This excerpt taken from the PBR 6-K filed Oct 10, 2008.
Clarifications about investments in Ecuador
(Rio de Janeiro, October 10 2008) PETRÓLEO BRASILEIRO S/A - PETROBRAS, [Bovespa: PETR3/PETR4, NYSE: PBR/PBRA, Latibex: XPBR/XPBRA, BCBA: APBR/APBRA], a Brazilian international energy company, responding to written notice CVM/SEP/GEA-2/Nº 249/08, regarding the story published by the Valor Econômico journal titled Petrobras cancels investments in Ecuador, clarifies that:
Petrobras Energia Ecuador, a subsidiary of Petrobras Energia S.A. (PESA), a publicly traded company headquartered in Argentina, which, in turn, is a subsidiary of Petróleo Brasileiro S.A. Petrobras, signed, last September 16, an agreement with the government of Ecuador (Acta de Entendimiento) in which it commits to return exploratory block 31. This agreement is subject to a few conditions being met, among which approval by PESAS Board of Directors.
PESAS accumulated investments in this block add up to $200 million in nominal values. Anticipating the difficulties to develop these reserves, a provision was made in 2007 for the write-off of the asset. By returning the block, PESA will not have its own oil to transport in the OCP oil pipeline, in which it has already contracted capacity (ship-or-pay). Because of this, it is negotiating an oil transportation agreement with Petroecuador for the usage of this idle capacity.
Once the return of exploratory block 31 has been confirmed, the investments Petrobras Energia Ecuador had programmed to develop production will no longer be made.
This document may contain forecasts that merely reflect the expectations of the Companys 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.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: October 10, 2008
This press release may contain forward-looking statements. These statements are statements that are not historical facts, and are based on management's current view and estimates offuture economic circumstances, industry conditions, company performance and financial results. The words "anticipates", "believes", "estimates", "expects", "plans" and similar expressions, as they relate to the company, are intended to identify forward-looking statements. Statements regarding the declaration or payment of dividends, the implementation of principal operating and financing strategies and capital expenditure plans, the direction of future operations and the factors or trends affecting financial condition, liquidity or results of operations are examples of forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.