This excerpt taken from the PBR 6-K filed Aug 15, 2007.
1. Petroleum and Ethanol Accounts STN
In order to settle the accounts with the federal government, in accordance with Provisional Measure No. 2181 of August 24, 2001, Petrobras has already submitted all the information required by the National Treasury (STN) and is in discussion with the STN in order to reconcile the differences between the parties.
The account balance of R$ 793 million as of June 30, 2007 (R$ 789 million on March 31, 2007) may be paid by the federal government through the issuance of National Treasury bonds, in an amount equal to the final settlement amount or with other amounts that Petrobras may owe to the federal government, including those related to taxes, or through a combination of these options.