Petrobras held a conference call to discuss its second quarter 2006 results. Domestic oil production was relatively stable compared to the previous quarter despite scheduled maintenance stoppages. Average oil sales prices increased substantially due to higher international prices and a widening price spread between Brazilian and Brent crude. Lifting costs increased slightly while refining costs rose more significantly. Net income improved compared to the previous quarter due to higher oil prices offsetting increased costs.

1. PETROBRAS
Conference Call / Webcast
2nd Quarter 2006
(Brazilian Corporate Law)
Almir Barbassa
CFO and Investor Relations Officer
August, 15th 2006

2. PETROBRAS
Disclaimer
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.
1

3. PETROBRAS
Domestic oil and NGL production
∆ = 1,6%
1,757
1,751
thousand bpd
1,760
1,750
1,736 1,740
1,730
1,725 1,730
1,720
1,710
1,700
2Q05 3Q05 4Q05 1Q06 2Q06
• 2Q06 average production reflects the start-ups of P-50 (April) and FPSO
Capixaba (May), partially offset by the concentration of scheduled stoppages
of the following platforms:
• May: P-33, P-35 and P-43;
• June: P-26, P-40, FPSO Brasil, P-27, P-25 and P-31.
2

4. PETROBRAS
E&P – Oil Prices
US$ 11.42 bbl
69.62
61.75
61.53
56.90 57.59 64.74
US$/bbl
56.39
51.59
47.83 58.20
44.00 52.70
41.59 54.24 53.69
39.70 49.33
35.38 38.98
44.19
34.38 43.04 46.05
36.14 37.48
35.11
32.88
2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06
Brent (average) Average Sales Price OPEC Basket
The spread between Brazilian oil average price and Brent increased from
US$ 8.07/bbl to US$ 11.42/bbl, due to reduced oil products inventory in the
international market, which resulted in a higher value of light oil compared
to heavy oil.
3

5. PETROBRAS
Domestic Lifting Costs w/o Gov. Part.
∆ = -3% or US$ 0.20
6.07 6.32 6.12
5.99
5.45 5.44
1Q 05 2Q 05 3Q 05 4Q 05 1Q06 2Q06
-US$ 0,12/boe: higher expenditures with turbine maintenance, gas pipelines
repair and P-32 collection and flowage line substitution, all in the 1Q06;
• -US$ 0,07/boe: higher oil and gas production
• In reais, extraction cost decreased from R$ 13,84 in the 1Q06 to R$ 13,16 in
the 2Q06.
4

6. PETROBRAS
Lifting Costs including Gov. Participation
% 2002 – 2Q06
26 Brent = 181% 70
Lifting Cost = 103% 61.5 56.9 69.6
51.6 60
21 Gov. Participation = 185% 47.5 61.8
50
38.2 17,3 17,5
16,0
16 15,0 40
28.8 13,6 13,3
US$/boe
24.8
65%
63%
30
10,7 11.0 11.4
62%
59%
11 9.9
7.6 9.6
8,5 7.8 20
7,0
6.4
6 5.1 10
57%
4.0
6.0 5.5 5.4 6.1 6.3 6.1 0
3.0 3.4 4.3
1
-10
2002 2003 2004 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06
-4 -20
Lifting Cost Gov. Participation Brent
• Government Participation per barrel increased 4%, reflecting larger share in
total production of fields that are currently in a highly productive phase
(Barracuda and Caratinga) and a 9% increase in the reference price in reais for
Brazilian oil.
5

7. PETROBRAS
Refining and Sales in the Domestic Market
95
2,400
90
87 91 91
2,200 91 91
83 85
2,000 80
81 80 81 80
79 79
1,800 75
70
1,600
65
1,400 1,804 1,731 1,7951,684
1,708 1,589 1,668 1,665 1,761 1,647 1,812 1,649 60
1,200 55
1,000 50
1Q05 2Q05 3Q05 4Q05 1Q06 2Q06
Dom estic oil products production Oil products sales volum e
Prim ary processed installed capacity - Brazil (%) Dom estic crude as % of total
• Brazilian oil products production slightly lower than in the previous quarter due
to more frequent scheduled stoppages in refineries;
• Higher nominal capacity utilization.
6

8. PETROBRAS
Domestic Refining Costs (US$/bbl)
2.07
2.03
1.96 1.90
1.86
1.74
1Q 05 2Q 05 3Q 05 4Q 05 1Q 06 2Q 06
• 9% increase with respect to previous quarter due to:
• +US$ 0,12/bbl: scheduled stoppages;
• + US$ 0,04/bbl: Materials;
• + US$ 0,04/bbl: FX Rate effect;
• - US$ 0,04/bbl: Increase in the throughput.
• Refining cost raised from R$ 4.19 in the 1Q06, to R$ 4.55 in the 2Q06
7

9. PETROBRAS
Average Realization Price - ARP
100
2Q05 4Q05 1Q06
Average Average Average
80 71.0 80.0
60.7 70.2 70.7
60
55.3 61.8 69,6
51.6
40
20
Jun-04 Sep-04 Dec-04 Mar-05 Jun-05 Sep-05 Dec-05 Mar-06 Jun-06
ARP Brazil (US$/bbl) Brent Average Price ARP USA (w/ volumes sold in Brazil)
• Unraveling from US ARP due to the beginning of US summer, reduced gasoline
inventories and Middle East conflicts that threaten supply;
• Higher quality requirements in the American market (MTBE).
8

10. PETROBRAS
Sales Volume
Thousand bpd 2Q06 1Q06 % 1H06 1H05 %
Total Oil Products 1,684 1,649 2 1,666 1,627 2
Alcohol, Nitrogen and others 13 30 -57 21 26 -19
Natural Gas 239 232 3 236 218 8
Total Dom estic Market 1,936 1,911 1 1,923 1,871 3
Exports 536 519 3 527 486 8
International Sales 459 437 5 448 376 19
Total Interational Market 995 956 4 975 862 13
Total 2,931 2,867 2 2,898 2,733 6
• Oil products sales volume increased 2% in the domestic market due to:
• Gasoline – reduction of the alcohol mixed with gasoline (from 25% to 20%) and loss
of alcohol competitiveness, due to its higher prices;
• Naphtha – attractive prices in comparison to international market;
• Diesel - consumption stable as a result of reduced agricultural demand.
• Natural Gas sales volume increased 3%.
2006 includes ongoing exports 9

11. PETROBRAS
Income Statement 2Q06 vs 1Q06
1Q06 2Q06
37.948 5.7%
Net Revenues
35.886
21.260
R$ Million
COGS 8.2%
19.644
13.614
EBITDA -3.5%
14.113
11.267
Operating Profit -6.2%
12.010
6.958
Net Income 4.2%
6.675
• Reduced operating profit due to higher oil price and COGS including government participation;
• Lower operating profit reflects mainly increases in general and administrative expenses and others, as
described in the next slide;
• Increase in Net Income due to Real depreciation (0.5%) over equity income of investments abroad.
10

12. PETROBRAS
Operating Expenses Analysis 2Q06 vs 1Q06
1Q06 2Q06
1.353
Sales Expenses 0.8%
1.342
General and 1.415
Administrative Exp. 1.186 19.3%
378
Exploratory Costs
310 21.9%
890
Others
428 107.9%
• Increase in the number of employees under training (2000 new employees);
• Increase in other operating expenses due to higher provisions for personnel and
expenses not directly related to the core business activities.
11

13. PETROBRAS
Changes in Operating Profit (2Q06 vs. 1Q06)- E&P
Changes in Operating Profit – R$ million
1,751 Domestic Oil, NGL and Condensate – thousand bpd 1,757
1.376 372 233 165 521
10.938
10.523
1Q06 Oper. Price effect on Volume effect Average cost Volume effect Operating 2Q06 Oper.
Profits Net Revenue on Net effect on COGs on COGs Expenses Profits
Revenue
• E&P results improvement due to better transfer and export prices;
• Volume growth limited by scheduled stoppages.
12

14. PETROBRAS
Changes in Operating Profit (2Q06 vs 1Q06)- Supply
Changes in Operating Profit – R$ million
160 748
441
3.013
96 249 35 2.486
1Q06 Op. Profit Price effect on Volum e effect Average cost Volum e effect Operating Off Shore 2Q06 Op. Profit
Net Revenue on Net effect on COGs on COGs Expenses effect on Vol.,
Revenue Rev. and COGs
• Increase in COGS due to:
• Higher E&P transfer costs;
• Higher imported oil costs;
• Increase in refining costs;
• Increase in operating expenses.
13

15. PETROBRAS
Changes in Net Profit – R$ million (2Q06 vs 1Q06)
1,751 Domestic Oil, NGL and Condensate – thousand bpd 1,757
1.320 839
1.143 24
543 6.958
6.675
378
1Q06 Net Profit Revenues COGS Oper. Exp. Fin. and non Employees Minority 2Q06 Net Profit
oper. exp., others Participation Interest/Taxes/Off-
and Equity Inc. shore Sales
• Net income in 2Q06 reflected stability in production, sales and FX rate, with
increase in oil prices and costs.
Not including off-shore operations in Revenues and COGs 14

16. PETROBRAS
Net exports of oil and oil products
Exports (thousand bpd) Imports (thousand bpd)
94 thous. bpd volume superavit in the 1Q06
536 559
504 519
446 109 446 459 442
338
409
241 257 269 105 94 115 88
213
228
450
233 352 344 354
263 262 267
233 181
2003 2004 2005 1Q06 2Q06 2003 2004 2005 1Q06 2Q06
Oil Oil Products Oil Oil Products
• Net exports growth limited by:
• Production stability due to scheduled stoppages;
• Domestic gasoline consumption increase due to ethanol reduction (mix reduced
from 25% to 20%);
• Oil inventories stored in new production units.
2006 includes ongoing exports 15

17. PETROBRAS
Leverage
Petrobras’ Leverage Ratio
R$ million 06/30/2006 03/31/2006
32% Short Term debt (1) 12.213 11.399
28%
26%
26% Long Term Debt (1) 31.306 33.100
24%
Total Debt 43.519 44.499
19% 20%
19% 23% 18%
Cash and Cash
22.713 22.983
Equivalents
Net debt (2) 20.806 21.516
6/30/2005 9/30/2005 12/31/2005 3/31/2006 6/30/2006
Net Debt/Net Capitalization
Short-Term Debt/Total Debt
• R$ 710 million decrease in net debt due to financing amortization, resulting in
a 2 b.p. reduction of the leverage.
(1)Includes debt contracted through leasing contracts of R$ 3.300 million on December 31, 2005, and R$ 4.021 million on December 31, 2004.
(2)Total debt - cash and cash equivalents 16

18. PETROBRAS
Consolidated Cash Flow Statement
R$ million
2Q06 1Q06
(=) Net Cash from Operating Activities 11.366 10.144
(-) Cash used in Cap. Expend. (6.641) (6.020)
(=) Free Cash Flow 4.725 4.124
(-) Cash used in Financing and Dividends (4.995) (4.558)
Financing (1.472) (499)
Dividends (3.523) (4.059)
(=) Net Cash Generated in the Period (270) (434)
Cash at the Beginning of Period 22.983 23.417
Cash at the End of Period 22.713 22.983
• R$ 600 million increase in Free Cash Flow.
As of January 1, 2005, the Special Purpose Companies whose activities are directly or indirectly controlled by Petrobras were included in the
Consolidated Financial Statements, as per CVM Instruction No. 408/2004.
17

19. PETROBRAS
Investments
1H06 % 1H05 % %
• Direct investments 12.345 91 9.790 89 26
Exploration & Production 7.195 53 5.786 53 24
Supply 1.538 11 1.350 12 14
Gas and Energy 1.041 8 940 9 11
International 1.889 14 1.231 11 53
Distribution 333 2 242 2 38
Corporate 349 3 241 2 45
• Special Purpose Companies 1.156 8 1.008 9 15
• Ventures under Negotiation 142 1 111 1 28
• Project Finance 1 - 81 1 -
Exploration & Production 1 - 81 1 -
Espadarte/Marimbá/Voador 1 - 52 - -
Others - - 29 - -
Total Investments 13.644 100 10.990 100 24
18

20. PETROBRAS
QUESTION AND ANSWER
SESSION
Visit our website: www.petrobras.com.br/ri/english
For further information please contact:
Petróleo Brasileiro S.A – PETROBRAS
Investor Relations Department
Raul Adalberto de Campos– Executive Manager
E-mail: petroinvest@petrobras.com.br
Av. República do Chile, 65 - 22nd floor
20031-912 – Rio de Janeiro, RJ
(55-21) 3224-1510 / 3224-9947
19