Refining, Transportation & Marketing (RTM) and Petrochemicals(RTM), and Petrochemicals
Paulo Roberto CostaDownstream Director
26th October, 2011,
1
DISCLAIMER
This presentation may contain forward-looking Cautionary statement for U.S. investors:statements. Such statements reflect only theexpectations of the Company's managementregarding the future conditions of the economy,the industry, the performance and financialresults of the Company, among other factors.
The United States Securities and ExchangeCommission permits oil and gas companies,in their filings with the SEC, to discloseproved reserves that a company has
y
results of the Company, among other factors.Such terms as "anticipate", "believe", "expect","forecast", "intend", "plan", "project", "seek","should", along with similar expressions, areused to identify such statements. Thesepredictions evidently involve risks and
proved reserves that a company hasdemonstrated by actual production orconclusive formation tests to be economicallyand legally viable under existing economicand operating conditions. We use certain
predictions evidently involve risks anduncertainties, whether foreseen or not by theCompany. Consequently, these statements donot represent assurance of future results of theCompany. Therefore, the Company's future
terms in this presentation, such asdiscoveries, that the SEC’s guidelines strictlyprohibit us from including in filings with theSEC.
results of operations may differ from currentexpectations, and readers must not base theirexpectations solely on the information presentedherein. The Company is not obliged to updatethe presentation and forward-looking statementsp gin light of new information or futuredevelopments. Amounts informed for the year2011 and upcoming years are either estimatesor targets.
2
BUSINESS MODELOperating as an integrated balanced oil company, dominant in Brazil
Exploration & Production
• Focus on production in deep and ultra‐deep waters;
D
• Licensed blocks guarantee access to reserves and economies of scale;
• New exploratory frontier, adjacent to existing operations.
Downstream
• Dominant position in a growing market, far from other refining centers;
Gas and Power
•Balance and integration between production, refining and demand.
• Gas infrastructure develeped for processand and transfer of gas;Gas infrastructure develeped for processand and transfer of gas;
• Complete flexibility to consume domestic and imported gas.
Biofuels
• High productivitiy of Brazilian ethanol;
• Large areas of available unused agricultural land;
• Large consumer market, with fleet and distribution in place.
3
Large consumer market, with fleet and distribution in place.
Proved Reserves – SPE criteria
RESERVES AND RECOVERABLE VOLUMESRapid growth in reserves from discoveries in deep waters
30.000
Million boe
25.000
15 000
20.000
Whales Park
Pre‐salt: Lula and Cernambi 15,28 Bi boe
10.000
15.000
Roncador
Whales Park, Mexilhão
5.000Garoupa
Namorado
Marlim
Guaricema
0
pCarmópolis
4
Onshore 0‐300 m 300‐1500 m > 1500 m Pre‐salt's Recoverable Volume Transfer of Rights
* Lula/Cernambi, Iara, Guará and Whales Park, ranging from 8.1 to 9.6 Billion boe
*
PRODUCTIONPetrobras history is to grow production by expanding into new frontiers
2000Deep and ultra‐deep water
2.0048,2% 8,2% p.yp.y. in the last 30 years. in the last 30 years
42749
1.601
800
1200
1600 Shallow WaterOnshore 1.271
653
bpd
bpd
106 211 230 21475
400 292 189
42
0
400
1980 1990 2000 2010
181
Mil
Mil
1980 1990 2000 2010
• 123 offshore units (45 floating e 78 fixed)
FPSO Cidade de Santos
• 123 offshore units (45 floating e 78 fixed)
• 25 new units installed in the last 5 years
FPSO Cidade de Angra dos ReisP‐56 P‐57FPSO Cidade de Santos
5
PRODUCTIONWith access to abundant reserves, Petrobras can more than double production
1 120
246142
6,418
618
1.120
180
125
3,993
2,772+ 35 Systems
2 575
321 317 334 435
618
111 132 14414199 96
93 962,386 2,516
oe/day
2,772
845Transfer of Rights
+10 Post‐Salt Projects
+8 Pre‐Salt Projects
+1 Transfer of Rights
2,575
3,070
4,910
1.855 1.971 2.004 2.100
2008 2009 2010 2011 2015 2020
1,148543
Pre-Salt’000
b Transfer of Rights13
Added Capacity
Oil: 2,300,000 bpd
2008 2009 2010 2011 2015 2020
Oil Production‐ Brazil Natural Gas Production ‐ Brazil Oil Production ‐ International Natural Gas Production ‐ International
• Pre‐salt and Transfer of Rights will represent 69% of the additional capacity up to 2020;
• Pre‐Salt participation in the total production will enhance from the current 2% to 18% in 2015 and 40.5% in 2020.
6Note: Does not include Non‐Consolidated International Production.
MONETIZING THE RESERVESBrazilian market is an attractive and sustainable way to monetize part of Petrobras reserves
A GROWING MARKET IN BRAZIL CREATES DOWNSTREAM A GROWING MARKET IN BRAZIL CREATES DOWNSTREAM OPPORTUNITIESOPPORTUNITIES……
Petroleum Consumption(per capita)
27.1
25.0
21.7
Growthreserves
18
Source: BP Statistical ReviewNote:1. Includes France, Germany, Italy and the UK
14.8 15.3
3.7
0.6 0.3
16.0
12.4
4.5
1.40.8
12.6
10.7
4.6
2.31.0
US Japan OECD Brazil China India
1980 2000 2009
OECD1
Margins and
Distance
Allocation
18
Productivity of existing refineries – 2020 Productivity of new refineries – 2020
PRODUCTSNew refineries will produce higher value‐added oil products
Margins and Refining Profile
Sustainable
• Lead-Times• Tanks• Inventories• Ships
21%
4%7%
10%
Light
36%
6%
9%
21%
Medium Distillated
43%
5%
38%
Others
Fuel Oil
Special
Naphtha
LPG
Gasoline
Jet Fuel
Diesel
Intermediary
4%
15%
19%
4%
11%
15%
65%
15%
50%
Productivity of existing refineries 2020
LightMedium Distillated Others
Productivity of new refineries 2020Sustainable Competitive Advantage
8
Crude freightProduct freight
40
• Increase in global demand for medium‐distillated products tends to lead to an increase in price versus the gasoline price.
D t fit bilit
Return and Risks
-3-2-101234567
-3-2-101234567
07 0806 1009
Competitors Range
1 1
1
1
6
PBR
Downstream Net Profit Margin (%)
Downstream profitability…
Adjusted EBITDA Breakdown per Segment (US$ bn) 1
25.0
35.4
19.3
5.2
11.0
0.8
1.4
1.10.90.5
0.2
1.1
7
50
Source: Reuters KnowledgeNet Profit Margin = Net Profit / Total RevenueCompetitors: XOM (US), XOM (non-US), CVX, RDS, COP
TO COME-1.6-0.8-0.2
2007 2008 2009 1S09 1S10
E&P Downstream Distribuition G&E International
Growth Potential
8
During recent years, the Demand growth in Brazil has increased its’ speed when compared with GDP growth …
1211-20 Demand Forecast11-20 GDP ForecastGDP and Demand growth rates (yearly)
6
8
10 Historical GDP
Historical Demand
5 5
2
4
6 5,5
4,5
4,1
3,8
4
‐2
0LowerGDP
HigherGDP
44
‐420032002 2011*201020092008200720062005200420012000
Percentage points (p.p.) of Demand growth above GDP growth Forecast
‐2
0
2
‐2
0
2
1 0-0,3
Historical average p.p. differenceHistorical p.p. difference
9‐6
‐4
2011*20102009200820072006200520042003200220012000‐6
‐4
20102009200820072006200520042003200220012000 2011*
-1,00,3LowerGDP
HigherGDP
JET FUEL MARKETA sharp growth in the air transportation industry has been observed in recent years
Number of passengers carried - air transportation (thousand) Seats / Km available
12.000
13.000
9.000
10.000
12%
10.000
11.000 +12%a.a.
7.000
8.000+12%a.a.
8.000
9.000
5 000
6.000
7.000
6.000
7.000
jan 12jan 11jan 10jan 09jan 08jan 074.000
5.000
jan 10jan 09jan 08jan 07 jan 12jan 11
In 2010, for the first time in our history, the number of travels interstate by plane exceeded the travels by bus
10
p y
Source: ANAC
AIR TRANSPORTATION The significant reduction in the airline tickets prices associated with the expansion of income in Brazil led to an accelerated growth in the sectorof income in Brazil led to an accelerated growth in the sector
Yield Revenue R$ (deflated by IPCA)Economic indicator that expresses the unit revenue earned by
1,1 R$ 2011
Economic indicator that expresses the unit revenue earned by airlines per each paying passenger per kilometer in Brazil
0,8
0,9
1,0
0 5
0,6
0,7-62%
0 2
0,3
0,4
0,5
0,2200420032002 2005 2007 20122006 2008 2009 2010 2011
11
Source: ANAC http://www2.anac.gov.br/estatistica/tarifasaereas/
CONCENTRATED TRANSPORT MATRIXThe Brazilian transportation matrix strongly depends on trucks
81%
46%
11%
11%
8%
43%Canada
Russia
46%
43%
11%
53% 4%
43%
Australia
Canada
43%
37%
25%
13%50%
32%
China
USA
Average Trucks Fleet Age (y)Average Trucks Fleet Age (y)25% 17%Brazil 58%
Trucks Maritime and OthersTrains BrazilBrazil
SpainSpain
USAUSA
GermanyGermany
EnglandEngland
12Sources: Plano Nacional de Logística e Transportes 2010 (PNLT), Ministério dos Transportes, Anuário do transporte de carga and Eurostat - 2007
EnglandEngland
DIESEL DEMANDThe diesel demand has also increased sharply
... not only based on recovery of the industrial activity, ...
... but also due to agricultural activity growth in Brazil over time
170
180
+52%140
145
Index - Industrial Output
140
150
160+52%
132
125
130
135
110
120
130
GDP110
115
120125
90
100
110
1009080706050403020100
Agriculture GDPGDP
104100
105
110
jan 2011jan 2010jan 2009jan 2008
1Q1
1Q0
1Q0
1Q0
1Q0
1Q0
1Q0
1Q0
1Q0
1Q0
1Q0
The cargo transportation matrix in Brazil is highly dependent upon trucks, with th th i i ti it b ti di l d d
jan 2011jan 2010jan 2009jan 2008
13
the growth in economic activity boosting diesel demand.
MIDDLE DISTILLATE DEMAND EVOLUTIONStrong diesel and jet fuel consumption growth in Brazil have been observed following the economic growth…
+9%8,7%4,1%
Diesel Sales (2006 to 2011/jun)
5,5%
Jan‐Jun 11Jan‐Jun 10
• The 1S2011 sales exceeded expected growth, keeping a faster-
Jan‐Jun 1120102009200820072006
13,4%
expected growth, keeping a fasterthan-GDP growth.
Jet Sales (2006 to 2011/jun)
+17%9,7%
Jan‐Jun 11Jan‐Jun 10• The same higher-than-GDP
1420102007 Jan‐Jun 1120082006 2009
acceleration was verified during first semester 2011.
HIGH GROWTH POTENTIALLow per capita consumption supports demand growth in developing countries
Total Oil Consumption Per capita consumptionPer capita consumption
27,125,0
22,3201020001980
125
130Barrels per year(Index =100 in 2002)
15,314,812 4
16,0
12 8
2010
110
115
120
4,5
12,4
4 9
9,9
12,8
100
105
110
0,6
3,7 1,4 2,54,9
90
95
2002 2003 2004 2005 2006 2007 2008 2009 2010
OEDCWorldBrazilUS
Source: BP Statistical Review 2011
OECD
15
POTENTIAL INCREASE OF OIL PRODUCTS CONSUMPTIONBrazil still has a low motorization rate
Licenses for new vehicles
17,4 18,0 20002010
6,0
11,8
5 0 4 0
20102015
ion of units
3,72,6 2,7 2,1 1,5 0,8
5,03,2 2,7 2,2
3,5 3,04,0
United States Japan Germany France Italy China Brazil India
Mill
United States Japan Germany France Italy China Brazil India
Number of vehicles per 1000 habitants814
592 545 599688 2010
2015
Number of vehicles per 1000 habitants
47153
16
208
16
United States Japan Germany France Italy China Brazil India
GROWTH DEMANDEconomic growth and improved living standards will lead to a significant increase in oil products demand in Brazilproducts demand in Brazil
OthersFuel oil
3.095
+3,8% p.y.
(GDP: 4,1% p.y.)Fuel oilGasolineMiddle destilates
128792
9282.147
2.643
1 814
402
507
567
98
124
128
602 593
696
dbp
d
1.814 1.776
708 761 9511.219 1.472
315 314402189 108
Thou
sand
2000 2005 2010 2015 2020
17Sourse: Petrobras (Plano Estratégico 2020)
DOWNSTREAM EXPANSIONReduced dependence on imports of oil products
’000 bpdIncrease in import levels will lead to higher
logistical costs...... and to high levels of exposure to
international supply
2006 2007 2008 2011E2009 2010Net Imports as a percentage of total demand (%)*
000 bpd g te at o a supp y
FranceBrazil (2010)
USA
SpainJapanChina
Germany
Brazil (2020)**Indonesia
MexicoSpain
( )
18* Source: IEA – 2010 World Energy Statistics** Without considering Capacity Expansion
REGIONAL GROWTHIn the last decade the growth has been and will be higher in the North, Northeast and Mid t i f B il
Demand 2001-2010 Demand 2010-2015Mid‐west regions of Brazil
3,1% 7634,9% 968
579763
1,4% 1.384 1.6753,9%
1.3841.224
19
kk
… increasing the need for new capacities in these regions
Market in 2015Market in 2010
552 968299
-416-464
763
DeficitDemandCapacity DeficitDemandCapacity
1.652 1.6751.466
DeficitDemandCapacity
Deficit
-23
DemandCapacity
821.384
SuperavitDemandCapacity
• Increase in demand in the Central‐West, Northeast, and North explains the concentration of investments in the Northeast;
DeficitDemandCapacitySuperavitDemandCapacity
20
Northeast;
• Tax incentives combined with environmental restrictions also contribute to the concentration in the region.
INTEGRATION AND BALANCEConstruction of new refineries intended to meet Brazilian demand
5000
PREMIUM I(2nd phase)300,000 bpd
(2019)
Thous bpd4,910
3000
4000 COMPERJ(2nd phase)165,000 bpd
(2018)
2,643 3,095
3,3273,2173,070
2000
Abreu e Lima
COMPERJ(1st phase)165,000 bpd
(2013)
PREMIUM I
PREMIUM II300,000 bpd
(2017)
2,536
1,641
2,2052,004
1,3931,798
1,036
2,1471,814
1,323
0
1000
1980 2000 2010 2015 2020
Abreu e LimaRefinery (RNE)230,000 bpd
(2012)
PREMIUM I(1st phase)300,000 bpd
(2016)181
... ... ... ...1980 2000 2010 2015 2020
Oil and NGL Production ‐ Brazil Total crude oil processed – Brazil Oil Products Market (2 scenarios)
• No new refineries built since 1980• Demand now exceeds refining capacity, with demand growing 20% last two years and growing
21
Refining Profile and Margins
22
REFINING MARGINSConservative assumptions compared to historical data and consultants’ forecast
Crack 321* and 2011 - 2020 average forecast Light-Heavy* and 2011 - 2020 average forecast
(US$/bbl)
404550 50
45PBR RangeConsultants Range(US$/bbl) (US$/bbl)
70
80 PBR RangeConsultants Range
25303540
40
50
60
10152025
10,6 Avg
Avg
20
30
40
27
05
10,
0
10
jan 12jan 11jan 10jan 09jan 08jan 07jan 06
The forecasts indicate an average Crack 321 Spread of US$ 8 5/ bbl and an
* (Unleaded USG + N2 Diesel USG)/2 – Fuel Oil 3% USG* (Unleaded USG*2 + N2 Diesel USG)/3 - Brent
23
The forecasts indicate an average Crack 321 Spread of US$ 8,5/ bbl and an average Light-Heavy differential of US$ 21,8 / bbl between 2011-2020.
Consultants’ forecasts include: Cera (3 Scenarios), Pira (3 Scenarios) and Woodmackenzie
REFINING MARGINSMargins can have large amplitude according to the type of processed oil and product i ldyields
USG LLS CrackingPBR Downstream Margin
$/bbl (US$ of 2010)
30USG Maya CokingUSG LLS Cracking
NWE Brent CrackingNWE Brent ToppingPBR Downstream Margin
20
25
19
1511
-8
5
10
6+6
5
0USG Maya
PBR Downstream
USG LLS Cracking
24
-5201020092008200720062005200420032002
Source: Margens internacionais - PIRA
yCokingMargin
g
PETROBRAS X MAYA COKINGComparison shows that the effect of the different oil processed and the average produtivity explain the deviation of our margins in relation to Maya Cokingprodutivity explain the deviation of our margins in relation to Maya Coking
$/bbl
Petrobras vs. Maya Coking (average 2002-2010)
19 US$/bbl 2010
3
19
5
11
Maya CokingMargin
Raw material cost effect
Produtivityeffect
Petrobras Margin
25
CONVERSIONNew refineries will have significant higher conversion than existing refineries , allowing l t f t i lless costs of raw material
Average Cost of Oil (2020)Convertion Capacity/ Destilation Capacity
31% 26%50
60
7064%
68%65%
HCCFCCCoker
Average Cost of Oil (2020)
-5,8
(US$/bbl)
10% 65%
31% 26%
30
40
50
37%-2,3
27%
0
10
20 38%36%
PREMIUMExistent Refineries
Brent
PREMIUMCOMPERJRNEExisting Refineries
(2010)
26
PRODUCTSNew refineries will produce higher value‐added oil products
65%Productivity of existing refineries – 2020 Productivity of new refineries – 2020
36%
43%50%
21%
36%
21%38% 19%15%
4%7%
10%
6%
9%
5%
4%
15%4%
11%
15%
15%
LightMedium Distillated Others
Fuel OilNaphthaGasolineDiesel
LightMedium Distillated Others
SpecialLPGJet Fuel Intermediary
• Increase in global demand for medium‐distillated products tends to lead to an increase in price versus the li i
27
gasoline price.
PRICES OF DISTILLATESIn recent years, we have been approximating to the import parity
Distillates had a prize in the last 8 years of US$/bbl in relation to the U S Gulf prices
8,0 8,0US$/bbl (actual value)
Distillates had a prize in the last 8 years of US$/bbl in relation to the U.S. Gulf prices, similar to cost freight + internalization
2002
-201
0 90,088,1
82 087,3
93,9
85,8
Aver
age
2 82,0
Jet FuelDieselPBRUSUSGC USGC PBRUS
… and these are the products that the new refineries will be focus
28
RESOURCE OPTIMIZATION AT PREMIUM REFINERIES
Lower refining costs due to design quality and scale
Economies of scale and new implementation strategies to reduce Capex, including:
• Design competition based on the lowest final cost
• Selection of UOP ‐ international company with extensive refining experience Age (years)
Current downstream cost(US$ / bbl in 2010)
refining experience
• Single design integrating all the refinery on‐site and off‐site
• Designer involved from conceptual design to technical assistance in the start up
• Scale economies (RPRE: 300kbpd modules)
Ma im m standardi ation of eq ipments specification• Maximum standardization of equipments specification
• Scheduling the construction stage allowing long‐term planning for equipment suppliers
• Reuse of the executive project allowing the incorporation of lessons learned Scale (’000 bpd)
29
FACTORS THAT WILL IMPACT THE COST OF THE PREMIUM REFINERIESProject under development already allows us to evaluate some optimizations
Scope Optimized RNESTRPRE
(projetct under development)Expected Effects
weight/capac.
Units of Diesel HDT 6 reactors 1 reactors
weight/capac.
80% less
Less Interconnectionsweight/capac.
Units of Diesel HDT 2 forno 1 forno
weight/capac.
60% less
Less Interconnections
L i t ti /
Coke Units 6 tambours 4 tambours
Less: interconnection / platforms of access / instruments / valves
etc.
Tankage55 tankes
for 230 kbpd
70 tankes
for 600 kbpdNot available
100+ bridges of Elimination of the Pipelines
100+ bridges of
100mPipe-rack bridges and increased
productivity
Electric System Interconnection
Underground structure
Cable-rack
( i l)
Less excavation, less impact on rainfall in the
3030
Interconnection structure (aerial)p
construction
Market Location
31
LOGISTICSDistance from the Brazilian coast to refining centers is at least 5.000 miles, or 16 to 33 da s of tra eldays of travel
Distance in miles / days of travel
5.50016 days
5.40016 days
8.00024 days 11.200
33 days
Processing in Brazil implies:• Lower Lead-Times• Reduced Tankage needs
L I t i
32Crude
• Lower Inventories• Reduced need for ships
LOGISTICSThese distances have relevant freight costs to reach the different markets
Freight cost ($/bbl)
2 8
2 8
2,8
4,9 5,4
2,87,7
4,1,
Processing in Brazil implies:• Lower Lead-Times• Reduced Tankage needs
L I t i
33
CrudeProducts
• Lower Inventories• Reduced need for ships
GLOBAL REFININGRegions with fast growth continue to invest in refining
Adding Refining Capacity (2011‐2016)
3.204
New RefineriesExpansion
and
bpd
1.7551.997
Thou
s
736 703
153437
Europe Africa
153
Latin America
Ex URSSNorth America
Middle EastAsia
• Small refineries and with low complexity being closed in stagnant markets
34
• New large‐scale refineries, high complexity, adapted to process heavy oil in growing markets
Source: Pira, Petrobras, 2011
Risk and Return
35
ProfitabilityNew refining projects have return rate above the cost of capital
Return rate (%)
Key Assumptions:18
• Refinery with trains of 300 k bpd
• Refining scheme with HCC, Coque and HDT12
14
16
•Refining costs in line with the current refineries that has the same scale
• Integrated Analysis
P d ti f th d ti k t6
8
10
• Production for the domestic market
• Does not include tax benefits in the operation of the asset
0
2
4
6
Case 1 – Capex US$ 30.000/bpd
C 2 C S$ 0 000/b d
Margin
US$/bbl
013 14 15 16 17 18 19 20 21 22 23
Case 3 ‐ Capex US$ 50.000/bpd
Case 2 – Capex US$ 40.000/bpd Expected Scenario
36
RISK MITIGATIONThe expansion of refining also allows us to mitigate risks from upstream, as in 2009, beyond the benefit of the integrationy f f g
Adjusted EBITDA by Segment (US$ bi)
48
233
351 0 12
40
21
21
1
331 1
1 2
11
4
19
31
4135
19
0-2
2008 2009 2010 2011*
InternationalDistribution
DownstreamE&P
37Note: (*) Calculated by the average exchange rates and considering the 12 months ended 30/06/11
G&EDistribution E&P
BUSINESS INTEGRATIONPetrobras will increase the importance in the industry through growing the oil production and expanding the Downstream
Oil Production
production and expanding the Downstream
6
5
2020
4
3
22010
0
1
1980
38Refining Capacity
For other companies, capacity in 2010.
00 1 2 3 4 5 6
SUPPORTTING UPSTREAM OPERATIONSThis integrated performance can be verified in Capex of "downstream" dedicated to support upstream operations
Capex for Fleet Expansion Capex for Logistics for Oil
support upstream operations
US$ 3,5 billionUS$ 4,4 billion
Capex for Fleet Expansion Capex for Logistics for Oil
Pre‐SaltProjects
21%
Plangás
30%Others
51%
30%
28%
Supply
70%
Oil
39
FLEXIBILITYThe existence of a flexible domestic refining capacity mitigates the risk of fluctuations in the demand
1.873 1.985k bpd
PRODUCTIONSALES
+5%1.786 +7%
oduc
ts
1H111H10 1H111H10
Oil
Pr
+14%
PRODUCTIONSALES
1H111H10 1H111H10
+6% +16%+9%
PRODUCTIONSALES
392
343
734
692
413
357
812
747
l ne
Die
sel
Gas
oli
40(*) Vendas do Abastecimento, não incluem as eliminações com a BR
1H111H101H111H10 1H111H101H111H10
Final Remarks
41
NEW REFINERIES, FUEL QUALITY AND MODERNIZATION SUM UP TO 74% OF RTM INVESTMENTS
US$70.6 billion
• Refining Capacity Expansion: Abreu e Lima R fi P i I d II d C j
4.5%4.9%Refinery, Premium I and II, and Comperj;
• Quality and Conversion: Modernization, conversion, and hydrodesulfurization;
1.1%0.8%15.2%
1.0%
13.9% , y ;
• Operating improvement: maintenance and optimization, HSEE, and R&D;
• Fleet Expansion
• Logistics for Oil: oil supply for refineries and
26.4%23.9%
infrastructure for oil exports.
Quality and Conversion
Refining Capacity Expansion
Operating improvement
Logistics for Oil
International
Fleet Expansion
Petrochemical Investments amount to US$3.8 billion
42
DECREASING INVESTMENTS IN QUALITY
US$16 billion in 2011‐15 Reduction in sulfur level
US$ 16 billion
5.9
7.0
4.94.5
-15%p.y.
Avg. Sulfur Level – Diesel (ppm)
3.2
2.3
p y
1.01.01.1
0.20.1
<250
15141312111098765
43
QUALITY INVESTMENTSNew units in existing refineries are being built
Gasoline Quality Diesel Quality:
2011 2012 2013 2014 2015
1000 ppm Trnasition 50 ppm
2011 2012 2013 2014 2015 and beyond
Diesel S-1800
RECAP Diesel and Gasoline
REPLAN Gasoline
Diesel S-500
Diesel S-50
REDUC Gasoline
REFAP Gasoline REPAR
Gasoline REVAP Gasoline
Diesel S-10
RECAP Diesel and
REFAP Diesel
REGAP Diesel
REDUC Diesel
REPAR
REGAP Gasoline
RPBC Gasoline
Diesel and Gasoline
RLAM Diesel
Diesel
REPLAN Diesel
Diesel
RPBC Diesel
REGAP
DieselDiesel
RLAM Gasoline
REGAP Revamp HDT
… reassuring Petrobras’ commitment with sustainability and sulfur
44
g yemission reduction over time.
HYDROREFINING INVESTMENTSCatch up phase to meet international standards for quality products
95%100
Hydrorefining Capacity relative to Distillation Capacity
70%
95%
69%70%67%
86%
80
100
74% (2020)67%
15%60
59% (2015)
36%
20
40
23% (current)
0
23%
Adding value to domestic crude oil by producing diesel and gasoline in‐line with international standards.
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Underinvested over the past years requires catching up with hydrorefining capacity (for removal of sulfur)
PETROCHEMICAL STRATEGY
PETROCHEMICAL AREA
Operate in the petrochemical sector in activities that are integrated manner with the other businesses of the Petrobras system
Increase petrochemicals and biopolymers production preferably through capital stock in Brazil and abroadand abroad
• Operate in an integrated manner with the other business of Petrobras, in the production of basic and second‐generation petrochemicals and biopolymers;
• Focus on developing assets in Brazil;
• Develop COMPERJ seeking partnerships;
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FINAL REMARKSAdding value in Refining, Transportation and Marketing (RTC) and Petrochemicals
Preserving our unique position in the Brazilian market as the best way to monetize our crude reservesour crude reserves
Shifting the refining system towards middle distillates production while increasing fuel quality standardsq y
Reducing import levels through refining capacity expansion and domestic crude processing maximization
Optimizing capital allocation through new refining modules concept and implementation strategy
Creating efficient and reliable infrastructure to get the best value of crude oil export operations
Mitigate risks and use the flexibilities in the existing refining facilities to optimize the product portfolio
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