4th Quarter and 2013 Year end Results

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Information about 4th Quarter and 2013 Year end Results
Investor Relations

Published on February 27, 2014

Author: petrobrasri

Source: slideshare.net

Description

Maria das Graças Silva Foster
CEO
Conference Call/Webcast
February 26th, 2014

4th Quarter and 2013 Year End Results Maria das Graças Silva Foster CEO Conference Call/Webcast February 26th, 2014 2013 Results

DISCLAIMER FORWARD-LOOKING STATEMENTS: DISCLAIMER The presentation may contain forward-looking statements about future events within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are not based on historical facts and are not assurances of future results. Such forward-looking statements merely reflect the Company’s current views and estimates of future economic circumstances, industry conditions, company performance and financial results. Such terms as "anticipate", "believe", "expect", "forecast", "intend", "plan", "project", "seek", "should", along with similar or analogous expressions, are used to identify such forward-looking statements. Readers are cautioned that these statements are only projections and may differ materially from actual future results or events. Readers are referred to the documents filed by the Company with the SEC, specifically the Company’s most recent Annual Report on Form 20-F, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements, including, among other things, risks relating to general economic and business conditions, including crude oil and other commodity prices, refining margins and prevailing exchange rates, uncertainties inherent in making estimates of our oil and gas reserves including recently discovered oil and gas reserves, international and Brazilian political, economic and social developments, receipt of governmental approvals and licenses and our ability to obtain financing. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information or future events or for any other reason. Figures for 2014 on are estimates or targets. All forward-looking statements are expressly qualified in their entirety by this cautionary statement, and you should not place reliance on any forward-looking statement contained 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 and gas resources, that we are not permitted to present in documents filed with the United States Securities and Exchange Commission (SEC) under new Subpart 1200 to Regulation S-K because such terms do not qualify as proved, probable or possible reserves under Rule 4-10(a) of Regulation S-X. 2

4th Quarter and 2013 Year End Results

Exploratory Activity Proven Reserves totaled 16.6 Bi boe. RRR* in Brazil above 100% for 22 years in a row. Highlights for new exploratory frontiers - Sergipe-Alagoas and Potiguar. Highlights in Brazil – 2013  Reserves/Production = 20 years  Offshore wells drilled: Post-salt (14) + Pre-salt (17)  16.6 Billion boe RRR Brazil: 131% (above 100% for the 22 years in a row)  Proven Reserves 2013 R$ 17.3 billion invested in exploration in 2013 4% International Brazil 15% 85% 96% Natural Gas Oil + NGL Main Discoveries in Brazil 2013 Campos Basin Santos Basin Post-salt Mandarim Pre-salt Sul de Tupi / Florim / Sagitário Iara Extensão 4 / Entorno de Iara Iguaçu Mirim / Franco Leste Iara Alto Ângulo / Jupiter Bracuhy Espírito Santo 2013 2013 Success Ratio in Brazil Pre-salt: 100% Post-salt Arjuna 75% Sergipe - Alagoas Potiguar Post-salt Pitú *RRR: Reserves Replacement Ratio 59% 64% Post-salt Farfan 1 / Muriú 1 / Moita Bonita 1 2011 2012 2013 4

Petrobras Oil and NGL Production in Brazil in 2013: 1,931 kbpd Oil and NGL production in Brazil reached 1,931 kpbd in 2013, down by 2.5% from 2012. Natural decline during the last 12 months below expected range of 10-11%. 2012: 1,980 kbpd Thousand bpd 2.300 2.250 2.200 2.150 1Q12 Avg. 2,066 2.110 2.100 2.050 2Q12 Avg. 1,970 3Q12 Avg. 1,904 2013: 1,931 kbpd 4Q12 Avg. 1,980 1Q13 Avg. 1,910 2Q13 Avg. 1,931 3Q13 Avg. 1,924 4Q13 Avg. 1,960 2.098 2.032 1.993 2.000 1.961 1.950 1.900 1.989 1.960 1.968 1.940 1.928 1.940 1.843 1.965 1.979 1.924 1.892 1.920 1.846 1.979 1.908 1.960 1.957 1.964 1.888 1.850 50 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Main factors that impacted production in 2013: -2.5% 1,980 1,931 2012 2013 P-63/Papa-Terra: changes in the subsea layout, postponing 1st oil (Jul/13 to Nov/13). Cid. de São Paulo/Sapinhoá and Cid. de Paraty/Lula NE: unavailability of the monobuoys (China), as well as difficulties during installation, delaying the ramp-up of the systems (BSR1 Jul/13 to Feb/14). P-55/Roncador Module III: delay in system delivery, postponement of 1st oil (Sep/13 to Dec/13). P-58/Parque das Baleias: delay in system delivery, postponement of 1st oil (Nov/13 to Mar/14). EWT-Franco: cancelled due to delay in receiving authorization from ANP (FPSO Dynamic Producer). Limited availability of PLSVs (Pipe-Laying Support Vessels) impacted the pace of interconnection of wells, due to the delayed decision of contracting abroad (should have been contracted by the end of 2011, but were contracted from Apr/2013). 5

Sales (2,383 kbpd) and Oil Products Output (2,124 kbpd) in Brazil Oil products sales increased by 4% in 2013. Higher increase in production (6%), especially diesel (+8.6%) and gasoline (+12.1%) reduced oil products import needs. Oil Products Output Oil Products Sales in Brazil +4% Thousand bbl/d Others Fuel Oil 199 2,383 2,285 Jet Fuel Naphtha LPG 165 224 Gasoline 570 Diesel 937 84 106 +3.5% 203 171 231 98 106 590 Others Fuel Oil Jet Fuel Naphtha LPG Gasoline 2012 +5.0% +6% Thousand bbl/d 984 2013  Gasoline (+3.5%): increase in automotive fleet, competitive price relative to ethanol and increase of the anhydrous ethanol content in Type C gasoline .  Diesel (+5.0%): increase in retail activities, higher thermal consumption, higher grain harvest and an increase in diesel light vehicle fleet. Diesel 2,124 1,997 196 238 143 438 782 2012 206 255 93 106 +12.1% 491 +8.6% 96 90 137 850 2013  Better performance due to the start-up of new quality and conversion units since 2012, optimization of refining processes and elimination of logistical bottlenecks. Utilization of refineries reached 97%, higher than 94% in 2012, with a 82% share of domestic crude oil processed.  Fuel Oil (+16.7%): increased consumption at thermoelectric plants for electricity generation and higher demand from suppliers of natural gas to thermal power plants. 6

Oil Products Price - Brazil vs International In 2013 we had 3 price increases in diesel and 2 in gasoline, totaling 20% and 11% increases respectively. The Real devaluation contributed significantly to the non-convergence of prices throughout the year. Average Realization Price Brazil* x Average Realization Price US Gulf** 2012 2013 Losses Nov 30th Jan 30th July 16th Jun 25th Average Sales Price Brazil Mar 6th Adjustments Adjustments Gasoline Imports *Considers Diesel, Gasoline, LPG, Jet Fuel and Fuel Oil ** Considers Brazilian market volumes for the above mentioned products. Dec/13 Nov/13 Oct/13 Sep/13 Aug/13 Jul/13 Jun/13 May/13 Apr/13 Mar/13 Feb/13 Jan/13 Dec/12 Nov/12 Oct/12 Sep/12 Aug/12 Jul/12 Jun/12 May/12 Apr/12 Mar/12 Feb/12 Jan/12 Adjustments Imported Volumes (kbpd) Prices (R$/bbl) Average Sales Price USGC Diesel Imports 7

Natural Gas Supply and Demand Higher demand for Natural Gas due to increase in thermoelectric demand Higher thermoelectric demand (+52%) due to the lower rainfall in the period, met mainly by LNG imports and natural gas from Bolivia. DEMAND +15% million m³/day SUPPLY +15% 85.4 85.9 74.5 74.9 38.6 39.3 40.8 39.5 Non-thermoelectric +52% 34.9 Thermoelectric 39,3 23.0 Fertilizers* 11,7 12.1 11.9 2012 37,0 2013 40,2 27.0 8.4 2012 Domestic +13% +73% 30.5 Bolivia 14.5 LNG 2013 * Other internal uses in Petrobras 2013 x 2012  Higher thermoelectric demand due to lower rainfall.  Thermoelectric generation using natural gas was 6 GW/average in 2013, 58% above the 3.8 GW/average in 2012.  In 2013 and 2012, we met 100% of ONS’s demands (National Operator of the Electric System). 8

Results of Structuring Programs in 2013 PROCOP, PRODESIN and PROEF PROCOP 2013 PRODESIN 2013 PROEF 2013 Operating Costs Optimization Program Divestment Program Program to Increase Operational Efficiency Conclusion of 21 divestments since Oct/2012, totalling US$ 10.7 billion, with US$ 3.4 billion in 2012 and US$ 7.3 billion in 2013. Gain of +63 kbpd in production, with +21 kbpd in UO-BC and +42 kbpd in UO-RIO, due to the higher level of operational efficiency. Actual Transactions: US$ 7.3 billion UO-BC: +7.5 p.p. Optimization of operational activities generated greater productivity levels and reduced unit costs above expectations Avoided Costs: R$ 6.6 billion US$ billion +68% R$ billion Operational Efficiency (%) +115% +7.5 p.p. 7.3 6.6 3.4 67.9 3.9 2012 Without With PROEF PROEF 2013 Cash contribution: R$ 8.5 billion 2013 Target 2013 Real The gains exceeded targets and were obtained through energy integration, workforce productivity, maritime transportation and inventories. Financial Restructuring* Assets 8.5 6.4 5.8 2012* * Petrobras and BR financial assets. 0.6 UO-RIO: +2.5 p.p. Operational Effriciency (%) +34% R$ billion 75.4 8.2 2013* 0.3 +2,5 p.p. 89.8 92.4 Without With PROEF PROEF 9

2013 Investments: R$ 104.4 Billion Investments totaled R$ 104.4 billion, 24% above 2012, including Libra’s signing fee (R$ 6 billion). Annual Investment Investment by Segment +24% 1.1% 1.1% 104.4 5% 84.1 0.3% 6% R$ Billion E&P Downstream International 29% 57% Gas & Energy Corporate Distribution 2012 2013 Biofuels Physical and financial monitoring of 158 individualized projects, which represent 73% of investments (S-Curves): average physical realization of 91% and financial realization of 101%. 10

2013 Results Increase of 6% in Operating Income and 11% in Net Income Operating Income increase in 2013 due to, mainly, readjustments in the price of oil products and asset sales (PRODESIN). The extension of hedge accounting since May/2013 contributed to an increase of 11% in the year’s net income. R$ billion 2013 x 2012 Results Highlights  Higher oil products prices (mainly diesel and gasoline since 2H12 and throughout 2013); 34.4 32.4 +6% 23.6 21.2  Higher throughput in our refineries, reducing imported oil products share in the sales mix;  Asset sales gains of PRODESIN – Divestment Program +11%  Lower dry and sub-commercial wells expenses;  Extension of hedge accounting since May/2013;  Lower crude oil exports due to lower production levels, as well as higher domestic crude oil share in throughput; 2012 2013  Persistence of domestic oil products price differentials relative to international prices due to the currency devaluation; Operating Income  Lower finance income due to the sales of government bonds (NTN-B) and readjustment of judicial deposits in 2012; and Net Income  Higher finance expense due to higher debt. 11

2013 Results EBITDA of R$ 63.0 Billion in 2013, 18% higher than 2012 In 2013, EBITDA was 18% higher than that of 2012 due to, mainly, adjustments of oil products price, asset sales of PRODESIN and lower dry and sub-commercial wells expenses. 63.0 R$ billion +18% 53.4 2013 x 2012 EBITDA  Higher oil products prices (mainly diesel and gasoline since 2H12 and throughout 2013);  Higher throughput in our refineries, reducing imported oil products share in the sales mix; 34.4 32.4 +6% 23.6 21.2 +11%  Asset sales gains of PRODESIN – Program of Divestitures  Lower dry and sub-commercial wells expenses;  Lower crude oil exports due to lower production levels, as well as higher domestic crude oil share in throughput;  Persistence of domestic oil products price differentials relative to international prices due to the currency devaluation 2012 2013 Operating Income Net Income EBITDA 12

2013 Net Income: Without Structuring Programs Structuring Programs: positive outcome of R$ 9.7 Billion in Net Income PROCOP (R$ 4.3 Billion), PRODESIN (R$ 3.3 Billion) and PROEF (R$ 2.1 Billion) increased Net Income by 41%. R$ -9.7 billion (-41%) R$ Billion 23.6 4.3 +130 kbpd 3.3 +100 kbpd 2.1 13.9 +63 kbpd Structuring Programs Structuring Programs Gains are equivalent of exports results of +293 kbpd of crude oil 2013 Net Income PROCOP PRODESIN PROEF Operating Costs Optimization Program Divestment Program Program to Increase Operational Efficiency Of UO-BC and UO-RIO 2013 Net Income Without Structuring Programs 13

Cash in 2013: Structuring Programs Structuring Programs : R$ 14.7 billion more in cash Positive impact on cash: Structuring programs PRODESIN (R$ 8.9 billion), INFRALOG (R$ 0.8 billion), PRC-Poço (R$ 0.7 billion) and Procop (R$ 4.3 billion) enabled a 47% higher cash position. R$ +14.7 billion (+47%) R$ Billion 46.3 8.9 0.8 0.7 4.3 31.6 Cash Position 2013 PRODESIN* INFRALOG PRC Poço PROCOP** Divestment Program Integrated Management of Logistcs Projects Program to Reduce Well Costs Operating Costs Optimization Program *Sales Value + Avoided CAPEX. **Gain with Income Tax discounted Avoided CAPEX was not considered in PRC-SUB in 2013 Cash Position without Structuring Programs 14

Debt Ratios Net Debt/EBITDA reached 3.52 in 2013 (2.77 in 2012), due to an increase in indebtedness as a result of new borrowings and the effect of the Real devaluation against the Dollar on net debt. Leverage was 39%. 1 2 Net Debt / Net Capitalization Net Debt /Adjusted EBITDA 4,5 31% 31% 50% 39% 36% 34% 40% 30% 3,5 2,5 3.52 3.05 2.77 2.32 20% 10% 2.57 0% 1,5 -10% 4Q12 1Q13 R$ Billion 2Q13 3Q13 12/31/12 4Q13 12/31/13 Short-term Debt 15.3 18.8 Long-term Debt 181.0 249.0 Total Debt 196.3 267.8 48.5 46.3 147.8 221.6 72.3 94.6 (-) Cash and Cash Equivalents 3 = Net Debt US$ Billion Net Debt 1) 2) 3) Refers to the adjusted EBITDA which excludes equity income and impairment. Net Debt / (Net Debt + Shareholder’s Equity) Includes tradable securities maturing in more than 90 days 15

Targets for 2014 Higher oil and oil products production, operational efficiency and cost optimization will drive 2014 results PROEF (Operational Efficiency %) Oil Production (kbpd) Máximo Meta Mínimo 7.5% +/- 1p.p. UO-BC 75.4 81.0 2013 1,931 2013 92.4 2013 2014 93.1 2014 Investments (R$ billion) +1% +0.7 p.p. 2,124 2,148 783 760 491 +5.6 p.p. 2014 UO-RIO Oil Products Output (kbpd) 480 Others 104.4 908 Gasoline Diesel 2013 2014 PROCOP – 2014 Target (R$ billion) -9% 57% E&P Brasil +7% 850 +11% +68% 94.6 64% E&P Brasil 6.6 7.3 2013 Real 2014 3.9 2013 2014 2103 Target 16

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