Modernizing Brazil’s oil & gas

legal framework

André CORRÊA DO LAGO

Brazil’s Ambassador to Japan

JOGMEC Techno Forum (Tokyo, November 29th, 2016)

1. Overview of Brazil’s Oil & Gas Production

2. Petrobras at a glance

3. What’s new in Brazil’s legal framework

4. Looking Forward

Overview of Brazil’s Oil & Gas Production (1/5)

Rounds

7.5 million km2 of sedimentary basins (both onshore and offshore)

Pre-salt area

Source: ANP

Source: ANP (National Agency of Petroleum, Natural Gas and Biofuels

Overview of Brazil’s Oil & Gas Production (2/5)

Source: ANP

Overview of Brazil’s Oil & Gas Production (3/5)

Source: ANP

Overview of Brazil’s Oil & Gas Production (4/5)

Source: ANP

Overview of Brazil’s Oil & Gas Production (5/5)

Petrobras at a glance (1/3)

• Founded in 1953

• 78 thousand employees

• Daily output: 2.8 million boe

• 10 ethanol plants and 5 biodiesel plants

• 126 vessels in operation (55 owned)

• 122 production platforms (64 fixed; 58

floating)

• Publicly-held company, with shares in São

Paulo and New York stock exhanges

(Government has a 50.3% stake in voting

shares)

Source: Petrobras

Petrobras at a glance (2/3)

Petrobras at a glance (3/3)

Oil refinery in Okinawa: Taiyo Oil

Gaspetro: 49% stake to Mitsui

Petrobras participation in the Pre-salt Petrobras would no longer have a mandatory stake in pre-salt fields. Instead, it would have the right to choose whether to act as operator and hold a minimum 30% stake in the consortia formed in the pre-salt area.

What’s new in Brazil’s legal framework (1/3)

Local content requirements Decree 8.637 (2016) Program to stimulate the competitiveness of the industry suppliers. Moving from a sanction-based regime to one based on both incentives and sanctions. Incentives not only to suppliers but also to concession holders

What’s new in Brazil’s legal framework (2/3)

Extension of REPETRO Special customs regime for the export and import of goods intended for research activities and exploitation of oil and gas. Established in 1999, expires in 2019. The Ministry of Mines and Energy has formally proposed its extension (Resolution 2, March 3rd, 2016)

What’s new in Brazil’s legal framework (3/3)

Sectors/Basins under ANP evaluation

14th Round – Concession of Exploratory Blocks

Areas under evaluation

Auction foreseen in 2017

Looking Forward (1/3)

4 Unitization areas in

the pre-salt under

evaluation

Auction foreseen in

2017

2nd Round – Production Sharing Contracts

Tartaruga Verde

Gato do Mato

Carcará (*)

Sapinhoá

Looking Forward (2/3)

MoC on Investment in Infrastructure Scope: (i) transportation and logistics ; (ii) information and communications technology ; and (iii) energy.

Looking Forward (2/3)

Thank you