PETROBRAS
__
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 2014 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.
22
PETROBRAS TODAY
Fully integrated across the hydrocarbon chain
Exploration and
Production
• 2.6 mm boed production
• 293 production fields
• 92% of Brazilian production
• 34% of global DW and UDW production
Downstream
Distribution
• 12 refineries (Brazil)
• 7,710 service stations
• 2.2 mm bpd refining capacity
• 37,7% of market share
• Oil products sales in Brazil: 2,443 Kbpd
• 9,190 km of gas pipelines in Brazil
• 21% share of service stations
Kbpd
30,6
-6,9
2011
2010
E&P
1,3
3,2
2,0
1,3
43,4
RTM
G&P
Biofuels
International
• 17 countries • 3 Biodiesel Plants and interest in 2 addiotional plants: 14,1 kbbld
• 0.7 Bn boe of 1P (SPE)
• Ethanol: opening new markets
• 217 th. boed production • 231 th. bpd refining capacity 42,0
-15,6
2012
Distribution
1,6
• Largest domestic producer of biodiesel: 20% of internal market
• 3rd producer of ethanol in Brazil
• 6,885 MW of generation capacity
Adjusted EBITDA per Segment (US$ bn) (1)
2,1
1,4
4,1
• NG Supply: 96.3 million m³/d
• 3 LNG Regasification terminals
with 41 MMm³/d capacity
• Oil products output in Brazil: ,2,180
3,0
3,6
Gas and Power
2013 Proven Reserves (SPE Criteria) ‐ Brazil
15.97 Billion boe
3,5
1,6
1,5
37,4
OnShore
8%
Ultra-Deep
Water
(> 1,500m)
41%
Shallow Water
(0-300m)
6%
-9,8
2013
Deep Water
(300-1,500m)
45%
International
(1) Adjusted according average exchange rate. Excludes Corporate and Elimination.
33
COMPETITIVE ADVANTAGES
Uniquely positioned to integrate upstream and downstream operations
Exploration & Production
• Leader in deep-water production,
with access to abundant oil
reserves
• New exploratory frontier, adjacent
to existing operations
Downstream
• Dominant position in growing
market, far from other refining
centers
• Balance and integration between
production, refining and demand
Abundant reserves
300 km away from
the market
Gas & Power/ Biofuels/Petrochemicals
• Fully developed infrastructure for
processing and transfporting gas
• Integration accross full energy
and hydrocarbon chain in Brazil
4
44
OWNERSHIP*
Broad distribution: government, Brazilian and foreign shareholders
Non‐Voting Shares
Social Capital
Voting Shares
27.92%
19.43%
36%
28.51%
36.29%
45.25%
63.60%
7.83%
48%
16.27%
7.89%
11.99%
26.83%
11.52%
4.5%
16%
Brazilian NonGov’t
Shareholders
Brazilian
Government
Foreign
Shareholders
Brazilian NonGov’t
Shareholders
Brazilian
Government
Foreign
Shareholders
Brazilian NonGov’t Shares
Non-Voting
Voting
Brazilian
Government **
Non-Voting
Voting
Foreign
Shareholders
Non-Voting
Voting
• Brazilian government, by law, must maintain control. Does so with 64% of voting shares.
• Petrobras is the most actively traded ADR on NYSE for three years, and among all stocks, the 8th most actively traded stock.
• On NYSE, Non-voting shareholders (ticker: PBRA) represent 11,54% while voting shareholders (ticker: PBR) represent 11,78% of capital stock
• In Bovespa, Petrobras is most actively traded stock, by shares and volume.
* Capital stock position on 06/30/14 **Includes: Federal Government, BNDES, BNDESPAR, Sov. Wealth Fund 55
Exploration &
Production
HISTORICAL FPSO INSTALLATION
Production grows when capacity of new production units exceeds decline of approximately 10% p.a.
2006-2010
2011-2015
• Petrobras installed, on average, 5 platforms per year from 2006 to 2010,
with capacity of 400-500KBPD.
• 2011/12: Inadequate installation of new capacity to overcome natural
decline.
• Ramp up of these units was delayed due to limited availability of drilling
rigs: Since 2006, fleet increased from less than 30 to more than 70
• 2014/15: Gradual well connection will lead to production growth within the
period
Units and Oil Capacity (1) added per year
5 units
370 kbpd
7 units
590 kbpd
4 units
210 kbpd
5 units
480 kbpd
5 units
400 kbpd
2 units
100 kbpd
1 unit
100 kbpd
9 units
840 kbpd
Manati
8MMm³/d
P-62
180 kbpd
P-54
180 kbpd
P-58
180 kbpd
FPSO Cid São
Mateus
Camarupim
10MMm³/d
FPSO Cidade de
Angra dos Reis
100 kbpd
TAD + P-61 + P-63
140 kbpd
P-62
180 kbpd
PPER-Phase 2
∆5.3MMm³/d
FPSO E.S. PQ
DAS CONCHAS
100 kbpd
FPSO Capixaba
(reallocation)
100 kbpd
P-55
180 kbpd
P-58
180 kbpd
FPSOPIRANEMA
30 kbpd
PRA-1
FPSO Cid.
Niteroi MLL
100 kbpd
FPSO Cidade de
Santos
10MMm³/d
Cid. Paraty
120 kbpd
P-61 + TAD
140 kbpd
P-34 JUBARTE
60 kbpd
FSO Cid. De
Macaé
FPSO Cid. Rio
Das Ostras
30 kbpd
Frade
100 kbpd
P-57
180 kbpd
Mexilhao
15MMm³/d
Cid. Itajaí
80 kbpd
Cid. Ilhabela
150 kbpd
P-50
180 kbpd
FPSO-Cid. RJ
100 kbpd
P-53 – MLL
180 kbpd
P-51 – MLS
Mód. 2
180 kbpd
SS-11
TIRO/SIDON
20 kbpd
P-56
100 kbpd
Cid. Anchieta
100 kbpd
Cid. São Paulo
120 kbpd
Cid. Mangaratiba
150 kbpd
2006
2007
2008
2009
2010
2011
2012
2013
2014
PPER-Phase 1
2.7MMm³/d
P-52
180 kbpd
FPSOCAPIXABA
100 kbpd
FPSO-CIDADE
DE VITÓRIA
100 kbpd
SEILLEAN
GOLFINHO
30 kbpd
(1) Petrobras’ Total Interest in capacity added to produce oil
77
PETROBRAS: OIL AND NGL PRODUCTION IN BRAZIL
New units are now contributing to an accelerating ramp up - especially total operated production
2013: 1,931 th. bpd
Th. bpd
2,400
2,350
1Q13
Average 1,910
P-63
5/Jan
(Piloto de Lula NE)
6/Jun
Capacity:
120 th. bpd (45% Petrobras)
2013 – 11 th. bpd
2Q14 – 40 th. bpd
FPSO Cidade de Itajaí
2,200
(Baúna)
16/Fev
2,150
2,100
Capacity:
80 th. bpd (100% Petrobras)
2013 – 36 th. bpd
2Q14 – 69 th. bpd
1,950
31
1,900
1,965
1,850
1,977
1,957
1,925
1,893
1,920
2,025
1,954
1,892
Apr-13
May-13
P-55
31/Dez
Capacity:
180 th. bpd
(100% Petrobras)
2Q14 – 18 th. bpd
2,012
2,029
1,990
P-58
(Parque das Baleias)
17/Mar
Capacity:
180 th. bpd
(100% Petrobras)
2Q14 – 38 th. bpd
2,012
2,017
P-62
(Roncador)
12/Mai
Capacity:
180 th. bpd
(100% Petrobras)
2Q14 – 8 th. bpd
103
2,019
2,049
2,008
1,979
1,888
2,152
2,120
2,078
1,932
1,979
1,924
1,997
2Q14
Average 1,972
1Q14
Average 1,922
(Roncador)
Capacity:
120 th. bpd (65% Petrobras)
2013 – 10 th. bpd
Capacity:
2Q14 – 28 th. bpd
140 th. bpd (62,5% Petrobras)
2013 – 1 th. bpd
2Q14 – 17 th. bpd
2,024
1,996
4Q13
Average 1,960
(Papa-Terra)
11/Nov
FPSO Cid. Paraty
(Sapinhoá)
2,250
2,000
3Q13
Average 1,924
FPSO Cid. São Paulo
2,300
2,050
2Q13
Average 1,931
1,960
1,957
1,975
1,964
1,908
1,917
1,923
1,926
1,933
Jan‐14
Feb‐14
Mar‐14
Apr‐14
1,846
Jan-13
Feb-13
Mar-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Production Operated by Petrobras
Nov-13
Dec-13
May‐14
Jun‐14
Jul‐14
Petrobras Production
Main factors influencing 2Q14 oil production, as compared to 1Q14
 Start-up of production for P-62 (Roncador)
 Contribution from new wells for P-55 (Roncador), P-58 (Parque das Baleias) and FPSO Cidade de São Paulo (Sapinhoá).
 Sustainable production growth (from 1,926 th. bpd in March to 2008 th. bpd in July), i.e., +82 th. bpd production throughout 2Q14.
88
OIL AND NGL PRODUCTION IN BRAZIL – 2014 PROJECTION
Production target of 7.5 (± 1 p.p.) maintained, as year end production offsets lower first half production
2013 Average: 1,931 th. bpd
Th bpd
1Q13
Average 1,910
2,600
2Q13
Average 1,931
3Q13
Average 1,924
2014 Average: 2.075 th. bpd +/- 1%
4Q13
Average 1,960
3Q14
2Q14
Average 1,972
4Q14
P-61
4Q
FPSO Cid. São Paulo
2,500
1Q14
Average 1,922
P-58
P-55
FPSO Cid. Paraty
Jan/5
Mar/17
Dec/31
Jun/6
2,400
2,300
P-62
P-63
FPSO Cidade de Itajaí
Feb/16
TAD
May/12
Nov/12
Illustration
4Q
2,200
2,103*
2,100
2,049
1,979
2,000 1,965
1,979
1,924
1,900
1,920
1,800
1,892
1,888
1,846
1,960
1,957
1,964
1,975
1,917 1,923 1,926
2,008
As of 08/09
Cid. Mangaratiba
4Q
1,933
1,908
4Q
Cid. Ilhabela
Actual
Factors that support production growth:

New systems: P-61/TAD (4Q14), FPSO Cidade de Ilhabela (4Q14) and FPSO Cidade de Mangaratiba (4Q14).

Planned connection of 33 production wells in 2H14. 30 were connected in 1H14.
-
PLSV FLEET INCREASE: 11 vessels in 1Q14, 13 in 2Q14, 16 in 3Q14 and 19 in 4Q14.
-
PRODUCTIVITY INCREASE: from 84 km / PLSV / year in 2Q13 to 114 km / PLSV / year in 2Q14 (+36%).
-
READINESS: Reduction in PLSV downtime: from 33% in 2Q13 to 31% in 2Q14 (-2 p.p.).
Dec‐14
Nov‐14
Oct‐14
Sep‐14
Aug‐14
Jul‐14
Jun‐14
May‐14
Apr‐14
Mar‐14
Feb‐14
Jan‐14
Dec‐13
Nov‐13
Oct-13
Sep-13
Aug-13
Jul-13
Jun-13
May-13
Apr-13
Mar-13
Feb-13
Jan-13
0
* Actual on August (preliminary)
99
LONG TERM PRODUCTION TARGETS
Targets based on new production capacity that is either ramping up, under construction, or under bidding
3 MM bbl
NE de Tupi
(P-72)-150kbpd
Deep Water ES
Sapinhoá Pilot
(Cid. São Paulo)
120kbpd
Norte Pq. Baleias
(P-58)
180kbpd
Baúna
(Cid. Itajaí)
80kbpd
Roncador IV
(P-62)
18okbpd
Lula NE Pilot
(Cid. Paraty)
120kbpd
Papa-Terra
(P-61+TAD)
Papa-Terra
(P-63)
140 kbpd
Roncador III
(P-55)
180kbpd
1,9
Sapinhoá Norte
(Cid. Ilhabela)
150kbpd
Iracema Sul
(C. Mangaratiba)
150kbpd
Lula Alto 150kbpd
Lula Ext. Sul
e CO Sul de Lula
(P-68) – 150kbpd
Lula Central
150kbpd
Lula Oeste
(P-69) – 150kbpd
Lula Sul
(P-66) – 150 kbpd
Búzios III
(P-76) – 150kbpd
Búzios I
(P-74) – 150 kbpd
Iara Horst
(P-70) – 150kbpd
Tartaruga Verde
e Mestiça –
150kbpd
Búzios IV
(P-77) – 150kbpd
Lapa – 100kbpd
Iracema Norte
(Cid. Itaguaí)
150kbpd
Lula Norte
(P-67) – 150kbpd
Espadarte III
Iara NW
(P-71) – 150kbpd
Deep Water II SE
Marlim I
Revitalization
Marlim II
Revitalization
SE Deep Water I
Libra
Sul Pq. Baleias
Maromba I
Carcará
Júpiter
Búzios V
Florim
4,2
Entorno de Iara
(P-73) – 150kbpd
3,2
Búzios II
(P-75) – 150kbpd
On Stream
Built
Ordered
Growth in 2014:
7.5% ± 1p.p.
Under Bidding
2013
2014
2015
2016
2017
2018
+640kbpd
+660kbpd
+150kbpd
+1000kbpd
+900kbpd
+1050kbpd
2019
2020
Capacity added per year
10
PLANNED DEVELOPMENT WELLS - 2014
Connecting wells already completed will accelerate production ramp-up during 2014
New Production Wells in 2014 (Jun/14)
55
63
New Injection Wells in 2014 (Jun/14)
27
63
24
21
27
3
Connected
Completed
Drilled
Total
Connected
Completed
Drilled
Total
11
11
Pre‐Salt Update
PRE-SALT PROVINCE
A huge area with much exploration still to occur
Average Water Depth: 2,100 m
MG
13%
Distance from the coast: 300 km
Consortium without
Petrobras
Salt thickness: 2 km
Reservoir average depth: 5 km
Recoverable Volumes
· Lula: 6.5 bi boe
· Lula – Iracema area: 1.8 bi boe
· Sapinhoá: 2.1 bi boe
· Transfer of Rights: 5.0 bi boe
Total: 15.4 bi boe
Remaining areas
103.4 mil km²
69%
Areas under
concession
45.6 mil km²
31%
87%
Petrobras and RJ
associates
Campos
Basin
7,000 km2
Rio de Janeiro
São Paulo
Curitiba
(1.7 million acres)
Santos Basin
Pre-Salt
15,000 km2
(3.7 million acres)
100 km
* Comerciality declaration of Lula (6,5 bi boe), Lula–Iracema (1,8 bi boe), Sapinhoá
(2,1 bi boe) e Lapa (459 mi boe)
650
US GoM
blocks
Concession
Transfer of Rights
Production Sharing
13
13
PRE-SALT – CURRENT PRODUCTION UNITS
Production from dedicated units in the Santos Basin and existing units in the Campos Basin
14
14
OIL PRODUCTION IN THE PRE-SALT
Daily Record of 546 th. bpd on July/13 with 25 wells
P-58
High productivity of Pre-salt wells contributed to lower lifting costs (LF) for these projects.
Lula field has a lifting cost of US$ 9/boe (2013), whereas Petrobras LF was US$ 14.76/boe.
Mar 17 2014
Installation of Sustained Buoy Riser
550
444
500
450
546
477
400
302
Mil bpd
350
300
Jan 05, 2013
250
200
119
150
100
50
FPSO Cid.
São Paulo
169
+ 4 BSR´s
Jun 06,2013
Height of 10 m x length of 40 m x widtho of 52m
3
41
15
FPSO Cid.
Paraty
0
2003
2004
2005
2006
2007
2008
2009
2010
Principal factors behind the production increase in 2014
2011
2012
2013
1T14
07/13/14
Average Production of Pre-salt in June
2014 (tbpd)
 Instalation of buoys and respective well connections
 Start-up of production of P-58, with 3 wells in the pre-salt
2T14
Santos Basin
224
252
Campos Basin
15
WELLS CONSTRUCTION IN SANTOS PRE-SALT – TOTAL DURATION
Learning curve bringing down days to drill and complete wells, reducing development costs
COMPLETION (including WCT)
DRILLING
168
158
125
-11% p.a.
98
-15% p.a.
102
98
89
86
78
64
2010
2011
2012
Duration (days/well)
2013
2014
2010
2011
2012
2013
2014
Duration (days/well)
16
16
FPSO CIDADE DE ILHABELA – SAPINHOA NORTE (START-UP 3Q14)
Next Santos pre-salt unit on schedule with topsides fabrication and integration in Brazil
• Sail away by Jul/2014
• 1st oil: 2H 2014
• 150 kbpd oil
• 6 MM m³/d gas
• 8p + 7i wells
17
17
FPSO CIDADE DE MANGARATIBA IRACEMA SUL (4Q14)
Santos pre-salt unit also being completed in Brazil and on schedule for production this year
• Sail away by Aug/2014
• 1st oil: 2H 2014
• 150 kppd oil
• 8 MM m³/d gas
• 8p + 7i wells
18
18
P-66 PROGRESS AT THE RIO GRANDE SHIPYARD
First hull completed, second hull being finalized
1
3
3
Rio Grande Shipyard ERG1 – RS (april/14)
(1) P-66 final hull construction activities at quay
– 1st hull for Pre-Salt fully built in Brazil –
70% Local content;
(2) P-67 hull construction on dry dock:
integration of mega blocks built in China;
(3) P-67 and P-69 mega blocks built in Rio
Grande Shipyard.
2
19
19
Additional Acreage in the Pre‐Salt
ACCUMULATED ACTIVITY IN THE SANTOS BASIN PRE-SALT
Accumulated drilling and testing de-risked the areas, defining Transfer of Rights and related acreage
Area (km2)
Lula
1,523
Transfer of Rights
Level of Maturity in
Reservoir Knowledge
Lula / área de
Iracema
Contracted Volume
Drilled wells or in
Transfer of Rights
progress
(bilion boe)
Tested wells or
with tests in
progress
CO2 content in
gas (%)
Not applicable
36
24
10 - 20%
Not applicable
16
5
very low
Sapinhoá
233
Not applicable
19
7
15 - 20%
Buzios
852
3.1
10
8
22 - 25%
Entorno de Iara
611
0.6
3
1
25 - 35%
NE Tupi
291
0.4
2
2
15 - 20%
Florim
292
0.5
2
1
very low
Sul de Lula
203
0.1
1
1
17%
Sul de Guará
145
0.3
1
0
15%
Libra
1,548
Not applicable
1
1
45%
• Transfer of Right Areas already have a significant number of wells drilled and tested, with excellent results Transfer of Rights Surplus
9.8 to 15.2 billion boe
Field / Area
• Great potential per well, in line with the projects already in production of pre‐salt Santos Basin, sanctioined with 20 thousand bpd and results that reach up to 35 thousand bpd
• Projects under development in progress, without any foreseeable additional risks related to volumes, reservoir properties, technologies and the availability of the required equipments and services to the projects
• Surplus volumes projects can "replicate" Transfer of Rights projects, with large gains in the learning curve and cost optimization
LIBRA: FIRST PRODUCTION SHARING BID ROUND
Bid round established the basis for the economics to negotiate Surplus Volumes Transfer of Rights
40%
20%
20%
10%
Unique Characteristics
L4
L1
L3
L2
10%
L5
L6 L7
L8
• Very thick Pre-salt reservoirs
L9
• Good reservoir quality
(porosity / permeability)
L11
L12
• Light Oil (~ 27° API)
L10
• ANP estimate of 8 to 12 billion
BOE
Libra
The Libra partnership offers a
vast array of opportunities
• Very strong oil companies
Concession
Transfer of Rights
Production Sharing
• Integrated Project Team
• Openness to new ideas
22
22
SURPLUS VOLUME TRANSFER OF RIGHTS AREAS (SVToR): POTENTIAL 9.8 -15.2 BILLION BOE
Minimum exploratory program of ToR has confirmed additional volumes in the areas
Areas
Additional Volumes to the Transfer of Rights Contract from
9.8 to 15.2 billion boe, according to ANP
(million boe)
Búzios
Between 6.500 and 10.000
Entorno de Iara
Between 2.500 and 4.000
Florim
Between 300 and 500
Nordeste de Tupi
Between 500 and 700
Source: CNPE Resolution N. 1, June, 24 2014.
Physical Progress (may/14): 55.5%
Búzios Module 1 (transfer of rights)
P-74: First Oil: 2016
Capacity: 150 thousand barrels/day
Complying with regulations, Petrobras informed the
ANP the estimates for volumes in Buzios, in the
Declaration of Commerciality, in Dec/13, indicating the
expectation of up to 7 billion boe in surplus volumes in this field (recoverable volume of 10 billion boe)
SVToR IMPACT ON INVESTMENT AND PRODUCTION
Additional investments to produce from SVtoR areas only from 2019, assuming first oil in 2021
9 Units
Completed
Production Units Planned in the Business Plan and Petrobras Strategic Plan
Cid São Paulo
Sapinhoá Pilot
Carcará
SVTR
SVTR
Cid Itajaí
Baúna
Deep Water
ES
SVTR
SVTR
SVTR
SVTR
SVTR
Cid Paraty
Lula NE Pilot
Cid. Maricá
Lula Alto
P-71
Iara NW
(1st Oil 2014-2020)
Transfer of Rights
Surplus Volume of Transfer of Rights (SVTR)
Other Areas under Concession or Production Sharing Agreement
P-63
Papa-Terra
P-58
Norte Pq.
Baleias
Cid Saquarema
Lula Central
Tartaruga Verde
and Mestiça
Marlim I
Revitalization
P-55
Roncador III
P-62
Roncador IV
P-66
Lula Sul
P-69
Lula Oeste
Deep Water I
SE
Libra
SVTR
P-58
Norte Pq.
Baleias
P-61
Papa-Terra
P-67
Lula Norte
P-70
Iara Horst
Sul Pq. Baleias
Espadarte III
SVTR
P-62
Roncador IV
TAD
Papa-Terra
Cid
Caraguatatuba
Lapa
P-68
Lula Ext. Sul e
CO Sul de Tupi
Maromba I
Deep Water II
SE
P-61
Papa-Terra
Cid Ilhabela
Sapinhoá Norte
P-74
Búzios 1
P-76
Búzios 3
P-72
NE de Tupi
Júpiter
Marlim II
Revitalization
TAD
Papa-Terra
Cid Mangaratiba
Iracema Sul
Cid Itaguaí
Iracema Norte
P-75
Búzios 2
P-77
Búzios 4
P-73
Iara Surrounding
Búzios 5
Florim
2013
2014
2015
2016
2017
2018
2019
2020
SVTR
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
11 units will be destinated to Libra
Planning includes: projects already announced in BMP, projects to be announced in the next BMPs, projects to revitalize the production, new units
planned in areas with volumes under long term evaluation and appraisal for the next discoveries
24
SVToR IMPACT ON FUTURE PETROBRAS INVESTMENT SPENDING
Reducing investments in the other segments while increasing investments in E&P in Brazil
US$ billion
Petrobras ex-E&P investments in Brazil in the 2014-2018 BMP / 2030 Strategic Plan
Average ex-E&P Investments: US$ 10.6 billion/year
Number of production platforms/year
2013
2014
2015
2016
+
2017
2018
2019
Average ex-E&P Investments: US$ 3.8 billion/year
2020
Average Investments in E&P: US$ 35 billion/year
Petrobras Average Production in Brazil: 2.9 million bpd
2021
2022
2023
2024
2025
2026
+
2027
2028
2029
2030
Average Investments in E&P: US$ 22.8 billion/year
Petrobras Average Production in Brazil: 3.7 – 4.2 million bpd
Petrobras Total E&P Investments in Brazil in the 2014-2018 BMP / 2030 Strategic Plan
Investments in “Under Implementation” Portfolio + “Under Bidding process” Portfolio (Partnerships in the Premiums Refineries)
25
Downstream
OPERATION PERFORMANCE IN BRAZIL – DOWNSTREAM
Refining throughput, product output and sales, and costs
Oil Products Sale in Brazil (kbpd)
Oil Products Output in Brazil (kbpd)
+1,3%
-0,6%
2,124
2,152
2,350
783
822
778
438
491
490
782
850
2012
2013
1,997
777
Others
Gasoline
2,422
2,407
809
824
570
590
610
840
937
984
973
1H2014
2012
2013
Others
Diesel
 Better performance due to the start-up of new quality and conversion units since
2012, optimization of refining processes and elimination of logistical bottlenecks.
Gasoline
1H2014
Diesel
 Gasoline: increase in automotive fleet, competitive price relative to ethanol and
increase of the anhydrous ethanol content in Type C gasoline .
 Diesel : increase in retail activities, higher thermal consumption, higher grain harvest
and an increase in diesel light vehicle fleet
Throughput (kbpd) and Utilization (%)
94%
1,944
350
97% 1
97%
2,074
373
2,080
374
modernization
1
1,594
1,701
1,706
2012
2013
1H2014
Utilization
Imported Oil
 Increasing production and higher utilization factor due to prior investments in
 Participation of domestic heavy crude oil increasing (maintaining share of
throughput)
0
Domestic Oil + NGL
27
Oil Products Output Record in Brazil: 12 Refineries
New HDT´s and conversion units, logistics and process optimization lead to higher output
Paulínia Refinery – REPLAN
Capacity: 415 th. bpd
+228 th. Bpd
+12%
Th. bpd
2,172
2,200
2,150
2,074
2,100
2,050
2,000
1,944
1,950
1,900
1,862
1,850
1,800
1,750
1,704
1,700
1,650
1,600
1,727
1,746
1,779
1,765
2007
2008
1,799
1,798
2009
2010
1,588
1,550
2003
2004
2005
2006
2011
2012
New production records in the refining segment
•
Excellent efficiency levels: utilization factor of 98% in 2Q14.
•
New monthly record of 2,172 th. bpd in June, 21 th. bpd above the previous record achieved in March 2014
Note: 2014 value refers to the monthly record achieved in June/14.
2013
2014
TRADE BALANCE
Rapid demand growth in the last 5 years has led to a shift in the trade balance
Diesel Sales - Brazil
740
800
809
880
937
973
600
400
200
0
2009
2010
2011
2012
2013
478
Exports
Gasoline Sales - Brazil
548
152
184
397
Imports
156
75
81
Balance
364
338
610
2010
2011
2012
2013
1H14
1H2014
862
415
433
336
170
346
18
Exports
590
489
779
549
570
394
2012
705
227
700
600
500
400
300
200
100
0
2009
1H14
2009
(thous. bpd)
Thousand bbl/d
1000
984
Thousand bbl/d
1200
Imports
-249
447
166
Exports
Imports
-281
-231
Oil
Oil Products
Balance
-245
-526
Balance
29
29
DOMESTIC AND INTERNATIONAL PRICE COMPARISON
Differential has continued despite price increases, due to higher oil price, weaker local currency
Average Brazil Price* x Average USGC Price**
2011
4Q10
2013
2012
1H14
280
Imported Volumes (Th. bpd)
Prices (R$/bbl)
260
240
Average Sales Price
USGC
220
200
Nov 30th
Mar 06th
Jan 30th
180
Nov 01st
160
Average Sales Price Brazil
Adjustment
Jul 16th
Jun 25th
Adjustments
Adjustments
Adjustment
140
120
Apr-14
May-14
Jun-14
Jan-14
Feb-14
Mar-14
Nov‐13
Dec‐13
Oct‐13
May‐13
Jun‐13
Jul‐13
Aug‐13
Sep‐13
Apr‐13
Dec-12
Jan‐13
Feb‐13
Mar‐13
Nov-12
Aug-12
Sep-12
Oct-12
Jun-12
Jul-12
May-12
Jan-12
Feb-12
Mar-12
Apr-12
Dec‐11
Jul‐11
Aug‐11
Sep‐11
Oct‐11
Nov‐11
Jun‐11
May‐11
Jan‐11
Feb‐11
Mar‐11
Apr‐11
Dec‐10
Nov-10
Oct‐10
100
Diesel and gasoline price readjustments 2012-2013
* Considers Diesel, Gasoline, LPG, Jet Fuel and Fuel Oil.
** USGC price with domestic market prices.
•
2012 - 7.8% gasoline, 9.9% diesel
•
2013 - 10.7% gasoline, 18.4% diesel
30
30
EBITDA
Price increases contributed to higher cash flow, but additional adjustments still needed
Adjusted EBITDA (US$ bn)*
Adjusted EBITDA Breakdown per Segment (US$ bn)**
37,3
33,7
27,6
3,0
3,6
29,4
2,1
1,4
4,1
1,3
3,2
2,0
1,3
43,4
42,0
30,6
2010
2011
2012
-6,9
2013
-15,6
2011
2010
E&P
RTM
G&P
2012
Distribution
1,6
3,5
1,6
1,5
37,4
-9,8
2013
International
(*) IFRS
(**) Adjusted according average exchange rate. Excludes Corporate and Elimination
31
31
BusinessPlan/
Finance
CAPEX EVOLUTION IN BUSINESS AND MANAGEMENT PLANS
Total planned investments declining, E&P share increasing in each of last five Plans
Investment
US$ 224.0 Billion
US$ 224.7 Billion
US$ 236.5 Billion
US$ 236.7 Billion
US$ 220.6 Billion
Portfolio of Projects for
Financiability Evaluation
70%
62%
E&P
48%
35%
52%
33%
Downstream
Other Areas*
17%
2010-2014 BMP
15%
2011‐2015 BMP
* Gas and Energy, International, BR Distribuidora, PBio , Engineering Technology and Materials (ETM) and Corporate and Services Area
56%
30%
14%
2012-2016 BMP
Total Capex
27%
18%
11%
2013-2017 BMP
Total Capex
12%
2014-2018 BMP
Total Capex
33
33
BUSINESS AND MANAGEMENT PLAN 2014-2018
Breakdown of total spending by projects under implementation, bidding process, and evaluation
Portfolio of Projects
Under Implementation + Under Bidding Process
US$ 206.8 Billion
Production
Development
112.5 (73%)
2014-18 BMP
Total Investment
US$ 220.6
billion
Exploration:
23.4 (15%)
Infrastructure:
18.0 (12%)
Exploration & Production 153.9 (69.8%)
Downstream 38.7 (17.5%)
Gas & Energy 10.1 (4.6%)
International 9.7 (4.4%)
Distribution 2.7 (1.2%)
Biofuels 2.3 (1.0%)
Engineering, Technology
& Materials 2.2 (1.0%)
Other Areas 1.0 (0.5%)
Portfolio of Projects Under Evaluation
US$ 13.8 Billion
Under Implementation
(US$ 175.9 billion)
• Projects being executed
(construction)
• Projects already bid
• Resources required for studies
of Projects Under Evaluation
Under Bidding Process¹
(US$ 30.9 billion)
• E&P projects in Brazil
- Represent around 200 th. bpd
of production in 2018 and 900
th. bpd in 2020.
Projects under Studies in
Phase I, II or III
(except E&P in Brazil)
• Refineries Premium I and II
- Capex considers a relevant
participation of partners
- Capex aligned to international
parameters2
(US$ 13,000 38,000/barrel).
Oil Production 2020:
4.2 million bpd
¹ Includes E&P projects in Brazil which will stil go through bidding process of their units, as well as Premium I and Premium II refineries, which will have the bidding process carried out throughout 2014
² Source: IHS CERA Regional Downstream Capital Costs Indexes - 2011
No impact in Oil
Production 2020
34
34
CAPEX
E&P and Downstream declining year over year, due to lack of bid round bonus, completing downstream projects
Downstream
Exploration & Production
US$ Million
US$ Million
30.000
18.000
16.000
25.000
14.000
20.000
12.000
10.000
15.000
8.000
10.000
6.000
4.000
5.000
2.000
0
0
2010
2011
Realized
2012
2013
2014 Budget
2014
2010
2011
Realized
2012
2013
2014
2014 Budget
35
35
2014-2018 BUSINESS AND MANAGEMENT PLAN: BASE CASE FOR LEVERAGE
USD $206.8 investment, FX R$ 2.23 in 2014, R$ 1.92 in the long term
Leverage
50%
Petrobras – Gross and Net Debt
40%
US$ billion
30%
140
20%
120
10%
0%
2014
100
2015
2016
2017
2018
 Declining leverage, within maximum limit of
35% as of 2015
Net Debt/EBITDA
4,0
80
60
40
20
3,0
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2007
2008
0
2,0
1,0
0,0
2014
Gross Debt
2015
2016
2017
 Net Debt/EBITDA within limit as of 2015
Net Debt
2018
36
Financial Ratios
Indebtedness
R$ Billion
 Total debt stable
 Decrease of cash and cash equivalents due to yearly dividend
payment and investments during the period.
03/31/14
06/30/14
Short-term Debt
21.8
23.5
Long-term Debt
286.3
284.2
Total Debt
308.1
307.7
78.5
66.4
229.7
241.3
101.5
109.6
(-) Cash and Cash Equivalent3
= Net Debt
US$ Billion
Net Debt / EBITDA ¹
Net Debt / Net Capitalization ²
Debt Ratios
 Leverage steady, at 40%.
ND/ EBITDA
 ND/EBITDA decreases from 4.00x to 3.94x due to the dilution of
1Q14 PIDV provision
4,5
3,5
39%
40%
4,00
3,94
50%
40%
30%
20%
2,5
LEVERAGE
Net Debt
10%
0%
1,5
1Q14
1) Net Debt / (adjusted EBITDA 1H14 x 2). Adjusted EBITDA= EBITDA excluding earnings of equity-accounted investments and impairments
2) Net debt / (Net Debt + Shareholders Equity)
3) Includes tradable securities maturing in more than 90 days
2Q14
37
Dividend Policy
Petrobras policy is to pay a minimum of 25% of adjusted net income to each class of shares
Petrobras By-Laws Consistent with Brazilian Corporate Law
 According to Brazilian Corporate Law, companies with two classes of shares must pay a minimum amount equal to 25%
of net income
 Regarding Petrobras By-Laws, minimum payable to non-voting shares (PN/PBR.A) is the higher of:
 25% of Adjusted Net Income
 3% of the PN’s proportional book value of shareholder’s equity
 5% of the PN’s proportional paid-in capital
 Non-voting shares have priority rights to distribution of dividends
 The application of Petrobras policy and by-laws resulted in the following declarations of dividends based on 2013
Adjusted Net Income:
SHARE
ADR
PN – PBR.A
R$ 0.9672
R$ 1.9344
ON – PBR
R$ 0.5217
R$ 1.0434
Note: 1 ADR = 2 shares
 PN/PBR.A received a higher dividend for 2013 results because of the requirement of a minimum distribution, based on
corporate by-laws, of 3% of the book value of shareholder equity
38
38
Thank you,
__
Information:
Investor Relations
+55 21 3224-1510
investors@petrobras.com