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Is GOD Brazilian? Byron W. King Editor, Outstanding Investments Agora Financial Symposium Vancouver, B.C July 23, 2009 Slide 2 How Could You Ask Such a Blasphemous Question? -- Email from a Reader After the Daily Reckoning and 5-Minute Forecast Announced the Title of My Talk Slide 3 OK, Heres the Rest of the Title: The Saudi Arabia -- Of The South Atlantic -- And How You Can Profit! Slide 4 What Do You Need to Know? Brazils Recent Discoveries change the game in world oil. The Perfect Storm For Brazil and for Investors! Brazils offshore oil resources may rival those of the TOTAL for Saudi Arabia. Slide 5 What Else Do You Need to Know? History is Being Made in the South Atlantic Start With 200 Million Years of Geology Then Add 50 Years of Exploration and Improvements in Technology Slide 6 What Else? MASSIVE Capital Flows Into Offshore Development, Leading To New Investment Opportunities Slide 7 Federative Republic of Brazil at a Glance Population:191M+ GDP:$1.6 trillion; G-20 Member Govt.Democracy (Stable) Established:1822 Language:Portuguese Slide 8 Think In Terms of Ocean Basins: NOT Your Fathers World Maps! Slide 9 Continental Drift Freshman Geology: A Long Time Ago, A Large Land Mass Pangaea Broke Up Slide 10 -- Continents All Fit Together -- Looks Easy, Right? But Nothing Is As Simple As It Seems Slide 11 Grad School Geology: 200 Million Years Ago Things Were Different Slide 12 What a Difference 50 Million Years Makes Slide 13 110 Million Years Ago A Proto-South Atlantic With a Black Sea-Type Environment Slide 14 Restricted Sea: Stromatolites and Other Inter-layered Shales and Carbonates a/k/a Source Beds! Slide 15 Restricted Basin Evaporites Slide 16 65 Million Years Ago Cretaceous-Tertiary Division Slide 17 Passive Margins Trailing Edges of Moving Continents Thick accumulations of sediments that Flow off the Landmass Under the Right Circumstances, You Get Large Hydrocarbon Accumulations Oil Beneath the Salt: Pre-Salt Oil Passive Margins Hold Much of the Worlds Future Supply of Oil and Gas Slide 18 Brazil Continental Shelf and Slope: Supergiant Petroleum Systems Slide 19 Meet the New Kid on the Block Tupi Holds 8 -12 Billion Bbls. Slide 20 How Big is the Brazilian Pre-Salt Play? Whats Known Off Brazil So Far Ghawar, Saudi Arabia, Compared with Louisiana Slide 21 Pre-Salt in General Far Out Drilling Wells Up to 200 Miles Offshore Water Depths Up to 12,000 Feet (as deep as the Titanic wreck) Up to 10,000 Feet of Rock Up to 15,000 Feet of Salt Oil-Bearing Carbonates, with Oil Rich Shales as Source Rocks. Slide 22 Development and Production Challenges in Deepwater Slide 23 Making the Cash Register Ring: 30 Years of Advancing Technology Imagery and Geochemical Sampling Gravity & Magnetism Measurements Seismic, Seismic, Seismic Processing, Processing, Processing Deepwater Technology (REALLY Deep) Big Money Drilling Eg. First Tupi Well About $240 Million! Slide 24 Finding Oil Seeps With NASAs Terra Satellite: Moderate Resolution Imaging Spectroradiometer (MODIS) 36 Wavelengths Sun-glint Slide 25 Gravity & Magnetic Mapping Slide 26 Advances in Seismic Data- Gathering and Use Slide 27 Visualizing the Rocks in 3D Slide 28 Advances in Signal Processing Slide 29 Opening Brazils Treasure Chest: Advances in Drilling Technology Slide 30 Complex, Expensive, Autonomous Subsea Drilling, Production, Piping and Safety (!) Systems Slide 31 There is no risk with the pre-salt. Brazilian Energy Minister Edison Lobao July22, 2009 Slide 32 Oil Changes the Game for Brazil Brazils Lula says oil find is the path to end poverty BRASILIA (Xinhua News) -- Brazil has found a path to eradicate poverty in its recent oil discovery but will not squander money it does not yet have, the countrys president, Luiz Inacio Lula da Silva, said. Slide 33 Brazil Pres. Lula da Silva Examines Oil from Tupi Field Top-Down Political Support for Petrobras and Offshore Development in Brazil Slide 34 Brazil Pres. Lula da Silva Christens Petrobras 53 FPSO Would You See This In the U.S.? A President Standing Next to an Oil Tanker? Slide 35 Investment: Key Oil Players Offshore Exploration & Development: Petroleo Brasileiro (PBR: NYSE) Repsol YPF (REP: NYSE) StatoilHydro (STO: NYSE) Hess (HES: NYSE) Others include Exxon-Mobil (XOM), BP, Chevron (CVX), Shell (RDS-B) Slide 36 Drillers and Service Cos. Transocean (RIG: NYSE) Diamond Offshore (DO: NYSE) Noble Corp (NE: NYSE) ********************************* Baker Hughes (BHI: NYSE) Halliburton (HAL: NYSE) Slide 37 Subsea Equipment Suppliers Cameron International (CAM: NYSE) FMC Technologies (FTI: NYSE) Dril-Quip, Inc. (DRQ: NYSE) Slide 38 Back to That Question About God Where were you when I laid the foundations of the earth?... Who shut in the sea and said Thus far shall you come, and no farther, and here shall your proud waves be stayed? Have you walked in the recesses of the deep? Have you seen the gates of deep darkness? Book of Job, 38: 1 - 18 Slide 39 So Is GOD Brazilian? Its Not for Us to Know But in Brazil They Dance Samba, Praise God, and Drill Oil Wells. Slide 40 Many Thanks to: NASA Jet Propulsion Laboratory Petrobras Exxon-Mobil Production Company HRT Petroleum (Rio di Janeiro) and Marcio Mello University of Texas, Jackson School of Geosciences