Petroleo Brasileiro SA · BMFBOVESPA:PETR3
Petroleo Brasileiro SA — Petrobras — Investor Presentation (June 2004)
38 slides from Petroleo Brasileiro SA's investor presentation, Jun 10, 2004
Slide 1: Petrobras Strategic Plan 2015
Petrobras Strategic Plan 2015 José Sérgio Gabrielli de Azevedo CFO and Investor Relations Officer London – June 10th, 2004
Slide 2: Forward-looking statements and cautionary statement for US investors
Petrobras 2015 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 expressio
Slide 3: Mission and Vision
Petrobras 2015 Mission and Vision Mission Vision 2015 Operate in a safe and profitable Petrobras will be an manner in the oil, gas and integrated energy company energy industry in Brazil and with a strong presence in abroad, with social and the international market environmental responsibility, and
Slide 4: Business Strategy
Petrobras 2015 Business Strategy Social and Environmental Growth Profitability Responsibility Lead the Latin American oil, oil products and natural gas market, and work as an integrated energy company, with selective expansion in petrochemical and international activities Consolidate and Develop and
Slide 5: Assumptions
Petrobras 2015 Assumptions Goals through 2010 were reviewed considering following assumptions: • Short-term Brent scenario of US$ 28.00 bbl and US$ 23/bbl average in the long-term; • Average annual growth rate of worldwide GDP of 4.2%; • Average annual growth rate of Brazilian GDP of 4.0%; • Average
Slide 6: Brent Price Forecasts
Petrobras 2015 Brent Price Forecasts (constant 2002 figures, US$/bbl) 35 30 25 OPEP band (deflated and 20 adjusted) 15 10 5 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 PIRA EIA/DOE (low prices) EIA/DOE (reference) EIA/DOE (high prices) CERA (Global) - 2002 CERA (Leviathan) - 200
Slide 7: Brent Price Forecast Range
Petrobras 2015 Brent Price 50 45 40 (consultants, banks and international Forecast Range 35 organizations) 30 28.00 25 20 23.00 (average) 15 10 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Slide 8: Oil Products and Natural Gas Consumption vs. GDP
Petrobras 2015 Oil Products and Natural Gas Consumption vs. GDP 2,000 2,500 2,000 1,500 1,500 1,000 1,000 500 500 0 - 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2010 Oil Products Consumption (thous. bpd) GDP (2003 pric
Slide 9: Oil Products Market in Brazil
Petrobras 2015 Oil Products Market in Brazil Thousand bpd 2.4% CAGR 2,023 1,700 258 121 100 127 874 732 226 246 300 323 196 222 2003 Target 2010 LPG Gasoline Naphta Diesel + Jet Fuel Fuel Oil Others
Slide 10: Natural Gas Market in Brazil
Petrobras 2015 Natural Gas Market in Brazil Million m3/day 77.6 14.2% CAGR 13.8 36.7 30.7 4.6 19.6 27.1 6.5 2003 Target 2010 Thermoelectric Industrial Others Obs.: Includes non-Petrobras supply
Slide 11: Investment Plan
Petrobras 2015 Investment Plan US$ 53.6 billion for 2004-2010, representing US$ 6.6 billion average annual investment in Brazil and US$ 1.1 billion abroad. Distribution by Distribution by Area Business Segment 21% 86% 2 bi 1. US$ 46.1 bi $1 US 6.1 11% US US$ 32.1 bi $7 .5 1.7 bi 60% 14% 1.4 3% 1.1 3
Slide 12: Sources and Uses (US$ Billion)
Petrobras 2015 Sources and Uses (US$ Billion) 1.4 2.6 2.7 3.5 5.9 53.6 57.1 19.6 2004-2010 2004-2010 Other Share Issuance BNDES International Bonds Project Finance Capex Cash Flow Debt Amortization
Slide 13: Financing Plan
Petrobras 2015 Financing Plan Financing Sources (US$ Billion) Planned funding compatible with historical borrowings Actual Planned Borrowings Net of Funding Amortization 16.1 11.4 4.0 2.1 2.7 5.9* 5.9 4.1 3.5 -0.7 2001-2003 2004-2010 Bonds Project Finance BNDES Other (*) Period 2000-2003
Slide 14: ROCE and Leverage in 2010
Petrobras 2015 ROCE and Leverage in 2010 Brent US$ 23 bbl Brent US$ 16 bbl ROCE (%) 15 9 Leverage (%) 16 34 Brent price sensitivity: • US$ 1.00 price change will result in a 1% change in ROCE. • US$ 1.00 price change will result in a US$ 1 billion change in the operational cash generation in 2010.
Slide 15: Leverage Ratios
Petrobras 2015 Leverage Ratios 54% 41% 41% 34% 16% 2002 2003 1Q04 Target 2010 Net debt/Net cap. Net debt/Net cap. (Brent US$ 16) Net debt/Net cap. (Brent US$ 23)
Slide 16: Business Strategies – E&P
Petrobras 2015 Business Strategies – E&P Increase production and reserves •Strengthen expertise in deep and ultra-deep waters; •Perform on-shore and in shallow water fields focusing on profitable opportunities; • Implement practices and new technologies in areas with high exploitation degree in orde
Slide 17: Business Strategies – E&P
Petrobras 2015 Business Strategies – E&P Production will grow at an average of 5.9% per year through 2010, achieving self-sufficiency in 2006. Production of oil and NGL (million bpd) 2.30 0.55 Surplus 1.78 production 1.54 0.42 0.23 Production 1.75 processed by 1.31 1.36 Petrobras in Brazil 2003 2005
Slide 18: Lifting Costs and Oil and NGL production
Petrobras 2015 Lifting Costs and Oil and NGL production 3,5 3,41 3,31 3,26 3,00 3,00 3,0 US$/bbl 2,5 2,0 2000 2001 2002 2003 Target 2010 Without government participation
Slide 19: Proven Reserves Target Growth
Petrobras 2015 Proven Reserves Target Growth Billion boe – SPE Criteria 17.3 Incorporation of: •Probable and 12.6 possible reserves 10.7 •Volumes already Planned discovered under Production for exploratory evaluation 2004-2010: •New discoveries. 6 billion boe 6.6 Remaining 2003 proved reserves 2003
Slide 20: Business Strategies – Supply
Petrobras 2015 Business Strategies – Supply • Expand refining and commercialization activities (domestically and abroad) in conjunction with market growth; • Diversify the business portfolio (emphasizing petrochemicals, logistics and commercial operations of new energy products), anchored in the syn
Slide 21: Business Strategies – Supply
Petrobras 2015 Business Strategies – Supply In refining, increase of 270,000 bpd in the throughput in existing facilities and increase of 300,000 in brazilian oil processed... Throughput (thousand bpd) Production x Demand x Throughput (thousand bpd) 2000 1800 1600 2400 2,300 1400 2200 1200 1000 2000
Slide 22: Refining Cost
Petrobras 2015 Refining Cost 1.58 US$/bbl 1.14 1.07 0.98 0.94 2000 2001 2002 2003 Target 2010 • Increase in refining costs as a consequence of higher production costs due to more complex plants and improvement in product quality; • Costs aligned with the oil industry.
Slide 23: Production Flow in 2010
Petrobras 2015 Production Flow in 2010 Thousand bpd International Production Brazilian Production 50 Brazilian Oil Products 479 2,300 Consumption 2,023 550 1,700 Brazilian Throughput 1,870 Oil Oil Products* 170 103 + Imports 479 550 273 International Sales 1,029 * Domestic imports
Slide 24: Business Strategy - Supply
Petrobras 2015 Business Strategy - Supply • In the transportation segment, US$ 1.2 billion will be slated for fleet renewal, for a total of 53 vessels ordered from shipyards in Brazil; • Close to US$ 1 billion will be employed in the expansion and improvement of operating and safety conditions at th
Slide 25: Business Strategies – Petrochemical
Petrobras 2015 Business Strategies – Petrochemical • Selective expansion in petrochemicals; • Emphasis on new projects that will serve growth in the Brazilian market; Main Projects: • Conclusion of Gas-Chemical Complex – RJ; • Polypropylene Unit; • Acrylic Acid Complex – SAP; • Phenol Unit; • Gas-Ch
Slide 26: Business Strategies - Distribution
Petrobras 2015 Business Strategies - Distribution • Be the preferred brand of the consumer, with a multi-business retail network that offers excellence in the quality of products and services, expanded leadership and guaranteed expected profitability; • Add value to the Petrobras system, beginning w
Slide 27: Business Strategies – Gas & Energy
Petrobras 2015 Business Strategies – Gas & Energy • Develop the natural gas industry, seeking to assure placement of Petrobras’ natural gas, acting in an integrated manner with other Company units throughout the entire productive chain in Brazil and other Southern Cone countries; • Operate in the el
Slide 28: Business Strategies – Gas & Energy: Main Natural Gas Projects
Petrobras 2015 Business Strategies – Gas & Energy Main Natural Gas Projects • Investments exceeding US$ 3.0 billion, seeking to develop the natural gas market: •Northeast Network gas pipelines •Southeast-Northeast GASENE Gas Pipeline •Urucu - Coari – Manaus Gas Pipeline •Campinas – RJ Gas Pipeline •
Slide 29: Business Strategies – Gas & Energy: Energy
Petrobras 2015 Business Strategies – Gas & Energy Energy Installed capacity of thermoelectric and cogeneration plants will be 5,044 MW in 2010. • Energy investments are slated primarily for conclusion of projects already underway. • Investments lower than US$ 1.5 billion. 5,044 2,407 2,407 2003 2005
Slide 30: Business Strategies – Gas and Energy: Renewable Energy
Petrobras 2015 Business Strategies – Gas and Energy Renewable Energy •Up to 0.5% of total investments will go towards Renewable Energy (wind power generation, biomass energy, photo voltaic and bio-diesel production). The main targets for 2010 will be availability of 96 MW and produce 2,300 bpd of bi
Slide 31: Business Strategies - International
Petrobras 2015 Business Strategies - International •Seek a leadership position as an integrated energy company in Latin America. •Expand operations in the American sector of the Gulf of Mexico, and Western Africa. •Expand Petrobras Focus Areas through businesses that contribute to growth and diversi
Slide 32: Business Strategies - International
Petrobras 2015 Business Strategies - International 80% of investments in the International area will go towards E&P Investments of US$ 7.5 billion Production (thousand boed) 613 134 80% 9% 305 246 107 479 4% 85 3% 161 198 2% 2% E&P Gas & Energy 2003 2005 2010 Refining & Marketing Petrochemicals Oil
Slide 33: Other Corporate Targets
Petrobras 2015 Other Corporate Targets Ratios 2005 2010 Maximum tolerable spill volume (m3) 633 598 SOx total emissions (tons) 160,128 153,804 Carbon credits generated in renewable energy projects (CO2 thous. tons) 130 1,200 Frequency Rate of Accidents Involving Absence from Work (1) 0.92 0.50 Clien
Slide 34: Corporate Strategy – 2000 peer comparison
Petrobras 2015 Corporate Strategy – 2000 peer comparison CAPEX vs Reserves 2000 14.000 12.000 CAPEX 10.000 BP ExxonMobil 8.000 ChevronTexaco Petrochina Shell Group (RD) Total 6.000 ENI (AGIP) 4.000 Petrobras Repsol-Ypf 2.000 ConocoPhillips Lukoil US GAAP Yukos 0 0 5.000 10.000 15.000 20.000 25.000 R
Slide 35: Corporate Strategy – 2003 peer comparison
Petrobras 2015 Corporate Strategy – 2003 peer comparison CAPEX vs Reserves 2003 14.000 ExxonMobil BPShell Group (RD) 12.000 10.000 Petrochina ENI (AGIP) CAPEX 8.000 Total Petrobras 6.000 ConocoPhillips ChevronTexaco 4.000 2.000 Lukoil US GAAP Repsol-Ypf Yukos 0 0 5.000 10.000 15.000 20.000 25.000 Re
Slide 36: Final Remarks
Petrobras 2015 Final Remarks • Continuous and expressive growth of production and reserves, achieving Brazilian self-sufficiency in oil in 2006; • Adjust and expand the refining complex to the profile of Brazilian consumption; • Fleet renovation; • Infrastructure expansion for development of the nat
Slide 37: Q&A Session
Petrobras Strategic Plan 2015 José Eduardo Dutra Chief Executive Officer New York – May 20th, 2004 Q&A Session
Slide 38: Companies Announced Targets
Petrobras 2015 Companies Announced Targets Company ROCE/ROACE Assumptions Financial Production (Presentation Date) (Corporate and (Robustness Business Segements Criteria)) Leverage BP Corp.13% $16/bbl Brent, 25-35% 5% a.a Mar 2004 E&P (12-13%) $2.70/mcf gas (2003-2008) R&M (12-13%) (vs. $2.40) inclu