Petrobras
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Address
Av. República do Chile, 65 RJ
Rio de Janeiro
Post Box 15515
20031-912
Tel (+55 21) 2534.1510
Fax (+55 21) 2534.6055
Web http://www2.petrobras.com.br
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Capex
Between 2007 and 2011, Petrobras plan to invest $12.1 billion abroad, $5.4 billion more than the 2006-2010 plan had foreseen. The Exploration & Production activities abroad will get 70,2% of the investments.
The International Area will focus on Western Africa (particularly Nigeria and Angola), and on the Gulf of Mexico, because of the deep water exploration perspectives in those regions.
The second biggest part of the investments - 24.8% - will be directed to the refining and marketing activities.
Of the $12.1 billion, 28% ($3.3 billion) will be allocated in Latin America, 23% ($2.8 billion) in North America, 16% ($2 billion) in Africa, and 33% ($4 billion) in new projects.
Petrobras' corporate strategy in its 2007-2011 Business Plan is to achieve leadership in the oil, natural gas, byproduct, and biofuel market in Latin America, performing as an integrated energy company with selective expansion in petrochemicals, renewable energy, and in international activities.Future Plans
Strategic Plan 2020 and Business Plan 2008 - 2012
In August 2007, Petrobras announced its Strategic Plan 2020 and the Business Plan 2008-2012. The Business Plan maintains the Company's aggressive growth targets and underscores the challenges to be met in the natural gas and biofuel markets.
The Strategic Plan 2020, which establishes the mission, vision, strategies and corporate objectives of the Company for the future, has expanded Petrobras' vision as a leader in Latin America to being one of the largest integrated energy companies in the world. The Plan maintains the strategy of expanding operations in the oil, oil products, petrochemicals, gas energy, biofuels and distribution markets with profitability, social and environmental responsibility and integrated growth.
The Plan also highlights the Company's operational excellence in management, human resources and technology in alignment with the following strategies:
• Exploration and Production: to grow production and oil and gas reserves sustainably, and to be recognized for excellence in E&P operations;
• Downstream and distribution: to expand integrated operations in refining, commercialization, logistics and distribution both in Brazil and abroad with a focus on the Atlantic Basin;
• Petrochemicals: to expand operations in petrochemicals in Brazil and South America on an integrated basis with the Petrobras Group's other businesses;
• Gas and Energy: to develop and spearhead the Brazilian natural gas market and operate on an integrated basis in the gas and electric energy markets with a focus on South America;
• Biofuels: to operate on a global basis in biofuels' commercialization and logistics, leading the domestic production of biodiesel and expanding participation in the ethanol business.
The new Plan poses fresh management challenges, including:
• Capital Discipline: to endeavor to achieve greater efficiency in the implementation of projects (terms and costs); Management of Inventory; Reduction in Operating and Administrative Costs and Portfolio Management;
• Human Resources: to be an international benchmark in the energy segment, in personnel management, having its employees as its most valuable asset;
• Social Responsibility: to be an international benchmark in social responsibility in the management of the businesses, contributing to sustainable development;
• Climatic Change: to reach levels of excellence in the energy industry with respect to greenhouse gas reductions in processes and products, contributing to the sustainability of the business and the mitigation of global climate change;
• Technology: to be a global benchmark in technologies which contribute to the Company's sustainable growth in the oil, natural gas, petrochemicals and biofuels industries.
The Business Plan 2008-2012 establishes production targets for oil and natural gas in Brazil: these will be 3,058,000 barrels of oil equivalent per day (boed) in 2012 and 3,455,000 boed in 2015. Petrobras aims to maintain a balance between growth in production and Brazilian refinery capacity, the target for domestic processed crude throughput in 2012 being 2,061,000 barrels per day (bpd), with a 90% participation of domestic crude.
The international targets also reflect the Company's integrated growth with production estimates of 436,000 boed of oil and gas in 2012 and processed crude throughput in Petrobras' refineries in other countries amounting to 348,000 bpd.
Petrobras' total estimated output (Brazil and overseas) by 2012 has been revised to 3,494,000 barrels daily and the target for 2015 set at 4,153,000 boed.
The integration process has also been extended to petrochemicals where the Company is estimating expansion in operations in Brazil and Latin America, in so doing, capturing synergies with the other businesses of the Petrobras Group.
The Plan calls for investments of US$ 112.4 billion until 2012, representing an annual average of US$ 22.5 billion, being 87% (US$ 97.4 billion) in Brazil and 13% (US$ 15.0 billion) overseas. This amount represents an increase of 29% compared with the previous Plan.
The highlights of the investments in Brazil are represented by the growth in Exploration and Production (an increase of 32%), Downstream (an increase of 35%) and Petrochemicals (an increase of 30%). The Plan also places an emphasis on biofuels which will receive investments of US$ 1.5 billion.
Investments in the international operations will focus largely on the area of Exploration and Production particularly in Latin America, West Africa and the Gulf of Mexico.
The growth of investments is due to: US$ 13.3 billion in new projects, US$ 10.9 billion for the increase in costs due to increased market demand for sector equipment and services, US$ 4.2 billion due to local currency appreciation and the remainder with respect to other factors such as changes in the project scope, in the business model, etc.
The Company aims to become a global company in the commercialization and logistics of biofuels, leading the domestic production of biodiesel and expanding its share of the ethanol business. In line with this strategy, H-BIO (Bio-refining) will provide leverage for growth in this market.Production
Domestic production grew by 5% in 2006, due to a 340 thousand barrels a day increase in production capacity, as a result of the P-34, FPSO-Capixaba and P-50 platforms all coming on-stream. A new production record was set in October, with the company achieving an output of 1.91 million barrels per day.Reserves
Petrobras Provides Review of Proved Reserves in 2007
Petrobras announces its proved reserves of oil, condensate and natural gas in Brazil and abroad in 2007, according to the Society of Petroleum Engineers - SPE and Security and Exchange Commission - SEC criteria.
Petrobras´ Proved Reserves in Brazil:
On December 31st, 2007 the Proved Reserves of oil, condensate and natural gas in the fields under concession to Petrobras in Brazil amounted to 13.920 billion barrels of oil equivalent (boe) according to ANP/SPE Criteria, representing an increase of 1.2% in relation to 2006.
Proved Reserves - SPE
Oil and Condensate (billion bbl): 11.802 (85%)
Natural Gas (billion m3): 336.715 (15%)
Oil Equivalent (billion boe): 13.920
During 2007, 875 billion boe were incorporated into Proved Reserves, with production over the same period amounting to 708 million boe, as shown in the following table:
Proved Reserves Breakdown – SPE Criteria
Volume (billion boe)
- Proved Reserves on December, 2006: 13.753
- Incorporated as Proved Reserves in 2007: 0.875
- Acumulated Production 2007: 0.708
- Proved Reserves on December, 2007 (A + D): 13.920
For each barrel of oil equivalent extracted in 2007, 1.236 boe were incorporated into Proved Reserves, resulting in a Reserve Reposition Index (RRI) of 123.6%. According to SPE criteria, Petrobras´ Reserve/Production (R/P) ratio in Brazil was 19.6 years.
In 2007 there were 53 discoveries notifications, onshore and in the continental platform. Some of theses discoveries already had its commerciality declaration in 2007. Besides those, other 24 areas were in evaluation phase. We highlight Tupi, in Santos Basin, that is currently in the Discovery evaluation phase – yet without commerciality declaration.
The highlights, in terms of Proved Reserves incorporation, were:
• Discoveries in Exploratory Blocks – Xerelete in Campos Basin; Guanambi in Recôncavo Terra Basin; Biguá, Cancã and Jacupemba, in Espírito Santo Basin - onshore; and Japuaçu in Alagoas Basin - onshore.
• Discoveries in exploratory blocks incorporated to already existing production fields – Fazenda São Rafael and Tabuiaiá in Espírito Santo E&P Business Unit (UN-ES).
• Discoveries of new hydrocarbon accumulations in existing production fields – Marlim Sul in Rio de Janeiro E&P Business Unit (UN-RIO); Baleia Azul, Baleia Franca, Cachalote, Golfinho and Jubarte Espírito Santo E&P Business Unit (UN-ES); Canto do Amaro, Guamaré and Macau in Rio Grande do Norte & Ceará E&P Business Unit (UN-RNCE).
• Revisions in existing fields in 2006 – mainly in Roncador and Albacora Leste in Rio de Janeiro E&P Business Unit (UN-RIO); Carapeba, Marlim and Congro in Campos Basin E&P Business Unit (UN-BC); Mexilhão in Santos Basin E&P Business Unit (UN-BS) and Manati in Bahia E&P Business Unit (UN-BA).
According to the SEC Criteria, Brazil´s Proved Reserves at December 31 2007, were of 10.818 billion boe, representing an increase of 2.3% (10.573 billion boe) in relation to 2006.
Proved Reserves - SEC Criteria
Oil and Condensate (billion bbl): 9.138 (84%)
Natural Gas (billion m3): 267.048 (16%)
Oil Equivalent (billion boe): 10.818
According to SEC criteria, 953 million boe were incorporated into Proved Reserves during 2007, compared with production of 708 million boe, resulting in a Reserve Reposition Index – RRI of 134.6%. In other words, for each 1 barrel of oil equivalent produced, 1.346 barrel was incorporated into Proved Reserves. Under the same criteria, the country´s Reserve/Production (R/P) ratio was 15.3 years.
Proved Reserves Breakdown - SEC Criteria
Volume (billion boe)
- Proved Reserves on December, 2006: 10.573
- Incorporated as Proved Reserves in 2007: 0.953
- Acumulated Production 2007: 0.708
- Proved Reserves on December, 2007: 10.818
The main discrepancies between the SEC and the ANP/SPE, are due to the differences between criteria employed (concession term and gas reserves with contracts not declared) and the non-booking to company accounts of projects in the initial stages of production development.
International Proved Reserves:
On December 31st, 2007 Proved Reserves of oil, condensate and natural gas, abroad, according to the SPE criteria, were 1.090 billion boe, representing a decrease of 14.2% in relation to 2006.
Proved Reserves - SPE
Oil and Condensate (billion bbl): 0.576 (53%)
Natural Gas (billion m3): 87.415 (47%)
Oil Equivalent (billion boe): 1.090
During 2007, the appropriation of proved reserves was supplemented by the period’s production, added to the contractual revisions that were made in Bolivia, and technical revisions occurred in Ecuador and in the United States. Therefore reserves were reduced by 180 million boe, as shown below:
Proved Reserves – SPE Criteria
Volume (billion boe)
- Proved Reserves on December, 2006: 1.270
- Incorporated as Proved Reserves in 2007: (0.094)
- Acumulated Production 2007: 0.086
- Proved Reserves on December, 2007 (A + D): 1.090
According to SPE criteria, international Reserve/Production (R/P) ratio was 12.7 years.
The oil, condensate and natural gas proved reserves, based on SEC Criteria, as at December 31st, 2007, were 886 million boe. This volume represents a reduction of approximately 0.11% compared to the preceding year (885 million boe).
Proved Reserves - SEC
Oil and Condensate (billion bbl): 0.474 (54%)
Natural Gas (billion m3): 69.898 (46%)
Oil Equivalent (billion boe): 0.886
During 2007, the appropriation of proved reserves, mainly in Nigeria and Peru, was supplemented by the period’s production, as shown below:
Proved Reserves Breakdown – SEC Criteria
Volume (billion boe)
- Proved Reserves on December, 2006: 0.885
- Incorporated as Proved Reserves in 2007: 0.085
- Acumulated Production 2007: 0.084
- Proved Reserves on December, 2007: 0.886
Using the same criterion, the Reserve/Production (R/P) ratio is 10.6 years.
The main reasons for the difference between SPE and SEC criteria are:
• By SEC criteria only the gas volumes covered by natural gas sales contracts can be declared as proven reserves, and in Bolivia this excludes volumes of discovered gas still not commercialized.
• In Nigeria, because of the current state of production development, only a part of total discovered volumes can be booked to the company reserves.
Petrobras’ Proved Reserves in 2007 (Brazil and International):
On December 31st, 2007 Petrobras´ Proved Reserves of oil, condensate and natural gas amounted to 15.010 billion boe, a 0.1% decrease compared to last year, as per the SPE criteria, distributed as shown:
Proved Reserves - SPE
Brasil: 13.920 (93%)
International: 1.090 (7%)
Total: 15.010
According to the SPE Criteria, 781 million boe were incorporated into Proved Reserves in 2006 and 794 million boe were produced, resulting in a decrease of 13 million boe in relation to 2005 proved reserves (15.023 billion boe). Consequently, for each barrel of oil equivalent produced during 2006, 0.984 barrels were incorporated into Proved Reserves, resulting in a Reserve Replacement Index – RRI of 98.4%. The Reserves/Production ratio (R/P) was 18.9 years.
Proved Reserves Breakdown - SPE
Volume (billion boe)
- Proved Reserves on December, 2006: 15.023
- Incorporated as Proved Reserves in 2007: 0.781
- Acumulated Production 2007: 0.794
- Proved Reserves on December, 2007: 15.010
Proved reserves on December 31st, 2007 according to the SEC criteria amounted to 11.704 boe, distributed as follows:
Proved Reserves - SEC
Volume (billion boe)
Brasil: 10.818 (92%)
International: 0.886 (8%)
Total: 11.704
According to the SEC Criteria, Proved Reserves increased by 1.1% in 2006 compared with the previous year.
Proved Reserves Breakdown - SEC
Volume (billion boe)
- Proved Reserves on December, 2006: 11.458
- Incorporated as Proved Reserves in 2007: 1.038
- Acumulated Production 2007: 0.792
- Proved Reserves on December, 2007: 11.704
According to the SEC criteria, 1.038 million boe were incorporated into Proved Reserves during 2007, compared with production of 792 million boe, resulting in a increase of 246 million boe in relation to 2006 proved reserves (11.458 billion boe). This corresponds to a Reserve Replacement Index - RRI of 131.1% or, in other words, for each barrel of oil equivalent produced incorporated into Proved Reserves. The Reserves/Production ratio (R/P) was 14.8 years.
Petrobras clarifies that the hydrocarbon reserve properties belong to their respective National States.
Who's Who
Dilma Vana Rousseff
Chairman of the Board of Directors
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José Sergio Gabrielli de Azevedo
President and Chief Executive Officer
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Ms. Maria das Graças Silva Foster
Director for Gas & Energy
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Jorge Luiz
International Business Officer
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Offices
Brazil
Head Office
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