Galp Energia, Sgps S.a. Class B · EURONEXT:GALP
Galp Energia, Sgps S.a. Class B — Galp Energia — Investor Day (March 2013)
105 slides from Galp Energia, Sgps S.a. Class B's investor day presentation, Mar 5, 2013
Slide 1: Capital Markets Day 2013
Capital Markets Day 2013 An integrated energy player focused on exploration and production 1 Galp Energia plc Capital Markets Day March 5th 2013
Slide 2: Strategy overview
Strategy overview Manuel Ferreira De Oliveira Chief Executive Officer 2 Capital Markets Day - March 5th 2013
Slide 3: A clear strategy to become an integrated energy player focused on E&P
A clear strategy to become an integrated energy player focused on E&P Allocating capital to high potential upstream assets to benefit from market trends Consistently following strategic path delineated Materialising potential on exploration while maximising value on production Ensuring growth whilst
Slide 4: Consistently delivering
Consistently delivering Allocating capital to high quality upstream assets Ensuring sustained upstream value creation Addressing main challenges Becoming an integrated player focused on E&P 4 Capital Markets Day - March 5th 2013
Slide 5: Galp Energia has reinforced the foundations for upstream long-term value creation
Galp Energia has reinforced the foundations for upstream long-term value creation High impact wells Developing world-class Expanding projects delivered projects inventory Carcará well unlocking field Focus on optimisation and Leveraging exploration development productivity knowledge Reinforc
Slide 6: Robust financial capacity in place to support upstream long-term value creation
Robust financial capacity in place to support upstream long-term value creation Reaping upstream Leveraging existing Regaining financial initial rewards downstream and gas assets flexibility Shift towards upstream Upgrade project up and running Rigorous capital discipline completed to deliver
Slide 7: Shareholder return impacted by non fundamental variables
Shareholder return impacted by non fundamental variables Share price evolution 110% End of shareholder Growing fears over the Eni and CGD agreement Portuguese economy placement 100% 90% MSCI Energy -4% 80% Galp Energia -7% 70% Ease of Euro Zone debt Peers -11% 60% crisis following Greek elections SX
Slide 8: Consistently delivering
Consistently delivering Allocating capital to high quality upstream assets Ensuring sustained upstream value creation Addressing main challenges Becoming an integrated player focused on E&P 8 Capital Markets Day - March 5th 2013
Slide 9: Long-term energy outlook remains robust
Long-term energy outlook remains robust Global energy demand Oil supply and NG net trade balance (bcm) (mtoe) spare capacity USD/bbl mbpod US Europe Asia CAGR 2010-2035 7.0 120 34 4,217 2.3% 100 5.0 2,403 -76 4,218 -118 0.8% 80 3,474 -265 4,106 3.0 2,740 1.6% 60 -454 4,113 0.5% 4,656 -515 40 1.0 200
Slide 10: Challenging Iberian environment
Challenging Iberian environment GDP growth Iberian demand mton bcm 2% 90 50 0% 80 40 -2% 70 30 -4% 60 20 -6% 50 10 2008 2009 2010 2011 2012 2013E 2014E 2007 2008 2009 2010 2011 2012 2013E 2014E Portugal Spain Oil products (LHS) Natural gas (RHS) 10 Capital Markets Day - March 5th 2013 Source: DGEG,
Slide 11: A strong set of assets in upstream
A strong set of assets in upstream Brazil Mozambique Angola Other areas World-class Material and growing 3 producing fields High-impact development projects resource base already reached peak exploration portfolio in Santos basin key to production production growth One of the largest Rec
Slide 12: Solid foundations to increase cash flow from downstream and gas operations
Solid foundations to increase cash flow from downstream and gas operations Refining Oil Marketing NG supply NG infrastructure High complex refining Leading player in the Strong and diversified NG distribution system set to deliver Iberian oil market portfolio of long-term network representin
Slide 13: Capital allocation towards high quality upstream assets
Capital allocation towards high quality upstream assets Upstream business Downstream and gas businesses High impact Integrated and Favourable global exploration complex refining Challenging environment portfolio and system and a global and local supporting oil world class leading position market out
Slide 14: Consistently delivering
Consistently delivering Allocating capital to high quality upstream assets Ensuring sustained upstream value creation Addressing main challenges Becoming an integrated player focused on E&P 14 Capital Markets Day - March 5th 2013
Slide 15: Benefiting from a unique set of competitive advantages
Benefiting from a unique set of competitive advantages Strong and National Who we are flexible player flag carrier Enduring partnerships What we have Financial strength Knowledge from Integrated What we bring breakthrough projects know-how 15 Capital Markets Day - March 5th 2013
Slide 16: A clear and sustainable E&P strategy
A clear and sustainable E&P strategy Exploration Production De-risk current exploration prospects and Gain the most value from every project continuously feed the exploration funnel Deliver profitable production growth in the Build a balanced portfolio coming years and sustain it in the long
Slide 17: Capturing value from early exploration to production
Capturing value from early exploration to production E&P projects lifecycle Development Exploration Production Appraisal Cumulative value creation Full cycle value creation highly driven by exploration and appraisal activities 17 Capital Markets Day - March 5th 2013
Slide 18: Steering towards a high impact exploration activity
Steering towards a high impact exploration activity Strong corporate commitment and reinforced budget Focus on frontier and Materiality Active risk management emerging plays Focus on basins where we can Increase Galp Energia’s Geographic diversification of leverage our competitive average stak
Slide 19: Exploration pipeline potential to deliver significant shareholder value
Exploration pipeline potential to deliver significant shareholder value Exploration de-risking process Average PoS Unlock 100-200 mboe per year through the drillbit Time 2013 prospects to de-risk Areas to de-risk going forward 19 Capital Markets Day - March 5th 2013 Bubble size corresponds to the ne
Slide 20: Recent new portfolio additions starting to realise exploration strategy
Recent new portfolio additions starting to realise exploration strategy Exploration portfolio recent additions Morocco Namibia Key data: Key data: • Operator • Non-Operator • Shallow water • Deep water • Gross potential1: • Gross potential: 450 mbbl 8 bn bbl • Stake: 50% • Stake: 14% 1 Includes only
Slide 21: Building a balanced E&P portfolio on a promising set of assets
Building a balanced E&P portfolio on a promising set of assets Portugal 8 8 Morocco Venezuela 1 Equatorial Guinea 2 East Timor Brazil 2 5 Mozambique 20 Angola 1 # of projects 7 2 Core area Namibia Uruguay Potential area 21 Capital Markets Day - March 5th 2013
Slide 22: Continuously adding resources through the drillbit
Continuously adding resources through the drillbit New Exploration Contingent Reserves ventures resources1 resources Unrisked 3,203 mboe 3C +14% YoY 3,245 mboe 3P Under 783 mboe +21% YoY continuous +10% YoY evaluation 2P 2C 640 mboe Risked 1,583 mboe +60% YoY 526 mboe +82% YoY +10% YoY 22 Capital Ma
Slide 23: Strong pipeline of projects to deliver production and value until end of decade
Strong pipeline of projects to deliver production and value until end of decade Infrastructure net installed capacity (kboepd) 375 Key production units onstream until 2020: 300 Lula / Iracema – 10x FPSO Iara – 2x FPSO 225 Júpiter – 1x FPSO 150 Carcará – 1x FPSO Block 14 – 2x CPT 75 Block
Slide 24: Ensuring sustainable production in the long run
Ensuring sustainable production in the long run Target long-term production profile Production target 300 kboepd Identified projects to de-risk Pre-sanctioned projects New ventures Sanctioned projects 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 Long term
Slide 25: Maximising value and optimising operations along the development phase
Maximising value and optimising operations along the development phase Development value creation upside Maximise recovery factor Cumulative Value Optimise development concepts Exploration Reduce capital requirements /Appraisal Mitigate execution risk Development/ Accelerate time to market
Slide 26: Extracting the most value through the full cycle
Extracting the most value through the full cycle Delivery on downstream Delivery of profitable and gas operations enables production growth supports Fast development of Increased focus on high quality projects E+D = Max(V) early exploration leads to De-risk of candidates to develop allows 26 Capital
Slide 27: Consistently delivering
Consistently delivering Allocating capital to high quality upstream assets Ensuring sustained upstream value creation Addressing main challenges Becoming an integrated player focused on E&P 27 Capital Markets Day - March 5th 2013
Slide 28: Overcoming challenges to succeed on our strategy
Overcoming challenges to succeed on our strategy Securing funding Ensuring project Developing the right Expanding and flexibility execution people sustainable practices Risk management framework in place 28 Capital Markets Day - March 5th 2013
Slide 29: Robust financial capacity is a key strategic pillar
Robust financial capacity is a key strategic pillar Solid funding Resilient Active Upstream and liquidity Iberian portfolio delivery position businesses management Maintaining financial flexibility to develop the portfolio and support growth 29 Capital Markets Day - March 5th 2013
Slide 30: Project execution supported by solid partnerships
Project execution supported by solid partnerships Partner with some of the most experienced and renowned companies worldwide Access to multiple technological options Knowledge from different projects is a valuable calling card Very active player in all the consortia, taking in-house knowledg
Slide 31: Developing the right people
Developing the right people Senior management conference Human capital is a key strategic asset and core to project execution Advanced programmes and partnerships with renowned Portuguese and Brazilian universities E&P recruitment, targeting a substantial increase in human resources to attract
Slide 32: Highly responsible practices are embedded in our culture
Highly responsible practices are embedded in our culture Safety performance Loss of containment 37 31 30 1.2 1.3 1.0 2.06 2.24 1.80 0.35 0.43 0.53 2010 2011 2012 2010 2011 2012 Accidents resulting in work absence LTIFR Tier 1 Tier 2 Notes: LTIFR - Lost time injury frequency rate. 32 Capital Markets
Slide 33: Consistently delivering
Consistently delivering Allocating capital to high quality upstream assets Ensuring sustained upstream value creation Addressing main challenges Becoming an integrated player focused on E&P 33 Capital Markets Day - March 5th 2013
Slide 34: An integrated energy player focused on E&P and on delivering shareholder value
An integrated energy player focused on E&P and on delivering shareholder value Well positioned to take advantage of growing demand for oil and gas Pursuing a clear capital allocation towards upstream Building a balanced exploration portfolio Maximizing value creation on the development phase
Slide 35: Upstream profitable growth
Upstream profitable growth Stephen Whyte Chief Operating Officer – E&P 35 Capital Markets Day - March 5th 2013
Slide 36: Executing a sustainable upstream strategy
Executing a sustainable upstream strategy Strategy in place towards a continuous high impact exploration activity Enlarging and globally diversifying exploration portfolio Reaching 300 kboepd by 2020 from existing portfolio Gaining the most value from development phase 36 Capital Markets Day - March
Slide 37: Solid track record; High potential exploration portfolio; Profitable production growth
Solid track record High potential exploration portfolio Profitable production growth Concluding remarks 37 Capital Markets Day - March 5th 2013
Slide 38: An increasingly diversified portfolio
An increasingly diversified portfolio Portugal Morocco Venezuela Equatorial Guinea Brazil East Timor Angola Mozambique Exploration and development activities Namibia Uruguay Exploration activities 38 Capital Markets Day - March 5th 2013
Slide 39: Solid track record in exploration
Solid track record in exploration Exploration performance1 (bn boe) Galp Energia’s major world-class discoveries in new frontier and 4.0 emerging basins: 3.3 Tupi Iracema Iara Júpiter 0.8 Carcará 2007 2012 Mamba / Coral 1 3P reserves + 3C contingent resources 39 Capital Markets Day - Mar
Slide 40: Exceptional exploration performance achieved in the recent past
Exceptional exploration performance achieved in the recent past Finding costs1 (USD/boe) Development costs1 (USD/boe) 2011 2011 2012 2012 0 5 10 15 20 0 10 20 30 40 Source: Evaluate Energy and company analysis. Peers include Anadarko, BG Group, BP, Chevron, ConocoPhillips, 40 Capital Markets Day - M
Slide 41: Three core hubs established
Three core hubs established Key geographies Current three core areas established based on previous successful exploration activity Still a lot to take from exploration, Brazil appraisal and development activities Mozambique Enduring partnerships with NOC’s and Angola cooperation agreements est
Slide 42: Solid track record; High potential exploration portfolio; Profitable production growth
Solid track record High potential exploration portfolio Profitable production growth Concluding remarks 42 Capital Markets Day - March 5th 2013
Slide 43: Focus on delivering sustainable value from exploration activity
Focus on delivering sustainable value from exploration activity Exploration Key objectives Deliver high impact organic growth opportunities Access promising new exploration areas Actively manage a lasting exploration portfolio Key targets Drill 7-10 material exploration wells/year De-risk
Slide 44: Continuously reinforcing and geographically diversifying our exploration portfolio
Continuously reinforcing and geographically diversifying our exploration portfolio Exploration resources1 (mboe) 3,203 2,821 Re-fill and diversify: • Materiality • Focus on frontier and emerging plays • Diversification and risk spreading • Ability to exercise competitive advantage 2011 Namibia Moroc
Slide 45: Geological diversification with increasing weight of emerging basins
Geological diversification with increasing weight of emerging basins Exploration portfolio 2011 2012 Emerging Frontier Maturing Mature Emerging Frontier Maturing Mature 45 Capital Markets Day - March 5th 2013
Slide 46: Focus on deep water projects while starting to diversify well type portfolio
Focus on deep water projects while starting to diversify well type portfolio Exploration portfolio 2011 2012 Deep Water Shallow Water Onshore Deep Water Shallow Water Onshore 46 Capital Markets Day - March 5th 2013
Slide 47: Balanced risk exposure
Balanced risk exposure Exploration portfolio profile Espírito Santo basin Mozambique Caramba Probability of success Blocks 14/14K Namibia Campos basin Blocks 32/33 Guanxuma Bracuhy Morocco 20% Portugal onshore Potiguar basin Peniche basin Pernambuco basin Alentejo basin East Timor Uruguay Amazonas b
Slide 48: BM-S-8: Significant exploration potential to be further de-risked
BM-S-8: Significant exploration potential to be further de-risked BM-S-8: Geological cross-section ▪ Evaluation period extension already requested ▪ Carcará appraisal well and a contingent DST in 4Q13 key to test productivity and the resource potential in the flanks ▪ One of the best rock quality id
Slide 49: BM-S-24: Bracuhy prospect with potential to increase resource volumes
BM-S-24: Bracuhy prospect with potential to increase resource volumes BM-S-24: Geological cross-section ▪ Júpiter NE well confirmed the continuity of the reservoir and the same hydrocarbon mix ▪ Bracuhy prospect to be drilled during 2013, offering additional upside to the Júpiter discovery ▪ Testing
Slide 50: Potiguar: A play opener of a new frontier province
Potiguar: A play opener of a new frontier province Potiguar basin ▪ 10 prospects identified in a predominantly stratigraphic setting (Cretaceous clastics) ▪ First exploration well, Ararauna already being drilled, followed by Pitú and Tango prospects during 2013 ▪ Targeting a potential analogue with
Slide 51: Mozambique: Oil potential in Area 4 to be tested during 2013
Mozambique: Oil potential in Area 4 to be tested during 2013 Area 4 ▪ Mamba structure appraisal campaign to be concluded during 1H13 ▪ K Bulge oil prospect to be drilled in 2Q13 ▪ Structure well defined and oil charge concept still valid despite non-successful well nearby ▪ Additional gas prospects
Slide 52: Namibia: Emerging province offers significant resource potential
Namibia: Emerging province offers significant resource potential Namibia: hydrocarbon seepage map ▪ Key material and independent prospects to be tested in 2013, Wingat, Moosehead and Murombe ▪ First exploration well about to start in Wingat prospect ▪ Multiple objectives over Cretaceous intervals (C
Slide 53: Morocco: Seismic data points to a potential analogue with Cap Juby oil discovery
Morocco: Seismic data points to a potential analogue with Cap Juby oil discovery Tarfaya Offshore area in Morocco ▪ Different Jurassic prospects identified, with Trident, the primary prospect, located in the middle Jurassic targeting light oil ▪ First exploration well to be drilled on Trident, but w
Slide 54: Targeted mboe to be de-risked during exploration drilling programme in 2013
Targeted 300 mboe to be de-risked during exploration drilling programme in 2013 2013 drilling activity Prospects: 45% Ararauna Tango Pitú Obsidiana 30% K Bulge Average PoS Bracuhy Wingat Prospects Net potential (mboe)1 Murombe 15% Moosehead >100 Carcará extension 50 – 100 <50 0%
Slide 55: Solid track record; High potential exploration portfolio; Profitable production growth
Solid track record High potential exploration portfolio Profitable production growth Concluding remarks 55 Capital Markets Day - March 5th 2013
Slide 56: Reach 300 kboepd by 2020 maximising value creation in development phase
Reach 300 kboepd by 2020 maximising value creation in development phase Production Key objectives Maximise oil recoverability Reduce capital requirement through project optimisation Mitigate execution risks and ensure a fast time to market of resources Key targets De-risk development concept
Slide 57: Robust resource base
Robust resource base 3P reserves1 (mboe) 3C contingent resources2 (mboe) 3,245 2,671 783 709 2011 Brazil Angola 2012 2011 Brazil Angola Mozambique 2012 Oil Gas 1Net entitlement; 2 Working interest 57 Capital Markets Day - March 5th 2013 Source: DeGolyer and MacNaughton
Slide 58: Several high impact development projects coming onstream
Several high impact development projects coming onstream Angola Additional projects to come onstream Mozambique FID and conceptual Production Brazil development decision to 2012 be taken by 2014 14 FPSOs producing 2020 by 2018 58 Capital Markets Day - March 5th 2013 Illustrative and non- exhaustive
Slide 59: Lula/Iracema: Project being successfully executed with upside potential
Lula/Iracema: Project being successfully executed with upside potential FPSO in Lula/Iracema ▪ One FPSO in production and nine already contracted for full development ▪ Lula-1 project revealed high well productivity, reaching full capacity with 4 producing wells ▪ Appraisal wells, WAG CO2 and horizo
Slide 60: Recovery factor increased from 23% to 28% so far
Recovery factor increased from 23% to 28% so far 2012 RDA wells Lula geological cross section Schematic water front displacement RDA wells evaluated Continuity confirmed Homogeneous peripheral connectivity displacement improves recovery expectations 60 Capital Markets Day - March 5th 2013
Slide 61: FPSO construction monitored to guarantee the fast development of Lula/Iracema
FPSO construction monitored to guarantee the fast development of Lula/Iracema Next FPSO coming onstream Lula NE1 (120 kbopd) Iracema South2 (150 kbopd) First oil scheduled for 4Q14 Iracema North3 (150 kbopd) First oil scheduled for 4Q15 First oil scheduled for May-2013 1 FPSO Cidade de Paraty at Ang
Slide 62: Future FPSO to benefit from learning curve of pilot units
Future FPSO to benefit from learning curve of pilot units Production ramp-up – Lula-1/ Lula NE ▪ Production ramp-up schedule of pilot units combines revenue objectives 100% with dynamic reservoir data acquisiton ▪ FPSO C. Angra dos Reis, reached full 50% capacity in c.18 months since the DoC ▪ FPSO
Slide 63: Replicant FPSO being developed in Brazil progressing according to plan
Replicant FPSO being developed in Brazil progressing according to plan Works at Rio Grande do Sul shipyard1 ▪ Hulls being constructed at Rio Grande do Sul shipyard ▪ Standard design and common construction strategy enables fast deployment of subsequent units ▪ Topside and integration package contrac
Slide 64: Addressing key development optimisation challenges of Lula/Iracema
Addressing key development optimisation challenges of Lula/Iracema Key development breakthroughs Risk mitigation Development wells Oil recoverability Chartering additional FPSO Drilling and completion Test WAG CO2 injectors on the international market duration to be reduced by performance duri
Slide 65: World-class pre-salt projects to start production by 2017/2018
World-class pre-salt projects to start production by 2017/2018 Future onstream projects Iara Carcará Júpiter Forthcoming appraisal activities to de-risk the development of each project benefiting from knowledge acquired at Lula/Iracema 65 Capital Markets Day - March 5th 2013
Slide 66: Iara: De-risking development through appraisal activities
Iara: De-risking development through appraisal activities Iara: Structural map ▪ Three additional appraisal wells, of which one is horizontal, to increase knowledge and de-risk development, with ongoing Iara West 2 ▪ Contingent EWT scheduled for the end of 2013 and production expected to start by 20
Slide 67: Carcará: Results justify a standalone development project
Carcará: Results justify a standalone development project BM-S-8: Carcará reservoir ▪ One FPSO allocated to Carcará area by 2018 ▪ Expected high well productivity given the high pressures identified ▪ Development project to be optimised after the appraisal well in Carcará and the exploration well in
Slide 68: Júpiter: No technological barriers to its development
Júpiter: No technological barriers to its development BM-S-24: Júpiter reservoir ▪ Conducting conceptual engineering development studies with several technological opportunities identified ▪ Oil rim development being matured and gas cap development pending on ongoing studies ▪ High CO2 content ident
Slide 69: Mozambique: World-class natural gas province established with over 100 tcf
Mozambique: World-class natural gas province established with over 100 tcf Mozambique: LNG possible routes ▪ A large scale LNG project being successfully de-risked ▪ Perfectly located to arbitrage on LNG market dynamics between Asia and Europe ▪ Area 4 potential of c.75 tcf GIIP with production phas
Slide 70: Rovuma basin: One of the most competitive LNG incremental projects
ADGAS Qatargas-2 Qatargas-3 Qatargas-4 RasGas I RasGas II RL 3 NLNG Expansion NLNG Plus 70 Capital Markets Day - March 5th 2013 Arun NLNG 6 Bontang Qalhat LNG EG LNG ELNG 2 Qatargas-1 ELNG 1 Brunei LNG Atlantic LNG 2&3 Darwin Atlantic LNG 1 MLNG key to secure LNG supply contracts OLNG Project compet
Slide 71: Recent progress de-risked development project
Recent progress de-risked development project Key development challenges Unitisation Infrastructure development Mozambique framework Heads of agreement already Common and coordinated Develop national infrastructure to established between Eni and development with Area 1 support the project Anad
Slide 72: Angola is a development story
Angola is a development story Angolan assets ▪ Current producing-fields (Kuito, BBLT and Tômbua-Lândana) already reached peak production ▪ New fields in Block 14 and Block 14K to be developed ▪ Block 32 start-up production expected by 2016 72 Capital Markets Day - March 5th 2013
Slide 73: Ensuring production increase in Angola from 2015 onwards
Ensuring production increase in Angola from 2015 onwards Block 14/14K Block 32 Production of five new areas coming Two FPSO expected to be installed in Kaombo onstream from 2015 onwards split hub area by 2016 and 2017 73 Capital Markets Day - March 5th 2013
Slide 74: Profitable production growth strategy in place towards 300 kboepd by 2020
Profitable production growth strategy in place towards 300 kboepd by 2020 Working interest production profile (kboepd) 2012 2016E 2020E Angola Lula/Iracema Iara Carcará Júpiter Mozambique of which, NG 74 Capital Markets Day - March 5th 2013
Slide 75: Highly profitable development projects enabling higher returns in the future
Highly profitable development projects enabling higher returns in the future OPEX USD/boe1 DD&A USD/boe1 20.6 13.3 2012 Long term 2012 Long term 1 Based on net entitlement production 75 Capital Markets Day - March 5th 2013
Slide 76: Solid track record and long term approach
Solid track record and long term approach A clear exploration strategy Profitable production growth Concluding remarks 76 Capital Markets Day - March 5th 2013
Slide 77: Ensuring enduring and rewarding upstream activity
Ensuring enduring and rewarding upstream activity Building an increasingly diversified portfolio driven by a broad range of exploration projects Focus on delivering sustainable value from early exploration phase Reaching 300 kboepd by 2020 gaining the most value from of projects Production g
Slide 78: Appendix
Appendix 78 Capital Markets Day - March 5th 2013
Slide 79: Maturing material exploration areas to be de-risked after 2013
Maturing material exploration areas to be de-risked after 2013 Caramba Pernambuco Alentejo Uruguay Caramba appraisal well Frontier area with 3D seismic campaign Several leads identified and with significant updip multiple objectives concluded with several 3D seismic acquisition potential identified
Slide 80: Promising exploration and appraisal drilling activity in 2013
Promising exploration and appraisal drilling activity in 2013 Galp Energia 2013 drilling schedule Brazil1 Africa Spud Duration Spud Duration Area Target Interest E/ A Country Area Target Interest E/ A Date (# days) Date (# days) Lula Lula West – 2 10% A 4Q12 120 PEL 23 Wingat 14% E 1Q13 90 Namibia P
Slide 81: Galp Energia reserves and resources portfolio
Galp Energia reserves and resources portfolio Reserves1 Contingent resources2 Exploration resources3 (mboe) (mboe) (mboe) 2011 2012 2011 2012 2011 2012 1P 145 154 1C 202 206 Unrisked 2,821 3,203 2P 399 640 2C 870 1,583 Risked 478 526 3P 709 783 3C 2,672 3,245 1 Net entitlement; 2 Working Interest; 3
Slide 82: Financial outlook
Financial outlook Filipe Silva Chief Financial Officer 82 Capital Markets Day - March 5th 2013
Slide 83: The key building blocks are in place
The key building blocks are in place Well defined projects and capex priorities Focus on cash generation Healthy financial position Value creation underpins shareholder return 83 Capital Markets Day - March 5th 2013
Slide 84: Our capex priorities
Our capex priorities Focus on cash generation Financial strength and liquidity Concluding remarks 84 Capital Markets Day - March 5th 2013
Slide 85: Capital allocation reflecting focus on upstream
Capital allocation reflecting focus on upstream Capex profile evolution 2008-2010 2011 2012 c.20% c.30% c.€1.2 bn/yr c.€1.0 bn c.€0.9 bn c.70% Upstream Downstream and gas Period of intensive upstream capex already underway 85 Capital Markets Day - March 5th 2013
Slide 86: Recent exploration success driving capex upwards
Recent exploration success driving capex upwards Estimated capex Capex estimate shifting upwards given new exploration and c.€1.4 – 1.6 bn/yr development projects Downstream and gas capex of Block 32 c.€1.2 LNG project bn/yr development Carcará c.€200 m/yr, focused on Iara Júpiter maintenance
Slide 87: Continued focus on exploration
Continued focus on exploration Exploration vs. development capex Exploration capex to rise reflecting increased focus on new areas €1.2 - 1.4 bn/yr Development of the new projects will continue to weigh on the investment programme, accounting €0.7 bn for c.60% of upstream capex Exploration in
Slide 88: Our capex priorities
Our capex priorities Focus on cash generation Financial strength and liquidity Concluding remarks 88 Capital Markets Day - March 5th 2013
Slide 89: Upstream Ebitda: from potential to reality
Upstream Ebitda: from potential to reality Upstream Ebitda Upstream profitability (USD/boe)1 Ebitda (€m) # FPSO in Brazil 22.7 12 8 c.€0.4 bn 1 4 3 2 2012 2013 2014 2015 2016 2017 2012 Going forward Upstream Ebitda growth tracking Scale and higher margin Brazil barrels FPSO ramp-up contribute to ups
Slide 90: Downstream and gas Ebitda: stable cash generation
Downstream and gas Ebitda: stable cash generation R&M benefiting from Stable gas business and Increased focus on refining upgrade strong trading environment cost optimisation 90 Capital Markets Day - March 5th 2013
Slide 91: Galp Energia Ebitda: growing over 25% p.a. until 2017
Galp Energia Ebitda: growing over 25% p.a. until 2017 Income statement (€m) Ebitda 2012-2017 (€m) 2012 YoY > 25% CAGR Turnover 18,507 10% EBITDA 1,015 27% EBIT 584 48% Associates 72 (1%) 1,015 Financial results (63) 49% Taxes (182) n.m. 2012 2017 Minority interests (53) n.m. Net income 359 43% 2013
Slide 92: Free cash flow positive during 2017
Free cash flow positive during 20171 Ebitda - Capex profile 2011 2012 2013E 2014E 2015E 2016E 2017E 2020E Upstream Ebitda Downstream and gas Ebitda Capex 1 Post interest, taxes, and dividends 92 Capital Markets Day - March 5th 2013
Slide 93: Our capex priorities
Our capex priorities Focus on cash generation Financial strength and liquidity Concluding remarks 93 Capital Markets Day - March 5th 2013
Slide 94: A strong starting point
A strong starting point Balance sheet YE2012 (€m) Liquidity and net debt YE2012 (€m) Fixed assets 6,599 Bank loans 1,924 Working capital 1,339 EIB + ECA 2 1,092 Bonds 625 Other assets (liabilities) (452) Gross debt 3,590 Net debt1 780 Deposits and treasury funds 1,893 Equity 6,706 Loan to Sinopec 91
Slide 95: Financial discipline: a key priority
Financial discipline: a key priority Sustain strong liquidity position Benefit from access to broader funding options Monetise non-core assets as required Maturity extension more in line with cash flow profile 95 Capital Markets Day - March 5th 2013
Slide 96: Extending debt maturities
Extending debt maturities Reimbursement profile (€m) Addressing all our 2013 funding requirements by Q2 and starting to 1,044 re-profile our 2014 maturities during 2H13 854 Banking and private placement bond markets currently very supportive for 3-5 year maturities Healthy financial position t
Slide 97: Our capex priorities
Our capex priorities Focus on cash generation Financial strength and liquidity Concluding remarks 97 Capital Markets Day - March 5th 2013
Slide 98: Value creation underpins shareholder return
Value creation underpins shareholder return Free cash flow growth driven by a very competitive set of assets Disciplined cost management and capital allocation focused on only the highest value-added projects Balanced and reliable sources of funding to support capex plan Commitment to a heal
Slide 99: Appendix
Appendix 99 Capital Markets Day - March 5th 2013
Slide 100: 2013-2017 business plan assumptions and sensitivities
2013-2017 business plan assumptions and sensitivities Mid-cycle assumptions and Ebitda sensitivities 2011 2012 Average 2013-2017 Oil price USD/bbl 111 112 93 Benchmark refining margin 1.3 1.7 3.0 USD/bbl1 EUR:USD 1.40 1.29 1.30 Change Approximate impact Approximate annual medium- in 2013 long term i
Slide 101: Closing remarks
Closing remarks Manuel Ferreira De Oliveira Chief Executive Officer 101 Capital Markets Day - March 5th 2013
Slide 102: 2013: Continuously delivering
2013: Continuously delivering Value delivery Value upside Development of Contribution from Continued robust Exploration key projects refining upgrade LNG trading focus c.20% net entitlement Estimated upgrade Sustained support to 7-10 high impact production growth impact of $2-$3/bbl1 earnings wells
Slide 103: Working to deliver until 2020…and beyond
Working to deliver until 2020…and beyond Ensure upstream value delivery Focus on cash generation World-class projects Exploration driven Execution focus Financial discipline Developing pre-salt De-risking resources Mitigating project Resilient downstream projects on time and on from explorat
Slide 104: Disclaimer
Disclaimer RCA figures except otherwise noted. Matters discussed in this presentation may constitute forward-looking statements. Forward-looking statements are statements other than in respect of historical facts. The words “believe,” “expect,” “anticipate,” “intends,” “estimate,” “will,” “may,” "co
Slide 105: Capital Markets Day 2013
Capital Markets Day 2013 An integrated energy player focused on exploration and production 105 Capital Markets Day - March 5th 2013