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2010 Brazil Oil & Gas Seminar

PrePre -Salt Opportunities & New Regulatory Framework
Magda Chambriard
Director Brazilian Petroleum Agency

Institutional Evolution O&G sector

Constitutional Amendment Nº 9/95 Law nº 9.478/97 – Creation of ANP & CNPE (National Energy Policy Council) Implementation of the ANP Directive CNPE nº 8/03
1995 1997 1998 1999 2000 2001 2002 2003 2004

Pre-salt IM group
Self-sufficiency Pre-salt discovery

2005

2006

2007

2008

2009

Concession contracts signed with Petrobras (Round Zero) GT ~ 60/65% Bill 5.938/2009 for the Pre-Salt areas ANP studies the areas, defines the blocks and promotes the bidding rounds. ANP studies areas and promotes the bidding rounds according CNPE approval.

5 million m3/day .Current scenario (2009) Proven Reserves(*) Oil – ~13 billion bbl Gas – ~366 billion m3 (*) without pre-salt discoveries Production Oil e LGN – 2.5 thousand bbl/day Gas – 23.9 million m3/day Imports/Exports Balance Oil – 132.03 million bbl/day Gas – 57.

Current scenario Concession contracts 38 sedimentary basins 29 principal basins 7.5 million km2 Concession Contracts: Exploratory Phase 377 blocks (JUN/2010) Production Phase 368 fields 304 operated by Petrobras .

15 billion Special Participation: R$ 4.84 billion Government Take ~54% (2008) .7 Billion bbl Royalties: R$ 2.Marlim Field Marlim Field: discovered in 1985 in 835m water depth Production (DEC/2008): 345 thousand bbl/day Proven Reserves (DEC/2008): 1.

The PrePre-Salt as a New Paradigm .

938/2009) Fields producing/under development Exploratory Rounds (Rounds) 0 1 2 3 4 5 6 7 9 .Pre-Salt Area PreThe study of the Interministerial Group 2-ANP-2-RJS 2-ANP-1-RJS Dry well Wells being drilled (APR/2010) Oil Oil and Gas Gas Pre-SaltPolygon Area Pre-Salt (Bill of Law 5.

Formation of a Social Fund (PL 5.938/09). .939/09).940/09). up to 5 billion boe (PL 5. Onerous assignment of rights. Creation of a new state company – Pre-Sal (PL 5. which shall grant Petrobras the right to produce in certain areas of the Pre-Salt.New Regulatory Framework New rules for E&P in the PrePre-Salt area: Four (04) Bills Production-sharing agreements for E&P in the unlicensed Pre-Salt areas (PL 5.941/09).

Petrobras can be contracted without a bidding process. 5. Petrobras shall be the only operator in this area with at least 30% participation.Production Sharing Contract Bill n. A New State Company shall run the State share of the contract. Main Rules: Brazil shall adopt the Production Sharing Contract in the Pre-Salt Area. ANP provides the bidding rounds and regulates the contracts. .938/09 Senate approval on 06/10/2010 General Features Objective: Increase the Brazilian Society benefit on the pre-salt E&P. The winner shall be the one who offers the biggest share of oil production to the State. Opportunities in the pre-salt area shall be bidden considering Petrobras as the Operator.

culture. from the signature bonus and from the royalties destined to the Federal Government. The revenue of the Social Fund will come from the sale of profit oil.940/09 Senate approval on 06/10/2010 The Social Fund shall use the resources generated by the production-sharing contracts in reducing poverty. science and technology.Pre-Salt Social Fund PreBill n. risk classification and diversification. education. expected return Investments in Brazil may be used in infrastructure projects Financial institutions may be hired to act as operating agents . environmental sustainability. 5. Investment Policy Social Fund shall carry out investments in Brazil and abroad in order to diversify the risk and avoid the problems of the “Dutch disease” Investments shall follow solidity criteria: liquidity.

The New State Company Bill n. Participates in the PSC on behalf of the Brazilian Government. Shall have casting vote. according to the contract.939/09 Lower Court approval on 11/18/09 New State Company Shall have a qualified technical staff. . but shall NOT be an operator. 5.

941/09 Senate approval on 06/10/2010 Objective: Petrobras capitalization Authorization to assign to Petrobras the right to explore and produce oil and gas up to 5 billion boe.Onerous Assignment Bill n. Authorization to subscribe and pay in new shares of Petrobras’ joint stock. . in selected areas not yet under contracts. 5.

938/09) TAC Limit (drilling) Exclusion Area 3D Seismic Pub Exc Pos 3D Seismic Conf NonExc Pos 2D Seismic Conf Exc Pos 2D Seismic Conf NonExc Pos Wells being drilled (APR/2010) Oil Óil and Gas Gas Pre-Salt Polygon (Bill of Law 5.The decision of drilling wells to increase prepre-salt value Pre-Salt Area (PL 5.938/2009) Fields producing/under development Exploratory Rounds (Rounds) 0 1 2 3 4 5 6 7 9 Franco 2-ANP-1-RJS Libra 2-ANP-2-RJS .

5 Bi bbl 3D structural map of the salt base as interpreted by the ANP technical staff (2010) .The decision of drilling wells to increase prepre-salt value 2-ANP-1-RJS 2-ANP-2-RJS Franco discovery (2 (2-ANPANP-1-RJS) Forecasted Recoverable Volume 4.

steel.). 2009 . 2008) Fonte: PETROBRAS. etc. 234 ships. including 70 large ones (Lima.Brazilian Opportunities PrePre -salt Campos & Santos Basins (50 billion barrels ?) Campos Basin Santos Basin If proven the way ANP forecasted. In a 1st step Brazil considers to hire 40 rigs and semisemisubmersible platforms. pipelines. ships. oil pipelines. Brazil will need to invest heavily in infrastructure (platforms. ports.

Brazilian Opportunities New Bidding Rounds After the approval of the PrePre -salt bills ANP shall bid: PrePre -salt areas under PSC (~ 2. . The 11th 11th Bid Round shall focus on the Brazilian equatorial margin.3% sedimentary area) Other areas under concession contracts (> 97% sedimentary area) ANP waits for CNPE approval the 11th Bid Round.

ANP waits for CNPE approval to promote the 11º bidbid-round focusing the equatorial margin. And to promote a bid round focusing prepre-salt opportunities. Production-sharing contracts shall be applied for the Pre ProductionPre-Salt area (around 2% of the Brazilian sedimentary area). . opportunities go far beyond the prepre-salt.Final Remarks The PrePre-Salt is a new paradigm in Brazil. Concession contracts shall be applied for ALL other areas (> 97%). In Brazil.

br .anp. Rio Branco. 65 12º ao 22º andar tel. 21 21122112-8100 www.Agência Nacional do Petróleo.gov. Gás Natural e Biocombustíveis Av.

Oil Price Evolution 160 140 120 Oil Barrel Price (U$) 100 80 60 40 20 0 1990 1995 2000 2005 2006 2007 2008 (JUL) 2008 (DEZ) 2009 YEAR .

Govern Take around the world Govern Take Evolution (2002 – 2007) Brasil 0% 10% 20% 30% 40% 50% 60% 70% Brazil – 60% GT .