—

Petrobras

turns around

—Pedro Parente

CEO of Petrobras

—

0

5

10

20

25

30

35

40

45

50

15

2003 2004 200520022001 2013200920082006 2014201120102007 2012

US$ Bi

2015

For a long time, investments of the industry followed the same

trajectory

Total Capex (US$ Bi)

Petrobras Exxon Chevron BPShell

Fonte: Evaluate Energy

2016

2

—

Major companies focused on E&P; but Petrobras diversified

CAPEX E&P / Total CAPEX

Fonte: Evaluate Energy

40

45

50

55

60

65

70

75

80

85

90

95

%

201

3

201

4

201

5

201

2

201

1

201

0

200

9

200

8

200

7

200

6

200

5

200

4

200

3

200

2

200

1Petrobras Shell Exxon Chevron BP

201

6

3

—

132

118

0

20

40

60

80

100

120

140

2006 2016

21

26

Operating cash generation Gross Debt

Gross Debt relative to Cash Generation

(US$ billion)

Petrobras

60

0,0

20,0

40,0

60,0

80,0

100,0

120,0

140,0

2006 2016

17

Operating cash generation Gross Debt

Gross Debt relative to Cash Generation

(US$ billion)

Peer group average of Exxon, BP, Chevron, Shell

Debt level and operating cash generation above industry peers

Source: Evaluate Energy and Companies Reports4

—

Higher interest payment

Interest payments

Interest payments (US$ billion)

0

1

2

3

4

5

6

7

8

1.7

7.3

Petrobras

Interest payments

Interest payments (US$ billion)

0

1

2

3

4

5

6

7

1.3

Peer group average of Exxon,

BP, Chevron, Shell

Source: Evaluate Energy and Companies reports5

—

In 2015, Petrobras’ debt leverage reached a peak level

6Source: Evaluate Energy *EBITDA normalized

0,9

1,4

0,9

2,8

1,3

0,5

1,1

1,2

1,8

1,4

1,1

1,0

5,1

Statoil

Ecopetrol

Rosneft

Lukoil

Gazprom

Sinopec

PetroChina

CNOOC

BP

Chevron

ExxonMobil

Shell

Petrobras

Majors

Chin

ese

Russ

ians

Oth

ers

Net Debt / EBITDA* - 2015

—

Strategic Plan financial target and drivers

FINANCIAL

Reduction in

LEVERAGENet Debt/EBITDA

TO

2.5by 2018

FROM

5.3in 2015

3.5in 2016

Capex efficiency

Opex efficiency

Partnerships and

divestments

Competitive prices

DRIVERS

7

—

2,65 2,652,55

2,69

2,832,90 2,89 2,84 2,88

2,81 2,862,94

Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16

Onshore Post-Salt Pre-Salt International

LULA

(FPSO CIDADE

MARICÁ)

LULA

(FPSO CIDADE

SAQUAREMA) + 3 new Units

+ ramp-up

+ Decline as

estimated

LAPA

(FPSO CIDADE

CARAGUATATUBA)

Oil and Gas Production (Million boe/d)

- PESA

Divestment

In 2016, the production target was achieved…

10% increase in total

production between

1Q16 and 4Q16

8

—

...which contributed to better results last year

2016

16

9

1717

13

2015

18

9

2017

10

24

31

2016

17

1113

2221

2015

201919

303026 26

EBITDA Margin (%) Cash Flow From Operating Activities

(US$ B)

TotalBPChevronExxonMobilShellPetrobras

9Source: Evaluate Energy and companies reports

—

2016

18,1

16,620,1

15,3

21,8

2015

24,9

18,5

29,726,426,5

23,1

15,9

-5,9

2016

-1,6

-7,3

6,8

-1,2

2015

-5,0

0,6

-10,3

3,93,34,5

12,4

Petrobras x Majors: 2016 X 2015

Free Cash Flow (US$ B)Capex (US$ B)

10

TotalBPChevronExxonMobilShellPetrobras

Source: Evaluate Energy and companies reports

—

2016

2226

2118

28

2015

2221151714

6055

2016

20,617,1

17,4

34,129,5

2015

25,419,4

24,1

40,3

26,7

21,6 23,5

Petrobras x Majors: 2016 X 2015

Leverage (%)EBITDA: Normalised (US$ B)

11

TotalBPChevronExxonMobilShellPetrobras

Source: Evaluate Energy and companies reports

—

12

In 2016, Petrobras’ leverage started converging towards industry levels

Statoil

Ecopetrol

Rosneft

Lukoil

Gazprom

Sinopec

PetroChina

CNOOC

BP

Chevron

ExxonMobil

Shell

Petrobras

1,1

2,0

1,4

2,2

2,7

0,7

0,3

1,4

1,5

2,2

2,5

3,5

N.A

Majors

Chin

ese

Russ

ians

Oth

ers

Net Debt / EBITDA* - 2016

Statoil

Ecopetrol

Rosneft

Lukoil

Gazprom

Sinopec

PetroChina

CNOOC

BP

Chevron

ExxonMobil

Shell

Petrobras

1,1

2,0

1,4

2,2

2,7

0,7

0,3

1,4

1,5

2,2

2,5

3,5

N.A

Majors

Chin

ese

Russ

ians

Oth

ers

Net Debt / EBITDA* - 2016

Source: Evaluate Energy *EBITDA normalized

13

2016 Highlights

* Source: EvaluateEnergy

Constant

improvement of

economic and

financials

results

Operating income of R$ 17 Billion in 2016 (vs loss of R$ 12 Billion in 2015)

Annual increase of 16% of adjusted EBITDA

Petrobras posted the highest operating cash flow among its peers companies, as well as the

highest EBITDA margin (31% vs 18% on average*)

Positive free cash flow for the 7th quarter in a row and 162% above 2015

Acceleration of

deleverage

process

6% decrease in gross debt US dollars and 22% in Reais

Pre-payment and amortization of debt with proceeds from divestments and operating cash flow

31% reduction in Net Debt/adjusted EBITDA, to 3.54 from 5.11

Safety 24% decrease of TRIFR (Total Recordable Injury Frequency Rate)

14

2016 Highlights

Progress in the

efficiency of

investments

and costs

Annual reduction of:

32% in investments

6% in manageable operating costs

6% in SG&A

20% in the workforce

Records in oil

and natural gas

production

Average oil production in Brazil reached a historic annual record in 2016 (2,144 kbpd); production

target was met for two consecutive years

In December, the monthly record for oil and natural gas production in Brazil and abroad was

reached, averaging 2.9 million barrels of oil equivalent per day (boed)

Petrobras became a net exporter, with exports growing 12% in the quarter

—

Strategic Plan main risks*

• Regulatory risks

• Material changes to market conditions

• Divestments and partnerships below plan

• Judicial disputes

*These risks are not exhaustive

Risks and mitigating activities managed by accountable people