Pre-Salt Oil: Developing The Frontier

Pre-Salt Oil: Developing The Frontier
José Sergio Gabrielli de Azevedo
CEO
November, 16th 2011
JP Morgan
1
DISCLAIMER
This presentation may contain forward-looking
statements. Such statements reflect only the
expectations of the Company's management
regarding the future conditions of the economy,
the industry, the performance and financial
results of the Company, among other factors.
Such terms as "anticipate", "believe", "expect",
"forecast", "intend", "plan", "project", "seek",
"should", along with similar expressions, are
used to identify such statements. These
predictions
evidently
involve
risks
and
uncertainties, whether foreseen or not by the
Company. Consequently, these statements do
not represent assurance of future results of the
Company. Therefore, the Company's future
results of operations may differ from current
expectations, and readers must not base their
expectations solely on the information presented
herein. The Company is not obliged to update
the presentation and forward-looking statements
in light of new information or future
developments. Amounts informed for the year
2011 and upcoming years are either estimates
or targets.
Cautionary statement for U.S. investors:
The United States Securities and Exchange
Commission permits oil and gas companies,
in their filings with the SEC, to disclose
proved reserves that a company has
demonstrated by actual production or
conclusive formation tests to be economically
and legally viable under existing economic
and operating conditions. We use certain
terms in this presentation, such as
discoveries, that the SEC’s guidelines strictly
prohibit us from including in filings with the
SEC.
2
Oil Production
PRE-SALT’S SHORT LAG BETWEEN DISCOVERY AND FIRST-OIL, AND FAST PROJECTED
RAMP-UP
Years after
Discovery
1
3
5
7
9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63
Pre-Salt
Discovery: SS032 (1947)
First oil: SS032 (1947)
GoM (USA)
Discovery: Q/13ª (1963)
First Oil: Dan (1972)
North Sea
Discovery: Garoupa (1974)
First oil: Enchova (1977)
Campos Basin
Discovery: Parati (2006)
First oil: Tupi (2009)
3
FPSOs/
Infraestructure
Definitive Systems
SANTOS PRE-SALT MASTER PLAN’S HIGHLIGHTS FROM 2006 TO 2010 ...
FPSOs/EWTs
Lula Pilot (AR)
Discoveries
New Rigs
Tupi (CSV)
...
2
2
Pre-Salt/Parati
Carioca
Tupi (Lula)
Caramba
2006
2007
1
Júpiter
Iara
Bem-Te-Vi
Guará
2008
Guará (DP)
3
Iracema
(cernambi)
2009
6
Franco
2010
4
FPSOs/EWTs
New Rigs
...
Route 3
Route 2
Pipeline
Lula-Mexilhão
FPSOs/
Definitive Systems
Infrastructure
... AND FROM 2011 ONWARDS
Guará
Pilot
Guará
Norte
Lula NE
Pilot
3
4 EWTs
6
8
2011
2012
3 EWTs
Cernambi
Sul
5 EWTs
Replic.
1
Replic.
3, 4, 5, 6,
7, 8
Replic.
2
Tranfer of
Rights
1
Tranfer of
Rights
2, 3 and 4
5 EWTs
8 already contracted + 21 to be contracted
2013
2014
2015
2016+
5
MORE DRILLING RIGS WILL ENABLE A FASTER RAMP-UP OF THE NEW PLATFORMS
To reach 50% of capacity
20
To reach 75% of capacity
Months
16
Forecast
12
8
4
0
P-43
P-48
P-50
P-52
P-54
P-53
P-51
FPSO
CAPIXABA
P-57
2004
2005
2006
2007
2007
2008
2009
2010
2010
Water Depth
2006
2008
2010
2011
2012
2013
Up to 1,000 meters
6
11
11
1,000 to 2,000 meters
19
19
21
+2
+1
+1
Over 2,000 meters
2
3
15
+10
+13
+1
6
CAPITAL COSTS: PRE-SALT vs. CAMPOS
Similar equipment and processes: main difference is drilling and completion
PRE-SALT
CAPEX DISTRIBUTION
20%
27%
53%
Gathering
Completion + Drilling
Units
DEEPWATER PROJECTS IN CAMPOS BASIN*
CAPEX DISTRIBUTION
33,3%
33,3%
Additional drilling and completion cost in
the pre-salt compared with an generic
deepwater project in Campos basin can be
partially or fully offset by higher quality and
quantity of oil expected in the pre-salt area.
33,3%
Gathering
Completion + Drilling
Units
* Generic example, considering that these rates can change among the different existing projects in Campos Basin
7
8
PRE-SALT’S ECONOMICS: PRODUCTIVITY GAINS ...
Average drilling time of the wells completed
during the year
Drilling needs
- 15%
85%
75%
66%
2006/2007
2008
2009
2010
Number of wells (phase 1a)
100%
PN 2010-2014
PN 2010-2015
8
… RESULTING IN A HIGHER EXPECTED NPV
Investment
200%
150%
100%
50%
- 45%
100%
81%
- 32%
55%
0%
PLANSAL 2008 (2008-2030)
PLANSAL 2009 (2008-2030)
PLANSAL 2010 (2008-2030)
Net Present Value
200%
150%
100%
50%
100%
118%
152%
0%
PLANSAL 2008 (2008-2030)
PLANSAL 2009 (2008-2030)
PLANSAL 2010 (2008-2030)
9
NATURAL GAS PRODUCTION
Start-up of Plangas and Pre-salt projects will substantially increase capacity
Manaus
Jurua Urucu
Coari
UTGCA
Mexilhão
Urugua
UGN
RPBC
PMLZ-1
Lula
Million m3
100
2011-15
Non-Associated Natural Gas
80
Mexilhão – 15MM m3/day
55
60
95
75
2015-20
Associated Natural Gas
from the Pre-salt
Uruguá-Tambaú – 10 MM m3/day
Juruá – 2 MM m3/day
42
40
20
Associated Natural Gas
Natural gas production from
Increasing production in the
Pre-salt in Santos Basin to
Campos and Santos Basins
surpass 20 MM m3/day
0
2010
2011
2015
2020
10
LOGISTICS AND INFRASTRUCTURE
11
E&P INVESTMENTS IN BRAZIL
Pre-salt now more than half of development spending over the next five years
Pre-Salt
US$ 53.4 Billion
13%
12%
Post-Salt
US$ 64.3 Billion
2%
Tranfer
of
Rights
21%
22%
21%
54%
57%
Development
Infrastructure and support
Exploration
12
PETROBRAS’ TOTAL RESERVES AND POTENTIAL RECOVERABLE VOLUMES
Continuous growth from deeper discoveries
Potential
increase
Million boe
30.000
25.000
20.000
15.000
10.000
5.000
0
Onshore
0-300 m
300-1500 m
> 1500 m
Pre-salt's Recoverable Volume
Transfer of Rights
13
PRODUCTION TARGETS
With broad access to new reserves, Petrobras can more than double its production in
the next decade
6,418
142
246
1.120
3,993
2,386
2,516
99
111
321
96
132
317
2,575
93
144
334
2,772
96
141
435
618
+10 Post-Salt Projects
4,910
+8 Pre-Salt Projects
’000 boe/day
+1 Transfer of Rights
1.855
1.971
2.004
2.100
+ 35 Systems
125
180
Added Capacity
Oil: 2,300,000 bpd
3,070
Transfer of Rights
13
543
2008
2009
Oil Production - Brazil
2010
2011
Natural Gas Production - Brazil
2015
Oil Production - International
Pre-Salt
845
1,148
2020
Natural Gas Production - International
14
MAIN E&P PROJECTS
Large projects sustain production increases
Natural Gas
Pre-Salt and Transfer of Rights
Post-Salt
EWTs
Lula Pilot
FPSO BW Cidade
Angra dos Reis
100.000 bpd
Cachalote and
Baleia Franca
FPSO Capixaba
100.000 bpd
Th bpd
3000
Uruguá
FPSO Cidade de
Santos
35.000 bpd
Jubarte
FPSO P-57
180.000 bpd




2500
Juruá GNA
Mexilhão
Jaqueta
HG
Tambaú
FPSO Cidade de
Santos
NG
Marlim Sul
module 3
SS P-56
100.000 bpd



2000
1000
500
Baleia Azul
FPSO Cidade de
Anchieta
100.000 bpd
(FPSO Espadarte
reallocation)
Parque das
Baleias
FPSO P-58
180.000 bpd
Papa-Terra
TLWP P-61 &
FPSO P-63
150.000 bpd
2.100
2.004
1500
Guará Pilot 2
FPSO Cidade de
São Paulo
120.000 bpd
Tiro Pilot
SS-11
Atlantic Zephir
30.000 bpd

EWT Guará
FPSO Dynamic
Producer
30.000 bpd


EWTs Lula NE e
Cernambi
FPSO BW Cidade
São Vicente
30.000 bpd
EWT Carioca
FPSO Dynamic
Producer
30.000 bpd

Franco 1
Transfer of
Rights
FPSO
150.000 bpd
Lula NE
FPSO Cidade de
Paraty
120.000 bpd
Guará (North)
FPSO
150.000 bpd
Cernambi South
FPSO
150.000 bpd
Baleia Azul
FPSO
60.000 bpd
FPSO P-67
Replicant 2
150.000 bpd
BMS-9 our11
3.070
FPSO P-66
Replicant 1
150.000 bpd
BMS-9 or 11
Roncador
module 3
SS P-55
180.000 bpd
Roncador
Módule 4
FPSO P-62
180.000 bpd
Tiro/Sidon
FPSO Cidade de
Itajaí
80.000 bpd
Aruanã
FPSO
100.000 bpd
4 EWTs
Pre-salt
3 EWTs
Pre-salt
5 EWTs
Pre-salt
5 EWTs
Pre-salt
2013
2014
2015
Siri
Jaqueta e FPSO
50.000 bpd
Maromba
FPSO
100.000 bpd
ESP/Marimbá
FPSO
40.000 bpd
0
2010
2011
2012
15
VARREDURA PROJECT
Technological development and exploratory optimization in existing concessions
Discoveriesdo
in Pr
Pre-salt
Descobertas
é-sal
naCampos
Bacia de
Campos
Basin 2009/10
2009/10
(VARREDURA)
(Varredura)
Recoverable volumes
discovered:
Post-salt: 1,105 MM boe
(Marimbá, Marlim Sul and Pampo)
Pre-salt: 1,130 MM boe*
(Barracuda, Caratinga, Marlim,
Marlim Leste, Albacora and Albacora
Leste)
*No volumes have been announced for the Marlim
Leste and Albacora Leste discoveries
Wells productivity close to
15,000 bpd
67 exploratory wells will be drilled
between 2011 and 2015 in production
areas in Campos basin
16
CUTTING-EDGE TECHNOLOGIES
OIL/WATER SUBSEA
SEPARATION
RAW WATER
INJECTION
- Resolves limitations from growing
- Increases production in existing
water production
- Separates water and oil under the
sea, reinjecting water and relieving
the size of the surface equipment
on the platform
systems
- 3 subsea systems for pumping raw
water (with little treatment) to
pressurize the reservoir, increasing
recovery factor without increasing
surface systems. Pioneer in the
world in such water depth
- Field: Marlim (Nov/2011)
- Field: Albacora (Dec/2011)
17
NEW VESSELS AND EQUIPMENTS
Resources required for production growth
Delivery Plan (to be contracted)
Accumulated Value
By 2013
By 2015
By 2020
Current Situation
(Dec/10)
Critical Resources
Drilling Rigs Water Depth Above 2.000 m
15
39
37 (1)
65 (2)
Supply and Special Vessel
287
423
479
568
Production Platforms (SS and FPSO)
44
54
61
94
Others (Jacket and TLWP)
78
80
81
83
Supply Vessel
Drilling Rig
FPSO
DRILLING RIGS UNDER CONTRACT
Water Depth
2006
2008
2010
Up to 1,000 meters
6
11
11
1,000 to 2,000 meters
19
19
Over 2,000 meters
2
3
(1) The contracts for two rigs reallocated from international operations expire in 2015
(2) Long-term demand will be adjusted according to new assessments
2011
2012
2013
21
+2
+1
+1
15
+10
+13
+1
18
19
19