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1
PETROBRAS OVERVIEW9º FORO LATIBEX
One-on-one meetings
Almir BarbassaCFO and Investor Relations Officer
Carlos Henrique Dumortout CastroInvestor Relations Manager
2
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.
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.
Cautionary Statement for US investors
Disclaimer
3
We will be one of the five largest integrated energy companies in the world and the
preferred choice among our stakeholders
Vision 2020
Our operations will be notable for:
• Strong international presence • World scale prominence in biofuels• Operational excellence in management, technology and
human resources• Profitability• Benchmark in social and environmental responsibility• Commitment to sustainable development
Vision 2020 Characteristics
Vision 2020 and Characteristics
4
Cor
pora
te S
trat
egy
Develop and lead the Brazilian
natural gas market and operate on an integrated basis in the gas and electric
energy markets with a focus on
South America
To expand integrated
operations in refining,
commercialization, logistics and
distribution with a focus on the
Atlantic Basin
Operate on a global basis in biofuels
commercialization and logistics, leading the domestic production
of biodiesel and expanding
participation in the ethanol segment
Expand operations in petrochemicals in Brazil and South America on
an integrated basis with the PETROBRAS
Group’s other businesses
To grow production and oil and gas reserves sustainably, being
recognized for excellence in E&P
operations
Expand operations in target markets for oil, oil products, petrochemicals, gas and energy, biofuels and distribution, being a world benchmark as an
integrated energy company
Commitment to sustainable development
Gas & EnergyE&P Downstream (RTC) Distribution Petrochemicals Biofuels
Operational, management, technological and human resources excellence
Integrated Growth Profitability Social and Environmental Responsibility
Corporate Strategy
Business Segment Strategy
5
Linked to international market prices, without
changes in relative prices
2.50
4.0
3.7
4.2
2007-2011
Linked to international market prices, without
changes in relative pricesOil Products Prices
4.3GDP – World (% p.y.) – PPP(*)
3.9GDP – Latin America (% p.y.) –PPP
2.18FX rate (R$/US$)
4.0GDP – Brazil (% p.y.)
2008-2012Indexes
Macroeconomic Assumptions
(*) PPP – purchase power parity
6
55
45 3550
3535353540
2008 2009 2010 2011 2012
Oil prices: Brent curves
Price curve BP 2007/11
Price curve BP 2008/12
BP – Business Plan
7
6%4%
1%2%26%
58%
2%
65.1
29.6
6.74.3
2.62.6
Investment Plan by Business Segment2008-12 Period
US$ 112.4 billion
E&P RTC G&EPetrochemical Distribution Corporate Biofuel
1.5
• US$ 65,1 billion directed to E&P:
• Exploration: US$ 11.6 billion
• Production: US$ 53.5 billion
13%
87%
Brasil Internacional
97.4
15.0
Note: Includes International
8
Investment Plan
87.1
1.80.72.3
3.3
7.3*21.9*49.3
Petrobras2007-11
29112.4Total
392.5Corporate1141.5Biofuels132.6Distribution
304.3Petrochemical
-26.7G&E2929.6RTC3265.1E&P
Difference (%)
Petrobras2008-12Business Segment
* 2007-2011 Plan included biofuels investments.
The forecast indicates annual average capital investment of US$ 22.5 billion for the period 2008 - 2012.
US$ billion
9
PN 2007-1183.571
Outros-2.435
Aumento de Custo10.912
Melhoria do grau de
Definição2.835
Alteração da Taxa de Câmbio
4.224
Projetos Novos13.267
Of the 34% increase in total capital spending, US$ 13.3 billion (or 16%) was due to the inclusion of new projects
• 13% increase in costs, in alignment with industry pressures
New Projects• Exploration & Production:
• Exploration• Enhanced Recovery from Mature
Fields • Support and Infra-structure• Plangás
• Refining, Transportation and Distribution:
• Plangás Downstream • Petrochemical
• New units COMPERJ
• 5% increase in CAPEX due to change in FX Rate premise
Costs Increase
US$ 10,912 mi
FX Rate Change
US$ 4,224 mi
New Projects
US$ 13,267 mi
Better degree of Definition
2,835
Others
-2,435
* 2008-2012 Amounts
*
Investment Plan
83,571
10
Sources and Uses – BP 2008-2012
104.4
19.4
2004-2010FinancingCash Flow
(84,3%)
(15,7%)
In the BP 2007-11, required financing was 13%
(US$ 123.8 Billion)
112.4
11.4
Debt AmortizationCAPEX
(90,8 %)
(US$ 123.8 Billion)
(9,2%)
11
Main Financial Indicators
1.5
25
3.5
3.1
16
AverageBP 2007-2011
1.4
20
3.1
3.9
14
AverageBP 2008-2012
Free Operating Cash Flow (US$ billion)
Cash Balance (end of the year) (US$ billion)Net Debt/ Net Debt + Shareholders’ Equity (Leverage) (%)
Long Term Funding (US$ billion per year)*
Return on Capital Employed (ROCE) (%)
Indicators
12
E&P - rapidly growing production profile
8 0 9 8 6 9 1 . 0 0 4 1 . 1 3 2 1 . 2 7 1 1 . 3 3 6 1 . 5 0 0 1 . 5 4 0 1 . 4 9 31 5 2
1 6 31 7 9
1 9 72 2 1 2 3 2
2 5 2 2 5 0 2 6 5
2 4 3
1 . 6 8 4
7 1 6
1 . 7 7 8
2 7 4
1 3 4
2 7 72 6 22 4 6
3 54 7
5 85 5
7 67 3
6 85 8
2 5 9
0
5 0 0
1 0 0 0
1 5 0 0
2 0 0 0
2 5 0 0
3 0 0 0
3 5 0 0
1 9 9 5 1 9 9 6 1 9 9 7 1 9 9 8 1 9 9 9 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6
Oi l and NGL - B r azi l Natur al Gas - B r azi l Oi l and NGL & Natur al Gas - Inter nat i onal
Thou
sand
boe
d
885 1,0081,090
1,2381,505
1,5651,636
1,810 2,036 2,0202,217
9% p.y. growth in L11Y
2,298
13
2 , 4 2 12 , 8 1 2
6 3 7
6 4 3
5 1 5
1 5 1
1 8 3
2 8 5
F o r e c a s t
2 0 1 5
1 , 7 7 81 , 4 9 3 1 , 6 8 4
2 6 52 7 4 2 7 71 6 8
1 6 3 1 4 29 49 6
1 0 1
2 0 0 4 2 0 0 5 2 0 0 6
O i l + N G L B r a z i l N a t u r a l G a s B r a z i l
O i l + N G L I n t e r n a t i o n a l N a t u r a l G a s I n t e r n a t i o n a l
2,0202,217 2,298
3,494
4,1537.2% p.y.
6.8% p.y.
Total Production – Oil, NGL and Natural Gas - Targets
Thousand boed
Target 2012
* Includes non consolidated production
**
*
*
14
Self-Sufficiency in Oil - Brazil
1875
2050
2191
22962374
2421
18521922
19682039
21012170
1700
1800
1900
2000
2100
2200
2300
2400
2500
2007 2008 2009 2010 2011 2012
Production Demand
Thousand bpd
15
2,421
1,840/50
2,050
2,191
2,2962,374
1,400
1,600
1,800
2,000
2,200
2,400
2,600
2007 2008 2009 2010 2011 2012
Parque das Conchas
100.000 bpd
2009
Parque das Conchas
100.000 bpd
2009Marlim Leste
P-53180.000 bpd
2008
Marlim LesteP-53
180.000 bpd2008
Frade100.000 bpd
2009
Frade100.000 bpd
2009Roncador
P-52180.000 bpdOctober 2007
RoncadorP-52
180.000 bpdOctober 2007
RoncadorP-54
180.000 bpdOctober 2007
RoncadorP-54
180.000 bpdOctober 2007
Marlim SulMod. 2P-51
180.000 bpd2008
Marlim SulMod. 2P-51
180.000 bpd2008
Piranema30.000 bpd
September 2007
Piranema30.000 bpd
September 2007
Rio de JaneiroEspadarte Mod II
100.000 bpd6/Jan/07
Rio de JaneiroEspadarte Mod II
100.000 bpd6/Jan/07
Cidade NiteróiJabuti(FPSO)
100.000 bpd2008
Cidade NiteróiJabuti(FPSO)
100.000 bpd2008Cidade de Vitória
Golfinho Mod. 2100.000 bpdOctober 2007
Cidade de VitóriaGolfinho Mod. 2
100.000 bpdOctober 2007
Thou
sand
bpd
Marlim SulMod. 3 - P-56100.000 bpd
2011
Marlim SulMod. 3 - P-56100.000 bpd
2011
Albacora(Water
Injection)23.000 bpd
2010
Albacora(Water
Injection)23.000 bpd
2010
Main Projects
Barracuda
(Infill Brilling)
50.000 bpd
2010
Barracuda
(Infill Brilling)
50.000 bpd
2010
Espadarte
Mod. 3
100.000 bpd
2012
Espadarte
Mod. 3
100.000 bpd
2012
Jubarte
P-57
180.000 bpd
2012
Jubarte
P-57
180.000 bpd
2012
Main Changes in relation to PN 2007-11: P-55 from 2011 to 2013; P-56 from 2013 to 2011; P-57 from 2010 to 2012
16
To sustain oil production growth, several projects will be implemented between 2013 and 2015.
2,421
2,812
2200
2300
2400
2500
2600
2700
2800
2900
2012 2015
• Roncador P-55 • Papa-Terra • Maromba• Cachalote e Baleia Franca• Baleia Azul• Caxaréu• Pirambu• BMS-11 Tupi
Main Projects for the Period 2013 - 2015
Thousand bpd
17
845
1.055
1.2561.443
1.6151.778
2.3742.296
2.1912.050
1.8751.778
-
500
1.000
1.500
2.000
2.500
2006 2007 2008 2009 2010 2011
Thou
sand
bpd 1,533
Total installed capacity in the period = 1,533 mbpd
937
596Production Net Increase
Production Natural Decline
E&P Brazil Production Curve - PN 2008-2012
18
12.531.22
2005 2006
Corporate Targets
Discoveries in Exploratory Blocks:• Maromba, in the Campos Basin; • Camarupim Catuá, in the Espírito Santos Basin - Offshore; Araracanga in the Solimões Basin;• Jaçanã and Pintassilgo in the Rio Grande do Norte Basin; • Tangará in the Recôncavo Basin; • Saíra, Seriema and Tabuiaiá , in the Espírito Santos Basin – Onshore.
Discoveries in exploratory blocks incorporated to already existing production fields
• Mexilhão, in the Rio de Janeiro E&P Business Unit; • Baleia Azul and Golfinho in the Espírito Santo E&P Business Unit.
Revisions in existing fields in 2006• Mainly in Marlim and Albacora, in the Campos Basin E&P Business Unit;• Roncador and Marlim Sul, in the Rio de Janeiro E&P Business Unit.Production
(0.70 billion boe)
2006 Internal Replacement
1.22
0.70= 174 %
Internal Replacement Proven Reserve Rate (SPE)
13.23 13.75
19
US$/bbl
• From 2003 to 3Q07 USD lifting cost was severely affected by FX behavior.
Domestic Lifting Costs in U.S.$’s vs. Real
7.65
6.595.73
4.28
0
1
2
3
4
5
6
7
8
9
2004 2005 2006 3Q07
14.66
12.30
14.2013.80
0
2
4
6
8
10
12
14
16
2004 2005 2006 3Q07
R$/bbl
Accounting Data in Reais only maintained since 2004
71% 20%
20
0.530.47
0.360.3
0.350.4
0.33
0.56
0.9
29
38
54
14
18
28
2324
65
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
1998 1999 2000 2001 2002 2003 2004 2005 20060
10
20
30
40
50
60
70
FC Brent46%
32%
20%
24%
23%
39%
50%55%
49%
1998 1999 2000 2001 2002 2003 2004 2005 2006
Finding cost vs. Brent – long term success ratioFinding costs - SPE
($/boe)
Brent
Low Finding Cost…
…Great Success Ratio
21
New Discoveries – Pre-salt Section
BM-S-11 Block (Tupi)• 28º API light oil was found below the salt layer in a new exploratory frontier of the Santos Basin.• Further investments will be required for a full evaluation of the oil volume in the discovered reserveCaxaréu Field • The discovery well 4-ESS-172-ES has located reservoirs saturated with light oil (approximately 30° API) under a thick layer of
salt. • It has shown to have excellent productivity in a formation test.Pirambu Field (Espírito Santos Basin)• The 4-ESS-175-ES well found deeper reservoirs saturated with light oil (nearly 29° API) positioned on the pre-salt section. • Results confirm the potentiality of this producer interval.
22
Caxaréu and Pirambu
TESTED WELLS
Tupi AreaTupi Area
BMS-11 (Tupi)
BMS-9 and BMS-10
23
Onshore
Offshore (0-300m)
Offshore (300-1500m)
Offshore (>1500m)
Proven Reserves by Category Worldwide Proved Reserves of Petrobras
Long-Term Record of Increasing Reserves
84%
7%9%
Non-Assoc. Gas
Assoc. Gas
Oil and Condensate
56%
23%
11%10%
By Depth
Note: Based on SPE method and reflect both Brazilian and international reserves Reviewed and Certified by DeGolyer and MacNaughton since 2001
< 31o API Heavy/Intermediate
> 31o API Light
74%26%
By GravityBy location
11%
89%BrazilInternational
Oil vs. Gas
10,4 10,7
12,1
14,5 14,9 14,9 15,0
0,0
2,0
4,0
6,0
8,0
10,0
12,0
14,0
16,0
2000 2001 2002 2003 2004 2005 2006
Year
Res
erve
s (in
bill
ion
BO
E)
24
Historic and Planned Exploration InvestmentsUS$ 2.76billion/y
Average (2008-12)
840956
814
549 505 448566 533 571
725833
10301163
1454
909
393
0
500
1000
1500
2000
2500
3000
US$ 880 million/y US$ 536
million/y
US$ 1.12 billion/y
Accumulated investments Accumulated investments 1954/2005: US$ 21 billion1954/2005: US$ 21 billion
1991 1995 1998 2002 2007 2012
U$
mill
ion
25
TOTAL:
681 exploration wells
31% overall success ratio
2005 55%
2006 49%
Seismic~ 550,000 km 2D seismic~ 130,000 km2 3D seismic
Exploration Activity (1998 - 2006)Wells & Seismic
• Espirito Santo 45 wells offshore• Campos 190 wells offshore• Santos 75 wells offshore• Other Basins
265 wells onshore110 wells offshore
0%
100%
200%
300%
400%
2003 2004 2005 2006
Average 206% for 2002-2006
Reserve Replacement Ratio (SPE/ANP Criteria)
26
EXPLORATORY AREA152.8 thousand km2
EXPLORATORY AREA152.8 thousand km2
CamposCamposCampos
Espírito SantoEspírito SantoEspírito Santo
Other Basins*Other BasinsOther Basins**
SantosSantosSantos
40 % of the concession areas in Campos, Espírito Santo e Santos basins.
* Other basins: Pelotas (2%), Ceará (0.8%) and Recôncavo (0,2%)
Petrobras’ Current Exploration Portfolio
11%
9%
10%
6%5%
4% 3%
6%
8%
25%
11%
Campos13.1 mil km2
Campos13.1 mil km2
Santos39.4 mil km2
Santos39.4 mil km2
EspíritoSanto
10.1 mil km2
EspíritoSanto
10.1 mil km2
Other (*)Pará Maranhão-Barreirinhas
Sergipe AlagoasPotiguar-Ceará
Bahia Sul
SolimõesSão Francisco Foz do Amazonas
27
87
46
41
Total2005 200620042003
66
41
25
Total
90
43
47
Total
27
5
22
Intern.
4944Offshore
9063Total
4119Onshore
TotalBrazil
Owned Rigs: 31Leased: 56
• Petrobras’ leasing contracts are long term, averaging a 5 years length;• In 2006, 15 offshore drilling rigs were owned by Petrobras;• In August 2005, Petrobras renewed 24 drilling rigs contracts.• In July 2006, Petrobras signed contracts worth R$ 10.5 billion for the charter of six drilling units:
• 4 rigs will operate in water depths of up to 2,000 meters (seven-year term contract, renewable for further seven years);• 2 rigs will operate at depths down to 2,400 meters (units chartered for 5 years, renewable for the same period);
• In September 2006, the Company contracted two ultra-deepwater rigs for its drilling operations in the Gulf of Mexico. The contracts have 5 and 6 years term.
Petrobras’ Drilling Rigs
28
Royalties• Monthly payment due from concessionaires for the exploration and production of oil and natural gas;
• Rates vary, according to the area, from 5% to 10% (per producing field) and are established in each concession contract;
• Production Volume x Reference Price (published by the regulator, the National Petroleum Agency - ANP), in relation to each field
7,630
6,366
5,0204,372
3,509
01,0002,0003,0004,0005,0006,0007,0008,0009,000
2002 2003 2004 2005 2006
R$
Mill
ion
29
Special Participation – Progressive Tax
10% 20%30% 35%
First Year of
Production
Second Year of
Production
Third Year of
Production
After the ThirdYear of
Production
40%
20 25 30 35
16.7 21.7 26.7 31.7
13.3 18.3 23.3 28.3
10 15 20 25
Dai
ly p
rodu
ctio
n (th
ousa
nd m
3 /day
)
6.3
conv
ersi
on F
acto
r
15
11.7
8.3
5
• Special Participation is the progressive tax applied over the net income from production.
• Tax depends on the year of production, daily production and location (Land, Offshore Shallow Water or Offshore Deep Water)
• Bellow, the characteristics of the special participation for deep water shelves:
Tax Rates
30
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
2001 2002 2003 2004 2005 2006
Lifting DD&A Exploratory costs SG&A R&D Other Other COGS Income Tax Government take Net Income
Distribution of the Realization Price of a Barrel of Domestically Produced Oil (%)
% S
hare
of
Rea
lizat
ion
Pric
e
31
Distribution of the Realization Price of a Barrel of Domestically Produced Oil ($)
$-
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
$45.00
$50.00
2001 2002 2003 2004 2005 2006
Lifting DD&A Exploratory costs SG&A R&D Other Other COGS Income Tax Government take Net Income
$ pe
r Bar
rel R
ealiz
atio
n Pr
ice
32
Downstream OperationsUpstream Operations
Domestic Reserves SPE (as of 12/31/2006)- Proved Reserves of 13,75 Billion BOE- Reserve / Production 19,5 years - Campos Basin accounts for more than 80% of
Brazil’s oil production
Vertical Integration
11 refineries in Brazil- 8 in the south/ southeast region- Installed capacity of 1,986 k bpd
33
237 257333 340 386 432241 282 281 28176 96 129 173706
779902
1105
116
138
153228
287
345
204 217
11095
0
500
1000
1500
2000
2500
3000
2006 2010 2015 2020
LPG Gasoline Naphta Jet Fuel Diesel Fuel Oil Others
Domestic Oil Products Market
2,337
1,824
2,732
2,039
2.93% p.y.
Thousand bpd
34
Downstream Investments
US$ 29.6 billion investments in the Downstream area
28%
13%
18%
4%
8%
8%
21%
Fuel QualityConversion
ExpansionHSE
TransportationPipelines
Others 6,1122,264 2,270 1,083 5,3533,938 8,619
US$ million
Includes Downstream International investment (US$ 3.513 million)
35
International285**
Production Brazil2.421
256
Throughput in Brazil 2.061
Oil Products Consumptionin Brazil ** 2.170
208Imported Oil
5Oil Products Exports ***
International Oil and Products Sales762
114
Thousand bpd
The production flow of liquids in 2012 shows the high degree of integration among the business segments in the Brazil and abroad.
29256*
Throughput Abroad348
Oil Purchase Abroad 23
296 158 1.853
(*) Includes non-consolidated production (**) Biodiesel Portion not included(***) Liquid Exports of Oil Products
36
Corporate Targets – Downstream
Refining Costs
1.90
2.292.59
3.69
1.30
1.73
2.83
2.24
2005 2006 9M07 Target 2012
Refining Cost - BrazilRefining Cost - International
US$
/bbl
37
New Refinery in Pernambuco•Total Investment: US$ 4.1 billion (Petrobras Investment US$2.4 billion);
• Throughput capacity: 200 thousand heavy oil barrels (60% Petrobras oil / 40% PDVSA oil);
• Focusing diesel and LPG production maximization, the new refinery will aim the growth of oil products demand in the Northeast.
•The Northeast Region, which responds for 19% of oil products demand and holds only one refinery in Bahia, will no longer be a fuel importer (either from refineries in Brazil or abroad);
• Costs reduction: oil products transportation are more expensive than for crude oil.
Business Strategies
Refinery in the USA• Petrobras has acquired 50% of the Pasadena Refinery System Inc. (PRSI), located in Texas, USA;
•The refinery, which already has a capacity of 100,000 bbl/day, will be upgraded to handle 70,000 bbl/day of heavy oil and feedstock (including Marlim field’s production);
• Planned expansion to 200,000 BPD. After the revamp project all products will match USA highest standards.
Refinery in Japan• Petrobras has acquired 87.5% of the Japanese Company Nansei Sekiyu Kabushiki Kaisha (NSS), located in Japan, for the value of approximately US$ 50 million;
•The refinery, which already has a capacity of 100,000 bbl/day, that process light crude oil and high qualityproducts, a crude oil and products terminal with storage capacity of 9.6 million barrels, three piers withcapacity to receive product vessels of up to 97 thousand deadweight tonnage (dwt) and a mono buoy for Very Large Crude vessels (VLCC) of up to 280 thousand dwt.
38
Throughput (Brazil and Abroad) and Processing of Domestic Oil Production in Brasil (Thousand bpd)
205348
348
2,0611,7922,659
92
90
80
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2008 2012 201574
76
78
80
82
84
86
88
90
92
94
BP 2008-12 - Throughput - International (thousand bpd)
BP 2008-12 - Throughput - Brazil (thousand bpd)
Domestic Crude Oil as a % of Total
Corporate Targets – Downstream
1,997
2,4093,007
39
BR Participation in the Brazilan Market (%)
3141
2436
2006 2012
BR Participation in Total Brazilian Market (%)
BR Participation in the Brazilian Automotive Market (%)
Corporate Targets – Distribution
40
Main Projects: Petrochemical Segment
COMPERJ - Intermediate (Styrene, PTA and Ethylene glycol)COMPERJ – Thermoplastic Resin ( Polyethylene, Polypropylene and PET)
Total investments: US$ 4.3 billionPetroquímica Paulínia - PolypropyleneInternational Petrochemical ProjectsCompanhia de Coque Calcinado de PetróleoCompanhia Integrada Têxtil de Pernambuco – CITEP (POY)Petroquímica SUAPE (PTA)
COMPERJ – Basic Petrochemicals UnitMain Projects
41
COMPLEXO PETROQUÍMICO DO RIO DE JANEIRO - COMPERJ
•Total Investment: US$ 8.4 billion (Petrobras Investment US$4.6 billion);• Throughput capacity: 150 thousand heavy oil barrels (Marlim oil from Campos Basin);• Start Up: 2012• Refining and Petrochemical Integrated Complex that through the use of new technologies process heavy oil to obtain oil products and first and second generation petrochemical products
Business Strategies
42
Domestic Natural Gas Market*
24
42.1
16.2
43.9
72.9
30.0
31.1
48.0
6.10
20
40
60
80
100
120
140
160
2006 2012
Thermoelectric Industry Other
Million m3/day134 134
(*) considering maximum dispatch of every thermoelectric power plant• Other: vehicular, residential / commercial, refineries and fertilizer units. (**) Adjusted to STD Heat Value (9,400 Kcal/kg)
E&P**
Bolívia
LNG
46.3
Supply 2012
19.4% p.y.
43
70,871,371,164,1
45,7
28
0
10
20
30
40
50
60
70
80
2007 2008 2009 2010 2011 2012
Parque das Conchas
2009
Parque das Conchas
2009
Marlim LesteP-532008
Marlim LesteP-532008
Frade2009
Frade2009
RoncadorP-52
Oct 2007
RoncadorP-52
Oct 2007
RoncadorP-54
Oct 2007
RoncadorP-54
Oct 2007
Marlim SulMod. IIP-512008
Marlim SulMod. IIP-512008
PiranemaSep 2007 PiranemaSep 2007
Rio de JaneiroEspadarte Mod II
6/jan/07
Rio de JaneiroEspadarte Mod II
6/jan/07
Cidade NiteróiJabuti(FPSO)2008
Cidade NiteróiJabuti(FPSO)2008
Cidade de VitóriaGolfinho Mod. II
Oct 2007
Cidade de VitóriaGolfinho Mod. II
Oct 2007
Marlim SulMod. III - P-56
2011
Marlim SulMod. III - P-56
2011
Albacora(Water
Injection)2010
Albacora(Water
Injection)2010
Main Projects: E&P Brazil Natural Gas
Barracuda
(Infill Drilling)
2010
Barracuda
(Infill Drilling)
2010
Espadarte
Mod. III
2012
Espadarte
Mod. III
2012
Jubarte
P-57
2012
Jubarte
P-57
2012
Peroá-CangoáPhase 2
Nov 2007
Peroá-CangoáPhase 2
Nov 2007
Urucu Sales Start-up
2008
Urucu Sales Start-up
2008
Canapu2008
Canapu2008
Mexilhão2009
Mexilhão2009
Uruguá -Tambaú
2010
Uruguá -Tambaú
2010
Non Associated NG
Associated NG
Camarupim2008
Camarupim2008
Lagosta2008
Lagosta2008
Mill
onm
3 /day
Bacia Campos 2008
Bacia Campos 2008
PirapitangaMod. I2012
PirapitangaMod. I2012
Manati15/jan/2007
Manati15/jan/2007
Main Changes in relation to PN 2007-11: P-55 from 2011 to 2013; P-56 from 2013 to 2011; P-57 from 2010 to 2012
44
Main Projects: Gas & EnergyUS$ million
Gas Pipelines: Gasene, Northeast and Southeast Network, Urucu-Coari-Manaus and Gasduc III
LNG – Liquified Natural Gas
Thermo-Electrics: Cubatão, Três Lagoas, Canoas and Termoaçu
Wind Power Generation
G&E in Argentina and Other Countries
Total investments US$ 6.7 billion
Main Projects
45
Domestic Natural Gas Sales – G&E* (million m3/day)
57
82
2008 2012
BP 2008-12 - Domestic Natural Gas Sales – G&E (million m3/day)
Corporate Targets – G&E
* Does not include Petrobras consumption
6,2% p.y.
46
• Supply will raise from the current 15.8 million to 40 million m3 per day in 2008 in the Southeast.
• Development of two new oil and gas fields in Espírito Santo;
• Increase of natural gas supply from the Marlim field (Campos Basin);
• Expansion of gas production in the Merluza field (Santos Basin).
• Demand reallocation
• Refineries, Distributors and flex-fuel thermoelectric plants (LNG, diesel and alcohol)
New investments will reduce the country’s dependence on imported gas.
Natural Gas supply in Southeast 2006 - 2008
47
Peroá/Cangoá
Vitória
REDUCREDUC
CabiúnasCabiúnasCampinasCampinas
Cacimbas
RPBC
Ubu
Belo HorizonteBelo Horizonte
Rio de JaneiroRio de Janeiro
CaraguatatubaCaraguatatuba
Lagoa Parda
Total Southeast 08: 40 MM m3/dAdditional: (+ 24,5 MM m3/d)
CanapuCamarupim
MerluzaLagosta
GaroupGaroupaaNamoradoNamorado
EnchovaEnchova
GuararemGuararemaa
PP--51 (MLS)51 (MLS)
Golfinho 2Golfinho 2
PP--52 (RO)52 (RO)PP--54 (RO)54 (RO)
JABUTI
Santos Basin
Espírito Santo Basin
Campos Basin
Barra do Riacho Terminal
18 MM m3/d(+16,7 MM m3/d)
Cacimbas fence
2,5 MM m3/d(+1,5 MM m3/d)
Cubatão fence
Ilha d’Água / IlhaCompridaTerminals
19,5 MM m3/d(+6,3 MM m3/d)
Cabiúnas fence
Natural Gas supply extension in Southeast 2006 - 2008PLANGAS 2008 targets
48
Flexible LNG ProjectFacilitates the adjustment of the offer to the market’s characteristic:
Flexible Offer (with guarantee) to the thermoelectric plants.
More efficient than Diesel in the thermo plants;
Mitigates the risk of failing to supply the gas due to abnormalities;
Diversifies the sources of imported gas;
Projects under evaluation: (up to 31 MM m3/d of re-gasification)
FSRUFSRUFloating Storage and Floating Storage and Regasification UnitRegasification Unit
49
Power Sales – PETROBRAS (TOTAL Brazil + International) (Average MW)
718 722
2,234
3,741118
976
5,439
3,070
0
1,000
2,000
3,000
4,000
5,000
6,000
2008 2012BP 2008-12 - Expansion Opportunities in Thermoplants (Average MW)BP 2008-12 - Thermoplants and Co-generation - Brazil (Average MW)BP 2008-12 - International (Average MW)BP 2008-12 - PETROBRAS (TOTAL Brazil + International) (Average MW)
Corporate Targets – G&E
50
International - Overview
Houston
Colombia
Argentina
Angola
United Kingdom.
USA
BRAZIL
Bolivia Rio de Janeiro
Trinidad &Tobago Nigeria
Venezuela
EcuadorPeru
Mexico
Tanzania
Saudi Arabia
Iran
EXPLORATION AND PRODUCTIONTRADING
HEAD OFFICE
REFINING
UNDER EVALUATION
REPRESENTATIVE OFFICE
New York
Tokyo
Beijing
Singapore
Libya
Mozambique
Uruguay
Equatorial Guinea
Turkey
Core Areas:
• Refining
• Add value to Brazilian heavy oil exports
• E&P: West Africa (Nigeria and Angola) & Gulf of Mexico:
• Apply deep water and deep well drilling technology.
• Latin America:
• Leadership as an integrated energy company
Senegal
Jordan
Pakistan
India
Portugal
51
UNITED STATES
MEXICO
HoustonNew Orleans
Successful Discoveries, Production in Cottonwood, Development in the Lower Tertiary
COULOMB NORTH
CHINOOK
ST. MALO
CASCADECOTTOWOOD
DISCOVERIES2002 - Cascade2003 - Chinook & St. Malo2004 - Coulomb North2005 - Cottonwood
Gulf of Mexico - Petrobras participates in 338 blocks, and operates 200.
52
International - Main Projects in the Gulf of Mexico
• Petrobras (50%) - operator
• Devon (50%)
• Petrobras (67%) - operator
• Total (33%)
• Petrobras (100%) - operator
Cascade (Under Evaluation)
Chinook (Under Evaluation)
Cottonwood(Development)
• EXPLORATION WELLS •Petrobras (20% to 100%)
• Various partners (Exxon, Newfield, BP,• BHPBilliton, Dominion, Carrizo, Hess,• Kerr McGee
LONG TERM COMMITMENTSTwo drilling units on long term contracts
• Petrobras (25%)
• Unocal (20%) - operator
• Chevron (13%)
• Encana (6%)
• Devon (23%)
• Exxon (4%)
• ENI (1%)
Blackbeard, Megamata (deep gas)Andromeda (WGoM), Alsace (GBanks)
Saint Malo(Under Evaluation)
53
CASCADE AND CHINOOK• First FPSO Deployment• First Oil: 2009• Hurricane factor: Run!
US regulators approve Petrobras plans to bring first FPSO to the Gulf of Mexico
Same technological concepts successfully applied in Brazil Petrobras America to invest $5 BN
(60% E&P) 2008-2012
2005 2006 2013
By 2013 production is expected to reach 130 thousand boed.
U.S. Gulf to become important source of international growth for Petrobras
54
International – West Africa
2,000m
1,000m
2,000m
1,000m
6 blocks (1 in production)
Operator in prolific Block 18 with 30% stake
Start up / Production Peak:AGBAMI:
- First oil: 2008 / Peak: 250,000 bpd in 2009 (total)AKPO:
- First oil: 2008 / Peak: 175,000 bpd in 2009 (total)Petrobras stake: from 70,000 to 100,000 bpd
Operator of new Block OPL 315 with stake of 45%
55
Main Projects: Biofuels
29%
46%
21%
4%
Biodiesel Pipelines and Ethanol Pipelines Others H-Bio
US$ 1.5 billion Investments
56
Corporate Targets – Biofuels
Biodiesel Available Capacity (thousand m3/year)
329
1,182938
844
2,705
1,254
0
500
1,000
1,500
2,000
2,500
2008 2012 20150
500
1,000
1,500
2,000
2,500
3,000
BP 2008-12 - Biodiesel Available Capacity (thousand m3/year)
Dopmestic Biodiesel M arket (thousand m3/year)
57
Future Markets for biodiesel
2005to
2007(2% allowable)
2008to
2012(2% demanding)
(5% allowable)
From 2013on
(5% demanding)
Brazilian market
0 - 840 million litters
Brazilian market
0,8 - 2,5 billion litters
Brazilian market
2,5 billion litters
Law 11.097/2005 – established minimal percentage for biodiesel mix in diesel
Business Strategies
58
BA
MG
CE
Montes Claros
Quixadá
semi-arid region
3 Projects Being Implemented
Capacity: 171 thou m3/year (~1 million bpy)
Investments (2008-12): US$ 40 million (*)
Jobs Generation: Construction: 1,200 direct and 400 indirectOperation: 105 directRaw material production:70,000 families
Start up: 4 Q/2007
InputsFamily Agriculture: castor, cotton, and palm.Complementary: soy.
All Petrobras Biodiesel has Social Fuel Seal
Candeias
Bio-diesel production facilities
(*) Total Investment – US$ 158 million
59
Ethanol Exports (Thousand m3)
500
4.750
0
1.000
2.000
3.000
4.000
5.000
2008 2012
BP 2008-12 - Ethanol Exports (Thousand m3)
Corporate Targets – Biofuels
45,5% p.y.
60
North and Central America
37%
Europe
9.8%
South America
38%
Asia
16.2%
Ethanol global market – 46.5 Billions LitersEthanol global market – 46.5 Billions Liters
Brazil35%
Brazil35%
A New Opportunity for Business
• Today the ethanol consumption is 2.6% of gasoline MKT• 10% of ethanol in gasoline will represent 118 Billions Lt
61
RAW MATERIALProduction / ha
(kg)Quantity of Ethanol/ ha
Energy out/ Energy
in
SUGAR CANE 85,000 7.080 liter 8,3
CORN 10,000 4.000 liter 1,3 - 1,8
Raw Material Comparison
851370180
619759
7,626390
• Total country• Native Amazon Forest• Secondary Amazon Forest and Others • Native Forests• Pasture• Temporary Crops• Permanent Crops• Available land • Available land with low impact (*)
Area (MMha)
Type (Land use in Brazil)
Source: FAO, 2002 and EMBRAPA (*)
62
Marine Terminal Rio de Janeiro
Marine Terminal São Paulo
Ethanol Export
Petrobras target:
4.75 Million m3 in 2012
• Petrobras, Mitsui and Camargo Correa signed an Memorandum of Understanding (MOU) to study the economic viability of a pipeline for ethanol exports.
• A pipeline network connecting the interior of the states of São Paulo and Goias to marine terminals in Rio and SP.
Ethanol Logistic to Export
63* Of total of Soybean oil exported, 2288 thousand m³ is crude oil, and 535 thousand m³ is refined oil** Estimated volume of imported diesel in 2006 = 1.709 thousand m3 Sources: Abiove and Petrobras
2007
2008
• H-BIO in 4 refineries (by year end)– using up to 256 thousand m3/year of vegetable oil
• Equivalent to 15% of Diesel imports• REGAP pre-operation license (ANP). Definitive license in two months.
• H-BIO in 3 more refineries• Using up to 425 thousand m3/year of vegetable oil • 15.1 % of total soy oil export• Equivalent to 25% of Diesel imports
Main advantages:• No waste
• Simple logistics
• Improves diesel quality
• Flexible vegetable oil source
H-BIO - a complementary use of vegetable oil
64
53.6% 61.6%44.4% 40.6% 40.1% 39.9%
46.4% 18.0%25.1% 23.1% 20.7% 20.4%
10.3% 9.9% 8.0% 7.7%
32.0%10.9% 31.2%26.4%20.3%9.5%
Oct/1992 Jul/2000 After Aug/00offering
After Jul/01offering
Dec/2003 Sep/07
Government (1) (%) Bovespa Brazil Bovespa Foreign ADRs
(1) Includes BNDES / BNDESPAR
Foreign39,7%
Free Float 46,4 38,4 55,6 59,4 59,9 60,2
Bovespa28,1%
Diversified Shareholder Base• 60% of the economic value of Petrobras in private hands, but Government maintains control w/55% of voting
shares• More than 500,000 investors in Brazil and abroad• NYSE Listed, quarterly disclosure in US GAAP
• Investment Grade: Baa1 (Moody’s), BBB- (S&P) and BBB- (Fitch)
65
Final CommentsVertical Integration Comparison
Majors Average *
2,776
3,136
4,661
4,307
1,629
1,632
National Oil Companies Average **
Petrobras2,557
2,156
Product Sales (thous. bpd)
Refining (thous. bpd)Production (thous. boed)
* Majors: BP, Exxon, Total, Royal Dutch Shell, Chevron, Conoco and Repsol-YPF ** NOC: PEMEX, PDVSA, Saudi Amraco, KPC, Pertamina and Sonatrach
Source: PIW Intelligence, 2005
2,217
3,500Year 2012
2011: New Refinery will add 200
thous. bpd capacity2010:
Pasadena Refinery revamp concluded – processing 70
thous. bpd of heavy oil
66
Results Announcement3rd Quarter 2007
(Brazilian Corporate Law)
67
1,7971,789
2Q07 3Q07
Δ = 0.45%
Thou
s. b
pd
• Domestic Oil and NGL production slightly higher compared to the 2Q07;
• Expected growth lower than expected due primarily to scheduled stoppages and delays in the delivery of some production projects;
DOMESTIC OIL AND NGL PRODUCTION
68
Δ +33 thous. bpd
P - 34Jubarte
60,000 bpdDecember 06
Jan-Sept 2006 Jan-Sept 2007
1,7631,796
New Systems
Δ +203 thous. bpd
Existing Systems*
Δ -170 thous. bpd
FPSO – Cidade do Rio de JaneiroEspadarte
100,000 bpdJanuary 07
FPSO - CapixabaGolfinho
100,000 bpdMay 06
P - 50Albacora Leste
180,000 bpdApril 06
* Natural decline and production stoppages
203Total New Systems
2828-FPSO-Cidade do Rio de Janeiro (Espadarte)
4040-P-34 (Jubarte)
183820FPSO-Capixaba (Golfinho)
11714831P-50 (Albacora Leste)
Change9M07 (thous. bpd)9M06 (thous. bpd)Unity
DOMESTIC OIL AND NGL PRODUCTION: MAIN PROJECTS IN 2006 AND 2007
69
PRINCIPAIS PROJETOS DE ÓLEO PARA O 4T07MAIN OIL PROJECTS IN THE 4Q07
Golfinho Module 2
FPSO Cidade de Vitória
• Capacity: 100 thous. bpd
• Wells:• 4 Producers• 3 Injectors
• Moored platform
• Fist Oil: Nov. 2007
• 2 wells in 2007
• Production peak: 1H08
Roncador Module 1A Fase 2
P-52
• Capacity: 180 thous. bpd• Wells:
• 18 Producers• 11 Injectors
• 2 gas lift manifolds• 1 self-supported rigid riser• Moored platform• First oil: Nov. 2007• 2 wells in 2007• Production peak: 2H08
Roncador Module 2
P-54
• Capacity : 180 thous. bpd
• Wells :•11 Producers• 6 Injectors
• Platform is being moored at the Roncador Field
• Fist Oil: Dec. 2007
• 1 well in 2007
• Production peak: 2H08
70
MAIN OIL PROJECTS IN 2008
Marlim Sul Module 2
• Capcity: 180 thous. bpd
• Wells:• 10 Producers• 9 Injectors
• First Oil: Jun. 2008
P-51
Marlim Leste
• Capacity : 180 mil bpd
• Well:• 14 Producers• 7 Injectors
• First Oil: Dec. 2008P-53
Jabuti
• Capacity: 100 thous. bpd
• Wells :• 8 Producers
• First Oil: Dec. 2008
FPSO Cidade de Niterói
1,8002,000
2007E 2008E
11.1%
Thou
s. b
pd
• New projects will add 460 thousand barrels/day of capacity;• These projects, along with those that will come online in the end of 2007, will contribute to reach the 2
million target in 2008.
71
Peroá Fase 2Installed Capacity Phase 1: • 3 million m3/d of gas• 3 producing wells in operation
Additional capacity in Phase 2:• 5 million m3/d of gas• 3 new producing wells
• Fist gas in Phase 2: Nov. 2007Peroá Platform
MAIN GAS PROJECTS IN THE 4Q07 AND 2008
Camarupim
• Capacity: 10 million m3/d of gas
• Wells:• 3 producers
• First gas: Dec. 2008
FPSO Cidade de São Mateus
72
• Strong increase in the sales volume as a result of economic growth and seasonability. However the increase in the domestic production was not enough to attend such demand, making it necessary to increase the import of oil products.
%
1,7531,696
1,7811,746
1,711
1,646
1,7091,7651,796 1,806
899085
8991
787879 7778
1,50 0
1,6 50
1,8 0 0
1,9 50
3 Q0 6 4 Q0 6 1Q0 7 2 Q0 7 3 Q0 750
6 0
70
8 0
9 0
D omest ic o il p rod uct s p roduct ion Oil p rod uct s sales vo lume
Primary p ro cessed inst alled capacit y - B raz il ( %) D omest ic crude o il as % o f t o t al
Thous. bpd
REFINING IN BRAZIL AND SALES IN THE DOMESTIC MARKET
73
Downstream - Conversion Projects (Coking Units)
Objective:
• Increase production of light oil products instead of fuel oil.
• Allow the processing of heavy oil from Campos Basin with no additional production of fuel oil.
• Profitability increase.
REDUCStatus: Work in progress
Startup: 2008
Capacity: 31.5 thous. bpd
REVAPStatus: Work in progress
Startup : 2009
Capacity : 31.5 thous. bpd
REPARStatus : Work in progress
Startup : 2010
Capacity: 31.5 thous. bpd
• New delayed coking projects will allow the additional production of 47 thousand barrels/day of diesel, while decreasing the fuel oil production by
61 thousand barrels/day.
8,000 bbl/dREVAP – Coke
14,000 bbl/dREPAR - Coke
9,000 bbl/dREDUC – Coke
IncreaseProject
Increase in National Oil Processing due to coker projects(2008-2020 average)
74
Results drivers - Margins
Aver. 3Q06
$8.5/bbl
0,00
5,00
10,00
15,00
20,00
25,00
30,00
Mar-06 Jun-06 Set-06 Dez-07 Mar-07 Jun-07
WTI Cracking USGC
Set-07
Aver.3Q07
$8.8/bbl
Aver. 2Q07
$14.9/bbl
74.9
68.8
57.859.7
48.7
47.8
57.0
64.4
4T06 1T07 2T07 3T07
Brent (average) Average Sales Price
-41%$11.8
$10.5
US$
/bar
rel
• Compared to the 2Q07, international refining margins declined substantially;
• During 3Q07 there was a substantive increase in oil prices, improving E&P results. This increase, however, together with stability in oil product prices (in Reais), was responsible for the sharp decrease in refining margins.
Source: Petrobras
75
AVERAGE REALIZATION PRICE - ARP
20
40
60
80
100
Dec-05 Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07
A R P B rasil ( U S$/ bb l)A verag e B rent Price ( U S$/ bb l)A R P U SA ( U S$/ b b l w/ sales vo l. in B rasil)
82.4
68.7
78.2
2Q07Aver.
3Q06Aver.
72.3
69.5
81.1 85.6
74.9
81.1
3Q07Aver.
• Petrobras continuously monitors international price trends in order to maintain its pricing aligned in the medium / long term.
76
6.800
11.535
14.190
24.489
41.798
5.528
10.272
13.061
27.264
44.469
Net Income
Operational Profit
EBITDA
COGS
Net Revenues
2Q07 3Q07
INCOME STATEMENT 3Q07 VS 2Q07
• Net Revenues increased compared to the previous quarter mainly due to higher sales volumes of oil products;
• Costs negatively affected by higher expenditure with oil and oil products imports; • Operational and net results were impacted not only by the decrease of refining margins, but also by
higher expenses (next slide).
-18.7%
6.4%
-10.9%
-8.0%
11.3%
R$
mill
ion
77
1,239
452
391
1,498
1,443
1,404
1,147
453
1,555
1,635
Others
Pension and HealthPlan
Exploratory Costs
General andAdministrative
Sales Expenses
2Q07 3Q07
OPERATIONAL EXPENSES ANALYSIS 3Q07 VS 2Q07
R$
mill
ion
• Operational Expenses were particularly affected by the increase of expenditures with the Pension Plan (Petros). Such expenses (R$ 695 million) were due to commitments related to the Petros Agreement and are not recurrent;
• The increase in sales expenses was a result of substantially higher sales volumes.
13.3%
15.9%
3.8%
13.3%
153.8%
78
LIFTING COSTS INCLUDING GOVERNMENT PARTICIPATION
15.46 15.20 14.45 14.66
22.2918.92 20.58
23.26
0
10
20
30
40
4Q06 1Q07 2Q07 3Q07
Lifting Cost (R$) Gov. Take (R$)
7.24 7.20 7.33 7.65
10.35 9.0410.62
12.48
74.968.8
57.859.7
0
10
20
30
4Q06 1Q07 2Q07 3Q070
20
40
60
80
Lifting Cost (US$) Gov. Take (US$) Brent
US$
/bar
rel
R$/
barr
el
20.1317.95
16.2517.59
37.9235.0334.12
37.75
• Government take and lifting costs highly correlated to Brent prices
79
CHANGE IN QUARTER REVENUES (3Q07 VS 2Q07)Exploration & Production – Operating Profit Change– R$ million
• Better E&P result is due to higher oil prices and slightly higher production.
10.024
1.527637
44 11.436420
986
2Q07 Oper. Profit Price Effect onNet Revenue
Volume Effect onNet Revenue
Avrg Cost Effecton COGS
Volume Effect onCOGS
Oper. Exp. 3Q07 Oper. Profit
1,7971,789 Domestic Production of Oil, NGL and Condensate (thous. bpd)
80
CHANGE IN QUARTER REVENUES (3Q07 VS 2Q07)
• Despite the increase in sales volume, the Downstream result was directly affected by lower refining margins. There was a strong increase in acquisition prices for oil and oil products and imported volumes, with stable ARP in Reais.
3.358338
1.936
7 1.893
776
916
2Q07 Oper.Profit
Price Effect onNet Revenue
Volume Effecton Net
Revenue
Avrg CostEffect on
COGS
Volume Effecton COGS
Oper. Exp. 3Q07 Oper.Profit
Downstream – Change in Operating Profit – R$ million
81
NET INCOME CHANGE – R$ million (3Q07 VS 2Q07)
• Despite the elevated operating revenues in the quarter, which increased due to economic growth and seasonality, the high costs of the downstream segment led to lower refining margins, which, together with the increase of expenditures with the pension plan Petros, resulted in a net income below the previous quarter.
1,7971,789 Domestic Oil, NGL and Condensate – thousand bpd
6,800
2,671 2,775
1,159
184 389 214 5,528
2Q07 NetIncome
Revenues COGS Oper. Exp. Fin. Exp andNon Oper.
Taxes Minority Inter.and Particip. inEquity Income
3Q07 NetIncome
82
INVESTMENTS
• By 09.30.2007, total capital spending reached R$ 30,606 million, representing an increase of 35% over the year to date amount for the similar period in 2006.
2007 % 2006 % %• Direct Investments 26,060 87 20,264 90 29 Exploration and Production 14,295 48 11,404 51 25 Downstream 4,607 15 2,800 13 65 Gas and Energy 1,057 4 1,203 5 (12) International 4,867 16 3,923 17 24 Distribution 702 2 477 2 47 Corporate 532 2 457 2 16 • Special Purpose Companies (SPC) 4,205 14 2,072 9 103 • Ventures under Negotiation 341 1 300 1 14 • Structured Projects - - 1 - - Exploration and Production - - 1 - (100) Total Investments 30,606 100 22,637 100 35
R$ millionJan-Sep
83
19%17%
18%17%
18%
24%
20%
16%
Dec-05 Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07
Net Debt/Net Capitalization
LEVERAGE
(1) Includes debt from leasing contracts (R$ 1.632 million on September 30, 2007 and R$ 1,980 million on June 30, 2007)(2) Total debt less cash and cash equivalents
• 12% increase in net debt during the quarter as a consequence of the reduction of cash/cash equivalents in long term bonds (R$2,909 million), to counterbalance the liabilities with Petros.
Petrobras’ Leverage Ratio
R$ million 09/30/2007 06/30/2007Short Term debt (1) 10,519 10,720Long Term Debt (1) 28,230 29,100
Total Debt 38,749 39,820
Cash and Cash Equivalents 14,216 17,854
Net Debt (2) 24,533 21,966
84
Total Shareholder's Return
15.8%
7.5%
6.0%
6.0%
5.8%
95.7%
36.1%
85.7%
44.5%
79.2%
30.2% 31.5%39.5%
22.8%28.0%
85.2%91.5%
50.5%43.6%
111.5%
0%
20%
40%
60%
80%
100%
120%
2003 2004 2005 2006 9M 07
Shares Increase Dividends Amex Oil Index (*)
Source: Bloomberg (PBR) * includes dividends for comparison
SHAREHOLDER’S RETURN
85
QUESTION AND ANSWER SESSIONVisit our website: www.petrobras.com.br/ri
For more information contact:Petróleo Brasileiro S.A – PETROBRAS
Investor Relations Department
E-mail: [email protected]. República do Chile, 65 – 22o floor
20031-912 – Rio de Janeiro, RJ(55-21) 3224-1510 / 3224-9947