biofuels market in brazil and the participation of petrobras
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Biofuels Market in Brazil and the Participation of Petrobras. Historical and Recent Development of Biofuels in Brazil. Integrated Growth. Social and Environmental Responsability. Profitability. - PowerPoint PPT PresentationTRANSCRIPT
Biofuels Market in Brazil and the Participation of Petrobras
To grow production and
oil and gas reserves
sustainably, being recognized for excellence in E&P operations
To grow production and
oil and gas reserves
sustainably, being recognized for excellence in E&P operations
To expand integrated
operations in refining,
commercialization, logistics and
distribution with a focus on the Atlantic
Basin
To expand integrated
operations in refining,
commercialization, logistics and
distribution with a focus on the Atlantic
Basin
Expand operations in target markets for oil, oil products, petrochemicals, gas and energy, biofuels and distribution, being a world benchmark as an integrated energy company
Expand operations in target markets for oil, oil products, petrochemicals, gas and energy, biofuels and distribution, being a world benchmark as an integrated energy company
Gas & EnergyE&P Downstream (RTC) Distribution Petrochemicals BiofuelsBiofuels
Develop and lead the Brazilian natural gas market and operate
on an integrated basis in the gas and
electric energy markets with a focus
on South America
Develop and lead the Brazilian natural gas market and operate
on an integrated basis in the gas and
electric energy markets with a focus
on South America
Expand operations in petrochemicals
in Brazil and South America on
an integrated basis with the PETROBRAS Group’s other businesses
Expand operations in petrochemicals
in Brazil and South America on
an integrated basis with the PETROBRAS Group’s other businesses
Operate on a global basis in biofuels
commercialization and logistics, leading the
domestic production of biodiesel and
expanding participation in the ethanol segment
Operate on a global basis in biofuels
commercialization and logistics, leading the
domestic production of biodiesel and
expanding participation in the ethanol segment
Operational, management, technological and human resources excellence Operational, management, technological and human resources excellence
Commitment to sustainable development
Profitability IntegratedGrowth
Social and Environmental Responsability
Historical and Recent Development of Biofuels in Brazil
Historical and Recent Development of Biofuels in Brazil
Ethanol dedicated vehicles participation of total vehicles sales
>90%
1979 1980
1973
1st Oil Chock
1974
Brazil creates PROÁLCOOL
1977
4,5% Blending of ethanol to gasoline
15% Blending of ethanol to gasoline
2nd Oil Chock1983
1985
Ethanol blending into gasoline reaches
22%
1989
Crude oil prices fall and price of gasoline
equates to that of ethanol
1992
Rio 92: Signing of the climate change
milestone
90’s
Ethanol blending varies between 20% - 25% of
gasoline
2003
Flex-Fuel vehicles launching2005
Biodiesel National Program launching
Jan 2008
2% Blending of biodiesel to diesel
Mar 2008
CNPE authorizes 3% blending of biodiesel to
diesel
May 2008
Ethanol consumption is bigger than
gasoline
2001
End of deregulation process
Non-Renewable Energy
World 86%
Brazil - 55%
Renewable Energy
World 14%
Brazil – 45%
July 11, oil prices rose to a new record of
$147.27
Aug 2008 Jul 2009
4% Blending of biodiesel to diesel
Jan 2010
CNPE anticipates 5% blending mandate from 2013 to 2010
The Economics of Brazilian Ethanol Supply
Source: MAPA
Proalcool Program and flex-fuel vehicles were both responsible for the strong growth observed in the last 30 years
Cane, Sugar and Ethanol Production
0
100
200
300
400
500
600
700
74/7
575
/7676
/7777
/7878
/7979
/8080
/8181
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/10
10/1
1(*)
Harvest
mill
ion
to
ns
(Can
e)
0
10
20
30
40
50
60
70
bill
ion
lite
rs (
Eth
ano
l)m
illio
n t
on
s (S
ug
ar)
Cane (million tons) Sugar (million tons) Ethanol (billion liters)
ProalcoolProalcool
Flex-fuel vehicles Flex-fuel vehicles launchinglaunching
ETHANOLProduction, consumption and export projections of ethanol reflect great dynamism, especially the growth of domestic demand.
Looking Ahead domestic market growth & export opportunities
bil
lio
n l
ite
rs
Ethanol Domestic Demand Forecast ProductionSource: EPE
Looking Ahead domestic market growth & export opportunities
BIODIESELAccompanying the demand for diesel, the demand for biodiesel is expected to reach 3.5 billion liters in 2017
Biodiesel production
Biodiesel Demand Projection (EPE)
mil
lio
n l
ite
rs
Source: EPE
Looking AheadLooking AheadEthanolEthanol
domestic market growth & export opportunitiesdomestic market growth & export opportunities
Historical and Recent Development of Biofuels in Brazil
PROALCOOL PRINCIPLES AND CHARACTERISTICS
On November 14, 1975 the Alcohol National Program was created with
five stated goals:
Foreign currency savings
Reducing regional income disparities
Reducing disparities in individual income
Growth of domestic income
Expansion of capital goods production
Use of its nationwide logistical and retail infrastructure to assure that the blend and the pure ethanol could reach all the country
Development of technical solutions for adequate handling of ethanol, including its transportation by multi-product pipelines and storage
Formulation of gasoline to receive the blend of ethanol
R&D of solutions regarding quality of product, effects of blend and pure ethanol on the engines and materials etc
Instrumental, on behalf of the government, in centralizing acquisitions of huge volumes of ethanol to regulate the domestic market
Historical and Recent Development of Biofuels in Brazil
The Economics of Brazilian Ethanol Supply
ETHANOL INDUSTRY HAS IMPROVED AND BECOME MORE SUSTAINABLE SINCE IT WAS FIRST ESTABLISHED
Sugar-energy sector: US$ 28.1531 billion (almost 2%of GDP)
Increased productivity (as ethanol yields)
*Mapping the sugarcane genome
Power generation with sugarcane bagasse (1/3 of the plant)
Use of the vinasse as a fertilizer
Production of 9.2 units of energy per unit of fossil fuel energy
Recognized as an advanced biofuel, it emits more than 60% less
Source: MAPA
~ 2 thousand liters/ha
~ 7 thousand liters/ha
The Economics of Brazilian Ethanol Supply
NUMBERS OF THE BRAZILIAN SUGARCANE INDUSTRY
434 Plants¹
70,000 Sugarcane growers
The 15 largest producers of ethanol represent only 37% of total production
1.28 million People formally employed²
1,042 Municipalities directly benefited
GDP of the sugarcane sector: US$ 28 billion
Foreign revenue: US$ 9.8 billion (2009)
Participation in Brazilian energy matrix: 18% (> Hidroelectricity)
Avoided CO2 emissions: > 600 million tons since 1975³
Source: UNICA (1-Position on 07/12/2010; 2-Data of 2008 from Rais (Relação Anual de Informações Sociais do Ministério do Trabalho e Emprego); 3- Neves, Marcos Fava et. al, (2009) -Mapeamento da cadeia sucroenergética)
Historical and Recent Development of Biofuels in Brazil
ETHANOL PLANTS IN BRAZIL
Ethanol Plants
Operational: 434 plants
Total: 27 billion liters/year
Looking Ahead domestic market growth & export opportunities
Ethanol (billion liters)Ethanol (billion liters) ProductionProduction
Source: AGE/MAPA
ExportsExportsDomestic DemandDomestic Demand
Growth Rate
2009/2010 up to 2019/2020
Production 9.38
Domestic Demand 9.00
Exports 10.70
Looking AheadLooking AheadBiodieselBiodiesel
domestic market growth & export opportunitiesdomestic market growth & export opportunities
Historical and Recent Development of Biofuels in Brazil
MOTIVATIONAL PRINCIPLES FOR THE CREATION OF BRAZILIAN BIODIESELPROGRAM
Fixing families in the countryside Expansion of sustainable agriculture
Utilization of soil unsuitable for food crops
Offering an environmentally friendly fuel
Introduction of a new sustainable renewable fuel Diversifying the Energy Matrix
Reduction in imports of diesel and oil
Employment creation and income
Castor-Oil Plant
Sunflower Soy African Oil Palm
Cotton
Historical and Recent Development of Biofuels in Brazil
BRAZILIAN VEGETABLE OIL PRODUCTION
Soy: large-scale farming, helped make Brazilian Biodiesel Program possible
Castor beans production: helping family farming
Jatropha, Macauba, Sunflower and Others: small scale or still in development
Animal Fat: the second largest feedstock for brazilian biodiesel
Palm oil in the north region: the new frontier Soy
Animal Fat
Cottonseed
Source: EPE
Granted to producers who:
Buy raw material from family agriculture in the minimum percentage of:
• 15% North and West-center region• 30% Other regions
Do negotiated contracts with family farmers, consisting:• The contractual period• The value of buying criteria and adjustment of contract price• The delivery terms of raw material• The safeguards of each party• Identification and agreement of a representation of farmers who
participated in the negotiations
Ensure training and technical assistance to family farmers.
Source: MDA
Social Fuel Stamp
Historical and Recent Development of Biofuels in Brazil
BIODIESEL PLANTS IN BRAZIL
Biodiesel plants
authorized by ANP
Operational: 63
Commercialization: 42
Total: 4,5 billion liters/year
B5: 2,4 billion liters/year
Plants in the Social Pact (k m³/y)
Plants not in the Social Pact (k m³/y)
0
Petrobras and Biofuels
• The segment of biofuels will receive U$ 3.5 billion, operating in production, logistics and marketing of biofuels and participating in the value chain in Brazil and abroad, working in an integrated manner.
• The strategy in the ethanol segment was redirected to the acquisition of shares in order to become a major player in the market, ensuring the field of technology for sustainable production of biofuels.
2.600
886
2010 2014
Mil
m³/
an
o
Produção de EtanolCapacidade de Produção de
Biodiesel no Brasil
747
507
2010 2014
Mil
m³/
an
o
1.055
449
2010 2014
Exportação de Etanol
+135%
Mil
m³/
an
o
PETROBRAS - BUSINESS PLAN 2010-2014
Ethanol Production Export of ethanol Production capacity of biodiesel in
Brazil
BIODIESEL and ETHANOL PLANTS
10 Ethanol units in operation:Guarani: 7 in SP and 1 in MoçambiqueTotal (MG)Nova Fronteira (GO)
4 Biodiesel Units in operation
Quixadá (CE)
Candeias (BA)
Montes Claros (MG)
Marialva (PR)
Semiarid region of Brazil• Candeias (BA), Quixadá (CE) and Montes Claros (MG)
2008/09: 150.000 tonnes/year (50.000 tonnes/year each plant) Dec,2009: 300.000 tonnes/year (100.000 tonnes/year each plant) Sept/10: duplication of Candeias: + 100.000 tonnes/year
South region of Brazil• Marialva
May,2010: 60.000 tonnes/year (PBIO owns 50% of the plant of 120.000 tonnes/year capacity)
New Projects
• Belém project (Portugal) 2014: 300.000 tonnes/year of palm oil biodiesel
• Pará project 2013: 120.000 tonnes/year of palm biodiesel
• Guamaré – RN (30% - castor oil) 2011: 55.000 tonnes/year (9,6% of semiarid production)
Project BelémProject Pará
Overall processing capacity (2010) ~ 475.000 tonnes/year
BIODIESEL PLANTS
GO
SP
SP
TOTAL BAMBUÍ
GUARANI SÃO JOSÉ
GUARANI TANABI
GUARANI ANDRADE
GUARANI VERTENTE
GUARANICRUZ ALTA
GUARANIMANDÚ
GUARANISEVERÍNIA
SÃO MARTINHOBOA VISTA
GUARANI SENA
( Mozambique – AFRICA)
GO
MG
SANTA LUZIAGreenfield project
ETHANOL PLANTS
Overall Crushing Capacity (2010) ~ 20 million tonnes of sugarcaneOverall Ethanol Production (2010) ~ 890.000 m3
December 22, 2009: Petrobras Biofuels announced its entry into the ethanol segment, by acquiring 40.4% of Usina Total S.A.
Plant capacity: production of 103.000 m3 of ethanol and 9.8 MW of electric power of 9.8 MW.
Petrobras Investment: R$ 150 MM that will be used to expand the unit to 203.000 m3 of ethanol and 38.5 MW of electricity. The other portion will be invested in machinery and equipment to achieve the goal of 100% of mechanized harvesting of sugarcane in 2012.
PARTNERSHIP: USINA TOTAL
A strategic investment
Petrobras Biocombustível announced in April, 2010 it was forming a strategic partnership with Tereos Internacional to jointly invest in Guarani and become a leading player in the Brazilian sugarcane industry.
A strategic investment that provides Petrobras Biocombustível with a significant stake in a market leader;
The capital increase strengthens Guarani’s balance-sheet and provides the company with new resources and expertise for its growth.
Total investment of R$2.2 Bn in Guarani
Investment by Petrobras Biocombustível of R$1.6 Bn over next 5 years (R$682 MM already invested) with an option to reach a stake of up to 49% in Guarani;
Option for Tereos Internacional to invest up to R$600 MM of new equity in Guarani in the 12 months following Petrobras Biocombustível’s initial investment in Guarani.
PARTNERSHIP: TEREOS
JV post-merger structure
26.3% to 49.0% 73.7% to 51.0%
PARTNERSHIP: SÃO MARTINHO
June, 21 2010: Petrobras announced a strategic partnership with Grupo São Martinho S.A. for the growth of ethanol production in the Midwest region of Brazil, State of Goiás.
A new company will be created, called Nova Fronteira Bioenergia S.A., which controls the Usina Boa Vista, currently in production, and the greenfield project called SMBJ Agroindustrial S.A., both located in Goiás.
Petrobras investment: R$ 420.8 MM to Petrobras Biocombustível acquire 49% stake in the new company.
The investment will be used to expand production of the new society, especially Usina Boa Vista. With the investments already made and implemented, it will have its milling capacity expanded from the current 2.5 million tonnes of sugarcane to 7 million tonnes in the 2014/15 season.
Export Logistics
Araçatuba
PresidenteEpitácio
Anhembi
PR
SP
MS
Senador Canedo
REPLAN
Ilha D’ água
REDUC
Ribeirão Preto
Uberaba
MG
RJ
3
1
4
São Sebastião
Taubaté
REVAP
Multi-product pipeline
Ethanol pipeline
Ethanol pipeline
Barges
2
2
1
3
4
Existent
Study concluded
In study
Study concluded