Petrobras (PBR)

Petrobras and YPFB sign an agreement on Bolivian gas

(Rio de Janeiro, february 15, 2007). – PETRÓLEO BRASILEIRO S/A - PETROBRAS, [Bovespa: PETR3/PETR4, NYSE: PBR/PBRA, Latibex: XPBR/XPBRA, BCBA: APBR/APBRA], a Brazilian international energy company, clarifies that during a meeting held in Brasília, attended by the Bolivian Hydrocarbon Minister, Carlos Villegas Quiroga, the Brazilian Mines & Energy Minister, Silas Rondeau Cavalcanti Silva, by the President of Yacimientos Petrolíferos Fiscales Bolivianos, Manoel Morales Olivera, and by the President of Petrobras, José Sergio Gabrielli, it was decided that:

• No change will be made to the Bolivian natural gas volumes or to the basic purchase price formula, as provided for by the current gas purchase & sale agreement (GSA) between YPFB and Petrobras.
  
  
• Petrobras has accepted to pay YPFB, at current international market prices, for the liquid hydrocarbon fractions present in the natural gas actually delivered that increase its calorific content above 8900 kilocalories (kcal) per cubic meter (m3), equivalent to 1000 BTU per cubic foot.

Currently, under the terms of the GSA, the natural gas YPFB delivers to Petrobras has a calorific power of no less than 9200 kcal/m3 (1034 BTU/cubic foot), reflecting the presence of natural gas liquids (ethane, butane, propane, and natural gas), which have higher values in the international market than methane, a basic component of natural gas for thermal use.

Acknowledging this quality benefit, Petrobras accepted to pay YPFB for the calorific value that surpasses 8900 kcal/m3 (1000 BTU/cubic foot), as per a formula that is yet to be negotiated based on international quotes and will be included in an additive to the GSA agreement. YPFB will ensure the maintenance of a minimum 9200-kcal/m3 calorific power. Petrobras will analyze the best way to use these more noble gas components.

YPFB took-on the commitment to register the operation agreements it signed with Petrobras on 10/282006 at a notary public, in addition to Petrobras’ use of gas swap agreements to adjust gas availability for exports to the Bolivian internal market’s requirements.

Petrobras informs that the gas sale agreements the state-owned company had already signed with distributors in Brazil will not be changed. Only the new agreements will take the new market conditions into account.

www.petrobras.com.br/ri/english
Contacts: PETRÓLEO BRASILEIRO S. A. – PETROBRAS
Investor Relations Department I Raul Adalberto de Campos - Gerente Executivo I E-mail: petroinvest@petrobras.com.br
Av. República do Chile, 65 – 22^nd floor - 20031-912 - Rio de Janeiro, RJ I Tel.: 55 (21) 3224-1510 / 9947

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