Petrobras (PBR)

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IASA, a subsidiary of Petrobras Distribuidora, contracts exchange hedge for its revenues in US dollars, since its foreign clients pay by letter of credit with a term of up to one year. In the third quarter IASA carried out transactions in NDFs (Non-Deliverable Forwards) in the amount of US$ 507 thousand.

REFAP has a policy of using swaps (US$ vs. CDI) for reducing exchange exposure. The Exchange Hedge Committee evaluates the risks that the Company is exposed to and recommends carrying out operations for contracting exchange hedge for future settlement at the cost of the Interbank Deposit Certificate (CDI), plus the exchange coupon. The exclusive purpose of the policy is to reduce exchange exposure.

Refinaria de Petróleo Riograndense uses exchange hedge through NDFs (Non-Deliverable Forwards) to ensure its margin in its refining activities. This occurs because the Refinery makes oil purchases according to the quotation per barrel on the international market, translated into Reais based on the exchange rate of the US dollar on the day of effective payment to the supplier, regardless of whether this oil is Brazilian or imported. On the other hand, it sells the main quantities from its refining directly in Reais, especially because of the market characteristics of diesel and gasoline. Accordingly, the purpose of the hedge is to mitigate the risks of exchange volatility at the time of settlement of the purchase of petroleum.

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The hedges settled during the period from April to June 2009 corresponded to approximately 16,48% of the traded volume of imports and exports to and from Brazil plus the total volume of the products traded abroad, compared to (9,58%) in the period from January to March 2009.

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The items that cannot be can attributed to the other departments are allocated to the corporate entities group, especially those connected to corporate financial management, overheads related to central administration and other expenses, including actuarial expenses related to the pension and healthcare plans for retired employees and pensioners.

The accounting information per business segment was prepared based on the assumption of controllability, for the purpose of attributing to the business sectors only those items over which these segments have effective control.

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Petrobras Energia S.A. - PESA, an indirect subsidiary of Petrobras, carries out forward and sale operations of US Dollars in exchange for Argentinean pesos. As at December 31, 2007, had no derivative financial instruments, but recognized a gain equal to R$ 175 (US$ 99 thousand) relating to contracts settled during the period from January to October 2007 (in 2006, loss of R$ 1.706/US$ 798 thousand).

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