Turning Petrobras around

Transcription

1 Turning Petrobras around Nelson Silva Chief of Strategy and Performance Officer 2017 General Electric Company - All rights reserved

2 Disclaimer FORWARD-LOOKING STATEMENTS: The presentation may contain forward-looking statements about future events within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are not based on historical facts and are not assurances of future results. Such forwardlooking statements merely reflect the Company s current views and estimates of future economic circumstances, industry conditions, company performance and financial results. Such terms as "anticipate", "believe", "expect", "forecast", "intend", "plan", "project", "seek", "should", along with similar or analogous expressions, are used to identify such forward-looking statements. Readers are cautioned that these statements are only projections and may differ materially from actual future results or events. Readers are referred to the documents filed by the Company with the SEC, specifically the Company s most recent Annual Report on Form 20-F, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements, including, among other things, risks relating to general economic and business conditions, including crude oil and other commodity prices, refining margins and prevailing exchange rates, uncertainties inherent in making estimates of our oil and gas reserves including recently discovered oil and gas reserves, international and Brazilian political, economic and social developments, receipt of governmental approvals and licenses and our ability to obtain financing. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information or future events or for any other reason. Figures for 2016 on are estimates or targets. All forward-looking statements are expressly qualified in their entirety by this cautionary statement, and you should not place reliance on any forward-looking statement contained in this presentation. In addition, this presentation also contains certain financial measures that are not recognized under Brazilian GAAP or IFRS. These measures do not have standardized meanings and may not be comparable to similarly-titled measures provided by other companies. We are providing these measures because we use them as a measure of company performance; they should not be considered in isolation or as a substitute for other financial measures that have been disclosed in accordance with Brazilian GAAP or IFRS. NON-SEC COMPLIANT OIL AND GAS RESERVES: CAUTIONARY STATEMENT FOR US INVESTORS We present certain data in this presentation, such as oil and gas resources, that we are not permitted to present in documents filed with the United States Securities and Exchange Commission (SEC) under new Subpart 1200 to Regulation S-K because such terms do not qualify as proved, probable or possible reserves under Rule 4-10(a) of Regulation S-X.

3 Commitment to Life Program Our daily safety challenge Petrobras HSE activities on a typical day Headcount at shipyards 38,000 Toolbox Dialogues 4,000 Work Permits 10,000 Confined Space Entry Permits 400 Interventions 1,500 Work Permits Audits 2,000 Job Safety Analysis 4,500 Distance travelled by trucks (km/day) 1,700,000 3

4 Challenging business environment Uncertainties of global economy Oil industry Changes in the competitive scenario: shale oil/gas Portfolio optimization and adjustments to the workforce Petrobras context Car-wash operation Challenging regulatory framework High debt levels and cost of borrowing Economic and political crisis in Brazil 4

5 Low oil prices challenge continues Oil Price (Brent -US$/bbl) Source: Bloomberg 5

6 driving down the industry s results % 30% 25% 20% 15% 10% 5% Return on average capital employed (ROACE) x Brent Brent ROACE US$/bbl % S16 0 ROACE Industry average* Brent Source: Evaluate Energy and corporate reports (Petrobras, Shell, Exxon, Chevron, BP, Statoil, ENI, ConocoPhillips, Ecopetrol and Total) 6

7 The oil and gas industry is cutting both investments and costs Upstream Global Investments ( ) (US$) Global Industry Cost (US$/boe) US$ Bi % -24% US$ per boe of production Other Expenses Production Expenses Exploration Costs Taxes Other than Income Development Costs Source: IEA - World Energy Investment 2016 Source: IHS Markit 7

8 Eight key areas of cost savings to reboot the business model 1 Technical standardization 2 Supply-chain partnering and renegotiation 3 Greater cooperation with industry players 4 Organizational rightsizing 5 Maintenance optimization 6 Streamlining overhead, real estate and support service costs 7 Improved workforce efficiency 8 Optimization of logistics Source: BCG 8

9 PETROBRAS UPDATED VISION To be an integrated energy company focused on oil and gas that evolves with society, creating high value with a unique technical capability 9

10 Main Metrics of Strategic Plan (SP) and Business and Management Plan (BMP) SAFETY FINANCIAL Reduction of 36% In the Total Recordable Injury Frequency Rate (TRIFR*) Reduction in LEVERAGE Net Debt/EBITDA FROM 2.2 in 2015 TO 1.4 in 2018 FROM 5.3 in 2015 TO 2.5 in 2018 * TRIFR = reportable incidents per million man-hours 10

11 Strategic Drivers EVOLUTION 11

12 Investment spending by Petrobras (Capex) Comparison of total capex (US$ Billion) % % 17% 1% 17% 81% 82% BMP BMP Capex US$ 19.2 Billion Exploration & Production (E&P) Refining & Natural Gas (RNG) Other segments 12

13 Cost reductions Manageable operating costs* (US$ Billion) % 10% % 53% E&P RGN Refining Demais & Natural áreas Gas (RNG) BMP Estimates BMP Other segments * Manageable operating costs: lifting, refining, logistics and distribution costs, overhead and others 13

14 Partnerships and divestments create benefits Amount in US$ Billion 21 Capex and risk sharing 13.6 Technological exchange Strengthening of corporate governance * Press Release Jan 2017 US$ 19,5 + 1,5 Bi - new target 14

15 As the pre-salt experience demonstrates CAMPOS BASIN Production 7 Fields (100%) 2 Exploration Blocks non Operated Cutting edge technological development Lower finding costs 7 3 Producing Fields Exploration Blocks SANTOS BASIN Fast production growth Lower CAPEX 1 Exploration Block SANTOS BASIN 10 Producing Fields (100%) SANTOS BASIN Lower lifting cost Competitive breakeven 15

16 Key messages Safety is Petrobras top priority The industry needs to reboot its business model The Brazilian business and regulatory environment is improving Petrobras is turning around 16

17 Thank you! Nelson Silva Chief of Strategy and Performance Officer