The document provides an overview of Petrobras' 4th quarter 2006 results and full year 2006 results. Key points include: - Domestic oil and gas production increased 5.6% in 2006 due to new production units coming online. - Total oil, gas, and NGL production increased 3.5% in 4Q06. - Average sales prices for oil increased 20.45% in 2006. - Net income decreased 26.6% in 4Q06 primarily due to lower oil prices and sales volumes. - Exploration and Production operational profit decreased due to international oil price declines.

1. Conference Call / Webcast Almir Barbassa
RESULTS ANNOUCEMENT CFO and Investor
4th Quarter 2006 and 2006 Relations Officer
Brazilian Corporate Law) February 14th 2007

2. 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. DOMESTIC OIL AND NGL PRODUCTION
5.6% increase y-o-y due to
.6 %
the start-up of the =5 1,778
following production Δ
units:
thousand bpd
P-50 (Albacora Leste), in April 2006 1,684
FPSO Capixaba (Golfinho), in May
2006
P-34 (Jubarte), in December 2006
2005 2006
2

4. TOTAL OIL, NGL AND GAS PRODUCTION
thous. boed
%
3.5% Δ = 1.4 2,334
Δ=
2,301
2,278 2,273
2,256
4Q05 1Q06 2Q06 3Q06 4Q06
• Increase in the 4Q06 production due to the start-up of new production wells linked to P-50 platform (Albacora Leste)
• For the same period, decrease in the international oil and gas production, as a consequence of the contractual negotiations in
Argentina that affected production in some fields (oil), lower demand for Bolivian gas and the finalization of some repairs in the duct of
San Antonio (gas).
3

5. E&P – OIL PRICES
US$/bbl 2005 2006 Δ
Aver. Sales Price 45.42 54.71 20.45%
Brent (Av.) 54.38 65.14 19.79%
Spread 8.96 10.43 - 69.62 69.49
61.53 61.75 59.68
64.74 66.07
56.39 56.9
US$/bbl
57.59 58.20 58.69
51.59 56.08 US$ 10.98 bbl
47.83 54.24 52.7 53.69
44.00 49.33 48.70
44.19 46.05
39.70 43.04
37.48
35.11
4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06
Average sales price Brent (average) OPEC Basket
Stable spread between Brazilian oil and Brent (US$ 10.80/bbl in the 3Q06 and US$ 10.98/bbl in the 4Q06)
despite of the oil prices decrease in the international market.
4

6. REFINING AND SALES IN THE DOMESTIC MARKET
Thousand barrels/day
95 %
89
93 90
1, 950
89 91
89 85
87
85
80
81 80 80
79 79 80
1, 800 78 75
70
1,8 12 65
1, 650 1,79 5 1,74 6 1,76 4
1,76 1 60
1,6 8 4 1,753 1,70 7 1,6 9 7
1,73 5
1,6 4 9 1,6 9 6 55
1,6 3 5 1,6 4 4
1, 500 50
4 Q0 5 1 Q0 6 2 Q06 3 Q0 6 4Q0 6 2005 2006
D o mest ic o il p r o d uct s p r o d uct io n Oil p ro d uct s sales vo lume
Pr imar y p r o cessed inst alled cap acit y - B r az il ( %) D o mest ic cr ud e as % o f t o t al
Oil products production in 4Q06 Sales volume Slight decline in domestic crude
decreased relative to 3Q06 because of decreased due participation was a consequence of
programmed stoppages in REVAP, to seasonal greater competitive advantage to
REFAP and REMAN refineries, also demand; process more light oil, reducing
affecting capacity utilization; production of fuel oil.
5

7. AVERAGE REALIZATION PRICE - ARP
US$/bbl 2005 2006 Δ
ARP Brazil 58.58 70.92 21.07% 4Q05 3Q06 4Q06
100 Brent (Av.) 54.38 65.14 19.79% Avrg Avrg Avrg
ARP USA 65.14 75.52 15.93% 81.83 70.59
72.90
80 72.28 68.81
68.90
56.90 69.49 59.68
60
40
20
Dec-04 M ar-05 Jun-05 Sep-05 Dec-05 M ar-06 Jun-06 Sep-06 Dec-06
ARP Brasil (US$/ bbl) Average Brent Price (US$/ bbl)
ARP USA (US$/ bbl w/sales vol.in Brasil)
Domestic prices aligned with the practiced prices in the American market in the 4Q06.
After summer season in the northern hemisphere, international oil prices tended to decrease.
6

8. INCOME STATEMENT 4Q06 VS 3Q06
3Q06 4Q06
41.041 - 5.4%
Net Revenue
43.363
26.696
COGS -1.4%
27.066
R$ million
10.594
EBITDA - 19.9%
13.218
7.829
Operational Profit - 26.2%
10.609
5.200 - 26.6%
Net Income
7.085
• The decrease in oil (E&P) and realization (Downstream) prices and smaller sales volume led to a fall in net
revenues in the 4Q06. In the other hand the drop in COGS wasn’t able to follow the decrease in the net
revenues as inventories with a higher costs basis purchased during prior quarters were liquidated. (inventories
evaluation using the average cost criteria).
• increase in operational expenses, specially Exploratory and General & Administrative.
7

9. OPERATIONAL EXPENSES ANALYSIS 4Q06 VS 3Q06
3Q06 4Q06
1.550 0,3%
Sales Expenses
1.546
General and 1.728 18,4%
Administrative 1.459
R$ million
818 54,0%
Exploratory Costs
531
356 35,9%
Taxes
262
1.059
Others
1.036
2,2%
• Sales Expenses: stable despite decrease in total volume sold in the domestic market. There was an increase in
gasoline and diesel sales volumes;
• General & Adm.: higher personnel expenses due to increase in labor force and collective bargaining agreement;
• Exploratory Costs: write-off of dry and non-commercial wells and update of provision for area abandonment.
These costs usually are concentrated in the fourth quarter.
8

10. CHANGE IN QUARTER REVENUES (4Q06 VS 3Q06)
Exploration & Production –Operational Profit Change– R$ millions
1,779 Domestic Oil, NGL and Condensate – thousand bpd 1,823
10.313 3.748
776 363
365
796 7.409
3Q06 Operating Price Effect on Avrg Cost Effect Volume Effect on Volume Effect on Operational 4Q06 Operating
Profit Net Revenue on COGS Net revenue COGS Expenses Profit
E&P’s operational result in 4Q06 was particularly affected by the decrease in the
international oil prices
9

11. CHANGE IN QUARTER REVENUES (4Q06 VS 3Q06)
Downstream – Change in Operating Profit – R$ million
326 319
4.191 142 2.315
634
1.533 3,557
3Q06 Operating Net Effect Volume Effect Volume Effect Operating 4Q06 Operating
Profit on Net on COGS Expenses Profit
Revenues
Price Effect Avrg Cost Effect
on Net Rev on COGS
• ARP’ drop reduced the operational revenues on the Downstream by R$ 3,557 million;
• The decrease on the transfer prices (E&P to Supply) and the lower offshore operating costs contributed to the
reduction in the average costs (R$ 4.191 million);
• R$ 634 million net effect as inventories with a higher costs basis purchased during prior quarters were liquidated.
10

12. NET PROFIT CHANGE – R$ million (4Q06 VS 3Q06)
1,779 Domestic Oil, NGL and Condensate – thousand bpd 1,823
7.085 2.322
370 43
828 361
63 5.200
640
3Q06 NP Income COGS Oper. Expen. Fin. Expen., Taxes Non Control. Employee Part. 4Q NP
Non Oper., Shareholder
Others and Inc Part.
Par
• Profit decrease in 4Q06 mainly due to smaller average realization prices of exports and oil products in the
domestic market;;
• Liquidated inventories with a higher costs basis purchased during prior quarters (average cost criteria) halted a
steeper drop in the COGS.
11

13. BUSINESS AREAS CONTRIBUITION TO OPERATIONAL PROFIT
2.904
10.609 4Q05 vs. 3Q05 (R$ million)
327 45
782 542
377 21 7.829
3Q06 Oper. E&P Downst G&E Distr. Inter. Corp. Elim. 4Q06 Oper.
Prof. Prof.
International: decrease mainly due to: G&E: improvement related to the previous quarter due to:
• Decrease in the international oil prices; • Increase in gross profit as a result of better
• Lower trade oil volume in Argentina (oil workers strike); commercialization energy margins;
• Lower sales volume in Bolivia (repairs in the Santo Antonio pipe); • Loss accrued in the 3Q06 as a result of the closing of
• Write-off of well in the USA and expenses with seismic in the hedge contract for the reduction of natural gas
Argentina and USA price volatility.
12

14. NET EXPORTS OF OIL AND OIL PRODUCTS
Volume Surplus 128 thous bpd in 4Q06 and 93 thous bpd in the year
Exports (thous barrels/day) Imports (thous barrels/day)
559 540
669 488
581 576 109 446 459 510
523 532 548 442 132
118 137
409 215 94 115 88
246
221
260 281
270
228
450
370 344 373 408
454 352 354
335 355
263 262 267
181
2004 2005 2006 1Q06 2Q06 3Q06 4Q06 2004 2005 2006 1Q06 2Q06 3Q06 4Q06
Oil Oil Products
• The lower percentage of domestic crude participation in the throughput (due to the commercial advantages of
processing light oil, reducing the fuel oil production) allowed an increase in the heavy oil exports and a decrease
in the fuel oil exports;
• On the other side there was an increase in the light oil imports and stability in the oil products imports.
2006 includes ongoing exports 13

15. Cash Breakdown (R$ millions)
1.600
25.000
1.200
15.000 800
Cash
400
5.000
0
'jun/05 'sept/05 'dec/05 'mar/06 'jun/06 'sept/06 'dec/06
(5.000)
FX rate
change* Δ-5.5% Δ5.3% Δ-7.2% Δ-0.4% Δ0.5% Δ-1.7% (400)
(15.000) Abroad In Brazil w/ FX correction
(800)
In Brazil CDI Cash
Financial Income
(25.000) (1.200)
• Financial revenues influenced by the US dollar indexed cash as hedge
against the debt and costs linked to dollar.
* Price of US Dollar at end of the period 14

16. LEVERAGE
Petrobras’ Leverage Ratio
37%
R$ million 12/31/2006 12/31/2005
32% (1)
Short Term debt 13.074 11.116
28% 27%
26% 26%
(1)
24%
28% Long Term Debt 33.531 37.126
20% 20%
19% 18%
23% 17% 16% Total Debt 46.605 48.242
19%
Cash and Cash
27.829 23.417
Equivalents
(2)
Mar-05 Jun-05 Sept- Dec-05 Mar-06 Jun-06 Sept- Dec-06 Net Debt 18.776 24.825
05 06
Net Debt/Net Capitalization
Short-Term Debt/Total Debt
Decrease in total and net debt:
Strong operating cash generation allows reduction of the debt (bonds
buyback) and increase in cash balance.
(1) Includes debt contracted through leasing contracts of R$ 2.540 million on December 31, 2006, and R$ 3.300 million on December31, 2005.
(2) Total debt - cash and cash equivalents
15

17. CONSOLIDATED CASH FLOW STATEMENT
R$ million
4Q06 3Q06
(=) Net Cash from Operating Activities 13.244 10.209
(-) Cash used in Cap. Expend. (12.061) (8.341)
(=) Free Cash Flow 1.183 1.868
(-) Cash used in Financing and Dividends 2.127 (62)
Financing 2.128 (60)
Dividends (1) (2)
(=) Net Cash Generated in the Period 3.310 1.806
Cash at the Beginning of Period 24.519 22.713
Cash at the End of Period 27.829 24.519
R$ 3,3 billion cash increase.
16

18. INVESTMENTS
2006 % 2005 % %
Direct investments 29.769 90 22.927 89 30
Exploration & Production 15.314 51 13.934 54 10
Downstream 4.181 13 3.286 13 27
Gas & Energy 1.566 5 1.527 6 3
International 7.161 17 3.153 12 127
Distribution 642 2 495 2 30
Corporate 905 2 532 2 70
Special Purpose Companies (SPCs) 3.507 9 2.385 10 47
Ventures under Negociation 409 1 311 1 32
Project Finance 1 - 87 - -
Total Investments 33.686 100 25.710 100 31
Primarily Investing in the development of oil and gas production capacity using own
resources and partnerships.
17

19. DOMESTIC LIFTING COSTS WITHOUT GOVERNMENT PARTICIPATION
Δ = 9% or US$ 0.60
7.24
US$/bbl 6.32 6.64
6.07 6.12
4Q 05 1Q06 2Q06 3Q06 4Q06
MAIN CAUSES
Higher expenditures:
• Drilling rigs
• Specialized services and materials
• Well interventions and repairs
• Personnel expenses resulting from wage readjustment
• High initial unitary costs from FPSO-Capixaba (Golfinho) and P-34 (Jubarte) projects, which will tend to
decrease with the production grow.
18

20. LIFTING COSTS INCLUDING GOVERNMENT PARTICIPATION
US$/boe 26
61,5 61,8
56,9 69,6 59,7
69,5 60
51,6
47,5 17,3 17,5 18,1 17,6
16,1
16 38,2 13,6 13,9
15,2 40
28,8
24,8 10,7 64% 11,0 65% 11,4 64% 11,5 59%10,4
8,5 9,7 10,0
7,0 7,7 59% 8,4 20
6,4
6 5,1
4,0 57%
6,0 6,1 6,3 6,1 6,6 7,2
4,3 5,4 5,4 0
3,0 3,4
2002 2003 2004 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06
-4 -20
Lifting Cost Participação Gov. Brent
Lower government participation in the quarter due to the decrease in the average reference price
of the domestic oil, linked to the international quotations.
19

21. REFINING COSTS IN BRAZIL (US$bbl)
Δ = 9% or US$ 0.23
2.71
2.48
2.03 2.07
1.90
4Q 05 1Q 06 2Q 06 3Q 06 4Q 06
9% increase in 4Q06 relative to the previous period reflecting an increase in personnel
expenses as due to Collective Work Agreement 2006/2007 and programmed stoppages
20

22. NET INCOME COMPARISON 3Q06 Vs 4Q06 AND 2006 Vs 2005
Petrobras presented the higher y-o-y growth among majors...
US$ billion 2005 2006 2006/ 2005
Petrobras* 9,74 11,92 22,3%
Chevron 14,10 17,14 21,6%
ConocoPhillips 13,53 15,55 14,9%
Exxon 36,13 39,50 9,3%
Shell 25,31 25,44 0,5%
BP 22,34 22,00 -1,5%
Média 11,2%
...however 4Q06 results were affected by the decrease in Brent price.
US$ bilhões 3Q06 4Q06 4T06/3T06
Exxon 10,49 10,25 -2,3%
Shell 5,94 5,28 -11,1%
ConocoPhillips 3,88 3,20 -17,5%
Chevron 5,02 3,77 -24,8%
Petrobras* 3,26 2,42 -25,8%
BP 6,23 2,88 -53,8%
Média -22,5%
Source: Evaluate Energy
* Petrobras results converted by the average dollar prices from their corresponding periods.
21

23. QUESTION AND ANSWER SESSION
Visit our website: www.petrobras.com.br/ri
For more information 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 – 22o floor
20031-912 – Rio de Janeiro, RJ
(55-21) 3224-1510 / 3224-9947
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