Continuous strategic monitoring: long term focus and 3 new strategies

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2 Disclaimer FORWARD-LOOKING STATEMENTS: DISCLAIMER 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 forward-looking 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 2017 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. 2

3 Continuous strategic monitoring: long term focus and 3 new strategies An integrated company of energy, with focus on oil and gas that evolves with society creating high value with a unique technical capability ACTIVE PORTFOLIO MANAGEMENT EXPLORATORY PORTFOLIO STRENGTHENING OF GOVERNANCE COST DISCIPLINE BEST PRACTICES TECHNOLOGICAL COMPETENCIES RESTRUCTURING OF THE ELECTRIC ENERGY BUSINESS E&P PROJECTS PORTFOLIO EXIT FROM NON-CORE BUSINESSES MAXIMIZATION OF GAS VALUE RECOVERY OF CREDIBILITY LOW CARBON ECONOMY DIGITAL TRANSFORMATION PROCUREMENT WITH A VALUE FOCUS MERITOCRACY RESERVES INCORPORATION PRICING POLICY FINANCIAL AND RISK MANAGEMENT DEEP WATER PRODUCTION DEVELOPMENT LOW BREAKEVEN PRICE PROJECTS 3

4 Preparing the company for a future based on a low carbon economy Reducing carbon emissions on our production processes Investing and promoting new technologies to reduce impacts on climate changes Developing high value businesses for renewable energies 4

5 Capturing opportunities generated by the digital transformation Value generation through digital solutions for reservoir management and geological processes (geophysics, geochemistry and petrophysics) Automation Big data Cloud computing Artificial intelligence High performance computing 5

6 Optimizing the company s financial and risk management Improvement on cash management, increasing predictability and optimizing size and allocation Reduction on risks associated to the company s cash flow 6

7 OUR MAIN METRICS Safety Anticipated in 2 years Financial Target maintained 1.0 in in 2018 TOTAL RECORDABLE INJURY FREQUENCY RATE (TRI)* NET DEBT/ADJUSTED EBITDA *Number of reportable injuries per million man-hours 7

8 Safety TRI TOTAL RECORDABLE INJURY FREQUENCY RATE (TRI)* Actual Actual 1.1 3Q in % reduction Peers average 8

9 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 9

10 Main planning assumptions Brent Prices (US$/barrel) Nominal exchange rate (R$/US$) 100, ,0 60,0 40,0 20, 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,

11 Net Debt/Ebitda Net Debt/EBITDA Sensitivity to Brent 4,5 BRENT US$/BBL Net Debt Adjusted Ebitda ,5 3 2,5 2 1, Brent (US$/bbl) 62.4 Monthly average values for ICE Brent futures contracts for 2018 (Feb to Dec/18) Planning assumption Futures prices* Spot Prices* *Data from December 20,

12 Continuous reduction and improvement in debt profile Indebtedness (US$ billion) Average maturity (years) and Average rate (% p.y.) Q16 4Q16 1Q17 2Q17 3Q17 4Q18 3Q16 4Q16 1Q17 2Q17 3Q17 Maturity Average rate Total amortizations of principal in 2018, 2019 and 2020 (US$ billion) 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) 12

13 Additional initiatives with impacts on cash flow Increase in market-share through an active pricing policy Additional reduction in disbursements (opex and capex) Acceleration in divestments with a US$ 5 billion increase in potential portfolio 13

14 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

15 Million boe/d Increase in oil and gas production OIL + GAS INTERNATIONAL NATURAL GAS BRAZIL OIL BRAZIL Note: Considers divestments 15

16 Focus on the most profitable invesment projects CAPEX Annual Capex 74.5 US$ billion 18% 1% E&P Refining and Natural Gas Other segments % 8.4 Note: incorporates reductions from divestments Capex was maintained at the same level of the previous plan 16

17 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 Increase in value associated to capex allocation, strategic partnerships and divestments 77% Risk Exploration Production Development Infrastructure + R&D Reduction on break-even Brent BMP BMP BMP Focus on the most profitable projects More competitive costs Resilience to price levels 17

18 Refining and Natural Gas Investments CAPEX RNG 6% Natural Gas Logistics Investments in pipelines, gas pipelines and natural gas processing units to offload pre-salt production 28% 13.1 US$ billion 66% Diesel Quality and Refining Expansion Investments focused on diesel quality and the 2nd phase of the RNEST refinery, for which partnerships are still being sought Refining, Transportation and Marketing Natural Gas and Power Distribution and Biofuels Operational Maintenance $ Investments in safety, maintenance and focus on the assets operational efficiency 18

19 Maintenance of our partnership and divestment program, with a target of US$ 21 billion until 2018 Total of US$ 4.5 billion in 2017 IPO Strategic Alliances Divestment Program IPO of Petrobras Distribuidora Partnership in the Roncador field in the Campos Basin Sale of Azulão Field R$ 5 billion US$ 2.9 billion US$ 55 million 19

20 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 20

21 Ongoing divestment processes 70 onshore fields 31 shallow water fields Distribution in Paraguay North/Northeast Gas Pipelines Fertilizer Units Upstream assets in Africa Divestment of BSBios Assignment of all rights in shallow-water fields Divestment of 100% equity interest of Petrobras Oil & Gas B.V. ( POGBV ) Divestments in the Fertilizer Sector (Ansa e UFN-III) Sale of 100% of PBIO s stake in BSBIOS Sale of 90% of Transportadora Associada de Gás S.A. ("TAG")G 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 aplicacble 21

22 We will keep our pricing policy Key Drivers Alignment to international prices Quest for competitiveness 22

23 Operational costs and expenses OPEX (US$ Billion) 59 Purchase of feedstock (33%) US$ billion Government take (14%) Depreciation (15%) Manageable operational Costs (35%) Others (3%) Operational costs at the same level of the previous business plan 2018 forecast for operational costs and expenses is US$ 74.4 billion (38% in E&P) *Average cost of the BMP Brazil and abroad **average cost of the BMP - Brazil 23

24 With costs under control MANAGEABLE OPERATING COSTS (US$ billion) 11.0 Lifting costs (US$/bbl) E&P RNG US$ billion 62.2 Corporate 9M ** Refining costs* (US$/bbl) M ** * Brazil **Average of BMP 24

25 Sources and Uses US$ billion Uses Investments Amortizations Financial Expenses Source Cash Buildup Partnerships and Divestments Operating Cash Flow (after dividends) 25

26 Main Projects 26

27 Main Projects 27

28 LULA: two new systems to start production in 2018, totaling 9 production systems CAPEX from 2018 to 2022* > US$ 4.5 Billion Daily Operated Production > 1.0 MMboe/d Accumulated Production > 800 MMboe Wells > 120 drilled > 40 in production Oil Gas Highest Monthly Production DISCOVERY 2006 * Petrobras WI only Cid. de Angra Cid. de Cid. de Cid. de Cid. de Cid. de dos Reis Paraty Mangaratiba Itaguaí Maricá Saquarema P-66 P-67 P

29 MERO: 1 st field under production sharing regime will have 2 systems until 2022 Mero Field Mero Mero Libra Area Recoverable Volume 3.3 billion oil barrels Good quality oil with high commercial value and expressive presence of associated gas Exploratory activity continues Period extended for additional 27 months 12 exploratory CAPEX from 2018 to 2022* US$ 2.3 Billion wells drilled Breakeven Price ~ US$ 35/barrel +2 until 2019 * Petrobras WI only 29

30 BÚZIOS: 5 new production systems within the plan period CAPEX from 2018 to 2022* US$11.4 Billion 5 FPSOs with capacities of: 750 kbpd OIL Wells: 45 production 40 injection with intensive application of WAG technology (Water Alternate Gas Injection) Búzios MMboe P-74 P-75 P-76 P-77 Leased FPSO * 100% Petrobras WI 30

31 CAMPOS BASIN: value maximization for the basin responsible for 50% of our production Integrated Parque das Baleias 2021 CAPEX from 2018 to 2022* US$ 18.9 billion 4 new systems until new exploratory blocks Blocks acquired during ANP 14 th Bidding Round, contiguous to the Pre-Salt polygon Revit. Marlim Revit. Marlim Partnership with Statoil in Roncador Technology sharing and increase of recovery factor Extension of Concessions 3 Signed off 6 Under negotiation Tartaruga Verde & Mestiça 2018 * Petrobras WI only. Includes all investments in the Basin 91 projects to increase the recovery factor 31

32 Integrated Project Route 3: Infrastructure Project for offloading and processing of natural gas from Santos Basin Pre-Salt Gas Pipeline 355 Km extension for drainage of up to 18 millions m3/day. The conclusion is planned for Natural Gas Processing Unit Total capacity to process 21 million m3/day of natural gas, increasing the offer to the market. The operational start up of this unit is forecasted to Located at Comperj. Additional Natural Gas Treating Unit at Cabiúnas Terminal (TECAB) Located at Macaé. 32

33 Paving the future 33

34 Petrobras is recomposing its exploratory portfolio NEW AREAS ACQUIRED RETURN OF 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) Poraquê Alto By bidding rounds + 2 rounds for marginal accumulations Carimbé Tracajá * RDA: Reservoir data acquisition ** APS: Anticipated production system 34

35 Keep strengthening its governance Improvement of Business Environment High Administration Compromise DDI Integrity Due Diligence Incentive for improvement of partners compliance programs LEADERSHIP THROUGH EXAMPLE Participation and incentive to the training realization BRAZILIAN NETWORK OF GLOBAL PACT Development of collective actions against corruption in Brazil DOCUMENT APPROVAL Approval of Politics and revision of the Conduction Guide, amplifying it s comprehensiveness for all Petrobras system IBP s COMPLIANCE COMISSION Discussion forum for compliance and integrity policies IMPROVEMENT OF COMPLIANCE CULTURE Mandatory trainings about compliance and ethics ETHOS INSTITUTE Signatories of the Business Pact for Integrity and against Corruption CONSEQUENCES MANAGEMENT Internal commissions for investigations Independent denunciation channel Correction Committee 35

36 And being recognized by the improvements implemented B3: Certification in the Corporate Governance Program for State- Owned Companies August/2017 The initiative intends to improve corporate governance practices in listed state-owned. Petrobras has complied with all the compulsory measures of the Program and obtained 56 points among others required measures. Estadão Empresas Mais Award September/2017 Ranking developed by Grupo Estado in partnership with Austin Rating and FIA (FEA/USP) elected the most efficient companies in 22 sectores of the economy and by region, with the best Corporate Governance practices. The Board of Directors of Petrobras won the 1 st place in its category. IG-SEST: Certificate of Excellence in Governance Program for State- Owned Companies November/2017 A continuous monitoring instrument for measuring compliance with Law /16, with the aim of monitoring the performance of the governance quality of the state-owned companies. The company scored 10 in all items and reached Level 1 of Governance. Petrobras request for joining the special listing segment Level 2 of Corporate Governance of B3 36

37 In a process of cultural transformation oriented to results Career and Managerial Succession Executive Talent Base New Program of Meritocracy HR POLICY Valuing people Merit as a basis for recognition Trails of technical and managerial knowledge Upgrade of the Remuneration and Carreer Models New working arrangements CULTURAL MANAGEMENT Results-oriented transformation Intensify mobility to balance staff Improve Relationship Model with Stakeholders 37

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