1. Brazil: Investment Opportunities and Challenges

2. WHITE & CASE Brazil: Opportunities and Challenges April 14, 2010 2 Brazil: Opportunities and Challenges  Brazil  General Info/Macroeconomic Situation  Opportunities  Challenges

3. WHITE & CASE Brazil: Opportunities and Challenges April 14, 2010 3 Brazil: General Facts  5th largest country in the world, with 8.5 million sq km (the U.S. is 3rd, with 9.8 million sq km)  5th most populated country in the world, with a population of 191.8 million (the U.S. is 3rd, with a population of 307.2 million)  10th largest economy in the world  GDP in 2008: R$2.9 trillion (U.S.$1.5 trillion), a 5.1% increase vs. 2007  Investment grade  2008: Standard & Poor’s and Fitch Ratings  September 2009: Moody’s  Stable democracy  Presidential elections in 2010

4. WHITE & CASE Brazil: Opportunities and Challenges April 14, 2010 4 Overview – strong growth is expected for 2010, which is expected to be reflected in considerable increases in stock market indices, especially those of developing countries. Expected GDP Growth 2009E 2010E (5.1%) (4.0%) (2.0%) (1.1%) (0.7%) (0.5%) 5.4% 8.5% 1.2% 1.9% 3.9% 2.0% 2.7% 4.0% 6.5% 10.0% África World Average 0.1% World Average 4.0% Source: IIF and FMI Impact on Stock Markets Source: Bloomberg as of September 25, 2009 52 0 49 6 21 5 12 0 34 1 11 5 2006200520072008 200 9 BrazilRussiaChinaIndiaUSAJapan 20% 72% 31% 47% 27% 78% -31% -40% -42% -43% -44% -72%

5. WHITE & CASE Brazil: Opportunities and Challenges April 14, 2010 5... Growing Stock Market – the real appreciated and Brazil had single-digit interest rates for the first time, which has had a positive impact on the market and brought the Brazil’s risk back to historically low levels. 186 Ibovespa X Country Risk 25,722 Ibovespa 60,356 20062005200720082009 Country Risk 19.25 19.50 16.50 14.25 12.75 11.25 11.75 13.00 11.25 8.75 Source: Bloomberg and Itaú BBA, on September 25, 2009 Decreases in Interest Rates (%) 1.79 1.0 1.5 2.0 2.5 3.0 Appreciation of the Exchange Rate (R$ / U.S.$) 20052008200920062007

6. WHITE & CASE Brazil: Opportunities and Challenges April 14, 2010 6 Current Economic Situation  Consumption: increased by 2.1% compared to the 1Qtr of 2009 and 3.2% compared to the 2Qtr 2008.  Industrial Production: increased by 2.2% in July 2009 compared to June 2009, growing for 7 consecutive months.  Commercial Balance: accumulated results by August 2009 increased by 18% compared to the same period in 2008.  Volume of credit reached a record amount of R$1,311.4 billion in June 2009 or 45% of GDP, representing an increase of 21% compared to June 2008.  GDP increased by 1.9% compared to the 1st Qrt of 2009.  International Reserves: increased by 3.4% from U.S.$211.9 billion in June 2009 to U.S.$219.1 billion in August 2009.  Inflation: in August 2009 inflation totaled 4.35% for the last 12 months, below the government’s target of 4.5%.  Primary Surplus: in the 12 months ended June 2009 totaled 1.76% of GDP, a 60% decrease compared to the previous year (4.38% of GDP).

7. WHITE & CASE Brazil: Opportunities and Challenges April 14, 2010 7 Promising Economic Sectors  Infrastructure... ports, roads, airports, mass transit, sanitation  Real Estate... housing deficit, reduced interest rates  Agribusiness... beef/poultry, soybeans, sugar/ethanol, pulp/paper  Mining... iron ore; other metals/commodities  Energy... oil & gas; hydroelectric power  World Cup... Olympics... = ??

8. WHITE & CASE Brazil: Opportunities and Challenges April 14, 2010 8 Brazil Oil & Gas: Pre-Salt Region  Region located approximately 170 miles off the coast of Brazil in the Atlantic Ocean, almost 500 miles in length and 125 miles in width  Named “pre-salt” because the oil is held beneath deep and ultra-deep waters (approximately 2,200 meters) and an additional layer of salt (up to an additional 2,000 meters)  Estimated reserves: 5-8bn barrels of oil equivalent (boe)-largest-ever deep- water oilfield discovery. (British Gas estimates between 12-13bn boe.)  Expected to result in Brazil becoming one of world’s leading oil producers (from 10th to 5th, or higher)

9. WHITE & CASE Brazil: Opportunities and Challenges April 14, 2010 9  Estimated investment needs of US$190 billion up to 2013.  Other estimates of required investments are much higher  With Spillover Investment Needs... Examples:  Refining  At least two large-scale refining projects being discussed  Shipbuilding: huge demand for drilling platforms and tankers.  Petrobras has announced plans for a public bidding process for 28 floating platforms, with an additional 21 to follow  Several greenfield shipyards under construction in Brazil Brazil Oil & Gas: Pre-Salt Region: Required Investments

10. WHITE & CASE Brazil: Opportunities and Challenges April 14, 2010 10  Infrastructure:  Large, long-range helicopters to ferry workers and equipment.  In City of Santos, in the State of São Paulo, Petrobras plans to build its "pre- salt" headquarters, housing 2,000 workers.  Other areas will have similar investments, and related required mass-transit, other infrastructure needs.  Technology:  Huge technological challenges to extracting the oil: distance to shore/depth/salt layer.  Schlumberger recently opened a research center in Rio de Janeiro. Brazil Oil & Gas: Pre-Salt Region: Required Investments

11. WHITE & CASE Brazil: Opportunities and Challenges April 14, 2010 11 Challenges  Lack of infrastructure  Deficient educational system/poverty... need for skilled workforce  Bloated bureaucracy... Corruption concerns  Security issues  Byzantine tax and labor system  Overwhelmed judicial system

12. WHITE & CASE Brazil: Opportunities and Challenges April 14, 2010 12 Negotiating Transactions in Brazil  Avoid conflicts... do not say “no”  Personal relationships...face-to-face meetings  Language issues  “Civil law approach” to contracts

13. WHITE & CASE Brazil: Opportunities and Challenges April 14, 2010 13 Worldwide. For Our Clients. White & Case, a New York State registered limited liability partnership, is engaged in the practice of law directly and through entities compliant with regulations regarding the practice of law in the countries and jurisdictions in which we have offices. www.whitecase.com