PETROBRAS Strategic & Business Plan 2009-2013 OTC 20091

2020 PETROBRAS STRATEGIC & BUSINESS PLAN
PETROBRAS Strategic & Business Plan 2009-2013

Opportunities for foreign suppliers
Houston, May 5th 2009 OTC 2009
Paulo Srgio Rodrigues Alonso D.Sc. Materials Engineering Manager

1
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. 2
PRESENTATION OUTLINE
Main objectives; PETROBRAS Overview; Strategic and Business Plans Highlights: E&P; Downstream; Petrochemical; Gas and Energy;
Critical Goods and Services and equipment quantities; PETROBRAS Strategies for purchasing goods and services; Register Requirements for Foreign Suppliers; PROMINP Governmental Program and Local Content; Conclusions.
3
MAIN OBJECTIVES
To provide a broad overview of PETROBRAS main investment programs, included in the Strategic and Business Plan for the period 2008-2012, aiming to expand the basis of selected goods and services foreign suppliers interested to come to Brazil and register with the Company in order to participate in the projects Vendor Lists.
Petrobras Overview
A WORLD-CLASS, PUBLIC, INTEGRATED ENERGY COMPANY

Among its peers, Petrobras has the:

4th largest Proven Reserves; 5th largest Oil & Gas Production;
6th largest Refining Capacity; 6th largest Market Value.
STRATEGIC VISION: TO BE ONE OF THE WORLDS FIVE LARGEST PUBLICLY TRADED OIL PRODUCERS
30,000
Production Target: 2020
25,000
Reserves(mmboe)
20,000
XOM BP
15,000
PBR
10,000
TOT
COP
CVX
RDS
5,000 2,000 2,500 3,000 3,500 4,000 4,500 5,000 5,500
Production(mboe/d)
2007 (SEC) reserves and production

Source: Bloomberg and Company Reports (2007 SEC Proven Reserves Data, 9M08 Oil & Gas Production data, 2008 Refining Capacity data and 2008 Market Value data)
DOMINANT POSITION IN A LARGE AND GROWING EMERGING MARKET
2007 Total Oil Consumption by Country (mmbo/d)

20.7 7.9
Brazil is worlds eighthlargest oil consumer
Total Oil Consumption mb/d (index)

160 150 140 Brazil OECD World
Brazil oil consumption growing at 2.4% p.a.

130
OECD oil consumption growing at 1% p.a.
120 110 100 1998 1999 2000 2001 2002 2003 2004 2005 2006 1990 1991 1992 1993 1994 1995 1996 1997 2007
Source: BP Statistical Review 2008, PFC Energy
HIGH-POTENTIAL PORTFOLIO IN ONE OF THE WORLDS MOST EXCITING PROVINCES...
Kashagan
Sakhalin II Sakhalin I
Thunder Horse
Shah Deniz Khurais Roncador Marlim Albacora Iara Jupiter Tupi Carioca
Kurmangazi Azadega n Anaran
Agbami Akpo Dalia Kizomba Girassol, Jaz, Rosa
82% of our total crude production currently comes from Campos Basin
Development of the Santos Basin sub-salt play will drive our longterm production growth
Significant light oil and gas discoveries have been made in the Espirito Santo Basin
Circle size indicates estimated reserves
Strategic and Business Plans highlights
VISION 2020 AND CHARACTERISTICS
Vision 2020
We will be one of the largest integrated energy companies in the world and the preferred choice among our stakeholders
Vision 2020 Characteristics

Our operations will be notable for: Strong international presence; World scale prominence in biofuels; Operational excellence in management, technology and human resources; Profitability; Benchmark in social and environmental responsibility; Commitment to sustainable development.
10
AND A CAREFULLY CRAFTED SPENDING PROGRAM TO SUPPORT THAT VISION
International Investments US$ 15.9 billion Business Plan 2009-2013 US$ 174.4 billion
3% 7% 2%
5.6
5% 1% 8% 7%
2%
2%
E&P
3.0 2.8 3.2

RTC G&E Petrochemicals Distribution
11.8
43.4
25%
104.6 (*)
59%
Biofuels Corporate
79% E&P Distribution RTCP Corporate G&E
(*) US$ 17.0 billion allocated to Exploration
11
CENPES
Total Area:114.000 m2 Building:75.000 m2 137 Laboratories 30 Pilot plants
CENPES Expansion and
Expansion
Dataprocessing integrated Center: Total Area: 190.000 m2 Building: 114.000 m2
Partnership with over 120 universities and research centers in Brazil, and 70 Institutions abroad
Investments in Technology 2009-2013
Technological programs
US$ 4.0 billion

25%
1.0
5%
0.2 0.9
1.9
47%
Frontier Areas
Basin Modeling
Deep and Ultra-deep Waters
Heavy Oil
Enhanced Oil Recovery
Pre-salt
Refining
23% E&P G&E
Downstream Corp.(Cenpes)
Optimization & Reliability
Fuel Innovation
Transportatio n
Natural Gas
Renewable Energy and Bio Fuels
Environment
Climate Changes
12
E&P Business Segment
13
E&P: FOCUSED & DISCIPLINED INVESTMENT
Total Investments
Total Investments of US$ 104.6 billion in E&P through 2013, of which US$ 92 billion will be spent in Brazil
12%
13%
Expected Costs of Production*
140
17%
Production costs (US$/bbl-2008)
120 100 80 60 40 20
Produced MENA
Deepwater and Ultra-deep water
Oil Shales
Gas to liquids
Coal to liquids
CO EOR EO R Arctic
Other conventi onal oil
58%
Exploration Development
Heavy oil and bitumen
Petrobras expected maximum break-even cost
Santos Pre-salt
International
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
Reserves (bn bbls)
* Source: IEA Outlook 2008
14
PRE-SALT PROVINCE
Total area of the Province: 112,000 km2 Area under concession: 41,000 km2 (38%) Area not under concession: 71,000 km2 (62%) MINA GERAIS Area with Petrobras interest: 35,000 km2 (31%)
ESPIRITO SANTO
SO PAULO
RIO DE JANEIRO
PARAN
Tested wells Campos HC Exploratory Blocks Pre-Salt reservoirs 15
SANTOS BASIN PRE-SALT CLUSTER
50 km
Rio de Janeiro
BM-S-10 BR 65%
BM-S-11 BR 65%
Major discoveries include: Tupi, Iara, Carioca, Guara, Jupiter, Parati, Bem-te-vi and Caramba Multi-billion barrel reserves potential Good oil quality: medium-light
BM-S-8 BR 66%
Seismic activity and appraisal wells underway

Iara
Parati Tupi Carioca Bem-te-vi Guara
Recoverable resources announced: 5-8 bn boe in Tupi and 3-4 bn boe in Iara Three production systems by 2014: Tupi, Iara and Guara
BM-S-21 BR 80%
Caramba
Azulo BM-S-9 BR 45%
BM-S-24 BR 80%
BM-S-22 BR 20%
16
ESPRITO SANTO PRE-SALT
UTG Cacimbas
Linhares Rio Doce
MG
Cango
Pero
Infrastructure in-place P-34 at Jubarte field, first pre-salt production: excellent results, prod. up to 18 k b/d FPSO Seillean started in dec/08 as pilot system of Cachalote (CHT) field FPSO Capixaba will move from Golfinho field to Cachalote/Baleia Franca (BFR) in 1H10 FPSO Pipa II will start in 2H10 as Baleia Azul (BAZ) pilot system Baleia Azul first definitive production unit by 4Q12 Natural gas production transported via pipeline
UPGN Lagoa Parda 24 66 km 25 MM m3/d

Camarupim Canapu Golfinho VITRIA
Vila Velha
Aracruz
Terminal Barra do Riacho
Carap
UTG Sul Capixaba

Guarapari
Anchieta Presidente Kennedy Marataizes
Sul Capixaba Gas pipeline 12 83 km 4,5 MM m3/d
Sul-Norte Capixaba Gas pipeline 12 a 24 160 km 7 a 15 MM m3/d
CHT JUB
ARG Baleia Franca NAU PRB Catu OST ABA
RJ
Baleia Azul CXR
17
MAJOR OIL PROJECTS

Marlim Sul Module 2 SS P-51 180,000 bpd 24/jan/09 Marlim Leste FPSO Cidade de Niteri 100,000 bpd 26/feb/09 Badejo FPSO Cidade Rio das Ostras 15.000 bpd 31/mar08 Tupi TLD FPSO BW Cidade de S.Vicente 30,000 bpd FPSO Frade 100,000 bpd Tupi Pilot FPSO Cidade de Angra dos Reis 100,000 bpd Marlim Sul SS P-56 Module 3 100,000 bpd
Thousand bpd
2800
Anticipation of Baleia Azul FPSO Espadarte 100,000 bpd
2,680
Roncador FPSO P-62 Module 4 100,000 bpd Roncador SS P-55 Module 3 180,000 bpd Papa-Terra TLWP P-61 & FPSO P-63 150,000 bpd Guar 1 Pilot FPSO 100,000 bpd
2600
2,580
2400
2,430
Jubarte FPSO P-57 180,000 bpd
2200
Marlim Leste FPU P-53 180,000 bpd 30/nov/08
2,250
Cachalote e Baleia Franca FPSO Capixaba 100,000 bpd
2000
2,050
Parque das Conchas FPSO Esprito Santo 100,000 bpd
1800
1,855
Cachalote FPSO Seillean 25,000 bpd 16/dec/08
1600
Pre-Salt Projects
1400 2008 2009 2010 2011 2012 2013 PN 2009-2013
18
CIDADE DO RIO DE JANEIRO FPSO(CAPACITY 100 .000 BPD), PRODUCTION ON 06/01/07 AT ESPADARTE FIELD
19
PIRANEMA FPSO (CAPACITY 30 .000 BPD), PRODUCTION ON 10/10/07
20
P-52 DECK MATING
21
P-52 - BRASFELS SHIPYARD- ANGRA DOS REIS
22
P-54 - MAU JURONG SHIPYARD- NITERI
23
P-54 LEAVING THE SHIPYARD ON 19-Out-2007
24
P-54 LEAVING THE SHIPYARD ON 19-Out-2007
25
Downstream Business Segment
26
DOMESTIC CRUDE THROUGHPUT (THOUSAND BPD)

Downstream Investments US$ 47.8 billion
Refining Pipelines&Terminal 8% Transport ShipTransport Petrochemicals
73%
Premium I 300 tho. bpd 1st Phase: 2013 2nd Phase: 2015 Premium II 300 tho. bpd 1st Phase: 2014 2nd Phase: 2016
12% 7%
Adding values to domestic crude and producing diesel and gasoline in-line with international standards Investment targets Fuel Quality, Conversion and Expansion
3,012
UPB 150 tho. bpd Dez/2012
2,270
1,779
1,791
RNE 230 tho. bpd 2011

REPLAN Revamp 33 tho. bpd 2010 REPAR Revamp 25 tho. bpd 2011
2008
2009
2010
2011
2012
2013
2020
27
NEW INVESTMENTS
NEW REFINERIES
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Start up:end of 2.012 Start up: 1 st quarter 2.011
Start up 2013 and 2015 Start up: 2013 and 2015
28
NEW INVESTMENTS - PREMIUM REFINERIES
LPG PETROCHEMICAL NAPHTHA
5% 20% 11% 50% 8% 3%
Feedstock oil basis: Marlim 20
AVIATION QUEROSENE DIESEL PETROCHEMICAL COKE BUNKER
Premium I MA
Premium II - CE 300 mil bpd 2013 e 2015 (2 phases)
Capacity Operation
600 mil bpd 2013 e 2015 (2 phases)
Market
GLP, Nafta e QAV (Brasil) e Diesel 10 ppm (Europa)
29
REFINERIES INVESTMENTS
done
present
planned
30
TERMINALS
26 water terminals, operated by means of monobuoys or buoy arrays 20 onshore terminals.
INVESTMENTSINLOGISTICS PIPELINESANDTERMINALS
Os investimentos previstos atendem s necessidades da carteira exploratria e de desenvolvimento da produo Total Investments: US$ 3.7 billion between 2009-2013; da Petrobras
Main Projects:
Storage extension in Santos and Paranagu ports; Increase in effluents treatment in So Sebastio (TEBAR), So Fransisco do Sul (TEFRAN), Cabinas, Ilha Grande (TEBIG) and TEDUT Terminals; Implantation of the Program Adequao de Suprimento de Petrleo (PASP) and the Plano Diretor de Dutos, in So Paulo State, through interventions in the OSVAT and OSCAN Systems, and new pier for the So Sebastio Terminal; Improvements in the oil product outflow system in Santos and Paranagu ports and Madre de Deus Terminal(TEMADRE).
31
Petrochemical Business Segment
32
COMPERJ
Site: Itabora - RJ; Capacity: 1300 kta ethylene; 700 kta P-Xylene; 881 kta Propylene; 608 kta Benzene; 157 kta Butadiene Total Investment: US$ 8.5 billion; Feedstocks: Heavy crude oil from Campos basin; Start up: 2012.
33
COMPERJ OUTPUTS
Products UPB
Production (kta)
Production (kta)
1st Generation
Products UPA
2nd Generation
Diesel
Fuels (UPB)
535 284 700 1.300 881 608

157
Polypropylene (PP)
Naphtha Coke Ethylene Propylene
850
Poliethylene (PE)
800
Styrene
500
Petrochemical Feedstocks (UPB)
Benzene
Butadiene
Ethylene glicol
600
PTA p-Xylene Sulfur 700 45 PET
500
600
34
COMPERJ MAP LOCATION
Itabora
35
Gas and Energy Business Segment
36
G&E INVESTMENTS
G&EInvestments US$10.6billion20092013
1,477 926 4.528 3.692
US$million Natural Gas US$ 8.2 billion Energy US$ 2.4 billion
ProjectsinPortfolio ProjectsinPortfolio
NewInvestmentsProposed NewInvestmentsProposed
37
MAIN PROJECTS: GAS & ENERGY
US$ million
Main Projects
Gas Pipelines: Gasene, Northeast and Southeast Network, South Section of Gasbol, Urucu-Coari-Manaus and Gasduc III LNG Liquefied Natural Gas Thermo-Electrics: Cubato, Trs Lagoas, Canoas and Termoau Wind Power Generation G&E in Argentina and Other Countries
Total investments US$ 10.6 billion
38
Critical goods and services and equipment quantities
39
E&P CRITICAL EQUIPMENT: OPPORTUNITIES FOR FOREIGN SUPPLIERS

Production pipelines alloy coatings (13 Cr, Super 13 Cr); Turbo compressors (6-10 Mw ); Polyester Mooring cables; Mooring systems; Drilling pipelines; Fiber glass pipelines; Electrical cables for CSP; Control Systems for well control, oil and gas metering systems, drilling activities; Offshore drilling rigs; Gravel packing; Drilling bits; Steam generators (25-50 x 106 BTU/d); Special submarine valves.
40
CRITICAL SERVICES FOR E&P ACTIVITIES: OPPORTUNITIES FOR FOREIGN SUPPLIERS
Drilling; Workover services; Flexible lines and umbilicals laying services; Support to diving; Support to ROV; Support to mooring activities; Special vessels; Submarine interconnection services.
41
CRITICAL EQUIPMENT AND SERVICES FOR REFINING ACTIVITIES: OPPORTUNITIES FOR FOREIGN SUPPLIERS
Equipment HCC Reactors (250-300 mm wall width, 200 Kgf/cm2); Boiler works with special alloys (reactors, towers, pressure vessels); Boilers (steam generators); Heat exchangers working with H2S traces (ASTM A 387 degree 11); API pumps; Structural packing for refining process towers;
Services Basic Design; Thermal Projects Design.
42
CRITICAL EQUIPMENT FOR G&E ACTIVITIES: OPPORTUNITIES FOR FOREIGN SUPPLIERS
Pipelines in the range of 14-42 inches diameter with longitudinal welding. Petrobras standards do not accept helicoidal welding.
43
NEW EQUIPMENTS TO BE CONTRACTED

Drillingshipsandsemisubmersibledrillingplatforms 29RIGSCONTRACTEDPLUS28TOBELEASEDUPTO2017,MAKINGATOTALOF57DRILLINGRIGS 17beingdeliveredbetween2009and2011 12willbecharteredviainternationalbidding,beingdeliveredin2012 MeetingPetrobrasshorttermneeds,while thenationalindustrypreparesitselffortheremainingunits 28willbebuiltinBrazilandoperatedbyBraziliancompanies,beingdeliveredbetween2013and2017 Items Wet Christmas Tree Well Head Flexible Lines Manifolds Producing pipes Umbilical Dry Christmas Tree Onshore well head Items Reactors Oil and water splitter Storage Tankers Turrets Un. un un km un t km un un Un. un un un un TOTAL 500 500 4.000 30 42.000 2.200 1.700 1.700 TOTAL 280 50 1.800 550 Items Pumps Compressors Winch Crane Engines Turbines Structure Steel (Hull) Un. un un un un un un t TOTAL 8.000 700 450 200 1.000 350 940.000
Items Power Generators Filters Flares
Un. un un un
TOTAL 500 300 30
44
Petrobras supply strategies for goods and services
45
SUPPLY STRATEGIES FOR GOODS AND SERVICES
Manufacturers
Equipment Chemicals Spare parts Etc. Seismic
US$ 7.0 Bi
Distributors Retailers
US$ 25.8 Bi
Service providers
Drilling Transport Etc. Platform Refinery Revamps Etc. 46
EPC
US$12.4 Bi
As per 2008
Shipyards Constructors
Up-dated Petrobras Vendor Register Requirements
47
REGISTER OF GOODS AND SERVICES SUPPLIERS

Requirements, Concepts and Ranking
MANDATORY REQUIREMENTS and RANKING REQUIREMENTS 5 CRITERIA
SOCIAL TECHNICAL RESPONSIBILITY
HSE
ECONOMIC
LEGAL
48
REGISTRATION FOR MATERIAL SUPPLIERS
TECHNICAL REQUIREMENTS FOR MATERIALS
Depending on the material or equipment, the supplier must comply with the following requirements:
Tradition (Main Sales, Reference Letters); Facilities for Technical Assistance (Automation Systems, Rotating Machinery, etc); Mandatory Product Certification (API, ASME, ...); Other Specific Requirements.
49
REGISTRATION FOR SERVICES SUPPLIERS
TECHNICAL REQUIREMENTS FOR SERVICES Depending on services criticality, the supplier must comply with the following requirements:
Tradition (List of Services Provided continuity and Reference Letters); List of Equipment relating to services provided; Main personnel curricula vitae; Other specific requirements.
50
SUPPLIERS REGISTRATION
LEGAL REQUIREMENTS
MATERIALS & SERVICES
Brazilian companies: Proof of being legally constituted in Brazil; Proof of being regular with Brazilian taxes; See details on registration website. Foreign companies: Proof of being legally constituted in its home country, issued by a Governmental Authority; Legal Representative in Brazil (mandatory); Commercial Representative (is not registered, but only indicated by and linked to the supplier):
Not mandatory (may be the own company); May be the same or other than the Legal representative.
51
ECONOMICAL REQUIREMENTS MATERIALS & SERVICES Annual Reports with Audited Financial Statements; Proof that the company is not bankrupt (bank statement or company declaration by its president).
52
MANAGEMENT and SOCIAL RESPONSIBILITY MATERIALS ISO-9001 - certification mandatory for suppliers of material & equipment which require technical qualification. SERVICES Compliance with some requirements of ISO-9001 for special services. MATERIALS & SERVICES Petrobras stimulates suppliers to improve Social Responsibility actions.
53
HELTH, SAFETY and ENVIRONMENT SERVICES ISO-14001 and OSHAS-18001: Certification is not mandatory; Petrobras evaluates how does the suppliers implement these standards requirements (0 to 10). MATERIALS PETROBRAS requires supplier formal declaration of compliance with legal requirements. Petrobras evaluates how the suppliers implement some standards requirements of ISO 14001 and OSHAS 18001 (not mandatory) (0 to 10).
54
REGISTER OF SUPPLIERS OF GOODS AND SERVICES
General
information
is
obtained
at
Petrobras
website:
www.petrobras.com.br Options (icons): English; Business, Material Channel, Registration Guide.
Corporate registration process must be carried out in Petrobras headquarters, in Rio de Janeiro.
55
PROMINP Governmental Program and Local Content
56
PROMINP BRAZILIAN OIL & GAS NATIONAL INDUSTRY MOBILIZATION PROGRAM
MINISTRY OF MINES AND ENERGY (MME) Programs promoter and manager PETROBRAS Leading operator in Brazil BRAZILIAN PETROLEUM INSTITUTE (IBP) Coordinator for the participation of the other operators NATIONAL ORGANIZATION OF THE INDUSTRY (ONIP) Coordinator for participation of class associations (suppliers) OIL the
BNDES ABIMAQ
ABEMI SINAVAL
ABDIB
ABCE
PROMINP
IBP
ONIP
57
COMPETITIVE NATIONAL SUPPLY OF GOODS AND SERVICES Adequacy of The National Supply Industrial Complex
GOOD AND SERVICES SUPPLY PATH
5. Incentive for international companies to establish operations in Brazill 4. Incentive for association between national and international companies 3. Incentive for new national entrants 2. Develop competition among medium competitive sectors
imports
Increase in National Supply Capacity of G&S imports
National Industry
1. Increase productivity capacity of highly competitive sectors
Current Demand
Source: Promimp, 2008
Future Demand 57
GLOBAL LOCAL CONTENT 4TH QUARTER 2008
PROMINP
$ Target National $ Accomplished Total
$ Target Total $ Accomplished National
Target LCI Accomplished LCI (US$bi)
58
CONCLUSIONS
Huge Strategic Plan for the period 2009-2013; Plenty of opportunities for foreign suppliers planning to establish in Brazil and address the Latin America Market; Strong industrial basis in Brazil, for the Oil and Gas segment representing today 15% of GDP; Opportunities shall be focused on critical goods and services not available in a competitive basis in local market; Foreign suppliers must be aware of the specific laws framework and Local Content requirements; incentives should be assigned by Government Offices once the intention to manufacture in Brazil is assured; Partnership with a local supplier operating in the same business area should be considered. .
59
PETROLEO BRASILEIRO S.A. PETROBRAS

The Challenge is our Energy
Paulo Sergio Rodrigues Alonso D.Sc. Materials Engineering Manager alonso@petrobras.com.br
60

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2020 PETROBRAS STRATEGIC & BUSINESS PLAN