procurement policy and critical equipment supply

Procurement Policy and Critical Equipment Supply

Disclaimer

The presentation may contain forward-looking statements aboutfuture events within the meaning of Section 27A of the Securities Actof 1933, as amended, and Section 21E of the Securities Exchange Actof 1934, as amended, that are not based on historical facts and arenot assurances of future results. Such forward-looking statementsmerely reflect the Company’s current views and estimates of futureeconomic circumstances, industry conditions, companyperformance and financial results. Such terms as "anticipate","believe", "expect", "forecast", "intend", "plan", "project", "seek","should", along with similar or analogous expressions, are used toidentify such forward-looking statements. Readers are cautioned thatthese statements are only projections and may differ materially fromactual future results or events. Readers are referred to thedocuments filed by the Company with the SEC, specifically theCompany’s most recent Annual Report on Form 20-F, which identifyimportant risk factors that could cause actual results to differ fromthose contained in the forward-looking statements, including, amongother things, risks relating to general economic and businessconditions, including crude oil and other commodity prices, refiningmargins and prevailing exchange rates, uncertainties inherent inmaking estimates of our oil and gas reserves including recentlydiscovered oil and gas reserves, international and Brazilian political,economic and social developments, receipt of governmentalapprovals and licenses and our ability to obtain financing.

We undertake no obligation to publicly update or revise anyforward-looking statements, whether as a result of newinformation or future events or for any other reason. Figuresfor 2012 on are estimates or targets.

All forward-looking statements are expressly qualified intheir entirety by this cautionary statement, and you shouldnot place reliance on any forward-looking statementcontained in this presentation.

NON-SEC COMPLIANT OIL AND GAS RESERVES:

CAUTIONARY STATEMENT FOR US INVESTORS

We present certain data in this presentation, such as oil andgas resources, that we are not permitted to present indocuments filed with the United States Securities andExchange Commission (SEC) under new Subpart 1200 toRegulation S-K because such terms do not qualify as proved,probable or possible reserves under Rule 4-10(a) ofRegulation S-X.

FORWARD-LOOKING STATEMENTS

Presentation Summary

1. Petrobras Business and Management Plan 2013-20172. Supply History3. What is Pre Salt?4. Critical Goods and Services5. Suppliers Qualification & Register6. Foreign Investment in Brazil: Oil and Gas Industry7. Conclusions

Petrobras Business and Management Plan

2013-2017

2013-2017US$ 236.7 Billion

Program InitiativesBusiness and Management Plan 2013-2017

PROEFProgram to Increase

Operational Efficiency

UO-BCUO-RIO

PRC-PoçoProgram to Reduce Well

Costs

PROCOPOperating Costs Optimization Program

PROCOP: Focus on OPEX, operating costs of the Company activities – Manageable Operating Costs.PRC-Poço: Focus on CAPEX dedicated to Wells construction – Investments in Drilling and Completion.

INFRALOG – Logistic Infrastructure Optimization ProgramPRODESIN – Divestment Program

Petrobras Local Content Management – Take advantage of the industry s capacity to maximize gains to Petrobras

TOTALUS$ 236.7 billion947 projects

UNDER EVALUATION

US$ 29.6 billion177 projects

UNDER IMPLEMENTATION

US$ 207.1 billion770 projects

All E&P projects in Brazil and projects of the remaining segments in phase IV*

Projects for the remaining segments, excluding E&P currently in phase I, II and III.

2013-2017 Business and Management Plan Investments

62.3%(US$ 147.5 Billion) 27.4%

(US$ 64.8 Billion)

1.0%(US$ 2.3 Billion)






71.2%(US$ 147.5 Billion) 20.9%

(US$ 43.2 Billion)






0.5%(US$ 1.0 Bililon)

73.0%(US$ 21.6 Billion)





International ETM* Other Areas*Pbio*E&P DistribuitionDownstream G&E

Phase I: Opportunity Identification; Phase II: Conceptual Project; Phase III: Basic Project ; Phase IV: Execution* Pbio = Petrobras Biofuel │ETM = Engineering, Technology and Materials │Other Areas = Financial, Strategy and Corporate

2013-2017 PERIODUS$ 147,5 billions*

Exploration & Production

* Does not include International E&P investments

Infrastructure and Support

ExplorationProduction Development

73%(106.9)

16%(24.3)

11%(16.3)

Areas Covered: Pre-salt

Petrobras Business and Management Plan 2013-2017Relevance of the Program

Production Curve in Brazil | Production of Oil and LNG2013-2017 BMP: Production Curve Maintained

2013

• Roncador III (P-55)

• Iracema Norte (Cid. Itaguaí)

• Florim• Júpiter

• Norte Pq. Baleias (P-58)

� Baleia Azul(Cid. Anchieta)

� Sapinhoá Pilot (Cid. São Paulo)

� Baúna(Cid. Itajaí)

• Lula NE Pilot (Cid. Paraty)

• Papa-Terra (P-63)

• Iracema Sul (Cid. Mangaratiba)

• Roncador IV (P-62)

• SapinhoáNorte

(Cid. Ilhabela)

• Lula Alto

• Lula Central

• Lula Sul (P-66)

• Franco 1 (P-74)

• Carioca

• Lula Norte (P-67)

• Franco SW (P-75)

• Bonito

• Franco Leste

• Espadarte III

• Papa-Terra (P-61)

2.0 2%2.02.0

Mill

ion

bpd

25 new production units will start-up between 2013-17 or38 new production units will start-up between 2013-20

• Lula Ext. Sul (P-68)

• Lula Oeste(P-69)

• Franco Sul (P-76)

•Tartaruga Verde e Mestiça

• Parque dos Doces

• Maromba

• Iara Horst(P-70)

• Franco NW (P-77)

• Entorno deIara (P-73)

• NE de Tupi (P-72)

• Iara NW (P-71)

• Sul Pq. Baleias

• Espadarte I

• Deep Waters Sergipe

• Carcará

� Production units in operation

Supply History

1950 1960

Contracting of goods andservices abroad.

1970 1980

Substitution of importing, similarity

law, nationalization, “reverse

engineering”, local market protection,

contracts in Brazil.

2002

1990 2000

2003

Opening of the market to importing,globalization, international bids.Focus on competitiveness. R&D inBrazil and abroad.

Focus on the Brazilian industry.

Increase of the Local Content in the

goods and services contracting

(competitiveness and technological adherence).

Most of the equipment

and materials

are acquired from abroad

Substitution of imported

equipment and materialsOpening of the

Brazilian market for

importing

History

What is Pre Salt?

Corcovado Hill

Located in a remote area, up to 300 km offshore

Total depth from5,000 to 7,000 meters

Salt layer more than 2,000 meters thick.

Pre-Salt LayerNew Exploratory Border

Water depths that canexceed 2,000 meters

Post-Salt LayerFocus up to 2006

Large Oil CarbonaticReservoirs

What Is Pre-salt?

Drilling and Completion

� Construction of high angle wells, deviated into the salt zone

� Well integrity

� Penetration rate in the microbial carbonate reservoir

� New alloys to reduce costs of well materials

PRE-SALT SOME TECHNOLOGICAL CHALLENGES

What Is Pre-salt?

What Is Pre-salt?

Reservoir

� Reservoir characterization

� Rock fluid interaction

� EOR


What Is Pre-salt?

Subsea

� Flexible risers for water depth of 2,200m (7,218 ft)

� Flow assurance

� Scaling control


What Is Pre-salt?


Floating Production Units

� Mooring in 2,200m water depths

� Interaction with the riser’s system

� CO2 processing

Critical Goods and Services

Demand for New EquipmentBusiness Plan 2012-2016

Item Un. TOTAL

Wet Christmas Trees un 761

Subsea Welheads un 1.072

Flexible Flowlines km 4.499

Manifolds un 78

Tubing and Casings t 1.164.667

Umbilicals km 4.898

Dry Christmas Trees un 522

Onshore Welheads un 1.928

Item Un. TOTAL

Pumps un 6.509

Compressors un 540

Whinches un 77

Cranes un 99

Combustion Engines un 162

Turbines un 807

Structural Steel t 2.182.838

Itens Un. TOTAL

Reators un 259

Oil/Water Separators un 638

Storage Tanks un 633

Towers un 372

Itens Un. TOTAL

Generators un 316

Filters un 1.206

Flares un 50

Suppliers Qualification & Register

Petrobras Concepts & Requirements Overview

The Corporate Register is a database of Brazilian and foreign companiesinterested in participating in bidding for Petrobras.

These companies, Brazilians or foreigners, are eligible to provide toPetrobras high complexity services or equipment/goods, which are underpermanent Petrobras interest.

Corporate Register

The evaluation approval, as part of the registration process,ensures the incorporation of the company in the PetrobrasCorporate Register, obtaining the CRCC – Certificate ofRegistration and Classification. Then, the company could beinvited to participate of new biddings.


Corporate GuidelinesRequirements:

�Legal

�Economics

�Technical Approval

ReferencesPetrobras Simplified Bidding ProcedureChapter IV(Issued by Government Decree 2.745/1998)

Petrobras Procurement Manual (MPC)Item 4.1.6(Approved by the Board of Directors)


Complementary Corporate Guidelines

Requirements:

�Health, Safety & Environment - HSE

�Management & Social Responsibility

It is an “e-Procurement” portal, which provides tools for acquiring goods andservices for Petrobras System companies and their suppliers. In its businessplatform are carried out several transactions ranging from requests for quotesand sending proposals to management of orders and contracting.

www.petronect.com.br

Petronect

http://www.petrobras.com.br/en/supplier-channel/


Foreign Investment in Brazil: Oil and Gas

Industry

‘Brazilian companies’ means companies that

have manufacturing processes and after-sales

services in Brazil, thus creating jobs and

collecting taxes in the country.

Brazilian Companies

Petrobras’ Partners

Brazilian Trade and Investment Promotion Agencyhttp://www2.apexbrasil.com.br/en/invest-in-brazil/apex-brasil-services-to-help-you

APEX Brazil

Foreign Investment in Brazil: Oil and Gas Industry

ONIPNational Organization of the Petroleum Industryhttp://www.onip.org.br/areas-of-activity/?lang=en

Foreign Companies Support in BrazilEmbassies, Consulates, Chambers of Commerce, etc.


� Focus on companies and projects that offer technological innovations and new business models, strengthen industrial supply chain, have a direct impact on national job increase and improve Brazilian exports.

� Support to all steps of the investor’s decision-making process.� Services portfolio:

� industry sectors and markets analysis, � economic trends, � general guidelines on legal and fiscal matters, and � information on input costs, suitable locations and talent

pool availability.

ONIP - National Organization of the Petroleum Industry (ONIP)

Services:� Technology and Innovation: Support to technological development and

innovation management in companies.

� Industry Intelligence and Registration Information: Preparation and offer of qualified reviews and registration information.

� Internationalization and Business Rounds: Promotion of exports and investments, partnerships with foreign companies and business rounds.


Foreign Companies Support in Brazil

� Foreign Suppliers’ Delegations and missions;� Support to the registration process at Petrobras Corporate Register;� Support to the companies moving to Brazil� Etc.

Legal Guide for Foreign Investors in BrazilMinistry of External Relations

http://www.brasilglobalnet.gov.br/arquivos/publicacoes/manuais/pubguialegali.pdf


Conclusions

�Petrobras has a robust projects portfolio, which is atypical of the currentglobal economic situation.

�There are huge opportunities for already installed and newcomers in theBrazilian market of suppliers, service and engineering companies due tothe scale provided by the project portfolio.

�In order to carry out such a portfolio, Petrobras is looking forward toestablish long term business with companies willing to invest in Brazil.

Conclusions

Thank you!

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procurement policy and critical equipment supply

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