Edition 39 - Sharing in Petrobras - September/2013
- 1. SHARING PETROBRAS NEWS September, 2013 • #39 www.petrobras.com.br/ir Petrobras issues US$ 11 billion in Global Notes — Stock Market Operation P etrobras has completed in May the issuance of Global Notes in the international capital markets in the amount of US$ 11 billion. The funding was comprised of notes maturing in 2016, 2019, 2023 and 2043, with fixed and floating rates. In just one day, the demand exceeded US$ 42 billion, with over two thousand orders from investors. The cost and average maturity was 3.79% and 10.37 years, respectively. These numbers bestow to the operation the title of biggest corporate debt issuance in dollars of emerging markets and the fifth largest in the world. The bonds were purchased by U.S. investors (73%), European (17%), Asian (7%) and other (3%). The proceeds will be used to finance the company’s investments. The success of the transaction shows investor confidence in the company’s fundamentals and in the commitment to maintaining the investment grade rating. The transaction continues to be in line with Petrobras’ strategy to access the debt market in dollars once a year. Why funding is so important With the growth opportunities arising from recent discoveries, especially the presalt, we face ahead a number of profitable projects to be developed. The main source of funds for these investments is the operating cash flow; however, it is also necessary to rely on loans, which is the second largest source of funds. Our current Business and Management Plan forecast a gross annual funding of US$12.3 billion. In recent years, we have experienced an improvement in our risk assessment by rating agencies, accompanied by a reduction in funding costs. HIGHLIGHTS Shareholders compensation New vessel The third and final installment of shareholders compensation for the year 2012 was paid on August 30, 2013. The payments were made in the form of interest on own capital, based on the shareholder position as of April 29, 2013: R$ 0.13719 per common share (ON) and R$ 0.39443 per preferred share (PN). The tanker Zumbi dos Palmares was the fifth vessel delivered by Transpetro, a subsidiary of Petrobras, as part of the Program for Modernization and Expansion of the Fleet (Promef). The vessel, which had its maiden voyage in May, was built in Estaleiro Atlântico Sul Shipyard in Pernambuco, and can carry a million barrels of oil, which is equivalent to almost half of the daily production nationwide. Program for suppliers reaches R$ 6 billion The “Progredir” Program, created by Petrobras to streamline and increase the supply and reduce the cost of financing of the working capital to its suppliers, reached its second anniversary. 1,200 operations were performed, allocating R$ 6 billion to 510 companies. In the anticipation of invoices, the volume was R$ 400 million resulting from 1,070 transactions with 140 suppliers. Premium Refineries Petrobras has signed two letters of intent for projects of Premium refineries, with the purpose of studying the feasibility of joint ventures. The Premium Refinery 1 in Maranhão state has been transacted with Chinese company Sinopec, while the Premium 2 in Ceará state, with Korean GSE.
- 2. Results for the first half of 2013 — Operating performance O 2Q 13 1Q 13 Variation Total crude oil, NGLs and natural gas production 2,555 2,552 0% Total crude oil and NGLs – Brazil 1,931 1,910 1% Oil products production 2,138 2,127 1% Net imports of crude oil and oil products ur net income in the first half of 2013 has reached R$ 13.9 billion, an increase of 77% over the same period of 2012. This increase was due to higher operating profit (+23%) and a lower impact of foreign exchange rate in the financial result. The higher operating income was mainly due to the increases in diesel and gasoline prices, higher production of oil products, lower dry and sub-commercial wells and divestments. In thousand barrels of oil equivalent per day 349 454 23% Utilization of nominal capacity in Brazilian refineries 99% 98% 1% Domestic crude oil of total feedstock processed 79% 83% -5% Economic and financial figures In US$ million 2Q 13 1Q 13 Variation Sales revenues 35,569 36,345 -2% In the 2 quarter, operating income was 13% higher than the first quarter of 2013 reflecting, in particular, gains with the sale of assets in Africa. Net income was 19% lower, mainly due to the negative financial result, affected by the devaluation of the real against the dollar. Gross profit 9,038 9,448 -4% Operating income* 5,366 4,935 9% Net income 2,996 3,854 -22% The production of oil and natural gas amounted to 2,500 barrels / day in the first half, 3% lower than the first half of 2012, as a result of the fields natural decline and concentration of maintenance stoppages during this period. In the quarter over quarter (2Q13 vs. 1Q13) comparison, production remained stable, in line with the plan. nd The production of oil products in Brazil increased by 8% in the first half, as a result of the better operational performance of refineries, enabling Petrobras to meet domestic demand growth of 6%, with 19% reduction in import costs. We obtained positive results from our structuring programs, such as savings of R$2.9 billion provided by the Operating Costs Optimization Program (PROCOP) and the increase of R$ 1.9 billion in income and a R$ 3.4 billion in cash from the sale of assets in Africa, under the Divestment Program (PRODESIN). In May, we adopted the hedge accounting in order to make the financial results less volatile and net income more representative of the actual operating performance through the hedge relationship between future exports and debt exposed to changes in exchange rate. The extension of this standard has allowed that losses of R$ 8 billion, relative to 70% of the net exposed to exchange rate variation, to be recognized in our shareholders’ equity this quarter. Investments in the first half of the year reached R$ 44.1 billion, being 54% in Exploration and Production. Earnings per share 0.23 0.30 -23% Adjusted EBITDA 8,740 8,133 7% Market value* 90,965 112,499 -19% Capital expenditures 11,758 9,907 19% Net debt 79,563 74,820 6% Net debt/Adjusted EBITDA 2,36 2,30 3% Net debt/(net debt + shareholder's equity) 34% 31% 10% *Net Income before financial results, share of profit of equity-accounted investments and income taxes. Petrobras ADR’s return (NYSE) Period PBR PBR/A DJIA Last 10 years (06/30/03 to 06/30/13) 172% 230% 66% Last year (06/30/12 to 06/30/13) -29% -19% 16% Performance shares (NYSE): PBR and PBR/A (Index number = 100 in 06/31/2003) 1,600 1,200 800 230% 172% 66% 400 0 Jun-03 Jun-05 Jun-07 PBR Jun-09 PBR/A Jun-11 Dow Jones Jun-13
- 3. P-61 Platform Innovation: Tension Leg Wellhead Platform in Brazil — P latform P-61, a TLWP type (Tension Leg Wellhead) Platform, the first built in the country and to be used by Petrobras, is nearing completion in Angra dos Reis (RJ). It is expected to start up operation at the end of the year. The platform will be installed in the Papa-Terra field in the Campos Basin, operating together with P-63 platform. It has a capacity to process 140,000 barrels / day of oil and to compress one million m3 of gas per day. The project includes drilling, completion P-63 Platform Petrobras acquires the largest amount of exploratory blocks offered in ANP’s Licensing I n the 11th Bidding Round held by the National Agency of Petroleum, Natural Gas and Biofuels (ANP) in May, Petrobras bought, whether by itself or in partnerships, 34 of the 289 blocks offered in the bid. In addition, Petrobras has offered the largest portion of the signing bonus. The total invested by Petrobras and its partners in the 11th round was R$ 1.5 billion. Petrobras also secured, according to its technicians’, the blocks with the highest exploratory potential offered by the agency, located in the Foz do Amazonas, Espírito Santo and Barreirinhas Basins. The strategy is aligned with the objectives set out in the Business and Management Plan to incorporate new exploratory areas for continuous replenishment of the portfolio, in order to ensure the volumes required for the sustainability of the companies future production curve. Light oil in Sergipe Basin I n August, two discoveries of deepwater light oil (best quality) in Sergipe Basin were reported. The discoveries were confirmed by applying the results of the drilling of the first extension well ‘Farfan 1’, in partnership with IBV-Brazil, and extension well ‘Muriú 1’, which is fully controlled by Petrobras. and interconnection of these platforms to 30 oil producing wells. The entire production of the P-61 will be transferred to the P-63, which will be responsible for the processing, storage and transfer of the produced oil. The use of this new type of platform will allow the control of the wells, in a depth of near one thousand meters, to be made on the surface, disregarding the need of intervention of higher cost underwater robots. PRE-SALT MORE ECONOMICAL A recent study carried out by Cenpes (Research Center of Petrobras) has verified that the water produced in the pre-salt fields in the Santos Basin is less acid than expected and therefore the amount of corrosion will be less. As a result, the company will be able to select the most appropriate metallurgical construction of the next non-injector wells. Savings of approximately R$ 500 million are estimated with the switch of materials. In addition to the cost reduction, the replacement will ensure lower delivery time and an increase in local content.
- 4. NEWS PANEL A second-generation Ethanol is on the way P etrobras is planning to unravel a new renewable fuel in the market in 2015: the second-generation ethanol, made out of sugarcane bagasse. This technology, developed by the company itself, was successfully tested during the Rio +20 Conference and has received an award from the American Chamber of Commerce (AmCham). Brazil is a major producer of ethanol and has plenty of bagasse available, i.e., it has the potential for commercial production of the new fuel. This technology allows an increase of up to 40% of the production on the same acreage, thus reducing the need for expansion of sugarcane plantations. The business model will be implemented in the first generation plants with the purpose of seeking synergy in the production process. More investments in training and infrastructure Graça Foster is featured in Forbes magazine G raça Foster, Petrobras’ CEO, was appointed by Forbes as the most powerful woman in the business sector in Brazil, ranking third in the world ranking. The classification took into account the company’s revenue, market value, media presence and impact in the industry. The magazine highlighted the fact that Grace Foster “plays a central role” in the development of Petrobras and stated that it “should bring good results this year.” In addition, the CEO also has been cited as one of the 100 most influential people in the world by Time magazine and named one of the world’s most powerful executives by Fortune, ranking first among the executives who work outside the U.S. P etrobras and FIRJAN / SENAI have signed an agreement for the development of simulators and virtual environments for the training of professional in the oil and gas industry activities. The investment includes 14 new equipments in the next five years, which will be located in Rio de Janeiro, comprising an investment of R$ 83.6 million. On another front, the company and UFRJ / COPPE have also opened in Rio, a set of three laboratories, which represent an investment of about R$ 17 million. The goal of such investment is to seek solutions for the pre-salt exploration. Graça Foster, Petrobras’ CEO Newsletter published by Petrobras’ Executive Management of Investor Relations • Executive manager: Theodore Helms • Journalist: Orlando Gonçalves Jr. MTb-MA 993 • Collaboration: Izabel Ramos, Fernanda Bianchini, Daniela Ultra, José Roberto Darbilly and Luan Barbosa (trainee) • Graphic project and desktop publishing: Estúdio Matiz. Shareholder Service: Av. República do Chile, 65/Sala 1002 – Centro • Rio de Janeiro – RJ – Brazil • Zip Code: 20031-912 Telephone: +55 21 3224-9916 • Fax: +55 21 2262-3678 • E-mail: acionistas@petrobras.com.br • Site: www.petrobras.com.br/ri