Petrobras (PBR)

17. Ipiranga Acquisition

On April 18, 2007, Ultrapar (the “Comissioner”), having Braskem S.A. and Petróleo Brasileiro SA - Petrobras (through a commission agreement) as intervening parties, acquired for the amount of US$2,694 (R$5,486 million) 61.6% of the common shares and 13.8% of the preferred shares in Refinaria de Petróleo Ipiranga SA (“RPI”), 65.5% of the common shares and 12.6% of the preferred shares in Distribuidora de Produtos de Petróleo Ipiranga SA (“DPPI”), and 3.6% of the common shares and 0.4% of the preferred shares in Companhia Brasileira de Petróleo Ipiranga (“CBPI”) held by the controlling shareholders of the Ipiranga Group.

Under the agreement signed by Ultrapar, Braskem and Petrobras, Ultrapar will have the control over the fuel and lubricant distribution businesses in the South and South-East regions (“Southern Distribution Assets”), Petrobras will have the control over the fuel and lubricant distribution businesses in the North, North-East and Central-West regions (“Northern Distribution Assets”), and Braskem will have the control over the petrochemical assets of Ipiranga Química SA, Ipiranga Petroquímica SA (IPQ) and over this company’s interests in Companhia Petroquímica do Sul (Copesul). The oil refinery assets held by RPI will be equally shared by Petrobras, Ultrapar and Braskem.

On April 18, 2007, Ultrapar, Petrobras and Braskem paid, as established in the purchase and sale agreement signed on March 18, 2007, US$1,017 relative to the controlling shareholders portion of the Ipiranga Group, US$365 of which was paid by Petrobras.

The US$365 was advanced by Petrobras to the Comissioner who will be responsible for the corporate reorganization of the acquired entity which will be subsequently exchanged for the advancement based upon the agreement. The transaction is expected to be completed by the end of 2007.

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17. Ipiranga Acquisition (Continued)

The transaction was submitted to the approval of Brazilian antitrust authorities (the Council for Economic Defense (CADE), the Office of Economic Law (SDE), the Economic Monitoring Agency (SEAE), as required by applicable laws and regulations.

Ultrapar is responsible for the corporate reorganization of the companies acquired in order to segregate the assets set aside for each company. This reorganization consists of the following stages:

a) A Mandatory Tender Offer (Tag-Along) to purchase the common shares in RPI, DPPI and CBPI (filed with the CVM on May 2, 2007);

b) The take over by Ultrapar of the shares of RPI, DPPI and CBPI;

c) The assets will be segregated as follows: (i) the capital of RPI and CBPI will be reduced to transfer the petrochemical assets directly to Ultrapar, which will be later delivered to Braskem and Petrobras under the terms of the commission agreement, and (ii) CBPI will be split to transfer the Northern Distribution Assets to a company controlled by Petrobras.

This operation is currently at the stage to launch a Public Offering (PO) of the common shares issued by RPI, DPPI and CBPI. The request for registration was filed with the CVM on May 02, 2007 and is being examined by this authority.

With regard to the petrochemical businesses, on April 18, 2007, Petrobras and Braskem filed a request with the CVM to register a PO to close the capital of Copesul, which is also still in analysis. As regards IPQ, the same companies filed for a Tag-Along PO, on May 18, 2007, allowing private parties to purchase shares held by the minority shareholders as at June 28, 2007, with the financial settlement and transfer of the shares by the shareholders. The value of the transaction was estimated in US$60 (R$118,000 thousand) and the vehicle utilized for the purchase was a special purpose company, EDSP67 Participações S.A., a subsidiary of Ipiranga Quimica S.A. On July 04, 2007, the CVM granted the application to waive this PO and, on July 18, 2007, the company’s registration as a quoted company was cancelled.

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17. Ipiranga Acquisition (Continued)

After the first phase of the acquisition, in the petrochemical businesses, Petrobras holds 8.94% of the total capital and 27.13% of the voting capital of Ipiranga Química, the paid amount of US$211 (R$429,405 thousand) was recorded as “Investments in non-consolidated companies and other investments”.

In the refinery businesses, Petrobras holds 10.01% of the total capital of RPI, recording the amount of US$1.5 (R$3,013 thousand) as “Investments in non-consolidated companies and other investments” and making a provision for loss in investments in the same amount due to negative stockholders equity.

On May 16, 2007, CADE approved an agreement entitled “Agreement to Preserve Reversibility of Transaction (APRO)” that allows Petrobras to choose a manager and negotiate the implementation of a governance policy that ensures the preservation of the assets and the rights of the minority shareholders. The timetable for the performance of the transaction remains unaltered.

With the agreement, the management of the distribution assets purchased by Petrobras will become separate from the management of the assets purchased by Ultrapar.

The manager of the Petrobras distribution assets has been selected from the market and is expected to run the businesses until the final decision on the transaction is made by CADE.

In the distribution business, Petrobras recorded the amount of US$154 (R$ 313,342 thousand), relating to the distribution assets, as an advance in “Other assets”, in long term receivables due to the APRO, awaiting the CADE’s final decision on the transaction .

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Ipiranga Acquisition

On April 18, 2007, Ultrapar, with Braskem S.A. and Petrobras (through a commission agreement) as intervening parties, acquired for the amount of U.S.$ 2,694 million (R$ 5,486 million), 61.6% of the common shares and 13.8% of the preferred shares in Refinaria de Petróleo Ipiranga SA (“RPI”), 65.5% of the common shares and 12.6% of the preferred shares in Distribuidora de Produtos de Petróleo Ipiranga SA (“DPPI”), and 3.6% of the common shares and 0.4% of the preferred shares in Companhia Brasileira de Petróleo Ipiranga (“CBPI”) held by the controlling shareholders of the Ipiranga Group.

Under the agreement signed by Ultrapar, Braskem and Petrobras, Ultrapar will have control over the fuel and lubricant distribution businesses in the South and South-East regions (“Southern Distribution Assets”), we will have control over the fuel and lubricant distribution businesses in the North, NorthEast and Central-West regions (“Northern Distribution Assets”), and Braskem will have control over the petrochemical assets of Ipiranga Química SA, Ipiranga Petroquímica SA (IPQ) and over this company’s interests in Companhia Petroquímica do Sul (Copesul). The oil refinery assets held by RPI will be equally shared by us, Ultrapar and Braskem.

On April 18, 2007, we, Ultrapar and Braskem paid as established in the purchase and sale agreement signed on March 18, 2007, U.S.$ 1,017 million relative to the controlling shareholders portion of the Ipiranga Group, U.S.$ 365 million of which was paid by us.

In the petrochemical businesses, we hold 8.94% of the total capital and 27.13% of the voting capital of Ipiranga Química, recording the amount of U.S.$ 211 million (R$ 429,405 thousand) as “Investments in non-consolidated companies and other investments”.

In the refinery businesses, we hold 10.01% of the total capital of RPI, recording the amount of U.S.$ 1.5 million (R$ 3,013 thousand) as “Investments in non-consolidated companies and other investments” and have taken a provision for loss in investments in the same amount due to negative stockholders equity.

In the distribution business, we recorded the amount of U.S.$ 154 million (R$ 313,342 thousand), relating to the distribution assets, as an advance in “Other assets”, in long term receivables awaiting the Council for Economic Defense (CADE)’s final decision on the transaction. See Note 17 of our unaudited consolidated financial statements for the six-month period ended June 30, 2007.

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