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Petrobras

Petrobras
Petróleo Brasileiro S.A.

Type

Semi-Public (BM&F Bovespa:PETR3/PETR4, NYSE: PBR / PBRA, Latibex:XPBR / XPBRA, Merval APBR) 1953 Rio de Janeiro, Brazil José Sérgio Gabrielli de Azevedo (CEO) Almir Guilherme Barbassa (CFO) Oil and Gasoline Petroleum and derived products BR service stations Lubrax motor oil ▲US$ 128 billion [1](2008) ▲US$ 15.3 billion[1] (2008) 74,240[2] (2009) www.petrobras.com

Founded Headquarters Key people

Industry Products

Revenue Net income Employees Website

Headquarters of Petrobras in downtown Rio de Janeiro. America, South America, Europe and Asia. These holdings as well as properties in Brazil give it total assets of $133.5 billion. The Brazilian government owns 55.7% of Petrobras’ common shares with voting rights,[4]. The privately held shares are traded on BM&F Bovespa, where they are part of the Ibovespa index. Petrobras began the processing of oil shale in 1953 by developing Petrosix technology for extracting oil from oil shale. The pilot plant started in 1982 and the commercial production started in 1992. At present, the company operates two retorts, the largest of which processes 260 tonnes/hour of oil shale. Petrobras operated the world’s largest oil platform - the Petrobras 36 Oil Platform - until an explosion on 15 March 2001 led to its sinking on 20 March 2001. Petrobras is also recognized as the largest sponsor of arts, culture, and environmental protection in Brazil. Among the

Petrobras (BM&F Bovespa:PETR3/PETR4, NYSE: PBR / PBRA, Latibex:XPBR / XPBRA, Merval APBR), short for Petróleo Brasileiro S.A., is a semi-public[3] Brazilian energy company headquartered in Rio de Janeiro. The company was founded in 1953 mainly due to the efforts of the Brazilian President Getúlio Vargas. While the company ceased to be Brazil’s oil monopoly in 1997, it remains a significant oil producer, with output of more than 2 million barrels of oil equivalent per day, as well as a major distributor of oil products. The company also owns oil refineries and oil tankers. Petrobras is a world leader in development of advanced technology from deep-water and ultra-deep water oil production.

Overview
Petrobras controls significant oil and energy assets in 18 countries in Africa, North

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environmental initiatives, Petrobras is the main supporter of whale conservation and research through the Brazilian Right Whale Project [5] and the Instituto Baleia Jubarte (Brazilian Humpback Whale Institute).[6] Petrobras has been a sponsor of the Williams Formula-1 team. The company employs the H-Bio process to produce biodiesel.[7] According to Fortune 500 Petrobras is the 63rd largest company in the world.[8]

Petrobras
national economy, came to a halt. The company itself almost faced bankruptcy. • : Petrobras discovered a huge oil field in Bacia de Campos, which oil reserves raise the company’s finances, "resurrecting" its operations nationwide. • : The company signed "risk contracts" of partnership with private oil companies to intensify the search for new oil fields and to consolidate its influences in the country. • : Petrobras was affected by second oil crisis, but the effect was not as strong as it had been in the crisis of 1973.

History

Petrobras standard model for its land oil pump, popularly known as Wood Horse (Cavalo de Pau in portuguese) in UFRN, Natal, Brazil. Petrobras was created in 1953 during the government of Brazilian president Getúlio Vargas, with popular support under the motto "The Petroleum is Ours!". The company’s creation provoked the wrath of Brazil’s elite, which reacted fervently against the institution and Vargas himself, who committed suicide in 1954. Many attempts were made to privatize the company, especially under the country’s dictatorship from 1964 to 1985.

Skyscraper of Petrobras in Avenida Paulista, São Paulo. • : The government approved Law N. 9.478, essentially breaking the company’s monopoly in Brazil and allowing competitors to develop the country’s oil fields. Petrobras also reached the mark of producing one million barrels per day. The company executed agreements with other Latin American governments and began operations outside of Brazilian domains. • : The company reached the world record of oil exploration in deep waters, at 1,877 meters below sea level. • : An accident occurred at the P-36 Platform, which was the world’s biggest

Chronology
• : The company is created by president Getúlio Vargas. • : The company faced opposition by the government. • : A report released by the government reveals pessimistic news about oil prospects in the country’s terrains. • : The company’s short period of growth was met by the first oil crisis. The crisis affected the country as a whole, as the "Brazilian miracle", fast growth in the

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oil platform. The platform, owing to technical failures, sank on 20 May with about 1500 tons of oil. : The company acquired Argentina’s largest oil company Perez Companc Energía (PECOM Energía S.A.), and its operational bases in Bolivia, Peru and Paraguay. : Petrobras achieved Brazilian selfsufficiency in oil. : The company recorded its highest earnings ever, with more than US$13 billion of profit. The company announced the discovery of the giant oil field "Jupiter", in Santos. Value of the company’s shares increased by about 106%, from February to December. : The company discovered what could be the world’s third largest oil field. The actual reserves are yet to be verified, however.

Petrobras
including biodiesel fuel. Petrobras recently opened its business to the ethanol fuel, facing great competition against the North American ethanol. However, investment in biofuels will represent only 1% of the company’s profit between 2008 and 2012.[12] Petrobras is involved in the following areas of business: • : Domestic sales represent the majority of the company’s profit and includes the extraction and distribution of oil, natural gas, electricity and petrochemical products;

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Bolivian controversy
On May 2006, Bolivia’s president Evo Morales announced the nationalization of all gas and oil fields in the country. Evo Morales ordered the occupation of all fields by the Bolivian Army. Petrobras was heavily affected by the nationalization. At the time, the company’s Bolivian subsidiary had great importance in the country’s economy[9]: • Petrobras represented 24% of the Bolivian industrial taxes, 18% of the country’s GDP and 20% of the foreign investments. • The company operated in 46% of the oil reserves in Bolivia and was responsible for 75% of the country’s gas exports to Brazil. • The company invested, between 1994 and 2005, US$1.5 billion in the Bolivian economy. The nationalization strained the relationship between Petrobras and the Bolivian government. On October 28, 2006, after a long negotiation, Petrobras and Bolivia signed an agreement, whereby the company would take 18% of the profits, and the Bolivian government would take the remainder.[10] Petrobras’ financial growth between 2002 and 2006 • : The main exports are not of oil extraction itself, but are related to mechanic technologies. However, it is planned to the company exports oil in large quantities when it begins to explore the Jupiter and the Tupi fields (see "List of recent oil field discoveries"); • : The company imports natural gas from other South American countries, mostly from Bolivia. According to the Brazilian group National Petroleum Agency, Petrobras owns Brazil’s largest and most important gas pipe network, having a near monopoly of the natural gas marketed in the country. Petrobras works extensively with foreign acquisitions too, buying and controlling the most important energy companies in South America and exploring huge deep-water fields of West Africa and the Gulf of Mexico. Petrobras is known for its technology in deep-water exploration. The Tupi field, which could be the world’s third largest oil field (although data is still unverified), is a deep-water discovery, located in the pre-salt layer. The company began to increase profits from 2002, with the government’s heavy investments. In the first quarter of 2008,

Business[11]
Petrobras’ most important assets are petroleum reserves in Brazil. Its oil field in the Campos Basin accounts more than 80% of the Brazilian oil production. The company also works on developing the "green energy",

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Petrobras reached the market value of US$295.6 billion, surpassing Microsoft (US$274 billion) and becoming America’s third largest company, ahead of giant oil companies such as BP and Chevron-Texaco, and only behind of ExxonMobil and General Electric. Petrobras’ market value is also bigger than Industrial and Commercial Bank of China (US$289.3 billion), making it the sixth biggest company in market value in the world.

Petrobras
be the largest oil company in the country, enjoying an almost monopoly condition;

Oil reserves
At the 20th National Forum, it was revealed that Petrobras, with 11.7 billion barrels of oil, has the fourth biggest oil reserves among petrochemical companies with publicly traded shares. The figure does not include the recent discoveries in the megafields of Tupi, Jupiter, Carioca and Bem-tevi.[13]

Competition
Comparison with world-wide companies
Company

Profitability
Oil & Gas Production Growth (%) 2006 4.5 -1.9 6.1 -1.0 From May 1997 to June 2006, the company’s value in the Ibovespa increased about 1200%, reaching a record profit in 2006, with approximately R$25.9 billion becoming the most profitable public company in Latin America of 2006. The discovery of large reserves in Santos increased its stock price by about 19% in one day. Petrobras, is considered the most reliable Blue Chip of the Bovespa Stock Exchange. While the North American Crisis of 2007 decreased the value of the stocks of a great majority of stock markets in the world, Petrobras, helped hold the Bovespa’s activities steady, making it one of the least affected stock exchanges in the world by the crisis.

Reserves Current Oil & Gas (MM Years of Production boe) Production (1000s boe/d) 2006 11,458 17,368 21,518 11,108 14.2 10.4 10.9 11.3 6.7 2,287 3,926 2,667 3,474

Petrobras BP ExxonMobil Royal Dutch Shell

ChevronTexaco 11,020

4,238 REFAP Basis 3.8

Growth
• : the company profits with the oil rising prices, caused by the great political instability in Middle East, a major oil producer region. The oil price reached US$120 on 20 May 2008; • : the oil demand has increased drastically in the emergent countries, for which Petrobras exports its technologies. The BRIC countries’ (Brazil itself, Russia, India and China) growth explains this huge demand. The Brazilian auto-sufficiency in Petroleum (May 2006) allowed the company to export small quantities of oil too; • : despite of being half-controlled by private investments, the company’s stock shares majority belongs to the Brazilian government, what gives it the right to control the company’s finances and operations. The recent growth of the company is explained by the political stability. Since 1997 the Brazilian oil market was opened to foreign investments, but Petrobras continues to

Investment grade
On April 30, 2008, Brazil received an "investment grade" rating from Standard & Poor’s, given to countries with stable and consistent growing economy. According to Standard & Poor’s, Brazil jumped from a BB+ grade to a BBB-, the minimum level any country needs to reach to receive the grade. Petrobras played a big part in the country’s growth,

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and the high rating would be useful in attracting foreign investments. Investors criticized the company for increasing the gasoline prices in Brazil, despite the record oil production. The company is having problems adapting its business to the ethanol’s market.

Petrobras
country’s reserves would increase by 62 per cent, and Tupi’s reserve would be on par with Norway’s 8.5 billion barrels of proven oil reserves .[17] The Financial Times listed Petrobras as one of the world’s 50 largest companies in 2007.[18] On January 21, 2008, Petrobras announced the discovery of Jupiter, a huge oil field which could equal the Tupi oil field. It is located 37 km (23 mi) from Tupi, 5,100 m (16,730 ft) below the Atlantic Ocean, 290 km (180 mi) from Rio de Janeiro.[19] On April 14, 2008, a second massive oil field was announced in the same region as the Tupi oil field with reserves estimated at 33 billion barrels of oil.[20] On May 21, 2008, Petrobras announced the discovery of a third megafield, located on the coast of the State of São Paulo. On May 19, 2009, Petrobras finalized a $10 billion loan from China in return for a ten years long supply of oil (150,000 barrels a day the first year, 200,000 barrels a day the nine others) [21]

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Devaluation
After a great advance on its stock shares (reaching R$52.30 in Ibovespa) in May 2008, Petrobras faced a great devaluation in the following month, with its shares decreasing to R$43.90 in June 19, 2008[14]. The most probable explanation for the great fall was the lack of information about the mega-fields recently discovered by the company. The great instability in Wall Street’s markets also had great weight in those terrible results.[15] Petrobras’ fall also led to bad results on the entire BM&F Bovespa, as Petrobras and Vale accounts for more than 25% of BM&F Bovespa’s trade value[16], the devaluation of those companies’ shares led it to lose more than 6,000 points in just 25 days. However, with the continuous decrease of oil prices, Petrobras’ stock shares fell to R$33,00 on August 14, 2008. Its market cap presented the biggest loss of value in the Americas, with US$93 billion (August 13, 2008).

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List of recent oil field discoveries
From 2002-2005, Petrobras doubled its success rate at drilling new wells.[22] Petrobras latest Oil Discoveries Date April 18, 2006 June 11, 2006 March 2, 2007 March 29, 2007 June 8, 2007 Basin Espirito Santo Santos Campos Santos Espirito Santo Field Golfinho API gravity 40

Milestones
• On December 19, 2005, Petrobras announced a contract with the Japanese Nippon Alcohol Hanbai to launch a jointventure. The project named Brazil-Japan Ethanol would import ethanol from Brazil, in a bid to develop an ethanol market in Japan. • On April 21, 2006, while on board the Petrobras P-50 oil rig, a floating production storage and offloading vessel, President Luiz Inácio Lula da Silva announced Brazil’s self-sufficiency in petroleum,. • In November 2007, Petrobras announced a discovery of a major new oil field off the coast of Rio de Janeiro. The Tupi oil field in the Santos Basin had an estimated reserve of 5 billion to 8 billion barrels. The figure would put Tupi as the world’s largest oil reserve since the discovery of Kashagan in Kazakhstan in 2000. The

1-RJS-628A 30 Caxareu below the salt layer Pirambu Tupi Xerelete Tupi 30 30 29 27 18 28

September Santos 4, 2007 September Campos 10, 2007 September Santos 20, 2007

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October 11, 2007 January 21, 2008 Sergipe Santos Piranema Jupiter 44

Petrobras
deep deposits, which may even make this exploration unfeasible. —[26]

Mega-fields
The company’s most important discoveries started at the end of 2007, when the first mega-field, named Tupi, was found at a depth of 5,000 meters below the sea level, the first discovery of the company in the pre-salt layer. The second discovery was announced on January 21, 2008: the new mega-field was named Jupiter and had the same size as Tupi.[23]. The company revealed no more information about the field, forcing many investors to regard those facts as an "industrial secret". On May 21, 2008, the company announced the discovery of a third oil megafield[24], located 250Km distant from the state of São Paulo, at a depth between 6000 and 6300 meters below sea level. The discovery was made by a consortium formed by Petrobras (66% of participation), Shell (20%) and Galp Energia (14%). The field’s oil reserves had an API gravity between 25 and 28.

Reputation
By the end of 2003, Petrobras subscribed to the United Nations Global Compact, a voluntary agreement which encompasses a set of principles regarding human rights, working conditions and the environment. The company’s growth since 2006 has made Petrobras the most profitable company in Brazilian economy, and gave it great importance worldwide, being recognized as the eighth biggest oil exploring company in the world.[27] Since 2006 Petrobras has been listed in the Dow Jones Sustainability Index, an important reference index for environmentally and socially responsible investors. On February 25, 2008, the Spanish consultancy firm Management and Excellence acknowledged Petrobras as the world’s most sustainable oil company.[28] The civil society named Transparency International, which fights against global corruption, published a list on April 28, 2008 containing the names of 42 companies with high transparency levels, in which Petrobras was included.[29] The World Trademark Review society has rated Petrobras as the South America’s brand management leader, competing with Coca-Cola, Pepsico, and Procter and Gamble.
[30]

Criticisms
According to the Brazilian economy website InfoMoney.com, North American stock companies are considering the oil mega-field discoveries suspicious. On May 24, 2008, the company’s shares fell 4% because of the scarce information given by Petrobras about the fields.[25] (Portuguese) An article written by Roberto Altenhofen Pires Pereira for InfoMoney.com said (translated from Portuguese): Differently from the incredible advance of 14% in Petrobras stock shares after the discovery of Tupi and Jupiter fields, the North American answer for the shares was the worst possible. Petrobras’ ADR’s American Depositary Receipts - fell more than 4% in New York. It seems that the market is interpreting the discovery with mistrust. (...) Everyone knows that the potential of the fields is huge, but that stills being only a "potential". No concrete information about the fields’ capacity has been released at any time. These are only expectations, which still face a great technological challenge to the exploration of so

Global operations

Petrobras’ global oil exploration, as shown in December 2006 with a total of 243,292 BOED
[31]

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Petrobras

Petrobras in popular culture
• Brazilian films and TV shows sponsored by Petrobras often included shots of the company’s operations. • In the Speed Racer live-action movie, one of the cars featured is the "Green Energy", a biodiesel fueled racing car sponsored by Petrobras. • Petrobras sponsored football teams Flamengo in Brazil, and River Plate in Argentina.

Refinery in Cochabamba, Bolivia. Petrobras global operations extends over 27 countries (including Brazil). Those operations are more related to diplomatic trades than oil exploration, although the company has important fields in India, Turkey, Angola and Nigeria. The most important countries for commercial agreements are Japan, United Kingdom and China. The complete map can be seen in Petrobras official link Petrobras Worldwide. Petrobras is a member of the following international associations: • ARPEL (Asociación Regional de Empresas de Petroleo y Gas Natural en Latinoamérica y el Caribe) • IPIECA (International Petroleum Industry Environmental Conservation Association) • OGP (International Association of Oil and Gas Producers) • WBCSD (World Business Council for Sustainable Development)

See also
• • • • • • History of Brazil (1945-1964) Ethanol fuel in Brazil Petrobras 36 Oil Platform Petrosix Transpetro Tupi oil field

References
[1] [2] [3] [4] ^ Jornal do Brasil, 3/7/2009 (port.) About us, Petrobras - Investor Relations Source: 09-July-2006 - Petrobras Investor Relation Site [5] Brazilian Right Whale Project [6] Instituto Baleia Jubarte [7] Petrobras.com [8] http://money.cnn.com/magazines/ fortune/global500/2008/full_list/ [9] Saiba o tamanho da Petrobras na economia da Bolívia, e a importância da Bolívia para a Petrobras - 02/05/2006 EFE - Economia [10] Folha Online - Dinheiro - Acordo com Bolívia garante rentabilidade para Petrobras, diz Silas - 29/10/2006 [11] http://www2.petrobras.com.br/ri/spic/ bco_arq/ 2778_form_20f_2005_port_16ago_alt8dez06.pdf [12] Microsoft PowerPoint - Petrobras and Biofuels - May 2007.ppt [13] Petrobras.com [14] [1] [15] InfoMoney: Petrobras: perda de suporte pode levar ações preferenciais aos R$ 43,00 [16] InfoMoney: JPMorgan Chase rebaixa recomendação do Brasil para underweight

Offices in other countries
• • • • • • • • • • • Rio de Janeiro - Headquarters São Paulo Logistical Office Beijing Tokyo Singapore Ankara Tehran London Mexico City Houston Caracas • • Montevideo • Santa Cruz de la Sierra • Tripoli • Lagos • Luanda • • • • • Bogota Quito Lima Asunción Buenos Aires Santiago

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Petrobras

[17] "Petróleo mostra que ’Deus pode mesmo news/view.asp?codigo=1129571&path=/ ser brasileiro’". BBC Brasil. 2007-11-16. investimentos/noticias/. Retrieved on http://oglobo.globo.com/economia/mat/ 2008-06-01. 2007/11/16/327191975.asp. Retrieved on [27] Portuguese: Petrobras Press release 2008-05-26. (2007-01-30). "Petrobras é 8ª empresa [18] "Global 500 2007 accounts" (pdf). de petróleo com ações em bolsa". Financial Times. 2007-07-29. Petrobras. http://media.ft.com/cms/ http://www2.petrobras.com.br/portal/ ac6bbb8c-2baf-11dcframe.asp?pagina=/ri/port/Noticias/ b498-000b5df10621,dwp_uuid=95d63dfa-257b-11dcNoticias/Index.asp&lang=pt&area=ri. b338-000b5df10621.pdf. Retrieved on Retrieved on 2008-05-26. ; "English". 2008-05-26. http://www2.petrobras.com.br/portal/ [19] Duffy, G (2008-01-22). "’Huge’ oil field frame_ri.asp?pagina=/ri/ing/ found off Brazil". BBC News. index.asp&lang=en&area=ri. http://news.bbc.co.uk/2/hi/americas/ [28] Management And Excellence 7201744.stm. Retrieved on 2008-05-26. [29] "Petrobras is a "transparency reference" [20] "Brazil Finds New Huge Oilfield, Possibly in the oil sector". 2008-04-29. World’s Third Largest". Brazzil Mag. http://www.agenciapetrobrasdenoticias.com.br/ 2008-04-14. http://www.brazzilmag.com/ en_materia.asp?id_editoria=8&id_noticia=4824. content/view/9245/1/. Retrieved on Retrieved on 2008-05-29. 2008-05-26. [30] Petrobras.com [21] WJS, May 19, 2009 [31] Untitled Document [22] Petrobras 2006 20-f, item 4, p 26 via • Silvestre, B. S., Dalcol, P. R. T. Wikinvest Geographical proximity and innovation: [23] Press Release: Important Gas and Evidences from the Campos Basin oil & Condensate field discovered in the Pregas industrial agglomeration — Brazil. Salt layer Technovation (2009), doi:10.1016/ [24] New Oil Accumulation Discovered in the j.technovation.2009.01.003 Santos Basin Pre-Salt Layer [25] InfoMoney: Reação às descobertas da Petrobras é posta em xeque, e • Global official web site (English) compromete rumo da ação • Brazilian official web site (Portuguese) [26] Roberto Pereira (2008-05-24). "Reaction • Petrobras’ News Agency (English) to Petrobras’ Discoveries Undertakes the • Petrobras Magazine (English) Share’s Future". InfoMoney.com. http://web.infomoney.com.br/templates/

External links

Retrieved from "http://en.wikipedia.org/wiki/Petrobras" Categories: Oil and gas companies of Brazil, National oil and gas companies, Oil shale companies, Automotive fuel brands, Companies listed on the New York Stock Exchange, Multinational companies, Biodiesel producers This page was last modified on 19 May 2009, at 17:04 (UTC). All text is available under the terms of the GNU Free Documentation License. (See Copyrights for details.) Wikipedia® is a registered trademark of the Wikimedia Foundation, Inc., a U.S. registered 501(c)(3) taxdeductible nonprofit charity. Privacy policy About Wikipedia Disclaimers

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