Petrobras (PBR)

Exploration, Including Exploratory Dry Holes

Exploration costs, including costs for exploratory dry holes, increased 7.4% to U.S.$798 million in the first half of 2009 compared to U.S.$743 million in the first half of 2008. This increase was primarily attributable to higher expenses related to domestic seismic drilling (U.S.$163 million) and to the write-off of dry and economically unviable wells in Brazil (U.S.$55 million) and abroad (U.S.$33 million). These increases were partially offset by a U.S.$56 million decrease in expenses related to international seismic drilling.

Exploration, including exploratory dry holes

Exploration costs, including costs for exploratory dry holes, increased 10.5% to U.S.$420 million in the three-month period ended March 31, 2009, compared to U.S.$380 million in the three-month period ended March 31, 2008. This increase was primarily attributable to higher expenses related to the write-off of dry and economically unviable wells in Brazil (U.S.$78 million) and abroad (U.S.$31 million), as a result of the intensification of our investment program.

Exploration, Including Exploratory Dry Holes

Exploration costs, including costs for exploratory dry holes, increased 24.7% to U.S.$1,775 million for 2008 compared to U.S.$1,423 million for 2007. This increase was primarily attributable to a U.S.$520 million increase in expenses related to the write-off of dry and economically unviable wells in Brazil due to: (1) increased number of drilled wells in the past few years, as a result of the Company's investment program; (2) the higher drilling costs resulted from Brazilian economic growth; and (3) the lower success exploration index, given the prospective drilling in higher risky areas located in the Santos and Espirito Santo Basins. These effects were partially offset by a U.S.$256 million decrease in expenses related to dry holes in international operations.

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Exploration, including exploratory dry holes

Exploration costs, including costs for exploratory dry holes, increased 52.9% to U.S.$1,206 million in the nine-month period ended September 30, 2008, compared to U.S.$789 million in the nine-month period ended September 30, 2007. This increase was primarily attributable to a U.S.$530 million increase in expenses related to the write-off of dry and economically unviable wells in Brazil. These effects were partially offset by a U.S.$88 million decrease in expenses related to international seismic drilling and by a U.S.$61 million decrease in expenses related to dry holes in international operations.

Exploration, including exploratory dry holes

Exploration costs, including costs for exploratory dry holes, increased 46.8% to U.S.$743 million in the first half of 2008, as compared to U.S.$506 million in the first half of 2007. This increase was primarily attributable to a U.S.$320 million increase in expenses related to the write-off of dry and economically unviable wells in Brazil, partially offset by a U.S.$118 million decrease in expenses related to international seismic drilling and by a U.S.$45 million decrease in expenses related to dry holes abroad, in the first half of 2008 compared to the first half of 2007.

Exploration, including exploratory dry holes

Exploration costs, including costs for exploratory dry holes, increased 25.8% to U.S.$380 million for the first quarter of 2008, as compared to U.S.$302 million for the first quarter of 2007. This increase was primarily attributable to a U.S.$165 million increase in expenses related to dry holes in Brazil, partially offset by a U.S.$101 million decrease in expenses related to international seismic drilling, in the first quarter of 2008 compared to the first quarter of 2007.

Exploration, including exploratory dry holes

Exploration costs, including costs for exploratory dry holes, increased 52.4% to U.S.$1,423 million for 2007, as compared to U.S.$934 million for 2006. This increase was primarily attributable to a U.S.$243 million increase in expenses for international seismic drilling, and a U.S.$99 million increase in expenses related to dry holes in international operations.

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Exploration, including exploratory dry holes

Exploration costs, including costs for exploratory dry holes, increased 44.8% to U.S.$ 789 million for the nine-month period ended September 30, 2007, as compared to U.S.$ 545 million for the nine-month period ended September 30, 2006. This increase was primarily attributable to the U.S.$ 217 million increase in exploration and drilling expenses related to seismic drilling abroad; and to the 8.3% increase in the value of the Real against the U.S. dollar in the nine-month period ended September 30, 2007, as compared to the nine-month period ended September 30, 2006.

Exploration, including exploratory dry holes

Exploration costs, including costs for exploratory dry holes, increased 68.1% to U.S.$ 506 million for the first half of 2007, as compared to U.S.$ 301 million for the first half of 2006. This increase was primarily attributable to the U.S.$ 204 million increase in exploration and drilling expenses related to seismic drilling abroad; and to the 6.6% increase in the value of the Real against the U.S. dollar in the first half of 2007, as compared to the first half of 2006.

Exploration, including exploratory dry holes

Exploration costs, including for exploratory dry holes, increased 118.8% to U.S.$ 302 million for the first quarter of 2007, as compared to U.S.$ 138 million for the first quarter of 2006. This increase was primarily attributable to the U.S.$ 159 million increase in exploration and drilling expenses from the acquisition of seismic data in Turkey, U.S.A. and Angola; and to the 3.9% increase in the value of the Real against the U.S. dollar in the first quarter of 2007, as compared to the first quarter of 2006.

Exploration, including exploratory dry holes

Exploration costs, including for exploratory dry holes, decreased 7.4% to U.S.$ 934 million for 2006, as compared to U.S.$ 1,009 million for 2005. This decrease was primarily attributable to the U.S.$ 71 million of gains resulting from the revision of estimated costs related to abandonment of wells and to the decrease of U.S.$ 109 million in expenses related to dry holes. These decreases were partially offset by the 10.7% increase in the value of the Real against the U.S. dollar in 2006, as compared to 2005.

Exploration, including exploratory dry holes

Exploration costs, including for exploratory dry holes, increased 24.4% to U.S.$ 545 million for the nine-month period ended September 30, 2006, as compared to U.S.$ 438 million for the nine-month period ended September 30, 2005. This increase was primarily attributable to the U.S.$ 74 million increase in geological and geophysical expenses, principally in the international plants (U.S.$ 62 million), and to the 12.6% increase in the value of the Real against the U.S. dollar in the nine-month period ended September 30, 2006, as compared to the nine-month period ended September 30, 2005.

Exploration, including exploratory dry holes

Exploration costs, including for exploratory dry holes increased 9.1% to U.S.$ 301 million for the first half of 2006, as compared to U.S.$ 276 million for the first half of 2005. This increase was primarily attributable to the 15.0% increase in the value of the Real against the U.S. dollars in the first half of 2006, as compared to the first half of 2005.

Exploration, including exploratory dry holes

Exploration costs, including for exploratory dry holes increased 26.6% to U.S.$ 138 million for the first quarter of 2006, as compared to U.S.$ 109 million for the first quarter of 2005. This increase was primarily attributable to the 17.7% increase in the value of the Real against the U.S. dollars in the first quarter of 2006, as compared to the first quarter of 2005.

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Exploration, including exploratory dry holes

Exploration costs, including exploratory dry holes increased 0.2% to U.S.$ 438 million for the nine-month period ended September 30, 2005, as compared to U.S.$ 437 million for the nine-month period ended September 30, 2004. This increase was primarily attributable to the 16.0% increase in the value of real against the U.S. dollar in the nine-month period ended September 30, 2005. This increase was partially offset by the decrease of dry holes expenses, which had resulted from the write-off of the signature bonuses in Angola in 2004. We adopted the amended FAS 19-1 effective January 1, 2004, without material impact.

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Exploration, including exploratory dry holes

Exploration costs, including exploratory dry holes increased 35.3% to U.S.$ 276 million for the first half of 2005, as compared to U.S.$ 204 million for the first half of 2004. This increase was primarily attributable to an increase of U.S.$ 52 million in geophysical and geological expenses.

Exploration, including exploratory dry holes

Exploration costs, including exploratory dry holes increased 17.7% to U.S.$512 million for 2003 as compared to U.S.$435 million for 2002. This increase was primarily attributable to the increase of approximately U.S.$49 million in exploration costs, including exploratory dry holes in connection with the consolidation of PEPSA and PELSA and U.S.$43 million in abandonment costs recognized. The increase in exploration costs, including exploratory dry holes, was partially offset by the effect of the 5.2% decrease in the value of the Real against the U.S. dollar in 2003, as compared to 2002.

Exploration, including exploratory dry holes

Exploration costs, including exploratory dry holes decreased 11.4% to U.S.$ 109 million for the first quarter of 2005, as compared to U.S.$ 123 million for the first quarter of 2004. This decrease was primarily attributable to a decrease of U.S.$ 70 million in dry holes expenses, which was partially offset by an increase of U.S.$ 50 million in geophysical and geological expenses.

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Table of Contents

Exploration, including exploratory dry holes

Exploration costs, including exploratory dry holes increased 19.7% to U.S.$ 613 million for 2004, as compared to U.S.$ 512 million for 2003. This increase was primarily attributable to the following:

These increases were partially offset by a decrease of U.S.$ 196 million due to a revision in the estimated expenses for dismantling oil and gas producing areas and future well abandonment.