Is the Turnaround Over? Pedro Parente CEO

Transcription

1 Is the Turnaround Over? Pedro Parente CEO

2 jan/13 mar/13 mai/13 jul/13 set/13 nov/13 jan/14 mar/14 mai/14 jul/14 set/14 nov/14 jan/15 mar/15 mai/15 jul/15 set/15 nov/15 jan/16 mar/16 mai/16 jul/16 set/16 nov/16 jan/17 mar/17 mai/17 jul/17 set/17 nov/17 jan/18 Brazil is leaving the political crisis behind 250% 200% 150% 100% Stable Currency BRL/USD 3.31 Climbing Stock Market IBOVESPA 76.4K 50% 0% Brazilian political crisis Inflation below target CPI* 2,8% * Consumer Price Index. Data on Jan 29 th

3 The business environment for O&G is more reliable and flexible Bidding rounds Steady rounds schedule Incentive for entry of new operators Improvement of the environmental licensing Faster environmental licenses issuing and reduction of fines Permanent supply Long-term opportunities for increased demand Legal certainty Greater regulatory stability, providing confidence to stakeholders Regulatory improvements Lower local content requirements Repetro extension Tax reform Reform in the legislative structure of taxes, fees and other contributions 3

4 Petrobras is ready to resume growth An impressive free cash flow turnaround of R$ 84 billion from 2013 to US$/bbl Brent Free cash flow Adjusted Ebitda R$ bn R$84 bi M17 4

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6 OUR MAIN METRICS Safety Achieved 2 years ahead of target Financial Maintained target 1.0 in in 2018 TOTAL RECORDABLE INJURY FREQUENCY RATE (TRI)* NET DEBT/ADJUSTED EBITDA *Number of recordable injuries per million man-hours 6

7 Safety TRI TOTAL RECORDABLE INJURY FREQUENCY RATE (TRI)* Actual Actual 1.1 3Q in % reduction Peers average 7

8 Financial Net Debt / Adjusted Ebitda 5.1 NET DEBT / ADJUSTED EBITDA Actual Actual 3.2 3Q in Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q18 40% reduction By 2022: metric converges to the global average of the main oil and gas companies rated as investment grade 8

9 Main planning assumptions Brent Prices (US$/barrel) Nominal exchange rate (R$/US$) 100, ,0 60,0 40, , Range of Estimates 0, Focus Range (11/03/2017) Source of estimates: IHS Jul/2017 (Scenarios Rivalry and Autonomy), PIRA Sept/2017 (Scenario Reference, High and Low), EIA International Energy Outlook Sept/2017 (High Price, Low Price, Reference) values represent the average until Nov 7,

10 Net Debt/Ebitda Net Debt/EBITDA Sensitivity to Brent 4,5 BRENT US$/BBL Net Debt Adjusted Ebitda 4, ,5 3,0 2,5 2,0 1, Brent (US$/bbl) 53 ~70 Planning Current assumption Spot price Planning assumption Current Spot price ~

11 Continuous reduction and improvement in debt profile Indebtedness (US$ billion) Average maturity (years) and Average rate (% p.y.) Q16 4Q16 1Q17 2Q17 3Q Maturity Average rate Total amortizations of principal in 2018, 2019 and 2020 (US$ billion) 3Q16 4Q16 1Q17 2Q17 3Q17 4Q Gross debt Net debt Position in 12/31/2014 Position in 11/30/2017* * Does not include pre-payment of US$ 2.8 billion with CDB (due in 2019) 11

12 Additional initiatives with impacts on cash flow Increase in market-share through an active pricing policy Additional reduction of expenditures (opex and capex) Accelaration of the divestment program with an increase of US$ 5 billion on the potential divestments portfolio 12

13 Start-up of 19 new production units by 2022 TARTARUGAS VERDE E MESTIÇA (99%) LULA NORTE P-67 (99%) BERBIGÃO P-68 (88%) REVIT. DE MARLIM MÓD. 1 LULA EXTREMO SUL P-69 (91%) REVIT. DE MARLIM MÓD. 2 BÚZIOS 1 P-74 (96%) INTEGRADO PARQUE DAS BALEIAS OWNED POS-SALT LEASED BÚZIOS 2 P-75 (92%) MERO 1 SERGIPE-ÁGUAS PROFUNDAS PRE SALT (CONCESSION) TRANSFER OF RIGHTS BÚZIOS 3 P-76 (93%) ATAPU 1 P-70 (88%) BÚZIOS 5 MERO 2 PSA Completion (%) EGINA Egina FPSO (85%) BÚZIOS 4 P-77 (90%) SÉPIA ITAPU

14 Million boe/d Oil and gas production growth OIL + GAS INTERNATIONAL NATURAL GAS BRAZIL OIL BRAZIL Note: Considers divestments 14

15 Consistent pricing policy Key Drivers International prices parity Competitiveness 15

16 Costs under control OPEX (US$ Billion) 2018: US$ 74.4 billion 11.0 Lifting costs (US$/bbl) Purchase of feedstock (33%) US$ billion 131 Government take (14%) Depreciation (15%) Manageable operational Costs (35%) 9M ** 3.0 Refining costs* (US$/bbl) 57 Others (3%) M ** * Average cost of the BMP Brazil and abroad ** Average cost of the BMP Brazil * Brazil **Average of BMP 16

17 And focus on the most profitable invesment projects CAPEX Annual Capex 74.5 US$ billion 18% 1% E&P Refining and Natural Gas Other segments % Note: incorporates reductions from divestments Capex was maintained at the same level of the previous plan 17

18 Return E&P Investments CAPEX E&P 12% 11% Investments by layer Post-Salt 42% Pre-salt 58% 58% of the capex will be deployed on the pre-salt, which presents a higher profitability relative to post-salt assets 60.3 US$ billion Active portfolio management Value increase associated with capex allocation, strategic partnerships and divestments Risk Exploration Infrastructure + R&D 77% Production Development Reduction on break-even Brent BMP BMP BMP Focus on the most profitable projects Competitive costs Resilience to the price levels 18

19 Building a competitive upstream portfolio in a lower price scenario Competitive portfolio breakeven Point-forward breakeven reduction of 30% Portfolio : 43 US$/bbl Portfolio : 29 US$/bbl 1) BMP ) BMP ) Transfer of Rights Pre-salt knowledge base Technology development Portfolio management & selectiveness High productivity and low lifting cost Selectiveness for new exploratory opportunities Preemption rights in pre-salt areas ToR 3 renegotiation Better regulatory and tax framework Lower local content requirements Renewal of special tax regime (Repetro) 19

20 2016 full-cycle Brent Breakeven, US$/bbl And great competitiveness worldwide $120. $100 Canada oil sands Venezuela $80 $60 $40 $20 Middle East Russia Algeria China Brazil NA Tight Oil West Africa Norway and UK US GoM * Breakeven price range for a typical Pre-salt project Kazakhstan $ New crude oil production, thousand b/d Sources: IHS Markit 2016; *Petrobras 20

21 Refining and Natural Gas Investments CAPEX RNG Natural Gas Logistics Investments in pipelines and natural gas processing units to offload pre-salt production 6% 28% 13.1 US$ billion 66% Diesel Quality and Refining Expansion Investments focused on diesel quality and the 2 nd phase of the RNEST refinery, for which we are seeking partnerships Refining, Transportation and Marketing Natural Gas and Power Distribution and Biofuels Operational Maintenance $ Investments in safety, maintenance and focus on the assets operational efficiency 21

22 Maintenance of our partnership and divestment program, with a target of US$ 21 billion for the biennium Total of US$ 4.5 billion in 2017 IPO Strategic Alliance Divestment Program IPO of Petrobras Distribuidora Partnership with Statoil in the Roncador Field in the Campos Basin Sale of Azulão Field R$ 5 billion US$ 2.9 billion US$ 55 million 22

23 Strategic Alliances Partnership in Lapa and Iara fields Partnership in Termobahia Agreement for alliances in the upstream and downstream segments and technological cooperation covering the areas of operation, research and technology Signed deals of US$ 2.2 billion Consortium to explore the area of Peroba MOU for cooperation in opportunities in Brazil and abroad in all segments of the oil and gas chain, including potential financing arrangements. Consortium to explore the areas of Peroba and Alto de Cabo Frio Central LOI for cooperation on exploration, production, refining, gas transportation and marketing, LNG, oil trading, lubricants, jet fuel, power generation and distribution, renewables, technology and low carbon initiatives Consortium to explore 6 off-shore blocks in Campos Basin MOU for cooperation in exploration, production, gas and chemicals both inside and outside Brazil. Partnership in the Roncador field in Campos Basin Strategic agreement for technical cooperation in order to increase recoverable volumes Sharing of gas exports infrastructure Signed deals of US$ 2.9 billion 23

24 Ongoing divestments 70 onshore fields 31 shallow water fields Distribution in Paraguay North/Northeast Gas Pipelines Fertilizer Units Upstream assets in Africa Divestment of BSBios Sale of 90% of Transportadora Associada de Gás S.A. ("TAG") Assignment of all rights in shallow-water fields Divestments in the Fertilizer Sector (Ansa e UFN-III) Sale of 100% of PBIO s stake in BSBIOS Divestment of 100% equity interest of Petrobras Oil & Gas B.V. ( POGBV ) Sale of Maromba Field (RJ) Assignment of all rights in five sets of onshore fields (CE, RN e SE) Assignment of all rights in three sets of onshore fields (RN e BA) Sale of Assets in Paraguay Sale of Azulão Field (AM) US$ 54.5 million Teaser Non-binding phase * Binding phase Closing New process for partnerships and divestitures Approval by Top Management and contracts signing * If applicable 24

25 PAVING THE FUTURE

26 We are recomposing our exploratory portfolio NEW AREAS ACQUIRED RESUMED EXPLORATORY ACTIVITIES NEW DISCOVERIES ON CAMPOS BASIN PRE-SALT 14 th Concession Round + 2 nd e 3 rd Production Sharing Rounds 10 new exploratory blocks 11.4 thousand km 2 of exploratory area (increase in 17% of our actual portfolio) R$ 2.9 billion invested in signature bonus Average of exploratory wells per year Forno (APS** in 2019) Brava (RDA* in 2018) By bidding rounds + 2 rounds for marginal accumulations Carimbé Poraquê Alto Tracajá * RDA: Reservoir data acquisition ** APS: Anticipated production system 26

27 And improving our governance and management GOVERNANCE STRENGTHENING HUMAN RESOURCES POLICIES Internal investigations commissions Independent denunciation channel Correction Committee Integrity Due Diligence on partners and suppliers Participation on compliance forums Business Pact for Integrity and against Corruption Improvement of the compliance and ethics culture throughout the company We ve applied to join B3 s Level 2 Corporate Governance listing Establishment of the culture of meritocracy Compensation and career models enhancement Workforce reallocation driven by efficiency Development of technical and managerial knowledge CLASS ACTION SETTLEMENT We agreed to pay US$ 2.95 billion and we firmly believe it is in the best interest of our shareholders, given the risks of a verdict All pending and prospective claims by purchasers of Petrobras securities in the US would be resolved, putting an end to uncertainties, burdens and costs of protracted litigation We will continue to pursue all available legal remedies from culpable companies and individuals Ongoing proceedings with the SEC and DOJ 27

28 In a nutshell The landscape for investments in Brazil has dramatically improved, specially for O&G We consistently delivered our goals, both operational and financial We will increase our production by 30% in the next 5 years Our governance and management systems are now much more consistent and reliable 28

29 Obrigado! Thank you!