Brazilian Exploration Scenario and

Opportunities

Marina Abelha

Superintendent of Exploration

Punta Del Este, Maldonado, Uruguay

December 6th, 2019

This institutional presentation is based upon or derived from sourcesbelieved to be reliable for informational purposes only.

Projections and future values are presented, but no representationregarding their accuracy or completeness is made.

Forward-looking statements regarding our intent, belief or currentexpectations may change without prior notice.

Disclaimer

Sumário

Brazillian E&P scenario1

2

3 Closing Remarks

Investments Opportunities

“The most excitement at the moment is from thedeepwater,” Mr Brown* told the Financial Times, saying

projects in Brazil, the Gulf of Mexico and West ofShetland in the North Sea were among the mostattractive.

* Andy Brown, Shell’s head of exploration and production

March 2018 - Exxon Mobil and other oil companiesopened their wallets at an offshore oil auction in Brazilon Thursday in a sign that the industry was steppingback into the deepwater drilling business. It was thethird encouraging Brazilian offshore auction since

September, and a vote of confidence for thecountry’s energy reform program (…)

This fresh investment, notably in offshore pre-salt basins,

follows the introduction of significant regulatorychanges to the oil and gas sector within Brazil.

Main Regulatory Enhancements

14

Bidding Rounds (in 2017/2021)

2016

Petrobras is no

loger the sole

Operator for

Pre-salt

2019

➢Open Acreage

➢Transfer of Rights

Surpluss

➢Discussion of

Decommissioning

Rules

2017➢New Simplified

Contract Rules

➢New Local Content

Rules

2017 & Beyond

➢Bidding Schedule

2018/2019

➢Extension -

Exploration Phase (Rounds 11 and 12)

2018➢Local Content Waver

(previous rounds - up to 13th

Round)

➢Royalties Reduction(incremental production in

mature fields)

➢Collateral Burden

Reduction(100% to 30% in marginal

fields)

➢Reserve Based

Landing (RBL)

Round Acquired Blocks Area (km2) Signing Bonus (US$ billion) Registered CompaniesWinner

Companies

37 (24 onshore and 13 offshore)

25,011.7 1.035 32 17

3 655.74 0.889 10 7

3 6,130.78 0.768 14 6

3 3,521.04 0.849 16 7

22 16,400.3 2.009 17 12

4 2,860.75 1.838 12 8

12 11,762.78 2.235 17 10

33 (30 onshore and 3 offshore)

16,730.43 1.873 47 10

1 4,475.68 1.295 17 2

2017 - 2019 Bidding Rounds Results – Exploration Blocks

Total 72 87,549.20 6.1

Round Acquired Blocks Area (km2) Signing Bonus (US$ billion) Registered CompaniesWinner

Companies

37 (24 onshore and 13 offshore)

25,011.7 1.035 32 17

3 655.74 0.889 10 7

3 6,130.78 0.768 14 6

3 3,521.04 0.849 16 7

22 16,400.3 2.009 17 12

4 2,860.75 1.838 12 8

12 11,762.78 2.235 17 10

33 (30 onshore and 3 offshore)

16,730.43 1.873 47 10

1 4,475.68 1.295 17 2

Total 72 87,549.20 6.1

Area equivalent

to Portugal

2017 - 2019 Bidding Rounds Results – Exploration Blocks

Estimated Impact from Recent Oil Auctions…

2017-2019New Investments

Hundreds of Wells!

Tax Revenues

Million bpd(added peak production)

Oil

13.4 Billion bbl

Gas

370 Billion m³

June, 2019

March, 2018

Proven Reserves

Pre-Salt

56%

Conventional Offshore37%

Onshore

7%

56%39%

5%

Oil Proven Reserves

Pre-Salt

Conventional Offshore

Onshore

53%

29%

18%

Gas Proven Reserves

Pre-Salt

Conventional Offshore

Onshore

Source: ANP’s statistical yearbook

Total Oil

0,0

0,5

1,0

1,5

2,0

2,5

3,0

Mill

ion

so

f B

arre

lso

f O

il/d

ayOil Production

Post-Salt Pre-Salt Onshore

Fonte: ANP’s Monthly Bulletin of Production - September/2019

2,927

1,827

Área : 7,5 milhões de km2

Brazil’s Current State

Area under concession

~ 280,000 km2

279 Blocks

434 fields

9th largest oil producer in the world

and the largest in Latin America

Onshore oil Production (Oct, 2018)

38%

107,415bpd

Foster Conventional Production

0

500

1000

Development Wells Concluded

59

June 2018

70%2015/2017

2012/2018

38%

2012/2018

0

500

1.000

1.500

2.000

2012 2013 2014 2015 2016 2017 2018

Th

ou

sa

nd

bp

d

Post-Salt Campos Basin Oil Production

4.500

6.500

8.500

10.500

12.500

14.500

16.500

2013 2014 2015 2016 2017 2018

Northeast Basins Offshore Oil Production

bpd

62%

SEAL

0

500

1.000

1.500

01/2

012

08/2

012

03/2

013

10/2

013

05/2

014

12/2

014

07/2

015

02/2

016

09/2

016

04/2

017

11/2

017

Pre-Salt Oil Production 729%

2012/2018

Th

ou

sa

nd

bp

d

41%2012/2018

RNCE

2014/2018

65

52

140

81

101

91 94108

149

193

139169

216215

122

89 77

3826

2727

87%2011/2018

Exploratory Wells Concluded

Current O&G Recovery Factor

Campos Basin

14%

Maximize Recovery Factor

Final O&G Recovery Factor

Brazil

21%

Campos BasinFinal O&G Recovery

Factor Average Final O&G

Recovery Factor

World

35%

Source: ANP (December 2017)

23%1% addition in Campos Basin:

985Mboe

New Reserves

1% addition in Onshore:

200Mboe

New Reserves

Sumário

Brazillian E&P scenario1

2

3 Closing Remarks

Investments Opportunities

E&P Environments

The Pre-salt Play

The Pre-salt Polygon is 3x

Larger than Switzerlan

~150 Thousand km2

Depositional Model

differentiated microbial

platforms

deep (>300m) lake

Linear ridges and cone-like

buildups

shallow evaporitic alcaline lake

Low gradiente ramp-like deposition

Source: Wright & Barnett (2017)

The Pre-salt Play

Platforms

Buildup

Transgressive limestone

Micritic limestone (mudstone -

wakestone)

Mud flat dolomite

Argillaceous limestone & marl Siltstone

Sandstone

Conglomerate

Basement

Intraclast-spherulite

(packtone - grainstone)

Wackestone - packstone

with spherulites

Argillaceous limestone & marl

with spherulites

Lime packestone - grainstone

with mollusk shells

Shale (commonly organic-rich)

Shrubby microbial boundstone

Domal to branching microbial

(chert boundstone)

Synrifte

Upper Synrifte

SAG

SAG

SAG

Basement

Source: Edited of Saller et all, 2016. Availible at Technical Seminar 3rd Pre-salt Bidding Round

Lower Synrifte

Depositional Model

The Pre-salt Play

Source: Larry Benson

Source: wikipedia

Large sub-lacustrine spring mounds develop in

perennial lakes – they need the space (depht) in

wich to grow

1-3 km long

Source: Edited from Wright & Barnett (2017)

Pyramid Lake, NevadaDepositional Model

The Pre-salt Play

The Pre-Salt comprises huge accumulations underneath the salt

layers;

Light Oil with excellent quality accumulations and high commercial

values;

1) Great prospectivity, potential for giant and supergiant oil fields;

2) High wells productivity related to high quality carbonate reservoirs

and extensive and thick production zones.

Source: Petrobras

After Formigli, 2007

The Pre-salt Play Prospectivity

Pre-salt Exploration Scenario

Before 2017 Currently

The Pre-salt Play Production

0,2

0,4

0,6

0,8

1,0

1,2

Mill

ion

ba

rre

lso

fo

il/d

ay

1,4

1,8

Sep/2019

The Pre-Salt production

comes from 110 wells:

87 in Santos Basin

23 in Campos Basin

~1.8 million barrels of oil/day

1,6

2,0

Lapa (2 wells)

Oil: 27.70 M bbl/d

Gas: 1.03 MM m3/d

Barracuda/Caratinga

(2 wells)

Oil: 5.0 M bbl/d

Gas: 99.3 M m3/d

Jubarte (17 wells)

Oil: 164.95 M bbl/d

Gas: 5.82 MM m3/d

Baleia Franca

(2 wells)

Marlim Leste

(5 wells)

Oil: 16.61 M bbl/d

Gas: 317 M m3/d

Baleia Azul

(4 wells)

Marlim/Voador

(1 wells)

Lula (52 wells)

Oil: 936,46 M bbl/d

Gas: 38.12 MM m3/d

Sapinhoá (13 wells)

Oil: 248.91 M bbl/d

Gas: 10.80 MM m3/d

~1.8 million barrels of oil/day

Sep/2019

Mero (1 well)

Oil: 12.25 M bbl/d

Gas: 840 M m3/d

The Pre-salt Play Production

2019 2020 20213rd QuarterTo be

definedTo be

defined

Bidding Rounds Schedule

Continuous offer of blocks and

mature fields.

Companies can bid on blocks not sold

in previous auctions.

Applications can be submitted

anytime and not just at designated

points.

It will promote exploration activity

especially in onshore areas.

Open Acreage

Open Acreage

567Blocks

2Brown

Fields

15Sedimentary

Basins

Open Acreage Under Study

Technical and Economical

Parameters under study

20Sedimentary

Basins

1,139Blocks

Solimões

Amazonas

FZAM PAMA

Barreirinhas

Potiguar

PEPB

SEAL

Tucano

Recôncavo

Jacuípe

Camamu-Almada

Jequitinhonha

Espírito-Santo

São Francisco

Santos

Pelotas

Paraná

Parecis

17th Bidding Round (2020)

128 Offshore blocks

~64,105 km2

Para-Maranhao, Potiguar,

Campos, Santos and

Pelotas basins

Next Pre-salt Bidding Rounds

7 Blocks up for Offer

3 in the 7th Bid

4 in the 8th Bid

Round 7 Pre-salt

Round 8 Pre-salt

Pre-salt Polygon

Offshore Basin

Sectors Under Examination

2020Para-Maranhão, Potiguar, Santos Campos & Pelotas Basins

2021Ceara, EspiritoSanto & Pelotas

Sumário

Brazillian E&P scenario1

2

3 Closing Remarks

Investments Opportunities

Attract Suitable Players

➢Major Operators

➢Exploration Specialists

➢Mature Field Players

Small and mid -

sized Companies0302➢Supermajors

➢Major Operators01

Pre-Salt Conventional Offshore

Onshore

Supported by Oilfield Service Companies, Suppliers and Financial Institutions !

ANP main objective is to promote a Predictable and Stable Regulatory Framework , that Attract New Investments and Accelerate the Development of the Pre-Salt, Conventional Offshore and Onshore E&P Environment.

Increase E&P Activities❖ Accelerate Pre-Salt Development❖ Improve Mature Fields Production❖ Improve Recovery Factor❖ Enhance Onshore Incentives❖ Expedite Environmental Licensing

Attract the Right Players ❖ Giant Fields❖ New Frontiers❖ Mature Fields❖ Onshore

Create a Secondary Market Attract mid/small-sized

companiesMaximize Production❖ Diversity of Players❖ EOR/IOR initiatives❖ New RD&I focus❖ Financing Opportunities

Final Remarks

Create Value through a

Developed, Diverse and Competitive

Market!

Brazilian National Agency for Oil Gas and Biofuels – ANPExploration Superintendency

Marina Abelhasep@anp.gov.br

Superintendent of Exploration