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Introduction Vision 2015 Petrobras will be an integrated energy company with a strong Annual Report international presence and leader in Latin America, operating with its focus on profi tability and on social and environmental responsibility. Introduction Transparency is key to the disclosure of information on Petrobras to all its stakeholders. This principle is integral to the best practices of corporate governance adopted by Petrobras and underlies the content of this Annual Report, the objective Annual Report being to provide shareholders, clients, employees, government and society with a comprehensive knowledge of the businesses. Additional information can be found in the web site www.petrobras.com.br www.petrobras.com.br Areas of operation Petrobras in Brazil and in the World Venezuela UUnitednited KKingdomingdom Colombia BELA VISTA MACAPÁ NNetherlandsetherlands JJapanapan REMAN BELÉM CChinahina Ecuador MANAUS FORTALEZA IIranran SÃO LUÍS Mucuripe NNewew YYorkork Coari LUBNOR Guamaré NATAL UUSASA - HHoustonouston TEREZINA Dunas JOÃO PESSOA Cabedelo PORTO RECIFE RIO BRANCO Suape MMexicoexico Siingaporengapore VELHO PALMAS MACEIÓ Brazil Candeias NNigeriaigeria ARACAJU RLAM VVenezuelaenezuela Peru DTBAS SALVADOR Credits Brasília t CUIABÁ CColombiaolombia TTanzaniaanzania La Paz Jequié Itabuna AAngolangola Sen. Canedo Preparation, Editing and General Coordination: Cochabamba GOIÂNIA Gualberto EEcuadorcuador Villarroel Santa Cruz BBrazilrazil Investor Relations and Institutional Communication de la Sierrra Guillermo BELO HORIZONTE Elder Bell Bolivia Uberlândia Betim PPerueru Corumbá HHeadead OOffiffi ccee Revision of Content: Uberaba REGAP CAMPO GRANDE Ribeirão VITÓRIA Refi nor The Global Consulting Group / Global RI Campinas Preto BBoliviaolivia Campos RECAP PParaguaaraguay REVAP REDUC Paraguay SÃO PAULO RIO DE JANEIRO Graphic Project: REPLAN São Sebastião REPAR RPBC CorpGroup CChilehile AArgentinargentina CURITIBA Paranaguá UUrurugguauay São Francisco do Sul (DTSUL) FLORIANÓPOLIS Photographs: Criciúma REFAP Bruno Veiga, Claudia Martins, Cris Isidoro, Fábio Corrêa, Uruguaiana COPESUL Tramandaí Capital Exploration and Production Felipe Goifman, Geraldo Falcão, Giovani Sérgio, José Caldas, Argentina Alegrete PORTO ALEGRE Juarez Cavalcanti, J. Valpereiro, Maurício Simonetti, Rogério Reis, Uruguay Terminal de Rio Grande Existing gas pipelines Trading Walter Firmo e Banco de Imagens Petrobras. Montevideo Refi nery Refi ning Graphic Design: Buenos Aires CorpGroup - Alexandre Dian Terminal Distribution Bahía Blanca Printing: Ricardo Eliçabe Fertilizer plant Merchandizing of lubricants Gráfi ca Santa Marta Representation Paper: This report was printed on Reciclato paper. Cover Photograph: Castor Oil Plant Leaf – Petrobras Images Bank The Castor Oil Biodiesel Pilot Plant in Guamaré (RN) has a capacity to produce 5,000 liters/day on a continuous basis as from 2005. With technology developed by Petrobras, Brazil is the only country able to extract biodiesel from the castor oil seed. Cover Photograph of the Financial Statements: Petrobras Images Bank - LNG / Liquefied Natural Gas Areas of operation Petrobras in Brazil and in the World Venezuela UUnitednited KKingdomingdom Colombia BELA VISTA MACAPÁ NNetherlandsetherlands JJapanapan REMAN BELÉM CChinahina Ecuador MANAUS FORTALEZA IIranran SÃO LUÍS Mucuripe NNewew YYorkork Coari LUBNOR Guamaré NATAL UUSASA - HHoustonouston TEREZINA Dunas JOÃO PESSOA Cabedelo PORTO RECIFE RIO BRANCO Suape MMexicoexico Siingaporengapore VELHO PALMAS MACEIÓ Brazil Candeias NNigeriaigeria ARACAJU RLAM VVenezuelaenezuela Peru DTBAS SALVADOR Credits Brasília t CUIABÁ CColombiaolombia TTanzaniaanzania La Paz Jequié Itabuna AAngolangola Sen. Canedo Preparation, Editing and General Coordination: Cochabamba GOIÂNIA Gualberto EEcuadorcuador Villarroel Santa Cruz BBrazilrazil Investor Relations and Institutional Communication de la Sierrra Guillermo BELO HORIZONTE Elder Bell Bolivia Uberlândia Betim PPerueru Corumbá HHeadead OOffiffi ccee Revision of Content: Uberaba REGAP CAMPO GRANDE Ribeirão VITÓRIA Refi nor The Global Consulting Group / Global RI Campinas Preto BBoliviaolivia Campos RECAP PParaguaaraguay REVAP REDUC Paraguay SÃO PAULO RIO DE JANEIRO Graphic Project: REPLAN São Sebastião REPAR RPBC CorpGroup CChilehile AArgentinargentina CURITIBA Paranaguá UUrurugguauay São Francisco do Sul (DTSUL) FLORIANÓPOLIS Photographs: Criciúma REFAP Bruno Veiga, Claudia Martins, Cris Isidoro, Fábio Corrêa, Uruguaiana COPESUL Tramandaí Capital Exploration and Production Felipe Goifman, Geraldo Falcão, Giovani Sérgio, José Caldas, Argentina Alegrete PORTO ALEGRE Juarez Cavalcanti, J. Valpereiro, Maurício Simonetti, Rogério Reis, Uruguay Terminal de Rio Grande Existing gas pipelines Trading Walter Firmo e Banco de Imagens Petrobras. Montevideo Refi nery Refi ning Graphic Design: Buenos Aires CorpGroup - Alexandre Dian Terminal Distribution Bahía Blanca Printing: Ricardo Eliçabe Fertilizer plant Merchandizing of lubricants Gráfi ca Santa Marta Representation Paper: This report was printed on Reciclato paper. Cover Photograph: Castor Oil Plant Leaf – Petrobras Images Bank The Castor Oil Biodiesel Pilot Plant in Guamaré (RN) has a capacity to produce 5,000 liters/day on a continuous basis as from 2005. With technology developed by Petrobras, Brazil is the only country able to extract biodiesel from the castor oil seed. Cover Photograph of the Financial Statements: Petrobras Images Bank - LNG / Liquefied Natural Gas Vision 2015 Petrobras will be an integrated energy company with a strong Annual Report international presence and leader in Latin America, operating with its focus on profi tability and on social and environmental responsibility. Introduction Transparency is key to the disclosure of information on Petrobras to all its stakeholders. This principle is integral to the best practices of corporate governance adopted by Petrobras and underlies the content of this Annual Report, the objective Annual Report being to provide shareholders, clients, employees, government and society with a comprehensive knowledge of the businesses. Additional information can be found in the web site www.petrobras.com.br www.petrobras.com.br Annual Report Contents Our energy Profi le 02 Highlights 04 Message from the President 10 Tendencies in the oil and natural gas market 14 Strategy 18 Our businesses Exploration and Production in Brazil 24 Refi ning, Commercialization, Petrochemicals and Transportation 30 Distribution 38 Natural Gas 42 Electric Energy 50 International 54 Our company Business performance 64 Risk Management 67 Capital markets 72 Intangible Assets 76 Social and environmental responsibility 88 Corporate governance 106 Glossary 116 Corporate information 126 2 Annual Report 2004 Petrobras Profile ................................................................................................... Highlights ............................................................................................. Message from the President ................................................................. Tendencies in the oil and natural gas market ........................................ Our Strategy ................................................................................................ Energy Profile Mission Values Petrobras is a publicly listed company To operate safely and profi tably in • Focus on the Company’s principal which operates on an integrated and the oil, gas and energy domestic and stakeholders: shareholders, clients, specialized basis in the following segments international markets in a socially and employees, society, government, of the oil, gas and energy industry: environmentally responsible manner, partners, suppliers and the communities exploration and production; refi ning, supplying products and services to meet in which the Company operates; commercialization, transportation and the needs of its clients and contributing petrochemicals; distribution of oil products; to the development of Brazil and the • A spirit of entrepreneurship and an natural gas and energy. Founded in 1953, countries in which it operates. ability to meet challenges; the Company is the world’s 15th largest oil company according to the periodical • A permanent quest for business leadership; Petroleum Intelligence Weekly. Leader in the Brazilian hydrocarbons sector, Petrobras has • Excellence and leadership in questions been expanding its operations to become of health, safety and preservation of an international energy company and a the environment; leader in Latin America. • Innovative and competitive spirit with a focus on providing services with a competitive edge and technological competence; • Achieving excellence in results. Petrobras Annual Report 2004 3 .................... 02 ....................04 .................... 10 ....................14 ....................18 Conduct Vision 2015 • Ethics in business; Petrobras will be an integrated • Leadership by example; energy company with a strong • Emphasis on integration and the international presence and leader development of team work; in Latin America, operating with its • Focus on development and the sustainability of competitive focus on profitability and social and advantages; environmental responsibility. • Rigorous monitoring of results with recognition and accountability by performance; • Transparency in the relations with the shareholders, employees, communities and the other stakeholders. 4 Annual Report 2004 Petrobras Highlights Operational summary – 2004 PROVED RESERVES (billions of barrels of oil equivalent
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