presentation procurement department petrobras rio oil gas 18set

PROCUREMENT

POLICY

AND CRITICAL

EQUIPMENT SUPPLY

DISCLOSURE & IMPORTANT NOTICE

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 of operations 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.

PRESENTATION SUMMARY

1. Business Plan

2. Pre-salt Overview

3. Local Content

4. Brazilian Companies

5. Relevant equipment demand for the period 2012-2017

6. Suppliers Qualification & Register

7. Conclusion

BUSINESS PLAN

Investments during the 2012-2016 period

US$ 208.7 Billion US$ 27.8 Billion US$ 236.5 Billion

28%

** E&P abroad

RTM E&P Petrochemical Distribution Biofuel Corporate G&E

60.0%

(US$ 141.8 Billion)

27.7%

(US$ 65.5 Billion)

1.3%

(US$ 3.0 Billion)

1.6%

(US$ 3.8 Billion)

1.5%

(US$ 3.6 Billion)

2.1%

(US$ 5.0 Billion)

5.8%

(US$ 13.8 Billion

24.8%

US$ 51.7 Billion

1.4%

(US$ 3.0 Billion)

0.9%

(US$ 1.9 Billion)

1.7%

(US$ 3.5 Billion)

1.8%

(US$ 3.7 Billion)

3.7%

(US$ 7.8 Billion)

17% (**)

(US$ 4.6 Billion)

50%

(US$ 13.9 Billion)

21%

(US$ 6.0 Billion)

5%

(US$ 1.3 Billion)

0%

(US$ 0.1 Billion)

7%

(US$ 1.9 Billion)

Under Implementation Under Evaluation + = 2012-2016 BP All E&P projects in Brazil and projects of the

remaining segments in phase IV*

Projects for the remaining segments currently

in phase I, II and III.

833 projects 147 projects 980 projects

* Includes budget already designated for projects under evaluation for RTM, G&E, Petrochemical, Distribution, Biofuels and Corporate

65.8%

(US$ 137.2 Billion)

Programs supporting the 2012-2016 BP

2012-2016 BP

US$ 236.5 Billion

Cost

Optimization

Program

Increase of

Operational

Efficiency

Program in

Campos Basin

Local

Content

Management

Program

Integrated Management of the Companys Portfolio | Safety and Environment

Production Curve in Brazil Post-Salt, Pre-Salt and Transfer of Rights

Pre-Salt (Concession)

5%

Post-Salt

95%

Transfer of Rights

1% Pre-Salt (Concession)

30%

Post-Salt 69%

New Discoveries (*)

12% Transfer of Rights

19%

Pre-Salt (Concession)

28%

Post- Salt

42%

Thousands bpd Norte Pq.

Baleias (P-58)

Roncador IV

(P-62)

Sapinho

Norte (Cid.

Ilhabela)

Iracema Sul

(Cid.

Mangaratiba)

Lula Alto

Lula Central

Lula Sul

Franco 1

Carioca 1

Lula Norte

Franco 2

Baleia Azul

(Cid. Anchieta)

Bana e

Piracaba

(Cid. Itaja)

Piloto Sapinho

(Cid. So Paulo)

Piloto Lula NE

(Cid. Paraty)

Papa-Terra

(P-61 e P-63)

Roncador III

(P-55)

Iracema

Norte

Lula Ext. Sul

Iara Horst

NE Tupi

Carimb

Aruan

Iara NW

Franco 3

Franco 4

Sul de Guar

Jpiter

Carcar

Sul Pq. Baleias

Franco 5

Espadarte I

Espadarte III

Florim Maromba

Bonito

Entorno de Iara

2011

2,022 kbpd

2016

2,500 kbpd

2020

4,200 kbpd

Production Units 19 up to 2016

38 up to 2020

(*) Includes new opportunities in blocks where discoveries have already been found

Oil and LNG Production

PETROBRAS: Reserve Replacement Ratio > 100% for the 20th consecutive year

Brasil

Other Discoveries

Deep Waters

34 billion bbl

Brazil

32%

19%

49%

New

Dis

cove

ries

200

5-2

010

In the last 5 years, more than 50% of the new discoveries worldwide were made in

deep waters. Brazil accounts for 63% of

these discoveries.

Projections indicate that as Brazil develops these newly discovered reserves, it will

lead non-OPEC supply growth until 2030

(PFC Energy).

Petrobras: Proven Reserves in Brazil (billion boe)

Reserve/Production 19.2 years

Reserves Incorporated in 2011

Total: 1.24 billion boe

Pre-Salt: 1 billion boe

20

05

+164%

20

10

19

91

7.53

19

95

20

00

13.23

20

11

+3%

9.65

5.96

15.28 15.71

E&P Investments

2012-2016 Period

Exploration

US$ 25.4 Billion

Production Development

US$ 89.9 Billion

8%

(2) 69%

(17.5)

24%

(6)

Transfer of Rights

Post-Salt

Pre-Salt 49%

(43.7)

34%

(30.2)

18%

(16.0)

Besides Exploration and Production Development, E&P investments in infrastructure total US$ 16.3 billion

BUSINESS PLAN - 2012-2016

More information about the Business Plan 2012-2016 at:

http://www.investidorpetrobras.com.br/2012-2016-business-plan.htm

PRE-SALT OVERVIEW

WHAT IS PRE-SALT?

Corcovado Hill

Located in a remote area, up to 300 km offshore

Total depth from 5,000 to 7,000

meters

Salt layer more than 2,000 meters thick.

Pre-Salt Layer New Exploratory

Border

Water depths that can exceed 2,000 meters

Post-Salt Layer Focus up to 2006

Large Oil Carbonatic Reservoirs

WHAT IS PRE-SALT?

WHAT IS PRE-SALT?

Drilling and Completion

Construction of high angle wells, deviated into the salt

zone

Well integrity

Penetration rate in the microbial carbonate

reservoir

New alloys to reduce costs of well materials

PRE-SALT - SOME TECHNOLOGICAL CHALLENGES

WHAT IS PRE-SALT?

Reservoir

Reservoir characterization

Rock fluid interaction

EOR


WHAT IS PRE-SALT?


Subsea

Flexible risers for water depth of 2,200m (7,218 ft)

Flow assurance

Scaling control

WHAT IS PRE-SALT?


Floating Production Units

Mooring in 2,200m water depths

Interaction with the risers system

CO2 processing

LOCAL CONTENT

LOCAL CONTENT

Petrobras Local Content Policy

PETROBRAS LOCAL CONTENT POLICY

The projects and contracts of Petrobras

must withstand the challenges of the

Strategic Plan and maximize Local Content

in competitive and sustainable basis,

contributing to market development where

Petrobras operates, guided by ethics and

continued innovation.

LOCAL CONTENT

Legal Requirements

E&P Explorao e

Desenvolvimento: comprovaes para

ANP para novos contratos de

concesso, partilha e cesso onerosa

Abast No existe

exigncia de Contedo Local.

Operadora declara meta e comprova ndice realizado

G&E No existe

exigncia de Contedo Local.

Operadora declara meta e comprova ndice realizado

Operating expenses are not subject to the requirements of the Local Content by ANP

E&P RTC There is no requirement to

Local Content.

The operating company

states its goal and proves

the percentage achieved

G&P Exploration and

Production:

Evidences to ANP for

new concessions

contracts, production

sharing and transfer of

rights

There is no requirement to

Local Content.

The operating company

states its goal and proves

the percentage achieved

Local Content Measurement and Monitoring Program

Bottlenecks identification and

industry mobilization

Objective Maximize the use of the Brazilian equipment and services industry capacity for

2012-2016 BP procurement demands, with schedules and costs aligned with best

market practices

Minimum Local Content

Planning of 2012 2016 BP projects

Local Content

Monitoring

Local Content

Measurement III I II

Information on Industry Capacity Identification of imported goods and services

Identification of items for nationalization

Implementation of Local Content Indicators Monitoring of local content in projects Actions for recovering occasional deviations in schedule and costs

Preparation of Execution Reports of Local Content per project (forecast x executed)

Updating data base for future projects

Motivation: Higher efficiency in maintenance and post-sales services, access to suppliers, logistics cost optimization, reduction on transportation and delivery time.

Action Plan

Develop

Component

Supplier

Item X

Use local industry

National

demand is

enough to

justify adding

capacity?

(incremental or

new plant) YES NO

NO

Import

Item

components,

individually,

can improve

local content?

YES

NO YES

Is it

possible to

buy in

Brazil? 85%

Services Materials Equipment

Local Content Downstream projects Global Average Source: ONIP

60

40

20

0

99%

68%

52% 44%

Goods

(Eq+Mat)

Global

100

80

REFINERIES AND G&E DECISION MATRIX

Local Content Formula

% LC = Imported Portion 1- System Total Price

without tax

X100

HOW TO MESURE LOCAL CONTENT

PROMINP

HISTORY - 2003

PROMINP Mobilization Program for the National Oil and Natural Gas Industry.

Coordinated by the Ministry of Mines and

Energy, was established by the Federal

Government through the Decree nr. 4925,

dated Dec/19th, 2003.

Its main goal is to maximize the participation

of the national goods and services industry, on

a competitive and sustainable basis, in the

implementation of projects in the area of

petroleum and natural gas in Brazil and

abroad.

Construction of research centers in Brazil

50 Thematic Networks

At the UFRJ technological complex, 9 P&D

centers of important equipment and services

suppliers are already in construction/operation:

Other Companies with development plans for

technological centers in Brazil:

Weatherford

Wellstream

FMC Technologies

Usiminas

TenarisConfab

Schlumberger

Baker Hughes

Halliburton

General Electric

Vallourec & Mannesman

Cameron

IBM

Technip

Source: E&P-CORP, May 25/2012 and CENPES, May 28/2012.

Petrobras partnerships with more than 120 universities and research centers

have led Brazil to have a prominent worldwide applied R&D complex

CENPES expansion (Mar/2012)

BRAZILIAN

COMPANIES

Brazilian companies means companies

that have manufacturing processes and

after-sales services in Brazil, thus creating

jobs and collecting taxes in the country.

BRAZILIAN COMPANIES

Definition

RELEVANT

EQUIPMENT

DEMAND

FOR THE PERIOD

2012-2017

INDUSTRIAL SECTORS PERFORMANCE ANALYSIS

17

16 18

20

19

21

15 14

9

13

2

3

4

11

10

1

12

22

23 24

6

5 8

7

Demand time spreading

O&G offer changing

Changes in production paths

Demand fulfillment

Productive Capacity

Low

M

ediu

m

Hig

h

Com

peti

tiveness

Legend

Sectors

1. Telecommunication 2. Substation and transformers 3. Generators and Motors 4. Electrical Distribution Panels 5. Automation 6. Pipelines 7. Mills 8. Steam Turbines 9. Winches 10. Valves 11. Flanges and Connections 12. Boilers Works 13. Subsea - Equipment 14. Subsea - Umbilical and

Flexible Pipes 15. Pumps 16. Alternative Compressors 17. Engines 18. Cranes (Onshore) 19. Engineering Services 20. Construction and Assembly 21. Instrumentation and

Measurement 22. Gas Turbines 23. Centrifugal Compressors 24. Electrical Motors (large

size)

Production capacity

expansion

Low Medium High

Degree of dependence of O&GI

30

Products Projects in Brazil

Subsea Pipelines

NKT Flexibles New flexible pipe plant in Brazil in 2013.

Technip Installation of new plant.

Wellstream

Current plant expansion in 2013 (60% capacity increase).

Prysmian

Plant expansion to produce flexible pipes. Butting

Construction of a new plant for the production of line pipes.

Umbilicals

Duco and Nexans Ongoing discussions to establish new plants in Brazil.

Oceaneering (MSD)

Current manufacturing capacity will double by early 2013.

MFX 80% expansion in manufacturing capacity by 2013.

Subsea Equipment

Aker

Increase of manufacturing capacity. FMC

Increase of manufacturing capacity and construction of a technology center. GE

Expansion of the Jandira Plant and the construction of a new unit.

Cameron

Industrial Expansion. 30

Local Content

Companies building capacity in Brazil

Local Content

Companies building capacity in Brazil

Products Projects in Brazil

Turbomachines

. Rolls-Royce

Construction of new plant in Santa Cruz (Turbogenerators).

Dresser-Rand

Construction of new unit in Santa Brbara do Oeste (Turbocompressors).

Offshore cranes

MEP Pellegrini

Working through partnerships, ongoing discussions to establish new plant in Brazil.

Drill pipes

V&M do Brasil

Adapting current units to manufacture pipes.

CRA Tubing V&M do Brasil

Capacity to produce high corrosion-resistant alloys

High diameter pipes USIMINAS

Current units under qualification.

Offshore steel

structures

Metasa

Industrial expansion.

Automation

Emerson

Industrial expansion to assemble equipments in Brazil.

(**) This list does not exhaust all the equipment and materials required for 2012-2017 period.

Unit 2012 2013 2014 2015 2016 2017 Total

Pumps un 899 1.737 942 381 96 331 4.386

Compressors un 174 54 51 23 40 45 387

Cranes un 23 25 24 8 7 6 93

Structure Steel (Ships Hull) t 205.100 45.600 31.750 29.600 70.900 70.900 453.850

Structure Steel (Plataforms

Hull) t 140.000 364.000 224.000 112.000 140.000 112.000 1.092.000

Structure Steel (Rigs Hull) t 0 120.000 120.000 120.000 120.000 80.000 560.000

Flares un 11 12 8 6 4 5 46

Power Generators (13,8 kV) un 32 189 14 20 27 17 299

Power Generators (0,48 kV) un 158 0 0 0 0 0 158

Tanks un 253 180 68 55 39 89 684

Processing Towers un 101 119 53 0 5 17 295

Reactors un 114 71 0 0 4 0 189

Wet Christmas Trees un 136 158 191 217 203 229 1.135

Offshore Wellheads un 215 204 220 225 207 235 1.307

Dry Christmas Trees un 457 522 436 324 189 120 2.047

Onshore Wellheads un 458 522 436 324 189 120 2.049

Manifolds un 10 18 23 15 12 21 99

Umbilicals km 517 714 887 1.295 1.485 1.593 6.492

EQUIPMENT AND MATERIALS REQUIRED FOR 2012-2017

Unit 2012 2013 2014 2015 2016 2017 Total

Tubing (Onshore) t 28.681 28.681 28.681 28.681 28.681 28.681 172.084

Tubing (Offshore) t 13.947 13.947 13.947 13.947 13.947 13.947 83.682

Flexible pipes km 743 616 713 957 1.471 1.478 5.977

Risers km 210 173 311 441 544 682 2.361

Turbines (Gas) un 41 38 18 12 16 26 151

Turbines (Steam) un 28 91 67 0 0 17 203

Special alloys for tubing and

casings t 2.470 3.293 5.927 6.256 11.525 11.854 41.325

Turbo generators un 32 37 12 8 12 37 138

Polyester mooring cables km 182 249 319 113 170 114 1.147

Fiberglass pipelines km 425 128 353 353 353 353 1.966

Electrical cables for CSP km 9.562 8.487 10.073 10.363 0 0 38.485

Steam generators un 0 0 0 0 0 0 0

HCC reactors un 0 5 0 0 4 0 9

Special alloy boilers, reactors,

towers, and pressure vessels un 64 79 67 0 4 5 219

Heat exchangers un 7 61 63 65 0 0 196

Reformer Furnaces un 3 6 0 0 0 0 9

(**) This list does not exhaust all the equipment and materials required for 2012-2017 period.

EQUIPMENT AND MATERIALS REQUIRED FOR 2012-2017

SUPPLIERS

QUALIFICATION &

REGISTER

Petrobras Concepts &

Requirements Overview

SUPPLIERS QUALIFICATION & REGISTER

Petrobras Procurement Manual (MPC)

Item 4.1.6

(Approved by the Board of Directors)

Petrobras Procurement Manual (MPC)

Item 4.1.6

(Approved by the Board of Directors)

The Corporate Register is a database of Brazilian and foreign

companies interested in participating in bidding for Petrobras.

These companies, Brazilians or foreigners, are eligible to

provide to Petrobras high complexity services or

equipment/goods, which are under permanent Petrobras

interest.

Corporate Register

The evaluation approval, as part of the registration process,

ensures the incorporation of the company in the Petrobras

Corporate Register, obtaining the CRCC Certificate of Registration and Classification. Then, the company could be

invited to participate of new biddings.


Corporate Guidelines

Complementary Corporate Guidelines

Requirements:

Legal

Economics

Technical Approval

Requirements:

Health, Safety & Environment - HSE

Management & Social Responsibility


It is an e-Procurement portal, which provides tools for acquiring goods and services for Petrobras System companies. In its

business platform are carried out several transactions ranging

from requests for quotes and sending proposals to

management of orders and contracting.

www.petronect.com.br

Petronect

http://www.petrobras.com.br/en/supplier-channel/


Since April 2012 the Suppliers Registration System was incorporated to Petronect as a integrated tool and access point for companies registration and bidding


Company Access at

www.petronect.com.br

Identification Identification: - Contact Information;

- Scope of Supply;

- Local Representative;

Questionnaire Criterias:

Technical;

- Legal;

- Economical;

- Managerial;

- Health, Safety &

Environment. Petrobras Approval

Company Registration

in SAP Petrobras

Register Flow Chart

Registration

Certificate

sent

to Company


Legal Requirements

Foreign Companies

Proof of being duly established and registered in

the country of origin;

Legal Representative in Brazil the company must

provide its legal representative in Brazil (Power of

Attorney);

Letter stating that the company is not bankrupt or in

debt;


Legal Requirements

Foreign Companies

Commitment Letter Through this document the

company shall formalize its intention of being included

in Petrobras Corporate Register;

Commercial Representative (indicated by and linked to

the supplier):

Not mandatory, but advisable (may be the own

company)

May be the same or other than the legal

representative


Economic Requirements

Brazilian and Foreign companies:

Annual Reports with Audited Financial Statements or

Balance Sheet and Income Statement

Financial statements of foreign companies must be prepared under

IFRS or USGAAP

Economic calculation formulas and acceptance criteria are public,

available online in the instructions.


Health, Safety and Environment

Service Providers

ISO-14001 and OHSAS-18001:

Certification is not mandatory

Petrobras evaluates how the suppliers implement these

standards requirements (ranking from 0 to 10 points)

Goods Suppliers

Not required


Management

Goods Suppliers

ISO-9001 certification is mandatory

Services Providers

Compliance to the requirements of ISO-9001 is

ranked from 0 to 10 points - certification is valued


Those equipments or materials which performance in the

industrial process of Petrobras can threaten continuity,

compromise the safety of personnel, facilities and

environment, and those products that, included in the

industrial process as raw material, can jeopardize the quality

of the final product of the Company.

RQT Category of products - definition

(RQT - requires specific technical qualification)


Tradition (Main Sales, Reference Letters)

Facilities for Technical Assistance (in the case of Automation Systems, Rotating Machinery, etc)

Mandatory Product Certification (API, ASME, ...)

Other Specific Requirements

Technical Requirements for Materials & Equipment

Depending on the material or equipment, the supplier must

comply with the following requirements:


Tradition (List of Services Provided continuity and Reference Letters)

List of equipment relating to services provided;

Main personnel curricula vitae

Other specific requirements

NOTE: in accordance to the Law, to render services in Brazilian territory the company must have a subsidiary or partner

company in Brazil.

Depending on services criticality, the supplier must comply

with the following requirements:

Technical Requirements for Services

CONCLUSIONS

CONCLUSIONS

Petrobras has a robust projects portfolio, which is atypical of the current economic situation.

There are huge opportunities for already installed and newcomers in the Brazilian market of suppliers, service

and engineering companies due to the scale provided by

the project portfolio.

In order to carry out such a portfolio, Petrobras is looking forward to establish long term business with

companies willing to invest in Brazil.

Petrobras has a robust projects portfolio, which is atypical of the current economic situation.

There are huge opportunities for already installed and newcomers in the Brazilian market of suppliers, service and

engineering companies due to the scale provided by the

project portfolio.

In order to carry out such a portfolio, Petrobras is looking forward to establish long term business with companies willing

to invest in Brazil.

CONCLUSIONS

Thank you !

[email protected]

[email protected]

[email protected]

[email protected]

presentation procurement department petrobras rio oil gas 18set

Documents

period us

salt concession

lula norte franco

ep projects

presalt overview

iracema norte lula

sapinho norte cid

baleias franco