riooilgas 2008 formigli pre-sal

Agenda

The presentation may contain forecasts about future events. Such forecasts merely reflect the expectations of the Company's management. Such terms as "anticipate", "believe", "expect", "forecast", "intend", "plan", "project", "seek", "should", along with similar or analogous expressions, are used to identify such forecasts.

These predictions evidently involve risks and uncertainties, whether foreseen or not by the Company. Therefore, the future results ofoperations may differ from current expectations, and readers must not base their expectations exclusively on the information presented herein.

The Company is not obliged to update the presentation/such forecasts in light of new information or future developments.

Agenda

PLANSAL Planning and GovernancePLANSAL Planning and Governance

Economical and Logistics ChallengesEconomical and Logistics Challenges

Technological ChallengesTechnological Challenges

Santos Basin PreSantos Basin Pre--Salt Development StrategySalt Development Strategy

Introduction Introduction -- PrePre--SaltSalt

ConclusionConclusion

Commercial StrategiesCommercial Strategies

Inter tidal and Sub tidal stromatolites – Australia – recent sedimentation

It was like this approximately 120 million years ago

Recent Stromatolites - Lagoa Salgada, RJ

Pre-Salt – Reservoirs

Pre-Salt Province

Disc Intra-Rift

Top of the Rift

Base of the Salt

Top of the Salt

Top of the Albian Top of the KSea bed

5 10 15 20 km0

Basement

WE

Seismic Line / Geological Section -Santos Basin

10

Some Location Details

Evaluation Plansapproved by ANP

Parati – 1-RJS-617Tupi – 1-RJS-628Carioca – 1-SPS-50Caramba – 1-SPS-51Guará – 1-SPS-55

Evaluation Plans beingprepared/under negotiation

Bem-Te-Vi – 1-SPS-52Júpiter – 1-RJS-652Iara – 1-RJS-656

General Data - Tupi Area

Petrobras (65%), BG (25%), Petrogal (10%)

Heterogeneous layered carbonates – microbiolateswith variable reservoir quality

Water Depth about 2,200 m

Salt layers with thickness –up to 2,000 m

Well tests indicate potential flow rates of 15-20 k bopd

API: 28-30º

Tupi Area

Oil viscosity around 1 cP

GOR around 230 m3/m3

Initial pressure 580 kgf/cm2

Low TAN (Total Acid Number)

CO2 in the associated gas (Tupi: 8 - 12%)

Concern with flow assurance due to wax deposition in pipes

BM-S-11(TUPI)

Pólo

Área: 378 Km2

PA do RJS-628

10 km

Pólo

Área: 378 Km2

PA do RJS-628

10 km

General Data - Tupi Area

Selected Area for the Pilot: 115 km2

Area of the Appraisal Plan: 1974 km2

The main reservoir in the Pre-Salt is known as the SAG reservoir.

Two other carbonate reservoirs are found in the area (RIFT, COQUINAS).

The preliminary estimates for the recoverable volume for the whole Tupi area are between 5 and 8 billion bbl

Tupi Area

General Data - Iara

•Petrobras (65%), BG (25%), Petrogal (10%)

•Area of the Appraisal Plan: 300 km2

•The preliminary estimates for the recoverable volume for Iara area are between 3and 4 billion bbl

•Water Depth about 2,230 m

• Reservoir Depth about 6,080 m

• API: 26-30º

Iara Area

Agenda








Development Strategy (Ex: Tupi)

20072007 ..........20122012 tt..........20092009

1st Oil – EWT Tupi (Mar/09)

20102010

1st Oil – Tupi Pilot(Dec/10)

20172017

Information Acquisition Definitive Development

Phase 0

EWT (Mar/2009), Tupi Pilot andAppraisal Wells

• Area Delimitation

• Analyse reservatoir flow

• Fractured Well performance

• Complete sampled core

• Material analysis X CO2

Phase 1A Phase 1B

Implementation of “X” production units(Replicant FPSOs)

• Implementation of “Y” production units.

• Analyse water and gas/CO2 injection behavior

• Test adjustments on FPU related to CO2

• Test improvements in well projects

• Apply previous dominated concepts and technologies with necessary adjustments to reach a significant production by 2017

• Aggregate inovative technical solutions to optimize project performance

Focu

sO

bjec

tive

Phases

Significantproduction level

Development Strategy by Phases

Phase 0: Information Acquisition: Appraisal Wells + EWT Tupi + 7 EWTs in other areas + Tupi&2Anticipated Pilots

Phase 1 – Definitive Development

Phase 1a – 8 FPSOs + Gas Transp.1a + Oil Transp.1a + Infra + Oil Utilization1a + Gas Commercialization 1a

Phase 1b – “N” FPUs + Gas Transp.1b + Oil Transp.1b + Oil Utilization1b + Gas Commercialization

Phase 0: Information Acquisition

Phase 1: Definitive Development

Dec

Nov

Apr

Dec

Dec

Oil Utilization

Infra - Logistics

Oil Transportation

Gas Transportation

Gas Commercialization

BMS – 24 Jupiter

BMS – 11 Iara

BMS – 8 Bem-Te-Vi

BMS – 21 Caramba

BMS – 9 Guará

BMS – 10 Parati

BMS – 9 Carioca

BMS – 11 Tupi

Programs

Phases Significantproduction level

Production Design

DRILLWELL P1

LDA: 2200m

PHASE 1WELL 3-RJS-646

6 MONTHS

6 “ PRODUCTION4” SERVICE

EHU6“ PRODUCTION

4” SERVICEEHU

PHASE 3WELL 3-RJS-646

3 MONTHSLINE

RELOCATION

PHASE 2WELL P1

6 MONTHS

• 2 Well Production: 3-RJS-646 and P1• Expected Flow: 14.000 bpd• Test Duration: 15 months

FPSO BW Cidade de São Vicente

1st Oil: March/2009

N

ReservoirReservoir

Production Pilot5 producers; 2 water injectors; 1 gas injectorConnected to a Spread Mooring FPSOProduction start-up scheduled for December, 2010. CO2 will be separatedand reinjected in the reservoir. Gas willflow to Mexilhão (shallow water gasfield, through a 200 km gas pipeline), Capacities:100,000 bopd and 4MMm3/day (gas)Main goal: investigate recovery mechanisms and well geometries.

Pilot Project Scope

LEGEND

PIPELINE

WATER

OILGAS INJECTION

UTGCAUGN

RPBC

TEFRAN

Tupi Area

URG

PMXL

PMLZ-1

170 Km

216 Km

212 Km

145 Km

Solution for the Pilot

Under studyExisting

Building

Gas exportation for the Tupi Pilot

Agenda








Reservoir Characterization and EngineeringFacies definition from seismic data. Internal reservoir characterization, with focus on the main heterogeneities.Secondary recovery: technical feasibility of water and gas injection.Geomechanics of the surrounding rocks with depletion.

Technological challenges

Salt drilling

Sea bed

Evaporitic session

Well Drilling and CompletionDeviation of the wells into the salt zone. Hydraulic fracture in horizontal wells.Wellbore materials, resistant to high CO2 content.Slow penetration in the reservoir.Extended Reach Wells.


Subsea Engineering Qualification of risers for water depth of 2,200 m, considering CO2 and high pressure.Scenario for riser towers, SCRs with lazy wave and other technologies.Qualification of thermal insulated flowlinesfor water depths of 2,200 m.Flowlines for high pressure gas injection


Flow Assurance and Artificial LiftPreventing hydrate formation Wax deposition in long pipelines.Scaling controlTemperature management along the lines


Floating Production Units

Mooring in water depths of 2,200 m

Interaction with the riser’s system

Scenario for platforms with direct access to the wells (SPAR, FPDSO).


Logistics for the Associated GasMore suitable materials for equipment dealing with high CO2 concentration gas streams. Gas pipeline larger than 18” in water depth of 2,200 m.Long distance to shore (300 km).Scenario for new technologies offshore: LNG, CNG, GTL, GTW, etc.


TECHNOLOGY PROGRAM ON NEW EXPLORATORY

FRONTIERS

PROPES

PROSAL

Petrobras Technological CorporatePrograms

137 Laboratories30 Pilot Plants

CENPESObjective:Develop and disseminate technologies to incorporate reserves and to develop the production of the recent discoveries in the pre-salt section.

Projects’ Portfolio:

Well construction for the pre-salt section (drilling fluids, cement resistance, stimulation techniques, geomechanical model, liner drilling, well control in the salt zone, multilaterals).

Geosciences (chemical stratigraphy, core-log-test integration, geomechanical model and fracture distribution, pre-salt imaging, seismic attributes)

Reservoir Engineering: Recovery optimization

PRO-SAL - Pre-Salt Technological Program

Agenda








Logistics – Petrobras strategy

Implemented culture for running fast track projects: Golfinho FPSOs, Plangas FPSOs, Roncador 1st DP FPSO, … ;Long run standardization program for most well design/ related equipment, as well as subsea hardware (wellheads, subsea trees, flexible lines, …);Extending this strategy to FPU design; ex: Opportunity FPSOs, FPSO “Flex”;Established “batch orders” with key suppliers for long lead items.Mobilized fleet + current negotiations with contractors for rigs, laying vessels, anchor handlers, … ;Established long term contracts with Service Companies.Interacting with the market for gas transportation to shore through alternative solutions in relation to traditional trunk line (LNG, CNG, GTW,…);Negotiations with partners for project’s scope and budget approvals.

Economic Challenges

CAPEX DISTRIBUTION

18%

19%

31%

9%

20%

2%0%1%

Residual Value Processing Plants Exportation GatheringFPU Completion Drilling Abandonment

Surf

Agenda








PLANSALPLANSAL

The Effort x Time analysis shows that the initial main focus of PLANSAL is strategy definition followed by project implementation phase.

Cluster Strategic Plan and IntegratedDevelopment Model

(Pre-Salt Committee)

Project Implementation(Areas)

Effort

Time

Guidelines

Projects

Programs

2009Pre-Release ofMaster Plan

> 2020Periodic Reviews

Petrobras Approach for Pre-Salt Development (Internal Process)

Gas Transfer, Processing,

Transportationand

CommercializationSubprogram

Gas Transfer, Processing,

Transportationand

CommercializationSubprogram

Oil Transfer, Transportationand Utilization

Oil Transfer, Transportationand Utilization

ProductionInfrastructureSubprogram

ProductionInfrastructureSubprogram

Exploration SubprogramExploration Subprogram

Prog

ram

Plan

ning

, Mon

itorin

gan

dM

anag

emen

tPr

ogra

mPl

anni

ng, M

onito

ring

and

Man

agem

ent

ProductionDevelopmentSubprogram

ProductionDevelopmentSubprogram

Environmental Licensing Plan

Human Resources Plan

Unitization Plan

• Logistics

Critical Resources Availability Plan

Technology Development Plan

Joint Ventures Management Plan

• Oil Transportation andUtilization

• Gas Transportation andMarketing

• Transportation • Oil Transportation– E&P • Gas Transportation – E&P

• CO2 use• Use and storage of gas

• Reservoir Drainage• Concepts of Floating Production Units

• Equipments and Drilling Services, Logistic, Wells and Submarine• Equipments and Services for Pipelines, Floating Productions Units and Facilities

PLANSAL Structure

Agenda








National Content Demand;

Resources Competition with local shipbuilding industry;

Large offshore platforms demand on short-term schedule;

Significant capacity increment of national marine/offshore construction sites.

Production Platforms Scenario

New infrastructure for building Production Platforms in Rio Grande City – RS.

Production Platforms Construction Strategy

Field tested technology for FPSO hull construction;

Standardization of FPSO hull, including all marine systems, facilities and accommodations;

FPSO hulls construction made by large experienced companies;

New hull building cost similar to converted hull’s cost due to scale effect

Standardization of FPSO´s Top sides whenever possible;

Sequence of 8 FPSO units


Basic project developed by Petrobras/CENPES;

Supply – critical items acquired by Petrobras, other items acquired byEPC Contracts;

Modules manufacturing in existing construction sites or to beprepared with low investiment;

Number of module contracts depends on plant configuration and facilities (waiting for EWT data);

Two or three big contracts for “Integration and commissioning”, under analysis.


Pipe manufacturer market highly committed;

Few number of suitable pipeline lay down vessels available in International Market;

Ultra deep water depth sites;

Irregular seabed pipeline routes;

Due to the water depth, it is recommended to use high strength steelpipe (API 5L X70/80). National industry is getting prepared to supply this kind of material.

Subsea Rigid Pipelines Scenario

Pipeline lay down Vessel availability:

Anticipate slot acquisition of new and existing vessels;

Construction of a new vessel in Joint venture with a experiencedOperator

EPCI Contracting Philosophy;

Combination of above strategies;

Subsea Rigid Pipelines Implementation Strategy

Drilling Rigs Contract Strategy (28 units)

Significant number (25) of drilling rigs under construction to be received until 2012;

Construction of new units, specifically in Brazil, to be delivered from 2014 and on (in analysis);

Hiring of extra existing units in global market, if necessary.

New Rig demands after 2013

Defining minimum necessary technical characteristics for development of new pre-salt fields;

Evaluating projects of drill units that better attend these requirements;

Evaluating the infra-structrure installed capacity;

Studying hiring strategies that makes feasibly the extremellysignificant investiments on competitive bases with internationalmarket.

Logistics Contract Strategy

146 Vessels (PSV – Platform Supply Vessel, AHTS – Anchor Handling Tug Supply, and LH – Line Handling) and Helicopters:

Operation is pool regime;

Bids in advance that allows the constructionVessels constructed in Brazil;

Contract of existing units, if necessary

Subsea Equipments and Laying VesselsContract Strategy

Subsea Equipment:

Long Term Contracts, with:minimum consumption guarantee;standard products;antecedence that allows investments in industrial enlargement and/or new companies entry in Brazil.

Vessels (PLSV):

Long Term Contracts, with:Additional units for Pre-Salt (increase actual fleet); Traditional suppliers will be invited for bids;Anticipation that allows the construction.

Well Equipments and Services

Well Equipments:

Long Term Contracts, with:minimum consumption guaranteetraditional suppliers will be invited to tenderantecedence that allows investments in industrial enlargement and/or new companies establishing in Brazil.

Well Services:

Long Term Contracts, with:anticipation that allows investments;Scale effect for rising competition.

Agenda








Conclusion

• Petrobras has a worldwide recognized deepwater experience to address technical and comercial challenges for Pre-salt appraisal anddevelopment

• A new paradigm will be established for conceptual design applied to Santos Basin Pre-salt cluster production development and logisticalsupport

• There are tremendous opportunities for already installed andnewcomers in Brazilian oil&gas equipment suppliers and servicecompanies due to the scale provide by upstream portfolio

• Pre-salt will start commercial production in 2010, with a steep ramp-up on the following years, reaching a significant contribution to Petrobras oil and gas production throughout next decade, as will beannounced by next revision of our Strategic Plan.

Question and Answer SessionVisit our website: www.petrobras.com.br/ri

For more information contact:Petróleo Brasileiro S.A - PETROBRASInvestor Relations Department

E-mail: [email protected]. República do Chile, 65 – 22º floor20031 912 – Rio de Janeiro, RJ(55-21) 3224 1510 / 3224 9947

Thank you!

riooilgas 2008 formigli pre-sal

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