Pre-Salt Reservoirs Offshore Brazil:

Perspectives and Challenges

José Formigli

PETROBRAS

E&P Production Engineering

November 2007

DISCLAIMER

•The presentation may contain forecasts about future events. Suchforecasts merely reflect the expectations of the Co mpany'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. T hese predictions evidently involve risks and uncertainties, whether foreseen or not by the Company. Therefore, the future results of operation s may differ from current expectations, and readers must not base the ir expectations exclusively on the information presented herein. Th e Company is not obliged to update the presentation/such forecasts i n light of new information or future developments.

•Cautionary Statement for US investors:•The United States Securities and Exchange Commissio n permits oil and gas companies, in their filings with the SEC, to di sclose only proved reserves that a company has demonstrated by actual production orconclusive formation tests to be economically and l egally producible under existing economic and operating conditions. W e use certain terms in this presentation, such as oil and gas resources , that the SEC’s guidelines strictly prohibit us from including in f ilings with the SEC.

New Discoveries – Pre-Salt Reservoirs

TUPI AREA (BMS-11): light oil (28º API) in a new frontier in the Santos Basin.Caxaréu Field – light oil (30° API) in the northern part of the Campos BasinPirambu Field – light oil (29° API) in the northern part of the Campos BasinJubarte Field – light oil in the northern part of the Campos Basin

Santos Basin Pre-Salt Seismic Section

Tested wells

Tupi Area5 to 8 billion barrels

Tested wells in the Pre-salt playTested wells in the Pre-salt play

Some production tests performed on the Pre-SaltSome production tests performed on the Pre-Salt

0 100 200 km

50 150 N

11--RJSRJS--617617

11--SPSSPS--050050

11--RJSRJS--628A628A

33--RJSRJS--646646

BM-S-21

BM-S-24

BM-S-8BM-S-9

BM-S-10

BM-S-11

BM-S-17

BM-S-42

BM-S-42

133 km

166 km

PMXL

22 km

200 km

290 km

RJS-628

Pre-Salt in the Santos Basin

RJS-646

RJS-617

SPS-50

SPS-51

SPS-52

Tupi Area5 to 8 Billion barrels

Consortia for the Pre-salt blocks in Santos Basin

2 blocks 100% Petrobras

3 Appraisal Plans approved

5 blocks with partners, Petrobras operates

1 block as non-operating partner

Bloco Appraisal Plan Consortium

BM-S-8 BR (66%), SHELL (20%), PETROGAL (14%)

BM-S-9 SPS-50 Area BR (45%), BG (30%), REPSOL (25%)

BM-S-10 RJS-617 Area BR (65%), BG (25%), PARTEX (10%)

BM-S-11 RJS-628 Area BR (65%), BG (25%), PETROGAL (10%)

BM-S-17 BR (100%)

BM-S-21 BR (80%), PETROGAL (20%)

BM-S-22 ESSO (40%), AMERADA (40%), BR (20%)

BM-S-24 BR (80%), PETROGAL (20%)

BM-S-42 BR (100%)

BM-S-50 BR (60%), BG (20%), REPSOL (20%)

BM-S-52 BR (60%), BG (40%)

General Data – BM-S-11 (Tupi Area)

• Petrobras (65%), BG (25%), Petrogal – GALP (10%)

• Heterogeneous layered carbonates - variable reservoir quality

• Water Depth about 2,200 m

• Salt layers with thickness till 2,000 m

• Well tests indicate potential flow rates of 15-20000bopd per well

• Oil API: 28-30º

• Oil viscosity around 1 cP

• GOR between 140 and 220 m3/m3

• Initial pressure 580 kgf/cm2

• Low TAN (Total Acid Number)

• CO2 in the associated gas (8 - 18%)

• Concern with flow assurance due to paraffin deposition in pipes

Recoverable volume just for the upper reservoir, for the whole area: 4.5 billion bbl.

As two other carbonate reservoirs were found in RJS-646, the preliminary

estimatives for the recoverable volume for the whole Tupi area can reach 8 billion

bbl (upper case)

Lower case: 5 billion bbl

Upper case: 8 billion bbl

Selected Area for the Pilot: 110 km2

Area of the Appraisal Plan: 936 km2

BM-S-11 – TUPI Area

DynamicPositioningFPSO

ShuttleTanker

DynamicPositioningFPSO

ShuttleTanker

EXTENDED WELL TEST

1 well connected to a DP FPSO, already under convertion, to investigate the reservoir behavior.

Scheduled to early 2010.

Extended Well Test in the Tupi Area

Pre-salt discoveries in Espírito Santo State(Campos Basin)

Pre-salt discoveries in Espírito Santo State(Campos Basin)

GaseneGasene

77 km

Catuá

Jubarte

Cachalote

Ostra

Abalone

Argonauta

Náutilus

Franca

Azul

Anã

Pirambú

CaxaréuMangangá

20 km

N

S

4-ESS-149 1-ESS-122

1-ESS-116

3-ESS-110HPA

4-ESS-135

1-ESS-119

BLA

BAZ

CTU

1-ESS-125

3-ESS-175

1-ESS-103

6-CHT-4

4-ESS-172

4-ESS-172-ES4-ESS-175-ES

1-ESS-103A-ESJUB

BFR

CHT

MGG

NAU

PRB

CXR

Well tests showed high productivities in the pre-salt reservoirs.

7-JUB-2HPA

Oil Production flowlineOil Production flowlineElectro-Hydraulic UmbilicalElectro-Hydraulic UmbilicalPower cablePower cableService LineService Line

P-34Shuttle

Ancoragem

3-ESS-110HPA

7-JUB-06

7-JUB-04HP

1-ESS-103A

LDA

: 134

3 m

Pre-Salt discovery in the Northern Part of theCampos Basin: ESS-103A well (Jubarte Field)

Current plans consider ESS-103 start up in April, 2008, connected to the P-34 FPSO.

Ongoing studies indicate that other pre-salt wells could be connected to the Cachalote Field FPU, from 2009 on.

Mobilizing critical resources – Petrobras strategy

• Long run standardization program for most well design/ related equipment, as well as subsea hardware (wellheads, subsea trees, flexible lines, …)

• Extending this strategy to FPSO/Semi-Submersible design; ex: Opportunity FPSOs and FPSO “Flex”

• DP FPSO (2nd in the fleet) for Extended Well Test already under conversion

• Established “batch orders” with key suppliers for long lead itens• Mobilized fleet + current negotiations with contractors for rigs,

laying vessels, anchor handlers, …• Established long term contracts with Service Companies • Implemented culture for running fast track projects: Golfinho

FPSOs, Plangas FPSOs, Roncador 1st DP FPSO, …• Interacting with the market for gas transportation to shore through

alternative solutions in relation to traditional trunk line (LNG, CNG, GTW,…)

• Running negotiations with partners for project’s scope and budget approvals

Technological Challenges

Reservoir

• Facies definition from seismic data.

• Internal reservoir characterization, with focus on the mainheterogeneities.

• Secondary recovery: technical feasibility of water and gas injection.

• Geomechanics of the surrounding rocks with depletion.

Technological Challenges - I

Well Engineering:

• Deviation of the wells into the salt zone.

• Hydraulic fracture in horizontal wells.

• Wellbore materials, resistant to high CO2 content.

• Slow penetration in the reservoir.

Flow assurance

• Paraffin deposition in long pipelines.

• Hydrate control.

• Scaling control.

Technological Challenges – II

Logistics for the associated gas

• Gas pipeline larger than 18” in water depth of 2,200 m.

• Long distance to shore (300 km).

• Scenario for new technologies offshore: LNG, CNG, GTL, GTW, etc.

Floating Production Units

• Mooring in water depths of 2,200 m

• Interaction with the riser’s system

• Scenario for platforms with access to the wells (SPAR, FPDSO)

Technological Challenges - III

Subsea engineering

• Qualification of risers for water depth of 2,200 m, considering CO2 and high pressure.

• Scenario for riser towers, SCRs with lazy wave and other technologies.

• Qualification of thermal insulated flowlines for water depths of 2,200 m.

• Flowlines for high pressure gas injection

Petrobras Technological Corporate ProgramsPetrobras Technological Corporate Programs

TECHNOLOGY PROGRAM ON NEW EXPLORATORY

FRONTIERS

PROPES

PROSAL

PROSAL - Pre-Salt Technological Program

137 Laboratories

30 Pilot Plants

CENPES

Objective:Develop and disseminate technologies to incorporatereserves and to develop the production of the recentdiscoveries in the pre-sal section.

Projects’ Portfolio:

• Well construction for the pre-salt section (drillingfluids, cement resistance, stimulation techniques, geomechanical model, liner drilling, well control in thesalt zone, multilaterals).

• Geoscience (chemical stratigraphy, core-log-test integration, geomechanical model and fracture distribution, pre-sal imaging, seismic attributes)

• Reservoir Engineering: Recovery optimization

Thank you!

QUESTION AND ANSWER SESSION

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Petróleo Brasileiro S.A – PETROBRAS

Investor Relations Department

E-mail: petroinvest@petrobras.com.br

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20031-912 – Rio de Janeiro, RJ

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