Clarifications about new discoveries

1/10/2008

Petrobras clarifications about the mandatory “notification of signs of hydrocarbons” to the National Petroleum Agency (NPA) and about the story aired by Agencia Estado’s Broadcast titled “Petrobras Announces New Oil Discoveries to the NPA:”

The exploratory block concession agreements signed with the NPA determine that any sign of oil, natural gas or other hydrocarbons in the concession area be notified to the NPA, exclusively and in writing, in no more than 72 hours. This requirement appears in the regulating agency’s standard agreements and is demanded of all concessionaires that operate in Brazil.

This notification is not related to the discovery’s “declaration of commerciality” or to the announcement of reserves. In effect, in isolation, the information that signs of hydrocarbons were found is of no significant value to the Company’s business and, thus, does not impact Petrobras stock trading and does not require divulging. Although it is a positive piece of information, it is not conclusive. It will only become relevant when associated to new studies, data, and other evidence. In this case, it will be widely announced by the Company.

On account of the great interest in the Santos Basin’s Pre-Salt region, Petrobras has been informing the market, via Announcements or Material Facts, regarding all of the stages involved in the exploratory phase of this area’s blocks, including the discovery of signs of hydrocarbons, to avoid speculation and misinformation.

With regard to discoveries made in other regions (onshore, and in shallow, deep and ultradeep waters, except for the Pre-Salt), the Company maintains the policy of only notifying the NPA about signs of hydrocarbons. If subsequent assessments show the fields are commercial and, thus, relevant, Petrobras will then proceed to divulge this.

Petrobras press release