#1The E&P sector in Brazil BRAZIL 2021 VIRTUAL TECHNICAL SYMPOSIUM Optimizing Exploration and Development Opportunities in Brazil's New Regulatory Scenario 22-23J2021 ABGP AAPG Asenneing the Pion of Fedmdeum Georxiansez™ Rodolfo Saboia Director-General June 22nd, 2021 Janp#2COD A 40 #Disclaimer 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, development of pre-salt fields, offshore blocks in the exploratory phase, and a calendar of new auctions, Brazil is ready to grow production and take leading position in the sector. a . . Half of the Brazilian refining capacity (REFAP •RNEST • REPAR RLAM LUBNOR REGAP REMAN SIX) is being sold by Petrobras, paving the way for a competitive and open refining and fuel market for the first time ever. ANP is taking measures to deal with the transition to this new environment and to competitiveness distribution sector. to bring the 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 and free consumers and distributors. An open season calendar is set for this year. anp#4Resilience in 2020 and ready for recovery Well positioned for growth Janp Emergency flexibilization measures Safety and health concerns - specific monitoring activity 5% of Production growth Gas: 127 Mm³/d Oil: 2.94 Mbpd Pre-salt high performance $ Export records Oil: 1.37 Mbpd Oil and fuel oil with low sulfur content Assets acquisition 50 M&As Upstream deals approved by ANP 18 areas sold in the 2nd Cycle of Open Offer More than 15 Offshore Right assets in the right Prod. Units expected to start operation until 2025 IEA (Oil 2021): "Brazil is poised to be one of the key sources of growth over the medium term" hands Ongoing huge Petrobras divestment plan: new investors in Brazil + Measures to increase competitiveness COVID 19#5Brazil is taking a leading role in the E&P sector 2021 Forecast 10th Crude Oil producer (BP Statistical Review 2020) Production: Reserves: 3M Bpd of oil production (April 2021) 12B Bbl in proved oil reserves (Dec 2020) 93 E&P company groups, 50% foreign (May 2021) 131M M³ of gas production (April 2021) 337B M³ in proved gas reserves (Dec 2020) Potential to reach more than 5 million oil bpd in 2030 (EPE) Potential to be the 5th Largest crude oil exporter in 2030 (EPE) 50 Billion dollars (Investments Forecast 2021 - 2025) anp#6E&P history in Brazil From a monopoly towards an open market 1953 1997 2010 Production Sharing Law Transfer of Rights Surplus Law Petrobras: 93% of production in Brazil Sharp reduction in onshore and post-salt offshore activities. Petrobras focus on the pre-salt 2021 Petrobras: 73% of Brazilian production 2008 Petrobras monopoly Petroleum Law Auction break 1st oil in pre-salt 1999-2008 10 Concession Rounds - new E&P companies in Brazil 2013 2015 2019 Rounds return Start of sharp drop in exploratory well drilling and in the number of new discoveries Oil price collapse and investment reduction Repositioning of Petrobras - first sales of the divestment plan 2016 Start of measures to resume activities at E&P 2017 New E&P Policies Rounds acceleration anp#7Many measures have already been taken to encourage E&P activities 2017 2019 2018 2016 No longer mandatory for Petrobras to be the sole operator in the pre-salt (Law 13,365/2016) A bidding rour (CNPE Resolutio New Local Con (CNPE Resoluti New E&P (CNPE Resolut E&P history in Brazil Froma maneply towarck an open maskel 1953 1997 e Petrobras monopoly Petroleum Law anp 2010 Production Sharing Law Transfer of Rights Surplus Law Petrobras: 93% of production in Brazil Sharp reduction in onshore and post-salt offshore activities. Petrobras focus on the pre-salt 2021 Petrobras: 73% of Brazilian production /2018) A new type of auction: Open Acreage Unlocking the Transfer of 2008 e Auction break 1 oil in pre-salt 1999-2008 10 Concession Rounds-new E&P companies in Brazil Exploratory Phase Extension for 11th and 12th Rounds (ANP Resolution n° 708/2017) REPETRO Extension (Law 13,586/2017) 2013 • Rounds returni Start of sharp drop in exploratory well drilling end in the number of new discoveries 2015 Oil price collapse and investment reduction 2019 Repositioning of Petrobras - first sales of the divestment plan 2016 Start of measures to resume activities at E&P 2017 New E&P Policies Rounds acceleration ntent the ion /2018) RBL and M&A made easier (ANP Resolution n° 785/2019) Mandatory investment or M&A in onshore and shallow water fields; deadline for Petrobras divestment (RD n° 568/2018) Rights Auction 2020 Regulation of decommissioning (ANP Resolution n° 817/2020) ANP Resolutions: Flexibility as a result of the pandemic 12 Bidding Rounds (from 2017 to 2020)#8And the results came, mainly in the pre-salt area... That will support E&P activities in the future 27°0'0"S 24°0'0"S 21°0'0"S 45°0'0"W 2016 Rio de Janeiro 42°0'0"W Vitória akm 0 40 80 160 240 320 39°0'0"W 27°0'0"S 24°0'0"S 21°0'0"S 45°0'0"W L 2021 Rio de Janeiro 42°0'0"W 39°0'0"W Vitória D TOTAL Growth in the number of E&P contracts for selected majors ExonMobi 35 ExxonMobil 30 25 ExonMobil 20 akm 0 40 80 160 240 320 15 10 5 2016 2020 قل للبزول Qatar Petrolum Chevron bp Te TotalEnergies 0 ExxonMobil Shell Brasil Brasil Equinor QPI Chevron Total E&P do Brasil BP Energy New companies stepping into the offshore: MURPHY The auctions held since 2017 have awarded 90,000 km² and yielded R$ 112 billion in signature bonuses OIL CORPORATION wintershall dea anp#9Also, 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 (highlight for 2 IPOs). All onshore fields are being sold by Petrobras - huge investment opportunities in mature fields Onshore E&P Companies in Brazil 50 39% 82 Onshore E&P Corporate Groups in Brazil 55 37 33% 2016 2021 2016 2021 energizzi ENERGIAS DO BRASIL VA petroburn PETRO VICTORY ENERGY Petro LérosPetróleo&Gás == EAGLE OIL & GAS CO. ÓLEO E GÁS SA ONTE EnP ENERGY PLATFORM Newo Growth in the number of companies operating onshore ENERGY Paranã Karavan OIL Brasil Refino bgn 3R Petroleum Redevelopment of oil & gas fields Potiguar E&P Slim DRILLING anp#1018 16 14 12 10 8642086420 The exploratory environment is increasingly diverse 234 exploratory blocks, 70% operated by non-Petrobras companies 173 thousand km² in exploratory areas: 61% offshore Onshore Operator Exploratory blocks Active blocks Petrobras 3 3 Others 87 69 Total 90 72 Onshore active blocks by operator Eneva Geopark Brasil Imetame Petroil TOG Brasil Petro-Victory Cowan Petróleo e Gás Petrobras Recôncavo Energia Rosneft Alvopetro BGM Great Energy Maha Energy Phoenix Óleo & Gás Vipetro Guindastes Brasil SHB 97% of onshore blocks operated by independent companies 50 45 40 35 30 25 20 15 10 5 0 Shell Brasil Petrobras ExxonMobil Brasil Offshore Operator Petrobras Others Total Exploratory blocks Active blocks 68 47 76 60 144 107 Offshore active blocks by operator BP Energy Repsol Chariot Brasil Wintershall Brasil Chevron Brasil Óleo Brasoil Manati OP Energia Petronas Total E&P do Brasil 3R Petroleum CNOOC Petroleum Equinor Energy Karoon Petro Rio Jaguar Premier Oil Brasil anp#11Natural gas: a big opportunity Offshore gas potential Onshore gas potential New gas market Relevant gas potential in the pre-salt. Natural gas production in Brazil should reach 276 million m3/day in 2030 (EPE) 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#12We need to increase exploration in Brazil The COVID-19 pandemic impacted exploratory activities in Brazil, accelerated energy transition discussions and reinforced the sense of urgency in exploring our resources Bucaramanga VENEZUELA in Bogota OLOMBIA Georgetown Paramaribo Cayenn GUYANA SURINAME FRENCH GUIANA 0000 01 70 Only 5% of the sedimentary area is contracted and just 30 thousand wells have been drilled to date Manaus 02 03 Net zero scenarios imply a drastic drop in oil demand. As less capital will be available for investments in O&G the least competitive countries will quickly be highly impacted Brazil has seen a sharp decrease in exploration activities in offshore new frontiers. Focus is basically on the pre-salt due to its high potential and smaller carbon footprint Brazil has a fantastic geological potential still unexplored with great opportunities Valparaiso Mendoza Santiago BOLIVIA Cochabamba Sucre San Miguel de Tucumán Cordoba PARAGUAY Asunción BRAZIL Belém São Luis Brasilia Goiania 日 Fataleza Teresina Salvador ☐ Belo Horizonte Campo Grande Vita Rosario URUGUAY Rio de Campinas Janeiro Sao Paulo Santos Curitiba Florianópolis Porto Alegre Natal Recife B Maceió anp#13A print screen of exploratory activities and results 250 Exploratory Wells Drilled 200 150 100 50 30 16 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 Declarations of Commerciality 35 30 25 Onshore Offshore 20 15 10 1999 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2021 forecast: 45 wells in exploratory blocks (26 onshore/19 offshore) and investments of R$ 6.5 billion anp#14Measures to increase exploration activities 1 2 3 A Д KEEP OFFERING AREAS ONSHORE DATA FOR FREE அil BidSIM Open Acreage and 2 auctions planned for this year. Petrobras Divestment Plan in progress also encourages new companies to enter the market and seek new areas Available on the internet (well data, seismic post-stack, non- seismic data and other studies) Download: Reate.cprm.gov.br/anp Governmental program to improve environmental licensing and fiscal regime IMPROVEMENT OF THE REGULATORY ENVIRONMENT Red tape reduction, rules simplification, new Gas Law etc. anp#15Brazil has great opportunities in 2021 auctions ROUND Brazil 17 92 blocks on offer OIL AND GAS CONCESSIONS 1 TRANSFER OF RIGHTS SURPLUS Brazil PRODUCTION SHARE Atapu and Sépia 44°00'W (pre-salt fields) TRANSFER OF RIGHTS SURPLUS Brazil PRODUCTION SHARE 4300 W RJ SPOT-AUP2 SPOT-AP2 12b bbl (OOIP) Atapu Prod: 91k boe/d in May 2021 Sépia: first oil expected this year Campos, Pelotas, Potiguar and Santos Basins Pre-salt opportunities beyond 200 nautical miles with 3D seismic recently acquired October 7th SS-AP4 SP-AR1 SP-AP1 SC-AP3 ✓ SC-AP1 SS-AUP5 SS-AUP4 SP-AUP1 SC-AUP2 0 300 600 2 42°00 W 41100 W 4000 W Sepia Sanine Bacia 4400W 43°00 W Atapu Campos Basin Technical and economical parameters approved by CNPE December 17th 4000W anp#1630°0'0"S 15°0'0"S ..0.0.0 Opportunities in the Open Acreage The Open Acreage allows the market to decide when bidding rounds will take place and what areas will be offered In addition to the 691 blocks already available 377 new blocks will be added to the menu 75°0'0"W OPEN ACREAGE Brazil OIL AND GAS CONCESSIONS 3rd cycle: 691 blocks available Onshore: 448 Offshore: 243 75°0'0"W 60°0'0"W 60°0'0"W 45°0'0"W 45°0'0"W 30°0'0"W 75°0'0"W N On offer: 691 blocks OPEN ACREAGE Brazil OIL AND GAS CONCESSIONS 500 1.000 km 30°0'0"W 30°0'0"S 15°0'0"S ..0.0.0 30°0'0'S 15°0'0"S ייסיסיס 377 blocks approved to be added Onshore: 72 Offshore: 305 60°0'0"W 45°0'0"W 30°0'0"W On study: 727 blocks 500 1.000 1.500 km The 3rd cycle will start when any company declare interest in at least one area anp#17The Production Phase 437 fields, of which 133 offshore and 304 onshore 264 fields produced in April 2021 O 2021: Production Maintenance Forecast 2025: Production growth sustained by the first oil of at least 15 new production units, mostly in the pre-salt Investment Forecast 2021-2025: BRL 262 billion Decommisioning opportunities: BRL 28 billion until 2025 Huge transformation with new operators jumping in mature fields already in production due to the Petrobras Divestment Plan. For instance (on shallow water): TE TRIDENT ENERGY PEREN CO anp#18Three environments in production 73% of total production 122 wells Pre-Salt 22,636 boe/d One of the best plays in the world. Some wells produce more than 50,000 boe/d 3.000.000 Average well production 2.500.000 Post-Salt Offshore 2.000.000 22% of total production Post- Salt Offshore 343 wells 2,443 boe/d Average well production Offshore beyond the pre-salt; new frontiers and mature fields boe/d 1.500.000 1.000.000 ww 5% of total production 5,947 wells Onshore 33 boe/d Mature and New Frontier Basins Average well production 500.000 jan/00 abr/01 Onshore jul/02 out/03 jan/05 abr/06 jul/07 out/08 jan/10 abr/11 jul/12 out/13 jan/15 abr/16 jul/17 out/18 jan/20 abr/21 Pre-salt prioritization accelerated the decline in onshore and pos-salt offshore production Pre-Salt anp#19E&P strategic goals Strategic goals for the three environments Accelerate the pre-salt exploration and development Pre-Salt Onshore REATE 2020 Increase mature fields RF and fasten exploratory activities in the new frontier basins Pos-Salt Offshore Brazil Revitalize the onshore, increase the mature fields RF, support small and medium producers, intensify exploratory activities, quantify the oil potential Attract the right players for each environment (assets in right hands) anp#20What we have already produced and our potential Brazil has produced only 10% of the volumes discovered in fields World average RF: 35% Brazil Remaining Volume 80% Produced 10% FR=20% Total Reserves 10% Onshore Brazil Campos Basin Onshore 1% more in the 2.4Bboe 1Bboe 200Mboe RF Produced 20% Total Remaining Volume 74% FR=26% Reserves 6% Increasing the RF is an energy policy goal and must be pursued by all agents as per best practices anp Source: Annual Reserves Bulletin 12/31/2020 (Oil and Gas)#21Ongoing measures to attract investment to fields in production A anp 1 2 3 அil OPEN ACREAGE AND PETROBRAS DIVESTMENT PLAN ROYALTIES REDUCTION FOR SMALL AND MEDIUM COMPANIES MARGINAL FIELD DEFINITION OTHERS REGULATORY MEASURES Petrobras Divestment Plan in progress: new companies in the onshore and post-salt offshore New ANP Resolution to be approved by July 2021 Draft in preparation. Expected public consultation in July 2021. Specific incentives should be discussed afterwards Access to essential infrastructure, measures under Reate, Promar and BidSIM programs, contract extension, royalty reduction on incremental production, etc.#22Final Remarks: E&P Business Environment in Brazil Our Strengths Brazil has never breached an E&P contract Geological potential Pre-salt: world-class low carbon intensity assets Past and future bidding rounds (including open acreage) Market opening (Petrobras Divestment Plan) What we need to improve Country risk Environmental licensing in new frontier basins Regressive tax regime Red tape and the pace of reforms Opportunities In the short term: oil prices trending up Last window of opportunity to explore less competitive assets Threats Global competition (Middle East, shale oil/gas, Guyana/Suriname, Africa, countries with more progressive tax regimes etc) Companies becoming more selective as there is less capital available for investment in E&P Energy transition will lower demand for oil and gas anp#23anp National Agency of Petroleum, Natural Gas and Biofuels 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 anp