Petrobras (PBR)

CLEP Project

By December 31, 2005, Companhia Locadora de Equipamentos Petrolíferos (CLEP) had transferred R$ 5.143.010 thousand to PETROBRAS as advances for the future sale of assets by PETROBRAS. PETROBRAS sold assets to CLEP at the amount of R$ 3.657.275 thousand and the advanced balance at the amount of R$ 1.485.736 thousand, was returned to CLEP in January/2006.

CLEP Project

At June 30, 2005, Companhia Locadora de Equipamentos Petrolíferos (CLEP) had transferred R$ 5.143.000 thousand to PETROBRAS as advances for the future sale of assets by PETROBRAS. This amount, net of assets sold by PETROBRAS to CLEP in the amount of R$ 1.727.214 thousand, totaled R$ 3.415.786 thousand is classified as project financings under current liabilities

20

CLEP Project

Through a financing structure that involves the SPC Companhia Locadora de Equipamentos Petrolíferos – CLEP, former Langstrand Holdings S.A, PETROBRAS will sell to this company assets related to the production of oil, located in the Campos Basin, and subsequently will lease such assets back through a leasing agreement. The funds necessary for CLEP to acquire the assets from PETROBRAS will be provided by shareholders’ capital (equivalent to US$ 180 million) and by the financing operations obtained in the international financial markets through the issuance of Medium Term Notes backed by CLEP receivables (lease payments to be made by PETROBRAS). CLEP’s shares are equally held primarily by the pension institutions PREVI, PETROS, VALIA, FUNCEF, FAPES and REAL GRANDEZA. The project is expected to be operational for 10 (ten) years, after which PETROBRAS will have the right to acquire the SPC’s shares or the project’s assets.

By December 31, 2004, CLEP had raised US$ 1.700 million. The amount equivalent to this figure in Reais, plus previously mentioned own capital of R$ 180.000, in a total of R$ 5.143.010, were fully transferred to PETROBRAS as advances for the future sale of the assets by PETROBRAS to CLEP, classified as project financings under the Parent company’s current liabilities. In December 2004, CLEP acquired from PETROBRAS assets amounting to R$ 1.727.224.

CLEP revenues will arise solely from the semi-annual lease payments to be made by PETROBRAS for the use of the assets, and PETROBRAS also ensures the payment of additional lease installments if CLEP revenues are not sufficient to cover its financial obligations related to the project. In an event of default, PETROBRAS is committed to acquire the SPC for the remaining balance of its obligations.