Petrobras

1
Petrobras Business Plan 2007-2011 and the Gulf
of Mexico
José Sergio Gabrielli de Azevedo President and
CEO September 19th, 2006
2
Disclosure
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. Cautionary
Statement for US investors 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 SECs guidelines strictly prohibit us
from including in filings with the SEC.
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Diversified Shareholder Base

• More than 400,000 investors in Brazil and abroad
• 60 of the economic value of Petrobras in private
  hands
• Almost 40 of the stocks with international
  investors

Foreign 39,8
Bovespa 28,7
Free Float
46,4
38,4
55,6
59,4
59,9
60,2
(1) Includes BNDES / BNDESPAR
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Corporate Strategy
Corporate Strategy
Social and Environmental Responsibility
Growth
Profitability
Lead the Latin American oil, natural gas, oil
products and biofuels market, working as an
integrated energy company, with selective
expansion in petrochemical, renewable energy and
international activities.
Liderar o mercado de petróleo, gás natural e
derivados na América Latina, atuando como
empresa integrada de energia, com expansão
seletiva da petroquímica e da atividade
internacional.
Consolidate and increase competitive advantages
in the Brazilian and South American oil and oil
products market
Develop and lead the domestic natural gas market
and perform in an integrated manner in the gas
and power market in South America
Selectively expand international activities in an
integrated manner with the Companys business
Selectively expand interest in the petrochemicals
market
Expand participation in biofuels market, lead the
domestic biodiesel production and increase
participation in the ethanol business
Operational, management, technological and human
resources excellence
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Integration of the Company's Activities
6
Investment Plan
Business Plan 2007-2011 US 87.1 billion
49,3
23,0
1,8
2,2
7,5
3,3
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Financial TargetsSources Uses
Sources
Uses
(US 99.3 billion)
(US 99.3 billion)
()

• Accrued Economic Profit (2006-2015) US 83.4
  billion (US 53.9 until 2011).

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Upstream

• Strong investments in production will optimize
  the development of Petrobras proven reserves,
  aiming light oil production and a minimum
  reserve/production ratio of 15 years.
• Petrobras had a 55 success ratio for our
  exploration wells during 2005, with 38 wells
  classified as discovery or producing wells.

Undeveloped Reserves / Total Reserves (2005)
17
Source Evaluate Energy
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Upstream Production targets Oil NGL and
Natural Gas
7.5 p.a.
Thousand boed
4,556
7.8 p.a.
3,493
2,403
2,217
2,036
2,020
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Upstream Petrobras CAPEX vs. Peers CAPEX
EP CAPEX to production 2005-2008E Average
(US/bbl)

• Per barrel CAPEX for Petrobras (2006-2011) of
  US 8.56 vs. Global Oils average (2005-08) of US
  13.74 (ex-PBR).

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Downstream
...of which US 14.2 billion in refining
US 23.1 billion in the downstream segment
US 0.9
US 3.7
US 2.7
US 2.5
US 4.4

• Aggregating value to our heavy oil and producing
  diesel and gasoline according to international
  standards.

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DownstreamRefining Investments
New Refinery in the USA

• Petrobras has acquired 50 of the Pasadena
  Refinery System Inc. (PRSI), located in Texas,
  USA
• Total Investment US 370 million
• The refinery, which already has a capacity of
  100,000 bbl/day, will be upgraded to handle
  70,000 bbl/day of heavy oil and feedstock
  (including Marlim fields production)

• The upgraded refinery will be ready in four
  years. After the revamp project all products will
  match USA highest standards
• Possible increase in capacity to 200,000
  bbl/day.

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DownstreamRefining Investments
New Refinery in Pernambuco

• Investment US 2,5 billion
• Throughput capacity 200 thousand heavy oil
  barrels (50 Petrobras oil / 50 PDVSA oil)
• Focusing diesel and LPG production maximization,
  the new refinery will aim the growth of oil
  products demand in the Northeast.

• The Northeast Region, which responds for 19 of
  oil products demand and holds only one refinery
  in Bahia, will no longer be a fuel importer
  (either from refineries in Brazil or abroad).
• Costs reduction oil products transportation are
  more expensive than for crude oil.

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DownstreamPetrochemical investments

• Basic Petrochemical Unit
• 150.000 bbl/d of Marlim Oil
• Products Diesel, LPG, Ethylene, Propylene, PX,
  Benzene and Coke.
• Petrochemical Integrated Complex
• - Polypropylene
• - Polyethylene
• - PTA
• - Ethylene glycol
• - PET
• - Styrene
• - Phenol.

• Investments of US 3.3 billion in
  Petrochemicals
• Reducing the Brazilian deficit and adding value
  to Downstream production.

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Carbon intensity reduction of operations and
products

Oil
Natural Gas
Renewables
Availability of 855,000 m3/year of biodiesel
Processing 425,000 m3/year of vegetable oil
(H-BIO)
3.5 million m3 ethanol exports
240 MW installed capacity of power generation
from renewable sources
Total avoided GHG emissions of 3.93 (M Tons of
CO2 Equivalent)
Investments of US 0.7 billion in renewable
energy and biofuels
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Ethanol Production
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Flex-Fuel Vehicles

• Consumer wants to decide the fuel at the gas
  station
• Fuel price is one the most important factor
• Consumer is aware of pollution and renewable
  fuels
• Today cars manufacturer is producing 80 of FFV
  in Brazil

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Ethanol Logistic to Export
New Ethanol Pipeline (800 km)
New Water Way for Ethanol
Ethanol Export 8.0 Million m3 in 2012
Marine Terminal Rio de Janeiro
Marine Terminal São Paulo
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Ethanol Market

• Ethanol global market is 46.5 Billion Liters
  (2005)
• Ethanol as a Fuel is 30.6 Billion Liters (67 of
  total ethanol production)
• Today the ethanol consumption is 2.6 of
  gasoline MKT
• 10 of ethanol in gasoline will represent 118
  Billion Lt

Brazil-Japan Ethanol Inc.

• Recently, Petrobras incorporated Brazil-Japan
  Ethanol Inc.
• The company will import and distribute
  Brazilian-produced ethanol in Japan
• Development of technical and commercial
  solutions for the reliable and long term supply
  of alcohol in the Japanese market
• Petrobras will break into one of the most
  complex and important energy markets in the
  World
• ethanol logistics distribution
• fuel distribution sector in Japan.

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H-Bio

• H-Bio refining process that utilizes vegetable
  oils as an input, in order to obtain diesel oil
• Hydrogenation of a blend of diesel and vegetable
  oils

Hydrogen
Diesel Fractions
Agribusiness
Processed Oil
Seeds
Farming
Crushing
Refinery
or
Diesel
or
Transerestification
Biodiesel
Ethanol
Distributors
or
or
B2 or B5 mixture
Diesel
Methanol
Stations
Glycerin Others
Complementary and not competitive processes
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InternationalPresence in 21 Countries
Targets
Total CAPEX US 12.1 billion
568
Thous. boed
259
262

• Core Areas
• Refining
• Add value to Brazilian heavy oil exports
• EP West Africa (Nigeria and Angola) Gulf of
  Mexico
• Apply deep water and deep well drilling
  technology.
• Latin America
• Leadership as an integrated energy company

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Investments by geographic area and New Businesses
US Million
Americas, Africa e Eurasia US 5.4 Million
South Cone US 2.8 Million
New Businesses US 3.9 Million
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InternationalLatin America
Activities in 9 countries Brazil, Argentina,
Bolivia, Colombia, Ecuador, Peru, Venezuela,
Paraguay and Uruguay.
Highlights

• Argentina
• Exploration, production, refining and
  distribution

• Mexico
• Service Contracts Cuervito Fronterizo blocks

• Bolivia
• Natural Gas exports to Brazil (up to 30 MMm3/d)

• Uruguay
• Natural Gas distribution and gas stations

• Colombia
• First oil production abroad (1972) and 3rd
  private producer
• 6 production blocks, 11 exploration blocks and
  gas stations

• Venezuela
• 4 assets in production and 2 in exploration

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The US Sector of Gulf of Mexico

• Current Portfolio
• Position
• 80 shallow water blocks and 197 deepwater blocks
• 6 Producing Fields
• 3 discoveries (appraisal) and studies of the
  production development
• 1 field on development.
• 1 onshore prospect
• Proven reserves (SPE, 2005) 39,0 million boe
• Average production (2005) 5,0 thousand boe/d

• In the latest Western Gulf of Mexico Lease Sale
  (Aug/16/2006), Petrobras had the highest number
  of bids (34), totaling an amount of US 45,5
  million.

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Main Projects in the Gulf of Mexico
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Recent DevelopmentsGulf of Mexico
Cascade and Chinook Fields

• Acquisition of additional participation in the
  Cascade and Chinook fields
• Use of a FPSO facility, a development concept
  so far never deployed in the American waters of
  the Gulf of Mexico
• Aggressive exploration campaign in the Gulf of
  Mexico, including acquisition of additional
  acreage and participation in wells being drilled
  or planned for the near future

Petrobras consolidating its position as one of
the leading players in the ultra deep waters of
the Gulf of Mexico, benefiting from its
deepwater expertise and technology developed
offshore Brazil
Floating Production Storage and Offloading
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Final CommentsVertical Integration Comparison
Majors Average
National Oil Companies Average
Petrobras
2011 New Refinery will add 200 thous. bpd
capacity 2010 Pasadena Refinery revamp
concluded processing 70 thous. bpd of heavy oil
2,296
2,114
Product Sales (thous. bpd)
2,217
Refining (thous. bpd)
3,400 Year 2011
Production (thous. boed)
2004 figures, except for Petrobras (2005)
Majors BP, Exxon, Total, Royal Dutch Shell,
Chevron, Conoco and Repsol-YPF
Source PIW Intelligence and Petrobras
NOIC PEMEX, PDVSA, Saudi Amraco, KPC,
Pertamina and Sonatrach
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Question and Answer Session