Procurement Policy and Critical Equipment Supply
Disclaimer
The presentation may contain forward-looking statements aboutfuture events within the meaning of Section 27A of the Securities Actof 1933, as amended, and Section 21E of the Securities Exchange Actof 1934, as amended, that are not based on historical facts and arenot assurances of future results. Such forward-looking statementsmerely reflect the Company’s current views and estimates of futureeconomic circumstances, industry conditions, companyperformance and financial results. Such terms as "anticipate","believe", "expect", "forecast", "intend", "plan", "project", "seek","should", along with similar or analogous expressions, are used toidentify such forward-looking statements. Readers are cautioned thatthese statements are only projections and may differ materially fromactual future results or events. Readers are referred to thedocuments filed by the Company with the SEC, specifically theCompany’s most recent Annual Report on Form 20-F, which identifyimportant risk factors that could cause actual results to differ fromthose contained in the forward-looking statements, including, amongother things, risks relating to general economic and businessconditions, including crude oil and other commodity prices, refiningmargins and prevailing exchange rates, uncertainties inherent inmaking estimates of our oil and gas reserves including recentlydiscovered oil and gas reserves, international and Brazilian political,economic and social developments, receipt of governmentalapprovals and licenses and our ability to obtain financing.
We undertake no obligation to publicly update or revise anyforward-looking statements, whether as a result of newinformation or future events or for any other reason. Figuresfor 2012 on are estimates or targets.
All forward-looking statements are expressly qualified intheir entirety by this cautionary statement, and you shouldnot place reliance on any forward-looking statementcontained 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 andgas resources, that we are not permitted to present indocuments filed with the United States Securities andExchange Commission (SEC) under new Subpart 1200 toRegulation S-K because such terms do not qualify as proved,probable or possible reserves under Rule 4-10(a) ofRegulation S-X.
FORWARD-LOOKING STATEMENTS
Presentation Summary
1. Petrobras Business and Management Plan 2013-20172. Supply History3. What is Pre Salt?4. Critical Goods and Services5. Suppliers Qualification & Register6. Foreign Investment in Brazil: Oil and Gas Industry7. Conclusions
Petrobras Business and Management Plan
2013-2017
2013-2017US$ 236.7 Billion
Program InitiativesBusiness and Management Plan 2013-2017
PROEFProgram to Increase
Operational Efficiency
UO-BCUO-RIO
PRC-PoçoProgram to Reduce Well
Costs
PROCOPOperating Costs Optimization Program
PROCOP: Focus on OPEX, operating costs of the Company activities – Manageable Operating Costs.PRC-Poço: Focus on CAPEX dedicated to Wells construction – Investments in Drilling and Completion.
INFRALOG – Logistic Infrastructure Optimization ProgramPRODESIN – Divestment Program
Petrobras Local Content Management – Take advantage of the industry s capacity to maximize gains to Petrobras
TOTALUS$ 236.7 billion947 projects
UNDER EVALUATION
US$ 29.6 billion177 projects
UNDER IMPLEMENTATION
US$ 207.1 billion770 projects
All E&P projects in Brazil and projects of the remaining segments in phase IV*
Projects for the remaining segments, excluding E&P currently in phase I, II and III.
2013-2017 Business and Management Plan Investments
62.3%(US$ 147.5 Billion) 27.4%
(US$ 64.8 Billion)
1.0%(US$ 2.3 Billion)
1.4%(US$ 3.2 Billion)
1.1%(US$ 2.9 Billion)
2.2%(US$ 5.1 Billion)
4.2%(US$ 9.9 Billion)
0.4%(US$ 1.0 Billion)
71.2%(US$ 147.5 Billion) 20.9%
(US$ 43.2 Billion)
1.1%(US$ 2.3 Billion)
1.4%(US$ 2.9 Billion)
0.5%(US$ 1.1 Billion)
1.5%(US$ 3.2 Billion)
2.9%(US$ 5.9 Billion)
0.5%(US$ 1.0 Bililon)
73.0%(US$ 21.6 Billion)
1.0%(US$ 0.3 Billion)
13.5%(US$ 4.0 Billion)
6.4%(US$ 1.9 Billion)
6.1%(US$ 1.8 Billion)
International ETM* Other Areas*Pbio*E&P DistribuitionDownstream G&E
Phase I: Opportunity Identification; Phase II: Conceptual Project; Phase III: Basic Project ; Phase IV: Execution* Pbio = Petrobras Biofuel │ETM = Engineering, Technology and Materials │Other Areas = Financial, Strategy and Corporate
2013-2017 PERIODUS$ 147,5 billions*
Exploration & Production
* Does not include International E&P investments
Infrastructure and Support
ExplorationProduction Development
73%(106.9)
16%(24.3)
11%(16.3)
Areas Covered: Pre-salt
Petrobras Business and Management Plan 2013-2017Relevance of the Program
Production Curve in Brazil | Production of Oil and LNG2013-2017 BMP: Production Curve Maintained
2013
• Roncador III (P-55)
• Iracema Norte (Cid. Itaguaí)
• Florim• Júpiter
• Norte Pq. Baleias (P-58)
� Baleia Azul(Cid. Anchieta)
� Sapinhoá Pilot (Cid. São Paulo)
� Baúna(Cid. Itajaí)
• Lula NE Pilot (Cid. Paraty)
• Papa-Terra (P-63)
• Iracema Sul (Cid. Mangaratiba)
• Roncador IV (P-62)
• SapinhoáNorte
(Cid. Ilhabela)
• Lula Alto
• Lula Central
• Lula Sul (P-66)
• Franco 1 (P-74)
• Carioca
• Lula Norte (P-67)
• Franco SW (P-75)
• Bonito
• Franco Leste
• Espadarte III
• Papa-Terra (P-61)
2.0 2%2.02.0
Mill
ion
bpd
25 new production units will start-up between 2013-17 or38 new production units will start-up between 2013-20
• Lula Ext. Sul (P-68)
• Lula Oeste(P-69)
• Franco Sul (P-76)
•Tartaruga Verde e Mestiça
• Parque dos Doces
• Maromba
• Iara Horst(P-70)
• Franco NW (P-77)
• Entorno deIara (P-73)
• NE de Tupi (P-72)
• Iara NW (P-71)
• Sul Pq. Baleias
• Espadarte I
• Deep Waters Sergipe
• Carcará
� Production units in operation
Supply History
1950 1960
Contracting of goods andservices abroad.
1970 1980
Substitution of importing, similarity
law, nationalization, “reverse
engineering”, local market protection,
contracts in Brazil.
2002
1990 2000
2003
Opening of the market to importing,globalization, international bids.Focus on competitiveness. R&D inBrazil and abroad.
Focus on the Brazilian industry.
Increase of the Local Content in the
goods and services contracting
(competitiveness and technological adherence).
Most of the equipment
and materials
are acquired from abroad
Substitution of imported
equipment and materialsOpening of the
Brazilian market for
importing
History
What is Pre Salt?
Corcovado Hill
Located in a remote area, up to 300 km offshore
Total depth from5,000 to 7,000 meters
Salt layer more than 2,000 meters thick.
Pre-Salt LayerNew Exploratory Border
Water depths that canexceed 2,000 meters
Post-Salt LayerFocus up to 2006
Large Oil CarbonaticReservoirs
What Is Pre-salt?
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
PRE-SALT SOME TECHNOLOGICAL CHALLENGES
What Is Pre-salt?
What Is Pre-salt?
Reservoir
� Reservoir characterization
� Rock fluid interaction
� EOR
PRE-SALT SOME TECHNOLOGICAL CHALLENGES
What Is Pre-salt?
Subsea
� Flexible risers for water depth of 2,200m (7,218 ft)
� Flow assurance
� Scaling control
PRE-SALT SOME TECHNOLOGICAL CHALLENGES
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
Critical Goods and Services
Demand for New EquipmentBusiness Plan 2012-2016
Item Un. TOTAL
Wet Christmas Trees un 761
Subsea Welheads un 1.072
Flexible Flowlines km 4.499
Manifolds un 78
Tubing and Casings t 1.164.667
Umbilicals km 4.898
Dry Christmas Trees un 522
Onshore Welheads un 1.928
Item Un. TOTAL
Pumps un 6.509
Compressors un 540
Whinches un 77
Cranes un 99
Combustion Engines un 162
Turbines un 807
Structural Steel t 2.182.838
Itens Un. TOTAL
Reators un 259
Oil/Water Separators un 638
Storage Tanks un 633
Towers un 372
Itens Un. TOTAL
Generators un 316
Filters un 1.206
Flares un 50
Suppliers Qualification & Register
Petrobras Concepts & Requirements Overview
The Corporate Register is a database of Brazilian and foreign companiesinterested in participating in bidding for Petrobras.
These companies, Brazilians or foreigners, are eligible to provide toPetrobras high complexity services or equipment/goods, which are underpermanent Petrobras interest.
Corporate Register
The evaluation approval, as part of the registration process,ensures the incorporation of the company in the PetrobrasCorporate Register, obtaining the CRCC – Certificate ofRegistration and Classification. Then, the company could beinvited to participate of new biddings.
Suppliers Qualification & Register
Corporate GuidelinesRequirements:
�Legal
�Economics
�Technical Approval
ReferencesPetrobras Simplified Bidding ProcedureChapter IV(Issued by Government Decree 2.745/1998)
Petrobras Procurement Manual (MPC)Item 4.1.6(Approved by the Board of Directors)
Suppliers Qualification & Register
Complementary Corporate Guidelines
Requirements:
�Health, Safety & Environment - HSE
�Management & Social Responsibility
It is an “e-Procurement” portal, which provides tools for acquiring goods andservices for Petrobras System companies and their suppliers. In its businessplatform are carried out several transactions ranging from requests for quotesand sending proposals to management of orders and contracting.
www.petronect.com.br
Petronect
http://www.petrobras.com.br/en/supplier-channel/
Suppliers Qualification & Register
Foreign Investment in Brazil: Oil and Gas
Industry
‘Brazilian companies’ means companies that
have manufacturing processes and after-sales
services in Brazil, thus creating jobs and
collecting taxes in the country.
Brazilian Companies
Petrobras’ Partners
Brazilian Trade and Investment Promotion Agencyhttp://www2.apexbrasil.com.br/en/invest-in-brazil/apex-brasil-services-to-help-you
APEX Brazil
Foreign Investment in Brazil: Oil and Gas Industry
ONIPNational Organization of the Petroleum Industryhttp://www.onip.org.br/areas-of-activity/?lang=en
Foreign Companies Support in BrazilEmbassies, Consulates, Chambers of Commerce, etc.
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.
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.
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 BrazilMinistry of External Relations
http://www.brasilglobalnet.gov.br/arquivos/publicacoes/manuais/pubguialegali.pdf
Foreign Investment in Brazil: Oil and Gas Industry
Conclusions
�Petrobras has a robust projects portfolio, which is atypical of the currentglobal economic situation.
�There are huge opportunities for already installed and newcomers in theBrazilian market of suppliers, service and engineering companies due tothe scale provided by the project portfolio.
�In order to carry out such a portfolio, Petrobras is looking forward toestablish long term business with companies willing to invest in Brazil.
Conclusions