Conference Call/Webcast
October 29th, 2012
» QUARTER HIGHLIGHTS
» Net Income of R$5,567 million and EBITDA of R$14,375 million
» Oil production in Brazil of 1,904 kboed (-3% vs. 2Q12) and natural gas of 377 kboed (+4% vs. 2Q12)
» Start up of FPSO Cidade de Anchieta in September 10th
» Current production: 42 kbpd with 3 wells
» Production peak (100 kbpd): March/2013
» Discoveries: Grana Padano (Espirito Santo), Pecém (Ceará), Barra and Moita Bonita (Sergipe Alagoas)
» Record refinery output (2,026 kbpd in 3Q12 vs. 1,886 kbpd in 3Q11)
» Start up of REPAR’s Coking unit
» 7th consecutive year in the Dow Jones Sustainability Index
1. 3rd Quarter 2012 (IFRS)
Conference Call/Webcast
October 29th, 2012
2. 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 2012 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,
CAUTIONARY STATEMENT FOR US INVESTORS
specifically the Company’s most recent Annual Report on
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
3. QUARTER HIGHLIGHTS
» Net Income of R$5,567 million and EBITDA of R$14,375 million
» Oil production in Brazil of 1,904 kboed (-3% vs. 2Q12) and natural gas of 377 kboed (+4% vs. 2Q12)
» Start up of FPSO Cidade de Anchieta in September 10th
» Current production: 42 kbpd with 3 wells
» Production peak (100 kbpd): March/2013
» Discoveries: Grana Padano (Espirito Santo), Pecém (Ceará), Barra and Moita Bonita (Sergipe Alagoas)
» Record refinery output (2,026 kbpd in 3Q12 vs. 1,886 kbpd in 3Q11)
» Start up of REPAR’s Coking unit
» 7th consecutive year in the Dow Jones Sustainability Index
FPSO Cidade Anchieta
3
5. DOMESTIC AND INTERNATIONAL PRICES
R$/bbl
kbpd
Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12
(1) (2)
ARP Brazil ARP USGC Gasoline Imports Diesel Imports
• Increasing price differential in 3Q12
• Growing imports
Note: (1) Weighted Average Realization Price of Diesel, Gasoline, Naphtha, LPG, Jet Fuel and Fuel Oil
(2) Average Realization Price in United States Gulf Coast, considering the same volumes and products sold in Brazil 5
10. 3Q12 vs 2Q12 OPERATING INCOME
5,746
1,475 8,600
(3,675)
5,282 (228)
R$ million
2Q12 Sales Revenue COGS SG&A Other Expenses 3Q12
Operating Income Operating Income
• Increase in realization prices and lower dry hole expense led to higher operating income
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11. 3Q12 vs 2Q12 NET INCOME
618
5,838
R$ million
5,567
(2,268) (593)
3,318
(1,346)
2Q12 Operating Financial Equity Income Taxes Minority 3Q12
Net Income Income Results Interest Net Income
• Higher operating income and financial results
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12. 3Q12 vs 2Q12 E&P
16,172 312 1,646 16,380
413
(937)
(1,226)
R$ million
2Q12 Price Effect Volume effect Average Cost Volume Effect Operational 3Q12
Operational on Revenue on Revenue effect in COGS on COGS Expenses Operational
Results Results
• Lower production and higher costs were offset by lower dry hole expense
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13. 3Q12 vs 2Q12 DOWNSTREAM
R$ million
1,402
3,102
(891)
(1,899)
(397) (8,651)
(9,968)
2Q12 Price Effect Volume Effect Average Cost Volume Effect Operational 3Q12
Operational on Revenue on Revenue Effect in COGS on COGS Expenses Operational
Results Results
• Reduced loss due to product price increases
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14. CAPITAL STRUCTURE
R$ Billion 09/30/12 06/30/12
50% 5,5
Endiv.Líq./Cap. Líquida
Net Debt/EBITDA1 Net Debt/Net Capitalization2
Div. Líq./EBITDA
Short-term Debt 15.3 17.6
40% 4,5
Long-term Debt 171.2 161.6 28% 28%
30% 22% 24% 24% 3,5
2.46 2.42
Total Debt 186.6 179.2
20% 2,5
1.66 1.61
(-) Cash and cash equivalents 3 52.6 45.9 1.41
10% 1,5
= Net Debt 133.9 133.2
0% 0,5
US$ Billion 09/30/12 06/30/12 3T11
3Q11 4T11
4Q11 1T12
1Q12 2T12
2Q12 3T12
3Q12
-10% -0,5
Net Debt 66.0 65.9
-20% -1,5
• Increase in cash equivalents due to exchange of guarantees with PETROS
• Funding of € 2 Bi and £ 450 MM in the European market (closed on Oct, 1st)
1) Net Debt / (EBITDA 9M12 / 9 X 12)
2) Net Debt / (Net Debt + shareholder’s equity)
14
3) Includes tradable securities (maturing in more than 90 days)