Petrobras Meeting with Investors

Transcription

1 Petrobras Meeting with Investors July 11 th, 2016

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 asaresult 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. 2

3 Agenda Introduction CEO Message Q&A Executive Directors Presentation Production Growth and E&P Investments Optimization Financiability Initiatives Compliance, Control and Environment Improvements 3

4 CEO Message

5 Production Growth and E&P Investments Optimization

6 Oil production in Brazil increases 8% in the 2Q16 New units, 39 new wells and less maintenance stoppages throughout the second half of the year will allow production to reach its target Oil and Gas Production in 2016 (MMboe/d) Oil - Brazil Oil- Abroad Natural Gas Total Óleo 1Q16 1,980 Mbbl/d % Q16 2,134 Mbbl/d , In the 2H16: Annual maintenance stoppages as planned 39 new wells connected Two new FPSOs in Pre-Salt + 4 units ramping-up (20 new wells) FPSO Cidade de Ilhabela 2 production 2 injectors FPSO Cidade de Itaguaí 1 production 2 injectors FPSO Cidade de Mangaratiba 1 production 1 injector FPSO Cidade de Maricá 2 production 1 injector FPSO Cidade de Saquarema 3 production 2 injectors FPSO Cidade de Caraguatatuba 2 production 1 injector Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2,145 Mbbl/d 6

7 Production predictability in Campos Basin Control of the decline rate and investment optimization ensure the profitability of the basin Campos Basin Oil Production (kbpd) Production decline rate lower than 5% p.a Deepwater Average Industry: 11,2%* Reservoirs management and the implementation of complementary projects enable (i) mitigation of the decline rate and (ii) production predictability. Investment optimization In 2015, 16% decrease in the average well drilling timein Campos Basin (from 92 to 77 days) Q132Q133Q134Q131Q142Q143Q144Q141Q152Q153Q154Q151Q162Q16 Temporary reduction of production in 1Q16 Maintenance stoppages in 1Q16, mainly P-58 (Pq. das Baleias, 180 kbpd), P-25 (Albacora, 120 kbpd) and P-53 (Marlim Leste, 180 kbpd). Reduction in production in the 1Q16 was expected by the annual schedule and it has already returned to the previous course. * Source: IHS Cera 7

8 10 th large system in the Pre-Salt in Start-up Process FPSO Cidade de Saquarema in first oil process and Cidade de Caraguatatuba in interconnection process FPSO CIDADE DE CARAGUATATUBA LAPA FIELD 100 Mbbl/d oil, 5 MMm³/d natural gas 3Q16 FPSO CIDADE DE SAQUAREMA (LULA FIELD) Capacity Water Depth Wells 150 thousand barrels of oil and 6 MM m³ of natural gas per day 2,120 meters 18 wells (9 production and 9 injectors) 3Q16 8

9 Investments Optimization The knowledge of the pre-salt reservoirs and its high productivity allowed a 26% reduction in E&P investments E&P Investments (US$ billion) Brazil s oil production in 2020 (Mbbl/d) SINCE 2010: -26% -4% Installation 10 PRODUCTION UNITS (5 with topped capacity ; 5 still ramping up) Connection 55 PRODUCTION WELLS 80.0 Reduction Well construction time from 310to 89days for each well Reached Production of 1 MILLION BARRELS of oil per day (Petrobras + partners) 43% of Brazilian production 70% = Petrobras stake BMP (Jun/15) BMP Revision (Jan/16) BMP (jun/15) BMP Revision (jan/16) Reduction Lifting cost reduced from US$ 10.4/boe to US$ 7.6/boe* *Lifting Cost disclosed on the 1Q16 9

10 Pre-salt high productivity allowed CAPEX dilution Ramp-up in two phases ensures the maintenance of a stable production peak Production Curve 1 Phase of Wells Production Curve 2 Phases of Wells 2 nd phase between 3 and 4 years after production start up Production Production years years 10

11 Financiability Initiatives

12 Capex Reduction In 2015, we reached positive free cash flow for the first time after 7 years Business and Management Plan Updates (US$ billion) Free Cash flow (R$ billion) -52% BMP BMP BMP with adjustments Q15 2Q15 3Q15 4Q15 1Q16 Four consecutive quarters of positive free cash flow 12

13 Divestment Plan plan of $ 15.1 billion, focusing on the deleveraging the Company Transactions completed - cash inflow of $ 0.73 billion 2015 Austral Basin assets in Argentina to CGG (Compañia General de Combustibles S.A.): US$ 101 million. 49% of Gaspetro to Mitsui: R$ 1.9 billion (US$ 540 million). Price adjustment on the sale of Innova and assets in Colombia: US$ 92 million. 1 transaction approved Expected cash inflow of US$ 0.89 billion Sale of 67.19% holding in PESA, to Pampa Energía: US$ 892 million with closing expected on Aug/16. Transactions in negotiation phase - subject to deliberation and approval by the competent bodies and instances 2016 Negotiations concluded with Southern Cross Group of the main conditions for the sale of 100% of Petrobras Distribution Chile Ltda. The final value of the operation is estimated at approximately $ 490 million. Conduction of negotiations with Brookfield approved, on an exclusive basis, for partnership on Nova Transportadora do Sudeste (NTS). Competitive process for partnership in BR Distribuidora in progress. Competitive process for the sale of LNG terminals and associated thermal plants in progress. Competitive process for the sale of land and shallow water fields in progress. Competitive process for the sale of Liquigás in progress. Competitive process for the sale of other assets in progress The divestment portfolio is dynamic and can be changed, either by internal factors (revaluation of portfolio and prioritization of projects), or by external factors (expression of interest and market response to divestment projects). 13

14 Liability Management Bond issuance with offer to purchase allow a maturity extension of our debt Highlights Petrobras successfully issued bonds in the international market: US$ 5 billion, with 5 years maturity and 8.625% yield US$ 1.75 billion, with 10 years maturity and 9.0% yield Impact on the debt maturity schedule (US$ Billion) Demand reached over US$ 20 billion, composed of approximately 850 orders; The proceeds were used for Liability Management. After the pricing of the New Issue, the tender cap was increased to USD 6 billion; Holders of bonds equivalent to US$7.5 billion and 1.9 billion tendered their Notes; The Company also announced an any-and-all offer with the intention to remove certain covenants from the 8.375% 2018 Notes. This offer remained open until July 8 th Amortization decrease due to the tender offers Amortization after the tender offers 14

15 OPEX reduction Initiatives to reduce Manageable Operating Costs Procedures to reduce costs Extra time labor Training Communication Consulting Travel and Transportation Real State demobilization 3 building in downtown RJ Between Dec/15 and May/16 Organizational restructuring Reduction of 43% in managerial position in nonoperating areas Jul/15 Sep/15 Oct/15 Nov/15 Mar/16 Apr/16 Decrease of third part contracted personnel Reduction of 30% in costs related to administrative support Demobilization of 6 thousand positions until May/16 Collective Bargain Agreement More restrictive agreement No additional bonus Inflation readjustment Conclusion of 1 st phase of critical contracts renegotiation Drilling rigs Vessels PLSVs Helicopters New Voluntary Severance Incentive Plan Targeting up to 12 thousand employees Other initiatives under planning: Ships fleet optimization 2 nd phase of contracts renegotiation: drilling rigs, vessels and aircrafts Optimization of expenses related to tankage conservation Reduction of 1 supply vessel of LNG New procedures to reduce administrative expenses 15

16 Compliance Program and Control Improvement

17 Petrobras Compliance Program FCPA GUIDE DOJ and SEC UKBA GUIDANCE /13 ACT Decree 8.420/15 COMPLIANCE Tone of the Top Conduct Guide Risk Assessment Policies and Procedures Communication and Training Disciplinary Regime Integrity Due Diligence of Third Parties Reporting Channels Internal Investigation Continuous Improvement 17

18 Improvements on Control framework New Governance, Risk and Compliance Office Chief GRC Officer hired from the market Special Committee ( reporting line ) Independent Investigation Sanctions Committee New Board Profile Integrity Background Check on key-positions candidates Compliance Goal: 100% of the employees Alignment of GRC activities with System's Subsidiaries Review of Approval Authority Limits / Collegiate Decisions 18

19 Thank You Investor Relations