Petrobras (PBR)

22. Environment

PETROBRAS’ continuous improvement in its environmental policy, as defined in the Strategic Plan, is associated with the implementation of two major programs: the Process Security Program (PSP) and the Program for Excellency in Environmental Management and Operational Safety (PEGASO).

Within the PEGASO program, in 2004 PETROBRAS continues to maintain the integrity of its facilities, to improve its contingency system and to reduce emissions, residues and effluents at its units.

These efforts have contributed to once again reduce the insurance premium paid for the Company’s operating risks in connection with its refineries and platforms, in May 2004, a decrease from US$ 31,9 million in 2003 to US$ 25,2 million in 2004, in spite of an increase in the sum insured from US$ 21.000 million to US$ 26.600 million over the same period. By December 2004, the investments in PEGASO as of its implementation, in mid-2000, totaled some R$ 8.000.000. These investments amounted approximately to R$ 1.750.000 in 2004 only.

All of PETROBRAS units in Brazil and most of its units located abroad have achieved the ISO 14001 (environment) certification and OHSAS 18000 (Occupational Health and Safety assessment System).

In 2004, PETROBRAS ENERGIA PARTICIPACIONES S.A – PEPSA introduced new policies in the Safety, Environmental and Health areas – “SMS”, representing a development of the principles in force until then. The new SMS policy includes advanced concepts such as ecoefficiency, life cycle and sustainability of operations, among others.

In this context, during 2004 an environmental study was conducted with a view to supplementing the environmental audit performed in 2003. Based on the new SMS policy, the study allowed the identification of required preventive measures, resulting in expenses of R$ 29.000 recorded by the Company in 2004. The total amount disbursed by the Company in connection with environmental protection was R$ 45.000 in 2004.