RESULTS ANNOUNCEMENT 1st Quarter 2012 (IFRS)
Conference Call/Webcast
May 17th, 2012
DISCLAIMER
2
FORWARD-LOOKING STATEMENTS:
DISCLAIMER
The presentation may contain forward-looking statements about future events within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are not based on historical facts and are not assurances of future results. Such forward-looking statements merely reflect the Company’s current views and estimates of future economic circumstances, industry conditions, company performance and financial results. Such terms as "anticipate", "believe", "expect", "forecast", "intend", "plan", "project", "seek", "should", along with similar or analogous expressions, are used to identify such forward-looking statements. Readers are cautioned that these statements are only projections and may differ materially from actual future results or events. Readers are referred to the documents filed by the Company with the SEC, specifically the Company’s most recent Annual Report on Form 20-F, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements, including, among other things, risks relating to general economic and business conditions, including crude oil and other commodity prices, refining margins and prevailing exchange rates, uncertainties inherent in making estimates of our oil and gas reserves including recently discovered oil and gas reserves, international and Brazilian political, economic and social developments, receipt of governmental approvals and licenses and our ability to obtain financing.
We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information or future events or for any other reason. Figures for 2012 on are estimates or targets.
All forward-looking statements are expressly qualified in their entirety by this cautionary statement, and you should not place reliance on any forward-looking statement contained in this presentation.
NON-SEC COMPLIANT OIL AND GAS RESERVES:
CAUTIONARY STATEMENT FOR US INVESTORS
We present certain data in this presentation, such as oil and gas resources, that we are not permitted to present in documents filed with the United States Securities and Exchange Commission (SEC) under new Subpart 1200 to Regulation S-K because such terms do not qualify as proved, probable or possible reserves under Rule 4-10(a) of Regulation S-X.
HIGHLIGHTS OF THE QUARTER
» Production start-up of Cascade deep water field in Gulf of
Mexico
» Raising of U.S.$7,2 billion of bonds in the international capital
markets, at record low rates
» Capital expenditures of R$ 18,020 million, 52% of which were
invested in Exploration & Production
» Net income of R$ 9,214 million and EBITDA of R$ 16,521 million
» Daily average production of 2,676 thous. boed (+2% in relation to 1Q11)
» Pre-Salt discoveries: Carioca Sela and Carcará in Santos Basin, Pão de Açúcar in Campos Basin
» Post-Salt discoveries: Leste do Igarapé Chibata in Solimões Basin and Tambuatá in Espírito
Santo Basin
» Oil products: output increase (+3% ) and sales increase (+10%) in relation to 1Q11
3
4
MAIN INDICATORS
1Q12 4Q11 ∆%
1Q12 X 4Q11 1Q11
EBITDA (R$/million) 16,521 14,054 +18% 15,855
OPERATING INCOME¹ (R$/million) 11,771 7,490 +57% 12,318
NET INCOME² (R$/million) 9,214 5,049 +82% 10,985
AVERAGE REALIZATION PRICES – ARP (R$/bbl) 176.72 173.13 +2% 163.72
Brent (US$/bbl) 118.49 109.31 +8% 104.97
Average FX Rate (R$) 1.77 1.80 -2% 1.67
Production (thousand bbl/day) 2,676 2,670 - 2,629
¹ Income before financial results, profit sharing and taxes
² Net income attributable to Petrobras shareholders
5
OIL AND GAS PRODUCTION
2,044 2,049 2,066
341 367 364
1Q2011 4Q 2011 1Q2012
Natural Gas Oil and NGL
Total Production (daily average)
Brazilian Production (daily average)
2,670 2,385 2,676 2,430
2,629 2,416
» Increased production in new systems more than offset the natural decline in production from mature fields
» Natural gas production increased due to the start up of Mexilhão and Uruguá production
» Production targets are dependent on the revaluation of the efficiency of production assets and defining the return of the
Frade field and will be released in conjunction with the review of the Company's Business Plan
(tho
us b
pd)
(tho
us b
pd)
2,385 2,416 2,430
244 254 246
1Q2011 4Q 2011 1Q2012
Brazil International Brazil International
6
OIL AND GAS PRODUCTION (BRAZIL)
358
85
+1% (+22 thous. bpd)
New Systems
1Q12
2,066
1,708
1Q11
2,044
1,959
New Systems
+ 273 thous. bbl/day
- 251 thous. bbl/day
Thous. bbl/day
» Decrease in existing systems:
» 1T12 vs 1T11 below expectations due to lower operating efficiency in Campos Basin
» Increasing attention being given to maintenance of older systems to recover efficiency
» Reservoir potential remains within expected levels
» Principal contributions from new systems (∆ 1T11 / 1T12) : P-56 +113 mil bpd, P-57 +86 mil bpd, Piloto
de Lula +31 mil bpd, TLD de Aruanã +20 mil bpd
7
PRE-SALT
Petrobras’ wells: drilling, completion or
testing
Santos Basin
Campos Basin
Santos Basin » 13 drilling rigs operating in Santos Pre-salt cluster
Expectation to have 20 rigs by the end of the year
» Lula Pilot:
» 4th producion well connected in March
» Drilling of 1st horizontal well
» Current oil production: 94,000 bpd
» To date: 46 drilled wells (33 exploratory wells); 2012
forecast: 32 additional wells
»1Q12 Production:71,100 bpd (Petrobras + partners)
» 1Q12 Production: 63,600 bpd
(Baleia Franca, Tracajá, Carimbé e Brava)
Spread
US$ 11
PRICES
70 73 74 72
80
94
109 103 103112
75 76 78 77
86
105
117113
109
118
20
40
60
80
100
120
4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12
Petrobras Oil (average) Brent
Oil Prices (US$/bbl)
40
90
140
190
240
1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12
USA ARP Petrobras ARP
Average Realization Price (R$/bbl)
Average
1Q12
211.64
Average
1Q11
Average
4Q11
Spread
US$ 6
» International oil price increase and spread reduction between light and heavy crude resulting in higher Petrobras oil price relative to
1Q11 (US$ 112/bbl X US$ 94/bbl)
» Higher Average Realization Prince in Brazil due to readjustment in diesel (+2%) and gasoline (+10%) prices in November/11
8
176.72
180.94 206.84
163.72 173.13
Lifting Cost Government Take
19.00 20.93 22.31 22.47 22.70
39.03 37.57 31.80 34.21
31.66
1Q11 2Q11 3Q11 4Q11 1Q12
COSTS
Lifting Cost (R$/barrel)
50.66 54.11
61.73
55,14 60.04
Refining Cost (R$/barrel)
7.578.78 8.56 8.57
7.54
1Q11 2Q11 3Q11 4Q11 1Q12
» Lifting Cost:
» Higher expenses with interventions due to increase in activities and increasing average rig rates
» Higher maintenance costs to recover efficiency in older systems
» Refining Cost:
» Lower costs with programmed stoppages and materials in 1Q12
9
PRODUCTION AND SALES
819 866 852
390 389 431
134 141 141
534 553 518
1Q11 4Q11 1Q12
895 1.010 970
439547 545
208
224 214426
448 439
1Q11 4Q11 1Q12
Tho
usan
d ba
rrel
s/ d
ay
1,877 1,949 1,942
» Gasoline and diesel production increase due to optimization of existing refineries and operational efficiency (utilization factor 94%)
» 10% growth in oil products sales 1Q12/1Q11:
» 24% boost in gasoline volume as a result of competiveness vis a vis ethanol, and fleet increase
» 9% boost in diesel volume due to increase in economic activities
» Seasonal demand responsible for decrease in sales relative to 4Q11
PRODUCTION SALES
1,968
2,229 2,168
Diesel + Jet Fuel Gasoline LPG Others
10
Tho
usan
d ba
rrel
s/ d
ay
TRADE BALANCE
Tho
us b
pd
497361
217
187
1Q12 4Q11
Oil Products
714
548
358 380
406 394
1Q12 4Q11
764 774
» Higher imports of oil products in 1Q12 , especially in March, to meet demand in 2Q12
» Higher crude oil exports due to the sales from inventories produced in 4Q 2011
Exports* Imports
11 * Recognized in the financial reports
Oil
NATURAL GAS
35,442,6
26,7
26,2
1,20,7
1Q11 1Q12
Import LNG Import Bolivia Domestic
38.5 39.4
6.311.4
1Q11 1Q12
Thermoelectrical Non Thermoelectrical
Mill
ion
cu
.m/d
ay
Supply Sales
44.8 50.8
» Demand from thermoelectric increased as a result of diminishing reservoir levels in the Southeast and energy exports to Uruguay
» Additional demand was met through domestic production, improving margins
+10%
+13%
*
* Sales do not consider transferences within Petrobras system (Refining, Fafens e UTEs) nor BR sales.
63,3 69,5
12
Mill
ion
cu
.m/d
ay
OPERATING INCOME 1Q12 VS 4Q11
4Q11
Operating Income Sales Revenue COGS SG&A 1Q12
Operating Income
Other Expenses
7,490 8772,061 252
1,091 11,771
(R$ million)
» Increase in operating income
» Higher sales revenue due to higher prices and increase of oil exports (+38%) due to increase in production and sales
from inventories built at the end of 2011
» Decrease in COGS due to lower sales volume in the domestic market and a lower percentage of oil products imports in
COGS
» Absence of extraordinary items which occurred in the 4Q11 - impairment, extemporaneous depreciation and higher
exploratory costs
13
NET INCOME 1Q12 VS 4Q11
5,049
4,281 65 41 (187) (35)9,214
4Q11 Net Income
OperatingIncome
FinancialResults
Equity Income Taxes Minority Interest 1Q12 Net Income
(R$ million)
14
» Higher Net Income
» Increase in operating income
» Stable financial results
E&P 1Q12 VS 4Q11
15.525 2.160 (32) 531 30 632 18.846
4Q11 Operational
Results
Price effect on revenue
Volume effect on revenue
Average cost effect in COGS
Volume effect on COGS
Operational Expenses
1Q12 Operational
Results
Operating Income (R$ million)
» Higher revenues due to higher oil prices
» COGS reduction due to lower depletion as a result of reserves revision and extemporaneous depreciation occurred on the
4Q11
» Lower operating expenses due to the recognition of losses in 4Q11 (dryhole expense, impairment and other)
15
, ,
,
DOWNSTREAM 1Q12 VS 4Q11
Operating Income
(6,557) 1,732
1,191
(2,626)(1,027)
186(7,101)
4Q11
Operational Results
Revenue
price effect
Volume effect on
revenue
Average cost
effect in COGS
Volume effect in
COGS
Operational
Expenses
1Q12
Operational Results
(R$ million)
» Increase in oil products price, especially gasoline and diesel
» Positive revenue from volumes due to higher exports, primarily of sales from inventories of oil produced in 4Q 2011
» Higher COGS due to higher level of acquisition costs/internal transfer prices, partially offset by lower sales of oil products
and lower share of imports in the sales volume (especially diesel)
16
R$ Billion 03/31/12 12/31/11
Short-term Debt 18.0 19.0
Long-term Debt 146.1 136.6
Total Debt 164.1 155.6
(-) Cash and cash equivalents * 57.9 52.6
= Net Debt 106.2 103.0
US$ Billion 03/31/12 12/31/11
Net Debt 58.3 54.9
1.03 1.07 1.41 1.66 1.61
17% 17% 22% 24% 24%
-20%
0%
20%
40%
-0,5
1,5
3,5
5,5
1Q11 2Q11 3Q11 4Q11 1Q12
Net Debt/EBITDA Net Debt/Net Cap.
* Includes tradable securities (maturing in more than 90 days) ** Net Debt / (Net Debt + shareholder’s equity)
17
**
» Operating income supported investment levels, keeping
leverage ratios stable
» Continued maintenance of high level of liquidity
» Access to capital markets: US$ 7.2 billion of bond
issuance, with tenor of up to 30y, at record low rates
CAPITAL STRUCTURE