Brazilian Oil & Gas Sector

Current Scenario and Perspectives

Magda Chambriard

Director-general

BRATECC Offshore 2014 – Breakfast Event

May 7th, 2014

ANP role in E&P 1

Final comments 4

Next steps 3

Current scenario & perspectives 2

Summary

ANP role in E&P 1

Final comments 4

Next steps 3

Current scenario & perspectives 2

Summary

REGULATING

CONTRACTING

MONITORING

ANP Role

Upstream Sector

Establishing directives, ordinances, resolutions and

normative statements

Promoting bidding rounds and entering into contracts with

petroleum companies on behalf of the Federal Government

Monitoring the activities of regulated industries, directly or

through agreements with other public agencies

ANP is responsible for the implementation of the oil sector policy, in

accordance with Petroleum Law (Law 9478/1997), Gas Law (Law

11909/2009), Ethanol Law (Law 12.490/2011) and Pre-Salt Laws (Laws

12.276/2010, 12.304/2010, 12.351/2010, 12.734/2012)

ANP Attributions

• Management of data and information on sedimentary basins;

• Continuously studying sedimentary basins, aiming its offering to the bidding rounds;

• Bids acreage for exploration and production;

• Management of concession, production sharing and onerous assignment contracts.

Upstream

Exploration

Development

Production

ANP and PPSA

Pre-salt Law o The State represented by the public company … and

based on assessments conducted by the ANP will celebrate with stakeholders the unitization agreement, …

PPSA Law o PPSA represents the State in the consortium formed for

the implementation of PSA;

o PPSA defends the interests of the State in operational committees;

o PPSA provides to ANP necessary information for its regulatory functions; ...

One country,

three systems

7.5 million km2

~ 2% of sedimentary areas:

Production Sharing Regime

1st Pre-salt Bidding Round

All other areas:

Concession Regime

12th Round

Onerous assignment:

6 blocks Lula

Libra

Libra

Round 12 (blocks already auctioned/contracts not yet signed)

ANP role in E&P 1

Final comments 4

Next steps 3

Current scenario & perspectives 2

Summary

Current scenario

and perspectives

Proven Reserves

Oil – ~15.6 billion bbl

Gas – ~458 billion m3

Near future: x2

Production

Oil and NGL – 2 million bbl/day

Gas – 77.2 million m3/day

Near future: x2 *

* Considering discoveries already made,

mainly in the pre-salt area

0,0

5,0

10,0

15,0

20,0

25,0

30,0

35,0

40,0

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Future

Proven Reserves (B boe)

Petroleum Natural Gas

Imports/Exports Balance

Oil – 405 / 381 thousand bbl/day

Gas – 45.2 million m3/day

Forecast

2022

Evolution of area

in production phase

* At the end of each year.

IEA: Since the 1980s, the waters of Brazil’s Atlantic Coast have

become one of the leading areas of interest worldwide for oil

and gas exploration.

Evolution of area

granted for exploration

0

50.000

100.000

150.000

200.000

250.000

300.000

350.000

400.000

450.000

500.000

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Area in Exploration Phase*(km²)

* In the end of each year; shaded area for 2013 considers Bid 12 results.

The last three bidding rounds meant more than 100 thousand km2

of new areas conducting exploration activities

≈ 5.5% of total

sedimentary

basins area

2013 Bidding Rounds

results

In 2013, 100,000 km2 included in the

exploratory scenario, as opportunities

for all sizes of petroleum companies

Contracted areas in 17 states and 15

basins

Northern coast:

Acreage contracted in five (5) new

frontier basins

3 bidding rounds

78 companies qualified

37 winning companies/consortia

Signature Bonus: R$ 17.6 billion (≈ US$ 7.7 billion)

Minimum Working Program: R$ 6.9 billion (≈ US$ 3

billion)

Local Content: 37% - 72% in Exploration Phase

55% - 84% in Development Phase

Undoubtedly, Brazil attracted the attention of companies and

investors in the E&P sector in 2013.

2013 Bidding Rounds

results

Pre-Salt investments

Libra prospect From 12 to 18 platforms

From 60 to 90 supply boats

Infrastructure investments:

At least US$ 65 billions

Production peak:

up to 1,4 million bbl/d (?)

Libra

Lula

Búzios

Sapinhoá

Uruguá

Mexilhão

Baúna

Merluza

Ro

ute

3

Lapa

Onerous assignment

ANP role in E&P 1

Final comments 4

Next steps 3

Current scenario & perspectives 2

Summary

New exploration

opportunities

The potential of Brazil goes far beyond

the completed rounds.

ANP is consolidating results, reanalyzing

areas and collecting information from

various sources, in order to identify new

opportunities. Focus on Brazilian Eastern

Margin.

New exploration

opportunities

Example of pre-salt potential – Pau Brasil area

ANP is consolidating results,

reanalyzing areas and collecting

information from various sources,

in order to identify new

opportunities.

Pau Brasil prospect

• Area ~ 320 km2

• Thickness ~ up to 450 m (?)

ANP role in E&P 1

Final comments 4

Next steps 3

Current scenario & perspectives 2

Summary

Brazil's plans to double production and reserves are

underway;

Brazilian projects will represent huge investments for

many years;

Several onshore and offshore areas, contracted in 2013,

shall result in even more exploratory investments;

In 2014, ANP studies focus the eastern margin;

Final comments

In Brazil, exploratory opportunities go far beyond pre-salt.

National Agency of Petroleum, Natural Gas and Biofuels – ANP

Av. Rio Branco, 65 – Centro – Rio de Janeiro – Brasil

12º to 22º andar

Phone: +55 (21) 2112-8100

www.anp.gov.br