Petrobras (PBR)

08.01 – COMMENTS ON THE CONSOLIDATED PERFORMANCE IN THE QUARTER

The net debt of the Petrobras Group on June 30, 2008, was 3% less than the amount recorded on March 31, 2008, due to the appreciation of the Real.

The level of indebtedness, measured by the net debt/EBITDA ratio, fell from 0.57, on March 31, 2008, to 0.48 on June 30, 2008. The portion of the capital structure represented by third parties was 46%, 1 percentage point down on March 31, 2008.

08.01 – COMMENTS ON THE CONSOLIDATED PERFORMANCE IN THE QUARTER

Petrobras reported a consolidated net income of R$ 6.800 million in the second quarter of 2007, an increase of 65% over the first quarter of 2007. The Company’s market capitalization stood at R$ 244.659 million on June 30, 2007. Petrobras System invested R$ 19.795 million during the first half of 2007, 45% above the Company’s expenditures during the same period for 2006, of which R$ 9.092 million was invested to expand future oil and gas production in Brazil to meet production targets. Adjusted EBITDA amounted to R$ 25.183 million, ensuring sufficient resources to fund the Company’s investments.

• Petrobras posted net income of R$ 6.800 million in the second quarter of 2007, reflecting an improved operating performance in comparison with the previous quarter. Compared to the second quarter of 2006, net income declined 2%, as a result of the decline in international oil prices and the impact of the appreciation of the Real in 2007. These effects were partially offset by higher sales volume and the fiscal benefit from the provisioning of interest on own capital (R$ 746 million).
  
  
• Domestic oil and NGL production averaged 1,789 thousand barrels per day in the second quarter of 2007, 2% higher than the second quarter of 2006. Approximately 83% of Brazilian oil production came from the Campos Basin (1,482 thousand barrels/day), led by incremental output from new production units P-50 (Albacora Leste), FPSO-Capixaba (Golfinho), P-34 (Jubarte) and FPSO-Cidade do Rio de Janeiro (Espadarte), which offset the natural decline in output from mature fields.
  
  
• The consolidated net debt of Petrobras amounted to R$ 21.966 million on June 30, 2007, 8% lower than the R$ 23.955 million reported three months earlier, as a result of free cash flow generated during the period (R$ 2.948 million), and in spite of the substantial increase in investments and the payment of dividends, as well as the impact of the appreciation of the Real on the gross debt.
  
  
• Value added by the Petrobras System totaled R$ 59.194 million, R$ 34.195 million of which went to government participations and federal, state, and municipal taxes; R$ 6.794 million to suppliers and financial institutions for financial charges, rent and charters; R$ 11.840 million to shareholders; and R$ 6.365 million to salaries, bonuses and benefits.