Petrobras (PBR)

Main Petrobras Projects in the Growth Acceleration Plan (GAP)

(Rio de Janeiro, January 23 2007). – PETRÓLEO BRASILEIRO S/A - PETROBRAS, [Bovespa: PETR3/PETR4, NYSE: PBR/PBRA, Latibex: XPBR/XPBRA, BCBA: APBR/APBRA], a Brazilian international energy company, announces that the Brazilian Growth Acceleration Plan (GAP) launched by the Federal Government yesterday (1/22) includes 183 of Petrobras’ Strategic Plan projects, representing investments in the order of R$171.7 billion (US$68.7 billion using the planning exchange rate of R$2.50) in oil and gas and in renewable fuel programs to be made by Petrobras and its partners through 2010. This investment (R$171.7 billion), to be made through 2010 and only in Brazil, reflects outlays already included in the 2007-11 Business Plan adjusted for revisions in costs of certain projects already approved by the Board of Directors, notably the Rio de Janeiro State Petrochemical Complex (Comperj), the Abreu e Lima Refinery in Pernambuco, the ethanol export pipelines and the Gas Production Anticipation Plan (Plangás).

Underpinned by socio-environmental responsibility and profitability principles, the Strategic Plan is in line with the GAP’s goals. In consonance with the company’s goals, the GAP’s premises for the sector include:

• Ensuring Brazil’s long-term oil self-sufficiency, with a minimum production 20% above Brazilian internal consumption, with a minimum 15-year reserve/production ratio, and heightened light oil production;
  
  
• Boosting and modernizing the refining park, increasing Brazilian oil participation in the processed load and bettering byproduct quality;
  
  
• Accelerating Brazilian gas production and offer;
  
  
• Ensuring leadership in the biofuel area.

The wide-ranging project portfolio Petrobras’ Business Plan encompasses for the 2007-2010 period also seeks to grow oil and gas reserves, to expand transportation and distribution infrastructure, and to augment alternate and renewable fuel and energy source research and development.
To keep increasing production in the long-term as well, Petrobras has been enhancing its exploratory portfolio and currently has, for future exploration, upwards of a hundred blocks it has purchased in National Petroleum, Natural Gas and Biofuel Agency (NPA) auctions, in addition to several areas overseas. This allows it to set a production goal of some 4,556,000 barrels a day for 2015. Meanwhile, for the latter portion of the decade, it is expected the company’s total oil and gas production will cap at 3,493,000 barrels per day, 2,925,000 lifted from Brazilian fields. Aside from the several ongoing projects, other relevant work will be kicked-off in 2007, the highlights of which are the major investments in view for the Downstream area, such as the Abreu e Lima Refinery, in Northeastern Brazil, and the Petrochemical Complex in the State of Rio de Janeiro.
The following are Petrobras System’s main investment projects for the upcoming years – a few with partners –which are part of the Brazilian Growth Acceleration Program (GAP).

Gas Production Anticipation Plan (Plangás)

Seeking to raise the natural gas offer in Southeastern Brazil, the Plangás’ goal is to increase production by 24 million cubic meters a day by late 2008, and by 39 million cubic meters a day by the end of 2010, to 40 million cubic meters and 55 million cubic meters, respectively. With investments of R$25 billion in the period, the plan involves several projects and, among other benefits, will improve the national power system’s reliability by making natural gas available for thermal energy generation.

• The Plangás project highlights are:

• Mexilhão Field Development: Located in the Santos Basin, the goal is to produce 15 million cubic meters of gas there per day. Operations are expected to go online in 2009 and to involve R$4.4 billion in investments. The project includes building and installing a fixed platform at a depth of 172 meters, a 145- km submarine pipeline that will connect the offshore platform to the gas treatment unit (GTU) that will be built in Caraguatatuba (Northern São Paulo State Coast), from where the gas will flow through an onshore pipeline to Taubaté (in the so-called Paraíba Valley, São Paulo) and then distributed for consumption.
  

• Golfinho Field Development: Located in the Espírito Santo sea, this field will be capable of producing 100 thousand barrels of oil and 3,5 million cubic meters of gas per day through a platform vessel. With operations slated to be kicked off in the first quarter of 2007, the project involves R$2 billion in investments.
  
  
• Gas Processing Unit in Cacimbas: The Cacimbas Pole, located in the Linhares municipality, some 200 km away from Vitória, is being revamped to attend to the potential natural gas production development in Espírito Santo. To offload production, the infrastructure involves building the Cacimbas-Vitória gas pipeline, scheduled to kick operations off in 1Q 2007, the Cabiúnas-Vitória gas pipeline, programmed for the 4Q 2007, and the Cabiúnas-Reduc gas pipeline expected to be wrapped-up in 2009.