The document discusses perspectives for the LP gas and oil markets. It summarizes that global oil demand is expected to increase significantly by 2020-2030, challenging production capacity. World LP gas demand is projected to grow over 1% annually. Brazil's pre-salt oil reserves could double the country's proven reserves. Domestic oil production and product demand in Brazil are both expected to increase steadily through 2020. LP gas consumption and imports in Brazil have grown but imports are projected to decline as new refineries come online. Petrobras' infrastructure includes refineries, natural gas units, pipelines and terminals to integrate operations across the LP gas supply chain. LP gas faces displacement risks from natural gas and wood but opportunities include modernizing bott
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08.10.2009 Presentation of President José Sergio Gabrielli de Azevedo about “LP Gas and Future Markets Perspectives” in Rio de Janeiro - RJ
1. LP Gas and Future Market Perspectives
José Sergio Gabrielli de Azevedo
CEO. October, 8th 2009
1
2. DISCLAIMER
The presentation may contain forecasts CAUTIONARY STATEMENT
about future events. Such forecasts merely FOR US INVESTORS
reflect the expectations of the Company's
management. Such terms as "anticipate", The United States Securities and Exchange
"believe", "expect", "forecast", "intend", Commission permits oil and gas companies,
"plan", "project", "seek", "should", along with in their filings with the SEC, to disclose only
similar or analogous expressions, are used proved reserves that a company has
to identify such forecasts. These predictions demonstrated by actual production or
evidently involve risks and uncertainties,
conclusive formation tests to be
whether foreseen or not by the Company.
Therefore, the future results of operations economically and legally producible under
may differ from current expectations, and existing economic and operating conditions.
readers must not base their expectations We use certain terms in this
exclusively on the information presented presentation, such as oil and gas
herein. The Company is not obliged to resources, that the SEC’s guidelines
update the presentation/such forecasts strictly prohibit us from including in
in light of new information or future filings with the SEC.
developments.
2
3. MEDIUM/LONG-TERM OIL MARKET OUTLOOK
REMAINS VERY STRONG
GLOBAL OIL DEMAND SCENARIOS
EIA/DOE High Demand
Scenario
IEA Reference Scenario
Global liquids demand scenarios
EIA/DOE Low Demand
Scenario
Actual decline
Additional Required
Natural decline Capacity (b/d)
Existing production
2020 | 42 – 51 mm
2030 | 66 – 85 mm
• The global crisis impacted down the perspectives for demand growth, but in medium/long-term
oil market outlook remains very strong
• Global oil production capacity will be challenged to meet projected demand growth
3 Source: IEA World Energy Outlook 2008, EIA International Energy Outlook 2009
4. WORLD LP GAS DEMAND
80
72,3
21,0%
31,0%
5,5% 62
60
6,1%
12,1% 24,3%
M illion Tons
Mexico Brazil Venezuela
Caribbean Argentina Others
40
33,9
28,1
20
18,1
11,2 10,6
2,1
0
Oceania Africa CIS Middle Latin Europe North Asia
East America America
4 Source: Purvin & Gertz
5. PRE-SALT POTENTIAL
• Total Area: 149,000 km2
• Area Under Concession: 41,772 km2 (28%)
• Area Not Under Concession: 107,228 km² (72%)
• Area With Petrobras Interest: 35,739 km2 (24%)
5
6. ANNOUNCED RECOVERABLE VOLUMES IN
SANTOS AND CAMPOS BASINS PRE-SALT
Santos Pre-Salt announced recoverable volumes, can
almost double Brazilian reserves.
mi boe ~ 25-30 bn boe
30,000
25,000
20,000
15,000
Higher estimates
+5,400
10,000
5,000
14,093 Lower estimates
10,600
0
2008 Proven Santos and Campos Basins Proven Reserves* +
Reserves* Pre-Salt Santos and Campos Basins
(Tupi, Iara, Guará and Whale’s Pre-Salt
Park)** (Tupi, Iara, Guará and Whale’s Park)**
*SPE Criteria
** include Petrobras and Partners
6
8. LP GAS COMSUMPTION IN BRAZIL
Domestic LPG production in 2008: 6,71 million tons
LPG Brazilian market grew 5,4% from 2004 to 2008, representing an average variation of 1,08% p.y.
Present in all Brazilian municipalities
47 million homes are attended monthly.
LP Gas Consumption (Thous. M3)
Business
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Plan 2020
14
12
10
T o s.
h u
8
6
4
2
0
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
Business
Plan 2020
Industrial Residential Others
After 2009 – Business Plan 2020 estimates
8 Source: ESTRATÉGIA / EMN & ANP
9. LP GAS IMPORTS
Importação Brasileira de GLP
LPG IMPORTS (million ton/year)
3
• From 2000 to 2005 LPG
Importação (milhão ton / ano)
import fell due to Natural
2,5 Gas substitution and
deregulation on LPG prices
2
at the end-user;
1,5
• Imports started to grow
1 from 2005 to 2008 due to
higher domestic residential
0,5 and industrial demand
0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Imports Origins (%)
Middle East;
12%
Americas; 35% Europe; 13%
Imports coming mainly from
America and Africa (2008)
Africa; 40%
Middle East Europe Africa Americas
9 Source: Petrobras
10. FUTURE IMPORT ESTIMATES
3
• From 2009 to 2016 - LPG imports will fall due to
PLANGAS and new refineries (Premium 1, Premium 2,
RNEST);
2,5
• Imports started to grow from 2017 on – no significant
increment in new production, despite of market
2 increasing in a pace of 1,7% per year
M illio n T o n s p .y
1,5
1
0,5
0
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Source: Petrobras.
* Data does not consider LPG production comming from pre-salt projects
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11. PETROBRAS – INFRASTRUCTURE
10 refineries PETROBRAS INFRASTRUCTURE
Petrobras Refineries 1 shale oil processing unit
Production:4,2 million tons/year
70% Petrobras /
NORTH
30% Repsol
REFAP S.A Production 0,4
million tons/year
Petrobras Participation
NE
MIDDLE
WEST
33 % Refinery of Rio Grande
SE
5 NGPUs
Petrobras Natural Gas
2 In Construction*
Producing Units(NGPU)
Production: 0,9 million
tons/year S
Refinery
NGPU
7 onshore terminals Off Land Terminal
2 offshore terminals in Terminal in Land
3rd party off land terminal
LPG Pipelines and construction
Terminals 11 offshore terminals LPG Pipeline
Ship
5 pipelines serving LPG,
Cabotage
Total extention:1.550 km
Import
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12. PETROBRAS A VERTICAL INTEGRATED
COMPANY
Production
Final consumer
domestic
A
Distributor
Dealer
B
Storage
C
D
Final consumer
bulk
Import
Petrobras is present in the entire supply chain
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13. LP GAS AND NATURAL GAS PARTICIPATION IN
RESIDENTIAL MARKET
LPG Residential Market Natural Gas Residential Market
(thous. m3/y) (thous. M3/y)*
12.000 450.000
400.000
11.500
+5,4%p.y
+1,7% p.y 350.000
11.000 300.000
250.000
10.500
200.000
10.000 150.000
100.000
9.500
50.000
9.000 0
2008 2010 2012 2014 2016 2018 2020
08
10
12
14
16
18
20
20
20
20
20
20
20
20
Residential Natural Gas market grows significantly more than LPG
residential market
13 * Energetic equivalence between LPG and NG: 1,63m3 of LPG = 880m3 of NG
14. LP GAS INDUSTRY CONSUMPTION
• Strong replacement of LPG for
Natural Gas, especially in the Industrial LPG Consumption
white ceramic industry in Santa 1600
Catarina and São Paulo States thousand m3
1400 Other
Metallurgy
LPG in ceramics 1200 Ceramic
700
thousand m3 1000
600
500 Others 800
Santa Catarina
400 São Paulo 600
300
400
200
100 200
0
0
2000 2008
1991 1993 1995 1997 1999 2001 2003 2005 2007
The strong shift of LPG in steel and ceramic segments is partially offset by a
small increase in the consumption of chemicals and foods.
14 Sourse: ESTRATÉGIA/EMN
15. PERSPECTIVES FOR LP GAS DOMESTIC MARKET
FINAL REMARKS
Difficulties:
• Use of wood as a substitute product
• Displacement by the entry of Natural Gas / LNG
• Informality in retail sector
Opportunities:
• Modernization of 18 plants for bottling system (improvement of
productivity and costs)
• Growth of internal production with reduction of LPG imports
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16. For more information:
Investor Relations
www.petrobras.com.br/ri
+55 21 3224-1510
petroinvest@petrobras.com.br
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