesel Gasoline Until July , Players define prices policy Need to observe competition defense law Subsidies: need proposition by CNPE and Brazilian Congress approval Logistics: infrastructure depends on long term investments

7 Petrobras Business Plan - Brazilian market for oil products resumes growth Brazilian oil products market (Million bpd) % Diesel Gasoline Others Source: Petrobras Business and Management Plan

8 Petrobras Business Plan Oil and Oil Products supply and demand Favorable conditions in Oil and Oil Products supply and demand are likely to continue in long term 5º biggest oil products market 8º biggest refining park Petrobras Oil, NGL * and Gas Production (million boed) Produção Óleo, LGN e Gás Petrobras Refining Capacity in Brazil and brazilian oil products market (kbpd) 2, , Oil + gas International Natural Gas Brazil Oil + NGL* Brazil 2,330 2,355 2, ,231 2,231 2,231 2, , Source: Petrobras Business and Management Plan * Natural Gas Liquids Petrobras Refining Capacity in Brazil Brazilian Oil Products market

9 Petrobras Business Plan new strategic statement Petrobras Refining and Natural Gas new strategic statement considers a competitive adaptation supported for some conditions: Competitive Adaptation Conditions Stimulate a relevant perform from other players in Brazilian downstream Competitive domestic prices Optimized refining without the obligation of market supply Petrobras and third parties imports to complement market supply Third parties invests in refining capacity and logistics infrastructure Regulatory and government agents works to engage all the value chain players to guarantee market supply

10 Petrobras Business Plan - Refining and Natural Gas Strategies Reduce Petrobras Refining, Transportation, Logistics, Distribution and Sales risk through partnerships and divestments Promote a market parity price policy and maximize margins in the value chain PETROBRAS VISION An integrated energy company focused on oil and gas that evolves with society, creating high value, with a unique technical capability Optimize the business portfolio, withdrawing entirely from biofuel production, LPG distribution, fertilizer production and petrochemical interests, preserving technological competencies in areas with development potential Maximize value creation in the gas chain, aligned with regulatory developments, ensuring the monetization of proprietary production and optimizing participation in the chain of natural gas as a fuel of transition to the long term Restructure the Energy Businesses, consolidating the thermoelectric assets and other businesses in this segment, seeking the alternative that maximizes value for the company Review the Lubricant business, with the purpose of maximizing value creation to Petrobras 10

11 Business Plan Petrobras - Refining and Natural Gas capex breakdown Total RNG U$S 12.4 Billion 24% 7% 33% 11% 25% RTC - Operational continuity G&E - Operational continuity Others (Petrobras Distribuidora, PBIO and R&D) RTC - Capital investments G&E - Capital investments Source: Petrobras Business and Management Plan RTC: Refining, Transportation and Commercialization; G&E: Gas & Energy; PBIO: Petrobras Biocombustível; R&D: Research & Development. 11

12 Business Plan Petrobras: Refining and Natural Gas main projects RNEST (Abreu e Lima) Pre-salt gas flow 1st refining unit (Train I) 2nd refining unit (Train II) 100 kbpd 130 kbpd SNOX unit (under procurement) Seeking partnership Route 1 Route 3 Expansion of UTGCA under study Gas pipeline and Gas Processing Unit implementation COMPERJ Gas Processing Unit In final stages Refinery Seeking partnership SNOX: emission reduction unit; UTGCA: Monteiro Lobato Gas Treatment Unit. 12

13 Business Plan Petrobras: Partnerships and divestments Amount in US$ Billion Benefits of the partnerships Risk sharing Capex reduction Increased capacity to invest along the value chain Technological exchange Strengthening of corporate governance The partnerships and divestments program of Petrobras leverages third parties investments that might surpass US$ 40 Billion* in the next 10 years. * Does not consider investments of suppliers to increase capacity 13

14 Petrobras Partnerships and divestments Downstream partnerships plan respects 3 main objectives to guarantee business value: 1 Provide liquidity to Petrobras 2 Create / protect RNG value 3 Create / protect Petrobras integrated company value Generate operational cash flow Contribute to divestments plan Manage mandatory or already compromised Capex Pricing Operational Efficiency Profitable Growth / Capex E&P: maximize / guarantee crude oil portfolio value Other business: maximize / protect integrated value

15 Integrated Supply Chain Petrobras Partnerships and divestments Downstream partnerships plan preserves integrated supply chain rationale, protecting Brazilian market value advantage Integrated player rationale Interests along supply chain Exploration & Production Logistics Increase oil reserves and production Capex and Opex reduction Maximize crude oil netback Allocate lowest commercial value crude oil Control and right of way in products logistics Control supplies alternatives Refining Optimize refining Conversion, OPEX e CAPEX Pricing (at refinery gate) Optimization vs. market share Logistics Control and right of way in products logistics Control supplies alternatives Distribution Optimization and distribution logistics range Pricing for resale Optimization vs. market share Maximize integrated margins

16 Thank You Fotos Banco de Imagens Petrobras e

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