1. Group B22 Aray Gustavo Furtado Feldens Gabriela Iervolino Petchprakai Sirilertsuwan LOGISTICS COSTS AT ME2605 - Cost Management and Control Professor Håkan Kullvén Group assignment Case study:

2. Petróleo Brasileiro S/A – PETROBRAS is the Brazilian largest energy company PETROBRAS is currently a semi public company after holding a monopoly from 1954 to 1997 The company currently has operational or office activities in 27 countries, and, in the global ranking, Petrobras became the 14th biggest of all oil companies, the 7th among the publicly traded ones PETROBRAS closed 2006 listed in Dow Jones Sustainability Index’s Global Sustainability Index On November 8, 2007, the market capitalization of Petrobras surpassed that of ExxonMobil, making it the world's second largest company by market cap, behind PetroChina PETROBRAS HISTORY

3. 103 production platforms (76 fixed and 27 floating) – producing, in 2006, more than 2.3 million barrels of oil equivalent –, and 16 refineries A significant oil producer; oil exploration, production and refining as well as a major distributor Petrobras owns oil refineries and oil tankers and controls oil and power industries assets, as well as related business activities Business Area PETROBRAS PROFILE

4. 25% of investments are in logistic Logistic in materials, products and people by Pipeline and Terminal, Cargo transport, Marine transport, Aerial transport PETROBRAS LOGISTICS

5. PETROBRAS DATA NET OPERATING REVENUES 72.347 US$ BILLION NET INCOME 12.826 US$ BILLION PROVEN RESERVES11.45 BILLION BARRELS OF OIL EQUIVALENT (BOE) AVERAGE DAILY PRODUCTION 2,298,000 BARRELS OF OIL EQUIVALENT (BOE) PIPELINES31,089 KM SHIPPING FLEET51 COMPANY OWNED AND 104 CHARTERED TERMINALS66 REFINERIES16 SERVICE STATIONSBRAZIL: 5,870 ABROAD: 1,012 EMPLOYEES537 in head office 1,968 on board Transpetro ships 1821 in the pipeline and terminal area

6. Logistics costs for transportation from Macaé/São Tomé to oil platforms in Brazil, the most recommended method would be The cost objects in this case would not be the final product, but support activities that would then be assigned to the other process 3 main activities were identified: Maritime transportation of people Macaé/plataformas/Macaé; Aerial transportation of people Macaé/plataformas/Macaé; Multi-modal transportation of raw materials (aerial and road) Macaé/ São Tomé/ platforms “ACTIVITY-BASED COSTING” ABC

7. Programming Inspection of baggage Boarding DepartureNavigationArrival LOGISTICS OF PERSONNEL

8. Drivers Distance navigated Number of trips Number of inspections RESOURCES & DRIVERS Resources Diesel oil Labor at the port services Labor at the boat Maintenance Administrative labor Audit labor

9. Diesel Port Labor Boat Labor Maintenance Administrative Labor Audit Labor Activity Cost object COST STRUCTURE Maritime transportation of personnel Process that the person transported belongs to

10. ABC is an appropriate tool for support activities and fits very well with logistics cost CONCLUSIONS AND CONSIDERATIONS Must analyze the benefits and costs before implementing Even for simple activities, it requires a good database and quality information to feed the cost database Only worth using it if actions are taken to improve the process or at least maintain it in control