This excerpt taken from the PBR 6-K filed Mar 18, 2005.
Reserve for retention of earnings
The purpose of this reserve is to be used in capital budget investments, principally in exploration and domestic oil production development, according to Federal Government policies and article 196 of Brazilian Corporate Law.
The proposal for appropriation of income for the year ended December 31, 2004 includes retained earnings in the amount of R$11.670.003, R$11.657.907 of which relate to net income for the year and R$12.096 to the remaining balance of retained earnings, to be approved by the General Shareholders Meeting to be held on March31, 2005. This proposal is intended to fund part of the annual investment program established in the 2005 capital budget.