1 almir guilherme barbassa chief financial officer march 30, 2010 company update and outlook for...
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1
Almir Guilherme Barbassa Chief Financial Officer
March 30, 2010
Company Update and Outlook for 2010
2
DISCLAIMERDISCLAIMER
The presentation may contain forecasts about future events. Such forecasts merely reflect the expectations of the Company's management. Such terms as "anticipate", "believe", "expect", "forecast", "intend", "plan", "project", "seek", "should", along with similar or analogous expressions, are used to identify such forecasts. These predictions evidently involve risks and uncertainties, whether foreseen or not by the Company. Therefore, the future results of operations may differ from current expectations, and readers must not base their expectations exclusively on the information presented herein. The Company is not obliged to update the presentation/such forecasts in light of new information or future developments.
The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this presentation, such as oil and gas resources, that the SEC’s guidelines strictly prohibit us from including in filings with the SEC.
CAUTIONARY STATEMENT FOR US INVESTORS
Exploration & Production
Downstream (Supply)
Gas & EnergyDistribution
Petrochemicals
International Biofuels
CORPORATE ORGANIZATION AND KEY OPERATING RESULTSCORPORATE ORGANIZATION AND KEY OPERATING RESULTS
2007 2008 2009 Net Revenues 87.7 118.3 91.9 EBITDA 25.6 31.1 28.9
Net Income 13.1 18.9 15.5 Capex 21.0 29.9 35.1 Total Debt(1) 21.9 27.1 57.1 Cash & Cash Equivalents 7.0 6.5 16.2 Net Debt 14.9 20.6 40.9 Total Equity 65.2 61.9 94.1 Total Assets 129.7 125.7 200.3
Summary Financials (US$ billion- USGAAP)
(1) Includes capital leases* Excludes Corporate and Elimination
-5
0
5
10
15
20
Domestic E&P Downstream Gas &EnergyDistribution International
Operating Income* (US$ billion- USGAAP)
18,9
15,513,1
2007 2008 2009
4
○ Installed 5 new production systems – 375 TBPD of new capacity
○ 6% Increase in national oil production
○ Initiated first Santos pre-salt production
○ Completed 3 new hydro-refining treatment units
○ Began distribution of S-50 diesel in major cities
○ Initiated LNG imports and neared completion of Nat. Gas infrastructure
○ Completed consolidation of the petrochemical sector
○ Raised US$ 35 billion of debt capital
○ Proposal of new Regulatory framework for the O&G sector in Brazil
○ Renewed participation in Dow Jones Sustainability Index
2009 HIGHLIGHTS2009 HIGHLIGHTSAccomplishments on the path to meeting long term visionAccomplishments on the path to meeting long term vision
STABLE FINANCIAL RESULTS DESPITE VOLATILE YEAR
11.969 12.056
2.124 2.113
Oil & NGL Natural Gas
International ReservesBrazil Reserves
2008 2009
Incorporation:
861 MM boe
Billion boe
o 18 years of reserves to production in Brazil, 8 year reserves to production internationally
o Pre-salt discoveries from Espirito Santo Basin contributed with 182 million boe. Estimated reserves in Santos Basin pre-salt are still under appraisal and therefore not included in proved reserves
o Decrease in international reserves as constitutional changes in Bolivia eliminate reserve recognition
2009 RESERVE REPLACEMENT:2009 RESERVE REPLACEMENT:17th consecutive year of fully replacing brazilian production17th consecutive year of fully replacing brazilian production
14.093 14.169
Production: 785 MM boe
0.497 0.493
0.4950.203
Oil & NGL Natural Gas
0.992
0.696
2008 2009
RRI: 110%
5
ANP/SPE Criteria
224 238
2,2882,176
National International
321 317
1,9711,855
Oil & NGL Natural Gas
PRODUÇÃO SEGUE TRAJETÓRIA SUSTENTADA DE CRESCIMENTO
Oil & Gas Average Total Production
2008 2009
+5%
Thous. boed
2008
+5%
2009 PRODUCTION:2009 PRODUCTION:Significant production increases in Brazil and internationallySignificant production increases in Brazil and internationally
2,400 2,526
2009
2,176 2,288
o 6% increase in national oil production from ramp-ups of P-52, P-54 and P-53 and start-up of 5 new units;
o 6% increase in international production from Akpo and Agbami fields in Nigeria;
o Natural Gas production declined because of reduced demand in Brazil
Oil & Natural Gas Average Domestic Production
6
PRODUÇÃO 2010
Pre salt
Natural Gas
Heavy oil
1ST QUARTER 2ND QUARTER 3RD QUARTER 4TH QUARTER
Cachalote eBaleia Franca
100 th. bpd3.2 million m3/d
EWT Tiro and Sidon20 th bpd
Uruguá Tambaú10 million m3/d
35 th. bpd
Mexilhão15 million m3/d
TUPI Pilot100 th. bpd
5 million m3/d
EWT Guará30 th. bpd
EWT Tupi Northeast 30 th. bpd
7971
2,050
2,100+- 2.5% 2,171
200
2009 Target Difference2009 Target–
Production 2009
Target 2010 Ajusted
(BP 09-13)
DifferenceTarget 2010 – Target 2009(BP 09-13)
Projects postponed
NEW 2010 TARGET
2010 PRODUCTION TARGET: 2010 PRODUCTION TARGET: Growth from new systems and enhanced recoveryGrowth from new systems and enhanced recovery
7
8
2009 and 2010 PRE-SALT: 2009 and 2010 PRE-SALT: Accelerating activities in the santos clusterAccelerating activities in the santos cluster
Caramba
Bem-te-vi Carioca
IguaçuAbaré
Azulão Guarani
GuaráNorth
ParatiIara
Iracema
Tupi
Tupi 660Tupi South
Jupiter
Tupi NE
Tupi O/A
Tupi 646Guará
Wells drilled
Drilling for ANP
Drilling
EWT
Completing / testing
o EWT currently producing 20 thous. bpd
o 2 wells being drilled: Tupi O/A, North of Guará
o 1 well being drilled for ANP in the North of Iara
o 1 well being completed and evaluated in Guará and Tupi NE test finished with high productivity of 30 th. bpd
o During 2010, 11 new wells expect to be drilled in the pre salt cluster
o Bids in progress:
(i) FPSO for Guará pilot
(ii) FPSO for the second pilot in the BM-S-11 (still being defined)
(iii) 8 hulls for the Santos cluster
DOWNSTREAM: DOWNSTREAM: Strong investments in fuel quality and expansionStrong investments in fuel quality and expansion
9%2%
34%
25%
30%
Fuel Quality
Complexity
New projects*
Logistics
Others
o 6.2% increase in diesel output and 5% reduction in fuel oil output yoy
o 6 million barrel reduction in diesel imports
○ Acid and ultra-acid oils processing up 178% yoy
○ Comply with more strict environmental standards
○ Start up of Diesel S-50 production in 3 refineries (REDUC, REPLAN and REGAP)
○ 1new HDT unit and 2 new Propene units
Downstream Investments in 2009 Downstream Investments in 2009 US$ 10.5 billionUS$ 10.5 billion
* Includes Northeast refinery, Comperj, Suape Petrochemical plant and Plangás
Construction in progress (US$ bn)
2008 2009US$ 11.9 US$ 22.7
Oil Products output (th. bpd)Oil Products output (th. bpd)
1,787 1,823
9
+2%
694 737
6574
343 331
136143
142135
255 243
153 159
2008 2009Diesel Jet fuel Gasoline Nafta LPG Fuel Oil Others
10
R$/bbl
ARP EUA: 194.71
ARP Petrobras: 176.41
2008 average
ARP EUA: 130.06
ARP Petrobras: 157.77
2009 average
o Growing crude oil exports benefit from higher crude oil prices, improving quarterly earnings during the year. Lower discount between benchmark light and Petrobras oil also contributed
o Following long term pricing policy, Petrobras average realization price (ARP) declined less than international prices, recovering shortfalls experienced in 2008
o Oil product pricing in Brazil continue to converge with international pricing
o Pricing policy contributed to positive refining margins in 2009 (stable revenues, declining costs)
2009 PRICE IMPACT:2009 PRICE IMPACT:Volatile international oil prices, stable domestic product pricesVolatile international oil prices, stable domestic product prices
0
50
100
150
200
250
Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09
86.13
32.23
48.68
7576.75
64.42
105.46
100.58
47.95
64.00
70.24
115
121
97
89
75
55
44
59
68
20.00
40.00
60.00
80.00
100.00
120.00
3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09
US$
/bbl
Petrobras Oil Price (US$/bbl) Brent (US$/bbl)
11
753 769 782
364 327 366211 222 212
434 492 489
4Q08 3Q09 4Q09Diesel Gasoline LPG Others
Oil Products
o Diesel sales increased with the Brazilian economy recovery (although imports decreased 43%)
o Higher level of gasoline sales due to reduced competitiveness of ethanol
o Reduced levels of natural gas sales due primarily to lower thermoelectric demand
4Q08 3Q09 4Q09
Natural Gas
244 247
311
2009 CRUDE OIL AND PRODUCT SALES:2009 CRUDE OIL AND PRODUCT SALES:Growth in domestic sales and higher export volumesGrowth in domestic sales and higher export volumes
Tho
us.b
arre
ls/d
ay
+2%1,762 1,810 1,849
12
NATURAL GAS AND ENERGY GENERATION:NATURAL GAS AND ENERGY GENERATION:Creating a new industry in Brazil Creating a new industry in Brazil
o Natural Gas logistic and Energy generation Infrastructure consolidation. Highlights:
o Urucu-Coari-Manaus pipeline and Gasoduc III – 844 KM and 44.1 MMm3/d NG capacity
o LNG Regasification Terminals:
- Guanabara Bay and Pecém - 27 MMm3/d
o Auctions and bi-lateral agreements to sell short-term NG supply (average sales of 4.7 MMm3/d de NG in 9 auctions)
o Portfolio diversification concluding first investment cycle
2009 CAPEX AND 2010 ESTIMATE:2009 CAPEX AND 2010 ESTIMATE:Substantially above the peer group to meet growth targets Substantially above the peer group to meet growth targets
0
5.000
10.000
15.000
20.000
25.000
30.000
35.000
40.000
45.000
50.00020
09
2010
2009
2010
2009
2010
2009
2010
2009
2010
2009
2010
2009
2010
2009
2010
2009
2010
2009
2010
2009
2010
US
$ M
M
2009 average without Petrobras2010 average without Petrobras
Source: Evaluate Energy and Company Reports
2010 Petrobras CAPEX , of R$ 88.5 Bi, was converted using FX rate of 1,87 R$/US$ (2010 Petrobras premise). For 2009, preliminary results in USGAAP – Not audited
*
13
Investments 2008
US$ 29.9 billion
31 29
2008 2009
5,6
6,1
24,710,1
0,05
1,3
1,1
3,8
EBITDA (in US$ billions)
Investments 2009
US$ 35.1 billion
14,3
7,2
4,2
3,0
0,3
0,8
16,5
10,5
5,1
2,1
0,3 0,6
E&P
RTM
Gas & Power
International
Distribution
Others
Stable cash generation supports Petrobras’s growing capital expenditures
2009 CAPEX SPENDING:2009 CAPEX SPENDING:Reflects continued ramp-up of long-term planReflects continued ramp-up of long-term plan
14
2009 CASH FLOWS:2009 CASH FLOWS:Investments suported by cash flow and incremental debt Investments suported by cash flow and incremental debt
o Stable operating cash flow, despite lower oil prices
o Increase in investments was supported by additions to debt
o Build-up in cash balances as of year end 2009 (despite advance payment of dividends), undrawn term loans and stable pricing, will support capex during 2010
15
Jan-Dec 2008 Jan-Dec 2009 4Q09
Cash at the beging of the period 6,987 6,499 16,595
Net cash from operating activities 28,220 24,920 6,915
Net cash used in investment activities (29,466) (35,120) (9,598)
Net cash from financing activities (2,778) (16,935) (2,311)
Effect of exchange rate on cash (2,020) 2,935 (54)
Cash at the end of the period 6,499 16,169 16,169
US$ Million
Brent (US$/bbl) 97 62 75
FX Rate (R$/USD) 1,84 2,00 1,74
2009 CAPITAL CONTRACTED:2009 CAPITAL CONTRACTED:Successful efforts to raise debt capital from long term sourcesSuccessful efforts to raise debt capital from long term sources
1.25
0
1.5
2.5
1.5
Brigde Loan Bond issue
Oct-30 (Maturity 2040)Yield: 7.00%
Oct-30 (Maturity 2020) Yield: 5.875%
Jul-09 (Maturity 2019)Yield: 6.875%
Feb-11 (Maturity 2019)Yield: 8.125%
6.5 6.756.75
(US
$ b
ilio
n)
Market Capital Bond issuanceMarket Capital Bond issuance
10
13.3
2
2.75
China Development Bank
BNDES
U S Eximbank
Others
(*)
(*) R$ 25 billions converted by FX tax in 07.30.09
Others LoansOthers Loans++US$ 28.05 billionsUS$ 28.05 billions
In 2009, In 2009, US$ 34.8 billion were raised US$ 34.8 billion were raised
with an average life of 10.6 yearswith an average life of 10.6 years
17
o Debt profile improved with new borrowings: longer tenor, competitive costs and diversified sources
o Leverage sustained within the target range (25% to 35%)
2009 CAPITAL STRUCTURE:2009 CAPITAL STRUCTURE:Higher leverage due to growing capex Higher leverage due to growing capex
US$ Billion 12/31/2009 12/31/2008 12/31/2007
Short Term Debt 8.5 5.9 1.5
Long Term Debt 48.6 20.6 19.6
Total Debt 57.1 27.1 21.8
Cash and Cash Equivalents
16.2 6.5 6.9
Net Debt 40.9 20.6 14.9
Net Debt/Ebitda 1.4X 0.7X 0.6X
Average life 7.46 6.49 4.21
CAPEX 2010 vs. 2009:CAPEX 2010 vs. 2009:Growth in capex, from additional upstream and downstream spending Growth in capex, from additional upstream and downstream spending
Annual Business Plan 2010
R$ 88.5 billion
CAPEX 2009 E&P Downstream CAPEX 2010G&E International Distribution, Biofuels and
Corporate
5.1
(0.7)(2.4) (0.9) 88.5
70.8
16.6
34,0
6,2
36,7
8,1
0,9
2,6
(R$
bil
lio
n)
(R$
bil
lio
n)
Investments 2009
R$ 70.8 billions
3,80,6
10,5 31,6
6,8
17,4
E &P
D ownstream
G as & E nergy
International
D istribuition
Others
25%25%
-
5.000
10.000
15.000
20.000
25.000
30.000
35.000
40.000
45.000
50.000
OCF 2009 Capex 2009 (1) Capex 2010 (2) Est.Maintenance
Capex
Others
Gas & Energy
Downstream
E&P
US$ MMUS$ MM
35,13435,134
47,32647,326
14,50014,500
(1) In USGAAP(2) R$ 88.5 billion converted by FX rate of 1,87 R$/US$ (Petrobras forecast to 2010)
CAPEX FOR GROWTH:CAPEX FOR GROWTH:Expansion is responsible for increase in capex spendingExpansion is responsible for increase in capex spending
24,92024,920
BUSINESS PLAN 2010 – 2014:BUSINESS PLAN 2010 – 2014:Commitment to a strong capital structure Commitment to a strong capital structure
INVESTMENT 2010 – 2014 BETWEEN US$ 200 TO US$ 220 BILLIONS:INVESTMENT 2010 – 2014 BETWEEN US$ 200 TO US$ 220 BILLIONS:
MONITORING FINANCIAL RATIOSMONITORING FINANCIAL RATIOS
o Leverage between 25% and 35%
o Net Debt/ EBITDA up to 2.5X
o Investment revenue maintenance in the different segments
RELEVANT ASSUMPTIONS FOR THE PROJECTIONSRELEVANT ASSUMPTIONS FOR THE PROJECTIONS
o Brent curve – upward trend
o Capitalization – value and timing
o Funding needs for the new Business Plan 2010-2014
20
Minority shareholders participation in the capitalization (US$ Bn) 15 25
Investments (US$ bn) 200 220Average Brent Price (US$ bbl) 64 77
Leverage 32% 27%Net Debt/EBITDA 2.2 1.6
ASSUMPTIONS
Financiability Simulation (Average 2010 - 2014)
FINANCIABILITY SIMULATION:FINANCIABILITY SIMULATION:Higher crude Long term oil price guarantee funding requirementsHigher crude Long term oil price guarantee funding requirements
21
There will be no regulatory changes in the areas under concession, including the pre-salt area already granted
Petrobras 100%
Petrobras Operator
Other companies through Bidding Process
Transfer of Rights with compensation
Production Sharing
Agreement
Pre-saltand
Strategic Areas
NEW REGULATORY MODELNEW REGULATORY MODEL
Other Areas Current
Concession Model
22
Appraisal need to consider
Oil Volume
Production Curve Capex
Production Costs
Reserves development/ Knowledge
Fiscal Environment
(government participation)
Future Oil prices
Discount Rate
TRANSFER OF RIGHTS APPRAISALTRANSFER OF RIGHTS APPRAISALBased on common variables standard throughout the industryBased on common variables standard throughout the industry
Oil reservoir
24
Valuation of the barrels
Timing
CAPITALIZATION UPDATE: CAPITALIZATION UPDATE: Bills approved in lower house, now before senateBills approved in lower house, now before senate
Transparency and fairness
Size of capitalization
o Access to 5 billion barrels
o Greater Financial strength
o Participation of all shareholders in a larger company with more opportunities
o Access to 5 billion barrels
o Greater Financial strength
o Participation of all shareholders in a larger company with more opportunities
Results ofcapitalization
Results ofcapitalization
o Only completed after areas defined
o One well drilling, another scheduled
o Appraisal by at least 2 independent certification companies
o Future revaluation to ensure fairness
o STILL TO BE DETERMINED
o Variables value of the barrels + funding needs + capital structure
o Board Committee to represent minority and preferred shareholders
o All shareholders will have equal subscription rights
o Full and Transparent disclosure of all relevant information
o All Bills for capitalization and new regulatory regime now passed by Lower House
o Senate has up to 45 days to approve, modify or reject the bill. If modified, must reconcile with lower house
o Completion of Capitalization 60 to 90 days after bill becomes law
BILL 5941/09 COURSE OF ACTION (CAPITALIZATION):BILL 5941/09 COURSE OF ACTION (CAPITALIZATION):Fast track procedure since arrival in the SenateFast track procedure since arrival in the Senate
1 Bills sent to commission
2 Amendments are presented in the CCJ
Arrival in the Senate, appreciation of the bill and forward1
Presidential message requesting fast track procedure Art.64 F.C.
o Bill is sent to commissions and timeline is open for amendments 2
o After deadline for amendments the bill shall be voted and sent to plenary
25 days
Subject inclusion
Voting process
Up to 35 days
After 45 days, subject is ceased
Approval with amendments
Approval
Rejected
Filled
Presidential approval
Up to 15 business days
Art 66 FC
Returns to the Lower House
Up to 10 days
Appreciation and amendment voting
03/22/10 05/06/10
05/17/10
06/04/10 05/27/10
Up to 15 business days
Art 66 FC
25
26
R$/bbl
ARP EUA: 194.71
ARP Petrobras: 176.41
2008 average
ARP EUA: 130.06
ARP Petrobras: 157.77
2009 average
o Growing crude oil exports benefit from higher crude oil prices, improving quarterly earnings during the year. Lower discount between benchmark light and Petrobras oil also contributed
o Following long term pricing policy, Petrobras average realization price (ARP) declined less than international prices, recovering shortfalls experienced in 2008
o Oil product pricing in Brazil continue to converge with international pricing
o Pricing policy contributed to positive refining margins in 2009 (stable revenues, declining costs)
2009 PRICE IMPACT:2009 PRICE IMPACT:Volatile international oil prices, stable domestic product pricesVolatile international oil prices, stable domestic product prices
0
50
100
150
200
250
Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09
86.13
32.23
48.68
7576.75
64.42
105.46
100.58
47.95
64.00
70.24
115
121
97
89
75
55
44
59
68
20.00
40.00
60.00
80.00
100.00
120.00
3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09
US$
/bbl
Petrobras Oil Price (US$/bbl) Brent (US$/bbl)
(R$ MILLION)
45,950 (32,408) 32,586 - 46,128
2008Operating Income (1)
Net Operating Revenue
COGS Operating Expenses
2009Operating Income (1)
28(1) Operating income before financial result, equity balance and taxes
o Decrease in operating income due to lower oil prices (2008: R$ 149.80; 2009: R$ 104.88) and lower ARP of oil products (2008: R$ 176.41; 2009: R$ 157.77)
o COGS decrease due to lower lifting cost with government participation and oil and oil products import price decrease
o Operating expenses were flat despite Marlin Special Participation (R$ 2.065 bi)
FULL YEAR 2009 OPERATING INCOME:FULL YEAR 2009 OPERATING INCOME:Higher income with efficient cost controlsHigher income with efficient cost controls
(R$ MILLION)
2009Net Income
32,988 178 (5,967)28,982
5,985
790
(4,992)
o The deterioration in the financial results were due to: Real revaluation (2008: depreciated 32%; 2009: appreciated 26%) and increase in debt indexed to the exchange rate
o Increase in equity income reflects better results from petrochemical sector (R$ 682 million) and international subsidiaries (R$ 127 million)
o Decrease in taxes due to lower income, results increase in units abroad which present differentiated tax regimes and losses in some subsidiaries
o Negative results in Minority Interest reflect FX gains in debt of consolidated SPE’s
2008Net Income
Taxes Minority Interest and Employees
Part.
Financial Result
Equity Income
Operating Income
29
FULL YEAR 2009 NET INCOME:FULL YEAR 2009 NET INCOME:Small decline, largely from exchange related variationsSmall decline, largely from exchange related variations
(33,093)
5,689 3,050 (1,195) (1,711) 29,972
57,232
o Revenue decline from 30% decrease in petroleum price and 44% decrease in gas transfer price
o Higher sales volume due to 5% growth in domestic oil and gas production
o 17% decrease in lifting cost, primarily a reduction in Royalties and Special Participation contributed to the decrease in COGS
o Increase in operational expenses due to non-recurring charge for adjustment to Special Participation tax for Marlim field
Jan-Dec/08Oper. Income
Jan-Dec/09Oper. Income
(R$ MILLION)
Price Effect on Revenues
Volume Effecton Revenues
Cost Effecton COGS
Operational Expenses
Volume Effecton COGS
30
FULL YEAR 2009 SEGMENT RESULTS - E&P:FULL YEAR 2009 SEGMENT RESULTS - E&P:Lower average oil price reduces operating incomeLower average oil price reduces operating income
(28,648)
53,457 2,240 (2,203)234 20,482
(4,598)
(R$ MILLION)
Price Effect on Revenues
Volume Effecton Revenues
Cost Effecton COGS
Operational Expenses
Volume Effecton COGS
Jan-Dec/08Oper. Income
Jan-Dec/09Oper. Income
31
o Lower export prices and ARP in the domestic market contributed to revenue reduction
o Decrease in downstream COGS reflected: strong reduction in domestic oil and international oil products acquisition cost as well as lower average inventory costs
o 6% increase in diesel production therefore an import reduction amounting 6 million barrels
o Margin in 2009 of 14%, versus -3% in 2009
FULL YEAR 2009 SEGMENT RESULTS – DOWNSTREAM:FULL YEAR 2009 SEGMENT RESULTS – DOWNSTREAM:Stable prices and declining COGS lead to turnaroundStable prices and declining COGS lead to turnaround
(1,482)
3,388 (2,879)
2,497
546 1,541
(529)
(R$ MILLION)
o Revenue decrease due to lower gas sales volume (19% decrease), gas price reduction (7% decrease) as well as reduced power dispatch
o Higher gross margins (from 11% to 28%) due to lower acquisition costs for gas and electrical energy
o Ongoing completion of gas infrastructure has led to avoided penalties and higher electricity sales
Price Effect on Revenues
Volume Effecton Revenues
Cost Effecton COGS
Operational Expenses
Volume Effecton COGS
Jan-Dec/08Oper. Income
Jan-Dec/09Oper. Income
32
FULL YEAR 2009 SEGMENT RESULTS - GAS AND POWER: FULL YEAR 2009 SEGMENT RESULTS - GAS AND POWER: Margins improve, offsetting reduction in demandMargins improve, offsetting reduction in demand
(4,887) 4,792
7,401 (6,786)
(318)2,035
1,833
(R$ MILLION)
o Decrease in sales price more than offset by increase in sales volume (+13%) and higher market share following acquisiton of Alvo Distribuidora (2008: 34.9%; 2009: 38.6%)
o Increase in operational expenses due to higher SG&A from increased sales activities
Price Effect on Revenues
Volume Effecton Revenues
Cost Effecton COGS
Operational Expenses
Volume Effecton COGS
Jan-Dec/08Oper. Income
Jan-Dec/09Oper. Income
33
FULL YEAR 2009 SEGMENT RESULTS - DISTRIBUTION: FULL YEAR 2009 SEGMENT RESULTS - DISTRIBUTION: Growing market share leading to higher sales increased earningsGrowing market share leading to higher sales increased earnings
(2,748) 3,282
1,452
(1,025) 1,146 813
(1,294)
(R$ MILLION)
o Decrease in prices for crude and product sales (petroleum:-15%;gas:-26%) partially offset by production increase in Agbami ( Start up July 08) and Akpo (Start up March 09)
o Lower acquisition prices and higher refining margins in US and Japan contributed to COGS decrease
o Reduced losses from devaluation of inventories (-R$ 261mi) and improvement in the impairment account (2008:-330 mi; 2009:+7mi) explain lower expenses and gains in operating margin
Price Effect on Revenues
Volume Effecton Revenues
Cost Effecton COGS
Operational Expenses
Volume Effecton COGS
Jan-Dec/08Oper. Income
Jan-Dec/09Oper. Income
34
FULLY YEAR 2009 SEGMENT RESULTS - INTERNATIONAL:FULLY YEAR 2009 SEGMENT RESULTS - INTERNATIONAL:Production growth and better refining margins improve resultsProduction growth and better refining margins improve results