—
Petrobras
turns around
—Pedro Parente
CEO of Petrobras
—
0
5
10
20
25
30
35
40
45
50
15
2003 2004 200520022001 2013200920082006 2014201120102007 2012
US$ Bi
2015
For a long time, investments of the industry followed the same
trajectory
Total Capex (US$ Bi)
Petrobras Exxon Chevron BPShell
Fonte: Evaluate Energy
2016
2
—
Major companies focused on E&P; but Petrobras diversified
CAPEX E&P / Total CAPEX
Fonte: Evaluate Energy
40
45
50
55
60
65
70
75
80
85
90
95
%
201
3
201
4
201
5
201
2
201
1
201
0
200
9
200
8
200
7
200
6
200
5
200
4
200
3
200
2
200
1Petrobras Shell Exxon Chevron BP
201
6
3
—
132
118
0
20
40
60
80
100
120
140
2006 2016
21
26
Operating cash generation Gross Debt
Gross Debt relative to Cash Generation
(US$ billion)
Petrobras
60
0,0
20,0
40,0
60,0
80,0
100,0
120,0
140,0
2006 2016
17
Operating cash generation Gross Debt
Gross Debt relative to Cash Generation
(US$ billion)
Peer group average of Exxon, BP, Chevron, Shell
Debt level and operating cash generation above industry peers
Source: Evaluate Energy and Companies Reports4
—
Higher interest payment
Interest payments
Interest payments (US$ billion)
0
1
2
3
4
5
6
7
8
1.7
7.3
Petrobras
Interest payments
Interest payments (US$ billion)
0
1
2
3
4
5
6
7
1.3
Peer group average of Exxon,
BP, Chevron, Shell
Source: Evaluate Energy and Companies reports5
—
In 2015, Petrobras’ debt leverage reached a peak level
6Source: Evaluate Energy *EBITDA normalized
0,9
1,4
0,9
2,8
1,3
0,5
1,1
1,2
1,8
1,4
1,1
1,0
5,1
Statoil
Ecopetrol
Rosneft
Lukoil
Gazprom
Sinopec
PetroChina
CNOOC
BP
Chevron
ExxonMobil
Shell
Petrobras
Majors
Chin
ese
Russ
ians
Oth
ers
Net Debt / EBITDA* - 2015
—
Strategic Plan financial target and drivers
FINANCIAL
Reduction in
LEVERAGENet Debt/EBITDA
TO
2.5by 2018
FROM
5.3in 2015
3.5in 2016
Capex efficiency
Opex efficiency
Partnerships and
divestments
Competitive prices
DRIVERS
7
—
2,65 2,652,55
2,69
2,832,90 2,89 2,84 2,88
2,81 2,862,94
Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16
Onshore Post-Salt Pre-Salt International
LULA
(FPSO CIDADE
MARICÁ)
LULA
(FPSO CIDADE
SAQUAREMA) + 3 new Units
+ ramp-up
+ Decline as
estimated
LAPA
(FPSO CIDADE
CARAGUATATUBA)
Oil and Gas Production (Million boe/d)
- PESA
Divestment
In 2016, the production target was achieved…
10% increase in total
production between
1Q16 and 4Q16
8
—
...which contributed to better results last year
2016
16
9
1717
13
2015
18
9
2017
10
24
31
2016
17
1113
2221
2015
201919
303026 26
EBITDA Margin (%) Cash Flow From Operating Activities
(US$ B)
TotalBPChevronExxonMobilShellPetrobras
9Source: Evaluate Energy and companies reports
—
2016
18,1
16,620,1
15,3
21,8
2015
24,9
18,5
29,726,426,5
23,1
15,9
-5,9
2016
-1,6
-7,3
6,8
-1,2
2015
-5,0
0,6
-10,3
3,93,34,5
12,4
Petrobras x Majors: 2016 X 2015
Free Cash Flow (US$ B)Capex (US$ B)
10
TotalBPChevronExxonMobilShellPetrobras
Source: Evaluate Energy and companies reports
—
2016
2226
2118
28
2015
2221151714
6055
2016
20,617,1
17,4
34,129,5
2015
25,419,4
24,1
40,3
26,7
21,6 23,5
Petrobras x Majors: 2016 X 2015
Leverage (%)EBITDA: Normalised (US$ B)
11
TotalBPChevronExxonMobilShellPetrobras
Source: Evaluate Energy and companies reports
—
12
In 2016, Petrobras’ leverage started converging towards industry levels
Statoil
Ecopetrol
Rosneft
Lukoil
Gazprom
Sinopec
PetroChina
CNOOC
BP
Chevron
ExxonMobil
Shell
Petrobras
1,1
2,0
1,4
2,2
2,7
0,7
0,3
1,4
1,5
2,2
2,5
3,5
N.A
Majors
Chin
ese
Russ
ians
Oth
ers
Net Debt / EBITDA* - 2016
Statoil
Ecopetrol
Rosneft
Lukoil
Gazprom
Sinopec
PetroChina
CNOOC
BP
Chevron
ExxonMobil
Shell
Petrobras
1,1
2,0
1,4
2,2
2,7
0,7
0,3
1,4
1,5
2,2
2,5
3,5
N.A
Majors
Chin
ese
Russ
ians
Oth
ers
Net Debt / EBITDA* - 2016
Source: Evaluate Energy *EBITDA normalized
13
2016 Highlights
* Source: EvaluateEnergy
Constant
improvement of
economic and
financials
results
Operating income of R$ 17 Billion in 2016 (vs loss of R$ 12 Billion in 2015)
Annual increase of 16% of adjusted EBITDA
Petrobras posted the highest operating cash flow among its peers companies, as well as the
highest EBITDA margin (31% vs 18% on average*)
Positive free cash flow for the 7th quarter in a row and 162% above 2015
Acceleration of
deleverage
process
6% decrease in gross debt US dollars and 22% in Reais
Pre-payment and amortization of debt with proceeds from divestments and operating cash flow
31% reduction in Net Debt/adjusted EBITDA, to 3.54 from 5.11
Safety 24% decrease of TRIFR (Total Recordable Injury Frequency Rate)
14
2016 Highlights
Progress in the
efficiency of
investments
and costs
Annual reduction of:
32% in investments
6% in manageable operating costs
6% in SG&A
20% in the workforce
Records in oil
and natural gas
production
Average oil production in Brazil reached a historic annual record in 2016 (2,144 kbpd); production
target was met for two consecutive years
In December, the monthly record for oil and natural gas production in Brazil and abroad was
reached, averaging 2.9 million barrels of oil equivalent per day (boed)
Petrobras became a net exporter, with exports growing 12% in the quarter
—
Strategic Plan main risks*
• Regulatory risks
• Material changes to market conditions
• Divestments and partnerships below plan
• Judicial disputes
*These risks are not exhaustive
Risks and mitigating activities managed by accountable people