Financing the Brazilian O&G Supply Chain BNDES: Current Status and Future Perpectives

1. Financing the Brazilian O&G Supply Chain BNDES: Current Status and Future Perpectives Ricardo Cunha da Costa May / 2013

2. Agenda BNDES – Brazilian Development Bank. BNDES and the Oil & Gas Sector. BNDES P&G Program. Inova Petro. 2

3. BNDES Brazilian Development Bank

4. BNDES Highlights • Fully state-owned company under private law. • Key instrument for implementation of public policies. • Provides long-term financing (the main provider) directly or by accredited financial agents. • Provides equity investment directly or by private equity funds. • Emphasis on financing investment projects (CAPEX), but also supports exports, environmental and social projects.

5. Annual Disbursements Converted to US dollar on the disbursement dates Average growth of 22% in disbursements during the 2008 – 2012 period

6. BNDES vs. Multilateral Banks IDB = Inter-American Development Bank IBRD = The International Bank for Reconstruction and Development (World Bank) (*) Unlike other institutions, 12-month fiscal year ends June 30th CAF = Corporación Andina de Fomento CDB = China Development Bank Capitalization = Shareholders’ Equity / Total Assets ROA = Return On average Assets ROE = Return On average Equity

7. BNDES and the Oil & Gas Sector

8. Financed Projects • Gas Platform Mexilhão e Manati • Refinery REFAP

9. Financed Projects • Gas Pipeline Urucu-Manaus e Gasene • Gas Utilities CEG, Comgás, Gasmig e GNSP-Sul • LPG Distribution Liquigás

10. Financed Projects - OSVs • 84 PSV – Platform Supply Vessel • 19 AHTS – Anchor, Handling, Tug and Supply • 3 OSRV – Oil Spill Response Vessel (OSRV) • 2 PLSV – Pipe Laying Support Vessel • 2 RSV-ROV – Remotely Operated Vehicle Support Vessel

11. Financed Projects - Tankers and Shipyards • Transpetro - Promef I (2007) • 23 Tankers - 10 Suezmax; 5 Aframax; 4 Panamax and 4 Product Ships. • Transpetro - Promef II (2010) • 7 Tankers - 4 Suezmax and 3 Aframax. • SHIPYARDS • Navship (SC) • Aker Promar (RJ) • Aliança (RJ) • Atlântico Sul (PE) • Wilson, Sons (SP and RS) • OSX Shipyard (RJ)

12. The 2010s: O&G demand creates new challenges to the shipbuilding sector. Petrobras Business Plan – production target requires numerous critical resources. E&P local content commitements induce the construction in Brazil. BNDES can support the local content of projects, offering long term loans. Shipbuilding Sector: New Challenges Drillships FPSOs Complex OSVs

13. 8 FPSOs (“Replicants”): Santos Basin Operation starts in 2015 P-58 and P-62: Campos Basin Operation starts in 2013 4 FPSOs (Transfer of Rights): Santos Basin (pre-salt) Operation starts in 2015 Petrobras contracted 14 FPSOs to be built in Brazilian shipyards. Global local content: from 65% up to 75.5%. Perspectives: FPSOs

14. Perspectives: Drillships • Petrobras hired 28 new drill ships to be built in Brazilian shipyards. • Deliveries must occur between 2015-2020.

15. BNDES P&G Program

16. BNDES P&G Highlights • To increase RD&I activities; • To promote local content; • To increase supplier domestic production; • To reduce production bottlenecks. Goals • To facilitate access to the credit and provide more favorable conditions; • To increase credit exposition, accepting contracts as collaterals; • Lower financing cost. SME’s (Revenues up to R$ 90 millions – US$ 52 MM) Win-win relationship • Better relationship between Umbrella Company and its suppliers; • Cooperative environment; • Promotion of clusters. Umbrella Company

17. Installation, expansion, rehabilitation and/or modernization of production capacity; • Increase of goods and services supply capacity; • Including Training, technology transfer, certification, etc. Capex • Only for Brazilian Equity Control Companies • M&A and Internationalization looking for new technologies; • Strategic partnerships for developing local O&G sector; • Equity (preferable) or Loan may be considered. M&A and Internationalization • Financing cash flow of goods and services suppliers; • Goods and services contracts are taken as collaterals from the company. Working Capital • Supporting innovation on O&G supply chain; • Financing condition according BNDES rules. Innovation e Technological Development A Program aiming the local industries needs (Direct and Indirect Operation Mode) (Direct operation mode only) (Direct and Indirect Operation Mode) (Direct operation mode only)

18. INOVA PETRO

19. BUDGET, DURATION AND SUPPORT INSTRUMENTS O INOVA PETRO is a joint initiativeBNDES, FINEP and PETROBRAS. Budget: R$ 3.0 billions Duration: 2012-2017 (periodic public calls). Integration of the instruments of support to the innovation: • Debt. • Equity (Shareholding). • Grants for University-Company. • Grants for Companies. • Technical Support.

20. Thematic Lines The Program support the Oil and Gas Offshore Upstream: Top Side equipments + Subsea systems + Down-Hole. • Line 1 – Development of new technologies of primary processing of oil and gas in top side equipments. • Line 2 – Development of new technologies to be applied in subsea systems. • Line 3 – Development of new technologies applicable in systems and installation of wells (Down-Hole).

21. THANK YOU Ricardo Cunha da Costa www.bndes.gov.br/english