Petrobras (PBR)

PETROBRAS ANNOUNCES FIRST QUARTER OF 2008 RESULTS

(Rio de Janeiro – May 21, 2008) PETRÓLEO BRASILEIRO S.A. – PETROBRAS today announced its consolidated results stated in U.S. dollars, prepared in accordance with U.S. GAAP.

Consolidated net income in the first quarter of 2008 was 108.5% higher than in the first quarter of 2007, due to the increase in our net operating revenues and to the positive impact that the lower appreciation of the Real had on our financial result. The increase in our oil and gas production and the upturn in oil and oil products prices also contributed to our improved performance.

Consolidated net income in the first quarter of 2008 increased 60.1% compared to the fourth quarter of 2007 primarily due to the lower appreciation of the Real on the financial results and to the reduction in operating expenses and, to a lesser extent, as a result of higher oil and oil products prices.

Adjusted EBITDA in the first quarter of 2008 increased 54.3% compared to the first quarter of 2007 due to the increase in net operating revenues. In comparison with the fourth quarter of 2007, adjusted EBITDA increased 17.6% for the same reasons mentioned above.

The average oil and gas production during the first quarter of 2008 increased primarily due to the operational start-up of the platforms FPSO-Cidade de Rio de Janeiro (Espadarte), FPSO-Piranema (Piranema), Cidade de Vitória (Golfinho), P-52 (Roncador) and P-54 (Roncador) platforms. It is especially worth highlighting our domestic natural gas output during this period, which increased by 10.9% as compared to the first quarter of 2007 and 9.7% as compared to the fourth quarter of 2007.

Due to delays associated with the availability of offshore support vessels in the first quarter of 2008, oil production was not as high as expected during this period , and we expect that output from the P-52 and P-54 platforms will only reach maximum levels in the second half of 2008. In addition, difficulties related to maintaining pressure in the Golfinho reservoir hampered production from this field.

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Our total capital expenditures in the first quarter of 2008 were 65.9% higher than in the first quarter of 2007 and 12.6% lower as compared to the fourth quarter of 2007.

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