Petroleo Brasileiro SA · BMFBOVESPA:PETR3
Petroleo Brasileiro SA — Petrobras — Non-Deal Roadshow (December 2001)
41 slides from Petroleo Brasileiro SA's roadshow presentation, December 2001
Slide 1: Petrobras
PETROBRAS Luiz Fernando Nogueira Executive Manager Investor Relations 1
Slide 2: Company Overview
Company Overview Board of Directors President & 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 International Total Net Revenues $27.0
Slide 3: Top Tier Ranking
Top Tier Ranking Oil and Gas Proved Reserves BBOE (2000) Refining Capacity in mbpd (2000) ExxonMobil 20.9 ExxonMobil 5,432 RD Shell 19.1 RD Shell 3,999 BP 15.2 BP 3,186 TotalFinaElf 10.8 TotalFina Elf 2,503 th Petrobras Chevron 9.8 5 Petrobras 1,991 5th 6.6 Chevron 1,420 Eni 6.0 Texaco 1,307 Texaco
Slide 4: Key Messages
Key Messages Drive organization for profit and efficiency Sustain superior volume growth Diversify into new international core areas Capture gas & power potential in high growth market Achieve international standards in HSE Add Shareholder Value New Culture Accountability Capital Discipline World Cl
Slide 5: Strategic redirection: Accomplishments 1999-2001
Strategic redirection Accomplishments 1999-2001 Domestic Corporate Corporate Domestic E&P E&P International International •• Successive Successive production production •• Regional Regional player player in in records •• New New organization organization Downstream Downstream and and G&P G&P records
Slide 6: Market recognition: Successful Global Stock Offerings
Market recognition Successful Global Stock Offerings (Aug/00 and Jul/01) ! US$ 4.8 billion; 126,701 thousand shares (20% of total shareholders equity) ! Demand far exceeded supply ! 73% of the demand came from global investors Free Float 80% 55.6% 59.3% 60% 39.1% 40% 20% 0% July 2000 June 2001 July
Slide 7: Market recognition: rating upgrade
... market recognition Rating upgraded from B1 to Ba1 by Moody’s (Sept, 14th) ! Three levels above the Brazilian sovereign rating ! Only one level below investment grade ! The only Brazilian company above sovereign rating ! Rated Baa1 in local currency – investment grade 7
Slide 8: Main corporate strategies preserved
Main corporate strategies preserved Growth Profitability Consolidate competitive advantage in domestic oil market Lead the Brazilian natural gas market, integrated with the power generation business Expand international operations Social Responsibility 8
Slide 9: Guiding corporate policies
Guiding corporate policies Health, safety and Capital discipline environment (HSE) ! Management by ROCE per business ! HSE culture reinforcement, unit including suppliers and partners ! Systematic and integrated portfolio ! Accountability and recognition management systems ! Preventive attitude Cost
Slide 10: Short term impacts of the September 11th events
Short term impacts of the September 11th events Shifting from soft to hard landing in US economy... – Echoes in European countries and Japan – Potential impact on Brazilian economic growth – Oil products and crude demand reduction, mainly in US – Oil price volatility ... partially offset by Brazilia
Slide 11: Exploration & Production
EXPLORATION & PRODUCTION 11
Slide 12: 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 (as of August, 2001) h Total of 326 (86% of total), repres
Slide 13: Top Tier Ranking
Top Tier Ranking Annualized (A.P.R.)Production Growth Rate Annualized (A.P.R.) Internal Reserve Replacement 1995-2000 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 EN n EN n co co l
Slide 14: 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 1,490 2005 Mbpd Mbpd Aug / 2000 1,390 MARLIM SUL 1,400 1,400 Mod 2 MARLIM 2004 Mod 4 1,271 Sep / 19
Slide 15: E&P Strategy in Brazil
E&P Strategy in Brazil 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 15
Slide 16: Downstream
DOWNSTREAM 16
Slide 17: 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 Investments of US$4.0 billion (2001-2005) to i
Slide 18: Key Messages
Key Messages ! Maintain leadership in Brazilian downstream market ! Improve product quality standards ! Increase the amount of domestic oil throughput ! Invest in heavy oil processing technology ! Focus on integrated operations and logistic capabilities Refineries Platforms Pipelines 18
Slide 19: Gas & Power
GAS & POWER 19
Slide 20: 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 Porto Velho PILAR Maceió · (10.1 tcf - SPE and 8.0 tcf - SEC
Slide 21: Key Messages
Key Messages ! Develop the domestic natural gas market ! Pursue a leading position in the natural gas distribution market ! Consolidate integration between gas and power businesses to create value ! Develop markets for alternative energy solutions 21
Slide 22: International
INTERNATIONAL 22
Slide 23: Why Petrobras is going abroad?
Why Petrobras is going abroad? Portfolio diversification Capital cost reduction Generate cash flow in strong currency Process Petrobras’s oil abroad 23
Slide 24: International: Main Considerations
Main Considerations Higher growth and focus !International E&P growing in Latin America, West Africa and Gulf of Mexico !Business expansion in refining and marketing to become an important competitor in the South America !Pursue a leading position in gas and power in the Southern Cone h491 mmboe of
Slide 25: Health, Safety and Environment
HEALTH, SAFETY AND ENVIRONMENT 25
Slide 26: 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 27: 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 28: Finance
FINANCE 28
Slide 29: Results: Revenue and Income
First Half 2001 Results - Revenue and Income BRGAAP R$ million Jan-Sep 00 Jan-Sep 01 Change Net operating revenue 34,928 44,048 26% Gross profit 14,585 17,567 20% Operating income 10,862 11,386 5% Net income 6,707 7,044 5% Earnings per share 6.18 6.49 5% EBITDA 13,190 14,043 6% Operating Margin 6000
Slide 30: Results - Decreasing Leverage
Results - Decreasing Leverage BRGAAP Petrobras Leverage Ratios Petrobras Balance Sheet R$ million 1999 2000 Sep 01 55.1% Cash / cash 46.8% 43.7% equivalents 5,394 11,391 13,575 33.6% Short-term debt 25.8% 30.6% 10,488 8,083 6,088 25.8% 19.1% 17.0% Long-term debt 8,554 9,196 13,834 Total Debt 19,042
Slide 31: Financial Highlight
Financial Highlight BRGAAP Cash Cash flow flow Segmentation Segmentation -- Operating Operating Income Income 2% 0% 10 20 18.3 9 18 36% 8 7.6 7.6 16 14.0 7 6.2 14 60% R$Bi 6 12 10.0 R$Bi 5 10 4 8 3 6 E&P 2% International 2 4 1 2 Supply Distribuition 0 0 Gas&Energy 1999 2000 jan-set 01 1999 2000 jan-
Slide 32: Operational Performance
Operational Performance Exploration & Production Refining, Transport and Marketing Jan-Sep - Barrels/Day (thousands) Jan-Sep - Average for the period in thousands 2001 2000 % 2001 2000 % Oil and LNG production 1,370 1,277 7 Crude oil imports 346 381 (9) Domestic market 1,328 1,225 8 Oil product impo
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$2.9 bn (Jun/01) Spread Differential vs
Slide 35: Capital Discipline
Capital Discipline Targeting economic profit and encouraging value creation WACC by business line and geographic location Capital Employed by business units Investment Committee (top management): monitoring performance and portfolio management Compensation plans linked to value creation and performa
Slide 36: Aggressive but Achievable Targets 2001-2005
Aggressive but Achievable Targets 2001-2005 Jan-Sep/01 (*) 2001 2002 2005 Production (mmboed) 1.55 1.62 1.83 2.57 Brazil 1.48 1.55 1.77 2.27 Crude Oil 1.33 1.39 1.49 1.90 Natural Gas 0.15 0.16 0.28 0.37 International 0.07 0.07 0.06 0.30 Throughput (mmbpd) 1.65 1.72 1.70 2.06 (*) Incurred 36
Slide 37: Aggressive but Achievable Targets 2001-2005
Aggressive but Achievable Targets 2001-2005 Jan-Sep/01 (*) 2001 2002 2005 Costs Lifting(1) (US$/boe) 3.33 3.70 3.30 2.80 Refining (US$/bbl) 0.93 1,02 0.89 0.85 - - 25% Net Debt / Net Capitalization 17% - - 35% ROCE (Brent US$15/bbl) 14% LTIF22 (employees and contractors) 1.50 (2) LTIF: Lost time inj
Slide 38: Investment Program 2001-2005: Maintaining capital discipline
Investment Program 2001-2005: Maintaining capital discipline Petrobras Capital Expenditures 2001-5: US$31.7 Billion 23% 20% 93% 5% 69% 7% 4% 2% 77% Domestic International E&P * Downstream * Project finance Gas & Power * Distribution * Corporate Cash flow and corporate de bt * includes international
Slide 39: Final Remarks
FINAL REMARKS 39
Slide 40: 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 Add Shareholder Value New Culture Accountability Capital Discipline World Cl
Slide 41: Vision for 2010
Vision for 2010 Petrobras will be a leading energy company in Latin America, with a strong presence in the international market, with the freedom of action of an international corporation, focusing on shareholder value and social responsibility 41