PETROBRAS

Development of pipeline network to meet a changing energy supply profile

Ildo Luis SauerDirector, Natural Gas & Energy

Projects International Conference

Paris, March 2004

PETROBRAS

This presentation may contain information that constitutes projections, expectations, beliefs or similar forward-looking statements. These forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that will occur in the future.Therefore, actual future results could differ materially from the results anticipated or projected by any of these forward-looking statements.

March, 2004.

PETROBRAS

36.7%

14.5%

7.9%

9.1%

27.3%

4.5%

Industrial Agro IndustryTansportation Residential+CommercialEnergy Others

Brazilian Energy Supply and Consumption – 2002

43.2%

13.6% 27.2%

7.5%

1.9%

6.6%

Oil Hydro Biomass

Natural Gas Uranium Coal

Primary Energy Supply by Sources

Final Energy Consumption by

Sector

3.6%

84.4%

24%

Hydro Thermal Nuclear

Power Supply by Sources

Brazil Overview

PETROBRAS

The same goals and pillars

Corporate Strategy

Profitability Social Responsibility

Consolidating competitive

advantage in domestic oil

market

Expanding international operations

Leading the Brazilian natural gas market and working in an

integrated way with power generation

Leadership in the Brazilian oil and oil products market, consolidation as an

energy company and selective expansion of international operations

PETROBRAS

Piping and Equipment Industry Construction and Assembly

Other ContractorsOther Industries

Financial InstitutionsAutomotive Industry

A Driving force for development and job creation

Government Performance

Transports MarketVN

G

Natural Gas Production Natural Gas

Transport

Local Distribution

Network

Natural Gas Reserves

IndustrialMarket

ResidentialMarketNatural Gas

Import

Commercial and Services

MarketRaw

Mat

eria

l Th

erm

o pl

ant

Co-

Gen

arat

ion

Natural Gas Production Chain

PETROBRAS

Bolivia 200252.3 TCF

(1,480 bi m3)

Argentina 200232.9 TCF

(931 bi m3)

Brazil 200311.2 TCF

(317 bi m3)

Natural Gas – A New Opportunity for the Southern Cone

Total Brazil Potential Reserves: 22.3 TCF

(645 billion m3; 4,06 billion boe)

Projected Supply Capacity:30 Bolivia + 80 Brazil = 110

MMm3/day

2003 Average Natural Gas Consumption (sales) - 28 MMm3/day2003 Average Bolivian Natural Gas imports - 14 MMm3/day (included in the above)

Present Reserves

Natural Gas Reserves

PETROBRAS

Campos basin – BC-60Jubarte / Cachalote fields ~ 950 million bbl

(~ 17º API oil) ~ 2.0 billion bbl

E&P Brazil - Exploration activities (1998/2003) – main results

0.95 BbblJubarte & Cachalote

3.95 Bbbl +14.8 TCFs (419 bi m3)TOTAL

2.0 Bbbl~ 17 º API oil

1.0 BbblLight oil

14.8 TCFsNatural Gas

-30 00m

I TOB I

250k m0

RING FENCES

G3980

Santos basin – BS-400(natural gas) ~14.8 TCFs

(light oil) ~ 435 million bbl

Espirito Santo basin- BES-100(light oil) ~450 million bbl

Sergipe-Alagoas basin(light oil) ~150 million bbl

Natural Gas Reserves

PETROBRAS

2003 New Natural Gas Discoveries – Close to the Main Market (Overview)

Natural Gas Reserves

PETROBRAS

0

5,000

10,000

15,000

20,000

25,000

thou

sand

m3 /d

ia

NE 2,116 2,371 2,360 2,620 2,826 3,245 3,731 4,787 5,123 5,575S/SE/CO 5,378 5,410 6,027 6,948 7,620 7,594 8,614 11,020 15,190 18,848

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Past Natural Gas Sales in Brazil

Total 7,494 7,781 8,387 9,568 10,446 10,839 12,345 15,807 20,313Total 7,494 7,781 8,387 9,568 10,446 10,839 12,345 15,807 20,313

S/SE/CO18% aa

NE13% aa

Market

ProductionTransport DistributionReserves

Industrial

ResidentialImport

Commercial& Serv.

Transport

VGN

Raw

mat

eria

l,C

o-ge

nera

tion,

ther

moe

lect

ricity

PETROBRAS

Annual fleet renewal (2002)Buses: 16,550 Trucks: 66,400Cars: 1,228.800Commercials (light): 175,000

Brazil: 557,268 vehicles have already been converted to natural gas through 2003

Brazilian Vehicle Market

Market

ource: ANFAVEA Vehicles Commercial (light) Trucks Bus Total

rojected Fleet in 2001 16,021 2,511 1,243 319 20,09

Vehicle production in 2002 1521 180 68.5 22.7 1,79

Vehicle exports in 2002 362 40 5.4 6.7 41

ational vehicle domestic sales in 2002 1163 138.9 64.2 16.35 1,38

oreign vehicle domestic sales in 2002 65,8 36.1 2.2 0.2 10

Domestic sales (total) in 2002 1,228.80 175 66.4 16.55 1,48

(thousand vehicl

PETROBRAS

Potential Natural Gas DemandHow much, when and how will this gas volume be in the market?

Market

(Million m3/day) 2003 2015Industrial Total 19.6 42 to 47

Residential and Commercial Total 0.9 3 to 7

Cars and Light Comercial 3.6 10 to 18

Urban Buses and Trucks 0 7 to 10

Raw Material 2.0 14 to 18

Non Thermal Mkt 26.1 76 a 100

Petrobras Own Consumption 6.6 16 to 19

Non Thermal Total 32.7 92 to 119

Thermopower Plants 5.0 20 to 35

Total Demand 37.7 112 to 154

PETROBRAS

Initiatives aiming at accelerating the Brazilian Natural Gas market through project implementation:

• Infrastructure Expansion• Technological Development • Business Involvement• Government Initiatives• Investor Awareness

Plan for massification of Natural Gas UseMarket

PETROBRAS

Source: PETROBRAS/E&P

GASENEProjected Operational start up: 2007

Length: 1,225 kmInvestment: US$ 767 million

Manaus

Belém

Natal

Recife

Salvador

Rio de JaneiroSão Paulo

Porto Alegre

Southeast – Northeast Integration gas pipeline (GASENE)

Natural Gas Transport

ProductionTransport DistributionReserves

Industrial

ResidentialImport

Commercial& Serv.

Transport

VGN

Raw

mat

eria

l,C

o-ge

nera

tion,

ther

moe

lect

ricity

-15

-10

-5

0

5

10

15

2003 2015

Northeast South-Southeast

Projected Supply/Deficit (million cubic meters per day)

PETROBRAS

Regap

Reduc

Revap

Recap

RPBC

Refap

Replan

Bolívia

TSB

Guararema

TBGGTB

Gasan

Gaspal

Gasbel

Gasbol

Campinas - RioCampo Grande

Campinas

Curitiba

Florianópolis

Porto Alegre

Japeri

Cabiunas

Taubaté

Volta Redonda

Mantiqueira

Tapinhoã

São Carlos

BOLÍVIA BRASIL

Atibaia

EBAS

Ibirité

Compressão existente

Dutos Novos

Compressão a ser AlugadaCompressão Futura

Santos

Regap

Reduc

Revap

Recap

RPBC

Refap

Replan

Bolívia

TSB

Guararema

TBGGTB

Gasan

Gaspal

Gasbel

Gasbol

Campinas - RioCampo Grande

Campinas

Curitiba

Florianópolis

Porto Alegre

Japeri

Cabiunas

Taubaté

Volta Redonda

Mantiqueira

Tapinhoã

São Carlos

BOLÍVIA BRASIL

Atibaia

EBAS

Ibirité

Compressão existente

Dutos Novos

Compressão a ser AlugadaCompressão Futura

Compressão existente

Dutos Novos

Compressão a ser AlugadaCompressão Futura

Santos

Termoaçu12” x 59

km

14” x 370 km

26” x 276 km

SE

BA

AtalaiaCatu

Camaçari

Guamaré

UTE Camaçari

(UTE Pernambuco)

Pilar

Aracati

Carmópolis

CE RN

RN

PB

PE

AL

SE

PE

AL

(Suape)

UTE Fortaleza

Termoceará

DowAratuRlam/Termobahia

Candeias

Cabo

26” x 185 km

Macaíba

Santa Rita

Novos Dutos

Etenoduto Existente

Compressão definitiva

Gasodutos Existentes

Compressão provisória

.

Termoaçu12” x 59

km

14” x 370 km

26” x 276 km

SE

BA

AtalaiaCatu

Camaçari

Guamaré

UTE Camaçari

(UTE Pernambuco)

Pilar

Aracati

Carmópolis

CE RN

RN

PB

PE

AL

SE

PE

AL

(Suape)

UTE Fortaleza

Termoceará

DowAratuRlam/Termobahia

Candeias

Cabo

26” x 185 km

Macaíba

Santa RitaTermoaçu12” x 59

km

Termoaçu12” x 59

km

14” x 370 km14” x 370 km

26” x 276 km

SE

BA

AtalaiaCatu

Camaçari

Guamaré

UTE Camaçari

(UTE Pernambuco)

Pilar

Aracati

Carmópolis

CE RN

RN

PB

PE

AL

SE

PE

AL

(Suape)

UTE Fortaleza

Termoceará

DowAratuRlam/Termobahia

Candeias

Cabo

26” x 185 km

Macaíba

Santa Rita

Novos Dutos

Etenoduto Existente

Compressão definitiva

Gasodutos Existentes

Compressão provisória

.

Novos Dutos

Etenoduto Existente

Compressão definitiva

Gasodutos Existentes

Compressão provisória

Novos Dutos

Etenoduto Existente

Compressão definitiva

Gasodutos Existentes

Compressão provisória

.

Southeast - Northeast Connection Gas pipeline (GASENE)

Gas pipeline - 970 Km 564

City-Gate 44

Pump and Compression Units 54

Total Network 662

Investments (US$ million)

Northeast Network

Gas pipeline - 453 Km 328

City-Gate 47

Pump and Compression Units 40

Total Network 415

Southeast Network

Investments (US$ million)

Natural Gas Transport

PETROBRAS

Project Length (km)

Investments * (US$ million)

Urucu-Porto Velho (Amazon) 550 350

Urucu-Coari/Manaus (Amazon) 725 420

Southeast/Northeast integration 1.225 770

Cacimbas/Vitoria 125 70

Northeast Network enlargement 970 710

Pecém-Teresina-S.Luis 1.515 520

Southeast Network enlargement 450 500

TOTAL Gas pipeline 5.560 3.340

InvestmentNatural Gas Transport

(*) Includes investments under evaluation

PETROBRAS Natural Gas Distribution

Petrobras Participation in Natural Gas Distribution Companies in Brazil

CIGÁS41,5%

41,5%41,5%

41,5%

41,5%

41,5%41,5%

100%

25%

49%

41%

24,5%

41,5%

32,0%

49%

28,17%

GASMARGASMAR GASPISAGASPISA37,25%

23,5%

18 Local Distribution Companies - LDCs

ProductionTransport DistributionReserves

Industrial

ResidentialImport

Commercial& Serv.

Transport

VGN

Raw

mat

eria

l,C

o-ge

nera

tion,

ther

moe

lect

ricity