This document contains a presentation by Petrobras executives discussing the company's strategic plan and 3rd quarter results for 2006. The presentation outlines Petrobras' key drivers and business strategies, including expanding natural gas and downstream operations. It provides macroeconomic assumptions for 2007-2011 and details Petrobras' $87 billion investment plan over that period focused on exploration and production, downstream activities, and international expansion. Production targets, main projects, and financial targets are also summarized.

1. PETROBRAS
8º Foro Latibex
November, 15, 16 and 17
Madrid
Strategic Plan and 3rd Quarter Results - 2006
Raul Adalberto de Campos
Executive Manager Investor Relations
Carlos Henrique Dumortout Castro
Investor Relations Manager
November, 2006 0

2. PETROBRAS
Disclosure
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
Drivers & Strategies
Drivers Business Strategies
E&P
Develop market and monetize • Focus on light oil and natural gas
natural gas reserves in Brazil production and reserve growth
Downstream
Reduce dependence on light oil • Expand conversion capacity and improve
and oil product imports quality of refined products
• Increase bio-refining capacity, biomass,
petrochemical and fertilizers businesses
Improve oil product quality in • Promote Brazilian biodiesel production and
Brazil and abroad export ethanol
Distribution
Reduce carbon intensity of • Increase market-share in Brazil for oil
operations and products products and biofuels
Gas & Energy
Assure future demand and add
value to heavy oil exports • Develop and establish a profitable and
reliable natural gas market including LNG
International
Exploit competitive advantage • Expand E&P in Gulf of Mexico and Africa
from deep water exploration • Undertake investments in refining
technology abroad conversion capacity and quality
2

4. PETROBRAS
Fundamentals - Macroeconomic assumptions
Assumptions 2007-2011 • Market developments indicate an
appreciation of the FX rate
GDP – World (% p.a.) –
4.2 (R$/US$).
PPP*
GDP – Latin America (%
3.7 • Petrobras robustness Brent price
p.a.) – PPP
below the low end of market’s
GDP – Brazil (% p.a.) 4.0
forecast band.
FX rate (R$/US$) 2.50
Robustness Brent • Costs are projected at current
23.00
(US$/bbl) levels, with no adjustment for
future price reductions.
2006 – 62.00
Brent for funding 2007 – 55.00
(US$/bbl)
• Petrobras products prices follow
2008 – 40.00
2009-2011 – 35.00 international prices in the medium
term.
Costs At current levels
Linked to • Natural gas prices to accompany
Domestic sales prices international market international differentials to oil
prices products.
* PPP – purchase power parity
3

5. PETROBRAS
Fundamentals - Domestic oil products market
Variation 2004 x 2005
Brazil’s Oil products demand
Cocke and Others 0.00%
Fuel Oil -6.90%
Diesel + Jet Fuel 0.52%
2500 Naphtha 0.00%
Gasoline A 0.96% 3.1% p.a.
LPG 0.00%
2,117
2000 211
1,767 1,766 97
Thousand bpd
128 128
1500 116 108
935
773 777
1000
282
237 237
500
312 315 368
201 201 224
0
2004 2005 2011
LPG Gasoline A Naphta Diesel* + Jet Fuel Fuel Oil Coke + Others
• Increasing demand for middle distillates.
*Includes Biodiesel (2%) 4

6. PETROBRAS
Investment Plan
Business Plan 2007-2011
US$ 87.1 billion
56% 14%
49.3 U
S$
12
49,3 .1
bi
31.0
23,0 US$ 75.0 bi
1.8
1,8
2.3 3.3 23.0
3% 2,2 3,3 7,5 26%
7.5
1.0
3% 1.0
4% 12.4
9% 86%
E&P Downstream G&E Brazil International
Petrochemical Distribution Corporate
Note: Includes International
5

7. PETROBRAS
Investment Plan
• New projects represent 50% and cost increase 23% of the additional
Capex in relation to the previous Plan.
• Exploration and development US$ Million
projects
• Offshore production
• Diesel and gasoline quality and Business Model Scope Change Other
conversion portfolio Change 1,824
517
• Fleet renovation and expansion 2,957
program FX Rate
Appreciation
4,189
• New exploration projects in Cost Increase
Brazil 7,792
• Production development
Jabuti, ESS-164
• HBIO, RPBC modernization
• Ethanol exports
New Projects
• New vessels
17,412
• Northeast and southeast LNG
• New projects in E&P and BP 2006-10
refining abroad 52,430
6

8. PETROBRAS
Financial Targets - Sources & Uses
Sources Uses
(US$ 99.3 billion) (US$ 99.3 billion)
12.6 12.2
86.7 87.1
(*)
2004-2010 2004-2010
Financing Debt Amortization
Cash Flow Capex
• Accrued Economic Profit (2006-2015): US$ 83.4 billion (US$ 53.9 until 2011).
7

9. PETROBRAS
Financial Targets - Main Financial Indicators
2006-2010 2007-2011
Indicators Average
Average
Return on Capital Employed (ROCE) (%) 15 16
Long Term Funding (US$ billion per year) 2.9 3.1
Cash Balance (end of the year) (US$ billion) 4.4 3.5
Net Debt/ Net Debt + Shareholders’ Equity
28 25
(Leverage) (%)
Oper. Cash Flow before interest and taxes /
8.6x 13.7x
interest
Free Operating Cash Flow (US$ billion) 1.5 1.5
Sensitivity to Brent in 2007-2011(annual average)
Every US$ 5.00 Brent price change will result in:
• 3 pp change in ROCE;
• US$ 3.5 billion change in the operational cash generation;
• 10 pp change in leverage.
8

10. PETROBRAS
E&P - Production targets – Oil & NGL and Natural Gas
7.5% p.a.
Thousand boed 4,556
278
7.8% p.a.
3,493 742
185
383 724
2,403
2,036 2,020 2,217
101
96 551
85 94 133
163 289
161 168
274
250 265
2, 812
2, 374
1, 880
1, 540 1, 684
1, 493
2003 2004 2005 T a r get 2 006 T a rg e t 2 0 1 1
2015
Oi l and N GL - B r az i l N at ur al Gas - B r az i l For ecast
Oi l and N GL - I nt er naci ona l N at ur al Gas - I nt e r naci onal
9

11. PETROBRAS
E&P - Main production projects in 2006
FPSO Cidade do
P-50 FPSO Capixaba P-34 Rio de Janeiro
Albacora Leste Golfinho Mod. 1 Jubarte Phase 1
Espadarte Mod. II
Capacity 180,000 bpd Capacity 100,000 bpd Capacity 60,000 bpd
Cap.: 100,000 bpd
April 2006 May 2006 November 2006
December 2006
In 2006, two platforms, P-50 and FPSO Capixaba, have started operating. Until the
end of the year, other two platforms will start-up operation, adding a production
capacity of 440 thousand bpd to the county.
• P-50 is currently producing 150,000 bpd and should reach its production peak by the end of the year.
• FPSO Capixaba is producing 35.000 bpd and should reach its full capacity in 2007.
• P-34 is being tested on the ocean and its start-up is scheduled to November.
• The start-up of FPSO Rio de Janeiro was anticipated form 2007 to December 2006.
10

12. PETROBRAS
E&P - Main production projects in 2007 - 2011
Aditional
2007 2008 2009 2010 2011
Capacity (bpd)
480,000 280,000 280,000 180,000 280,000
Parque
Parque
2.600 das Conchas
das Conchas
Cidade de Vitória
Cidade de Vitória 100,000 bpd
100,000 bpd
Golfinho Mod. 2
Golfinho Mod. 2 Frade
Frade 2011
2011
100,000 bpd
100,000 bpd ESS-130
ESS-130 100.000 bpd
2.368
2.400 100.000 bpd
Thousand bpd
May/2007
May/2007 Golfinho Mód. III
Golfinho Mód. III 2009
2009 2.374
(FPSO)
(FPSO)
Roncador
Roncador 100,000 bpd
100,000 bpd Jubarte
Jubarte
2.200 P-52
P-52 2008
2008 Roncador
Roncador
2.195 Fase 2
Fase 2
180,000 bpd
180,000 bpd P-55
P-55
P-57
P-57
Dec/2007
Dec/2007 Marlim Leste 180,000 bpd
180,000 bpd
Marlim Leste 180,000 bpd
180,000 bpd
2.000 P-53*
P-53* 2010 2011
2011
2.061 2010
180,000 bpd
180,000 bpd
1.979 2009
2009
Piranema
Piranema Marlim Sul
Marlim Sul
1.800 Módulo 2
20,000 bpd
20,000 bpd Módulo 2
April/2007
April/2007 P-51
P-51
180,000 bpd
180,000 bpd
Roncador
Roncador
1.600 2008
2008
P-54
P-54
180,000 bpd
180,000 bpd
Oct/2007
Oct/2007
1.400
2007 2008 2009 2010 2011
11

13. PETROBRAS
E&P - Platforms under Construction in Brazil
Currently, three Petrobras platforms are being built in Brazil
P-51 P-52
Capacity: 180,000 bpd Capacity: 180,000 bpd
Modality: Owned Modality: Owned
Current Situation: under Current Situation: under
construction in Angra dos Reis construction in Angra dos Reis
(RJ) (RJ)
Start-up: February 2008 (Marlim Start-up: December 2007
Sul Field) (Roncador Field)
P-51will be the first semi-submersible unit to be entirely built in Brazil.
P-54
Capacity: 180,000 bpd
Modality: Owned
Current Situation: under
construction in the Mauá-Jurong
(RJ) shipyard
Start-up: September 2007
(Roncador Field)
12

14. PETROBRAS
E&P - 2011-2015 main Brazilian projects
• To sustain production growth, 15 large projects will be implemented between
2011 to 2015. The highlights are:
2900 Oil Production in Brazil (Thous. bbl) 2,812
2800
2700 • Marlim Sul P-56
• Roncador P-55
2600
• Papa-Terra Mód. 1 e 2
2500 • Marlim Sul Mód. 4
• Roncador Mód. 4
2400
2,374
• Cachalote and Baleia Franca
• Baleia Azul
2300
2200
2100
2011 2015
13

15. PETROBRAS
E&P Investments - Brazilian production curve
2.600 2,368 2,374
2,195
690
1,979 2,061
2.100 1,880 Net Increase
1,684
1.600
Thous. bpd
1.100
600 +
100
(154) (154)
(326)
(172) (508)
(400) (181) (697)
(897) 1,114
(189)
(201) Accumulated
(900)
(217) Natural Decline
(1.400)
2005 2006 2007 2008 2009 2010 2011
1,804
Total Production Accumulated Decline Annual Decline
Gross Increase
14

16. PETROBRAS
E&P Investments
• 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.
Undeveloped Reserves / Total Reserves* (2005)
60,0%
54,3% 53,1%
51,5% 50,5%
50,0%
43,8%
40,5% 39,7%
40,0%
34,3%
30,0% 29,7%
30,0%
25,0%
20,3%
20,0%
12,9%
10,0%
0,0%
n
C
na
l
as
il
c
BP
l
s
PF
l
il
ta
el
oi
ro
ko
pe
ob
llip
O
i
To
Sh
at
br
ev
Ch
-Y
O
Lu
no
nM
i
St
tr o
Ph
CN
ol
Ch
tr o
Si
xo
ps
Pe
co
Pe
Ex
Re
no
Co
* Source: Evaluate Energy 17
15

17. PETROBRAS
E&P Investments - Petrobras CAPEX vs. Peers CAPEX
E&P CAPEX to production 2005-2008E Average (US$/bbl)
30
Petro-Canada: 14,17
ConocoPhillips: 12,5
Marathon Oil: 12,31
25
CNOOC: 13,19
Imperial Oil: 10,21
Exxon Mobil: 9,54
Chevron: 11,32
Petrochina: 10,2
Sinopec: 10,02
Petrobras*: 8,56
Shell Canada: 26,86
Murphy Oil: 27,75
20
Statoil: 9,89
Total: 9,41
Suncor: 21,65
15
BP: 7,03
10
5
0
* CAPEX and production over 2006-2011
Global Oils E&P CAPEX to production 2005-2008E Average
Source: Merrill Lynch estimates based on available data for the companies.
• Per barrel CAPEX* for Petrobras (2006-2011) of US$ 8.56 vs. Global Oils average (2005-08) of
US$ 13.74 (ex-PBR).
16

18. PETROBRAS
E&P - Petrobras’ Drilling Rigs
2003 2004 2005
Internatio
Total Total Brazil Total
nal
Onshore 25 47 22 19 41
Offshore 41 43 42 4 46
Owned Rigs: 31
Total 66 90 64 23 87 Leased: 56
• Petrobras’ leasing contracts are long term, averaging a 5 years length;
• In 2005, 18 offshore drilling rigs were owned by Petrobras;
• In August 2005, Petrobras renovated 24 drilling rigs contracts.
17

19. PETROBRAS
Downstream – 2007-2011 Investments
US$ 23.1 billion in the downstream segment… ...of which US$ 14.2 billion in refining
14% 6% 26%
US
$
US$ 3.7
0.
US$ 3.2
9
19%
US$ 2.7
12% US$ 2.8 61%
US$ 2.5
US$ 14.2 18%
0
US$ 4.4
3.
$
US
13% 31%
Refining
Pipelines & Terminals Transport Gasoline and Diesel Quality Expansion
Ship Transport
Petrochemical HSE Conversion
Others
• Aggregating value to our heavy oil and producing diesel and gasoline
according to international standards.
18

20. PETROBRAS
Vertical Integration Comparison
Majors Average *
4,793
3,176
2,735
National Oil Companies Average **
1,579
1,630
4,329
2011: Petrobras
New Refinery will add 200
thous. bpd capacity 2,296
2010:
Pasadena Refinery revamp
concluded – processing 70
2,114
thous. bpd of heavy oil
Product Sales (thous. bpd)
2,217
Refining (thous. bpd)
3,400 Production (thous. boed)
Year 2011
* Majors: BP, Exxon, Total, Royal Dutch Shell, Chevron, Conoco and Repsol-YPF *** 2004 figures, except for Petrobras (2005)
** NOIC: PEMEX, PDVSA, Saudi Amraco, KPC, Pertamina and Sonatrach Source: PIW Intelligence and Petrobras
19

21. PETROBRAS
Business Strategies - Downstream
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.
New Refinery in the USA
• Petrobras has acquired 50% of the Passadena Refinery System
Inc. (PRSI), located in Texas, USA;
• Total Investment: US$ 370 million;
• The refinery, which already has a capacity of 100,000 bbl/day, will
be upgraded to handle 70,000 bbl/day of heavy oil and feedstock
(including Marlim field’s production);
• The upgraded refinery will be ready in four years. After the revamp project all products will match
USA highest standards.
20

22. PETROBRAS
Downstream Investments - Petrochemical investments
Advantages:
Main Projects • Proximity to Petrobras’ installations in Rio de
Janeiro;
Rio de Janeiro • Availability of labor for both the construction
Petrochemical Complex and operational phase;
• Proximity to port installations.
Acrylic Complex /SAP • Products: Diesel, LPG, Ethylene, Propylene,
PX, Benzene and Coke.
PTA Pernambuco
•The Complex will add value to 150,000
Nitrogenated Fertilizers barrels/day of heavy oil form the Campos
Basin.
Unit III
Fafen BA
• Investments of US$ 3.3 billion in
Petrochemicals; Petrochemical
São Gonçalo
• Reducing the Brazilian deficit and adding Complex –
Liquids
value to Downstream production. Itaboraí
Outflow Unit
21

23. PETROBRAS
Downstream Investments - Liquid products flow
• In 2011 international sales will amount to 967 Thous. bpd.
International Production Brazilian Production 80 Oil products consumption
383 2,374 in Brazil (**) 2,099
584 1,710
Throughput in
Brazil 1,877
Oil Oil Products (*)
167 142
Imports
383 + 584
309
International oil sales
In Thous. bpd
967 (*) National imports and private refineries
(**) Biodiesel portion not included
22

24. PETROBRAS
Natural Gas Investments
Challenges Business Plan 2007-2011 Targets
Over 75% of Petrobras’ current natural Investments to develop production of
gas production is associated gas non-associated gas
Risk of gas supply failure due to LNG to provide flexibility to mitigate
abnormalities such risk
Lack of infrastructure to develop Total investment (Petrobras and
Brazilian market partners) in Brazilian natural gas chain
adds up to US$ 22.1 billion
23

25. PETROBRAS
Fundamentals - Domestic natural gas market
140 Natural gas market
121.0 121.0
120
up to 20.0
100 34.0
17.7% p.a.
up to 30.0
80
Million m3/day
38.6
60
45.4
40 13.5 up to 71.0
20 24.8 48.4
0 7.1
Consumed in 2005 Maximum Demand Potential Supply 2011
2011(*)
Thermoplants Industry Other
National Production Bolivian Imports LNG
* Considers maximal dispatch for every thermoelectric power plant
24

26. PETROBRAS
Natural Gas Investments - Delivery Curve
Million m3/day
SPS25 RJS633 Cavalo
80 ESS164
2008
2009 2010 Marinho
2010
Roncador
(P-55)
Urucu 2011
Natural gas Mexilhão 70
70 sales
2007
2009
70.6
Roncador Golfinho 65.2 Parque das
60 (P-54)
2007
Mod 2
2007
Canapu
2008 Tambaú/Uruguá
Conchas
2011
2010
Peroá- Frade
50 Cangoa 2009
Jubarte Fase 2
NG non associated
NG associated
(P-57)
Phase 1 49.4 Marlim Leste
(P-53) 2010
2006 Marlim Sul
40 Manati
ESS130 Mod 2
2009
2008 (P-51)
2006 2008
34.1
30 Piranema Peroá-
Cangoa
27.5 2006
Roncador Phase 2
20 Jubarte
(P-52)
2007
2007
Albacora
Albacora (P-34)
Complemental
Leste 2006 Espadarte
10 (P-50) Mod. 2
2007
2007
2006 Golfinho Mod 1
2006
0
2006 2007 2008 2009 2010 2011
25

27. PETROBRAS
Natural Gas Investments
New investments will reduce the country’s dependence on imported gas.
• Production will raise from the current 15.8
million to 40 million m3 per day in 2008 in
(Light oil)
(Light oil)
(Light
the Southeast.
(Heavy oil)
Heavy oil
• Development of two new oil and gas
fields in Espírito Santo;
ESS-130
ESS-
ESS-130 • Increase of natural gas supply from
(Light oil
(Light oil
(Light )
) the Marlim field (Campos Basin);
• Expansion of gas production in the
Merluza field (Santos Basin).
• Demand Flexibilization
• Refineries, Distributors and flex-fuel
thermoelectric plants ( LNG, diesel and
Gas and light oil
Gas and light oil BC-20
BC-20
Gas
Gas (Heavy oil)
Heavy oil)
oil)
alcohol)
BS-500
26

28. PETROBRAS
Natural Gas supply extension in Southeast 2006 - 2008
PLANGÁS
Dec./2008 Cacimbas (20 MM m3/d)
Peroá (10 MM m3/d)
Lagoa parda
Belo Horizonte
Vitória
Pólo Golfinho
ESS-164
ESS-
+16,3 MM m3/d (*)
Ubu Golfinho + Canapu
Pq. Baleias +
Pq.
BC10
Campinas
Cabiúnas Total Southeast:
Garoupa ESS-130
ESS-
Caraguatatuba
Rio de Janeiro 40 MM m3/d
Namorado
Enchova
(+ 24,2 MM m3/d)
REDUC Pampo
RPBC
Plataformas da
UN-BC e UN-RIO
UN- UN-
Tambaú
+6,4 MM m3/d (*)
Mexilhão Uruguá
Merluza - II Merluza
•Development of new fields in Espírito Santos field
Lagosta
(BM-S-3/ BM-S-7,
(BM- BM- (1-ESS-164 and 1-ESS-130)
SPS-25)
SPS-
+1,5 MM m3/d (*) • Increase in Marlim supply (Campos Basin)
(*) Schedules under evaluation • Merluza production expansion (Santos Basin)
(*) Additional to the current supply
27

29. PETROBRAS
Natural Gas supply extension in Brazil
New investments will reduce the country’s dependence on imported gas.
• SE production will raise from the current 15.8 million to 40 million m3 per day in 2008.
• Development of two new oil and gas fields in Espírito Santo;
• Increase of natural gas supply from the Marlim field (Campos Basin);
• Expansion of gas production in the Merluza field (Santos Basin);
• Demand rationalization;
• Refineries, Distributors and flex-fuel thermoelectric plants ( LNG, diesel and
alcohol).
Highlights
Santos Basin:
• Investments: US$ 18 billion over the next 10 years;
• Increase of 12 million m3/day in the supply of gas as of 2009;
• In 2010, total volume will reach 30 million m3/day.
Peroá Field:
• Gas production will guarantee a 1.3 million m3/day supply to the State of Espírito Santo
• Supply may be duplicated with the start-up of the first 100km of Gasene.
Manati Project:
• Forecasted production of 6 million m3/day, attending the demand of the State of Bahia.
28

30. PETROBRAS
Flexible LNG Project
Facilitates the adjustment of the offer to the market’s characteristic:
Flexible Offer (with guarantee) to the thermoelectric plants.
More efficient than Diesel in the thermo plants;
Mitigates the risk of failing to supply the gas due to abnormalities;
Diversifies the sources of imported gas;
Projects under evaluation:
Purchase or freight of floating storage and regasification units (FSRU);
Maritime terminal in Pecém (Ceará) - 6 MM m³/day (estimate Jul/2008 ± 3 months)
Maritime terminal in the Guanabara Bay (Rio de Janeiro)– 12/14 MM m³/day (estimate
Jul/2008 ± 3 months)
FSRU
Floating Storage and
Regasification Unit
29

31. PETROBRAS
Natural Gas Investments
Main Projects
LNG – Liquefied Natural Gas
Gasene – Northern Segment
Urucu-Coari-Manaus Gas Pipeline
NG infra-structure maintenance
Southeast Gas Pipeline Network
Gasbel Extension
Espírito
Extension of Gasbol Southern
Campos
Santo
Segment (LNG distribution)
Santos Northeast Gas Pipeline Network
US$ 6.5 billion investments
between 2007-2011
TOTAL INVESTMENTS OF US$ 22,1 BIILION IN THE BRAZILIAN NATURAL GAS CHAIN
FROM 2007 – 2011 (Petrobras and Partners)
30

32. PETROBRAS
Business Strategies - Downstream
Domestic refining and sales
91 91 91 91 95
2,400 88
87 90
87
2,200 83 85
80 81 80
79 79 80
2,000 77 80
81
1,800 75
70
1,600
65
1,400
1,70 8 1,58 9 1,6 6 8 1,6 6 5 1,8 0 4 1,73 1 1,76 1 1,6 4 7 1,8 12 1, 6 4 9 1,79 5 1, 6 8 4 1,6 9 6 1, 6 3 7 1,73 5 1,6 55 60
1,200 55
1,000 50
1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 2004 2005
Dom estic oil products production Oil products sales volum e
Dom estic crude as % of total Prim ary processed installed capacity - Brazil (%)
• High utilization factor (91%) in the second half of 2005 in the refineries resulted in maintenance of
the oil products production high level, diminishing the needs for oil products imports.
• In 2005, the contribution of the National oil Production in the feedstock were 84 thousand bpd
higher than in 2004.
31

33. PETROBRAS
Distribution Investments
Market Share of Fuel Distribution • Lead the Brazilian market for oil products
Companies in Brazil (%) and bio-fuels;
34% • Expand domestic market-share and client
21%
portfolio;
8% • Internationalize and add value to
Petrobras’ brand.
7%
13% 17%
BR Ipiranga Shell
Esso Texaco Outras
US$ 2.2 billion to be invested between 2007-2011
32

34. PETROBRAS
International - Overview
United Kingdom.
New York
USA
Houston Turkey
Tokyo
Iran Beijing
Lybia
Mexico Trinidad & Saudi Arabia
Tobago Nigeria
Venezuela
Colombia
Equatorial Guinea Tanzania Singapore
Ecuador
BRAZIL Angola Mozambique
Peru
Bolivia Rio de
Janeiro
Uruguay
HEAD OFFICE Argentina
REPRESENTATIVE OFFICE
REFINING
TRADING
EXPLORATION AND PRODUCTION
UNDER EVALUATION
33

35. PETROBRAS
International Investments
Total CAPEX: US$ 12.1 billion Targets
0,8%
1,7%
0,8% 568
1,7%
Thous. boed
E&P
185
Refining and
Marketing 259
262
Petrochemical 24,8%
94 96
Gas & Energy 383
70,2% 168 163
Distribution
Corporate 2004 2005 2011 Target
Oil and NGL Natural Gas
Core Areas:
• Refining
• Add value to Brazilian heavy oil exports
• E&P: West Africa (Nigeria and Angola) & Gulf of Mexico:
• Apply deep water and deep well drilling technology.
• Latin America:
• Leadership as an integrated energy company
34

36. PETROBRAS
The US Sector of Gulf of Mexico
Current Portfolio
UNITED STATES
Position:
• 80 shallow water
blocks and 197 New Orleans
Houston
deepwater blocks
• 6 Producing Fields
• 3 discoveries Coulomb North
(appraisal) and Deep Shelf Gas Prospects Zion
studies of the
production
Redbud
development Aquila Aquarius Bryce Sedona
Cottonwood
• 1 field on Pegasus Andromeda Live Oak
Monte Belo
development. Centaurus Cascade
Crater Flavian
Scorpio
• 1 onshore Hadrian Malo
St Chinook
prospect Cygnus
Claudius
Aurelian Hadrian S Das Bump
• Proven reserves
(SPE, 2005): 39,0
million boe Producing Fields
Discoveries
• Average
production (2005): MEXICO Prospects
5,0 thousand boe/d 35

37. PETROBRAS
International - Main Projects in the Gulf of Mexico
Cottonwood Chinook Cascade
(Development) (Under Evaluation) (Under Evaluation)
• Petrobras (80%) - Operator • Petrobras (67%) - Operator • Petrobras (50%) - Operator
• Mariner (20%) • Total (33%) • Devon (50%)
Saint Malo Blackbeard, Megamata (deep gas)
(Under Evaluation) Andromeda (WGoM), Alsace (GBanks)
• Petrobras (25%) • EXPLORATION WELLS
•Petrobras (20% to 100%)
• Unocal (20%) - Operator
• Various partners (Exxon, Newfield, BP,
• Chevron (13%)
• BHPBilliton, Dominion, Carrizo, Hess,
• Encana (6%) • Kerr McGee
• Devon (23%)
LONG TERM COMMITMENTS
• Exxon (4%) Two drilling units on long term contracts
• ENI (1%)
36

38. PETROBRAS
Recent Developments - Gulf of Mexico
• Petrobras recently announced the acquisition of additional participation in the Cascade
and Chinook fields;
• Both fields will be developed using a FPSO* facility, a development concept so far never
deployed in the American waters of the Gulf of Mexico;
• Petrobras is conducting an aggressive exploration campaign in the Gulf of Mexico, which
includes acquisition of additional acreage and participation in wells being drilled or
planned for the near future;
• With these developments, Petrobras consolidates its position as one of the leading
players in the ultra deep waters of the Gulf of Mexico, benefiting from its deepwater
expertise and technology developed offshore Brazil
* Floating Production Storage and Offloading 37

39. PETROBRAS
International - Main Projects in West of Africa
Start up / Production Peak:
AGBAMI:
- First oil: 2008 / Peak: 250,000 bpd in 2009 (total)
AKPO:
- First oil: 2008 / Peak: 175,000 bpd in 2009 (total)
Proven reserves (SPE): 249 million bbl
31
5
37,5%
9%
13%
40%
1,000m
2,000m
Production (2005):
8,300 bpd
Proven reserves (SPE):
9,1 million bbl
38

40. PETROBRAS
Situation in Bolivia
• As a consequence to the measures adopted by the Bolivian Government, Petrobras
will act to:
• Protect its interests through negotiations by all legal means;
• Suspend all new investments in Bolivia as well as those related to the Bolivia-Brazil Gas Pipeline
(GASBOL);
• Immediately initiate studies to diversify supply sources, including LNG regasefication project(s);
120
Natural Gas Offer - Million m3/day Substitution of additional imports from Bolivia
11.0
100 11.0
4.0
80 30.0
30.0
30.0
60 30.0
30.0 30.0
40
61.5 69.6
54.3
20 43.0
26.5 31.4
0
2005 2006 2007 2008 2009 2010
Domestic Production Imports from Bolivia as of existing GSA
National Production Increase or LNG
39

41. PETROBRAS
A New Opportunity for Business
Ethanol global market – 46.5 Billions Liters
North and Central Europe
America
9.8%
37%
Brazil
35%
South America Asia
38% 16.2%
How much the production can be increased to attend the demand
with social responsibility?
40

42. PETROBRAS
Biofuel Production
• 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
Hydrogen Diesel
Agribusiness Fractions
Processed
Seeds Oil
Farming Crushing Refinery
or Diesel
or
Transerestification Biodiesel
Ethanol
Distributors
or or
B2 or B5 Diesel
Methanol mixture
Stations
Glycerin + Others
Complementary and not competitive processes 41

43. PETROBRAS
Renewable Energy and Biofuels
2007-2011 Investments 2011 Target
Biodiesel Plants Availability of 855 Thous. m3/year
Processing 425 Thous. m3/year
H-Bio (Bio-Refining)
of vegetable oil
Alcohol pipelines
3.5 million m3 Ethanol Exports
Alcohol Vessel Project
Wind Power
240 MW Installed Capacity of Power
Photovoltaic
Generation from Renewable Sources
Other Renewable Energy Sources
Investments of US$ 0.7 billion in development of renewable energy sources
and biofuels
* 2010 Target 42

44. PETROBRAS
Future Markets for biodiesel
Law 11.097/2005 – established minimal percentage for biodiesel mix in diesel
2008
2005
to From 2012
to
2012 on
2007
(2% demanding) (5% demanding)
(2% allowable)
(5% allowable)
Brazilian market Brazilian market Brazilian market
0 – 5.2 million barrels 5.2 – 15.7 million barrels 15.7 million barrels
Petrobras market share Petrobras market share Petrobras market share
0 – 1.3 million barrels 1.3 -3.8 million barrels 3.8 million barrels
• Petrobras target for 2010: Production of 8,200 bpd of Biodiesel
• Two new experimental units of biodiesel (Guamaré – Rio Grande do Norte),
which have received investments of R$ 19 million in research & development until
now, will produce up to 300 bpd of biodiesel.

45. PETROBRAS
Ethanol Market
• 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
Brazil-Japan Ethanol Inc.
• 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.
44

46. PETROBRAS
Ethanol Logistic to Export
New Ethanol Pipeline
(800 km)
New Water Way
for Ethanol Ethanol Export
8.0 Million m3 in 2012
Marine Terminal
Rio de Janeiro
Marine Terminal
São Paulo 45

47. PETROBRAS
Flex-Fuel Vehicles
• 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
LIGHT VEHICLES TOTAL SALES units
150,000
Ethanol Gasoline FFV 140,000
130,000
120,000
110,000
100,000
90,000
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
Nov-05
Feb-06
Nov-03
Nov-04
Aug-05
Feb-03
Feb-05
Aug-03
Feb-04
Aug-04
Dec-05
Apr-03
May-03
Apr-04
Apr-05
Sep-05
Jun-03
May-04
Jun-04
May-05
Oct-05
Mar-06
Jan-06
Jun-05
Dec-03
Dec-04
Sep-03
Sep-04
Jan-04
Jul-03
Jul-04
Jul-05
Jan-03
Jan-05
Mar-03
Oct-03
Oct-04
Mar-05
Mar-04
46

48. PETROBRAS
3rd Quarter 2006 Results
(Brazilian Corporate Law)

49. PETROBRAS
Domestic oil and NGL production
∆ = 3.1%
∆ = 1.3%
thousand bpd
1,779 1.790
1.780
1,757 1.770
1,751 1.760
1.750
1,736
1,725 1.740
1.730
1.720
1.710
1.700
3Q05 4Q05 1Q06 2Q06 3Q06
• 1.3% increase due to P-50 (Albacora Leste) and FPSO Capixaba (Golfinho) platforms performances,
both recently started operations;
• In the 3Q06, P-50’s contribution was around 18 thous. bpd above 2Q06 average, while FPSO
Capixaba increased production around 8 thous. bpd in the same period.
48

50. PETROBRAS
E&P – Oil Prices
69,62
US$ 10.80 bbl
69,49
64,74
61,53 61,75 66,07
56,9 57,59
56,39 58,69
51,59 58,2
US$/bbl
47,83 54,24 52,7 53,69
44,00 49,33
41,59 46,05
39,70 44,19
43,04
38,98
37,48
36,14 35,11
3T04 4T04 1T05 2T05 3T05 4T05 1T06 2T06 3T06
Average Sales Price Brent (average) Cesta OPEP
• The spread between Brazilian oil and Brent decreased from US$ 11.42/bbl, in the
2Q06, to US$ 10.80/bbl, in the 3Q06.
49

51. PETROBRAS
Domestic Lifting Costs without Government Participation
∆ = 8.5% or US$ 0.52
6.32 6.64
6.07 6.12
US$/bbl
5.44
3Q 05 4Q 05 1Q06 2Q06 3Q06
Main Causes
• Higher expenditure in:
• Transportation cost, seismic and drilling for wells intervention;
• Corrective maintenances;
• Higher costs due to initial operational phase in Albacora Leste and Golfinho
fields.
50

52. PETROBRAS
Lifting Costs including Government Participation
26 70
61,5 56,9 69,6 69,5
51,6 60
21 47,5 61,8
17.5 18.1 50
38,2 17.3
15.2 16.1
16 40
28,8 13.6 13.9
63%
US$/boe
24,8 11,5 30
63%
10.7 10,0 11,0 11,4
11
9,7
62%
7,7 8,4
59%
8.5 20
7.0 6,4
6 10
57%
5,1
4,0
6,0 5,4 5,4 6,1 6,3 6,1 6,6 0
3,0 3,4 4,3
1
-10
2002 2003 2004 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06
-4 -20
Lifting Cost Gov. Participation Brent
• Government participation remained stable due to the stability of the Brent
price, FX rate and production.
Obs.: Lifting Cost w/ gov. part. series was adjusted (retroactive to 2002) due to new ANP interpretation of the expense deductibility for the Finance Project
of Marlim Field, calculated as special participation. 51

53. PETROBRAS
Refining and Sales in the Domestic Market
91 95
2.400 91
93 90
Thous. barrels/day
91
2.200 89 85
2.000 80
80 81 80
79 79 75
%
1.800
70
1.600
65
1.804 1.720 1.761 1.753 1.757
1.400 1.812 1.795 1.684
1.647 1.649 60
1.200 55
1.000 50
3Q05 4Q05 1Q06 2Q06 3Q06
D o m e s t ic o il pro duc t s pro duc t io n O il pro duc t s s a le s v o lum e
P rim a ry pro c e s s e d ins t a lle d c a pa c it y - B ra zil ( %) D o m e s t ic c rude a s % o f t o t a l
• 4 pp reduction in throughput due to:
• Oil supply limitation;
• More scheduled stoppages compared to 2Q06;
• 1 pp decrease in domestic crude participation in processed feedstock due to operational problems in Golfinho
(less light oil) and increase spread between fuel oil and domestic heavy oil (more profitable to export).
• Increase in sales volume due to seasonality in agricultural diesel consumption, industrial fuel oil and
substitution of imported naphtha.
52

54. PETROBRAS
Domestic Refining Costs (US$/bbl)
2.48
2.03 2.07
1.86 1.90
3Q 05 4Q 05 1Q 06 2Q 06 3Q 06
• 20% increase compared to the previous quarter due to the occurrence of more
scheduled stoppages.
53

55. PETROBRAS
Average Realization Price - ARP
3Q05 2Q06 3Q06
100 Average Average
Average
81,83
81,78
80
72,43 72,28
70,66
61,54 69,49
60 69,62
60,26
40
20
Sep-04 Dec-04 Mar-05 Jun-05 Sep-05 Dec-05 Mar-06 Jun-06 Sep-06
ARP Brazil (US$/bbl) Brent Average Price ARP USA (w/ volumes sold in Brazil)
• Prices in US reflect the Brent price decrease in September;
• ARP in Brazil follows the mid term adjustments price policy.
54

56. PETROBRAS
Sales Volume
Jan- Jan-
Thousand bpd 3Q06 2Q06 % %
Sept 06 Sept 05
Total Oil Products 1,757 1,684 4 1,697 1,658 2
Alcohol, Nitrogen and others 35 13 169 26 26 0
Natural Gas 250 239 5 240 224 7
Total Dom estic Market 2,042 1,936 5 1,963 1,908 3
Exports 564 536 5 540 498 8
International Sales 509 459 11 468 388 21
Total International Market 1,073 995 8 1,008 886 14
Total 3,115 2,931 6 2,971 2,794 6
• Increase in the sales of fuel oil, diesel, LPG and gasoline.
2006 includes ongoing exports 55

57. PETROBRAS
Income Statement 3Q06 vs 2Q06
2Q06 3Q06
43.363 14.3%
Net Revenues
37.948
R$ Million
27.066 27.3%
COGS
21.260
12.912 -5.2%
EBITDA
13.614
10.303 -8.6%
Operating Profit
11.267
7.085 1.8%
Net Income
6.959
• Net Revenues: 5% increase in the domestic sales volume, oil exports (33%) and ARP (2%);
• COGS: ANP (National Petroleum Agency) new interpretation of special participation in the Marlim field
(retroactive to 2002); expenses adjustment related to reinjected gas (Solimões, Campos and Esp. Santo
Basins).
• Net Income: R$ 1.492 billion in benefits due to Interest on Own Capital provision, reduced in R$ 321
million relative to bonds buyback.
56

58. PETROBRAS
Operating Expenses Analysis 3Q06 vs 2Q06
2Q06 3Q06
1.546 14.3%
Sales Expenses
1.353
R$ million
General and 1.459 3.1%
Administrative Exp. 1.415
531
Exploratory Costs 40.5%
378
1.342
Others 50.8%
890
• Operating Expenses increase mainly because of:
• Sales Expenses: increase in domestic sales (5.5%) and oil exports volume (33%);
• Exploratory Costs: write-off of dried wells (Brazil and abroad);
• Others: hedge contract maturity with ANDINA (R$ 167 million) and others (R$ 285 million).
57

59. PETROBRAS
Changes in Operating Profit (3Q06 vs. 2Q06)- E&P
Changes in Operating Profit – R$ million
1,757 Domestic Oil, NGL and Condensate – thousand bpd 1,779
536
1.040
408
10.938 18 426 420 10.198
6
Extraordinary Items:
R$ 834 million
2Q06 Oper. Price effect Volum e Average cost Gas Marlim part. Volum e Operating 3Q06 Oper.
Profits on Net effect on Net effect on Reinjection Calculation effect on Expenses Profits
Revenue Revenue COGs Effect Effect COGs
• Quarter characterized by the increase in production and accounting of extraordinary items.
58

60. PETROBRAS
Changes in Operating Profit (3Q06 vs 2Q06)- Supply
Changes in Operating Profit – R$ million
3.168 2.160
2.944
1.017
2.486
106 1.461
2Q06 Oper. Price effect on Volume effect Average cost Volume effect Oper. Exp. 3Q06 Oper.
Profit Net Revenue on Net effect on COG on COGs Profit
Revenue
• Increase in oil products domestic sales volume (4%), offset by inventory sales with
a higher average cost.
59

61. PETROBRAS
Changes in Operating Profit (3Q06 vs 2Q06)- International
Changes in Operating Profit – R$ million
219 283
183
137
507 156
333
2Q06 Price Effect on Volume Effect Cost Effect on Volume Effect Operating 3Q06
Operating Revenues on Revenues COGS on COGS Expenses Operating
Profit Profit
• Cost effect on COGS due to:
• Increase in the production costs in Bolivia resulting from tax increase on hydrocarbons from
50% to 82% as of May 2006.
• Stoppage in the San Lorenzo refinery, Argentina.
60

62. PETROBRAS
Gas & Energy Results (3T06 vs. 2T06)
Main factors that affected the Gas & Energy Business
• R$ 581 million loss mainly due to:
• R$ 150 million decrease in gross income due to lower energy
commercialization margins because of increase in the Electric Energy
Commercialization price (decrease in reservoirs water level in South region);
• Loss accrual of R$ 167 million, resulting from conclusion of hedge contract
that reduced imported natural gas price volatility.
• These factors were partially offset by the 5% increase in the natural gas sales
volume.
61

63. PETROBRAS
Changes in Net Profit – R$ million (3Q06 vs 2Q06)
1,757 Domestic Oil, NGL and Condensate – thousand bpd 1,779
4.982 Extraordinary Items and
5.415
Bonds Buyback:
R$ 1.145 million
6.959 149 7.085
824 573 1.603
341 321
2Q06 Net Revenues GOGS w/o Extr. Items Oper. Exp. Fin. and Non Bonds Taxes Minority 3Q06 Net
Profit extraordinary Oper. Exp. Buyback Interest Income
items and Eq.
Income
• COGS: influenced by extraordinary effects (R$ 426 million reinjected gas and R$ 408 million
special participation costs in Marlim field) and sales of higher costs inventories;
• Operating Expenses: write-off of dried wells (Brazil and foreign); increase in the domestic sales
and oil exports volume; maturity of the hedge with ANDINA, operating expenses with
thermoelectric plants and others.
62

64. PETROBRAS
Net exports of oil and oil products
Exports (thousand bpd) Imports (thousand bpd)
54 thous. bpd volume surplus in the 3Q06
536 564 559
512 519 510
446 424 446 459
409 209 109 442
249 257 269 137
213 105 94 115 88
228
355 450
319 352 344 354 373
233 263 262 267
181
2003 2004 2005 1Q06 2Q06 3Q06 2003 2004 2005 1Q06 2Q06 3Q06
Oil Oil Products Oil Oil Products
• Oil exports increase due to scheduled stoppages in refineries with high complexity;
• Oil products imports increase due to the seasonal increase in the diesel
consumption.
2006 includes ongoing exports 63

65. PETROBRAS
Leverage
Petrobras’ Leverage Ratio
R$ million 09/30/2006 06/30/2006
28%
27% Short Term debt (1) 11,858 12,214
26%
26% Long Term Debt (1) 32,280 31,307
24%
Total Debt 44,138 43,521
23% 20%
19%
18% 17% Cash and Cash
24,519 22,713
Equivalents
Net debt (2) 19,619 20,808
set/05 dez/05 mar/06 jun/06 set/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)
(1)Includes debt contracted throughcash contracts of R$ 3.300 million on December 31, 2005, and R$ 4.021 million on December 31, 2004.
and increase in leasing balance.
(2)Total debt - cash and cash equivalents
(1)Includes debt contracted through leasing contracts of R$ 2,729 million on September 30, 2006, and R$ 2,815 million on June 30, 2006.
(2)Total debt - cash and cash equivalents 64

66. PETROBRAS
Consolidated Cash Flow Statement
R$ million
3Q06 2Q06
(=) Net Cash from Operating Activities 10,209 11,365
(-) Cash used in Cap. Expend. (8,337) (6,640)
(=) Free Cash Flow 1,872 4,725
(-) Cash used in Financing and Dividends (66) (4,995)
Financing (60) (1,472)
Dividends (6) (3,523)
(=) Net Cash Generated in the Period 1,806 (270)
Cash at the Beginning of Period 22,713 22,983
Cash at the End of Period 24,519 22,713
• R$ 1,8 billion increase in Free Cash Flow.
65

67. PETROBRAS
Investments (Capex)
R$ million Jan-Sept/06 % Jan-Sept/05 % %
• Direct investments 20.264 90 14.751 87 37
Exploration & Production 11.404 51 8.907 53 28
Supply 2.800 13 2.184 13 28
Gas and Energy 1.203 5 1.098 6 10
International 3.923 17 1.871 11 110
Distribution 477 2 368 2 30
Corporate 457 2 323 2 41
• Special Purpose Companies 2.072 9 1.914 11 8
• Ventures under Negotiation 300 1 169 1 78
• Project Finance 1 0 87 1 0
Total Investments 22.637 100 16.921 100 34
• Following the targets established in its Business Plan, the company
continues to invest primarily in Exploration and Production.
66