Petrobras (PBR)

Research and Development Expenses

Research and development expenses decreased 30.9% to U.S.$322 million in the first half of 2009 from U.S.$466 million in the first half of 2008. This lower expense was primarily due to decreased average sales prices, which is the basis for a fixed 0.5% provision for expenses on research and development investment according to Regulation ANP 05/2005.

Research and Development Expenses

Research and development expenses decreased 38.4% to U.S.$146 million in the three-month period ended March 31, 2009, from U.S.$237 million in the three-month period ended March 31, 2008. This lower expense was primarily due to the decrease on the average sales prices which is the basis for a fixed 0.5% provision for expenses on research and development investment according to Regulation ANP 05/2005.

Research and Development Expenses

Research and development expenses increased 6.8% to U.S.$941 million for 2008 from U.S.$881 million for 2007. This increase was primarily due to higher training and research costs for production from current reserves and new exploratory areas.

Research and development expenses

Research and development expenses increased 23.5% to U.S.$756 million in the nine-month period ended September 30, 2008, from U.S.$612 million in the nine-month period ended September 30, 2007. This increase was primarily due to higher training costs and research costs related to production from current reserves and new exploratory areas.

Research and development expenses

Research and development expenses increased 17.1% to U.S.$466 million in the first half of 2008 from U.S.$398 million in the first half of 2007. This increase was primarily due to higher costs for training of the technical workforce and research for development of production from current reserves and new exploratory frontiers.

Research and development expenses

Research and development expenses increased 30.2% to U.S.$237 million for the first quarter of 2008 from U.S.$182 million for the first quarter of 2007. This increase was primarily due to expanded cost for training of the technical workforce and research for development of production from current reserves and new exploratory frontiers.

Research and development expenses

Research and development expenses increased 20.7% to U.S.$881 million for 2007 from U.S.$730 million for 2006. This increase was primarily due to expanded cost for training of the technical workforce, and research for development of production from current reserves and new exploratory frontiers.

Research and development expenses

Research and development expenses increased 19.5% to U.S.$ 612 million for the nine-month period ended September 30, 2007, as compared to U.S.$ 512 million for the nine-month period ended September 30, 2006. This increase was primarily due to:

• U.S.$ 55 million in expenses related to regulation ANP 05/2005, pursuant to which concessionaires must invest an amount, corresponding to 1% of the gross income from production in a given field, in qualifying research and development activities in Brazil; and

• the 8.3% increase in the value of the Real against the U.S. dollar in the nine-month period ended September 30, 2007, as compared to the nine-month period ended September 30, 2006.

Research and development expenses

Research and development expenses increased 17.4% to U.S.$ 398 million for the first half of 2007, as compared to U.S.$ 339 million for the first half of 2006. This increase was primarily due to:

9

• U.S.$ 35 million in expenses related to regulation ANP 05/2005, pursuant to which concessionaires must invest an amount, corresponding to 1% of the gross income from production in a given field, in qualifying research and development activities in Brazil; and
  
  
• the 6.6% increase in the value of the Real against the U.S. dollar in the first half of 2007, as compared to the first half of 2006.

Research and development expenses

Research and development expenses increased 59.3 % to U.S.$ 180 million for the first quarter of 2007, as compared to U.S.$ 113 million for the first quarter of 2006. This increase was primarily due to:

• a U.S.$ 55 million in expenses related to regulation ANP 05/2005, pursuant to which concessionaires must invest an amount, corresponding to 1% of the gross income from production in a given field, in qualifying research and development activities in Brazil; and
  
  
• the 3.9% increase in the value of the Real against the U.S. dollar in the first quarter of 2007, as compared to the first quarter of 2006.

10

Research and development expenses

Research and development expenses increased 82.2% to U.S.$ 727 million for 2006, as compared to U.S.$ 399 million for 2005. This increase was primarily due to:

• a provision for an ANP research and development investment, related to regulation ANP 05/2005, in the amount of approximately U.S.$ 249 million;
  
  
• additional investments in programs for environmental safety, including deepwater and refining technologies of approximately U.S.$ 31 million; and
  
  
• the 10.7% increase in the value of the Real against the U.S. dollar in 2006, as compared to 2005.

Research and development expenses

Research and development expenses increased 85.8% to U.S.$ 511 million for the nine-month period ended September 30, 2006, as compared to U.S.$ 275 million for the nine-month period ended September 30, 2005. This increase was primarily due to:

• a provision for an ANP research and development investment, related to regulation ANP 05/2005, in the amount of approximately U.S.$ 143 million;
  
• additional investments in programs for environmental safety, including deep water and refining technologies of approximately U.S.$ 63 million; and
  
• the 12.6% increase in the value of the Real against the U.S. dollar in the nine-month period ended September 30, 2006, as compared to the nine-month period ended September 30, 2005.

Research and development expenses

Research and development expenses increased 104.2% to U.S.$ 339 million for the first half of 2006, as compared to U.S.$ 166 million for the first half of 2005. This increase was primarily due to:

• a provision for ANP research and development investment, related to regulation ANP 05/2005, in the amount of approximately U.S.$ 93 million;
  
  
• additional investments in programs for environmental safety, to deep water and refining technologies of approximately U.S.$ 51 million; and
  
  
• the 15.0% increase in the value of the Real against the U.S. dollars in the first half of 2006, as compared to the first half of 2005.

Research and development expenses

Research and development expenses increased 50.7% to U.S.$ 113 million for the first quarter of 2006, as compared to U.S.$ 75 million for the first quarter of 2005. This increase was primarily related to additional investments in programs for environmental safety, to deepwater and refining technologies of approximately U.S.$ 23 million and to the 17.7% increase in the value of the Real against the U.S. dollars in the first quarter of 2006, as compared to the first quarter of 2005.

Research and development expenses

Research and development expenses increased 52.8% to U.S.$ 275 million for the nine-month period ended September 30, 2005, as compared to U.S.$ 180 million for the nine-month period ended September 30, 2004. This increase was primarily related to additional investments in programs for environmental safety, deepwater and refining technologies of, approximately, U.S.$ 60 million and to the 16.0% increase in the value of the Real against the U.S. dollar in the nine-month period ended September 30, 2005, as compared to the nine-month period ended September 30, 2004.

Research and development expenses

Research and development expenses increased 45.6% to U.S.$ 166 million for the first half of 2005, as compared to U.S.$ 114 million for the first half of 2004. This increase was primarily related to additional investments in programs for environmental safety, deepwater and refining technologies of, approximately, U.S.$ 35 million and to the 13.4% increase in the value of the Real against the U.S. dollar in the first half of 2005, as compared to the first half of 2004.

Research and development expenses

Research and development expenses increased 36.7% to U.S.$201 million for 2003, as compared to U.S.$147 million for 2002. This increase was primarily related to our additional investments in programs for environmental

95

Table of Contents

safety, deepwater and refining technologies of approximately U.S.$62 million, and was partially offset by the effect of the 5.2% decrease in the value of the Real against the U.S. dollar in 2003, as compared to 2002.

Research and development expenses

Research and development expenses increased 44.2% to U.S.$ 75 million for the first quarter of 2005, as compared to U.S.$ 52 million for the first quarter of 2004. This increase was primarily related to additional investments in programs for environmental safety, deepwater and refining technologies of, approximately, U.S.$ 18 million and to the 8.0% increase in the value of the Real against the U.S. dollar in the first quarter of 2005, as compared to the first quarter of 2004.

Research and development expenses

Research and development expenses increased 23.4% to U.S.$ 248 million for 2004, as compared to U.S.$ 201 million for 2003. This increase was primarily related to additional investments in programs for environmental safety, deepwater and refining technologies of approximately U.S.$ 36 million and to the 4.8% increase in the value of the Real against the U.S. dollar in 2004, as compared to 2003.