4th Quarter and Year Endand Year End 2011 Results

(IFRS)

Conference Call / Webcast

Almir Guilherme BarbassaCFO and Investor Relations Officer

February 14th 2012

Disclaimer

FORWARD-LOOKING STATEMENTS:

DISCLAIMER

The presentation may contain forward-looking statementsb f h h f f

We undertake no obligation to publicly update orabout future events within the meaning of Section 27A ofthe Securities Act of 1933, as amended, and Section 21Eof the Securities Exchange Act of 1934, as amended, thatare not based on historical facts and are not assurances offuture results. Such forward-looking statements merely

fl t th C ’ t i d ti t f

revise any forward-looking statements, whether asa result of new information or future events or forany other reason. Figures for 2012 on areestimates or targets.

reflect the Company’s current views and estimates offuture economic circumstances, industry conditions,company performance and financial results. Such termsas "anticipate", "believe", "expect", "forecast", "intend","plan", "project", "seek", "should", along with similar oranalogous expressions are used to identify such forward

All forward-looking statements are expresslyqualified in their entirety by this cautionarystatement, and you should not place reliance onany forward-looking statement contained in this

t tianalogous expressions, are used to identify such forward-looking statements. Readers are cautioned that thesestatements are only projections and may differ materiallyfrom actual future results or events. Readers are referredto the documents filed by the Company with the SEC,specifically the Company’s most recent Annual Report on

presentation.

NON-SEC COMPLIANT OIL AND GAS RESERVES:

CAUTIONARY STATEMENT FOR US INVESTORSspecifically the Company s most recent Annual Report onForm 20-F, which identify important risk factors that couldcause actual results to differ from those contained in theforward-looking statements, including, among otherthings, risks relating to general economic and businessconditions including crude oil and other commodity

We present certain data in this presentation, suchas oil and gas resources, that we are not permittedto present in documents filed with the UnitedStates Securities and Exchange Commission (SEC)under new Subpart 1200 to Regulation S-K becauseconditions, including crude oil and other commodity

prices, refining margins and prevailing exchange rates,uncertainties inherent in making estimates of our oil andgas reserves including recently discovered oil and gasreserves, international and Brazilian political, economicand social developments, receipt of governmental

under new Subpart 1200 to Regulation S-K becausesuch terms do not qualify as proved, probable orpossible reserves under Rule 4-10(a) of RegulationS-X.

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and social developments, receipt of governmentalapprovals and licenses and our ability to obtain financing.

2011 HIGHLIGHTS

Proven Reserves» 16.41 billion boe (SPE/ANP criterion)» Reserve replacement ratio = 148%

» Reserve/Production (R/P) = 18.5 years

Production

Reserve/Production (R/P) 18.5 years

»Total Oil and Gas Production: 2.62 million boe per day (up 2 %)» Brazilian oil and NGL production: 2.02 million bpd (up 1%)p p ( p )

» Delivery of Brazilian Natural gas: 214 thousand boe per day (up 18%)

P d i i f 71 h d b d i J 133 h d b d i D *Pre‐Salt

» Production increase from 71 thousand bpd in Jan to 133 thousand bpd in Dec *» Lula Pilot, Lula NE and Carioca NE EWTs and Lula‐Mexilhão pipeline

»Declaration of Commerciality for Guará Area (Sapinhoá) ‐ 2.1 billion of boe

Oil Products Sales» Petrobras’s oil products sales in the domestic market increased 9% in 2011, reaching 2,131 thousand bbl/d

Investments » R$ 73 billion, 47% in E&P

* Oil only. Petrobras’ stake 3

Proven Reserves (ANP/SPE Criterion)

Proven Reserves 2011

16.4 Bi boeUltradeep Waterp(>1.500m)

Deep Water(300 1 500m)

International

96%4%Brazil

ShallowWater

(300‐1.500m)

O h

96%Brazil

Onshore

Proven Reserves in Brazil (billion boe) RRR in Brazil above 100% for the 20th

» 2011 Reserve Replacement Ratio = 152%

» Reserve/Production = 19 2 years

15,2815,71

5 3 % p y

consecutive year

» Reserve/Production = 19.2 years

» Proven reserves incorporatedn in 2011: 1.242 bi boe

» Pre‐salt = 0.978 bi boe

14,175.3 % p.y.

» Highlights: Sapinhoá (Santos Basin)Albacora (Campos Basin) 

2009 2010 2011

4

Exploratory Activity

Espírito S t

Campos Santos

2011 Discoveries

Success IndexSanto

Malombe  

Post‐salt

p

GuanabaraTucura

Patola40%57% 59% Post‐salt Post‐salt

Brigadeiro

Pé‐de‐moleque

QuindimGáveaForno

Pre‐salt Abaré

Biguá2009 2010 2011

Pre‐salt

Exploratory Wells » Since 2007 total estimated recoverable volume was higher

» Offshore 66

p y » Since 2007, total estimated recoverable volume was higher than 2.5 billion boe/year

» Finding costs in 2011 of US$1.56/boe. Business Plan 2011‐2015 forecasts finding costs around US$ 2/boe

2011 2012

» Onshore – 76

» Offshore – 47

» Pre‐salt  (17)

» Offshore – 66   

» Campos (16)

» Santos (18) 

2015 forecasts finding costs around US$ 2/boe

» In 2011, R$ 9 billion invested in exploration. In 2012, R$ 10.1 billion estimated

» Espírito Santo (11)

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Production in Brazil

4Q11 3Q11 ( 3 6%)4Q11 vs. 3Q11 (+3,6%):» Marlim field stoppages (-24 thous bpd in 4Q11 vs -79 thous in

3Q11)

» Pre-Salt wells (average Dec/11): 133 thous bpd

Thous. bpd

Pre Salt wells (average Dec/11): 133 thous bpd

» The “Varredura” wells averaged 46 thous bpd in Dec/11

» In 4Q11, start-up of 9 producing wells, versus total of 16 that had been planned

Oil

2011 vs. 2010 (+1%):» Planned and unplanned maintenance reduced production by 67

thous bpd of which 33 thous bpd unplanned

2,0302,044

2,018

2,049

thous bpd, of which 33 thous bpd unplanned

» 2011 production also affected by delays in new wells1,978

Natural Gas» Principal concessions contributing to growth: Mexilhão, Uruguá

4Q10 1Q11 2Q11 3Q11 4Q11

p g g , gand Lula

» Flare reduction of 26% YoY

6

2012 Production

CONTRIBUTIONS FROM FPSO RAMP‐UPS 

ProjectsOperationalStart Up

2012 Estimates2011 Average Production

P‐57 4Q10 151 thous. bpd 80 thous. bpdP 57 4Q10 151 thous. bpd 80 thous. bpd

Lula Pilot 4Q10 44 thous. bpd 28 thous. bpd

P‐56 3Q11 105 thous. bpd 17 thous. bpd

FPSO Cid. Anchieta  3Q12 25 thous. bpd7 wells by 

the end of 2012the end of  2012

FPSO Cid. Itajaí 3Q12 11 thous. bpd3 wells by 

the end of 2012

» Additionally, discoveries in ring fence of Varredura: 5 production wells currently planned, contributing estimatedaverage of 31 thous. bpd during 2012

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Santos Basin Pre-salt

» Production Start up of Lula Pilot (Dec/2011): 65.000 bpd( i h i d d i ll )

Franco 2 NWFranco 2 NWFranco 2 NWFranco 2 NW

Petrobras’ Wells : drilling, completion or testing (Dec/11)2011 ACOMPLISHMENTS

Concession

Transfer of Rights

(with 3 integrated production wells)

» Declaration of Commerciality for Guará Sapinhoá Field(BM‐S‐09)

» 17 wells drilled, totaling 37 wells in Santos Basin Pre‐salt

St t f L l NE EWT

Nordeste de TupiNordeste de TupiNordeste de TupiNordeste de Tupi

Iara Iara OesteOesteIara Iara OesteOeste

» Start up of Lula NE EWT

» Start up of Carioca NE EWT

» 4 hulls already contracted to be converted to the firstFPSOs for the Transfer of Rights areas

Piloto Lula Piloto Lula P8HP8HPiloto Lula Piloto Lula P8HP8H

Piloto Lula Piloto Lula IWAGIWAG‐‐55Piloto Lula Piloto Lula IWAGIWAG‐‐55

CarcaráCarcaráCarcaráCarcará

Lula Alto ADRLula Alto ADRLula Alto ADRLula Alto ADR

2012 ACTIVITIES

Carioca Carioca SelaSelaCarioca Carioca SelaSelaLula SulLula SulLula SulLula Sul» Start up of FPSO in Sapinhoá (BM‐S‐09) – Cid. de

São Paulo: end of 2012» Start up of Franco EWT (Transfer of Rights): end of

2012

Guará NorteGuará NorteGuará NorteGuará Norte

2012» EWTs in Cernambi South, Sapinhoá North and

another one to be defined» 10 drilling rigs operating in the cluster. Forecast to

double the number by the end of 2012double the number by the end of 2012

8

Campos Basin Pre-Salt

» Jubarte: 14 000 bpd (ESS 103)

Status on Dec/11

» Jubarte: 14.000 bpd (ESS‐103)

» Baleia Franca: 21.500 bpd (BRF‐1 + BRF‐6)

» Brava: 6.500 bpd (MRL‐199D)

Discoveries

» Carimbé: 19.000 bpd (CRT‐43)

» Tracajá: 20.000 bpd (MLL‐70)

» Total: 81.000 bopd

2012 activities2012 activities

» 9 ring‐fence exploratory wells (post‐salt and pre‐salt)

» New production wells in Barracuda,Marlim Leste and Albacora Leste (totalpotential of 35 thousand bpd)

9* Petrobras’ production + partners

Drilling Rigs

FLOATING RIGS UNDER CONTRACT(2,000 m – 3,000 m)

1319

+15 Estimates of New Rigs

35

2008 2009 2010 2011 2012

Demand for Rigs Construction of 33 rigs in Brazil

» Medium term rig needs  are  now adequately supplied by contracted rigs

» Petrobras permanently analyzes  and revises its future rigs needs, based on production plans

» Average daily rates in line with international prices

» Governmental support  with financing, guaranties, and tax benefitsfuture  rigs needs, based on production plans 

that are continuously updated by actual results

» Petrobras continuously monitors the rig market to ensure availability for future needs

guaranties,  and tax benefits

» Local content index between 55% and 65%» Deliveries  contracted for 2015  and beyond to meet  long‐term demand

10

E&P Economics

B kd f li i i b d d i B il

R$ per barrel realization price %  share of realization price

Breakdown of realization price per boe produced in Brazil

180

25% 31% 33%80%

100%

R$ 52140

160

22%21% 21%

60%

80%

R$ 34R$ 26

R$ 39

80

100

120

23%18% 16%

13%16% 17%

20%

40%

R$ 25

R$ 13 R$ 20R$ 27

R$ 22R$ 26

40

60

80

17% 14% 13%

16%

0%

20%

2009 2010 2011

R$ 17 R$ 18 R$ 21

R$ 24 R$ 22 R$ 25

0

20

2009 2010 2011 2009 2010 2011

Lifting Cost Exploratory costs + DD&A + Others Income Tax Govt take Net Income*

I l ti t t bl t

*Others include tax expenses, R&D, SG&A 11

» In relative terms, stable costs

» In nominal terms, net income per barrel doubled in the last two years

Prices

240

Average 2011

Petrobras ARP: 167.87

Average 2011

Petrobras ARP: 167.87

Average Realization Price (R$/bbl)Oil Prices (US$/bbl)

109103 10386

105117 113

109

100

120

190

240USA ARP 194.46USA ARP 194.46

70 73 74 7280

9475 76 78 7786

60

80140

Average 2010

b

Average 2010

b

4Q11: spread decrease

Light/heavy oils

4Q11: spread decrease

Light/heavy oils

20

40

40

90Petrobras ARP: 158.43

USA ARP: 150.48

Petrobras ARP: 158.43

USA ARP: 150.48

Light/heavy oilsLight/heavy oils

4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11

Petrobras Oil (average) Brent

404Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11

USA ARP Petrobras ARP

» Gasoline and diesel price increases in Nov 2011

» USA Average Realization Price increased in 4Q11, in Reais, due to an average depreciation of the Real by 10%

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Domestic Refining and Sales

2,0521 910 1 886 1,9492,208 2,229

PRODUCTION SALES

219235 224

479435 448

,

570 511 552

rrels/ day

1,910 1,886

rels/ day

414488 547

219

378 406 389134 133 141

Thou

s. bar

Thou

s. barr

940 1,050 1,010828 836 866

4Q10 3Q11 4Q11Diesel+Jet Fuel Gasoline LPG Other

4Q10 3Q11 4Q11

Diesel + Jet Fuel Gasoline LPG Other

» Increase in domestic production of diesel and gasoline in the existing refineries in 2011» Increase in domestic production of diesel and gasoline in the existing refineries, in 2011

» 9% growth on oil products sales in year over year comparison:

» 24% increase in gasoline volumes due to more attractive prices relative to ethanol and an increase in the vehicles fleet

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» 9% increase in diesel volumes due to the growth of economic activity and agroindustry

» 18% drop on fuel oil sales (included in ‘Other') due to the substitution for natural gas

Highlights - Downstream

» Records in processed feedstock (+4%) and production of oil products (+3%)

2011 ACHIEVEMENTS

» Utilization Factor of 92%

» 14 new units completed and operational, largely to improve product quality

» Distribution of S‐50 diesel in 56 additional municipalities in the states of São Paulo and Rio de Janeiro

» Conversion: Start up of REPAR’s Coke + HDT

2012 PERSPECTIVES

» Conversion: Start‐up of REPAR s Coke + HDT

» Diesel Quality Portfolio : RLAM and REPAR

» Additional sales volume of 500.000 m3/month of lower sulfur diesel

» PROMEF I and II: 2 Suezmax, 3 product carriers and 1 Bunker carrier

» RNEST: FIrst train in June 2013 and Second train in January 2014

MAJOR ONGOING PROJECTS

, p

» RNEST: FIrst train in June 2013 and Second train in January 2014

» COMPERJ: First train in September 2014

» Approximately 90% of investments in quality and conversion will be completed during 2013completed during 2013

14

Highlights - Gas & Power

6262

Natural Gas: Supply

d12 8

50

60

70

7260

70

d

Natural Gas: Demand

6262

4037 34

Millionm

3 /d

37 40

13 14

20

30

40

50

+7%

34

2727

2030

4050

+18%Millionm

3 /d

4037 3428

0

10

2010 2011Non Thermoeletric Internal Supply Thermoeletric

28 34

010

20

2010 2011National Bolívia LNG Importsa o a o a G po s

2011 HIGHLIGHTS AND 2012 PERSPECTIVES

» Completion of natural gas pipeline infra‐structure

» Start‐ups: Gastau, Gaspal II, Gasan II and Variante do Nordestão

2012 M i i» 2012 Main investments:

» Baixada Fluminense Thermoeletric Unit

» Três Lagoas Fertilizer Plants– UFN III

l h

Note:  Internal Supply: Intersegment (Downstream) and G&P consumption (Fertilizers plants and Thermoeletrics)

» LNG Terminal: Bahia

» Natural Gas processing unit : Cabiúnas (Pre‐salt route 2)

15

Operating Income 2010 vs 2011

( $ ll )

32,334 (31,322)

(R$ million)

46,394 45,403(765)(1,238)

2010OperatingIncome

Sales Revenue

COGS Selling, general and

adm.

2011OperatingIncome

Otherexpenses

» Higher sales revenues due to the domestic market growth (+6%) and higher oil and oil product prices (Brent: +40%;Petrobras Average Realization Price: +6%)

» Increase in COGS reflected higher imports of oil and oil products, higher international prices on imports and higherproduction taxes

» Increase in operational expenses due to higher exploratory costs and R&D

16

Net Income 2010 vs 2011

( $ ll )

35,18933,313

(991) (2,498)(199) 131 786 895

(R$ million)

(199) 131

2010 Net Income

Operating Income

Financial Results

Equity Income Employees Participation

Taxes Minority Interest

2011 Net Income

» Lower net financial results from the depreciation of the Real in 2011 (13%) versus an appreciation in 2010 (4%),reduced net incomefits of R$ 2.5 billion

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( $ ll )

Operating Income 3Q11 vs 4Q11

(R$ million)

12 3721,703 (4,465)

12,372

(1,552)(306)7,752

3Q11OperatingIncome

Sales Revenue

COGS SG&A 4Q11OperatingIncome

Otherexpenses

Income Income

» Increase in diesel and gasoline prices in Nov/11 contributed to higher revenues

» Increase in COGS due to:

G th l l ith hi h h f i t» Growth on sales volume with higher share of imports

» Foreign exchange effect (+10%) in costs in dollars

» Change in the special participation tax rate due to production growth

» Higher depreciation recognized from as a result of more assets to be amortized and retroactiveHigher depreciation recognized from as a result of more assets to be amortized and retroactiveamortization

» Increase in expenses with impairment and dry hole costs

18

Net Income 3Q11 vs 4Q11

( $ ll )

6 3365,627

492 (43) (1,508)

(R$ million)

6,336

5,049

(4,620) (1,235)

3Q11 Net Income

Operating Income

Financial Results

Equity Income Employees´s Participation

Taxes Minority Interest

4Q11 Net Income

» Better financial results due to a lower FX rate depreciation in 4Q11 (2%), compared to 3Q11 (19%)

» Due to the adoption of CPC 19, the results of jointly controlled companies were registered as Equity Income, withno effect on Net Income

19

Potential factors deviating from market expectations

R$ million

Variation 4Q11 vs 3Q11*OperatingIncome EBITDA

Average FX rate effect on costs 2,609  2,609 

Share of imports in the sales mix (from 28%  to 32%) 1,163  1,163 

Inventories formed abroad 738 738Inventories formed abroad 738  738 

Deconsolidation of jointly controlled companies (CPC 19) 736  1.069 

Dry hole costs 693  693 

Impairment 690  ‐

Extemporaneous depreciation 670  ‐

20* Estimates

E&P 3Q11 vs 4Q11

( $ ll )

3 150 168 (2 245)

Operating Income(R$ million)

15,729

3,150 168 (2,245)(78) (1,118) 15,606

3Q11          Operating Income

Price effect on revenue

Volume effect on revenue

Effect average cost in COGS

Volume Effect on COGS

Operational Expenses

4Q11           Operating Income

» Revenue volume effect doesn´t fully reflect production growth (4%) due to increase in inventories

» Production increase in fields with higher Special Participation tax rate

» Impairment and dry wells account for higher operating expenses

21

Downstream 3Q11 vs 4Q11

( $ ll )Operating Income

(R$ million)

(4,086) 1,584 (1,118)

(3,350) 1,047 (579)(6,502)( )

3Q11          O ti l

Revenue Price Eff t

Revenue Volume Eff t

Average Cost Eff t CPV

Volume Effect on CPV

Operational E

4Q11           O ti lOperational 

ResultEffect Effect  Effect on CPV CPV Expenses Operational 

Result

» Increase in diesel and gasoline prices did not offset the 10% average FX rate depreciation in 4Q11

» Higher share of imports in the sales volume, especially gasoline

» Increase of average internal transfer prices

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» Negative revenue volume effect due to ongoing exports in 4Q11

Investments

R$ 72.5 BillionR$ 87.5 Billion

2012 INVESTMENT BUDGET 2011 INVESTMENTS

5%5% 5%

48%38%

» E&P: focus on increasing production capacity and development of the pre‐salt

E&P    Downstream G&P International Other

» E&P: focus on increasing production capacity and development of the pre‐salt

» Downstream: modernization and expansion of refining capacity, improved quality of oil products andpetrochemical assets

» G&P: completions of the 1st cycle of investments (infrastructure and logistics of natural gas)

» Average FX rate appreciation of 5% in 2011 contributed to reduce investments when expressed in R$

23

Capital Structure

% 24% 30%

40%

50%

4,5

5,5

Net Debt/EBITDA Net Debt./Net.Cap

1.03 1.03 1.071.41 1.66

16% 17% 17%22% 24%

0%

10%

20%

30%

1,5

2,5

3,5

,

‐20%

‐10%

‐0,5

0,5

4Q10 1Q11 2Q11 3Q11 4Q11

R$ Billion 12/31/11 12/31/10

Short-term Debt 19.0 15.1» Funding of $ 18 billion in 2011, with $ 9.6 

Long-term Debt 136.6 100.9

Total Debt 155.6 116.0

(-) Cash and cash equivalents * 52.6 55.0

g $ , $billion in bonds issuances, including Euro and Sterling

» Feb/2012 issuance of $ 7 billion in four = Net Debt 103.0 61.0

US$ Billion 12/31/11 12/31/10

Net Debt 54.9 36.6

tranches of 3, 5, 10 and 30 years, helping to reduce the cost of capital

* Includes tradable securities (maturing in more than 90 days) 24

Information:

Investor Relations

+55 21 3224-1510

petroinvest@petrobras.com.br

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