BUSINESS PLAN Webcast. Almir Barbassa CFO STRATEGIC PLAN PETROBRAS 2020

Transcription

1 BUSINESS PLAN Webcast José Sergio Gabrielli CEO Almir Barbassa CFO 1

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 2010 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 CHALLENGES TO WORLD OIL SUPPLY Natural decline requires finding new reserves to meet world demand Scenario: Business as Usual Projected Decline Scenario: Sustainable Development Required Addition to Capacity 2020: MM bpd 2030: MM bpd % of needed supply must come from re-valuing existing reserves, or from reserves not yet discovered or declared commercial 13% 28% Production from reserves not yet discovered or without a development plan Production currently developed with operations in short and medium term 59% Source: Estimates using WoodMackenzies data Production from revaluation of existing reserves (increases to Oil in Place or the recovery factor ) 3

4 PRIMARY DEMAND FOR ENERGY Despite growth of alternatives, oil will maintain its importance Average Annual Change 0.5% 0.4% 12,974 7% 6% 6% 1.30% 1% 17,236 6% 7% 6% 29% 1% 1.32% 17,324 7% 2% 7% 6% 28% 1% Traditional Biomass Other Renewable sources Biofuels Hydro Business as Usual +4.2% p.y. +5.2% p.y. Sustainable Development +7.8% p.y. +6.1% p.y. 26% Nuclear MMTOE 22% 22% 22% Coal Gas 33% 29% 28% Oil Business as Usual 2030 Sustainable Development Aggressive growth in biofuels will only slow the rate of growth in the consumption of Petroleum products * Aeolian, Solar and Geothermal 4

5 DEMAND FOR PETROLEUM Developing country demand should exceed reduced OECD demand Per capita petroleum consumption 30 Petroleum demand (variation million bpd) per capita - barrels per year OECD Europe USA Middle East Brazil 5 India 0 US Japan OECD* Brazil China India China Transport Eletrical Generation Others Considering France, Germany, Italy and UK Source: BP 5

6 OIL AND GAS PRODUCTION TARGETS: SUPERMAJORS AND PETROBRAS Petrobras has the highest growth rate target of the industry 6000 thousand boe/d ExxonMobil: Production growth rate ~3-4% in 2010; ~2-3% p.y. up to 2013 Petrobras: 3.9 MM boe/d in 2014 and 5.4 MM boe/d in 2020 BP: Production growth rate ~1-2% p.y. up to 2015 Shell: ~3.5 MM boe/d in 2012 and ~3.7 MM boe/d in Chevron: production growth rate ~1% p.y. between and 4.5% p.y. between Source: PFC Energy and Company reports 6

7 PETROBRAS CORPORATE STRATEGY to 2020 Integrated, profitable growth, on a sustainable basis Commitment to Sustainable Development Integrated Growth Profitability Social and Environmental Responsibility Expand operations in target markets for oil, oil products, petrochemicals, gas and energy, biofuels and distribution and to be recognized as a benchmark among integrated energy companies Corporate Strategy Grow oil and gas production in a sustainable manner, becoming one of the five largest oil producers in the world Expand refining in Brazil, ensuring sufficiency in domestic supply and leadership in distribution, while developing export markets for products, with emphasis in the Atlantic basin Consolidate leadership in the Brazilian natural gas market, and establishing an international presence and increasing the domestic electricity generation business and gas chemical, emphasizing fertilizers Operate in the petrochemical sector in activities that are integrated manner with the other businesses of the Petrobras system Operate in Brazil and abroad in the biofuels sector in activities that are integrated with the Petrobras system, and to do so on a sustainable basisl Business Segments Operational excellence, in management, in energy efficiency, in human resources and in technology E&P Downstream Distribution Gas and Energy Petrochemicals Biofuels (RTC) 7

8 BUSINESS PLAN : 14: US$ 224 BILLION Increased investment for integrated operations in Brazil Business Segment 1% 2% 1% Brazil and Abroad 8% 2% International 5% % % 95% Brazil E&P Downstream G&E Petrochemicals Distribution Biofuels Corporate 8

9 ADJUSTMENTS TO THE PORTFOLIO Increased spending on infrastructure, logistics, value chain in Brazil 31.6 (17.0) (6.8) CAPEX in Business Plan New Projects Projects Excluded Change in project timeline Change in project design and cost Change in Stake Business Plan E&P Downstream Gas & Energy Corporate 1% 21% % 62% New projects for pre-salt, logistics, increased utilization of domestic oil, and monetization of natural gas. Change in partnership participation reflecting uncertainty about participation of partners in downstream projects 9

10 APPROVAL STATUS OF PORTFOLIO Flexibility to adjust Capex for projects in Phases I and II US$ 224 Billion 686 projects 0.4% 0,9 0, % Phase I 59.4 Phase II 54.7% % Phase III Phase IV + Aquisitions 10.5% Phase I Identification of Opportunity Phase II In Conceptual Phase Phase III In Basic Project Phase IV + Authorization for Execution/Implementation/Operations 10

11 LOCAL CONTENT PARTICIPATION Brazilian suppliers expected to provide nearly 70% of total needs Distribution and Biofuels (100%) Gas & Energy (82%) 100 % Business unit Capex in Brazil (US$ billion) Investments in Brazil Purchased in Brazilian Market Brazilian content (%) Downstream and 80 % E&P % Corporate (80%) RTM and Petrochem % E&P (53%) 60 % 40 % Gas & Energy Distribution Biofuels Corporate % 100% 100% 80% 20 % Total % Brazilian Content 0 % + US$ 46.4 billion from Partners Petrobras purchases in Brazil of approximately $28 billion per year (versus $20 billion per year in prior plan) 11

12 Goals and Principal Projects 12

13 OIL AND GAS PRODUCTION TARGETS Domestic targets unchanged, international targets reduced Production curve for domestic oil gas production consistent with prior Business Plan Projected international production reduced as a result of decrease in investment Production curve does not currently assume any contribution from Transfer of Rights 5, % p.y (Thous. boe/day) 1,810 2,037 2, % p.y. 2, ,297 2,301 2, , , % p.y. 3, , ,950 1,500 1,540 1,493 1,684 1,778 1,792 1,855 1,971 2, , 078 Pre-Salt Oil Production - Brazil Gas Production - Brazil Oil Production - International Gas Production - International

14 PRINCIPAL PROJECTS SCHEDULED DURING Updated business plan added new projects Th. bpd Mexilhão NG Uruguá/Tambaú FPSO Cidade de Santos NG/35,000bpd Marlim Sul SS P-56 Module 3 100,000 bpd Antecipation of Baleia Azul FPSO Espadarte 100,000 bpd Guará Pilot FPSO 120,000 bpd Tupi NE Pilot FPSO 120,000 bpd 2, Tupi Pilot Cidade de Angra dos Reis 100,000 bpd ,100 Cachalote e Baleia Franca FPSO Capixaba 100,000 bpd Tupi NE EWT bpd Guará EWT Dynamic Producer 30,000 bpd Tiro EWT SS-11 30,000 bpd Aruanã EWT Cidade Rio das Ostras 15,000 bpd Roncador Papa-Terra Roncador SS P-55 TLWP P-61 & FPSO P-62 Module 3 FPSO P-63 Module 4 180,000 bpd 150,000 bpd 180,000 bpd Jubarte Tiro/Sidon Whales Park FPSO P-57 FPSO FPSO P ,000 bpd 100,000 bpd 180,000 bpd Aruanã Guaiamá FPSO FPSO 100,000 bpd 100,000 bpd 4 EWT 4 EWT 3 EWT 2 EWT Pre-salt Pre-salt Pre-salt Pre-salt Oil Pre salt EWT = Extended Well Test Natural Gas 14

15 E&P-BRAZIL INVESTMENTS Continued emphasis on Post-Salt acreage, growing spending on Pre-Salt Pre-Salt US$ 33.0 Billion 3% 13% Post-Salt US$ 75.2 Billion 15% 18% % 67% Exploration Development Infrastructure Annual expenditures for exploration of more than US$4 billion annually Development capex in Pre-salt approaching 50% of Post-salt spending 15

16 NEW VESSELS AND PURCHASE OF NEW EQUIPMENTS Petrobras critical resources demand will drive Brazilian and international industry Critical Resources Current Situation (Dec/09) Delivery Plan (to be contracted) Accumulated Value By 2013 By 2015 By 2020 Drilling Rigs Water Depth Above m * Supply and Special Vessel Production Platforms SS e FPSO Others (Jacket and TLWP) Supply Vessel Drilling Rigs Production Platform (FPSO) 26 RIGS CONTRACTED, 28 MORE TO BE BUILT BY 2020: o Until 2013: 13 rigs contracted before 2008 and 1 rig relocated from international operations*; +12 new rigs contracted in 2008, through international bidding; o : Bidding process in progress, to contract 28 rigs to be built in Brazil. * The rig reallocated from international operations, expire in 2015, so it is not considered in the 2020 accumulated value 16

17 Market Demand, Goals and Principal Activities RTM (Refining, Transportation and Marketing) and PETROCHEMICALS BUSINESS 17 17

18 BRAZILIAN PRODUCTION, REFINING AND DEMAND Long term plans to achieve greater balance and integration 124% Production as a % of refining 132% 110% kbpd 13% 2,980 1,393 1,036 1,971 1,791 1,933 2,260 2,356 3,950 3,196 2, Production E 2020E Throughput Oil Product Demand Oil Production and the Brazilian market demand currently exceed refining capacity By 2014, exports are projected to reach nearly 1 million bpd, even as refining capacity is expanded to process Brazilian production to meet demand 18

19 BRAZILIAN DEMAND AND REFINING CAPACITY Strong Brazilian GDP growth projected to increase demand 3.4% p.y. Thousand bpd 3000 Clara Camarão 2010 RNE 230 thous. bpd (2013) PREMIUM I (1ª phase) 300 thou. bpd (2014) PREMIUM I (2ª fase) 300 thous. bpd (2016) 2,794 3, , REPLAN Revamp U200+PAM 33 thous. bpd (2010) 1,831 COMPERJ (1º phase) 165 thous. bpd (2013) 2,356 1,016 2,260 PREMIUM II 300 thous. bpd (2017) COMPERJ (2º phase) 165 thous. bpd (2018) 1, , Gasoline Diesel Others Throughput Domestic production will represent 91% of refinery throughput by 2020 Comperj s first phase is now a new refinery 19

20 RTM AND PETROCHEMICALS INVESTMENTS New refineries, fuel quality, and modernization account for 70% of capex US$ 73.6 Billion 11% 6% 3% 1% Additional capacity: Refinery NE Premium I Comperj 29% Additional capacity Operational Improvement Logistics for oil 50% Quality and conversion Fleet expansion International Quality and conversion Sulfur removal Modernization Upgrading (coker) Operating improvement and logistics: Maintenance HSE Logistics for oil and biofuels Investments of US$ 5.1 Billion in Petrochemical (includes acquisition of Quattor) 20

21 Demand, Goals and Principal Activities GAS, ENERGY AND GAS CHEMICAL BUSINESS STRATEGIC STRATEGIC PLAN PLAN PLAN PETROBRAS PETROBRAS PETROBRAS

22 NATURAL GAS MARKET AND POWER CAPACITY Growth in natural gas demand, consolidation in Thermo Power capacity city Natural Gas Demand 130* Million m3/day Electrical Generation Industrial Fertilizers Other uses * 2014 Thermooelectrical generationa refers to full and simultaneous dispatch of plants Installed Capacity of Electrical Energy Generation (MW) 7, % 7, ,997 6,437 1,093 1, International Thermoelectrical and Co-generation Renewables Sources 22

23 NATURAL GAS BASED FERTILIZERS Fertilizer plants to take advantage of available gas and infrastructure ructure +160% UFN III (sep/14) Ammonia: 81th. ton/year Urea th. ton/year Ammonia Plant (Dec/14) 519 th. ton/year UFN IV (dec/15) Urea 763 th. ton/year 2,911 2,104 Th. ton/year 1, ,374 1, Ammonia Urea Manage total demand for gas by transforming natural gas into fertilizers needed by Brazilian agriculture (substituting demand that is currently imported) 23

24 GAS, POWER AND GAS CHEMICAL INVESTMENTS Transition from investment in infrastructure to gas demand flexibility Investments US$ 17.8 billion 30% % Completion of the natural gas transport and processing infrastructure % Consolidating investment in power generation: thermo-electric, wind, biomass 5.7 Presence in LNG chain for transport and distribution of pre-salt gas 32% Major investments in the conversion of natural gas in to Urea and Ammonia LNG Electrical Energy Pipeline network Chemical Gas Facilities (Fertilizers, ammonia) 24

25 Goals and Main Projects DISTRIBUTION INTERNATIONAL BIOFUELS BUSINESS 25

26 DISTRIBUTION INVESTMENTS Leading the Brazilian market for distribution, increasing the market share BR market share in the total and automotive market (%) BR market share in total market in Brazil (%) BR market share in automotive market in Brazil (%) Distribution CAPEX Brazil US$ 2.5 Billion 23% 27% Gas station 8 p.p. increase in the global and automotive market share in the last 5 years. 24% 26% Wholesales consumers Operation and Logistics Liquigás + Others We intend to continue leading the Brazilian distribution market of oil products and biofuels, increasing our share in the market. 26

27 INTERNATIONAL STRATEGY Reduced allocation of capex,, with focus on upstream Ramp up of existing developments, stable production in long term Reduced investment and production a reflection of greater opportunities in Brazil DISTRIBUTION 221 2% G&E 186 2% INVESTMENTS : 2014: US$ 11.5 bi RTCP 615 5% CORPORATE 123 1% Thousand bpd INTERNATIONAL PRODUCTION OF OIL AND GAS BP Development focus: Gulf of Mexico, West Coast of Africa and Latin America Exploration focus: Atlantic Project, West coast of Africa, aligned with domestic E&P BP Target -49% Oil and NGL Natural Gas BP Target E&P 10,330 90% Reduced emphasis on refining Reduced emphasis on LNG, alignment with domestic Gas and Power segment 27

28 BIOFUEL TARGETS AND INVESTMENTS Continued expansion and integration with oil products Ethanol Production Production Capacity of Biodiesel in Brazil Thous. m³/year % 2,600 Thous. m³/year % Ethanol Exports +135% 1,055 INVESTMENTS : 2014: US$ 3.5 Bi 0.7 Thous. m³/year Ethanol Biodiesel R&D Logistics 28

29 Targets and Goals, HSE, Technology, and Research and Developments RESEARCH & DEVELOPMENT BUSINESS 29

30 TECNOLOGICAL CHANGES 3 Key pillars Expanding Limits New Exploratory Frontier Maximizing recovery factor Developing Production, Operation and Pre Salt Logistic Development of new generation Sea and Subsea Systems Sediments and other fuels characterization of the pre salt and other complex reservoirs Solutions for Natural Gas logistic in harsh environments Operational Optimization Middle distillate Maximization Adding value and Diversifying Products Sustainability Fuel, Lubricants and special products innovation Petrochemicals Gas Chemic Biofuels Other Renewable sources Energy Water management CO 2 and other gas management Energetic Efficiency 30

31 ENGINEERING CHALLENGES Competitiveness/ Sustainability Using international engineering patterns and metrics in our facility projects Simplification and Standardization Reduction in the complexity of the projects, using standard solutions Technological & Engineering Drivers Brazilian Content Contributing for the consolidation of Brazil as a supplying hub with international competitive level 31

32 R&D INVESTMENTS ALLOW TECHNOLOGICAL LEADERSHIP WITH FOCUS IN HSE ESTRUTURA CORPORATIVA DE RESPOSTA CDA / BASES AVANÇADAS / ED Investments in HSE, IT and R&D US$ 11.4 Billion 29% 46% HSE IT R&D 25% Continued spending of $1 billion per year on Research and Development Continued focus on Health, Safety and Environment 32

33 Cash generation and Funding needs PLAN FINANCING BUSINESS 33

34 FORECASTED OIL PRICE VERSUS Business PLAN Petrobras base case planning price at lower end of forecast range Forecasts: CERA, PIRA, WoodMackenzie, EIA e IEA Petrobras budget price

35 PRINCIPAL FINANCIAL INDICATORS vs Stable cash flows with increasing investments INDEX Plan Plan FX Rate (R$/US$) Brent for Funding (US$/bbl) Projected Investments (US$ bn) Projected Net Cash Flow (After dividends) (US$ bn) Net Total Capt. (US$ bn) 58* 23 Leverage Up to 35% Up to 35% Average Realization Price (R$ barrel) * Including Capitalization and excluding amortization of US$38 billion Conservative assumptions: Despite higher assumed oil prices, stable realization price 35

36 CASH GENERATION AND INVESTMENT Profitable investments funded with cash flow, debt and equity capital PROJECTED Operating Cash Flow ( ) Cash US$ 11 billion Funding (debt + equity) US$ 96 billion OCF (after dividends) US$ 155 billion Amortization US$ 38 billion Investments US$ 224 billion Sources Uses Plan requires additional debt and equity capital Return on portfolio of approximately 14% on the aggregate of projects in the Plan substantially exceeds cost of capital 36

37 CHALLENGES Capacity to execute a huge portfolio project Strength and reliability of supply chain Resource management and efficiency Human Resources challenges Funding requirements 37

38 Thank you 38