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Conference Call / Webcast
New E&P Regulatory ModelPre-salt and Strategic Areas
José Sergio GabrielliCEO
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The presentation may contain forecasts about future events. Such forecasts merely reflect the expectations of the Company's management. Such terms as "anticipate", "believe", "expect", "forecast", "intend", "plan", "project", "seek", "should", along with similar or analogous expressions, are used to identify such forecasts. These predictions evidently involve risks and uncertainties, whether foreseen or not by the Company. Therefore, the future results of operations may differ from current expectations, and readers must not base their expectations exclusively on the information presented herein. The Company is not obliged to update the presentation/such forecasts in light of new information or future developments
The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this presentation, such as oil and gas resources, that the SEC’s guidelines strictly prohibit us from including in filings with the SEC
CAUTIONARY STATEMENT FOR US INVESTORS
DISCLAIMER
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THE PRE-SALT REGION
• Total Area: 149,000 km2• Area Under Concession: 41,772 km2 (28%)• Area Not Under Concession: 107,228 km² (72%)• Area With Petrobras Interest: 35,739 km2 (24%)
The big blue area represents the expected Pre-salt location, with great potential for oil presenceCurrently, there is a production acceleration program in Jubarte (Whales’ Park) and an extended well test in Tupi (Santos Basin)
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Pre-saltand
Strategic Areas
Transfer of Rights with
Compensation
Production Sharing
AgreementPetrobras Operator
Other Companies Through Bidding Process
Other Areas Current Concession Model
Up to 5 billion boe
Petrobras 100%
NEW REGULATORY FRAMEWORK
There will be no regulatory changes in the areas under concession, including the pre-salt area already granted
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PRODUCTION SHARING AGREEMENTS
Profit Oil
Cost Oil
Companies
Government
Production sharing agreementsPetrobras will operate all blocks under this regime, with a minimum stake of 30%Consortium between Petrobras, Petro-sal and the winning bidder will be managed by the Operational CommitteePetrobras will be able to participate in the bidding process to increase its stake
The winning bidder will be the company that offers the highest percentage of “profit oil” for the Brazilian GovernmentPetrobras will have to follow the same percentage offered by the winning bidder
The Brazilian Government will not assume the risks of the activities, except when it decides to invest directlyPrior to contracting, the Government will evaluate the potential of the areas and may contract Petrobras directly
Graphs are showing only hypothetical values
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OPERATOR’S ROLE AND INDUSTRY PRACTICES
Responsible for conducting exploration and production activities providing critical resources: technology (usage and development), human resources and equipments
OPERATOR
Access to strategical information Production and costs control Technological access and development
PETROBRAS: defined as the exclusive operator of all areas under the production sharing agreements
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AGENT’S ROLE OF PROCUCTION SHARING AGREEMENTS
National Petroleum Agency - ANPPromote bids, regulate and superviseAnalyze and approve production sharing agreementsApprove the contracts of UnitizationAdapt and standardize the applicable rules under different regimesAdvising Ministry of Mines and Energy in blocks ring fences delimitation
PETRO-SAL
Will reduce information asymmetry between the Brazilian Government and oil companies, aiming to reduce cost oilWill not assume risks nor investContract management of production sharing agreementsWill not execute E&P activities
Definições Técnicas
NATIONAL ENERGY POLICY COUNCIL - CNPEBidding schedule and national contentBlocks for exclusive contracts and blocks for biddingTechnical and economical parameters of the contractsDefinition changes (increase) for the areas called pre-saltAreas to be classified as strategic
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E&P TRANSFER OF RIGHTS WITH COMPENSATION
Government may transfer to Petrobras, for compensation, without bidding, the rights to explore and produce oil in the pre-salt areas not under concession. These areas may or may not be contiguous
Transfer of rights limited to a maximum produced of 5 billion boe. Petrobras will be the owner of produced volumes
Oil values shall be determined by technical reports prepared by qualified third parties contracted by the government (ANP) and Petrobras, taking into account best industry practices
The transaction includes a clause of reappraisal of reserves value with a maximum deadline of 24 months
If the value of appraisal rises, Petrobras will pay the difference to the Government. If price falls, the contrary will happen
Royalties will be paid by Petrobras and distributed according to the Law nº9.478/97. No special participation payment is expected
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PETROBRAS’ INCREASE IN CAPITAL
At the same time of the “transfer of rights”, the Company will have an increase in capital, which shall be approved by the Extraordinary Shareholders Meeting :
Granting of shareholders’ right to exercise their preemptive rights to subscribe for additional sharesIncrease in capital will follow the current proportion of the different classes of sharesAll common shareholders will have voting rights
Appraisal of reserves in R$
Petrobras’ increase in capital
(to be approved by the ESM)
Petrobras will receive cash from
minority shareholders
Petrobras will pay the transfer of
rights with compensation to the federal govt
Graphs are showing only hypothetical values
Result:Increase of Petrobras’ financial capacity to invest, specially in the pre-salt areaIf minority shareholders do not exercise their rights in full, the Brazilian Government may enhance its participation in Petrobras’ capital and results
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PETROBRAS’ CHALLENGES
Ambitious Business Plan 2009-2013
Huge increase of E&P portfolio stimulating the integration of the different areas:Upgrading the Company management modelCritical resources management (financial, technological, human resources, equipments and services contracts )
Petrobras is an integrated company and CAPEX will increase in all business areas
Accounting, tax and financial management (CAPEX growth, cash management and different E&P regimes)
Hiring and training workforce
Internal controls strengthening with different parties in production sharing agreements (ANP, CNPE, Petro-sal)
BUSINESS PLAN
NEW REGULATORY FRAMEWORK BRINGS NEW CHALLENGES
