The Role of Petrobras in Energy Integration and Renewable Fuels in South America

Transcription

1 The Role of Petrobras in Energy Integration and Renewable Fuels in South America José Sergio Gabrielli de Azevedo President and CEO September 25,

2 Disclosure The presentation may contain forecasts about future events. Such forecasts merely reflect the expectations of the Company's management. Such terms as "anticipate", "believe", "expect", "forecast", "intend", "plan", "project", "seek", "should", along with similar or analogous expressions, are used to identify such forecasts. These predictions evidently involve risks and uncertainties, whether foreseen or not by the Company. Therefore, the future results of operations may differ from current expectations, and readers must not base their expectations exclusively on the information presented herein. The Company is not obliged to update the presentation/such forecasts in light of new information or future developments. Cautionary Statement for US investors The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this presentation, such as oil and gas resources, that the SEC s guidelines strictly prohibit us from including in filings with the SEC. 2 2

3 Concentration of reserves in sensitive areas cause for increasing concern In the medium to long term light oil supplies likely to come from Middle East, Africa (OPEC) and Russia More than 62% of the world reserves on the hands of 5 Middle East Countries (reserves billion boe) Asia North America South and Central America Fonte: BP Statistical Review of World Energy Africa Europe & Eurasia Middle East 3

4 Latin American proven oil reserves have increased in relative importance and average life R/P* = ,4% 7,6% 12,7% 4,8% 5,0% 56,5% R/P* = % 8.8% 6.4% 7.9% 3.8% 5.1% 9.4% 3.5% 65.1% 11.7% 8.5% R/P* = % Total 762 billion boe Total billion boe Middle East Europe & Eurasia Africa Total billion boe North America Pacific Asia Latin America 4 In 20 years, Latin America s proven reserves increased from 36.6 billion barrels (1984) to 101 billion barrels (2004). Source: BP Statistical Review of World Energy * Reserves/Production Latin America (years) 4

5 World Total Primary Energy Supply has shown increased use of gas, coal and nuclear sources 2% 1% 16% % 46.0% 24% 2% 6% 21% 11% ,154 Mtoe Increase 11,223 Mtoe 5,069 Mtoe 10.85% 13.04% 26.19% 22.12% 25.21% 2,59% 25% 35.2% Coal Gas Hydro Crude Oil Nuclear Renewables and Others 5 Source: IEA Energy Statistics 5

6 Compared to OECD, LA uses more hydro, oil and renewables and less nuclear and coal (2003) Latin America OECD 464 Mtoe 5,395 Mtoe World 10,579 Mtoe 19% 5% 2% 4% 11% 21% 2% 11% 6% 25% 1% 10% 20% 45.5% 22% 40% 21% 35% 6 Coal Crude Oil Gas Nuclear Hydro Renewables and Others In comparison to the whole world LA uses much less coal and more crude oil as a result of China. Source: IEA Energy Statistics 6

7 Transportation (liquids) in energy consumption is likely to increase with growing income Latin America OECD 364 Mtoe 3,754 Mtoe 3% 4% 28% 39% 33% 30% 30% 33% Industry Sector Other Sectors Transportation Sector Non-Energy Use 7 Source: IEA Energy Statistics 7

8 Coal has dominated Electric Energy Generation growth in the world Coal Crude Oil Natural Gas Nuclear Hydro Renewables Geothermal/Solar/Eolic 8 8

9 While in LA hydro power has predominated followed by natural gas Carvão Petróleo Gás Natural Nuclear Hídrica Renováveis Geotérmica/Solar/Eólica 9 9

10 PETROBRAS in position to promote energy integration in South America Explore synergies between existing companies in Brazil, Argentina, Bolivia and Colombia Increase exploration and production efforts in Peru, Ecuador and Venezuela Intensify commercial operations in Paraguay, Uruguay and Chile Invest in tecnology logistics and production of renewable fuels Participate in development of integrated gas pipeline network 10 10

11 Corporate Strategy already points to integration and renewable fuels Growth Profitability Corporate Strategy Social and Environmental Responsibility Lead the Latin Liderar American o mercado oil, de natural petróleo, gas, gás oil natural products e derivados and biofuels na América market, Latina, working as an integrated energy atuando company, como empresa with selective integrada expansion de energia, in petrochemical, com expansão renewable seletiva energy and da petroquímica international e da atividade activities. internacional. Consolidate and increase competitive advantages in the Brazilian and South American oil and oil products market Develop and lead the domestic natural gas market and perform in an integrated manner in the gas and power market in South America Selectively expand international activities in an integrated manner with the Company s business Selectively expand interest in the petrochemicals market Expand participation in biofuels market, lead the domestic biodiesel production and increase participation in the ethanol business Operational, management, technological and human resources excellence 11 11

12 Petrobras PETROBRASalready among largest publicly traded companies ExxonMobil Lukoil* Petrochina* BP Yukos* Chevron Texaco Petrobras Shell Total ConocoPhillips ENI Statoil Sinopec* Repsol Lukoil* Yukos* Petrochina* ExxonMobil Petrobras ConocoPhillips Chevron Texaco Sinopec Total BP ENI Statoil Shell Repsol Proven reserves (SEC - billion boe) Dec Oil and gas production (million boe) ,1 22,4 18,5 17,6 13,0 12,1 11,8 11,5 11,1 9,4 6,8 4,3 3,8 3,3 ExxonMobil BP Shell Petrochina* Chevron Texaco Total Petrobras ConocoPhillips Yukos* Lukoil* ENI Statoil Repsol Sinopec Reserve life (years) Dec Refining capacity (thousand bpd) ,7 20,8 19,6 15,1 14,6 XOM RDS Sinopec BP TOT ,2 COP ,1 12,3 12,2 12,2 11,5 10,1 9,0 8,0 Source: Evaluate Energy and Company Reports 5th 7th PetroChina CVX Petrobras Yukos Repsol Lukoil ENI** Statoil th 7th

13 Investment Plan reflects integrated global expansion Business Plan US$ 87.1 billion 56% 14% 49.3 US$ 12.1 bi 49, ,0 1, % 2,2 2.33, ,5 26% % 1.0 4% % E&P Downstream G&E Petrochemical Distribution Corporate Brazil US$ 75.0 bi 86% International Note: Includes International 13 13

14 Capex to be financed with its own cash flow Sources (US$ 99.3 billion) 12.6 Uses (US$ 99.3 billion) (*) Financing Cash Flow Debt Amortization Capex Accrued Economic Profit ( ): US$ 83.4 billion (US$ 53.9 until 2011)

15 Oil and gas production based on development of existing reserves Strong investments in production will optimize the development of Petrobras proven reserves, aiming light oil production and a minimum reserve/production ratio of 15 years. Petrobras had a 55% success ratio for our exploration wells during 2005, with 38 wells classified as discovery or producing wells. 60,0% Undeveloped Reserves / Total Reserves* (2005) 54,3% 53,1% 51,5% 50,5% 50,0% 40,0% 43,8% 40,5% 39,7% 34,3% 30,0% 30,0% 29,7% 25,0% 20,0% 20,3% 12,9% 10,0% 0,0% 15 Petrobras Shell * Source: Evaluate Energy Total CNOOC Statoil BP ExxonMobil Lukoil Chevron ConocoPhillips Repsol-YPF PetroChina Sinopec 15 17

16 Production targets assure brazilian consumption and among most ambitious in the industry Thousand boed 7.5% p.a. 4, % p.a. 3, ,036 2, ,540 1,493 2, ,684 2, , , , T ar get 2006 Oi l and NGL - Br azi l Oi l and NGL - I nter naci onal Target 2011 Natur al Gas - Br azil Natur al Gas - Inter nacional 2015 For ecast 16

17 Fast growing domestic natural gas market for electicity and other uses Million m 3 /day Variation 2004 x 2005 Others Industry Thermoplants 150% 8,30% -26,04% ,4 13,5 22,9 24,8 9,6 7, Consumed in 2005 Natural gas market 17.7% p.a ,6 48,4 Maximum Demand 2011(*) up to 20.0 up to 30.0 up to 71.0 Potential Supply Thermoplants Industry Other National Production Bolivian Imports LNG * Considers maximal dispatch for every thermoelectric power plant 17

18 Brazilian market open for investments in downstream New Refinery in Pernambuco Investment: US$ 2,5 billion Throughput capacity: 200 thousand heavy oil barrels (50% Petrobras oil / 50% PDVSA oil) Focusing diesel and LPG production maximization, the new refinery will aim the growth of oil products demand in the Northeast. The Northeast Region, which responds for 19% of oil products demand and holds only one refinery in Bahia, will no longer be a fuel importer (either from refineries in Brazil or abroad). Costs reduction: oil products transportation are more expensive than for crude oil

19 and petrochemicals Main Projects Advantages: Rio de Janeiro Petrochemical Complex Acrylic Complex /SAP PTA Pernambuco Proximity to Petrobras installations in Rio de Janeiro; Availability of labor for both the construction and operational phase; Proximity to port installations. Nitrogenated Fertilizers Unit III Fafen BA Investments of US$ 3.3 billion in Petrochemicals or more with Rio de Janeiro petrochemical plant Products: Diesel, LPG, Ethylene, Propylene, PX, Benzene and Coke. The Complex will add value to 150,000 barrels/day of heavy oil form the Campos Basin. 19 Reducing the Brazilian deficit and adding value to Downstream production. Petrochemical Complex Itaboraí São Gonçalo Liquids Outflow Unit 19

20 Southern cone and Venezuela to receive US$3.3 billion Capex and US$3.9 billion still to be allocated South Cone: US$ 2.8 Million Americas, Africa e Eurasia: US$ 5.4 Million Argentina 84% Venezuela 9% Others 8% United States 50% Others 4% Nigeria/ Guine 33% Ecuador 4% Peru 8% New Businesses: US$ 3.9 Million 20 20

21 Producing, refining and distributing in the South Cone Bolívia Production: San Alberto e San Antonio; and Colpa-Caranda (*) Proved Reserves: 553 MMBOe (SPE, 2005) 2005 Average Production: 54,100 boed Yacuiba Rio Grande Gas pipe (431 km, 32, 17 MM m3/dia transportation capacity) 2 Refineries, with 60,000 bpd of total capacity 20 service stations with Petrobras brand 21 Argentina (*) Proved Reserves: 336 MMBOe (SPE, 2005) 2005 Average Production: 104,000 boed Refining and Distribution: 62,900 bbld in Ricardo D. Eliçabe Bahía Blanca, Refisan - San Lorenzo; and Refinor (28.5 % interest:) refineries 648 service stations LUBRAS lubricant plant Dock Sud and Puerto Galvan Terminals Petrochemical Power generation Energy Transmission and Distribution Oil and Gas Transportation (*) Petrobras Energía Paraguay 132 service stations Uruguay 89 service stations Natural Gas Distribution: share control and operation of Conecta and Gaseba (Montevidéu) 21

22 Exploring and producing in Ecuador and Peru Ecuador (*) 1 Production Block 1 Exploration Block Proved Reserves: 81.2 MMBOe(SPE 2005) Production: 9.1 thous. boed 2005 Peru (*) 1 Production Block 5 Exploration Blocks Proved Reserves: MMBOe(SPE 2005) Production: 14.3 thous. boed (*) Petrobras Energía 22

23 Producing and exploring in Colombia and Venezuela, and distributing in Columbia Venezuela 4 Production Blocks (*) 2 Explorations Blocks (*) Proved Reserves: 269 MMBOe(SPE 2005) (*) Production 47.6 thous. boed 2005 (*) Moruy II exploratory block, operated by Petrobras in the Venezuelan Golf Colômbia 6 Production Blocks. Includes Guando field, the largest discovery in the country in the last 15 years. 11 Exploration Blocks. Includes Tayrona Block (22,500 km 2 ) in deep waters of the Caribbean Sea Proved Reserves 36.3 MMBOe (SPE 2005) Production 16.6 thous. boed service stations 23 (*) Petrobras Energía 23

24 Company PETROBRAScommitment to reduce carbon intensity of operations and products Oil Natural Gas Renewables Availability of 855,000 m 3 /year of biodiesel Processing 425,000 m 3 /year of vegetable oil (H-BIO) 3.5 million m 3 ethanol exports 240 MW installed capacity of power generation from renewable sources Total avoided GHG emissions of 3.93 (M Tons of CO 2 Equivalent) Investments of US$ 0.7 billion in renewable energy and biofuels

25 Ethanol from sugar cane much more efficient than from other crops Raw Material Wheat Corn Sugar Beet Sugar Cane (under Brazilian production conditions) Energy Output / Energy Input(boe) Raw Material Production / ha (kg) Quantity of Ethanol / ha Energy Output / Energy Input (boe) Sugar Cane 85,000 7,080 liter 8.3 Corn 10,000 4,000 liter

26 PETROBRAS Ethanol-gasoline flex-fuel vehicles are already a reality Consumer wants to decide the fuel at the gas station Fuel price is one the most important factor Consumer is aware of pollution and renewable fuels Today cars manufacturer is producing 80% of FFV in Brazil LIGHT VEHICLES TOTAL SALES units 150,000 Ethanol Gasoline FFV 140, , , , ,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 Jan-03 Feb-03 Mar-03 Apr-03 May-03 Jun-03 Jul-03 Aug-03 Sep-03 Oct-03 Nov-03 Dec-03 Jan-04 Feb-04 Mar-04 Apr-04 May-04 Jun-04 Jul-04 Aug-04 Sep-04 Oct-04 Nov-04 Dec-04 Jan-05 Feb-05 Mar-05 Apr-05 May-05 Jun-05 Jul-05 Aug-05 Sep-05 Oct-05 Nov-05 Dec-05 Jan-06 Feb-06 Mar

27 Ethanol may become a global market 27 Ethanol global market is 46.5 Billion Liters (2005) Ethanol as a Fuel is 30.6 Billion Liters (67% of total ethanol production) Today the ethanol consumption is 2.6% of gasoline MKT 10% of ethanol in gasoline will represent 118 Billion Lt Brazil-Japan Ethanol Inc. Recently, Petrobras incorporated Brazil-Japan Ethanol Inc. The company will import and distribute Brazilian-produced ethanol in Japan; Development of technical and commercial solutions for the reliable and long term supply of alcohol in the Japanese market; Petrobras will break into one of the most complex and important energy markets in the World: ethanol logistics distribution fuel distribution sector in Japan. 27

28 But as all renewables need investments in logistics New Ethanol Pipeline (800 km) New Water Way for Ethanol Ethanol Export 8.0 Million m 3 in 2012 Marine Terminal Rio de Janeiro 28 Marine Terminal São Paulo 28

29 Bio PETROBRAS diesel and H-bio will reduce dependency on imported diesel H-Bio: refining process that utilizes vegetable oils as an input, in order to obtain diesel oil; Hydrogenation of a blend of diesel and vegetable oils; Agribusiness Seeds Processed Oil Hydrogen Diesel Fractions Farming Crushing or Refinery Diesel Ethanol or Transesterification Biodiesel or Methanol B 2 or B 5 mixture Distributors or Diesel Glycerin + Others Stations Complementary and not competitive processes

30 PETROBRAS Muchas Gracias