Petrobras (PBR)

Refining Costs (US$/barrel)

Excluding the impact of the appreciation of the Real, the domestic unit refining cost moved up 21% year-on-year due to increased operating expenses, reflecting the wage increase, the expansion of the workforce, the electricity tariff hike and the heightened complexity of the refineries as they adapt to environmental and market demands for higher quality products.

Also excluding the impact of the appreciation of the Real, the domestic unit refining cost fell 2% over the 4Q-2007 due to reduced expenses from outsourced maintenance services.

The average international unit refining cost moved up due to higher costs in the USA caused by the programmed stoppage in the Pasadena refinery, associated with the first-quarter slide in processed crude.

The average international unit refining cost recorded an upturn over the 4Q-2007 due to scheduled stoppages in the USA and Argentina and the lower volume of processed crude in the first quarter.

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Refining Costs (US$/barrel)

Excluding the impact of the appreciation of the Real, the domestic unit refining cost moved up by 10% in 2007, due to increased operating expenses, reflecting the investments to adapt the refineries to higher quality products, plus environmental and market demands, as well as the increased number of scheduled maintenance stoppages.

Excluding the impact of the appreciation of the Real, the fourth-quarter refining cost climbed by 34%, reflecting the increased number of scheduled maintenance stoppages, especially the one in REDUC, the country’s biggest lubricant producer, following 5 years of uninterrupted operations, the wage increase and non-recurring expenses from the Leadership program in SMA and non-programmed stoppages in the RLAM units.

Average international unit refining costs increased in 2007 due to the inclusion of the Pasadena Refinery in the USA.

Average international unit refining costs recorded a reduction in the 4Q-2007 due to scheduled and unscheduled stoppages in the USA in the previous quarter.

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PETROBRAS SYSTEM	Operational Performance

Refining Costs (US$/Barrel)

Domestic unit refining costs moved up 20% year-on-year in the first nine months of 2007 due to increased operating expenses, linked to higher quality products, plus environmental and market demands, as well as the increased number of scheduled maintenance stoppages. Excluding the impact of the appreciation of the Real on Real-denominated refining costs, these costs would have climbed by 12%.

In the third quarter, the domestic unit refining cost fell 5% over the 2Q-2007, reflecting the reduction in programmed stoppages and the increase in processed crude.

Average unit international refining costs climbed 90% year-on-year in the first nine months, due to the inclusion of the Pasadena refinery (USA).

Refining Costs (US$/Barrel)

Domestic unit refining costs moved up 20% year-on-year in the first nine months of 2007 due to increased operating expenses, linked to higher quality products, plus environmental and market demands, as well as the increased number of scheduled maintenance stoppages. Excluding the impact of the appreciation of the Real on Real-denominated refining costs, these costs would have climbed by 12%.

In the third quarter, the domestic unit refining cost fell 5% over the 2Q-2007, reflecting the reduction in programmed stoppages and the increase in processed crude.

Average unit international refining costs climbed 90% year-on-year in the first nine months, due to the inclusion of the Pasadena refinery (USA).

In quarter-over-quarter terms, average unit international refining costs increased by 18% in the 3Q-2007 due to scheduled and unscheduled stoppages in the USA and the sale of the Bolivian refineries.

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PETROBRAS SYSTEM	Operational Performance

Refining Costs (US$/Barrel)

Domestic unit refining costs increased 32% during the first half of 2007 as compared to the first half of 2006, due to increased operating expenses from materials and services, reflecting the investments to adapt the refineries to new product quality demands, and the increase in the number and scope of scheduled stoppages. Excluding the impact of the 6% appreciation of the Real on Real-denominated refining costs, these costs would have climbed by 25%.

In the second quarter of 2007, the domestic unit refining cost increased by 6% over the first quarter of 2007, fully reflecting the impact of the appreciation of the Real on Real-denominated refining costs.

Refining Costs (US$/Barrel)

Domestic unit refining costs increased 32% during the first half of 2007 as compared to the first half of 2006, due to increased operating expenses from materials and services, reflecting the investments to adapt the refineries to new product quality demands, and the increase in the number and scope of scheduled stoppages. Excluding the impact of the 6% appreciation of the Real on Real-denominated refining costs, these costs would have climbed by 25%.

In the second quarter of 2007, the domestic unit refining cost increased by 6% over the first quarter of 2007, fully reflecting the impact of the appreciation of the Real on Real-denominated refining costs.

Average unit international refining costs climbed 85% year-on-year in the first half of 2007, due to the inclusion of the Pasadena refinery (USA) as of October 2006.

In quarter-over-quarter terms, average unit international refining costs increased by 24% in the second quarter of 2007 due to the unscheduled maintenance stoppage in the United States in April/07.

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Refining Costs (US$/Barrel)

Domestic refining costs for 2006 increased 21% versus the prior year, primarily as a result of the increasing complexity of our refineries as they are adapted to process heavy oil and to meet more stringent fuel quality standards. After adjusting for the effect of the 11% appreciation of the Real against the dollar, for refining costs denominated in local currency, refining costs increased 8%.

When compared to 3Q06, domestic refining costs increased 9%, reflecting an increase in personnel expenses (salaries and benefits) in accordance with the Collective Bargaining Agreement 2006/2007.

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During 2006, the average international refining cost increased 33% from 2005 as a result of the inclusion of the Pasadena (U.S.) refinery. Discounting the effect of Pasadena, the increase was 16% and reflects salary increases as well as the tariff increases for services contracted in Argentina.

The average international refining cost in 4Q06 increased 33% from 3Q06 with the inclusion of the Pasadena refinery. Discounting the effect of Pasadena, there was no change in the refining costs when compared to the third quarter.

Refining Costs (US$/Barrel)

Domestic refining costs for the January to September 2006 period increased by 16% versus the same period of last year. This increase is due to higher operating expenses, reflecting investments aimed at adapting the refineries to process heavy oil and to improve the quality of fuels to meet environmental requirements. Discounting the effects of a 13% appreciation of the Real, which caused the local currency component of the refining costs to increase when expressed in U.S. dollars, refining costs increased by 5%.

In comparison with the 2Q06, refining costs in Brazil for the third quarter 2006 increased by 20%, mainly due to a higher number of programmed maintenance stoppages during the quarter.

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For the first nine months of 2006, international refining costs increased by 16% in comparison to the same period of the prior year. This increase was driven by higher material and third party expenses in Argentina and in the refineries in Bolivia, caused by emergency maintenance stoppages which occurred in January, May, and June of 2006 and due to increased salary concessions in Argentina unit.

Average international refining costs for the 3Q06 increased 15% when compared to the 2Q06. The increase is mainly due to lower feedstock and higher third party, material and personnel expenses in refineries in Argentina, as a result of programmed maintenance for industrial units during the period.

Refining Costs (US$/Barrel)

Domestic unit refining costs in the 1H-2006 expressed in US$, increased 8% when compared to the same period of 2005. After adjusting for the effects of the 15% appreciation of the real for expenses denominated in Reais, domestic refining costs declined 6% mostly because of a larger number of scheduled stoppages in the prior period.

Compared with the 1Q-2006, unit refining costs for the 2Q-2006 increased 9%, mainly because of a larger number of scheduled maintenance stoppages and increased expenses for catalysts and chemical products.

In the 1H-2006, average international refining costs increased 19% in relation to the same period of 2005, due to higher costs for materials, equipment maintenance and personnel in the refineries in Bolivia and Argentina.

The average international refining cost in the 2Q-2006 declined 13% compared with the 1Q-2006. This decline was mainly due to lower costs for third party services, materials and personnel at the Argentina unit and lower costs with scheduled maintenance stoppages in Bolivia.