Webcast ingles 3 q10 versao_ing_final

Results Announcement
3nd Quarter 2010
(IFRS)

Conference Call / Webcast
Almir Guilherme Barbassa
CFO and Investor Relations Officer

November 16th, 2010

1

DISCLAIMER

FORWARD-LOOKING STATEMENTS:
DISCLAIMER
The presentation may contain forward-looking statements We undertake no obligation to publicly update or
about future events within the meaning of Section 27A of revise any forward-looking statements, whether as
the Securities Act of 1933, as amended, and Section 21E a result of new information or future events or for
of the Securities Exchange Act of 1934, as amended, that any other reason. Figures for 2010 on are
are not based on historical facts and are not assurances of estimates or targets.
future results. Such forward-looking statements merely
reflect the Company’s current views and estimates of
future economic circumstances, industry conditions, All forward-looking statements are expressly
company performance and financial results. Such terms qualified in their entirety by this cautionary
as "anticipate", "believe", "expect", "forecast", "intend", statement, and you should not place reliance on
"plan", "project", "seek", "should", along with similar or any forward-looking statement contained in this
analogous expressions, are used to identify such forward- presentation.
looking statements. Readers are cautioned that these
statements are only projections and may differ materially
from actual future results or events. Readers are referred NON-SEC COMPLIANT OIL AND GAS RESERVES:
to the documents filed by the Company with the SEC,
specifically the Company’s most recent Annual Report on CAUTIONARY STATEMENT FOR US INVESTORS
Form 20-F, which identify important risk factors that could We present certain data in this presentation, such
cause actual results to differ from those contained in the as oil and gas resources, that we are not permitted
forward-looking statements, including, among other to present in documents filed with the United
things, risks relating to general economic and business States Securities and Exchange Commission (SEC)
conditions, including crude oil and other commodity under new Subpart 1200 to Regulation S-K because
prices, refining margins and prevailing exchange rates, such terms do not qualify as proved, probable or
uncertainties inherent in making estimates of our oil and possible reserves under Rule 4-10(a) of Regulation
gas reserves including recently discovered oil and gas S-X.
reserves, international and Brazilian political, economic
and social developments, receipt of governmental
approvals and licenses and our ability to obtain financing.

2

HIGHLIGHTS

o Net income (R$ 24,588 million) increased 10% in 9M10 vs. 9M09. In the 3Q10, net
income reached R$ 8,566 million;

o Total investments of R$ 56,500 million YTD 2010, 11% higher than 9M09;

o Public offering resulted in a capital increase of R$ 120 billion;

o Acquired rights to produce 5 billion boe in new pre-salt areas not yet licensed;

o Reduced leverage ratios:

o Net Leverage decreased from 34% to 16%

o Net Debt/EBITDA from 1.52X to 0.94X

3

OPERATING HIGHLIGHTS

FPSO Cidade de Angra dos Reis

o Start-up of the first commercial FPSO in
Tupi:

o Estimated 2011 average production:
50 thous. bpd

o Peak production forecasted for 2012

o New exploratory frontier in ultra deepwater at Sergipe-Alagoas basin with light oil;

o Inauguration of the diesel hydrotreatment and coke units as part of the
modernization of Revap , which is responsible for 15% of the feedstock processed in
Brazil.

o Record thermoelectric generation in September (6,252 MW average) and of natural
gas sales in 3Q10 (360 thous. boed).

4

OIL AND NATURAL GAS PRODUCTION 9M10 VS 9M09:
Increase in domestic and international markets

Total Production (Thous. bpd)
National Production
2,513 2,568
234 246 International 2,279 2,322
National
316 327 Natural Gas
Oil and LNG
2,279 2,322
1,963 1,995

o Production growth of 2% in the year due to:
- Increase in the production of FPSO´s Cidade de Vitória, Cidade de Santos, Espírito
Santo and Frade and contribution of extended well tests (Tiro and Tupi);
- Higher demand for natural gas in the domestic market. Production achieved record
in September;
o Comparing 3Q10 vs 2Q10, reduction of 1% due to maintenance stoppages during August
of P-33 and P-35.
5

NEW PRODUCTION UNITS:
Continued increase in capacity
Main units
Projects Capacity 2Q10 3Q10
FPSO Cidade de Vitória
100 th. bpd 60.9 th. bpd 51 th. bpd
(Golfinho)
FPSO Capixaba 58 th. bpd
100 th. bpd 9.7 th. bpd
Cachalote e Baleia Franca
FPSO Espírito Santo
35 th. bpd 28.2 th. bpd 26 th. bpd
Parque das Conchas (1)

SS-11 (TLD de Tiro) 30 th. bpd 15 th. bpd 17 th. bpd

FPSO Frade (2) 30 th. bpd 17 th. bpd 18 th. bpd

FPSO Cidade de Santos 35 th. bpd and UTB: 15 th.bpd
(Uruguá-Tambaú) and -
25 million m3/d MXL.: 1Q11
Mexilhão
(1) Projects in partnership, capacity and production refers to Petrobras share (35%)
(2) Projects in partnership, capacity and production refers to Petrobras share (30%); Total: 185 th. bpd
New Units
Projetcs Capacity Start-up
FPSO Cidade de Angra dos Reis (Tupi) 100 th. bpd Oct/2010
Guará EWT 30 th. bpd Dec/2010
P-56 (Marlim Sul) 100 th. bpd Jul/2011
P-57 (Jubarte) 180 th. bpd Dec/2010 6

PRE-SALT UPDATE
Wells**:

Santos Basin Petrobras

o Acquisition of the rights to produce ANP
5 billion boe in specific areas of the ** Drilling or completion or test.
pre-salt that are not under
concession;
Libra

o Start up of FPSO Cidade de Angra
dos Reis in Tupi; Under Concession

Transfer of Rights

o 5 new wells to be concluded in
2010, totaling 16 wells this year;

o Two additional rigs still to arrive in Macunaíma
2010, increasing pre-salt operating
fleet to ten; Tupi NE

o Guará EWT scheduled to start up Carioca
Tupi Oeste Piloto de
by the end of November (FPSO NE Tupi IG1
already in Brazil);
Tupi Tupi Sul
Sudoeste
o Tupi NE EWT scheduled to start up
in 1Q11 (FPSO Cidade de São
Vicente).

7

DOWNSTREAM UPDATES

Revap – Reduction of future needs for Imports
• Investments of US$ 2.5 billion:

• Coke Unit (55%): higher added value products

• Capacity: 5,000 m³/day (3,000 m³/d additional domestic crude oil processing)

• Yield: Diesel (55%), LPG (5%), Naphtha (10%), Coke (20%) and Feed Cracker Unit (10%).

• Hydrotreatment of diesel (45%): Diesel S-50

• Increase in production capacity:
- LPG - 21 thous. bpd
- Nafta - 42 thous. bpd
- Diesel - 23 thous. bpd

New Refineries - Updates
• New buildings in Comperj and Abreu e Lima in progress

• Pre-operation of Polyester Yarn Unit (Suape Petrochemic)

• Contracting of basic engineering - Premium I (Maranhão) and II (Ceará)
Abreu e Lima

8

INVESTING IN TECHNOLOGY LEADERSHIP

Expansion of CENPES makes it one of the
largest research center in the world
Petrobras´s partnerships with 120 universities and
research centers has created one of the greatest
concentrations of energy research in the world

In the Technological Park of the Rio de Janeiro Federal
University, four R&D centers for major equipment and
services suppliers is currently under construction :
Petrobras Investments in
HSE, IT and R&D (2010-14) • Schlumberger • FMC Technologies
US$ 11.4 Billion • Baker Hughes • Usiminas
29% Others companies are schedule to come to Brazil to
develop technological centers:
46% • Cameron
1.9 •TenarisConfab
0.2 • General Electric
• Vallourec & Mannesman
0.9 • Halliburton
• Weatherford
• IBM
25% • Technip • Wellstream

HSE IT R&D
9

AVERAGE REALIZATION PRICE:
Stable price in the domestic market

US$/bbl

115 R$/bbl
120
101
100
220 Avg. Avg. Avg.
3Q09 2Q10 3Q10
170
80 75 76 78 77 152.34 158.60 158.17
59 68
60 55 120
44 64 70 73 74
49 132.87 152.64 144.47
40 72 70
48
20 32 20
4Q07 1Q08
2Q08 3Q08
3Q084Q08 4Q08 1Q09
1Q09 2Q09 3Q09 2Q09 3Q09
4Q09 1Q10
4Q09 1Q10 ARP USA 2Q10 3Q10
2Q10 3Q10
ARP Petrobras
Petrobras Oil Price Brent

o Average Realization Price remains stable.
o In the comparison 3Q10/2Q10, the gap between ARP USA and ARP Petrobras increased, due to
lower oil prices, Real strengthening and price stability in Brazil.

10

DOMESTIC LIFTING COST:
Increase explained by collective bargain and stoppages for maintenance
R$/barrel US$/barrel
76.2 78.3 76.9
74.6
140.2
137.2
134.5 68.3
129.7
127.7
24,74 24,50 24,67
43.04 43.82 43.91 42.72 23,73
41.62
22,86

24.78 26.53 26.87 26.37 24.26 13.84
15.23 14.33 14.71 14.07

16.84 16.51 16.95 17.54 18.46 9.02 9.51 9.40 9.79 10.60

3Q09 4Q09 1Q10 2Q10 3TQ10 3Q09 4Q09 1Q10 2Q10 3Q10
Lifting Cost Gov.Part. Brent (in R$) Lifting Cost Gov.Part. Brent (in US$)

Comparing 3Q10/2Q10:

o Collective Bargain Agreement (CBA), expenses with materials (equipments for platform
maintenance) and 1% decrease in production increased lifting costs;

o Lower government take due to decrease in international oil price (4%);

11

DOMESTIC OIL PRODUCTS :
Significant sales growth in the domestic market

Refinery Output Domestic Sales
Thous. bpd
-1% +11%

1,867 2,033
1,807 1,844 Others 1,825 1,898

640 LPG 565
637 634 507 501
134 Gasoline
134 128 222 221 230
338 Diesel
334 342 327 374 379

755
702 740 769 802 859
3Q09 3Q09
2Q10 2Q10
3Q10 3Q10
o Oil product sales in the domestic market grew 11% versus year earlier.
- Diesel (increase of 12%): growing economic activity and improved grain harvest;
- Gasoline (increase of 16%): substitution with ethanol due to higher ethanol prices;
- Other: (increase of 9%): largely from jet fuel, asphalt sales, and LPG

o Refinery output increased quarter over quarter as a result of restart of Replan

12

GAS & ENERGY
Investments consolidation
Infrastructure Flexibility Power Generation

NG Pipelines
Fertilizer
Thermo Power Plant
LNG Terminals

G&E Investments fully responded to higher demand

Power Generation in Brazil Natural Gas sales (Th. boed)
7000 +224% (3Q10 vs. 2Q10) +23% (3Q10 vs. 2Q10)
Brazil: 6,252 MW
6000 360
Average MW

5000 Gas to Petrobras 292
Gas to others 244
4000

3000

2000

1000
3Q09 2Q10 3Q10
0 13
Oct-09 Dec-09 Feb-10 Apr-10 Jun-10 Aug-10

OPERATING INCOME 3Q10 vs 2Q10

(R$ Million) - CBA 2010/2011: R$ 634 million
1,108
(580) - Barracuda: R$ 486 million
(270)
- Employees incentives: R$ 92 million
(1,888)
12,303
10,673

2Q10 Operat. Inventory Other Operating 3Q10
Operating Net Effect COGS Expenses Operating
Income Revenue (COGS) Income

o Higher Operating Revenue due to higher product sales volume in Brazilian market, met
largely by imports;
o Average inventory accounting increased COGS by R$ 580 million versus prior quarter;
o Increased operating expenses due primarily to non-recurrent items in 3rd Quarter: Collective
Bargaining Agreement (CBA) 2010/2011, terminating Barracuda financial structure, and
Incentives Progam for employees to purchase shares in the Public Offering.
14

NET INCOME 3Q10 vs 2Q10

(R$ Million)
460 (634)
2,598 (523)
8,566
8,295 (1,630)

2Q10 Operating Financial Equity Minority 3Q10
Taxes
Net Income Income Result Income Interest and Net Income
Employees Part.

o Higher financial results (R$2,598 million), due to q/q 6% valuation of Real on net debt;
o Equity income and Minority Interest also a consequence of Real strengthening;
o Increase in tax expenses as a consequence of higher operating income;
o Lower operating income offset by financial results, leading to 3% increase in net income.

*(1) Operating profit before financial income and participation in investments 15

EXPLORATION & PRODUCTION 3Q10 vs 2Q10
Operating Income

(R$ Million)

11,572 1,095 (506)
(930) (1,081)
125
10,275

2Q10 Price Effect Cost Effect Volume Effect Volume Effect Operating 3Q10
Operating on Revenues on COGS on Revenue on COGS Expenses Operating
Income Income

Reduction in operating income due to:
o Lower sales prices in the domestic market for oil and natural gas (oil: -2%; NG: -25%,
in US$/bbl);
o Higher volumes reflect sales from inventory during 3Q.
o Higher operating expenses reflect CBA (R$ 225 Million), Barracuda project structure
(R$ 486 Million)
16

DOWNSTREAM 3Q10 vs 2Q10
Operating Income
474 (365)
(R$ Million)
2, 497 (211)
1, 714

244 (925)

2Q10 Price Effect Cost Effect Volume Effect Volume Effect Operating 3Q10
Operating on Revenues on COGS on Revenue on COGS Expenses Operating
Income Income

o Higher sales volumes from increasing domestic demand;
o Lower cost of goods sold due to lower oil acquisition/transfer prices in the 3Q10 and
higher oil product import costs in the 2Q10, explain positive effect on cost;
o Positive effect on COGS due to lower acquisition/transfer prices and oil product
import costs;
o Operating expenses higher because of CBA 2010/11 (R$ 136 Million).

17

GAS & POWER, INTERNATIONAL and DISTRIBUITION
(3Q10 vs 2Q10)

3Q10 VS. 2Q10
Operating Results: 49 %
Gas & Power

R$ 264 million R$ 522 million

o Natural Gas: Lower margins due to sales to volumes;
o Energy: Lower result in energy commercialization due to increase in
META DE ENDIVIDAMENTO: price (PLD) offset by higher thermoeletric generation;
spot
Oferta Pública de Ações omelhora indicadores da Cia.
Non-recurring write-offs reduced operating income: ICMS Tax (-R$90
million); GTL Pilot Plant (-R$ 50 million), CBA 2010/2011 (-R$ 30
million), lower thermoeletric idleness (+R$45 million).
Distribution

3Q10 VS. 2QT10
Operating Results: 35 %
R$ 526 million R$ 390 million

o Increase of 10% on sales volume;
o Benefited from non-occurrence of expenses from the settlement of
ICMS tax debits, as occurred in the previous quarter.
International

Operating Results : 3Q10 VS. 2Q10
R$ 600 million
27 %
R$ 437 million

o Higher exploratory costs;
o Higher write-off of dry or economically unviable wells in Angola,
Nigeria, the USA and Argentina.
FPSO Campo de Akpo
18

INVESTMENTS 9M10 vs 9M09:

Investiments 9M10 Investiments 9M09
R$ 56.5 billion R$ 50.7 billion
4.4 6.5
0.5
3.4 E&P 0.4
3.7 0,05
5,6 Downstream 5.5
1,1 24.1 Gas & Power 23.2
1,3 International
3,8 4.5
20.6 6,1
RTC
10,1 24,7 Others

10.6

Investments in Downstream for 9M10: R$ 20,582 million

•Quality improvements Quality/Sulfer Content
(sulfur removal);
Conversion
27% 27%
•Maintenance, HSE,
New Units
operating efficiencies
logistics; Fleet Expansion
12% 13%
•Expansion of refining Investments in Braskem
capacity.
19%
Plangas, Maintenance,infrastructure,HSE
2% and others
19

PUBLIC OFFERING RECONCILIATION

R$ 120.2 Billion: Public Offering
R$ 115.1 billion: 3Q10

R$ 67.8 Billion: LFTs R$ 67.8 B: LFTs R$ 74.8 Billion
to acquire rights
GreenShoe

R$ 47.2 Billion:Cash R$ 7.0 Billion: Cash to 5 billion barrels

R$ 29.5 Billion: Cash
R$ 45.5 Billion
R$ 10.7 Billion: LFTs* Retained as cash
and equivalents
R$ 5.2 Billion: 4Q10 Cash
Before Public Offering After Public Offering
R$ Billion 06/30/2010 09/30/2010
Cash and Cash Equivalents(Adjusted by LFT) 24.2 58.0
Net Debt 94.2 57.1
Net Debt / Net Capitalization 34% 16%
Net Debt/Ebitda 1.52X 0.94X

*Government securities with a maturity greater than 90 days.
20

Information:
Investor Relations
+55 21 3224-1510
petroinvest@petrobras.com.br

21
21

Webcast ingles 3 q10 versao_ing_final

Related slideshows

Recommended for you

Recommended for you

Recommended for you

Recommended for you

Recommended for you

More Related Content

What's hot

What's hot (20)

Viewers also liked

Viewers also liked (13)

Similar to Webcast ingles 3 q10 versao_ing_final

Similar to Webcast ingles 3 q10 versao_ing_final (19)

More from Petrobras

More from Petrobras (20)

Recently uploaded

Recently uploaded (20)

Webcast ingles 3 q10 versao_ing_final