Brazil. A new window of opportunity. José Firmo. President of Brazilian Petroleum, Gas and Biofuels Institute

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1 Brazil A new window of opportunity José Firmo President of Brazilian Petroleum, Gas and Biofuels Institute

2 Disclaimer The content of this presentation is merely informative and uses data from third parties. IBP disclaims any responsibility for the completeness, accuracy and timeliness of the presented information, as well as for any effects arising from its use and interpretation. All intellectual property rights in any way related to the presented information, as well as any responsibility for its content, lies with its respective authors and/or proprietors.

3 Bidding s Offshore Operators Area by operator Thousand km² Competition Concentration Gap Back to competition! Petrobras Others st 2nd 3rd 4th 5th 6th 7th 9th 11th & Libra 13th 14th & PSC 15th & PSC Last update April/2018 Note: 8th Bidding canceled and there were no offshore areas offered in 10th and 12th Bidding s. Source: IBP with data retrieved from ANP

4 Future investment demand Committed demand (FPSO) 2027 s Forecast 7 Recoverable volume +10 bi bbl 3 C. de Maricá Lula Alto 2 Petrojar I Atlanta P-74 Búzios I Campos de Goytacazes Tartaruga V. P-67 Lula Norte P-68 Berbigão 4 Kangaroo & Echidna P-69 Ext. Sul Lula 6 Búzios V Parque das Baleias Rev. Marlim I Rev. Marlim II 3 Mero II New investments Offshore wells Production units Drilling rigs simultaneously US$230 bi C. de Saquarema Lula Central P-66 Lula Sul P-75 Búzios II P-79 Atapú I Carioca Sépia Itapu Flowlines 1,100 km C. de Caraguatatuba Lapa Pioneiro de Libra LDT Libra P-76 Búzios III P-77 Búzios IV Guanabara Mero Pilot Sergipe Gas pipelines 600 km Oil production increase +2 MMbpd Installed Under construction Pending final investment decisions Final investment decisions Bidding in progress Note: means To Be Named Source: IBP with data retrieved from E&P Brasil and ANP

Brazil s deepwater competitiveness Breakeven curve per play 2017 US$/bbl Brent 120 100

na produção de 2026 Non-OPEP Bone Spring Canada (oil sands) Europa Niobara Non-OPEP 80

Tight Oil Angola US Deepwaters OPEP OPEP Nigéria 0 1 2 3 4 5 6 7 8 9 10 11 12 Liquids

5 Brazil s deepwater competitiveness Breakeven curve per play 2017 US$/bbl Brent Águas profundas Águas rasas Terrestre Lower 48 Tight Oil Breakeven médio ponderado com base na produção de 2026 Non-OPEP Bone Spring Canada (oil sands) Europa Niobara Non-OPEP 80 Vertical L48 Bakken 60 Wolfcamp Eagle Ford Brazil Mid-Continent Non-OPEP Other L48 Tight Oil Angola US Deepwaters OPEP OPEP Nigéria Liquids production in 2026 (MMbpd) Source: Wood Mackenzie onshore breakevens at 10% discount rate, offshore at 15%

6 Brazil s deepwater competitiveness Breakeven curve per play 2018 US$/bbl Brent Deepwater Shallow water Onshore Lower 48 Tight Oil Weighted average breakeven based on 2026 production Europe Other L48 Tight Oil Canada Oil Sands Non-OPEP Vertical L48 Deepwater OPEP 80 OPEP Bone Spring 60 Wolfcamp Delaware Wolfcamp Midland Eagle Ford Bakken Niobara Nigeria Brazil Non-OPEP Deepwater US Non-OPEP OPEP Liquids production 2027 (MMbpd) Source: Wood Mackenzie onshore breakevens at 10% discount rate, offshore at 15%

7 The challenges of Re-Phasing Exploration Development Production Decomissioning 10 s to 100 s millions 100 s to 10 s millions billions 10 s to 100 s millions 10 s to 100 s millions 2-10 years 3-10 years years 3-10 years Source: Accenture Strategy Energy

8 Brazil s market opening evolution What was done What needs to be done Midstream opening Upstream opening Brown fields farm-out onshore and shallow-water (e.g. Azulão and Roncador) Pre-salt farm-out (Carcará, Lapa, Iara) Open Acreage Offer Downstream opening Source: Petrobras

Brazil s O&G chain by market share Production National O&G

2017 National refining 3% 3% 1% 4% Other companies 79% of

% 28% 50% 21% of total demand 51 % Others with partners

9 Brazil s O&G chain by market share Production National O&G production by company 2018 Refining Oil products consumption 2017 National refining 3% 3% 1% 4% Other companies 79% of total demand 1 % 11% +40 Other E&P companies 99 % Imports 49 % 28% 50% 21% of total demand 51 % Others with partners Petrobras currently holds 99% of refining sector Source: Petrobras, ANP

10 Unlocking the NG sector in Brazil - Today Production Processing Transport Distribution Consumers Multiple agents Incumbent 2 agents Shipping still with incumbent States monopoly Gas trading by LDCs* *LDCs: Local Distribution Companies Source: IBP

11 Unlocking the NG sector in Brazil - Future Production Processing Transport Distribution Consumers Multiple agents Multiple agents Multiple agents States monopoly Choice of natural gas supplier Source: IBP

FOR SALE NORTHEAST 430 mbpd 15 pipelines

12 Market opening initiatives in Brazil MIDSTREAM Refineries REFINERY CLUSTERS FOR SALE NORTHEAST 430 mbpd 15 pipelines 5 terminals DOWNSTREAM Combustível Brasil initiative Liquigás SOUTH 416 mbpd 9 pipelines 7 terminals Pipelines Refineries NATURAL GAS Gas para Crescer initiative Gas pipelines network (Gaspetro, NTS, TAG) Assets included on Petrobras Divestment Plan Source: Petrobras, Ministry of Mines and Energy

13 Brazil is back Enjoy this opportunity to do business and network in this giant energy market.

14 Production: Book now your participation (+55 21)

15 Thank you! José Firmo President of Brazilian Petroleum, Gas and Biofuels Institute (IBP) 25

Brazil: a Historic Opportunity for the Global Oil and Gas Industry

Brazil: a Historic Opportunity for the Global Oil and Gas Industry Décio Oddone Director General 5 th May, 2017 Outline 1 2 3 4 O&G in Brazil: a historic opportunity Bidding Rounds Schedule Potential Results