Petrobras (PBR)

2.5 Government subsidies and assistance

Government subsidies for investments, received as from January 1, 2008, are recognized as revenue throughout the period, compared with the expenses that it intends to offset on a systematic basis, and are applied in Petrobras in the following manner:

•   Subsidies with re-investments: in the same proportion as the depreciation of the asset; and

•   Direct subsidies related to the operating profit: directly in the results.

The amounts allocated in the statement of income will be distributed to the tax incentive reserve, in the shareholders' equity.

The balances of the capital reserves referring to donations and subsidies for investments at December 31, 2007 were held in shareholders' equity until their total use, as established in Law 6.404/76.

2.5 Government subsidies and assistance

Government subsidies for investments, received as from January 1, 2008, are recognized as revenue throughout the period, compared with the expenses that it intends to offset on a systematic basis, and are applied in Petrobras in the following manner:

Subsidies with re-investments: in the same proportion as the depreciation of the asset; and

Direct subsidies related to the operating profit: directly in the results.

The amounts allocated in the statement of income will be distributed to the tax incentive reserve.

The balances of the capital reserves referring to donations and subsidiaries for investment, as of December 31, 2007, were held in the shareholders’ equity until their total use, as established in Law 6.404/76.

2.6 Government subsidies and assistance

The CPC 07 establishes that tax incentives resulting from governmental donations or subsidies for investments, received as from January 1, 2008, are recognized as revenue during the period, compared with the expenses that it intends to offset on a systematic basis, which is applied in Petrobras in the following way:

Subsidies with re-investments: in the same proportion as the depreciation of the asset;

Direct subsidies related to the exploration profit: directly in the results.

The amounts allocated in the statement of income will be distributed to the Tax Incentive Reserve.

The balances of the capital reserves referring to donations and subsidies for investments at December 31, 2007 will be held in shareholders' equity until their total use, as established in Law 6.404/76.

3.7 Government subsidies and assistance

The CPC 07 establishes that the tax incentives resulting from governmental donations or subsidies for investments, received as from January 1, 2008, are recognized as revenue during the period, compared with the expenses that it intends to offset on a systematic basis, which is applied in Petrobras in the following way:

a) Subsidies with re-investments: in the same proportion as the depreciation of the asset;

b) Direct subsidies related to the operating profit: directly in the Profit and Loss accounts.

The amounts allocated in the Profit and Loss accounts in 2008 will be allocated to the Tax Incentive Reserve.

The balances of the capital reserves referring to donations and subsidies for investments at December 31, 2007 will be held in shareholders’ equity until their total use, as established in Law 6.404/76.