Petrobras (PBR)

4. Incorporation of 17 de Maio’s assets by PETROBRAS

Asset Transference. With its incorporation of 17 de Maio, the totality of 17 de Maio’s assets will be transferred to PETROBRAS, and 17 de Maio will then be extinguished.

Share Cancellation, no Joint Stock Increase for PETROBRAS and Investment Substitution. For the purpose of the proposed incorporation, PETROBRAS shares will not be attributed to 17 de Maio shareholders, since PETROBRAS owns the totality of the shares issued by 17 de Maio. As a result, the 661,546,958 (six hundred sixty one million five hundred forty six thousand nine hundred fifty eight) ordinary shares issued by 17 de Maio will be extinguished, and the necessary adjustments and adaptations will be made to PETROBRAS’ accounting records. As this is an incorporation of an invested company by its investor, there will be no cancellation or issuing of new shares by PETROBRAS as a result of the incorporation; furthermore, no change will be made to its joint stock, and, thus, at the end of the incorporation, PETROBRAS’ joint stock and Articles of Incorporation will remain unaltered. The substitution of the investments made by PETROBRAS in 17 de Maio by the asset and liability elements that appear in 17 de Maio’s Balance Sheet will be carried out without any change being made to PETROBRAS’ net asset value.

Premium to be Amortized. The premium calculated when the Ipiranga Group petrochemical asset investment was acquired was approximately R$472,999,407.57 (four hundred seventy two million nine hundred ninety nine thousand four hundred seven Reais and fifty seven cents), based on the expectation of future results. With the incorporation of 17 de Maio, the mentioned premium will be deductible, for PETROBRAS, from the calculation of the Legal Entity Income Tax and of the Social Tax on Net Profits at a rate of 1/120 fractions per month under the terms of SRF IN 11/99.

Extinction of 17 de Maio and Succession by PETROBRAS. With the Incorporation, 17 de Maio will be extinguished and PETROBRAS will be the universal successor of its rights and obligations.

Inexistence of Minority Shareholders and of the Right to Withdrawal. 17 de Maio does not have nor will it have minority shareholders on the date of the Incorporation, and, for this reason there is no right to withdrawal derived from the Incorporation nor to the reimbursement of shares issued by 17 de Maio.