Procurement Policy and Critical Equipment Supply Disclaimer FORWARD-LOOKING STATEMENTS 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 2012 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. 1
Presentation Summary 1. Petrobras Business and Management Plan 2013-2017 2. Supply History 3. What is Pre-Salt? 4. Local Content Supply Policy 5. Critical Goods and Services 6. Foreign Investment in Brazil: Oil and Gas Industry 7. Conclusions Petrobras Business and Management Plan 2013-2017 2
PETROBRAS TODAY Fully integrated across the hydrocarbon chain Exploration and Production Downstream Distribution Gas and Power International Biofuels 2.4 mm boed production 293 production fields 96% of Brazilian production 34% of global DW and UDW production 12 refineries (Brazil) 2.0 mm bpd refining capacity Oil products sales in Brazil: 2,285 Kbpd Oil products output in Brazil: 1,997 Kbpd 7,641 service stations 38,1% of market share 20% share of service stations 9,190 km of gas pipelines in Brazil NG Supply: 74.9 million m³/d 3 LNG Regasification terminals by 2013 with 41 MMm³/d capacity 7,028 MW of generation capacity 24 countries 0.7 Bn boe of 1P (SPE) 243 th. boed production 231 th. bpd refining capacity 3 Biodiesel Plants Ethanol: opening new markets Largest domestic producer of biodiesel 3 rd producer of ethanol in Brazil Adjusted EBITDA per Segment (US$ bn) (1) Average 2009-2012 2012 Proven Reserves (SPE Criteria) Brazil 15.73 Billion boe 2 1 2 E&P -2 RTM G&P Onshore 8% Shallow Water (0-300m) 8% 34 Distribution International Ultra-Deep Water (> 1,500m) 36% Deep Water (300-1,500m) 48% (1) Adjusted according average exchange rate. Excludes Corporate and Elimination. 5 5 RELATIVE POSITION Ranked among the leading integrated energy companies 2012 Oil and Gas Production (mm boe/d) 2012 Proven Reserves SEC (bn boe) 25.2 4.2 3.3 3.2 16.8 2.6 2.6 2.3 1.7 1.6 0.6 13.3 12.3 11.3 10.8 8.6 6.8 5.2 Exxon BP Shell Chevron BR Total ENI Conoco BG Gás Oil 5.5 2012 Refining Capacity (mm boe/d) Exxon BP Shell BR Chevron Total Conoco ENI Statoil Gas Oil 383 Market Cap (US$ bn) August 30 th, 2013 3.7 2.9 2.3 2.2 2.1 1.9 0.9 0.3 232 208 131 130 90 82 81 69 Exxon Shell BP BR Conoco Total Chevron ENI Statoil EXXON CHEVRON SHELL TOTAL BP BR ENI CONOCO STATOIL Source: Evaluate Energy (barrels per calendar day, considering company % shareholding and including JVs) and Bloomberg Note: Peer companies selected above have a majority of of capital traded in in the the public market. 6 3
2013-2017 BMP INVESTMENTS Projects Under Implementation x Under Evaluation Total = Under Implementation All E&P projects in Brazil and projects of the remaining segments in phase IV + Under Evaluation Projects for the remaining segments, excluding E&P, currently in phase I, II and III. US$ 236.7 Billion 947 projects US$ 207.1 Billion US$ 29.6 Billion 770 projects 177 projects 62.3% (US$ 147.5 Billion) 27.4% (US$ 64.8 Billion) 4.2% (US$ 9.9 Billion) 2.2% (US$ 5.1 Billion) 1.1% (US$ 2.9 Billion) 0.4% 1.4% (US$ 1.0 Billion) 1.0% (US$ 3.2 Billion) (US$ 2.3 Billion) E&P Downstream G&E 71.2% (US$ 147.5 Billion) 20.9% (US$ 43.2 Billion) 2.9% (US$ 5.9 Billion) 1.5% (US$ 3.2 Billion) 0.5% (US$ 1.1 Billion) 1.4% (US$ 2.9 Billion) 1.1% 0.5% (US$ 2.3 Billion) (US$ 1.0 Bililon) Phase I: Opportunity Identification; Phase II: Conceptual Project; Phase III: Basic Project ; Phase IV: Execution 1.0% 6.1% (US$ 0.3 Billion) (US$ 1.8 Billion) 6.4% (US$ 1.9 Billion) 13.5% (US$ 4.0 Billion) * Pbio = Petrobras Biofuel ETM = Engineering, Technology and Materials Other Areas = Financial, Strategy and Corporate 73.0% (US$ 21.6 Billion) International Pbio* Distribuition ETM* Other Areas* E&P INVESTMENTS 2013-2017 Period US$ 147.5 Billion16% (24.3) 73% 11% 11% Production Development Exploration Infrastructure and Support Exploration US$ 24.3 Billion Production Development US$ 106.9 Billion 6% 25% 24% 70% Post-Salt Pre-Salt Transfer of Rights 43% 32% Aside from Exploration and Production Development, E&P infrastructure investments total US$ 16.3 Billion. 4
PRODUCTION CURVE IN BRAZIL - OIL AND NGL Post-Salt, Pre-Salt and Transfer of Rights Thousand bpd 2,022 2012 Baleia Azul (Cid. Anchieta) 1,980 5% 7% 2013 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) Papa-Terra (P-61) Total** 660 kbpd 2,022 ( 2%) 2014 Roncador IV (P-62) Sapinhoá Norte (Cid. Ilhabela) Iracema Sul (Cid. Mangaratiba) Total** 345 kbpd 2015 Iracema Norte (Cid. Itaguaí) 2016 Lula Alto Lula Central Lula Sul (P-66) Franco 1 (P-74) Carioca Lula Norte (P-67) Franco SW (P-75) 2,500 1% 2017 Lula Ext. Sul (P-68) Lula Oeste (P-69) Franco Sul (P-76) Tartaruga Verde e Mestiça Iara Horst (P-70) Parque dos Doces Franco NW (P-77) 2,750 7% 30% 35% 2018 NE de Tupi (P-72) Iara NW (P-71) Deep Waters Sergipe Sul Pq. Baleias Maromba Espadarte I Carcará Entorno de Iara (P-73) 2019 Júpiter Bonito Franco Leste 2020 Espadarte III Florim 4,200 6% 19% 31% 95% 93% 69% 58% 44% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Post-salt Pre-salt (Concession) Transfer of Rights New Discoveries* (*) Includes new opportunities in blocks where discoveries have already been found (**) Total capacity added considering only Petrobras stake 9 COMPETITIVE ADVANTAGES Uniquely positioned to integrate upstream and downstream operations Abundant reserves 300 km away from the market Exploration & Production Leader in deep-water production, with access to abundant oil reserves New exploratory frontier, adjacent to existing operations Downstream Dominant position in growing market, far from other refining centers Balance and integration between production, refining and demand Gas & Power/ Biofuels/Petrochemicals Fully developed infrastructure for processing and transporting gas Integration across full energy and hydrocarbon chain in Brazil 10 5
PRE-SALT PRODUCTION IS A REALITY Production reached 326 thousand barrels of oil per day in Jun/22/2013 Pre-Salt Production Data Oil Production reached 326 kbpd (Petrobras + Partners); This level was reached with only 17 producing wells, 6 in Santos Basin and 11 in Campos Basin; Level reached only 7 years after discovery: Campos Basin: 11 years US Gulf of Mexico: 17 years North Sea: 9 years Technological Challenges Surmounted High Resolution Seismic: higher exploratory success Geological and numerical modeling: better production behavior forecast Reduction of well construction time from 134 days in 2006 to 70 day in 2012: lower costs Selection of new materials: lower costs Qualification of new systems for production gathering: higher competitiveness Separation of CO 2 from natural gas in deep waters and reinjection: lower emissions and increase in recovery factor PRE SALT WHAT IS NEXT 24 New Production Units by 2020 8 Lula Iracema 1 Jupiter 1 NE Tupi MG 1 Florim 2 Vitória Parque das Baleias ES PR SC 1 Sapinhoá Curitiba 1 Carcará SP 1 Carioca Florianopolis São Paulo Santos Basin Rio de Janeiro RJ 5 Franco Campos Basin 1 Entorno de Iara 2 Iara 100 km 6
DOWNSTREAM INVESTMENTS Projects Under Implementation US$ 43.2 billion 45% (19.4) 1% (0.3) 6% (2.4) 1% (0.4) 21% (9.2) 11% (4.9) 9% (3.7) 6% (2.8) 6% (2,8) Projects Under Evaluation US$ 21.6 billion 2% (0.5) 64% (13.8) 7% (1.5) 16% (3.5) 8% (1.7) 3% (0.5) 2013-2017 HIGHLIGHTS Refining capacity expansion on the Under Implementation Portfolio: RNEST (Pernambuco) and COMPERJ 1st Phase (Rio de Janeiro) Refining capacity expansion in design phase: Premium I (Maranhão), Premium II (Ceará) and COMPERJ 2nd Phase (Rio de Janeiro) Diesel and Gasoline Quality Portfolio: REPLAN, RPBC, REGAP, REFAP and RLAM Fleet expansion: PROMEF 45 Oil and Oil Products transportation vessels Refining Capacity Expansion Operational Improvement Quality and Conversion Logistics for Oil Fleet Expansion Petrochemical Ethanol Logistics Corporate GAS & ENERGY INVESTMENTS Projects Under Implementation US$ 5.9 billion 32% (1.9) 2013-2017 HIGHLIGHTS 19% (1.1) 43% (2.6) 6% (0.3) Conversion of Natural Gas into fertilizers and other gas chemical products: UFN III at Três Lagoas (Mato Grosso do Sul) Projects Under Evaluation US$ 4.0 billion 3% (0.1) 12% (0.5) 34% (1.4) 51% (2.0) Natural gas processing and transportation: NGPU Cabiúnas (Rio de Janeiro) Electric energy generation: Thermal Power Plant Baixada Fluminense (Rio de Janeiro) LNG Regasification: Bahia Terminal (Bahia) Units in Design Phase: UFN IV (Espírito Santo) and UFN V (Minas Gerais) Electric Energy Network LNG Gas-chemical plants 7
Supply History History Opening Focus Substitution of the market Brazilian of to industry. importing, similarity Contracting of goods and globalization, Increase law, nationalization, of international the Local Content bids. services abroad. reverse in the Focus goods on engineering, and competitiveness. services local contracting market R&D in protection, Brazil (competitiveness and abroad. contracts in and Brazil. technological adherence). 1950 1960 1970 1980 1990 2000 Most of the equipment and materials are acquired abroad Substitution of imported equipment and materials Opening of the 2002 Brazilian market for importing 2003 8
What is Pre Salt? What Is Pre-salt? Areas Covered: Pre-salt 9
What Is Pre-salt? Located in a remote area, up to 300 km offshore Water depths that can exceed 2,000 meters Corcovado Hill Post-Salt Layer Focus up to 2006 Pre-Salt Layer New Exploratory Border Large Oil Carbonatic Reservoirs Total depth from 5,000 to 7,000 meters Salt layer more than 2,000 meters thick. What Is Pre-salt? PRE-SALT SOME TECHNOLOGICAL CHALLENGES Drilling and Completion Construction of high angle wells, deviated into the salt zone Well integrity Penetration rate in the microbial carbonate reservoir New alloys to reduce costs of well materials 10
What Is Pre-salt? PRE-SALT SOME TECHNOLOGICAL CHALLENGES Reservoir Reservoir characterization Rock fluid interaction EOR What Is Pre-salt? PRE-SALT SOME TECHNOLOGICAL CHALLENGES Subsea Flexible risers for water depth of 2,200m (7,218 ft) Flow assurance Scaling control 11
What Is Pre-salt? PRE-SALT SOME TECHNOLOGICAL CHALLENGES Floating Production Units Mooring in 2,200m water depths Interaction with the riser s system CO2 processing Local Content Supply Policy 12
Local Content PETROBRAS LOCAL CONTENT POLICY The projects and contracts for Petrobras must withstand the challenges of the Strategic Plan and maximize Local Content in competitive and sustainable basis, accelerating the development of the markets where it operates and guided by the ethics and continued innovation. Local Content Requirements E&P REFINERIES Abast G&E Exploração e Não existe exigência Não existe exigência Minimum Desenvolvimento: Local Content de Conteúdo Local. de Conteúdo Local. Minimum Local Content Minimum Local Content comprovações para Operadora declara Operadora declara requirement ANP para novos at contracts requirement meta e comprova requirement meta e comprova for O&G contratos de Exploration and according índice realizado Petrobras according índice realizado Petrobras Field concessão, partilha e Development Local Content Policy Local Content Policy cessão onerosa Minimum Local Content requirement for financing concession (BNDES) 13
WHY LOCAL CONTENT Advantage and Facilities to Oil Industry in Brazil For the Country Potential Gains For the Oil Companies Employment and Income Generation Operating Costs Reduction Local Economy Diversification Sustainable Economic Growth Increase Country s Attractiveness for Investors Local Productive Capacity Development Tax Revenue Increase Local Content Proximity between Suppliers and the Operation Reduced Dependence on Expatriated Workforce Suppliers Innovation Capacity Increased Logistic Risks Reduction Local Technical Assistance Availability RESEARCH & DEVELOPMENT Establishing research centers enhances long term future of Brazil as hub Petrobras partnerships with more than 120 universities and research centers have led Brazil to have a prominent worldwide applied research complex Technological Park Companies with R&D centers in operation, construction or plans for Brazil: Schlumberger Baker Hughes FMC Technologies Halliburton General Electric Vallourec & Mannesman Usiminas TenarisConfab Cameron IBM Technip Weatherford Wellstream 14
How to Measure Local Content Local Content Formula % LC = 1- Imported Portion System Total Price without tax X100 Brazilian Companies Brazilian companies means companies that have manufacturing processes and after-sales services in Brazil, thus creating jobs and collecting taxes in the country. 15
Critical Goods and Services Demand for New Equipment Business Plan 2013-2017 Item Un. TOTAL Wet Christmas Trees un 423 Subsea Welheads un 263 Flexible Flowlines km 3.667 Manifolds un 58 Tubing and Casings t 638.870 Umbilicals km 2.557 Dry Christmas Trees un 148 Onshore Welheads un 206 Item Un. TOTAL Pumps un 3.863 Compressors un 373 Winches un 298 Cranes un 178 Combustion Engines un 148 Turbines un 395 Structural Steel t 878.000 Item Un. TOTAL Reators un 181 Oil/Water Separators un 1.104 Storage Tanks un 431 Towers un 221 Item Un. TOTAL Generators un 97 Filters un 773 Flares un 60 16
Foreign Investment in Brazil: Oil and Gas Industry Foreign Investment in Brazil: Oil and Gas Industry Petrobras Partners APEX Brazil Brazilian Trade and Investment Promotion Agency http://www2.apexbrasil.com.br/en/invest-in-brazil/apex-brasil-services-to-help-you ONIP National Organization of the Petroleum Industry http://www.onip.org.br/areas-of-activity/?lang=en Foreign Companies Support in Brazil Embassies, Consulates, Chambers of Commerce, etc. 17
Foreign Investment in Brazil: Oil and Gas Industry Focus on companies and projects that offer technological innovations and new business models, strengthen industrial supply chain, have a direct impact on national job increase and improve Brazilian exports. Support to all steps of the investor s decision-making process. Services portfolio: industry sectors and markets analysis, economic trends, general guidelines on legal and fiscal matters, and information on input costs, suitable locations and talent pool availability. Foreign Investment in Brazil: Oil and Gas Industry ONIP - National Organization of the Petroleum Industry (ONIP) Services: Technology and Innovation: Support to technological development and innovation management in companies. Industry Intelligence and Registration Information: Preparation and offer of qualified reviews and registration information. Internationalization and Business Rounds: Promotion of exports and investments, partnerships with foreign companies and business rounds. 18
Foreign Investment in Brazil: Oil and Gas Industry Foreign Companies Support in Brazil Foreign Suppliers Delegations and missions; Support to the registration process at Petrobras Corporate Register; Support to the companies moving to Brazil Etc. Legal Guide for Foreign Investors in Brazil Ministry of External Relations http://www.brasilglobalnet.gov.br/arquivos/publicacoes/manuais/ pubguialegali.pdf Conclusions 19
Conclusions Petrobras has a robust projects portfolio, which is atypical in the current global economic situation. There are huge opportunities for already installed companies and newcomers in the Brazilian market of suppliers, services and engineering due to the scale provided by the project portfolio. Local content is a relevant issue in Petrobras supply strategy for goods and services Shipbuilding is presently the main challenge to comply with the Petrobras business plans targets. Danke Sehr! RONALDO MARTINS ronaldomartins@petrobras.com.br materiais.rel@petrobras.com.br 20