Petrobras (PBR)

PETROBRAS reported net income of R$ 23,725 million in 2005, 40% higher than the amount reported in 2004 and the highest in its history. 2005-4Q net income of R$ 8,142 was also a record.

In 2005-4Q, consolidated net operating income was R$ 38,638 million, 31% higher than the same period in 2004 (R$ 29,402 million). EBITDA in 2005-4Q was R$ 12,416 million, 40% higher than the R$ 8,858 million reported in 2004-4Q. The market value of the company at 12.31.2005 totaled R$ 173,584 million, an increase of 54% when compared to year-end 2004.

• Consolidated net income in 2005-4Q was R$ 8,142 million, 92% higher than the 2004-4Q results, due to higher oil and oil product prices in the domestic and international markets, the increase in domestic oil and NGL (15%) production, the higher production and quality of oil products (2%) and the fiscal benefit (R$ 746 million) arising from greater provisioning of interest on own capital.
  Partially offsetting these gains were higher expenses from drilling and exploration as well as other operating expenses.
  
  
  
• Total production of oil, NGL´s and natural gas increased by 11% in 2005-4Q versus the same period in 2004, reaching an average of 2,257 thousand barrels per day due in part to the start of production at platform P-43 (Barracuda) in December/2004 and platform P-48 (Caratinga) in February/2005. The domestic production of oil and NGL´s averaged 1,736 barrels/day in 2005, with 85% being produced in the Bacia de Campos (1,467 barrels/day).
  
  
• The share of the domestic oil in the refinery throughput was also a record, reaching 1,376 thousand barrels/day in 2005 (against 1,292 barrels/day in 2004).
  
  
• During 2005-4Q and for the full year 2005, the increase in Brazilian production of oil and oil products caused PETROBRAS to become a net exporter for the first time, exporting more liquid barrels of oil and oil products than were imported.
  
  
• Brazil's proven reserves in 2005 based on SPE (Society of Petroleum Engineers) criteria, totaled 13.2 billion barrels of oil equivalent (BOE), an increase of 2% over 2004 (implying a reserve life of 19.7 years based on current production rates). The Reserves Replacement Index (RRI) was 131.1% The International proven reserves totaled 1.68 billion of boe in 2005 (SPE criteria), a decrease of 0.191 billion of boe when compared to 2004, due to the reassessment of reserves in Bolivia and Argentina. The implied reserve life for International production is now 17.8 years. According to SEC criteria, proven reserves in 2005 were 10.6 billion of boe in Brazil and 1.197 billion of boe abroad (10.6 billion of BOE and 1.25 billion of BOE in 2004, respectively).
  
  
• The consolidated net debt of PETROBRAS was reduced from R$ 35,816 million on 12.31.2004 to R$ 24,825 million as of 12.31.2005, due to higher cash flow generation and a decrease in reported debt caused by the appreciation of the Brazilian real against the U.S. dollar (12%).

1

PETROBRAS SYSTEM

PETROBRAS reported net income of R$ 23,725 million in 2005, 40% higher than the amount reported in 2004 and the highest in its history. 2005-4Q net income of R$ 8,142 was also a record.

In 2005-4Q, consolidated net operating income was R$ 38,638 million, 31% higher than the same period in 2004 (R$ 29,402 million). EBITDA in 2005-4Q was R$ 12,416 million, 40% higher than the R$ 8,858 million reported in 2004-4Q. The market value of the company at 12.31.2005 totaled R$ 173,584 million, an increase of 54% when compared to year-end 2004.

• Consolidated net income in 2005-4Q was R$ 8,142 million, 92% higher than the 2004-4Q results, due to higher oil and oil product prices in the domestic and international markets, the increase in domestic oil and NGL (15%) production, the higher production and quality of oil products (2%) and the fiscal benefit (R$ 746 million) arising from greater provisioning of interest on own capital.
  Partially offsetting these gains were higher expenses from drilling and exploration as well as other operating expenses.
  
  
  
• Total production of oil, NGL´s and natural gas increased by 11% in 2005-4Q versus the same period in 2004, reaching an average of 2,257 thousand barrels per day due in part to the start of production at platform P-43 (Barracuda) in December/2004 and platform P-48 (Caratinga) in February/2005. The domestic production of oil and NGL´s averaged 1,736 barrels/day in 2005, with 85% being produced in the Bacia de Campos (1,467 barrels/day).
  
  
• The share of the domestic oil in the refinery throughput was also a record, reaching 1,376 thousand barrels/day in 2005 (against 1,292 barrels/day in 2004).
  
  
• During 2005-4Q and for the full year 2005, the increase in Brazilian production of oil and oil products caused PETROBRAS to become a net exporter for the first time, exporting more liquid barrels of oil and oil products than were imported.
  
  
• Brazil's proven reserves in 2005 based on SPE (Society of Petroleum Engineers) criteria, totaled 13.2 billion barrels of oil equivalent (BOE), an increase of 2% over 2004 (implying a reserve life of 19.7 years based on current production rates). The Reserves Replacement Index (RRI) was 131.1% The International proven reserves totaled 1.68 billion of boe in 2005 (SPE criteria), a decrease of 0.191 billion of boe when compared to 2004, due to the reassessment of reserves in Bolivia and Argentina. The implied reserve life for International production is now 17.8 years. According to SEC criteria, proven reserves in 2005 were 10.6 billion of boe in Brazil and 1.197 billion of boe abroad (10.6 billion of BOE and 1.25 billion of BOE in 2004, respectively).
  
  
• The consolidated net debt of PETROBRAS was reduced from R$ 35,816 million on 12.31.2004 to R$ 24,825 million as of 12.31.2005, due to higher cash flow generation and a decrease in reported debt caused by the appreciation of the Brazilian real against the U.S. dollar (12%).

1

PETROBRAS SYSTEM