1 José Sergio Gabrielli de Azevedo President and CEO September 25, 2006 The Role of Petrobras in Energy Integration and Renewable Fuels in South America

2 2 The presentation may contain forecasts about future events. Such forecasts merely reflect the expectations of the Company's management. Such terms as "anticipate", "believe", "expect", "forecast", "intend", "plan", "project", "seek", "should", along with similar or analogous expressions, are used to identify such forecasts. These predictions evidently involve risks and uncertainties, whether foreseen or not by the Company. Therefore, the future results of operations may differ from current expectations, and readers must not base their expectations exclusively on the information presented herein. The Company is not obliged to update the presentation/such forecasts in light of new information or future developments. Cautionary Statement for US investors The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this presentation, such as oil and gas resources, that the SEC’s guidelines strictly prohibit us from including in filings with the SEC. Disclosure

3 3 Concentration of reserves in sensitive areas cause for increasing concern In the medium to long term light oil supplies likely to come from Middle East, Africa (OPEC) and Russia More than 62% of the world reserves on the hands of 5 Middle East Countries AsiaNorth America Africa South and Central America Europe & Eurasia Middle East (reserves billion boe ) Fonte: BP Statistical Review of World Energy

Total 762 billion boe Total billion boe Total billion boe In 20 years, Latin America’s proven reserves increased from 36.6 billion barrels (1984) to 101 billion barrels (2004). Source: BP Statistical Review of World Energy Latin American proven oil reserves have increased in relative importance and average life R/P* = R/P* = R/P* = * Reserves/Production Latin America (years)

5 5 World Total Primary Energy Supply has shown increased use of gas, coal and nuclear sources Source: IEA Energy Statistics Increase 5,069 Mtoe 6,154 Mtoe11,223 Mtoe

6 6 Compared to OECD, LA uses more hydro, oil and renewables and less nuclear and coal (2003) Source: IEA Energy Statistics Latin America OECD 464 Mtoe 5,395 Mtoe World 10,579 Mtoe In comparison to the whole world LA uses much less coal and more crude oil as a result of China.

7 7 Transportation (liquids) in energy consumption is likely to increase with growing income Source: IEA Energy Statistics Latin America OECD 364 Mtoe 3,754 Mtoe

8 8 CoalCrude OilNatural GasNuclearHydroRenewablesGeothermal/Solar/Eolic Coal has dominated Electric Energy Generation growth in the world

9 9 CarvãoPetróleoGás NaturalNuclearHídricaRenováveisGeotérmica/Solar/Eólica While in LA hydro power has predominated followed by natural gas

10 Explore synergies between existing companies in Brazil, Argentina, Bolivia and Colombia Increase exploration and production efforts in Peru, Ecuador and Venezuela Intensify commercial operations in Paraguay, Uruguay and Chile Invest in tecnology logistics and production of renewable fuels Participate in development of integrated gas pipeline network PETROBRAS in position to promote energy integration in South America

11 Liderar o mercado de petróleo, gás natural e derivados na América Latina, atuando como empresa integrada de energia, com expansão seletiva da petroquímica e da atividade internacional. Growth Profitability Social and Environmental Responsibility Consolidate and increase competitive advantages in the Brazilian and South American oil and oil products market Develop and lead the domestic natural gas market and perform in an integrated manner in the gas and power market in South America Selectively expand international activities in an integrated manner with the Company’s business Selectively expand interest in the petrochemicals market Expand participation in biofuels market, lead the domestic biodiesel production and increase participation in the ethanol business Operational, management, technological and human resources excellence Lead the Latin American oil, natural gas, oil products and biofuels market, working as an integrated energy company, with selective expansion in petrochemical, renewable energy and international activities. Corporate Strategy Corporate Strategy already points to integration and renewable fuels

PETROBRAS 12 Petrobras already among largest publicly traded companies Proven reserves (SEC - billion boe) – Dec Oil and gas production (million boe) Reserve life (years) – Dec Refining capacity (thousand bpd) Source: Evaluate Energy and Company Reports 7th 5th 9th 7th

13 Note: Includes International E&PDownstreamG&E Petrochemical Distribution Corporate Business Plan US$ 87.1 billion US$ 12.1 bi US$ 75.0 bi Investment Plan reflects integrated global expansion 49,3 23,0 7,5 3,3 2,2 1,8

14 Sources (*) (US$ 99.3 billion) Accrued Economic Profit ( ): US$ 83.4 billion (US$ 53.9 until 2011). Uses Capex to be financed with its own cash flow

15 Undeveloped Reserves / Total Reserves* (2005) Strong investments in production will optimize the development of Petrobras’ proven reserves, aiming light oil production and a minimum reserve/production ratio of 15 years. Petrobras had a 55% success ratio for our exploration wells during 2005, with 38 wells classified as discovery or producing wells. * Source: Evaluate Energy Oil and gas production based on development of existing reserves 17

16 2,0362,020 2,217 2,403 3,493 4,556 Thousand boed 7.8% p.a. 7.5% p.a. Production targets assure brazilian consumption and among most ambitious in the industry

17 Fast growing domestic natural gas market for electicity and other uses Million m 3 /day * Considers maximal dispatch for every thermoelectric power plant % p.a Natural gas market 36.9 Variation 2004 x 2005 Others150% Industry8,30% Thermoplants-26,04%

18 New Refinery in Pernambuco Investment: US$ 2,5 billion Throughput capacity: 200 thousand heavy oil barrels (50% Petrobras oil / 50% PDVSA oil) Focusing diesel and LPG production maximization, the new refinery will aim the growth of oil products demand in the Northeast. The Northeast Region, which responds for 19% of oil products demand and holds only one refinery in Bahia, will no longer be a fuel importer (either from refineries in Brazil or abroad). Costs reduction: oil products transportation are more expensive than for crude oil. Brazilian market open for investments in downstream

19 Main Projects Rio de Janeiro Petrochemical Complex Acrylic Complex /SAP PTA Pernambuco Nitrogenated Fertilizers Unit III Fafen BA Advantages: Proximity to Petrobras’ installations in Rio de Janeiro; Availability of labor for both the construction and operational phase; Proximity to port installations. Products: Diesel, LPG, Ethylene, Propylene, PX, Benzene and Coke. The Complex will add value to 150,000 barrels/day of heavy oil form the Campos Basin. and petrochemicals Investments of US$ 3.3 billion in Petrochemicals or more with Rio de Janeiro petrochemical plant Reducing the Brazilian deficit and adding value to Downstream production. São Gonçalo Liquids Outflow Unit Petrochemical Complex – Itaboraí

20 South Cone: US$ 2.8 Million Americas, Africa e Eurasia: US$ 5.4 Million New Businesses: US$ 3.9 Million Southern cone and Venezuela to receive US$3.3 billion Capex and US$3.9 billion still to be allocated

21 (*) Petrobras Energía Argentina (*) Proved Reserves: 336 MMBOe (SPE, 2005) 2005 Average Production: 104,000 boed Refining and Distribution: 62,900 bbld in Ricardo D. Eliçabe – Bahía Blanca, Refisan - San Lorenzo; and Refinor (28.5 % interest:) refineries 648 service stations LUBRAS lubricant plant Dock Sud and Puerto Galvan Terminals Petrochemical Power generation Energy Transmission and Distribution Oil and Gas Transportation Producing, refining and distributing in the South Cone Bolívia Production: San Alberto e San Antonio; and Colpa-Caranda (*) Proved Reserves: 553 MMBOe (SPE, 2005) 2005 Average Production: 54,100 boed Yacuiba – Rio Grande Gas pipe (431 km, 32”, 17 MM m3/dia transportation capacity) 2 Refineries, with 60,000 bpd of total capacity 20 service stations with Petrobras brand Paraguay 132 service stations Uruguay 89 service stations Natural Gas Distribution: share control and operation of Conecta and Gaseba (Montevidéu)

22 (*) Petrobras Energía Ecuador (*) 1 Production Block 1 Exploration Block Proved Reserves: 81.2 MMBOe(SPE 2005) Production: 9.1 thous. boed – 2005 Peru (*) 1 Production Block 5 Exploration Blocks Proved Reserves: MMBOe(SPE 2005) Production: 14.3 thous. boed – 2005 Exploring and producing in Ecuador and Peru

23 Venezuela 4 Production Blocks (*) 2 Explorations Blocks (*) Proved Reserves: 269 MMBOe(SPE 2005) (*) Production 47.6 thous. boed – 2005 (*) Moruy II exploratory block, operated by Petrobras in the Venezuelan Golf (*) Petrobras Energía Colômbia 6 Production Blocks. Includes Guando field, the largest discovery in the country in the last 15 years. 11 Exploration Blocks. Includes Tayrona Block (22,500 km 2 ) in deep waters of the Caribbean Sea Proved Reserves 36.3 MMBOe (SPE 2005) Production 16.6 thous. boed – service stations Producing and exploring in Colombia and Venezuela, and distributing in Columbia

PETROBRAS 24 OilNaturalGas Renewables Investments of US$ 0.7 billion in renewable energy and biofuels Total avoided GHG emissions of 3.93 (M Tons of CO 2 Equivalent) Availability of 855,000 m 3 /year of biodiesel Processing 425,000 m 3 /year of vegetable oil (H-BIO) 240 MW installed capacity of power generation from renewable sources 3.5 million m 3 ethanol exports Company commitment to reduce carbon intensity of operations and products

25 Ethanol from sugar cane much more efficient than from other crops Raw MaterialEnergy Output / Energy Input(boe) Wheat1.2 Corn1.3 – 1.8 Sugar Beet1.9 Sugar Cane (under Brazilian production conditions) 8.3 Raw Material Production / ha (kg) Quantity of Ethanol / ha Energy Output / Energy Input (boe) Sugar Cane85,0007,080 liter8.3 Corn10,0004,000 liter1.3 – 1.8

PETROBRAS 26 Consumer wants to decide the fuel at the gas station Fuel price is one the most important factor Consumer is aware of pollution and renewable fuels Today cars manufacturer is producing 80% of FFV in Brazil Ethanol-gasoline flex-fuel vehicles are already a reality

27 Ethanol global market is 46.5 Billion Liters (2005) Ethanol as a Fuel is 30.6 Billion Liters (67% of total ethanol production) Today the ethanol consumption is 2.6% of gasoline MKT 10% of ethanol in gasoline will represent 118 Billion Lt Recently, Petrobras incorporated Brazil-Japan Ethanol Inc. The company will import and distribute Brazilian-produced ethanol in Japan; Development of technical and commercial solutions for the reliable and long term supply of alcohol in the Japanese market; Petrobras will break into one of the most complex and important energy markets in the World: ethanol logistics distribution fuel distribution sector in Japan. Brazil-Japan Ethanol Inc. Ethanol may become a global market

28 Marine Terminal Rio de Janeiro Marine Terminal São Paulo New Ethanol Pipeline (800 km) New Water Way for Ethanol Ethanol Export 8.0 Million m 3 in 2012 But as all renewables need investments in logistics

PETROBRAS 29 Agribusiness Farming Seeds or Ethanol Methanol Glycerin + Others Biodiesel B 2 or B 5 mixture or Diesel Distributors Diesel Refinery Hydrogen Diesel Fractions Stations Processed Oil Crushing Transesterification Bio diesel and H-bio will reduce dependency on imported diesel Complementary and not competitive processes H-Bio: refining process that utilizes vegetable oils as an input, in order to obtain diesel oil; Hydrogenation of a blend of diesel and vegetable oils;

PETROBRAS 30 Muchas Gracias