This excerpt taken from the PBR 6-K filed Jun 23, 2005.
Petrobras clarifies differences in payment of government participations
(Rio de Janeiro, June 22, 2005). PETRÓLEO BRASILEIRO S/A - PETROBRAS, [Bovespa: PETR3/PETR4, NYSE: PBR/PBRA, Latibex: XPBR/XPBRA], a Brazilian international energy company, wishes to clarify a news item published on June 21 2005 referring to the National Petroleum Agencys (ANP) inspection of government participations due from the Company.
The ANP issued a payment demand to Petrobras for differences in government participations payable totaling R$ 425 million for the period 2002 to 2004. Petrobras has already settled the amount in full, booking the payments in accordance to the appropriate fiscal year. Up to the present time, the Company has not been notified as to any further such payment that might impact its future results.
The larger part of these payables relate to differences of interpretation and application of the legislation governing the oil industry (Article 7 of Decree 2,705/98), more specifically as to the modus operandi for calculating the average selling price of exported domestic oil. However, to date such differences have been settled on a consensual basis avoiding the need for any type of civil lawsuit in relation to payment.
We would further point out that Petrobras has never deducted unrealized investments from the calculation base for special participations. Investments are deducted from the Special Participation calculation only following their effective realization and under no circumstances while they remain in programs submitted for ANP approval.
The measurement of the volume of oil production for the purposes of calculating and payment of the special participation and royalties adheres to the rigid standards of control, established by the ANP itself and informed by Petrobras on a monthly basis in specific measurement bulletins. It therefore follows that there is no way in which differences can arise between the volume of oil produced and the values informed for the purposes of payment of government participations.
Between 2002 and the first quarter of 2005, Petrobras paid out R$ 28.3 billion in royalties and special participation levies. The differences identified by the ANP account for a little over 1% of this amount and have been duly paid.
Petróleo Brasileiro S.A PETROBRAS
Investor Relations Department
Raul Adalberto de Campos Executive Manager
Av. República do Chile, 65 - 4th floor
20031-912 Rio de Janeiro, RJ
(55-21) 3224-1510 / 9947
This document may contain forecasts that merely reflect the expectations of the Companys management. Such terms as anticipate, believe, expect, forecast, intend, plan, project, seek, should, along with similar or analogous expressions, are used to identify such forecasts. These predictions evidently involve risks and uncertainties, whether foreseen or not by the Company. Therefore, the future results of operations may differ from current expectations, and readers must not base their expectations exclusively on the information presented herein.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: June 22, 2005
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