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 60% preserved areas and other usages 40% arable 3% Sugar Cane ethanol Population million GDP – U$ 1.5 trillion World´s tenth largest economy Political, Economical and Regulatory stability Over US$ 200 billion in International Reserves Investment grade ( Moody´s, Fitch and Standard and Poors ) Biofuels, Oil and Natural Gas regulated under the same instutional environment (ANP)

Brazilian Energy Supply Source: PNE 2030 / BEN 2008

Constitutional Amendment # 9/1995 Flexibly the monopoly Constitutional Amendment # 9/1995 Flexibly the monopoly Oil Law 9.478/1997 Creates CNPE and ANP Bio fuels Law /2005 Introduces bio fuels in the Energetic Matrix Gas Law /2009 Transportation Oil Law 9.478/1997 Creates CNPE and ANP Bio fuels Law /2005 Introduces bio fuels in the Energetic Matrix Gas Law /2009 Transportation CNPE # 8/2003 Bidding Rounds Guidelines Ministry of Mines and Energy CNPE´s Technical Support CNPE # 8/2003 Bidding Rounds Guidelines Ministry of Mines and Energy CNPE´s Technical Support ANP’s Responsibilities Implement CNPE’s resolutions Define explorations blocks Set criteria that encourages exploratory programs Set a minimum percentage for the local content Manage E&P contracts; Establishing of updated specification of biofuels Development of quality and price fuel monitoring programmes; Enforcement action all over the country ANP’s Responsibilities Implement CNPE’s resolutions Define explorations blocks Set criteria that encourages exploratory programs Set a minimum percentage for the local content Manage E&P contracts; Establishing of updated specification of biofuels Development of quality and price fuel monitoring programmes; Enforcement action all over the country 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

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

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 +++

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

Brazilian Market Total production around 23 bi liters in 2008; 421 production plants Increased demand with the flex-fuel technology launch ; Main national fuel for light vehicles; More than 30 years of commercial use; High productive of Brazilian sugar cane (R&D; “DNA”) Production and supply consolidated;

Supply (m³) 2008jan-jun, 2009 Anhydrous Ethanol 13,981,4599,069,926 Hydrated Ethanol 8,464,5203,549,812 Brazilian Ethanol Produced from sugar cane. Ethanol types: Anhydrous: blended with refinery’s gasoline,currently is 25% (v/v) Hydrated: used in ethanol-fueled vehicles and flex fuel vehicles (FFV).

Biodiesel Program National specification established for reaching a higher quality fuel, considering a diversity of feedstock and the final usage. Positive results with the biodiesel insertion in brazilian market. Few feedstock applied in commercial scale: soy, tallow, cotton, palm and sunflower.

Optional 2% may/2005 jan/2008 3% jul/2008 5% jan/2010 4% jul/2009 Biodiesel Content in Diesel

Producers and Suppliers Consumer 21 Hired Institutions and Universities and CPT Service station Report of Quality Fuels Report of Quality Fuels Quality Fuels Indicators Logistic

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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