#1THE O&G INDUSTRY IN BRAZIL An overview and opportunities for Japanese Investors in the E&P and gas market BRASIL 駐日ブラジル大使館 Rodolfo Saboia Director-General October 27th, 2021 Janp#2#Disclaimer 0 LOD This ANP institutional presentation is based on current and reliable information, but no representation or warranty is made as to its accurateness and completeness, and it should not be relied upon as such. All and any such responsibility and liability is expressly disclaimed. Readers are cautioned that these statements are only projections and may differ materially from actual future results or events. Forward-looking data, information, projections and opinions expressed during the presentation are subject to change without prior notice.#3An unprecedent transformation We continue to make progress in opening the O&G sector E&P Downstream Gas A completely diverse sector will emerge from Petrobras Divestment Plan. All onshore and shallow water fields are being sold, as well as some great offshore post-salt concessions. With new investments in mature fields, pre-salt fields and offshore blocks in the exploratory phase, Brazil is ready to grow production and take a leading position in the sector. Half of the Brazilian refining capacity (REFAP • RNEST REPAR⚫ RLAM LUBNOR REGAP • REMAN • SIX) is being sold by Petrobras, paving the way for competitive and refining and fuel market for the first time ever. a open ANP is taking measures to deal with the transition to this new environment and to bring competitiveness to the distribution sector. First-ever effective opening in the natural gas market with Petrobras leaving the transport and distribution sectors. A new legal framework has just been put in place for the gas market (Law 14,134/2021 and Decree 10,712/2021) and a strong regulatory agenda is underway to create opportunities for suppliers, free consumers and distributors. An open season calendar is set for this year. anp#4Even at challenging times, Brazil's O&G Industry has responded with remarkable resilience 2020 5% of production growth 3,558 3,742 3,774 3,291 and exports record Pre-salt high performance Exports of oil and fuel oil with low sulfur content 1,123 1,172 1,367 1,373 2021 Slightly growth of O&G production and exports Potential new records anp கு 2nd Cycle of Open Acreage Performed in December: 18 areas sold $ Assets Acquisition 50 M&As approved by ANP COVID 19 Flexible emergency measures - supportive approach by ANP 2018 2019 2020 2021* ■Crude Oil Exports (kbbl/d) O&G Production (kboe/d) *Up to Sep 2021 А $ 2 Bidding Rounds 5 areas sold in the 17th Round TOR BID scheduled to Dec 2021 1,068 areas available in the Open Acreage Assets Acquisition increased ~50 M&As approved by ANP only up to July 2021 Returning to business-as-usual, but continued flexibility available where COVID 19 required#5Brazil is taking a leading role in the E&P sector 2021 Forecast Production: 8th Crude Oil and Condensate producer (BP Statistical Review 2021) 3M Bpd of oil production (Sep 2021) 86 E&P company groups, ~50% foreign (Oct 2021) 133M M of gas production (Sep 2021) Potential to reach more than 5 million oil bpd in 2030 (EPE) Potential to be the Reserves: 12B Bbl in proved oil reserves (Dec 2020) 337B M in proved gas reserves (Dec 2020) 5th Largest crude oil exporter in 2030 (EPE) anp#6E&P at a glance anp Pre-Salt One of the best plays in the world and the most competitive deepwater assets. 74% of production 130 producer wells 21,886 Average well production (boe/d) 26B 50M Barrels equivalent of O&G produced to date Billion dollars E&P Investments Forecast 2021-2025 5 Billion dollars Decommissioning Costs 2021-2025 Prod: 2,845,213 boe/d Post-Salt Green and brownfields, deep and shallow waters. 20% of production 332 producer wells Prod: 758,366 boe/d Onshore 2,284 Average well production (boe/d) Mature basins and new frontier basins (gas prone). 375 Fields under development or production 249 Exploratory Blocks 30,000+ Wells drilled 19,000+ Km of O&G pipelines Investments Forecast by Origin Asian Others Companies 1% 4% European Companies 16% 6% 5,779 of production producer wells Prod: 236,111 boe/d 41 Average well production (boe/d) *Sep 2021 400+ Production Installations Brazilian Companies 79%#7E&P strategic goals RIGHT ASSETS IN THE RIGHT HANDS Petrobras Divestment Plan plays key role in this goal. Support small and medium producers market INCREASE THE RECOVERY FACTOR Brazil's Current RF: 10% This represents an enormous opportunity in the mature fields. Need to reduce OPEX and decommissioning costs INCREASE EXPLORATORY ACTIVITIES The COVID-19 pandemic accelerated energy transition discussions and reinforced the sense of urgency in exploring our resources MAKE VIABLE THE MARGINAL DISCOVERIES There are many marginal discoveries in the different environments that could be developed if we address the correct incentives to make them viable We need to keep increasing above ground competitiveness in order to achieve our main goals anp#8Brazil is poised to be one of the key sources of growth over the medium term, but still need to keep taking measures for the long term Medium Term Long Term anp Production Oil (Mbpd) Gas (Mm³/d) 137 17 offshore production units are scheduled to start operation until 2025 +45% 276 3.65 +26% 3 174 5.3 The long-term production scenario depends on the exploration results of the contracted blocks and on the fiscal attractiveness of these discoveries. Also, is very relayed on new investments in exploration. Considering the energy transition, we have the last opportunity to contribute to this scenario, by increasing upstream competitiveness. Not only the pre-salt will be important to the long-term production, but also the new frontier basins, like the equatorial margin basins, SEAL basin etc. August/2021 2025 2030 (EPE) 2050 (net zero)#9Offshore Projects to start operation until 2025 10 new FPSOs to develop the pre-salt and 7 new production units to revitalize and develop the post-salt 2022 2023 2024 2025 Marlim 1 Búzios 6 Búzios 7 Mero 1 Marlim 2 Mero 3 Mero 4 Búzios 5 Peregrino (Phase 2) Itapu - IPB – Parque Búzios 8 das Baleias Mero 2 Neon Atlanta FDS Enchova & Pampo Bacalhau *Operated by non-Petrobras companies Brazil is home to most of the offshore projects under development in the world anp#10Offshore Highlights & Opportunities anp PRE- SALT Giant oil reserves with lower costs and emission rates. One well can produce more than 50,000 bpd of oil 7-BUZ-10 Well (July/21) Oil (bpd) Gas (km³/d) 55,064 1,874 51,121 2,119 7-BUZ-31D IHS yet to be found resources estimates in the pre- salt: more than 50Bboe IHS Markit YTF resource estimates Basin name Sergipe-Alagoas Espirito Santo Campos Santos Play name (1) Deepwater cretaceous Total (billion boe) 6.92 Pre-salt Post-salt (2) 1.60 1.26 Pre-salt 18.00 Post-salt (2) Pre-salt 1.78 36.01 Note: (1) Estimated in 4th quarter of 2019; (2) Estimated in 1st quarter of 2020. Source: IHS Markit ©2021 IHS Markit POST- SALT All shallow water fields being divested, as well as some of the deepwater assets. Independents, specialized in mature fields jumping into these opportunities. New operators are working on reducing OPEX and decommissioning costs, revitalizing production facilities and implementing IOR opportunities to leverage existing underutilized facilities Investment commitment of more than 1.5 billion dollars in the new Development Plans presented for shallow water assets of Trident, Perenco and BW. CAMPOS BASIN: home to most opportunities of improving RF Since the first discover in 1974 (Garoupa Field), we have produced only 16% of the volume in place and we estimate 22% of RF. Each 1% more in Campos Basin RF representes almost 1 Bboe of new oil. 93.786 14.892 6.011 Campos ■Volume in Place (Mboe) Produced to date (Mboe) Total Reserves (Mboe)#11Also, a new onshore market is being set up A new onshore market with small and medium companies is being established with Petrobras Divestment Plan, supported by foreign and national investors anp Onshore E&P Groups in Brazil energizzi petroborn Petro ONTE 37 == Lerosas Newo EAGLE OIL & GAS CO 13R EnP PLA ENERGY Parana Petroleum Karavan OIL Potiguar E&P Slim DRILLING Brasil Refino 33% 55 2016 2021 Recovery Factor in Brazil Produced 20% Total Reserves 6% Key Messages All onshore fields are being sold by Petrobras The numbers of E&P groups acting in onshore activities increased more than 30% since 2016 New operators are increasing production Huge investment opportunities in mature fields (IOR/EOR). 1% more in the onshore RF means 200Mboe Remaining Volume 74%#12Ongoing measures to attract investments $ anp KEEP OFFERING AREAS 2nd TOR Surplus Open Acreage + Ongoing Petrobras Divestment Plan ONSHORE DATA AVAILABLE FOR FREE Download: Reate.cprm.gov.br/anp Studies in progress to also public offshore data MARGINAL FIELD DEFINITION Draft under public consultation. Specific incentives should be discussed afterwards ROYALTIES REDUCTION FOR SMALL AND MEDIUM COMPANIES New ANP Resolution approved by ANP Already implemented: royalties reduction for incremental production OTHER REGULATORY MEASURES TO REDUCE ABOVE GROUND RISKS AND IMPROVE FISCAL TERMS Measures under REATE, PROMAR and BIDSIM programs, including studies to improve environmental licensing process and competitiveness of marginal discoveries Also, the new gas law was a decisive step towards a competitive gas market, with great opportunities#13anp 40°0'0"W Opportunities in the 2nd ToR Surplus Round SÉPIA Pre-salt field 157km² In Place Volume: 5.3 Bbbl oil 124 Bm³ gas Signature Bonus: R$7.138 billion Minimum Profit Share: 15,02% ATAPU Pre-salt field 229km² In Place Volume: 7.2 Bbbl oil 179 Bm³ gas Signature Bonus: R$4,002 billion Minimum Profit Share: 5,89% 25°0'0"S 24'00"S TRANSFER OF RIGHTS SURPLUS Brazil PRODUCTION SHARE 44°0'0"W TRANSFER OF RIGHTS SURPLUS Brazil PRODUCTION SHARE Auction: December 17th Rio de Janeirol 43°0'0"W RJ 42°0'0"W Compensation to Petrobras: ~US$6.45 billion 01 41°00 W Prod Sep/21 (FPSO Carioca): Oil: 44 Kbpd Gas: 1 Mm³/d Prod Sep/21 (P-70): Oil: 132 Kbpd Gas: 4.5 Mm³/d S..0.0.02 30 44°0'0"W Sepia S..0.0.EZ 24'00"S Campos Basin Atapu S..0.0.92 01 S..0.0.92 Santos Bacin 90 120 Km 43°0'0"W A 200W V 1 de 1 41190 W 40°0'0"W#14Opportunities in the Open Acreage The Open Acreage allows the market to decide when bidding rounds will take place and what areas from the stock will be offered. The 3rd cycle will start when any registered company declares interest in at least one area. The objective of the Open Acreage is to decentralize exploratory investments in the country, with opportunities being available at any time. OPEN ACREAGE Brazil OIL AND GAS CONCESSIONS 691 blocks in the 1st semester จ B 0 500 OPEN ACREAGE Brazil OIL AND GAS CONCESSIONS + 377 new blocks included on July 30th Onshore: 72 Offshore: 305 12 Basins 0 500 1.000 km 1,068 blocks already available for the 3rd cycle anp Additional 350 blocks and 11 marginal fields under study to be added in the future#15#3 Natural Gas Market#16The natural gas market in numbers Natural gas production in Brazil is mainly associated with oil produced in offshore fields Other sources include imports through pipelines from Bolivia and LNG through regasification terminals Only around 40% of the national production is consumed by the Brazilian market due to lack of demand/infrastructure and high gas prices Recently, we saw a great increase in gas demand due to the economic recovery and the worst drought in more than 90 years SUPPL 90 Million m³/d National Production DEMAND 86 Million m³/d Consumption by sector Industrial 57 % Bolivia Imports % LONDON G -----/////////22 LNG Imports --------------| 21 *1st Semester Results (Average) % Automotive Electric Generation % Cogeneratio ||||| 42 423 % Others % anp % %#17Natural gas: a big opportunity Towards an open and competitive natural gas market Offshore gas potential Onshore gas potential New gas market Huge gas potential in the pre-salt. All efforts are being made so that this gas can be monetized 4 paleozoic basins with potential for natural gas: Parnaiba, Solimões, Amazonas, Paraná basins Most of the onshore exploration in new frontier basins is to produce gas. Relevant reservoir-to-wire projects in Parnaiba and Amazonas Basins The new Gas Law (Law 14,134/2021) is a decisive step towards an open, liquid and competitive market A robust regulatory agenda is underway to build the new natural gas market, which is creating big opportunities in Brazil anp#18Open Season Calendar 郾 Annual Open Season to offer available capacity Tender and Contracts Publication October 25th 2021 Estimated Conclusion TBG NTS TAG TBG NTS TAG December 2021 2022 2022 Incremental Open Season Tender and Contracts Estimated Publication Conclusion November/2021 March/2022 December/2021 March/2022 2022 anp#19#4 Energy Transition#20The role of the O&G Industry in the pathway to net zero O&G will continue to play an important role O&G play a critical role in today's energy and economic systems (more than 50% of primary energy), being affordable, reliable and providing supplies that are necessary in the pathway to net zero. Also, the O&G industry has the skills, infrastructure and capital to help unlock net zero solutions such as CCS, low-carbon hydrogen and offshore wind. Carbon reduction is imperative in the O&G sector Regardless of the speed and the pathways of the transition, climate impacts will become more visible and severe over the coming years. Emissions reduction are not an option if the sector wants to retain its social license to operate. The competitive landscape will also be about the lower carbon footprint. O&G demand should decrease before supply Hydrocarbon demand is not falling fast enough to match the potential underinvestment in fossil fuels nowadays. Therefore, the gas, coal, and electricity crisis shows that investments in traditional sources are still needed if there is demand, like the one motivated by the rapid economic rebound from the covid recession and weather factors, and to create redundancy. anp#21Brazil has one of the cleanest energy mix in the word, but is also committed to decarbonization Janp 48.4% Renewable energy sources in the Brazilian Energy Mix Brazil (2020) Sugarcane Biomass (19.1%) B Hydro (12.6%) 13.8% Firewood and charcoal (8.9%) Others (7.7%) Brazil's National Determined Contribution in the context of Paris Agreement: targets for 2025 and 2030, compared to 2005 GHG emissions Net zero World Average Source: EPE BEN 2021 Electricity generation from renewable sources in 2020 84.8% Solar 1,70% Wind 8,80% Biomass 9,10% Hydro 65,20% 23% World Average 37% 43 % 2050 2025 2030 Emissions goals announced by the Brazilian government#22Energy Transition: Highlights in the upstream 01 Since 2009, O&G production operated by Petrobras (who operates more than 90% of the O&G production in Brazil) increased more than 40% without increasing absolute emissions. Also, Petrobras established several ESG commitments in the E&P like zero routine flaring by 2030, 32% reduction in carbon intensity and 30-50% reduction in methane emissions by 2025. Brazil has already a high produced gas utilization rate (more than 97,7% in Aug 2021). 10 Sustainability Commitments BR PETROBRAS 1. Zero growth in absolute operating emissions until 2025 2. Zero routine flaring by 2030 CLIMATE 3. -40 MM ton CO2 reinjection in CCUS (Carbon Capture, Utilization and Storage) projects 4. 32% reduction in carbon intensity in the E&P segment by 2025, reaching 15 kgCO₂e/boe WATER WASTE BIODIVERSITY SOCIAL RESPONSABILITY 5. 30%-50% reduction in methane emission intensity in the E&P segment by 2025 6. 16% reduction in carbon intensity in the refining segment by 2025, reaching 36 kgCO₂e/CWT 7. 30% reduction in freshwater capture in our operations with focus on incresing reuse by 2025 8. Zero increase in waste generation by 2025 9. 100% of Petrobras facilities with a biodiversity action plan by 2025 10. Investments in environmental and social projects *Note: Carbon commitments related to 2015 base. Other commitments based on 2018. Source: Petrobras (ESG Presentation, Oct 2020) 2 02 1,000 Ocean 2,000 3,000 Post-salt 4,000 5,000 Salt layer 6,000 7,000 Pre-salt Source: gCaptain Pre-Salt: globally competitive assets in the energy transition scenario, with low breakeven and low GHG emissions Low sulfur content High productivity Bacalhau oil discovery, to be operated by Equinor, is expected to produce about 9 kg of carbon dioxide (CO2) per barrel, against a global average of more than 17 kg per barrel. Source: Reuters anp#23Energy Transition: Highlights in the downstream Brazil is the 2nd largest producer and consumer of biofuels. 30% of the vehicle matrix is fueled by renewables and 70% to 80% of our automobiles are flex-fuel CNG Gasoline A 22,22% COMBUSTÍVEL DO FUTURO Main Government Programs Renovabio: in 2020, more than 14 million tons of greenhouse gas emissions were avoided. Fuel of the Future: incentives to the large-scale use of 2nd generation ethanol; R&D to encourage fuel-cell technology; creation of green corridors to supply heavy vehicles powered by biomethane; introduction of BioJet Fuel; BioCCS etc Vehicle Diesel A 43,22% 4,37% Matrix 2020 Hydrated Ethanol 16,36% Biodiesel 5,61% Anhydrous ethanol 8,22% m Refineries: investments on increase energy efficiency, reduce emissions, increase water reuse and generate lower sulfur products or products with renewable content Janp#24Brazil has huge and diverse potential for renewables Brazil is currently among the five most attractive emerging markets for investments in renewable energy. (https://global-climatescope.org/) Oil majors are also betting on the Brazilian renewables market. We believe they will integrate their portfolio with cleaner energy projects, while capitalizing on synergies and tapping the huge potential in Brazil for renewable energy projects. Biofuels Brazil has large experience in producing biofuels and benefits from a longstanding well-established industry. Shell (Raízen) and BP (BP Bunge Bioenergia) are betting high in this market. Biogas/ Biomethane Biogas has every condition to achieve greater participation in the Brazilian energy matrix. The sugarcane industry represents a large opportunity for biogas generation. One example is the Raízen Geo Biogas plant. ◆ Hydrogen Solar Wind National Hydrogen Program has been established recently. Possible investments in green hydrogen announced so far in Ceará, Pernambuco and RJ States are only from companies in the renewable energy sectors. Solar and Wind energies represent a good proportion of our energy matrix. Total operates three solar plants and is developing new wind projects through its affiliate Total Eren. Also, the first solar plant in Equinor's global portfolio is located at Ceará State (Apodi solar power plant). Brazil enjoys great potential for offshore wind plants. Brazil's shallow waters alone hold potential for 700GW of offshore wind generation. Equinor plans to install 4GW of offshore wind energy in Rio and Espírito Santo States. anp#25#5 Final Remarks#26Brazil is a country of great opportunities Our Strengths Sanctity of Contract Geological potential Pre-salt: world-class assets with low carbon intensity Huge opportunities in onshore and post-salt offshore mature fields (Petrobras divestment plan) Past and future bidding rounds (including open acreage) Market Opening (New Gas Law etc) Great Potential for renewables anp#27どうもありがとうございます anp National Agency of Petroleum, Natural Gas and Biofuels anp http://rodadas.anp.gov.br/pt/ www.gov.br/anp/pt-br Av. Rio Branco 65, 21st floor - Rio de Janeiro - Brazil Phone: +55 21 2112-8100