Petrobras (PBR)

Consolidated net income for the nine-month period ended September 30, 2008 increased 61.9%, compared to the nine-month period ended September 30, 2007, due in large part to increased production, higher average sales prices for oil and oil products, reduced pension plan expenses and the appreciation of the Real.

Adjusted EBITDA in the third quarter of 2008 increased 29.9% compared to the third quarter of 2007, and decreased 14.7% compared to the second quarter of 2008. This decrease was primarily due to higher production taxes and import costs, as well as the sale of inventory acquired at a higher cost in the second quarter of 2008.

Adjusted EBITDA increased 45.7% in the nine-month period ended September 30, 2008 compared to the nine-month period ended September 30, 2007, reaching U.S.$27,348 million. This figure, together with net income for the period of U.S.$16,713 million, reflects the Company’s sound operating, economic and financial performance, and ensures the sustainability of the Company’s investment plan.

See page 4 for a reconciliation of Adjusted EBITDA to net income.

Total oil and gas production increased 5.5% in the third quarter of 2008 compared to the third quarter of 2007, and 2.0% compared to the second quarter of 2008. This increase was led by natural gas output in Brazil, which grew by 21.8% in the third quarter of 2008 compared to the third quarter of 2007, and 2.8% compared to the second quarter of 2008. The startup of new wells in the Roncador field, and the startup of the ESS-103 well in the pre-salt layer of the Campos Basin, drove the quarterly production increase.

Brazil’s oil output reached a new monthly record of 1,897,000 barrels per day in September, 2008.

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Our total capital expenditures for the nine-month period ended September 30, 2008 reached U.S.$20,057 million, 43.2% higher than our capital expenditures for the nine-month period ended September 30, 2007. Most of these funds were allocated to boosting oil and gas production capacity in Brazil.

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