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com

Jos Sergio Gabrielli

August, 2011

CEO

DISCLAIMER

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This presentation may contain forward-looking statements. Such statements reflect only the expectations of the Company's management regarding the future conditions of the economy, the industry, the performance and financial results of the Company, among other factors. Such terms as "anticipate", "believe", "expect", "forecast", "intend", "plan", "project", "seek", "should", along with similar expressions, are used to identify such statements. These predictions evidently involve risks and uncertainties, whether foreseen or not by the Company. Consequently, these statements do not represent assurance of future results of the Company. Therefore, the Company's future results of operations may differ from current expectations, and readers must not base their expectations solely on the information presented herein. The Company is not obliged to update the presentation and forward-looking statements in light of new information or future developments. Amounts informed for the year 2011 and upcoming years are either estimates or targets.

Cautionary statement for U.S. investors: The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally viable under existing economic and operating conditions. We use certain terms in this presentation, such as discoveries, that the SECs guidelines strictly prohibit us from including in filings with the SEC.

BRAZIL LEADERSHIP IN RECENT DISCOVERIES


Deep-water discoveries in Brazil represent 1/3 of the worldwide discoveries in the last 5 years
New Discoveries 2005-2010 (33,989 million bbl) Deep-Water Discoveries

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38%

Brazil Brasil
62%

Outros Other

Other Discoveries

Deep-Waters

In the last 5 years, more than 50% of the new discoveries (worldwide) were made in deep waters The development of these reserves will demand additional capacity from the supply chain Expansion of the oil and gas chain in Brazil is in line with this perspective Petrobras expects to double its proved reserves until 2020, keeping the discovery cost around US$2/boe

Source: PFC Energy

INCREASE IN SALES VOLUMES


Sales Volume (thousand boe/day)
6.6% p.y.

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8,000 7,000
5.6% p.y.

7,142
79 141 401

Fertilizers

El ectri c Energy

6,000 5,000 3,773 4,000 3,000 2,000 1,000 0 2009 2010 2011 3,464
17 94 125 542 231 706 1,097 652 17 94 136 593 312 699 1,204 718

4,958 3,848
17 97 147 634 320 586 1,315 731 38 106 290 738 436 997

906 480

Bi ofuel s

Interna ti ona l Sa l es (*)

2,317
Na tura l Ga s

Exports

1,739 1,453 1,078


Other Di stri bui tors

899

Sa l es to BR

2015

2020

BP 2011-15 - Petrobras Total Sales Volume

(*) international area sales and offshore trading operations free from eliminations

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Investment Program

2011-15

2011-2015 INVESTMENTS Stable investments, greater focus on E&P 2010-14 Business Plan
US$224 billion
2% 1% 2% 1% 2,9 8%
17.8
2.9 3.5 2.4 5.1

2011-15 Business Plan


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US$224.7 billion 2% 2% 1% 2,4 1% 6% 2.4 2,3


4,2 4,2 14,73,2 4.1 3,2 14,7 13.2 3.1 4,14,1
3.8

118.8 73.6

53%

33%

31%

65,5 65,5 70.6

127.5

(*)

57%

E&P E&P
Gas, Energy & Gas Chemicals Gs,Energia & Gs Qumica

RTM RTC Petrochemicals Petroqumica

(*) US$22.8 billion in Exploration

Distribuio Distribution Corporativo Corporate

Biocombustveis Biofuels

5% of investments will be made overseas, 87% of which in E&P

HSEE (US$ 4.2 bi), IT (US$ 2.7 bi), Technology (US$ 4.6 bi), Logistics (US$ 17.4 bi), Maintenance & Infrastructure (US$ 20.6 bi) 6

INVESTMENTS BP 2011-15 VS. BP 2010-14 Increase from new E&P projects and FX rate offset by downstream deferrals
US$ billion
BP 2010-14 (R$ 419.7 billion) BP 2011-15

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(R$ 388.9 billion)

US$ 224 billion


Excluded

0,3%

US$ 224.7 billion


New

10,8
82,9 37%

-9,7%
Maintained

32,1

90,6 40%

213,2
141,1 63%

Maintained

192,6
Changes in: FX rate Budget Schedule Business model Scope
134,1

8.6 1.5 (23.7) (0.6) (6.4)

60%

Total in Foreign Currency Total in Local Currency

KEY CHANGES IN PORTFOLIO Reassignment of E&P investments


Exploration & Production Supply (includes Petrochemicals) Gas & Energy

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+ US$8.7 billion

- US$4.3 billion

- US$4.6 billion
New Projects
TPP Barra do Rocha I TPP Bahia II

New Projects
Transfer of Rights New Pre-Salt Units (Lula) Infrastructure New Discoveries and R&D

New Projects
New Comperj units Oil Logistics

Projects concluded in 2010


Gas pipelines: Gasene, PilarIpojuca, Gasduc III and Gasbel II

Projects concluded in 2010


Braskem capital contribution Fuels quality investment

Excluded, Revised and/or Postponed Projects


Postponement of projects: UFN IV, UFN V, GTL Paraffins and Gas FSO Exclusion of Catu-camaari gas pipeline and Ecomp Itajupe Exclusion of TPP projects (from 2010 auctions)

Excluded, Revised and/or Postponed Projects


Projects discontinued after unsuccessful exploratory phase Revision of Development Projects

Excluded, Revised and/or Postponed Projects


Postponement of Premium I Refinery

INVESTMENTS AND PROJECT APPROVAL TIMELINE


US$224.7 billion 688 projects 2011-15 Period
US$ billion

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250
112 projetos 112 projects 39 projects 39 projetos 41 projects 22 projects 22 projetos 41 projetos

200
104 projetos 104 projects

13,5
6%

5,4
2%

4,1
2%

33,5
15%

150
95 projects 95 projetos

41,4
18%

51,0 100
275 projects 275 projetos

224,7

23%

50

75,7
34%

0
Approved Aprovados until 2009 at 2009

2010

2011

2012

2013

2014

After2014 Ps 2014

Total

CONSOLIDATED RETURNS E&P drives results


E&P Investments (57% of total) ensure production growth and high IRR

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Other investments (43% of total) add value to the chain, generating returns equal or higher than the cost of capital Investments in quality are a legal requirement Total investments (BP 2011-2015) with attractive IRR Petrobras is an integrated company ready to speed up production growth Reduced cost due to a higher business integration and a leading position in a large and growing market
ROCE
35% 30% 25% 20% 15% 10% 5% 0% -5%

Integrated companies deliver better returns

20 01

20 02

20 05

20 00

20 03

20 06

20 08

20 09

Integrated Integradas CompanhiasCompanies

20 04

Companhias de E&P E&P Companies

20 07

Companhias de Refino Downstream Companies

Source: selected company data

20 10

10

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Funding Needs

11

OIL PRICE Oil price assumptions within market's expectations


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US$/bbl
250 225 200 175 150 125 100 75 50 25 0 2010

95 80 Petrobras Scenarios

2011

2012

2013

2014

2015

Based on 2011-2012 forecasts: Banks (Source: Bloomberg) Based on 2013-2015 forecasts: PIRA, DOE, CERA, WoodMackenzie, IEA

12

VARIABLES Key variables that impact the cash flow and funding needs
Assumptions
No Equity Issue in the period Investment grade maintenance

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Key variables for Cash Generation and Investment Level


Oil price Foreign Exchange Rate Brazilian Market Growth Average Realization Price (ARP) Brazil International Parity International margins per product Oil and oil products exports and imports Investment Program Divestments and business restructuring Third-party funding
13

CASH GENERATION AND INVESTMENTS Divestment and traditional funding sources adequate for Plan needs
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Scenario A
US$ 256.1
13,6 31,4 26,1 26,1

Scenario B
US$ 255.6
13,6 30,9

US$ 256.1

US$ 255.6

Key assumptions Scenario A Exchange rate (R$/US$) 1.73 2011 110 2012 80 Scenario B 1,73 2011 110 2012 95 2013 95 2014 95 2015 95 26% 1.5 177

67,0 91,4

224,7

224,7

Brent (US$/bbl)

2013 80 2014 80

148,9 125,0

2015 80 Leverage (Average) Net Debt/EBITDA (Average) ARP (R$/bbl) 29% 1.9 158

Sources

Use

Sources

Use

Divestment and Restructuring Cash Third-Party Resources (Debt) Operating Cash Flow (After Dividends)

Debt Amortization Investments

40% of capex in dollar in comparison to 37% in the previous Plan

14

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Exploration & Production

US$127.5 billion

15

STRATEGY Sustainable development of hydrocarbon reserves


Increase oil and gas reserves and production, in a sustainable manner, and be recognized for its excellence in E&P operations, placing the Company among the worlds five largest oil producers

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2011-15 Business Plan Highlights: 65% of Capex allocated to production development 19 large projects, adding capacity of 2.3 million bpd Drilling of more than 1,000 offshore wells, of these 40% is exploratory and 60% is production development In 2020, the pre-salt production will correspond to 40.5% of the oil production in Brazil

16

E&P INVESTMENTS IN BRAZIL 2011-15 BUSINESS PLAN


Exploration

E&P investments in Brazil: US$117.7 bn


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Pre-Salt US$ 53.4 billion


Infrastructure 17%

Post-Salt US$ 64.3 billion


68% Other areas 18% Exploration

26% Pre-salt

6% Transfer of Rights

65% Production Development

Production Development

Other areas 48%

Pre-salt 37%

Annual investments of more than US$ 4 billion in exploration


15%

Investments of US$ 12.4 billion related to the transfer of rights areas in 2011-15 In the BP 2010-2014, the forecasted investment for the PreSalt was of US$33 billion
Note: Pre-salt includes Basins in Santos, Campos and Esprito Santo

Transfer of Rights

17

PRODUCTION

Petrobras can more than double production in the next decade


Business Plan 2011-15
3,993
125 180 618

6,418
142 246 1.120

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2,386 000 boe/day


99 111 321

2,516
96 132 317

2,575
93 144 334

2,772
96 141 435

+ 35 Systems

+10 Post-Salt Projects +8 Pre-Salt Projects +1 Transfer of Rights

4,910 3,070 845


Transfer of Rights Pre-Salt

1.855

1.971

2.004

2.100

Added Capacity Oil: 2,300,000 bpd

13

543

1,148

2008

2009

2010

2011

2015
Oil Production - International

2020
Natural Gas Production - International

Oil Production- Brazil

Natural Gas Production - Brazil


3,907
128 176

Business Plan 2010-14


2,575
334
93 144

623
+ 9 Post-Salt Projects + 5 Pre-Salt Projects Added Capacity Oil: 1,800,000 bpd

Pre-salt and Transfer of Rights will represent 69% of the additional capacity up to 2020 Pre-Salt participation in the total production will enhance from the current 2% to 18% in 2015 and 40.5% in 2020

2.980

2.004

2010

2014
Note: Does not include Non-Consolidated International Production.

18

PRODUCTION Long history of implementing offshore projects in Brazil


Thous. bpd Thous.

2,004

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2000 1600 1200 800 400 0 Deep water Shallow water Onshore

10% p.y over the last 30 years

1,271
1,601

653
42 400

749

187
112 1980
Onshore

292

189

75

211 1990
Shallow Water

230 2000
Deep Water

214 2010
Deep & UltraDeep Water Pre-Salt

123 offshore units (45 floating and 78 fixed) 25 new units installed over the last 5 years
P-56 P-57

19

NEW PROJECTS Large projects drive the increase in production


Lula Pilot FPSO BW Cidade Angra dos Reis 100.000 bpd Cachalote and Baleia Franca FPSO Capixaba 100.000 bpd Thous. bpd Urugu FPSO Cidade de Santos 35.000 bpd Jubarte FPSO P-57 180.000 bpd Mexilho Jaqueta HG Tamba FPSO Cidade de Santos NG Marlim Sul module 3 SS P-56 100.000 bpd

NG Projects Pre-Salt and Transfer of Rights Projects Post-Salt Projects

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Juru NG Lula NE FPSO Cidade de Paraty 120.000 bpd Parque das Baleias FPSO P-58 180.000 bpd Papa-Terra TLWP P-61 & FPSO P-63 150.000 bpd Guar (North) FPSO 150.000 bpd Cernambi South FPSO 150.000 bpd

EWTs
Franco 1 Transfer of Rights FPSO 150.000 bpd FPSO P-67 Replicant 2 150.000 bpd BMS-9 our11

Guar Pilot 2 FPSO Cidade de So Paulo 120.000 bpd Baleia Azul FPSO Cidade de Anchieta 100.000 bpd (FPSO Espadarte reallocation)

3.070
FPSO P-66 Replicant 1 150.000 bpd BMS-9 or 11 Maromba FPSO 100.000 bpd ESP/Marimb FPSO 40.000 bpd 5 EWTs Pre-salt

3000 2500 2000 1500 1000 500 0

2.004
Tiro Pilot SS-11 Atlantic Zephir 30.000 bpd EWT Guar FPSO Dynamic Producer 30.000 bpd

2.100
EWTs Lula NE e Cernambi FPSO BW Cidade So Vicente 30.000 bpd EWT Carioca FPSO Dynamic Producer 30.000 bpd Roncador module 3 SS P-55 180.000 bpd Tiro/Sidon FPSO Cidade de Itaja 80.000 bpd 4 EWTs Pre-salt Roncador module 4 FPSO P-62 180.000 bpd Aruan FPSO 100.000 bpd 3 EWTs Pre-salt Baleia Azul FPSO 60.000 bpd Siri Jaqueta e FPSO 50.000 bpd 5 EWTs Pre-salt

2010

2011

2012

2013

2014

2015
20

NEW PROJECTS Higher number of drilling rigs will enable a faster ramp-up of the new platforms
Months

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20 16 12 8 4 0
P-43

To atingir 50% capacidade Parareach 50% capacity Parareach 75% capacity To atingir 75% capacidade

Forecast

P-48

P-50

P-52

P-54

P-53

P-51

FPSO CAPIXABA

P-57

2004

2005

2006

2007

2007

2008

2009

2010

2010

P-56: 1 producing well and 1 injection well at the start-up (3Q11). 4 connected wells by end of 2011

Water Depth
Up to 1,000 meters 1,000 to 2,000 meters Over 2,000 meters

2006
6 19 2

2008
11 19 3

2010
11 21 15

2011
+2 +10

2012
+1 +13

2013
+1 +1

From 2007 to 2012 Petrobras will double its fleet of contracted drilling rigs, focusing on modern, recently built drilling rigs with capacity to operate in the Pre-salt layer 21

PRE-SALT RESULTS EWT results and learning curve from drilling show improving economics
Average drilling time of wells completed during the year (versus combined average time for 2006/7)
5 wells 4 wells 5 wells 6 wells

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Results obtained during EWTs

Stable production Restriction due to flaring limitation Good reservoirs behavior Good lateral communication No oil flow issues

EWT Schedule
4 4 1 1 4 5 3 5

2011

2012
Rights

2013

2014
EWT Other areas TLD - Outras reas

2015

EWT Pre-Salt Cesso Onerosa TLD - Pr-Sal e and Transfer of

22

COST-BENEFIT ANALYSIS Capital investments required by Plansal 45% lower, increasing NPV
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Investment

Concession Areas

Net Present Value

Concession Areas

23

PROFITABILITY New E&P projects generate attractive returns

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Key Assumptions:

150,000 bpd FPSO Production of 500,000 BOE Ramp-up in line with industry Historic decline rate Oil value = 95% Brent Does not include exploration and acquisition costs

US$/ bbl
Case 1 US$12/boe Capex / US$5/boe Opex Case 2 US$15/boe Capex / US$7/boe Opex Case 3 US$12/boe Capex / US$5/boe Opex without Special Participation (such as Transfer of Rights) (expected scenario)

The graph illustrates the cost-benefit ratio of a standard production development in Brazil, using assumptions based on previous experiences

24

E&P PROFITABILITY IN BRAZIL Profitability of oil Production in Brazil fully exposed to oil prices
Brent vs. Net income per Barrel E&P Net Income ($/boe)

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Net income per Barrel (US$)

Peers Petrobras

Brent (Average in dollars)

E&P ROCE

E&P profitability strongly correlated to oil price Production in Brazil: 86% oil and 14% gas Higher net profit per barrel yields better return than its peers Stable regulatory environment allows for capturing the benefits of the increase in oil prices
Peers Petrobras

Source: PFC Energy

Peers: BP, CVX, XOM,RDS, TOT

25

VARREDURA PROJECT

Technological development and exploratory optimization


Discoveries indo Pr -sal Descobertas Pre-salt na Bacia de Campos Campos Basin 2009/10 2009/10 (VARREDURA) (Varredura)

Varredura Project
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Additional recoverable volume from discoveries: Post-salt: Marimb, Marlim Sul and Pampo: 1,105 MM boe Pre-salt: Barracuda, Caratinga, Marlim, Marlim Leste, Albacora and Albacora Leste: 1,130 MM boe* Well productivity exceeds 20,000 bpd

Between 2011 and 2015 67 exploratory wells will be drilled in current production areas in Campos basin

*No volumes have been announced regarding the Marlim Leste and Albacora Leste discoveries.

26

NEW TECHNOLOGIES

Applications enhance recovery, slow decline rates and increase production


Technological Solution Technology Status

Subsea BCS Subsea Pumping Systems Subsea Pumping Model Skid BCS Subsea Multiphase Pump BMSHA Gas/Liquid Subsea Separation Oil/Water Subsea Separation Raw water injection Subsea electric transmission and distribution VASPS SSAO SRWI Under qualification

In Operation In Operation (Jubarte e Golfinho) Prototype in TLD ESP 23 (Oct/11) Prototype in Barracuda (Dec/11) Prototype Tested in P-08 (2011) Prototype in Marlim (End of 2011) Prototype in Albacora (End of 2011) Prototype scheduled to 2015

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VASPS

Underwater Electric Pump in Skid

Raw water injection

Oil/Water Subsea Separation

27

NEW VESSELS AND EQUIPMENTS

Resources required for production growth


Critical Resources
Drilling Rigs Water Depth Above 2.000 m Supply and Special Vessel Production Platforms SS e FPSO Others (Jacket and TLWP) Current Situation (Dec/10) 15 287 44 78 Delivery Plan (to be contracted) Accumulated Value

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By 2013 39 423 54 80

By 2015 37 (1) 479 61 81

By 2020 65 (2) 568 94 83

Production Supply Vessel Drilling Rigs Platform (FPSO)

39 rigs contracted, 28 more to be built by 2020:


o Until 2013: 16 rigs contracted before 2008 and 2 rigs relocated from international operations; +15 new rigs contracted in 2008, +1 in 2009, +1 in 2010 and +4 in 2011 through international bidding o 2015-2020: From the 28 rigs to be built in Brazil, EAS won the bid for the first package - construction and chartering of seven drilling rigs to be built in Brazil. A new bid was open for the remaining 21
(1) Two rigs reallocated from international operations, expire in 2015, so it is not considered in the 2020 accumulated value (2) The demand for long-term will be adjusted as new demand assessments are made.

28

TRANSFER OF RIGHTS

Development of the areas fully under way


Declaration of Commerciality

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Exploration

Production
Development

Duration: 4 years Extendable for 2 more years

Variable, according to Development Plan

Total Duration: 40 years, extendable for 5 more years according to specific criteria

Area
Franco lara surroundings Florim NE of Tupi South of Guar South of Tupi

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Resources already available for: 7 Exploratory wells 1 contingent Exploratory well 1 EWT 2 contingent EWTs 3D Seismic

First 4 production units undergoing contracting (*)

New technologies and definition of resource allocation

* Conversion at the Inhama shipyard

29

THE TRANSFER OF RIGHTS Mechanisms for the revision allow for fair valuation
The revision will be completed after the declaration of commerciality (4 years period)

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Revision based on technical reports and on assumptions provided in the contract Assumptions for price revision: Changes in oil price Production curve Cost assumptions update No changes in the discount rate and same appraisal base-date

Final value

Higher

Lower

Petrobras pays the difference to the Federal Government (or) Petrobras requests a reduction in volumes corresponding to the difference

Federal Government pays the difference to Petrobras

30

BENEFITS FROM THE DEVELOPMENT OF THE LOCAL INDUSTRY


Suppliers investing in Brazil Flexible pipes - Wellstream and Prysmian Pumping Units Weatherford
30 x
Jobs Positions at Navy Industry

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Valves Cameron Turbine generators Rolls-Royce 2 FPSOs fully built in Brazil 6 Platforms under construction in Brazil Construction of 8 hulls for replicant FPSOs (65% Local Content) Contracting of 7 drilling rigs at competitive cost and 21 being leased (55%-65% Local Content)

Platforms built in Brazil with competitive cost

Source: Sinaval

31

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Refining, Transportation & Marketing (RTM), Including Petrochemicals US$74.4 billion

32

STRATEGY Expansion, quality, logistics and commercialization


Expand the downstream, ensuring domestic supply and distribution leadership, developing markets for the oil surplus produced in Brazil

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2011-15 Business Plan Highlights: Downstream capacity will increase by 395 thousand bpd between 2011-15 and 1,065 thousand bpd between 2016-2020 Conclusion of the refining modernization process Logistics integrated with upstream activities ensuring oil surplus marketing Increase petrochemicals and biopolymers production

33

DOWNSTREAM INVESTMENTS New refineries, fuel quality and modernization account for 74% of RTM investments
US$70.6 billion
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4.5% 4.9% 1.0% 1.1% 0.8%

Refining Capacity Expansion: Abreu e Lima Refinery, Premium I and II, and Comperj Quality & Conversion: Modernization, conversion, and hydrodesulphurization projects Operational improvement: maintenance & optimization, HSE, and R&D

15.2% 13.9%

26.4% 23.9%

Fleet Expansion Logistics for Oil: oil supply to refineries and oil exports infrastructure

Refining Capacity Expansion Quality and Conversion Operational improvement Fleet Expansion Logistics for Oil International

Petrochemical Investments amount to US$3.8 billion

34

DOWNSTREAM EXPANSION Reduced dependence on imports of oil products


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Increase in import levels will lead to higher logistical costs... 000 bpd 2006 2007 2008 2009 2010 2011E ... and to high levels of exposure to international supply Net Imports as a percentage of total demand (%)*

USA Brazil (2010) France Germany China Japan Spain Mexico Indonesia Brazil (2020)**

* Source: IEA 2010 World Energy Statistics ** Without considering Capacity Expansion

35

PRODUCTION, DOWNSTREAM AND DEMAND IN BRAZIL Construction of new refineries to meet the demands of the local market
,000 bpd 5,000
PREMIUM I (2nd phase) 300,000 bpd (2019) COMPERJ (2nd phase) 165,000 bpd (2018)

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COMPERJ (1st phase) 165,000 bpd (2013) Abreu e Lima Refinery (RNE) 230,000 bpd (2012)

4,000

3,327

2,536

3,070

2,147

1,971

1,933

2,004

2,100

1,000

0 2009
Oil and NGL Production Brazil

1,792

2010

1,798

1,811

2011
Total crude oil processed Brazil

2,208

2015

2,205

2020
Oil Products Market (2 scenarios)

3,217
36

2,000

PREMIUM I (1st phase) 300,000 bpd (2016)

4,910

3,000

2,643

PREMIUM II 300,000 bpd (2017)

3,095

REFINERY EXPANSION 2011-15 First construction of greenfield refineries in 32 years


REPRE I REPRE II

Abreu e Lima Refinery


Capacity: 230,000 bpd Stage: Implementation Startup: 2012

Comperj

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Capacity: 330,000 bpd Stage: Implementation Startup: 2013 and 2018

RNE

Premium I Refinery
Capacity: 600,000 bpd Comperj Stage: Earthworks Startup: 2016 and 2019

Premium II Refinery
Capacity: 300,000 bpd Stage: Preliminary License issued Startup: 2017

Petrobras Refineries
RNEST COMPERJ PREMIUM I PREMIUM II REMAN REDUC REPLAN REGAP REFAP RLAM RECAP RPBC REVAP REPAR

32 years

50s

60s

70s

80s

90s

00s

10s

Learning curve from Abreu e Lima and Comperj will reduce Premium refineries CAPEX

37

PRODUCT DEMAND Product deficits in the northeast determine location of new refineries
Market in 2010 Market in 2015

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299

552

968

763 -464 Deficit -416 Capacity Demand


1.652
1.466

Capacity

Demand

Deficit 1.675

1.384
82

-23 Capacity Demand Deficit

Capacity

Demand

Surplus

Increased demand in Central-West, Northeast, and North regions explains the investments in the Northeast Tax incentives and environmental restrictions (in other regions) contribute to these investments assignments

38

PRODUCTS New refineries will produce higher value-added oil products


Existing refineries output 2020 New refineries output 2020

65%

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43% 36% 21% 50%

38%

21% 10%

19% 4% 15% Medium Distillated Naphtha Special 15% Light

9% 5% Medium Distillated 6% Light Diesel Jet Fuel

15% 4% 11% Others

7% 4% Others Gasoline LPG

Fuel Oil Intermediary

Higher global demand for medium-distillates products tends to lead to an increase in these prices

39

PREMIUM REFINERIES Positive returns based on scale, standardization and design


Economies of scale and new implementation strategies to reduce Capex, including: Design competition project based on the lowest cost Hiring of UOP - international company with wide experience Unique design integrating both on-site and off-site Designer involved from conceptual design to technical assistance when the start up Economy of Scale (Train: 300kbpd modules) Standardization of equipments Lower refining cost due to design quality and scale

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Current downstream cost (US$ / bbl in 2010)


Age (years)

Scale (000 bpd)

40

INVESTMENT LEVEL Decreasing investments in quality after the segments modernization stage
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US$16 billion in 2011-15


7.0
US$ 16 billion

Reduction in sulfur content

5.9 4.5 4.9


Avg. Sulfur content Diesel (ppm)

-15%p.y.

3.2 2.3 1.1 0.1 0.2


5 6 7 8 9 10 11 12 13 14 15

1.0 1.0

41

MARKET IN BRAZIL Free market follows international prices in the long term
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160 140 120 100 80 60 40 20

2002-2011
US$/bbl

ARP USA ARP Brazil

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

42

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Natural Gas, Electric Energy and Fertilizers


US$13.2 billion

43

GAS, ENERGY, AND GAS-CHEMICALS; 2011-2015 US$ 13,2 billion in gas pipelines, LNG regasification, power and fertilizers
2011-15 Investments US$13.2 billion
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6%

2%

0,8 0,8 0,3 0,3


3,4

Investment cycle in the expansion of the transportation network to be completed by 2011


26%

New city gates and negotiation with distribution companies aiming to increase the sales and establish different contract types Investment in thermal power generation
21%
3,4

5,9 5,9
45%

2,8

Investment in LNG for the pre-salt gas production transportation and to supply the thermal power market investment in natural gas conversion into urea, ammonia, methanol and other gas-chemicals products

Network Gas-chemicals plants (Nitrogenized) LNG

Electric Energy International


2,8

3,4

44

2ND INVESTMENT CYCLE: MONETIZATION OF THE PRE-SALT RESERVES


1st Investment Cycle COMPLETED
Acquisition TPPs LNG Pecm LNG BGUA Cubato TPP Biofuel Conversion Termoau Ammonia Sulfate (May/13)

2nd Investment Cycle 2011-2015 BP 2011UFN III (Sep/14) UFN V (Sep/15)

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ARLA 32 (out/11) UFN IV (Jun/17)

% of total investment

Gasduc III Gasbel II Regs Bahia Gasene Pilar-Ipojuca New NG TPPs (Jan/14)

Cacimbas-Vitria Catu-Pilar Atalaia-Itaporanga

Japeri-Reduc Gascav Gascar Urucu-Manaus Gastau Gaspal II Gasan II UPGN Cabinas 2nd Route PreSalt (Aug/14) NG Comps + City gates + Network Maintenance

Adjustment of the Gas Pipeline Network (US$ 3.34 bi) New NG TPPs (US$ 1.82 bi) LNG regasification (US$ 0.74 bi) Chemical Transformation of NG (US$ 5.85 bi)

TPP Commitments (US$ 0.94 bi) Renewable Energy: Wind Power and Biomass (US$ 0.02 bi) Natural Gas Liquefaction (US$ 0.10 bi)

45

INCREASING DEMAND New units to consume higher natural gas production


Fertilizer Production Generation Capacity
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UFN IV (Jun/2017)

4.000

UFN V (Sep/2015) UFN III (Sep/2014)

30 2,936 25
11,000 9,000

9,475
70

Million cm/d

Thous.ton /year

3.000 2,271 2.000 1,109 1.000 3 291 2011 Ammonia 6 813 813 13

20 15 10 5 -

6,518
7,000 MW 5,000 3,000 1,000 6,098 420 30

7,114
420 34

581 44

60 50 40 30

Million cm/day

8,894 6,694

20 10

0 2015 Urea 2020 Natural Gas Consumption

-1,000

2011 UTE

2015 Renewable

0 2020 Natural Gas Consumption

Brazil currently imports 53% of its total ammonia consumption and will be self-sufficient in 2015 Brazil currently import 53% of the total urea consumed. This amount will reduce to 28% in 2015, 16% in 2017 and 22% in 2020

46

SUPPLY & DEMAND (MILLION M3/D) Increasing supply of associated domestic gas and flexible demand
PCS 9.400 kcal/m

SUPPLY
102 78 55
6 49 69 9 93 9

DEMAND
Thermal Power Plants Demand: Petrobras + Third parties

Domestic NG Supply
North Region

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Other Regions

38 (6.7 GW)

59 (10.7 GW)

76 (15.1 GW) To be contracted (5.5 GW)

25
2015 2020 2011

37
13 2015

40

Flexible Inflexible

2011

2020

Supply via LNG Regasification Terminals

LDC Demand

21 14 2011

41 14 20 2015

41 14 20 2020

Bahia Pecm Guanabara Bay 2011 2015 2020

Non-thermal power

Bolivian Supply

Petrobras Demand: Downstream + Fertilizers


61 39 Fertilizers 16 Flexible 17 2011 25 2015 Firm 32 2020 UPGN Downstream

30 24 2011

30 24 2015

30 24 2020

106

149

173

Total Supply

96

151

200

Total Demand 47

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US$18.2 billion

International

Distribution

Biofuels

48

BIOFUEL INVESTMENTS Priority for ethanol in partnership with private companies


INVESTMENTS US$ 4.1 billion
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7% 14% 0.6 1.9 1.3 47% 0.3

Ethanol Ethanol Logistics Biodiesel R&D

32%

Ethanol supply (million m)


Market-share Pbio+Partners: 2011: 5.3% 2015: 12%
273%

Biodiesel supply (000 m)


5.6 Market Share Pbio+Partners: 2011: 28% 2015: 26%
16%

855

735 1.5

2011

2015

2011

2015

Pbio + Partners

Pbio + Partners

49

INVESTMENTS IN DISTRIBUTION
2011/15 Investment US$3.1 billion
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Mercado Automotivo Gas Stations
Wholesales Consumers Mercado Consumidor

21% 42%

Operaes e Logstica Operations & Logistics Liquigs Company Liquigas Internacional International

18% 6% 13%

Share in the automotive and global markets


50 40 30 20 10 0 2009 2010 2011 2015

38.6

38.8

38.5

40.6

30.6

30.9

31.3

33.7

Automotive Market (%)

Global Market (%)

50

INTERNATIONAL INVESTMENTS Focus on offshore projects in promising basins


US$11 billion

Gulf of Mexico
Key Projects:

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3%
E&P G&E RTCP Distribution Corporate

7%

1% 2%

Cascade / Chinook Saint-Malo Tiber

87%

Africas West Coast


Key Projects: Nigria Akpo Agbami Egina

Latin America
Key Projects: Bolivia San Alberto / San Antonio Supply the Brazilian market Peru Natural Gas Project Lots 57 and 58 Oil Production Lot X Argentina Keeping the existing assets

Angola Block 26

51

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Final Considerations

52

HUMAN RESOURCES
85.417 24.347

Projeo de Labor Force Forecast PetrobrasEfetivo do Sistema Petrobras


103.030 96.953 89.201 92.693 28.608 25.528 26.722 27.985

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BP 2011-2015 requires additional personnel 51% of the workforce with less than 10 years, while 46% with more than 20 years
68.968 74.422

61.070

63.673

65.971

2011

2012 Controladora Parent

2013

2014

2015

35.000 30.000 25.000

3000

Outras Empresas do Sistema Petrobras Group Other companies in Petrobras

a te stim E

Company

2500 2000

Production (thousd. bbl/d)

55%

E&P workforce

20.000 1500 15.000 1000 10.000 5.000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 500 0

E&P Segment will lead workforce increase in line with production growth

Position in Jan/11

Workforce Efetivo

Production Produo

53

TECHNOLOGY MANAGEMENT Complete integration with suppliers, research institutions and other oil companies
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International Research Centers Other operators Suppliers

Brazilian Universities and Research Centers

Expenditures: US$1.3 billion / year Four R&D centers of Petrobras suppliers under construction In order to meet local content requirements, several companies will develop technological centers in Brazil
54

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55