Petroleo Brasileiro SA · BMFBOVESPA:PETR3
Petroleo Brasileiro SA — Petrobras — New York Conference May 2001
30 slides from Petroleo Brasileiro SA's conference presentation, May 2001
Slide 1: New York Conference May 2001
NEW YORK CONFERENCE MAY, 2001 Philippe Reichstul President & CEO
Slide 2: Driving Change in Petrobras
Driving Change in Petrobras Add Shareholder Value New Culture Accountability Capital Discipline Worldclass Skills Transparency Agility
Slide 3: Agenda
Agenda The P-36 Accident Actions and Plans in HSE Targets Update
Slide 4: The P-36 Accident
| THE P-36 ACCIDENT ee
Slide 5: What happened to P-36?
What happened to P-36? On March 15th, two explosions occurred in one of the P-36 columns The platform was producing 80,000 bpd During next 5 days, every possible effort was made to recover the bodies and to prevent the loss of the platform The platform sank on March 20 th An Inquiry Committee was se
Slide 6: Inquiry Committee - Preliminary Conclusions
Inquiry Committee - Preliminary Conclusions Hypotheses under investigation: Hydrocarbon leakage into the Emergency Drain Storage Tank Entry of gas into the Waste Oil Tank Gas leakage in the Gas Compression System Gas leakage from flanges and/or piping rupture due to misalignment of pipes Entry of hy
Slide 7: Inquiry Committee - Preliminary Conclusions
Inquiry Committee - Preliminary Conclusions Less Probable Hypotheses: Sabotage Collision Fault in risers or connections on the spider deck Cargo handling
Slide 8: Inquiry Committee - Preliminary Conclusions
Inquiry Committee - Preliminary Conclusions Propositions: Continue studies of the possible causes of the initial explosion Determine the most likely location and causes of the second explosion Continue and broaden the analysis of the project Broaden the investigation into the causes of the pressure
Slide 9: Actions to Mitigate Production Losses
Actions to Mitigate Production Losses The equipment (flowlines, Xmas trees) and resources (rigs, boats) of the Roncador field development to be transferred to accelerate the production ramp-up of the Marlim Sul field The Roncador field production is expected to be resumed in September 2002 to a FPSO
Slide 10: Impact of the Accident
Impact of the Accident Insurance proceeds in the range of US$ 500 million expected to be received in 90 days (positive cash flow impact of US$ 180 million) Pre-tax earnings reduction estimated to be US$ 100 million in 2001 Unaudited accounting loss: US$ 70 million (BR GAAP) and US$ 90 million (US GA
Slide 11: Actions and Plans in HSE
| ACTIONS AND PLANS IN HSE ee
Slide 12: HSE Strategy is Key to Petrobras
HSE Strategy is Key to Petrobras Raise the importance of HSE in Petrobras’ culture Ensure management accountability for HSE performance Implement US$ 1 billion program for excellence on environmental management and operational safety- PEGASO Expenditures in HSE Improve responsiveness (US$ million) 4
Slide 13: Profitability & Corporate Citizenship in Harmony
Profitability & Corporate Citizenship in Harmony Corporate Citizenship Profitability HSE Corporate Indicators HSE resources Objective Investment in alternative energy To achieve international Lost time standards for HSE accident rate management Environmental performance
Slide 14: Moving to International Environmental Standards
Moving to International Environmental Standards Excellence in environmental management • 80% waste reduction • Application of new technologies • Effluent treatment • 100% units with • Continuous improvement ISO14000 and BS8800 • Emission Control action • 100% main pipes with • 100% contingency plans
Slide 15: Pegaso Expenditures May/2000 - March/2001
Pegaso Expenditures May/2000 - March/2001 PIPELINES ENVIRONMENTAL PREVENTION 5% 2% 1% 1% SAFETY PREVENTION 10% 33% EFFLUENTS CONTINGENCY WASTES 11% EMISSION MANAGEMENT OTHERS 17% 20% Total: US$ 356 million as of March 2001 7% 3% 16% 42% UPSTREAM – US$ 154 million DOWNSTREAM – US$ 112 million TRANSPO
Slide 16: Pegaso New Contingency Response Plans
Pegaso New Contingency Response Plans Environmental Contingency Units - 9 centers already in operation São Luiz All local emergency plans Manaus Guamaré revised Very intensive response drills Madre Goiânia de Deus Macaé Guarulhos Rio de Janeiro Itajaí
Slide 17: Pegaso Actions in progress
Pegaso Actions in progress New procedures Inspection - Smart PIG (barriers, scrapers, on service Forecast: 13,000 Km inspection) Total accomplished: 9,000 Km Automation 14,000 Km pipelines 8,075 Km automated (58%)
Slide 18: Certification
Certification Petrobras will achieve certification of all the downstream sites, under ISO 14001 and BS 8800 requirements Units certified Certifications schedule - 2001 REPLAN REDUC REMAN RLAM RLAM REFAP SIX REPAR REPAR RECAP FAFEN-SE RPBC RPBC REGAP FAFEN-BA ALLUPSTREAM ALL UPSTREAM SITES SITES LUBN
Slide 19: Pegaso Management Assessment and Audit
Pegaso Management Assessment and Audit PRICE WATERHOUSE is auditing: • Management Process • Investments Progress • Goals and Policy Compliance “Most of the actions and projects established for the 14 sites visited have been implemented as planned or approved and there are no reasons to consider that
Slide 20: Process Safety Program (PSP) Key for Cultural Changes
Process Safety Program (PSP) Key for Cultural Changes Minimize and control risks to people, facilities and the environment Sustain the HSE guidelines of Petrobras’ strategic plan Contribute to the recognition of Petrobras to achieve international standards in HSE management Be a reference in HSE man
Slide 21: Moving to International Safety Standards
Moving to International Safety Standards Employee Lost Time Injury Frequency (per 1,000,000 manhours) 9.0 1998 API Average: 1.6 2.59 2.58 JAN/ 0.8 MAR 1995 2000 2001 2005 (Target) PEGASO implementation – May 2000 Emergency Plan – August 2000
Slide 22: Fatalities in Accidents
Fatalities in Accidents PETROBRAS Employees PETROBRAS - Total Construction Aircraft and Vehicle Operation 14 12 12 12 Nº Fatalities 10 8 6 4 4 4 4 2 2 1 1 1 1 0 0 0 0 0 0 0 1998 1999 2000 Jan/Apr
Slide 23: Fatalities in Accidents
Fatalities in Accidents Contract workers PETROBRAS - Total Construction 30 27 Aircraft and Vehicle Operation 25 22 Nº Fatalities 20 16 14 15 13 10 7 7 7 6 6 4 4 5 2 2 1 0 0 1998 1999 2000 Jan/Apr
Slide 24: Meeting the Safety & Environmental Challenge
Meeting the Safety & Environmental Challenge Transform Petrobras' HSE culture Ensure management accountability Enforce international standards Promote corporate citizenship in harmony with profitability
Slide 25: Targets Update
Y TARG ETS UPDATE ee
Slide 26: Targets Update 2001-2005
Targets Update 2001-2005 2001 2001 2005 Revised Production, mmboed 1.66 1.62 2.50 Brazil 1.59 1.55 2.20 Crude Oil 1.42 1.39 1.90 Natural Gas 0.17 0.16 0.30 International 0.07 0.07 0.30 Throughput, mmbpd 1.72 1.72 2.06 Domestic Capacity 89% 89% 92% Utilization Natural Gas Sales, mmcmd 20 20 75
Slide 27: Domestic E&P: Maintaining 2005 Production Target
Domestic E&P Maintaining 2005 Production Target RONCADOR Mod 2 2,000 2,000 ALBACORA 2005 LESTE 1,900 2003 BIJUPIRÁ MARLIM SALEMA 1,800 1,800 Mod 5 2003 MARLIM SUL MARLIM LESTE Jul / 2000 Mod 1 ESPADARTE FRADE 2001 2005 bpd Thousand bpd 1,600 1,600 Aug / 2000 1,520 Thousand 1,390 MARLIM SUL 1,400 1,4
Slide 28: Targets Update 2001-2005
Targets Update 2001-2005 2001 2001 2005 Revised ROCE (Brent US$15/bbl) - - 14% Costs Lifting* (US$/boe) 3.60 3.70 2.80 Refining (US$/bbl) 1.02 1.02 0.80 Net debt/Net capitalization - - 25% - 35% Underlying Earnings Top Quartile Growth * excluding Government Take
Slide 29: Investing for Growth
Investing for Growth Petrobras will invest US$ 30.0 Billion (2001 – 2005) Revised from US$ 29.4 Billion $35 $30 Corporate (2%) Capital Expenditures (U.S. $ billion) Gas & Power (7%) International Project Finance (11%) Revised from 18% to 17% $25 Downstream Revised from 28% to 27% $20 Cash Flow and $
Slide 30: Key Messages
Key Messages Drive organization for profit and efficiency Sustain superior volume growth Diversify into new international core areas Capture gas & power potential in high growth market Promote corporate citizenship in harmony with profitability