Current Petrobras Technology Strategy - An Overview

Current Petrobras Technology Strategy - An Overview Brazil-Texas Chamber of Commerce May 5, 2010 Carlos Tadeu da Costa Fraga Petrobras R&D Executive Manager

Disclaimer 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

Petrobras 2000 2009 Reserves (SPE) 10.4 14.9 billion boe Production 1.6 2.5 million boe/d Revenues 35.5 115.9 billion US$ Total CAPEX 3.6 35.1 billion US$ 3

Petrobras CAPEX 2009-2010 E&P Downstream Gas & Power Internacional Distribution Others 3.3 3.4 0.3 4.7 15.3 4.3 1.4 0.5 3.3 19.6 8.2 2009 CAPEX * 1 US$ 35.1 billions 25% 18.2 2010 Planned CAPEX * 2 US$ 47.3 billions * 1 2009 Petrobras CAPEX distribution among areas is preliminary and non-audited (USGAAP based) * 2 2010 Petrobras CAPEX estimated using a exchange rate of 1.87 R$/US$. 4

2009 CAPEX and 2010 estimated CAPEX 2009 average excluding Petrobras 2010 average excluding Petrobras Source: Evaluate Energy and Disclosed Company Reports * 2010 Petrobras CAPEX estimated using a exchange rate of 1.87 R$/US$. 2009 Petrobras CAPEX is preliminary and non-audited (USGAAP based) 5

Market Value (NYSE) US$ billions Dec/31/2009 324 199 181 181 154 150 Petrobras market value as of Dec/31/2000 US$ 26 billions(665% growth) 6

Business Results Technology Capacity 7

Petrobras Industry rank Innovation 1 Published: March 22nd, 2010 8

INNOVATION DRIVERS Strong alignment and focus Implementation Cooperation Local capacity building 9

INNOVATION DRIVERS Strong alignment and focus Implementation Cooperation Local capacity building 10

Current Technology Strategy What and when? 11

TECHNOLOGY DRIVERS THE 3 KEY AXIS EXPANDING THE LIMITS New Exploratory Frontiers EOR Ultra-deep Water Pre-Salt Petrochemicals and Middle Distillates Maximization Logistics CHANGING THE MIX SUSTAINABILITY Biofuels Other Renewables CO 2 Management Water Reuse Energy Efficiency 12

Pre-salt 13

PRE-SALT GEOLOGICAL HISTORY Earth s current 130 122 108 152 164 shape million years ago 14

Pre-salt rocks 15

HIGH-POTENTIAL PORTFOLIO IN ONE OF THE WORLD S MOST EXCITING PROVINCES Kashagan Sakhalin II Sakhalin I Thunder Horse Shah Deniz Khurais Guara Agbami Iracema Akpo Iara Jupiter Dalia Kizomba Tupi Carioca Girassol, Jaz, Rosa Parque das Baleias Kurmangazi Azadegan Anaran Development of the Pre-Salt discoveries will drive substantial production growth Circle size indicates estimated reserves 16

COMPETITIVE ADVANTAGE IN THE DEEPWATER Petrobras operates 23% of global deepwater production Petrobras operates 23% of global deepwater production Gross Global Operated Deepwater Production (mboe/d) MUR FPS Operators Contracted Vessels (Total 252) 0 20 40 60 80 100 120 Petrobras Shell 15 45 APC 6% StatoilHydro ExxonMobil BP Chevron Anadarko 15 13 12 12 10 XOM Total CNOOC ConocoPhillips ENI/Agip Others 5 9 8 8 100 FPSO Semi Spar TLP Others Source: PFC Energy 2007. Note: Estimated volumes above reflect what operators are responsible for producing, not what they keep on a net working interest or entitlement basis. Minimum water depth is 300 meters; eleven operators above account for 94% of global deepwater production in 2007. 17

PRE-SALT PROVINCE Total area of the Province: 149.000 km2 Area under concession: 41.772 km2 (28%) Area not under concession: 107.228 km2 (72%) Area under concession with Petrobras participation : 35.739 km2 (24%) 18

Pre-Salt Area compared to US GoM EUA 19 t

INNOVATION DRIVERS Strong alignment and focus Implementation Cooperation Local capacity building 20

Current Technology Strategy How? 21

RESOURCES FOR INNOVATION People Investments Infrastructure R&D Agenda 22

PEOPLE Total in R,D&E 1,610 M.Sc. 48% 24% D.Sc. R&D Researchers 28% Labs & Pilot Plants Technicians 504 783 323 60 56% B.Sc. Experience Engineering 40 35% 20 5% 4% 0 < 10 11 a 20 21 a 30 > 30 years 23

Millions of US$ Biofuels Gas & Power R&D Expenditures by Area Environment 3% 4% 10% Others 3% 12% Exploration R&D EXPENDITURES 3 year average US$ 834 millions Downstream 21% 47% Production 2007-2009 Millions of US$ 1.200 1.000 800 600 400 200 US$ 2.503 millions 8 largest R&D expenditures in the energy sector (2004-2008) % Income 5,0% 4,0% 3,0% 2,0% 1,0% 0 04 05 06 07 08 04 05 06 07 08 04 05 06 07 08 04 05 06 07 08 04 05 06 07 08 04 05 06 07 08 04 05 06 07 08 04 05 06 07 08 A B C D E F G 24 0,0%

Cooperation + Local capacity building Cooperation + Local capacity building PETROBRAS INFRASTRUCTURE R&D Institutions and Universities Suppliers 25

Founded in 1963 PETROBRAS Current facilities (since 1972) 122,000 m2 (30 acres) Expansion (2nd semester 2010) 183,000 m2 (45 acres) BIOLUBRICANTS Fortaleza (CE) 1,600 mi BIOFUELS Guamaré Guamaré (RN) 1,550 mi FLOW ASSURANCE & PROCESSING Aracaju (SE) 1,110 mi WELL TECHNOLOGY Taquipe (BA) 990 mi CENPES Rio de Janeiro (RJ) REFINING São Mateus do Sul (PR) 560 mi Leopoldo Américo Miguez de Mello R&D Center - CENPES 26

BRAZILIAN R&D INSTITUTIONS AND UNIVERSITIES Legislation for R&D incentives in Brazil % Oil Royalties % of profit of large-scale production fields Oil and Gas Sectorial Fund E&P Concession Contracts of Oil and Gas Fields Petrobras R&D investments in Brazilian R&D institutions and universities Desired Situation Petrobras Strategy Conceptual model 4.5x US$ 200 milions Physical and Human Infrastructure R&D Projects Technological Services 2004 2005 2006 2007 2008 Time 27

R&D INSTITUTIONS AND UNIVERSITIES World-class World-classfacilities facilities 4 times the constructed area of Petrobras R&D Center Pipeline Integrity Test Facility Maritime Engine Test Facilities Heavy Oil Characterization Lab Numerical Test Tank Facility Oceanic Tank Test Facility Multi-size Inspection Pigs Lab Corrosion and Materials Test Facilities Naval Hull Modeling & Simulation Facilities Pipeline Technology Center Federal University ofof de Federal University Espírito Santo University of São Paulo Federal University of Rio de Janeiro Catholic University ofrio Rio dejaneiro Janeiro Rio de Janeiro Technological Research Institute Technology Networks 80 R&D Institutions and universities 28 US$ 200 million per year

SUPPLIERS - Historical partnerships with main local and international suppliers: manufacturing facilities in Brazil Pre-salt A great opportunity to explore new partnerships - Commercial - Intellectual 29

SUPPLIERS to have new technology centers in Brazil Rio de Janeiro Federal University Campus 30

RESOURCES FOR INNOVATION COOPERATION + LOCAL CAPACITY BUILDING People Investments Infrastructure R&D Agenda 31

The Target Petrobras Local R&D Organizations International R&D Organizations Cooperative R&D Agenda Suppliers 32

Final Remarks Brazilian Oil & Gas Sector Great Opportunities -Innovation -Cooperation 33

Thank you 34