ResultsAnnouncement
4th Quarter and 2012 Year End ResultsConference Call / Webcast
February 5th, 2013
2
FORWARD-LOOKING STATEMENTS:
DISCLAIMER
The presentation may contain forward-looking statements about futureevents within the meaning of Section 27A of the Securities Act of 1933, asamended, and Section 21E of the Securities Exchange Act of 1934, asamended, that are not based on historical facts and are not assurances offuture results. Such forward-looking statements merely reflect theCompany’s current views and estimates of future economiccircumstances, industry conditions, company performance and financialresults. Such terms as "anticipate", "believe", "expect", "forecast", "intend","plan", "project", "seek", "should", along with similar or analogousexpressions, are used to identify such forward-looking statements.Readers are cautioned that these statements are only projections and maydiffer materially from actual future results or events. Readers are referredto the documents filed by the Company with the SEC, specifically theCompany’s most recent Annual Report on Form 20-F, which identifyimportant risk factors that could cause actual results to differ from thosecontained in the forward-looking statements, including, among otherthings, risks relating to general economic and business conditions,including crude oil and other commodity prices, refining margins andprevailing exchange rates, uncertainties inherent in making estimates ofour oil and gas reserves including recently discovered oil and gasreserves, international and Brazilian political, economic and socialdevelopments, receipt of governmental approvals and licenses and ourability to obtain financing.
We undertake no obligation to publicly update or revise anyforward-looking statements, whether as a result of newinformation or future events or for any other reason. Figures for2013 on are estimates or targets.
All forward-looking statements are expressly qualified in theirentirety by this cautionary statement, and you should not placereliance on any forward-looking statement contained in thispresentation.
NON-SEC COMPLIANT OIL AND GAS RESERVES:
CAUTIONARY STATEMENT FOR US INVESTORS
We present certain data in this presentation, such as oil and gasresources, that we are not permitted to present in documents filedwith the United States Securities and Exchange Commission(SEC) under new Subpart 1200 to Regulation S-K because suchterms do not qualify as proved, probable or possible reservesunder Rule 4-10(a) of Regulation S-X.
DISCLAIMER
2012 Highlights
Results • Operating Income: R$ 32,397 million• Net Income: R$ 21,182 million
Exploration & Production
• Improvement in planning through the accomplishment of the 2012 target (2,022 kbpd ± 2%): 1,980 kbpd• Start up of FPSO Cid. Anchieta (Baleia Azul) in September: 78 kbpd production in December• Postponement of the start up of FPSO Cid. Itajaí (Baúna and Piracaba): Feb/2013• Petrobras Pre-salt production’s share: from 5% in 2011 (100.3 kbpd) to 6.9% in 2012 (136.4 kbpd)• Pre-salt daily production record: 213.9 kbpd in Dec /27 (Petrobras)
245.6 kbpd in Dec /31 (Petrobras & partners)• Arrival of 15 deepwater rigs, total ultra deep fleet now 40 units• Proven Reserves (Brazil and International): 16.44 billion boe (SPE/ANP criterion)• Reserve Replacement Ratio (Brazil and International): 103.3%• Reserves/Production (Brazil and International): 18.6 years
Downstream
• Three price increases in diesel and two in gasoline over the last eight months: increase of 10.2% in diesel and7.8% in gasoline in 2012 and new increase of 5.4% in diesel and 6.6% in gasoline in Jan/30/13
• Oil products output: 1,997 kbpd (+5% compared to 2011)• Oil products sales in Brazil: 2,285 kbpd (+7% compared to 2011)• Daily throughput record: 2,101 kbpd (in the Aug/09-12 period)
Gas & Power• Natural gas demand: 74.5 million m³/d (89.4 million m³/d in 4Q12)• Electric generation daily record: 5,883MW in Nov/26• Natural gas delivery daily record: 49.6 million m3 /d in Oct/11
3
Management• PROEF: operational efficiency increase in Campos Basin (UO-BC and UO-RIO)• PROCOP: cost reduction target of R$ 32 billion between 2013 and 2016• PRODESIN: restructured divestiture unit. Execution of the 1st transaction (BS-4: Atlanta and Oliva)• Investment Projects: achievement of 104.8% of the physical targets forecasted in the S-Curves Performance
2012 Brazil Production: Target achieved according to 2012-16 BMP
• Decrease of 2% in oil and LNG production due to: Frade field interruption due to seepage (-14 kbpd), longer thanexpected scheduled maintenance (-6 kbpd) and unexpected operational interruptions (-68 kbpd).
• Increase of 5.6% in natural gas production with new wells (Canapu and Lula) and beginning of NG exports from theFPSO Cid. de Anchieta.
4
2,110 2,098
1,9931,961
1,9891,960 1,940 1,928
1,843
1,9401,968
2,032
2,4912,456
2,3462,305
2,350 2,339 2,315 2,306
2,222
2,333 2,359
2,441
1800
1900
2000
2100
2200
2300
2400
2500
2600
2700
jan-12 feb-12 mar-12 apr-12 may-12 june-12 july-12 aug-12 sep-12 oct-12 nov-12 dec-12
Oil and LNG Production Total Production (Oil, LNG and Natural Gas)
2011Average 2,022 kbpd 2012
Average 1,980 kbpd
2011Average 2,377 kboed 2012
Average 2,355 kboed
kboe
d 2011355 kboed
of Natural Gas
NG = from 355 kboed to 375 kboed
2012375 kboed
of Natural Gas
Non operated production of Petrobras: 46 kbpd in 2011 vs 23 kbpd in 2012 Operated production of Petrobras on behalf of third parties: 26 kbpd in 2011 vs 38 kbpd in 2012
5
+25 kbpd
With PROEF
459
Without PROEF
434
dec/12nov/12oct/12sep/12aug/12july/12june/12may/12apr/12mar/12jan/12
398412414408
425405411
437437
469
495499
445434
448465
454437
461468
350
400
450
500
550
71.769.8
+1.9 p.p.
Oper
ation
al Ef
ficien
cy in
2012
(%)
+ 31 mbpd+ 50
+ 32+ 29
Oper
ation
al Ef
ficien
cy (%
)
PROEF start-up at UO-BC
+ 34+ 22 + 47
Oil P
rodu
ction
in 20
12 (k
bpd)
+ 57
Oil a
nd LN
G Pr
oduc
tion (
kbpd
)
Production Units: 29Production in 2012: 459 kbpd
Without PROEF the decrease would reach 101 kbpd
PROEF avoided a decrease of 47 kbpd
with PROEFwithout PROEF
In 2012 UO-BC’s average production was improved by 25 kbpd through PROEF, reaching 459 kbpd. The averageoperational efficiency increased 11 p.p., from 67% in April to 78% in December. Cost to date US$ 831 million and NPV ofUS$ 519 million.
PROEF UO-BC: Program to Recover Operational Efficiency
With PROEF
Without PROEF
PROEF start-up at UO-BC
feb/12
dec/12nov/12oct/12sep/12aug/12july/12june/12may/12apr/12mar/12jan/12 feb/12
73 74 71 67 70 69 67 71 75 76 74 78
50556065707580
+11p.p.
RRR Brazil: 103% / R/P =19.3 years
RRR Brazil above 100% for the 21st consecutive year
Offshore exploratory wells: Post-salt (38) + Pre-salt (19)
Finding costs in 2012 of US$1.96/bbl
In 2012, R$ 11.6 billion invested in exploration
Exploratory Activity
16.4 Bi boe
96%4%
Brazil HighlightsSuccess Rate (Onshore and Offshore)
2012 Discoveries in Brazil / Basins2012 Proven Reserves
Proven Reserves 16.4 Bi boe at year end. In Brazil, Reserve Replacement Ratio (RRR) above 100% for the 21st consecutive year. New discoveries, especially in new exploratory frontiers.
6
84%
16%
Natural GasOil + NGLInternational
Brazil
Espírito Santo
Post-saltTambuatá and Grana
Padano
Campos
Pre-salt
Pão de Açúcar
Santos
Post-saltBaúna and Piracaba
Pre-saltFranco NW, Carioca Sela, Carioca Norte,Nordeste de Tupi,
Carcará, Iara Oeste, Dolomita Sul, Sul de Guará, Franco SW e
Júpiter Nordeste
Solimões / Ceará
Post-saltIgarapé Chibata /
Pecém
Sergipe - Alagoas
Post-saltBarra, Moita Bonita,
Farfan, Muriú, Cumbe
58% 59%64%
50%55%60%65%70%75%80%85%
2010 2011 2012
Pre-salt: 82%
Domestic Output of Oil Products: Focus on Diesel and Gasoline
Oil Products Output
kbpd
Increase of 82 kbpd in throughput using more domestic crude oil while improving the production profile. Increases in diesel and gasoline production minimized import needs.
745 782
395 438
109 1069393
Fuel OilOthers
2012
1,997
143
238196
2011
1,896
137
234183
+5%
Diesel
GasolineLPG
NaphthaJet Fuel
Throughputand Utilization
Thro
ughp
ut (kb
pd) Utilization (%
)
2012
1,594
2011
1,527
Domestic OilImported OilUtilization(%)
2012 Start up of Major Units(Refineries / Units)
REVAP – Cracked naphtha HDS
REPAR – Coke Naphtha HDT
RLAM – Diesel HDT
REPLAN – Cracked naphtha HDS
REPAR – Cracked naphtha HDS
REPAR – Coke
REPAR – Reform
REFAP – Cracked naphtha HDS
REPAR – Diesel HDT
RECAP – Cracked naphtha HDS
7
+11%
+5%
1,944
1.594
1,862
1.527+5%
340 351
92% 96%
0
10
20
30
40
50
60
70
80
90
100
0
500
1.000
1.500
2.000
2.500
1,523 1,594
Oil Products Sales in Brazil
880 937
489570
1011068284
+7%
2,131
Diesel
Gasoline
LPGNaphthaJet FuelFuel OilOthers
2012
2,285
224165
199
2011
188
kbpd
Increase of 81 kbpd in gasoline sales and 57 kbpd in diesel sales due to economic growth, especially retail.
Oil Products Sales in Brazil
8
+6%
+17%
224167
Oil products sales in Brazil were 7% higher compared to2011:
Gasoline (+17%): increase in the flex-fuel automotivefleet along with price advantage relative to ethanol;
Diesel (+6%): increase in the retail sector, along withhigher thermoelectric consumption in the northern regionof Brazil;
Jet fuel (+5%): higher demand in the aviation sector.
Oil Products Price - Brazil vs International
9
• Price adjustments were not enough to close the gap between domestic and international prices due to theincrease in the oil price and, especially, FX rate fluctuation.
• Petrobras continues to pursue price parity, which is an assumption of the Business and Management Plan.
100
120
140
160
180
200
220
240
260
july/1
1
june//
11
may/1
1
apr/1
1
mar/1
1
feb/11
jan/11
Dec/1
1
nov/1
1
oct/1
1
Sep/1
1
aug//
11
Price
s (R$
/bbl
) ARP in USGC
ARP in Brazil
ARP in Brazil* x ARP in USGC**
Jun/25 Jul/16
Adjustment:Gasoline: 7.83%
Diesel: 3.94%
Jan/30
Nov/01Adjustment:Gasoline: 10%Diesel: 2%
Adjustment:Gasoline: 6.6%Diesel: 5.4%
FX Rate: R$ 1.99/US$Brent: US$ 115.94/bbl
FX Rate: R$ 1.75/US$Brent: US$ 108.91/bbl
* *
* Forecast
2011 2012 2013
Adjustment:Diesel: 6%
∆ FX Rate: 14%∆ Brent: 6%
* Weighted Average Realization Price of Diesel, Gasoline, Naphtha, LPG, Jet Fuel and Fuel Oil** Average Realization Price in United States Gulf Coast, considering the same volumes and products sold in Brazil
july/1
2
june//
12
may/1
2
apr/1
2
mar/1
2
feb/12
jan/12
Dec/1
2
nov/1
2
oct/1
2
Sep/1
2
aug//
12
feb/13
jan/13
kbpd
-184 -249
66 18
43 87164 190
43 31
346
2011
749
180
2012
779
156+96%
+4%
-13%
2012
-231
2011
-118
362
2012
548
153
631
160
428
2011
364
Market growth exceeded production, leading to higher gasoline and diesel imports. Increase in domestic feedstockand lower crude oil production reduced oil exports in 2012.
10
+16%
+102%
Oil ProductsGasolineDieselOther Oil ProductsFuel OilOil
Exports Imports Balance
Trade Balance of Oil and Oil Products
millio
nm³/d
1.6 8.4
+22%
2012
74.9
27.0
39.5
2011
61.2
26.1
33.5
10.8 12.1
74.5
23.0
39.3
2011
+22%
2012
61.1
10.5
39.9
SUPPLY
Natural Gas Demand and Supply
7.4 16.024.6
30.8
39.643.5
12.1 12.418.7
38.640.3
38.3
71.6 90.1
+26%
3Q12 4Q12
3Q12 4Q12
71.089.4
+26%
DEMAND
millio
nm³/d
Increase of 22% in natural gas demand in 2012 (74.5 MM m³/d), largely due to higher thermal power generation(+119%). Demand was met through higher domestic supply and LNG imports. The increase in domestic naturalgas production reduced the need for LNG imports.
Domestic
Bolivia
LNG
Non Thermal
Thermal
Refineries / E&P Fertllizer plants
3Q12 vs 4Q122011 vs 2012
2011 vs 2012 3Q12 vs 4Q12
11
12
Investments of R$ 84 billion, 16% above 2011.
R$ bi
llion
Annual Investment
Physical and financial monitoring of 174 individualized projects (S-Curves):average physical realization of 104.8% and financial realization of 110.6%.
72.5 84.1+16%
20122011
34%51%
International
E&PDownstream
CorporateDistributionBiofuel
G&P
6%5%
2%1.6%
0.4% E&P: Production Development Projects of Baleia
Azul (Cid. de Anchieta), Sapinhoá (Cid. de SãoPaulo), Roncador Modules 3 and 4 (P-55 and P-62)and Papa-Terra (P-61 and P-63).
Downstream: Abreu e Lima Refinery and Comperj. G&P: UFN-3, Bahia Regasification Terminal and
UPGN Cabiúnas. International: Production Development Projects of
Cascade and Saint-Malo.
Investment by Segment Main Projects
2012 Investments
↑ Aumento da oferta de gás nacional em +18%.
↔Aumento do despacho termelétrico, associado ao aumentodopreço da energia (PLD), atendido pela
NL e gás boliviano.
↓ Reconhecimento de créditos fiscais no valor líquido de R$ 928
milhões em 2011
↑ Reajuste de 7,8% no preço da gasolina e de 10,2% no el.↑ Ddddddddddddd fflfdldljfdjdfjlkfjfjgjfg dsfkjldfldfjdlkfjdflj
dslfkdfjldfjj↑ Depreciação cambial ampliou a defasagem em relação a↓ Crescimento das vendas de derivados em +7%.
dfdgffdglkfdgl↓ Maiores importações de gasolina (+102%) e de diesel
(+16%).↓ Crescimento dos custos de aquisição do óleo em Reais em
+21%.Aumento do
rate.
↓ d
↓ 1
↓ H
13
DownstreamExploration and Production
Net Result by Segment - 2011 vs 2012
R$ 40.6 Bi vs R$ 45.4 Bi
↑ g rate.
↓ d
↓ 1
↓ H
- R$ 9.9 Bi vs - R$ 22.9 Bi
InternationalR$ 1.9 Bi vs R$ 1.3 Bi
Gas & PowerR$ 3.1 Bi vs R$ 1.6 Bi
Impairment generated losses of R$ 487 milliion in 2012.
Scheduled maintenance in Akpo field (Nigeria). Start up of Cascade and Chinook fields, in deepwater GoM,
with higher lifting costs due to initial production costs.
Higher realization prices due to the FX devaluation (17%).
Increase in Government Take (+15%).
Higher lifting cost (+28%).
Higher dry hole expenses.
Increase in refining capacity utilization from 92% to 96%.
Increase of 7.8% in gasoline and 10.2% in diesel prices.
Higher oil products sales (+7%). FX devaluation increased the differential versus international
prices. Higher imports of gasoline (+102%) and diesel (+16%).
Higher crude oil acquisition costs in Reais (+21%).
Increase in domestic natural gas supply (+18%). Increase of thermoelectric dispatch associated with higher
energy prices (‘PLD’) accompanied by higher LNG andBolivian gas imports.
In 2011, recognition of tax credits in the net amount ofR$ 928 million (non recuring gain).
2011 vs 2012 Operating Income
2011Operating
Income
Sales Revenues
COGS SG&A 2012Operating
Income
45,403
32,397
37,203
(43,533)(4,827)
Other Expenses
(1,849)
(R$ million)
14
Higher sales revenues reflecting growth in domestic demand, as well as higher prices for domestic products and exports.
Increase in COGS due to higher sales volumes supplied by imports, and effect of FX devaluation on imports and production taxes.
Increase in SG&A expenses primarily reflecting higher personnel costs.
Other operating expenses increased due to higher dry hole expense.
2011 vs 2012 Net Income
33,313
21,182
(R$ million)
15
204,447555
(302)(3,845)(13,006)
2011Net Income
Equity inearnings of
investments
Profit Sharing
2012Net Income
Minority Interest
Operating Income
Financial Result
Lower operating income due to higher demand largely supplied by imports, and domestic prices below international levels.
Financial results decreased primarily due to the devaluation of the Real and higher net liabilities denominated in dollars.
Decrease in taxes as a result of reduced taxable income.
Income Tax /Social
Contribution
(R$ million)
3Q12 vs 4Q12 Operating Income
3Q12Operating
Income
Sales Revenue
COGS SG&A 4Q12Operating
Income
Other Expenses
8,864(388)
(1,136)(1,318)
(98)6,120
16
Revenue: higher demand and prices offset by reduced exports (income from exports in transit not yet recognized).
Increase in COGS as higher sales volumes were broadly supplied by imports.
Increase in Other Expenses due to higher dry hole expense and impairments of international assets.
3Q12 vs 4Q12 Net Income
5,567
7,747
(2,744)
3,357
(10) (117)
1,646 48
(R$ million)
17
3Q12Net Income
Equity Income
Profit Sharing
4Q12Net Income
Minority Interest
Operating Income
Financial Results
Higher net financial results from the sale of Government securities (NTN-B) and income from deposits for legal provisions.
Income tax reduction due to fiscal benefit related to provisions of interest on own capital.
Income Tax /Social
Contribution
1) Net Debt / (Net Debt + Shareholder’s Equity)2) Refers to the adjusted EBITDA which excludes equity income and impairment.3) Includes tradable securities maturing in more than 90 days4) Period-end commercial selling rate for U.S. dollar
Capital Structure
Lower operating cash flow and higher capexresulted in net debt increase.
The devaluation of the Real (9%4) alsoincreased net debt.
R$ Billion 12/31/12 12/31/11Short-term Debt 15.3 19.0Long-term Debt 181.0 136.6Total Debt 196.3 155.6(-) Cash and Cash Equivalents 3 48.5 52.5= Net Debt 147.8 103.0
US$ BillionNet Debt 72.3 54.9
18
1.66 1.61
2.46 2.42 2.77
24% 24%28% 28% 30%
-20%
-10%
0%
10%
20%
30%
40%
0
1
2
3
4
5
4Q11 1Q12 2Q12 3Q12 4Q12
Net Debt/EBITDA Net Debt/Net Capitalization1
2
Dividends
19
Companies with two classes of shares must pay a minimum amount of dividends
Minimum amount to be distributed (common + prefs): 25% of Adjusted Net Income
Priority to preferred shareholders, who will receive the higher of:
25% of Adjusted Net Income
3% of the PN’s proportional book value of shareholder’s equity
5% of the PN’s proportional paid-in capital
General Rules
Proposed Dividends
PN = R$ 0.96 / share and R$ 1.92 / ADR
ON = R$ 0.47 / share and R$ 0.94 / ADRNote: 1 ADR = 2 shares
2013 Outlook
20
Oil products market’s growth of 4%, lower than 2012(8%).
Flat refining output despite higher scheduledmaintenance.
Increase in diesel production (5%), to the detriment ofother products.
Higher participation of domestic oil in throughput (84% vs82% in 2012).
Downstream and Oil Products Market
Management
PROCOP: program implementation to achieve firstresults in 2013.
PROEF: continuing activities to recover operationalefficiency.
PRODESIN: intensification of the Divestment Program.
Investments
Capital budget: R$ 97.7 billion, of which 53% to E&P and33% to Downstream.
6 News Production Units in 2013 Start-Up
Total Capacity/ Petrobras Interest
(kbpd)
Sapinhoá PilotFPSO Cid. São Paulo Jan-13 120 / 54
Baúna and PiracabaFPSO Cid. Itajaí Feb-13 80 / 80
Lula NE PilotFPSO Cid. Paraty May-13 120 / 78
Papa TerraP-63 July-13 140 / 87,5*
Roncador Mod. IIIP-55 Sep-13 180 / 180
Papa Terra P-61 Dec-13 * processing capacity of
P-63
Franco’s EWT Start-up (Transfer of Rights). Sapinhoá North’s EWT Start-up.
Oil Production in Brazil Average production flat as compared to 2012. Lower production in 1H13 due to higher concentration of
scheduled stoppages and the smaller contribution from newsystems. On the other hand, in 2H13 the ramp-up ofSapinhoá, Baúna e Piracaba, Lula NE, Papa-Terra P-63and Roncador P-55 will support the production increaseforecasted for 2014.
Announcement of the Results
END4th Quarter and Year End 2012 Results
Conference Call / Webcast
February 5th, 2013