Petrobras (PBR)

Clarifications about News

(Rio de Janeiro, May 18 2009). – PETRÓLEO BRASILEIRO S/A - PETROBRAS, [Bovespa: PETR3/PETR4, NYSE: PBR/PBRA, Latibex: XPBR/XPBRA, BCBA: APBR/APBRA], a Brazilian international energy company, clarifies an article published by the Folha de São Paulo newspaper titled “Petrobras’ Balance Sheet omitted Fiscal change.”

The Company clarifies that the model used to calculate the taxes payment in 2008 is supported by the legislation in effect, according to the Company’s understanding, and is unrelated to accounting issues.

According to the Brazilian Accounting Practices (BR GAAP), taxes are accounted under the accrual basis, and when they differ from the fiscal calculation, which sometimes is under the cash basis, the difference is presented as deferred taxes (CVM Deliberation # 273). Therefore, there is no accounting issue related to the balance sheet, considering that the Company accounts its taxes under the accrual bases, and will have to continue doing so.

The effect of calculating the tax payment incurring on the exchange variation under the cash basis, instead of the accrual basis, is that they are accounted as Deferred Income Tax and Social Contributions in the 2008 Financial Statements submitted to the Securities and Exchange Commission of Brazil – CVM on 03/06/2009.

Additionally, with regard to the amounts Petrobras compensated for, the Company reasserts that tax compensation derived from adopting tax calculation based on exchange variations (cash basis) was only R$1.14 billion, since using Interest on Equity benefits is a practice that is widely adopted by several Brazilian companies and there is no difference in interpretation regarding this issue.

Adopting the new system was a business management decision that is in line with the Company’s governance, which always seeks to align the best interests of its shareholders (majority and minority), of the society, and of all other stakeholders.

www.petrobras.com.br/ri/english
Contacts: PETRÓLEO BRASILEIRO S. A. – PETROBRAS
Investor Relations Department I E-mail: petroinvest@petrobras.com.br / acionistas@petrobras.com.br
Av. República do Chile, 65 – 22^nd floor - 20031-912 - Rio de Janeiro, RJ I Tel.: 55 (21) 3224-1510 / 9947

This document may contain forecasts that 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.

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.