Petrobras (PBR)

US regulators approve Petrobras plans to bring first FPSO to the Gulf of Mexico

(Rio de Janeiro, December 11, 2006). - PETRÓLEO BRASILEIRO S/A - PETROBRAS, [Bovespa: PETR3/PETR4, NYSE: PBR/PBRA, Latibex: XPBR/XPBRA, BCBA: APBR/APBRA], a Brazilian international energy company, announces that, its Conceptual Plan for the subsea development of Cascade and Chinook fields has received approval from the United States Minerals Management Service (MMS). It is the first approval at this level of a plan that includes the deployment of a Floating, Production, Storage and Offloading (FPSO) facility in the Gulf of Mexico. MMS is an agency of the United States Government that manages the natural gas, oil and other mineral resources on the outer continental shelf (OCS).

The application of new Petrobras technologies will allow a fast tracked, development approach, with start of oil production scheduled for 2009. Petrobras has an extensive experience in the use of FPSO since 1979, with fifteen units currently under operation offshore Brazil, and another nine under construction to be deployed in that area. The proposed solution has a proven track record of improving the capabilities of developing oil and gas reserves in deep and ultra deep water environments.

Petrobras has proposed the use of six technologies which are new to the US Gulf of Mexico including a disconnectable turret buoy allowing the FPSO to move offsite during hurricanes and severe weather, crude transportation via shuttle tanker, free-standing hybrid risers, subsea electric submersible pumps, torpedo pile vertical loaded anchors and polyester mooring systems.

The plan consists of the installation and operation of a FPSO vessel in approximately 8,200 feet of water. The plan provides for at least two subsea wells in Cascade and one subsea well in Chinook, each drilled to an approximate depth of 27,000 feet and to be tied back to the FPSO. Based on reservoir performance, the development plan could be expanded to include additional wells on each unit.

More detailed engineering studies will now be carried out, including the preparation of the Deepwater Operations Plan which will include all technical details demonstrating that these technologies will meet or exceed the current requirements for operations in the Gulf of Mexico.

PETROBRAS is the operator of the Cascade and Chinook Units owning 50% and 66.67% respectively. Devon Energy Corporation owns the remaining 50% of Cascade Unit and TOTAL E&P USA, Inc, a subsidiary of TOTAL SA, owns 33.33% of Chinook Unit.