Energy for TomorrowJose Sergio Gabrielli de AzevedoMay,2012

1

Looking Ahead

• Rising energy

consumption

• Climate Change

constraints

• Emerging countries

demand

• Adjustment of primary

sources of energy

• Oil, coal and natural gas

remain big

• Time cycle for renewables

• New energy Geography

2

Income growth

Income distribution

Energy consumption

Primary sources

Substitution

Energy efficiency

High energy consumption growth

• In spite of the OECD crisis, energy consumption rises at high rates

(5.6% in 2010, the highest rate since 1973). Energy consumption in

China grew by 11.2%.• Coal consumption increased

by 7.6% in 2010, also the

highest since 1973.

• Biofuels production globally

increased by 13.8%, led by

the U.S. at 17% and Brazil at

11.5%.

• Renewable energy for power

generation increased by

15.5%, led by wind power

with an increase of 22.7%.

• China had the highest

growth rate of renewable

energy among large

countries at 74.5%.

Source:BP Statistical Review of World Energy 20113

4

Crude Oil Imports

5

Energy Consumption Projections

Source: BP Energy Outlook 2030

1990

1995

2000

2005

2010

2015

2020

2025

2030

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

923.3

951.2

1059.5

1131.0

1039.7

987.7

964.5

937.3

897.2

1130.6

945.4

938.6

970.1

922.9

897.1

897.8

891.4

865.1

660.2

863.2

991.1

1144.5

1267.8

1405.8

1543.0

1685.8

1821.5

North America

S & C America

Europe & Eurasia

Middle East

Africa

Asia Pacific

6

Energy Consumption by Primary Source 1990-2030

1

2

3

4

5

6

7

8

9

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Total Liquids Consumption^

Total Natural Gas Consumption

Total Coal Consumption

Total Nuclear Energy Consumption

Total Hydroelectricity Con-sumption

Total Renewables Consumptionw

Source: BP Energy Outlook 2030 7

8

Difference between Expected Consumption and Production by Primary Source 1990-2030

Source: BP Energy Outlook 2030

1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

-250.0

-200.0

-150.0

-100.0

-50.0

0.0

50.0

100.0

150.0

200.0

250.0

Liquids-OilNat GascoalNuclearHydroRenewables+Biofuel

9

Increasing demand of fossil energy• Oil prices

remains high

Rising consumption of coal• New

technologies, regulation, social conflict

Search for new technologies of renewables• Energy

Efficiency rises

Oil declines in transportation• Chemical

transformation of hydrocarbons in new dimension

Big Expected Changes

10

Shale Gas

Oil will combine excess supply in the long run and shortage in the medium run. Declining rates are key variables

Source: http://ourfiniteworld.com/

Reserves still strongly concentrated in areas politically unstable or with big environmental challenges

11

Middle East is the main

provider of oil and Gas

USA moves up in gas and it is the third in oil

production

Offshore oil is the new frontier

Geopolitical change of oil production

12

The cost of the new production will determine the speed of substitution for renewables

World oil demand and supply respond in correlated way to price movements.US oil supply remains lagging in response.

Source : http://www.forbes.com/sites/tomkonrad/2012/01/26/the-end-of-elastic-oil/2/

13

New role for South America and Brazil

Source: http://energyinsights.net14

0.0%20.0%40.0%60.0%80.0%

100.0%120.0%140.0%160.0%180.0%200.0%

Relation between Estimated Undiscovered Resources and Proved Reserves

Source: US Congress. http://www.fas.org/sgp/crs/misc/R40872.pdf. U.S. Geological Survey, World Petroleum Assessment, 2000,

Brazilian potential is the biggest,said in 2000 the US Geological Survey

e

» Reserves totallingbillionsof barrels ofgood quality oil

» In Dec/2011, Pre-saltrepresented 7% of theCompany’s totaldomestic oilproduction

» The 3 producing wellsin Lula Pilot rankamong the 30 mostproductive wells inBrazil

PRE-SALTPre-salt represents a large and relatively unexplored area

15

e

BRAZILIAN BASINSHighly productive SE basins are still under explored relatively to GoM

USA

DiscoveriesBefore 1984 – Shallow WaterBetween1985-2001 – Deep WaterBetween2002-2007 – Deep WaterPre-salt Cluster

t

16

’000

boe

/day1.855 1.971 2.004 2.022

180618

125

2008 2009 2010 2011 2015 2020

Oil Production - Brazil Natural Gas Production - Brazil Oil Production - International Natural Gas Production - International

2,38699111321

2,51696132317

2,614

97140355

845

1,148

Transferof Rights

Pre-Salt13

543

+10 Post-Salt Projects

+8 Pre-Salt Projects

+1 Transferof Rights

+ 35 Systems

Added CapacityOil: 2,300,000 bpd

2,57593144334

3,070

4,910

OIL PRODUCTIONWith access to abundant reserves, Petrobras can more than double its production

6,418142246

1.120

3,993

•Maintain/growslowly traditionalexisting concessions, while growing from New Frontier – Pre-salt;

• Pre-Salt participationin the total productionwill enhancefrom the current2% to 18% in 2015 and 40.5% in 2020.

1919

17

Source: PFC Energy

BRAZIL LEADERSHIP IN RECENT DISCOVERIESDiscoveries in Brazil represent 1/3 of all discoveries in the last 5 years

•

•

In the last 5 years, more than 50% of the new discoveries(worldwide) were made in deep waters.Brazil alone accounts for 62% of these discoveries.

Projectionsindicate that as Brazil develops thesenewly discoveredreserves,it will lead non-OPECsupply growthin the coming decades

OtherDiscoveries

Deep-Waters

New Discoveries 2005-2010

33,989 million bbl

19%

49%

32%

Brazil

Net Changes in Non-OPEC Production Capacity BetweenNow and 2030 for Non-OPEC Countries

18

Risks of delivering oil until 2020

Risks

International Geo Political Conditions

Project Manageme

nt

Financing Constraint

s

Supply Chain Capacity

Speed of new

technology deployment

for Renewable

s

Brazilian political stability

and regulatory conditions

Small exploratory risk

and some development

risk

19

Cheaper primary

sources of energy

Energy efficiency rises up

Renewables become

economically feasible

Better sustainable

world

Wishful Thinking

20

BAHIA STATE &

Energy and Mining

THE LAND OF ALL Government of Bahia

Thank You!Arigatou Gozaimashita!

BAHIA STATE PLANNING SECRETARYwww.seplan.ba.gov.br

www.youtube.com/tvseplan

Phone: +55 71 3115 3550