GRI 1.1 | 1.2

QGEP’s performance in 2012 was characterized by investments to identify and develop new assets. This effort was an important step to take full advantage of opportunities for growth, particularly in the pre-salt exploration prospects. Through our operations in the deep waters of the pre-salt zone, we further developed our technical expertise and promoted efficiency and safety in all our operations.

Worldwide growth in oil and gas production has been achieved through technological advances that make it easier to search for and identify hydrocarbon reserves. These innovations therefore  reduce the risk and uncertainty inherent in the business model. Thanks to the pre-salt discovery, Brazil has taken on a key role in the international oil industry, and is expected to double its oil production by 2020, based on current figures. QGEP is already contributing to the national industry, and this contribution will increase, when the Carcará in Block BM-S-8 goes into production in 2018, as planned by the operator.

This is a transformational discovery for QGEP, as the data obtained from drilling proved a 471-meter column of high quality oil, making it the largest column yet found in the pre-salt area. This data, coupled with the experience of the operator, allow us to estimate that the reserves for this discovery have a high flow potential.

In Block BS-4, where we are the operator, we expect to begin producing oil in early 2015 from the Atlanta Field through an early production system. Our team has focused on achieving a higher recovery factor for the well, as well as offloading systems, making use of the natural gas and lower production costs.

One challenge that QGEP is already overcoming is the training of skilled labor for these new operations. We use our successful staff management model, which is based on transferring skills and knowledge from our experienced, recognized professionals to our younger team members to create a pool of world-class professionals to develop our various assets.

Our corporate structure and governance policies represent another differentiating factor. QGEP complies with the rules of the Novo Mercado, the BM&FBovespa’s highest governance standards level. The strength and reputation of the Queiroz Galvão Group, which has 60 years of experience in key industries such as construction, steel and energy complements this transparency and accountability.

This harmonious blend of skills and strategies is helping us to make meaningful progress towards fulfilling our vision of becoming one of Brazil’s leading oil and gas companies by 2020, with a market-leading level of transparency and management responsibility.