This document provides an overview of Petrobras' 3rd quarter 2006 earnings conference call. It includes: 1) Domestic oil production increased 1.3% compared to the previous quarter due to new platform performances. 2) Lifting costs increased 8.5% due to higher transportation, seismic, and drilling expenses as well as initial operational costs for new fields. 3) Net income increased slightly to R$7.085 billion, with higher revenues offset by a change in how ANP calculates special participation costs in the Marlim field.

1. PETROBRAS
Conference Call / Webcast
3rd Quarter 2006
(Brazilian Corporate Law)
Almir Barbassa
CFO and Investor Relations Officer
November, 13th 2006
0

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
Δ = 3.1%
Δ = 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.
2

4. 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.
3

5. PETROBRAS
Domestic Lifting Costs without Government Participation
Δ = 8.5% or US$ 0.52
6.32 6.64
6.07 6.12
US$/bbl
5.44
3Q 05 4Q 05 1Q06 2Q06 3Q06
Main Causes
• Higher expenditure in:
• Transportation, seismic and drilling for wells intervention;
• Corrective maintenances;
• Higher costs due to initial operational phase in Albacora Leste and Golfinho
fields.
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6. PETROBRAS
Lifting Costs including Government Participation
26 70
61,5 56,9 69,6 69,5
51,6 60
21 47,5 61,8
17.5 18.1 50
38,2 17.3
15.2 16.1
16 40
28,8 13.6 13.9
63%
US$/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. 5

7. 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.
6

8. 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 and restrictions to oil receipt.
7

9. PETROBRAS
Average Realization Price - ARP
100 3Q05 2Q06 3Q06
Average Average Average
81,83
81,78
80 72,43 72,28
70,66
61,54 69,49
60 69,62
60,26
40
ARP Brazil (US$/bbl) Brent Average Price ARP USA (w/ volumes sold in Brazil)
20
Sep-04 Dec-04 Mar-05 Jun-05 Sep-05 Dec-05 Mar-06 Jun-06 Sep-06
8

10. 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 9

11. 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.
10

12. 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 like consulting and
technical consulting (R$ 285 million).
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13. 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.
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14. 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.
13

15. PETROBRAS
Changes in Net Profit – R$ million (3Q06 vs 2Q06)
1,757 Domestic Oil, NGL and Condensate – thousand bpd 1,779
5.415 4.982 Extraordinary Items and
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 (Int. Minority 3Q06 Net
Profit extraordinary Oper. Exp. Buyback Own Cap.) 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 and others.
14

16. 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 15

17. 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 16

18. 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.
17

19. 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.
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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
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