Petroleo Brasileiro SA · BMFBOVESPA:PETR3
Petroleo Brasileiro SA — Petrobras — Non-Deal Roadshow (2001)
42 slides from Petroleo Brasileiro SA's roadshow presentation, 2001
Slide 1: Petrobras
PETROBRAS =e,
Slide 2: Company Overview
Company Overview Board Board of of Directors Directors President President & & CEO CEO E&P E&P Gas Gas & & Downstream Downstream International International (Upstream) (Upstream) Power Power Finance Finance Services Services 2000 Financial Data (US GAAP) US$ billion As of December 2000 Domestic Inte
Slide 3: Top Tier Ranking
Top Tier Ranking Oil and Gas Proved Reserves BBOE (2000) Refining Capacity in mbpd (2000) ExxonMobil 20.9 ExxonMobil 5,432 RD Shell 19.1 RD Shell 3,999 BP 15.2 BP 3,186 TotalFinaElf 10.8 TotalFina Elf 2,503 Petrobras 9.8 Petrobras 1,991 Chevron 6.6 Chevron 1,420 Eni 6.0 Texaco Texaco 1,307 4.9 Repso
Slide 4: 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 Achieve international standards in Health, Safety, and Environmental policy (HSE) 4
Slide 5: Driving Change in Petrobras
Driving Change in Petrobras Add Shareholder Value New Culture Accountability Capital Discipline World Class Skills Transparency Agility 5
Slide 6: Exploration & Production
EXPLORATION & PRODUCTION ee BF
Slide 7: Domestic E&P Overview
Domestic E&P Overview Petrobras is the Dominant Domestic E&P Company Reserves (at December 31, 2000) h Proved reserves of 9,272 mmboe h Proved reserve life of 18 years Production (2000) h 1.5 million boe/d h 1997–2000 CAGR of 12% Concessions h Total of 384 (88% of total), representing 67 million acr
Slide 8: Top Tier Ranking
Top Tier Ranking Annualized Production Growth Rate 1995-2000 Annualized Internal Reserve Replacement 1998-2000 250% 17% 202% 15,0% 200% 14% 160% 147% 150% 135% 11% 9,7% 121% 117% 112% 8% 100% 6,6% 5% 4,4% 3,6% 50% 2,6% 2,4% 1,9% 2% 1,0% -0,3% -0,7% 0% -1% I I BP BP on EN o on EN ps l co o l ps n as
Slide 9: Exploiting Deepwater Creates Consistent Growth
Exploiting Deepwater Creates Consistent Growth Domestic Oil Production Distribution Proved : 9.3 billion boe mbpd 1,900 2,000 13.30% 1,800 1995/2000: 12.2% p.a. 1,600 2000/2005: 8.4% p.a. 1,271 36.03% 1,400 12.44% 1,200 1,000 800 600 400 38.23% 200 Year Onshore Onshore Offshore (0- 400m) Offshore (<
Slide 10: Reducing Internal Costs
Reducing Internal Costs Lifting Costs 2000 (US$/boe) h Optimization of logistics, operation and 7.0 6.0 0.8 5.0 5.4 0.7 3.7 administrative process 4.0 4.8 1.7 3.7 h Wells, platforms and plants automation h Production increase 3.0 3.2 3.3 2.0 2.8 1.0 h Technological enhancements 0.0 1997 1998 1999 20
Slide 11: Main Domestic Projects
Main Domestic Projects RONCADOR Mod 2 2,000 2,000 ALBACORA 2005 LESTE 1,900 2003 BIJUPIRÁ 1,800 MARLIM SALEMA 1,800 Mod 5 2003 MARLIM SUL MARLIM LESTE Jul / 2000 Mod 1 FRADE 1,600 1,600 ESPADARTE 2001 1,520 2005 Mbpd Mbpd Aug / 2000 1,390 MARLIM SUL 1,400 1,400 Mod 2 MARLIM 2004 Mod 4 1,271 Sep / 19
Slide 12: Key Messages
Key Messages Strengthen deepwater and develop ultra-deepwater positioning Monetize reserves through aggressive, low cost, fast track development program Invest in exploration to sustain production increases Retain attractive onshore and shallow water assets Lower operating costs 12
Slide 13: Downstream
DOWNSTREAM 13
Slide 14: Leadership in Refining
Leadership in Refining Petrobras controls 11 refineries in Brazil and 2 in Bolivia, with 1,991 thousand barrels per day capacity Fifth biggest refiner among international companies Petrobras refined 92% of company’s sales in 2000 Leadership in logistics: owns most petroleum pipelines and terminals i
Slide 15: Reducing Refining Costs
Reducing Refining Costs 3.0 95.0% 2.73 92 2.7 92.5% Moving to international cost standards 2.4 90.0% 2.17 2.1 86 87.5% Further reduce unit costs by 25% 1.8 85.0% by 2005 US$/bbl 1.66 1.5 82.5% CAGR (5.6%) Increase utilization factor 1.2 1.07 80.0% 79 0.9 0.80 77.5% Decrease dependence on imports 0.6
Slide 16: Key Messages
Key Messages Petrobras remains the leader in a unique market, offering high growth and attractive margins Strong competitive advantage from integration and logistics Improving performance, reducing costs while investing in quality Focusing on customer service and loyalty High potential for further p
Slide 17: Gas & Power
GAS & POWER 17
Slide 18: Gas & Power Overview
Gas & Power Overview Dramatically increasing demand RE M A N Terminal Belém do Solimões São Luis Porto Terminal Coari Fortaleza Guamaré Natal Petrobras supply position (Urucu) RUC-4 (E&P) João Pessoa CABO Recife · Reserves in Southern Cone (10.1 tcf - Porto Velho PILAR Maceió SPE and 8.0 tcf - SEC)
Slide 19: Growing Gas & Power Value Chain Assets
Growing Gas & Power Value Chain Assets OTHERS MARKETING SUPPLIERS 90.0 mmcmd by 2005 E&P TRANSPORTATION DISTRIBUTION POWER GENERATION MARKETING & TRADING 10.1 tcf (SPE) 5,155 Km of Participation in 14 Participation in 29 2,500 MW by 2005 8.0 tcf (SEC) Pipelines LDCs projects Proved reserves in 3 cou
Slide 20: New Power Generation: A Driver For Gas Supply
New Power Generation: A Driver For Gas Supply Brazil Natural Gas Demand 100 90 75 MMcmd 70 50 25 0 2001 2002 2003 2004 2005 Strategic Plan New Scenario Petrobras Thermal Plants 10,000 New 8,000 Previous MW 6,000 4,000 2,000 0 July-01 July-02 July-03 July-04 July-05 20
Slide 21: Emergency Thermo-Power
Emergency Thermo-Power Petrobras Natural Gas Investments Capacity Operating Projects Site Participation Consumption (US$ Million) (MW) Start (%) (mmcmd) TERMOBAHIA RLAM-Bahia 205 29 190(*) 1,100 Mar/02 TERMORIO REDUC-Rio de Janeiro 190 96 220(*) 1,500 Mar/02 IBIRITÉ REGAP-Minas Gerais 110 33 150(*)
Slide 22: Key Messages
Key Messages Leading company in highest growth gas & power market Well positioned in gas value chain to capture potential in Southern Cone New power generation to drive gas sales Integrating gas & power assets to create value 22
Slide 23: International
INTERNATIONAL 23
Slide 24: Focused International Diversification Leveraged by Domestic Expertise
Focused International Diversification Leveraged by Domestic Expertise G.O.M. & USA Cuba CARIBBEAN Trinidad & Tobago Nigeria Colombia Equatorial Guinea Angola Bolivia Rio de Janeiro SOUTH AMERICA Argentina WEST AFRICA Exploration & Production Refining & Marketing (1) h491 mmboe of proved reserves (SE
Slide 25: Key Messages: High Growth, Strong Focus
Key Messages High Growth, Strong Focus Significant international growth with emphasis on Latin America, West Africa and emerging position in Gulf of Mexico Leverage deepwater expertise and position in Brazil Establish dominant position in regional gas & power Expand R&M into regional key player posi
Slide 26: Health, Safety and Environment
HEALTH, SAFETY AND ENVIRONMENT 26
Slide 27: 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$1 billion program for excellence in environmental management and operational safety- PEGASO Improve responsiveness Expenditures in HSE (US$ million) Pu
Slide 28: Moving to International Environmental Standards
Moving to International Environmental Standards Excellence in environmental management • Application of new • 80% Waste reduction technologies • 100% Units with ISO14000 and BS8800 • Effluent treatment • Continuous improvement • 100% Main pipes with • Emission control action supervised automation •
Slide 29: Key Messages
Key Messages HSE supports corporate citizenship in harmony with profitability Pegaso Program is a major commitment to reach international standards Aggressive responsiveness and prevention will reduce environmental and safety risks 29
Slide 30: Finance
FINANCE 30
Slide 31: First Quarter 2001 Results - Revenue and Income
First Quarter 2001 Results - Revenue and Income Petrobras Summary Income Statement US$ million 1Q 00 1Q 01 % Change % Net operating revenue $5,775 $6,554 13% Gross profit 2,973 3,396 14% Operating income 2,208 2,219 0.5% Net income 1,221 1,221 0% Earnings per share 1.12 1.12 0% EBITDA 2,595 2,817 9%
Slide 32: First Quarter 2001 Results - Decreasing Leverage
First Quarter 2001 Results - Decreasing Leverage Petrobras Credit Ratios Petrobras Balance Sheet 49% US$ million* 12/99 12/00 03/01 48% Cash / cash equivalents $3,015 $5,826 $6,073 37% Short-term debt 6,292 4,881 4,218 38% 34% 35% Long-term debt 6,559 8,259 7,940 33% 33% 31% Total Debt 12,851 13,140
Slide 33: Financial Strategy
Financial Strategy Reduce cost of capital Optimize financial management Capital discipline 33
Slide 34: Reduce Cost of Capital: Innovative Financing
Reduce Cost of Capital Innovative Financing Short Term Debt Long Term Debt - PIFco Deal US$6.0 bn (1999) US$ in millions May 2, 2001(a) June 28, 2001(b) Libor + 450 bps Size $450 $600 US$4.0 bn (2000) Yield (%) 9.95 9.79 Libor + 50 bps Spread (bps) +477 +444 US$2.9 bn (Jun/01) Spread Differential vs
Slide 35: Capital Discipline
Capital Discipline Targeting economic profit and encouraging value creation WACC by business line and geographic location Capital Employed by business units ROCE targets by business units in place during 2H/01 Investment Committee (top management): monitoring performance and portfolio management Com
Slide 36: Key Messages
Key Messages Improving financial performance Sophisticated financial management Reducing cost of capital Capital discipline Increase shareholder value 36
Slide 37: Final Remarks
FINAL REMARKS 37
Slide 38: Aggressive but Achievable Targets 2001-2005
Aggressive but Achievable Targets 2001-2005 2001 2005 Avg % Annual Change ROCE (Brent US$15/bbl) - 14% - Costs Lifting* (US$/boe) 3.70 2.80 (7%) Refining (US$/bbl) 1.02 0.80 (6%) Net Debt / Net Capitalization - 25% - 35% - Underlying Earnings Growth Top Quartile 38 * Excluding Government Take
Slide 39: Aggressive but Achievable Targets 2001-2005
Aggressive but Achievable Targets 2001-2005 2001 2005 Avg % Annual Change Production, mmboed 1.62 2.50 11% Brazil 1.55 2.20 9 Crude Oil 1.39 1.90 8 Natural Gas 0.16 0.30 17 International 0.07 0.30 44 Throughput, mmbpd 1.72 2.06 5 Domestic Capacity Utilization 89% 92% - Natural Gas Sales, mmcmd 20 95
Slide 40: Investing for Growth
Investing for Growth Petrobras expects to invest US$31.1 Billion over the 2001-2005 time period $35 Capital Expenditures (U.S. $ billion) $30 Corporate (2%) Gas & Power (9%) Project Finance (10%) International (17%) $25 Downstream (26%) $20 Cash Flow and $15 Corporate Debt Domestic (83%) (90%) $10 E
Slide 41: 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 Achieve international standards in HSE 41
Slide 42: Vision 2010: Shareholder Value
Vision 2010 A world class integrated energy company, leading in Latin America, focusing on Shareholder Value 42