October 2009 Nelson Narciso Filho ANP Director

Potential Database Regulatory Stability Developed domestic market Political and Economical Stability Transparent processes Pre-salt Opportunities

Area – 8,547,403.5 Km² Population million GDP – US$ 1.5 trillion World´s tenth largest economy The 10th country in the world to attract investments (US$ 45.1 billion in foreign direct investments) Political and economical stability Over US$ 200 billion in International Reserves Investment grade ( Moody´s, Fitch and Standard and Poors )

Constitutional Amendment # 9/1995 Makes the Union monopoly flexible and establishes the Granting System Constitutional Amendment # 9/1995 Makes the Union monopoly flexible and establishes the Granting System Oil Law 9.478/1997 Creates CNPE and ANP Gas Law /2009 Gaspipe Concession Oil Law 9.478/1997 Creates CNPE and ANP Gas Law /2009 Gaspipe Concession CNPE # 8/2003 Establishes guidelines for the Rounds of Bidding CNPE # 8/2003 Establishes guidelines for the Rounds of Bidding ANP’s Responsibilities Implement CNPE’s resolutions Define explorations blocks Include areas in mature, high potential and new frontier basins; Promote the participation of small companies and the continuity of exploration and production in mature areas Set criteria that encourages exploratory programs Set a minimum percentage for the local content Manage contracts ANP’s Responsibilities Implement CNPE’s resolutions Define explorations blocks Include areas in mature, high potential and new frontier basins; Promote the participation of small companies and the continuity of exploration and production in mature areas Set criteria that encourages exploratory programs Set a minimum percentage for the local content Manage contracts REGULATIONCONTRACTINGMONITORING

STATE ANP Regulatory Agency Regulatory Agency Investors Consumers

Oil and Gas Overview Regulatory Stability: over 10 years of Petroleum Law and ANP Brazil is one of the countries with the highest volume of seismic data Brazil is one of the countries with the highest increase of incorporated reserves in the recent years Recent discoveries at Pre-Salt: Santos and Campos basins 77 groups (38 foreign companies) involved in E&P activities Solid local industry, with large availability of materials, equipments and services Well-developed domestic market (over 100 billion liters of fuel/year) New pre-salt regulatory framework submitted to the congress

Areas under concession 29 sedimentary basins with oil and gas potential; 7.5 million Km², with 2.5 million Km² offshore; Around 350,000 Km² of exploratory areas under concession; Approximately 21,000 Km² of areas in development and production in the country Only 4,9% under concession for E&P activities Only 4,9% under concession for E&P activities

Available Information Brazilian Exploration and Production Database (BDEP) Includes data acquired during the monopoly of Petrobras and after the opening of the Brazilian market Geological Summary Seismic 2D and 3D (2.3 Petabytes – pre stack and 14 Terabytes – pos stack) Wells data (23,164 wells) Potential Methods (246 reports) Geological Reports from Universities ANP’s Geological Interpretations {

Sequence of Activities Geochemical Surveys Grav/Mag Surveys Data Integration Well Drilling Seismic Surveys US$ 1 billion

Blocks definition Beginning of the process Qualification of the companies Bidding and Concession

Panama Japan Italy India France Spain Denmark Korea Colombia Singapore Argentina Angola Portugal Norway United Kingdom Australia Canada USA Brazil

What is it ? Companies must prioritize acquiring goods and services from Brazilian suppliers; One of the three Bid Factors of the Exploration and Production Bidding Rounds; What does Brazil offer ? Opportunity to create joint-ventures Manpower supply Developed industry of goods and services Manpower development programs: CT-Petro, PRH and Prominp BRASIL MANPOWER TECHNOLOGY =+

Sectors with No National Production*: - Compressors (centrif.) - Motors (gas) and diesel (large scale) - Turbines (gas) - Instrumentation Sectors of High Competitiveness*: - Forging - Tubes - Rods e pumping units - Subsea equipment - Pumps - Turbines (steam) - Generators e Electric motors - Substation and transformers Sectors of Medium Competitiveness*: - Connections e joints - Boilery - Compressors (alternativ) - Gas and Diesel Motors - Cranes and Tow-Trucks - Valves - Engineering services - Construction and Assembly * Prominp

Opportunities: Engineering services Construction and assembly services Instrumentation Drilling equipments Wells completion Support to diving and ROV vehicles Support in binding activities Special supply boats Subsea wells connection Others joint-ventures Opportunities

Duration: up to 34 years, including the exploratory phase and the production phase The exploration phase may last from 3 to 7 years, divided in two periods Immediate announcement of any discovery Mandatory choice between the return of the area or the commitment of well drilling Declaration of commerciality Submission of the Development Plan for ANP’s approval Maximum period of production: 27 years Multiple Development Areas possible under single Concession Agreement Rules of unitization Mandatory R&D investments only for fields that pay Special Participation ( 1% of gross field revenue)

Tupi EWT (Extended Well Test) Tupi EWT (Extended Well Test) According to the Law Project 5938/2009, the pre-salt area was defined like this Iara APPRAISAL – on evaluation

Production Sharing Agreement ( Petrobras - operator of all blocks, Minimum 30% participation) Production Sharing Agreement ( Petrobras - operator of all blocks, Minimum 30% participation) Onerous yielding to Petrobras (up to 5 billion barrels) Onerous yielding to Petrobras (up to 5 billion barrels) Creation of a state- owned company: Petro-Sal Creation of a state- owned company: Petro-Sal Creation of a Social Fund Creation of a Social Fund +++

Regulate and supervise activities and contracts Promote technical studies Prepare the bidding documents for the Production Sharing Agreement contracts Ensure the best industry practices are honored Analise and approval of the evaluation and development production plans

Oversees the industries’ best practices, the sector’s competitiveness and environment protection Regulate and Monitor the Industry State goals ANP Takes part in the Operational Committee of the business consortium Supervises the profitability of the areas under PSA Government goals Petro-Sal x

Sedimentary basins are at different stages of exploration and there are still several unexplored areas Opportunities for different kinds of companies Excellent local capacity for provision of goods and services Domestic market – more than 100 billion liters of oil/year Pre-salt Institutional and regulatory stability distinguishes Brazil from other countries with high oil and gas potential Open for investments Brazil is one of the Best choice of investment in the world

Stability of the rules Stability of the rules Strict contract observation Strict contract observation Investment friendly Investment friendlyenvironment Absolute transparency Absolute transparency ANP is fully committed with:

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