From Lobato to Tupi70 years of results and challenges

for People and Technology

From Lobato to Tupi70 years of results and challenges

for People and Technology

José Sergio Gabrielli de AzevedoPetrobras President

José Sergio Gabrielli de AzevedoPetrobras President

An exploratory “reality”: no oil fields in the paleozoic basins!

An exploratory “reality”: no oil fields in the paleozoic basins!

End of 1950’sEnd of 1950’sNational Production: 51.000 bopdNational Consumption: 220.000 bopdNational Production: 51.00051.000 bopdNational Consumption: 220.000220.000 bopd

19581958

Oilfields end of 50´s (Reconcavo basin)

Geologist and geophysicist need to search new exploratory areasLessons learned: Brazil and Petrobras needed Geologist and training program

Petrobras Training Process in the 50’s & 60’sPetrobras Training Process in the 50’s & 60’s

ForeignForeign BrazilianBrazilian

Beginning of Geology graduation courses in Brazilian UniversitiesBeginning of Geology graduation courses in Brazilian Universities

Petrobras and University of Bahia ConveniaPetrobras and University of Bahia Convenia

Specialization courses in USASpecialization courses in USA

Petrobras Geologist and Geophysicists (~300)Petrobras Geologist and Geophysicists (~300)

Petrobras PioneerGeophysicist

Petrobras PioneerGeophysical Observer

1957 First Graduation in Geology

Engineer-geologist

Petrobras First Brazilian Geologists Employees Petrobras First Brazilian Geologists Employees

CENAP Geologist and Geophysicist Students 1957

Petrobras in the beginning of Training and Research Activities

Carmópolis Fieldthe first giant

Carmópolis Fieldthe first giant

19631963

1960’s First Giant Result1960’s First Giant Result

CarmópolisCarmópolis

Middle 60’sMiddle 60’s

National Production: 93.988 bopdNational Consumption: 331.000 bopdNational Production: 93.988 bopdNational Consumption: 331.000 bopd

19651965

E&P Target: Exploration in onshore basins

E&P Target: Exploration in onshore basins

Buracica (BA)Buracica (BA)

Search of a New ExplorationScenario for Prospection

Geologist and Geophysicist must learn howto discovery oil in Offshore Sedimentary Basin

Technology and Training Program

End of 60´s

No perspectives for self-sufficiency

Technological Innovation

Petrobras made a Geophysical Prospection in a Regional Scale at Brazilian Continental Platform to map new exploratory prospects (Digital 2D Seismic)

To reveal the first Offshore Oil Prospects (Guaricema, Garoupa, Namorado,…)

Digital Technology and First Brazilian Processing Center (1968)

Petroleum industry worldwide start to incorporated Digital Technology to improve Seismic Resolution and Exploratory Results.

Base Base ofofCalumbiCalumbi Fm.Fm.

1-SES-11-SES-1

StructuralStructural mapmapBase Base ofof CalumbiCalumbi Fm. Fm.

11--SESSES--11

Guaricema Field (1-SES-1)The first offshore discoveryGuaricema Field (1-SES-1)The first offshore discovery

São Francisco São Francisco deltadelta

First oilfield discovered at Brazilian offshoreFirst oilfield discovered at Brazilian offshore

Bisol, 1968

1968

Moving to Campos basin - GaroupaMoving to Campos basin - Garoupa

The first discoveryAlbian CarbonatesThe first discoveryAlbian Carbonates

2D Seismic technology/interpretation revealed the first oilfield at Campos basin.

First oilfield Campos basin

1974

Namorado FieldThe first giant in turbidite reservoirs

Namorado FieldThe first giant in turbidite reservoirs

Campos Campos BasinBasin19751975

First Giant Offshore Results

2D Seismic interpretation revealed the first giant oilfield at Campos basin.The first result with Seismic Attribute Technology to identify reservoir with oil, like a Direct Hydrocarbon Identification (DHI).

Geologist and Geophysicist worldwide works to increase Exploratory Success Rate using 3D Seismic Technology

Petrobras Geologist and Geophysicist after Guaricema, Namorado e Marlim oilfields discovered start to use 3D seismic technology to address Self-Sufficiency challenge

End of 70´s

30 Campos basin oilfields discovered with 2D Seismic Technology

58 Campos basin oilfields discovered with 2D and 3D Seismic Technology

From Cherne (1978) to Tupi (2001)

Key technology for E&P3D Seismic Technology

Petrobras Geologist and Geophysicists (~700)

Continuing internal training programsContinuing internal training programs

Early 1980’s

1961 First Graduation in Geology

Engineer-geologist

Geologist and geophysicist worldwide and at Petrobras incorporated Digital and 3D Seismic Technologies increasing Exploratory Success Rate.

Self-Sufficiency Challenge require moreSelf-Sufficiency Challenge require more

Intensive training abroad:Geophysics Ph.D. programsAdvances on Stratigraphy and Seismic-StratigraphyCapacitation in turbidites - Field coursesKnowledge and people skill development in carbonatesTectonics and basin modelling

Intensive training abroad:Geophysics Ph.D. programsAdvances on Stratigraphy and Seismic-StratigraphyCapacitation in turbidites - Field coursesKnowledge and people skill development in carbonatesTectonics and basin modelling

Agreements between Petrobras and Brazilian UniversitiesMaster and Ph.D. programs on Geophysics, Petrology, Sedimentology.

Agreements between Petrobras and Brazilian UniversitiesMaster and Ph.D. programs on Geophysics, Petrology, Sedimentology.

Marlim, a giant in deep waters Marlim, a giant in deep waters

2,7 Billions barrels of reserves2,7 Billions barrels of reserves

• Geological Models for deep water siliciclastic systems supported seismic acquisition/processing in deep water

• Geological Models for deep water siliciclastic systems supported seismic acquisition/processing in deep water

Petrobras seismic processing technology (DEFANINST), shows that the original position of the first well at Marlim was placed not in the best position.

After seismic re-processing the RJS-219 well was placed in the discovery position.

1985

Petrobras Geologist and Geophysicists (~1,000)

With continuous internal training programsWith continuous internal training programs

Early 1990’s

Engineer-geologist

1961 First Graduation in Geology

1987 Petrobras Geologists & Geophysicist beyond 1,000

New geologist and geophysicist learned with experience of his colleagues. But, still had the challenge to search new exploratory opportunities, not

only in Campos basin. New sedimentary basin - new geological challenges!

Early 2000’s - Expanding Exploratory FrontiersEarly 2000’s - Expanding Exploratory Frontiers

Proved Reserves 2008 (SPE)Proved Reserves 2008 (SPE)

4D Seismic Technology at Marlim oilfieldA key technology for Petrobras´s E&P Strategic Recovery Program

Marlim oilfield recovery factor increasedfrom 35 to 65% due to 4D and

in-fill drilling program.

4D Seismic technologyallows reservoir managementto identify oil not yet produced. Water injection

Gas

Santos Basin: existing challenges in the middle 1990’s Santos Basin: existing challenges in the middle 1990’s

SESE

?? ? ? ?

NWNW

60006000

50005000

40004000

30003000

4702m4702m2D seismic line (time)2D seismic line (time)

The key question for geologists: was there a rift like Campos beneath the salt?The key question for geologists: was there a rift like Campos beneath the salt?

2D seismic quality, resolution and imaging was poor!How to identify Pre-Salt prospects?

Top KTop K

EvaporitesEvaporites

RiftRift

Late 90´s: delineation of the riftLate 90´s: delineation of the rift

5 km5 km

SESE

20002000

30003000

40004000

50005000

60006000

NWNW2D seismic quality, resolution and imaging were improved!

E&P first strategy: new acquisition and processing of 2D seismE&P first strategy: new acquisition and processing of 2D seismic data ic data

Seismic Quality, Resolution and Imaging became a crucial element to identify and to characterize Santos basin Pre-Salt reservoirs.

Pre-salt province : the dawn of a new eraPre-salt province : the dawn of a new era

++ --

Tupi Seismic Image: the first Brazilian Super GiantTupi Seismic Image: the first Brazilian Super Giant

70007000

60006000

50005000

40004000

30003000

20002000Loc.TUPILoc.TUPI

f.d.f.d.=6.000m=6.000m

Base Base saltsalt

Top Top SaltSalt

w.d.w.d.=2.140m=2.140m

2,0km2,0km

WW EE

Seismic Interpretation helped Petrobras to reveal reserves of 5 to 8 BBO

NNN

AreaArea: 1.974km: 1.974km22

IRACEMA

RJS628A

RJS646

6,3km

Iracema (NW) / Tupi (NE) Iracema (NW) / Tupi (NE) structuralstructural complexcomplex

3D Seismic Structural Map of Tupi3D Seismic Structural Map of Tupi

Base of SaltBase of Salt

ForeignForeign BrazilianBrazilian

E082

3

Geologists and Geophysicists in Petrobras (~1,500)Geologists and Geophysicists in Petrobras (~1,500)

Training 2003/2008Total investments (US$)

Brazil: 120 MM Abroad: 24 MM

Training 2003/2008Total investments (US$)

Brazil: 120 MM Abroad: 24 MM

Petrobras Geophysical Main Current Projects

Data Acquisition (> 20,000 km2 of new data):- 4D Ocean Bottom Cable Seismic (~1,100 km2)- 4D High Resolution Data Seismic (~10,000 km2)- 3D High Resolution Data Seismic (~9,000 km2) Tupi new seismic HR data.- 3D Offshore Exploratory Data- 3D Rio Urucu Project (Amazonas)- 05 Onshore Seismic Crew (Potiguar, Reconcavo, Se-Al)- 01 Eletromagnetic Acquisition Project

Data Processing (BR world center of seismic processing):

Data Interpretation (high level of geological knowledge):

- In-house seismic processing 3D and 4D projects- Two New dedicated 4D Seismic Processing Centers- New In-house seismic algorithm and methodologies in development- Breakthrough technology in computer infrastructure

- More than 250 geophysicists interpreter working at E&P- Development of new seismic attributes algorithm- 3D and 4D seismic interpretation projects in the most important oilfields

Petrobras Partners

Partnership with service companies to achieve plannedresults in E&P projects

Impressive record of accelerating development Impressive record of accelerating development

Discovery of giant fields in Campos Basininc. Albacora/Marlim

Discovery of the Pre-salt, including Parati (2006)

Number of years

Production since foundingof Petrobras (1954)

12 y

ears

22 y

ears

16 y

ears

27 y

ears

45 y

ears

54 y

ears

Discovery of Garoupa in theCampos Basin (1974)

People and technology are crucial for Petrobras projects!

Carefully crafted spending program to support our visionCarefully crafted spending program to support our vision

Business Plan 2008-12

26%

1%2%

6%

4%2%

59%

E&P

RTC

G&E

Petrochemicals

Biofuels

Distribution

Corporate

US$ 112.4 billion

65.129.6

6.74.3 2.6

1.52.5

Business Plan 2009-2013

25%

2%2%

7%3%

2%

59%

E&P

RTC

G&E

Petrochemicals

Biofuels

Distribution

Corporate

US$ 174.4 billion

104.6 (*)43.4

11.8

5.6 3.02.83.2

PN 2009‐13 | Brazil/International

91%

9%

158.2

16.2

Brazil

International

US$ 174.4 billion

US$ 17.0 billion

allocated to Exploration

Pursuing new projects while maximizing production from existing assetsPursuing new projects while maximizing production from existing assets

Petrobras Total Production (000 b/d)

8.8% p.y.2,4002,3082,3052,2232,0272,042

1,8121,637

5.6% p.y.

5,729

3,655

2,757

7.5% p.y.

232252 251 265

274 277 273 321463

634

161 168163 142 126 124

142

210

409

131

223

3,920

2,6802,0501,8551,7921,7781,6841,4931,5401,5001,335

1,177

3544

10310010910196

94852324

2001 2002 2003 2004 2005 2006 2007 2008 2009 2013 2020

Oil  production  ‐ Brazi l Ga s  producti on  ‐ Bra zil Oil  Product ‐  Internationa l Ga s  Product ‐  Inte rna tiona l

Pre-salt oil productionPre-salt oil production

8731,183160

463

632

157 422

62

2013 2015 2017 2020

Pre‐Salt Petrobras Pre‐salt  Partners

Petrobras Pre‐saltOil Production (000 b/d)

2009-2013 2009 -2020

Petrobras Total Pre-salt Capex (Production Development) 28.9 111.4

Santos Basin Pre-salt 18.6 98.8

Espírito Santo Pre-salt (includes post-salt fields) 10.3 12.6

Pre‐salt Capex Through 2020

219

1,336

1,815

582

Production increase followed by increase in domestic oil products marketProduction increase followed by increase in domestic oil products marketm

bpd

208 214 230 257326 332 367 419250 218 255 24684 89 118 179738 783

9011224119 107

112

150

182 202274

4002,301 2,400

3,655

5,729

1,7921,855

2,680

3,920

2007 2008E 2013E 2020E

Others

Fuel Oil

Diesel

Jet Fuel

Naphtha

Gasoline

LPG

Oil Production in Brazil

Oil and Gas Production inBrazil and Abroad

1,906 1,945

2,257

2,876

7,5% p.a.

REPLANRevamp33 M bpd

2010

RNE230 M bpd

2011

REPARRevamp

25 M bpd2011

UPB150 M bpd

Dec/2012

Premium I(600 M bpd) e

Premium II (300 M bpd)

1st Phase: 20132nd Phase: 2015

Clara CamarãoRefinery2010

Petrobras research center: technological innovation for the next decadesPetrobras research center: technological innovation for the next decades

GAS Y ENERGY

+ 2,332 km of gas pipelines until 2010+ 19 new power plants+ 1,236 MW until 2010+ GNL Terminal

+ 307 km of gas pipelines+ new compression stations;

+ 2 LNG terminals (Terminal Regás-Flex)+ natural gas power plants

1st investment cycle(until 2010)

2nd investment cycle(2011 on)

- 26 offshore terminals, operated by means of monobuoys or buoys arrays- 20 land terminals.- 20 onshore terminals.- Total Investments in logistics : US$ 3.7 billion between 2009-2013

(pipelines and terminals);

TERMINALS

BIOFUELS Strategy:

To establish a global presence in the biofuels segment, with a

particular focus on biodiesel and ethanol

.

16%

84%

Etanol Biodiesel

PN 2009-13US$ 2.8 BILLION

GAS & ENERGY, TERMINALS AND BIOFUELS PROJECTS

Petrobras research center: technological innovation for the next decadesPetrobras research center: technological innovation for the next decades

Environment

Renewable Energy

andBio Fuels

Natural Gas

Frontier Areas

Basin Modeling

Heavy Oil

Optimization &

Reliability

Deep and Ultra-deep

Waters

Fuel Innovation

Refining

Climate ChangesTransportatio

n

Enhanced Oil

Recovery

Pre-salt

Technological programs

Partnership with over 120 universities and research

centers in Brazil, and 70 Institutions abroad.

Investments in Technology2009-2013

47%

23%

5%

25%

E&P Downstream

G&E Corp. (Cenpes)

1.90.2

1.0

0.9

US$ 4.0 billion

Challenges for geologist and geophysicist

To find supergiant and giant oilfield is NOT impossible!

To discovery small and middle size oilfield with production facilities established could be very good business.

Companies with more than 300 oilfields need always to optimize fields Recovery Factor with new update technology.

For search new exploratory frontiers and for optimize the recovery factor we need geologist and geophysicist with knowledge, motivation and open mind for new technologies.

Keep the integration between Geologist and Geophysicist skills is a key value of Petrobras E&P expertise.

ConclusionConclusion

The successful history of petroleum exploration and production of Petrobras

was marked by paradigms breaks: hard work, determination, and competence

are the key elements.

Breaking paradigms is facing risks. Definitively Petrobras is not a risk-aversion

company.

The human mind, birthplace of creativity and knowledge and its continuous

development are the most valuable assets of Petrobras exploratory and

production process

The successful history of petroleum exploration and production of Petrobras

was marked by paradigms breaks: hard work, determination, and competence

are the key elements.

Breaking paradigms is facing risks. Definitively Petrobras is not a risk-aversion

company.

The human mind, birthplace of creativity and knowledge and its continuous

development are the most valuable assets of Petrobras exploratory and

production process

ConclusionConclusion

The geologic and geophysical knowledge is the technical foundation for

Petrobras exploratory and production investments. It is based on the continuous

evaluation of Brazilian sedimentary basins as a whole, not only blocks. It is

supported by efficient training and technological development.

The commitment to Brazil and the Brazilian people is on the basis of Petrobras

employee enthusiasm.

Geophysical Technology and Geophysicist Community commitment are

fundamental elements for Petrobras E&P Activity.

The geologic and geophysical knowledge is the technical foundation for

Petrobras exploratory and production investments. It is based on the continuous

evaluation of Brazilian sedimentary basins as a whole, not only blocks. It is

supported by efficient training and technological development.

The commitment to Brazil and the Brazilian people is on the basis of Petrobras

employee enthusiasm.

Geophysical Technology and Geophysicist Community commitment are

fundamental elements for Petrobras E&P Activity.