Petrobras (PBR)

Exploration and Production – Thous. Barrels/day

Production of domestic oil and LNG in 1Q-2005 increased 5% over 1Q-2004 due to the production start-up of FPSO-MLS (Marlim Sul) in June 2004, and platforms P-43 (Barracuda) and P-48 (Caratinga) in December 2004 and February 2005, respectively.

In 1Q-2005, production of domestic oil and LNG increased 2% over 4Q-2004 production following the production start-up at platforms P-43 and P-48 in the Barracuda and Caratinga fields and wells ESP-010, connected to FPSO-ESPF (Espardate), and MRL-171, interconnected to platform P-35 (Marlim), in January and February 2005, respectively. This helped Petrobras reach record daily oil production in Brazil of 1,650,947 barrels on March 30, 2005. In April 2005, the Company reached a new average oil production record of 1,704,315 thousand barrels per day.

In 1Q-2005, international oil production fell 2% in relation to 1Q-2004, and gas production grew 7%. In comparison to 4Q-2004, international oil production dropped 3%, while gas production rose 5%. The variations in oil production are due to the decline in some mature fields at the facilities in Argentina, while variations in gas production are due to increased production in Bolivia, reflecting the higher demand in the Brazilian and Argentine markets.

Exploration and Production – Thous. barrels/day

In 4Q04, production of domestic oil and NGL fell 1% in relation to production in 3Q04, due to stops on platforms P-25 (Albacora), P-26 and P-35 (Marlim) and FPSO-MLS (Marlim Sul).

Production of domestic oil and NGL in fiscal year 2004 fell 3% in relation to fiscal year 2003, due to production interruptions at DP-Seillean in the Jubarte field for scheduled inspections, the stop of FPSO-Brasil, the closure of wells in the Marlim Sul fields, the partial production stop at P-40 (Marlim Sul) because of elevated water production and limited oil processing at the plant, the closure of some wells at Albacora for maintenance of turbo-compressors, the scheduled stop at platforms at Linguado, Pampo and Enchova, and to the potential reduction in opening productive wells at the Marlim field. This last was due mainly to increased water production associated with oil and the high production of associated gas. The delay, due to contractual reasons, in deliveries of platforms P-43, P-48 and P-50 to the fields at Barracuda, Caratinga and Albacora Leste, also contributed to the fact that the 2003 production level was not surpassed.

International oil production remained stable in 4Q04 in relation to 3Q04, while gas production fell 5% due to lower demand for Bolivian gas in the Brazilian and Argentine markets.

In fiscal year 2004, international oil and gas production grew 4% and 11%, respectively, in relation to fiscal year 2003, due to regularization of production at PEPSA in Venezuela, which was compromised in January and February of 2003 because of strikes in that country, and to the increased production of Bolivian gas, which reflected the demand in the Brazilian market and the start of the sales contract, in June 2004, of Bolivian gas to Argentina.

Exploration and Production – Thous. barrels/day

In 4Q04, production of domestic oil and NGL fell 1% in relation to production in 3Q04, due to stops on platforms P-25 (Albacora), P-26 and P-35 (Marlim) and FPSO-MLS (Marlim Sul).

Production of domestic oil and NGL in fiscal year 2004 fell 3% in relation to fiscal year 2003, due to production interruptions at DP-Seillean in the Jubarte field for scheduled inspections, the stop of FPSO-Brasil, the closure of wells in the Marlim Sul fields, the partial production stop at P-40 (Marlim Sul) because of elevated water production and limited oil processing at the plant, the closure of some wells at Albacora for maintenance of turbo-compressors, the scheduled stop at platforms at Linguado, Pampo and Enchova, and to the potential reduction in opening productive wells at the Marlim field. This last was due mainly to increased water production associated with oil and the high production of associated gas. The delay, due to contractual reasons, in deliveries of platforms P-43, P-48 and P-50 to the fields at Barracuda, Caratinga and Albacora Leste, also contributed to the fact that the 2003 production level was not surpassed.

International oil production remained stable in 4Q04 in relation to 3Q04, while gas production fell 5% due to lower demand for Bolivian gas in the Brazilian and Argentine markets.

In fiscal year 2004, international oil and gas production grew 4% and 11%, respectively, in relation to fiscal year 2003, due to regularization of production at PEPSA in Venezuela, which was compromised in January and February of 2003 because of strikes in that country, and to the increased production of Bolivian gas, which reflected the demand in the Brazilian market and the start of the sales contract, in June 2004, of Bolivian gas to Argentina.