1. Investor Relations • Year VII • nº 26
Petrobras em Ações
Sharing in Petrobras
Petrobras is the company
HIGHLIGHTS
The world’s sixth biggest
energy company
■ Petrobras rose from 11th to 6th place in the ranking with the highest market
published by the PFC Energy 50 consultancy firm,
which listed the world’s biggest oil companies based value in Latin America
on their market values in late 2007. The company
T
appears ahead of companies of the likes of BP and he announcement of the 2007 fourth quarter and annual results
Total. PFC Energy is an energy consultancy that has achieved by Petrobras revealed a new record: it is the compa-
been performing with companies and governments ny with the biggest market value in Latin America
from all over the world for more than 20 years. (The – R$430 billion (approximately $243 billon), an 87% growth com-
ranking is available at www.pfcenergy.com).
pared to 2006.
Global Note issuing completed Two factors influenced this achievement the most: the discovery of
new exploratory frontiers (Tupi and Jupiter areas, in the so-called pre-salt
■ Petrobras, via its Petrobras International Finance
layer, in the Santos Basin), which might rank
Company (PIFCo) subsidiary, has completed an
issuing, reopening the Global Note-type bond in the
Brazil as one of the world’s biggest oil-
international capitals market due on 03/01/2018, as producing countries, and the growth in
an unsecured senior, non-subordinated debt for $750 investments foreseen by the company’s
million. This reopening will be a single issuing fungible Strategic Planning, particularly in produc-
with the $1 billion launched on 11/01/2007. In total, tion development.
there will be $1.750 billion in bonds issued and due on This led to the biggest record in
03/01/2018, representing the lowest historical cost of the shareholders’ total return
a Brazilian company in the debt market in Dollars. in Petrobras’ recent history:
83.9% for the shareholders (PETR4) and
Payment of anticipation
of interest on own capital 131.4% for those who hold ADRs (PBR),
considering the reinvestment of the
■ On 01/23/08, Petrobras paid the first installment
received dividends. The company’s
of the anticipation of interest on own capital to
the holders of ordinary and preferred stock on the
preferred shares exceeded, for
base date of 08/17/07, for the total gross value the fourth year in a row, the
of R$0.5034 per share. The second parcel was paid São Paulo Stock Exchange
on 03/31/08 to the holders of ordinary or preferred (Bovespa) Ibovespa rate. So far as the ordi-
stock on the base date of 10/05/07, for a total gross nary receipts are concerned, 2007 was the
value of R$0.5130 per share. Income Tax withholding fifth year in a row that these bonds
must be observed, except for shareholders who are eclipsed the Amex Oil, the sec-
immune or exempt. tor’s benchmark. In the United Petrobras’ Headquarter
States, the appreciation of Petrobras’
Power generation record shares traded at the New York Stock
■ In February 2008, Petrobras set a new power Exchange (NYSE) was also expressive.
generation record for the National Integrated System
These results show the success the company’s Investment
(SIN). In total, 4,040 MW were produced in natural
gas, diesel fuel, and fuel oil plants, compared to
Plan has achieved and set positive perspectives for 2008. The con-
jugation of the planning that was made with the investments that are in
the mark of 2,900 MW in November 2007. Several
factors contributed to this result: the Cabiúnas) – course will contribute to ensuring Petrobras’ future and sustainable
Vitória gas pipeline kicking-off operations, growth.
the use of more efficient units, and lower internal
consumption at the company.
More than two Exploratory Reference
million barrels success in the among oil
per day pre-salt layer companies
PAGE 3 PAGE 3 PAGE 4

2. PROFITABILITY
Results of the
fourth quarter 2007
T
he improved sale performance Meanwhile, total derivative production cost in Brazil, in Dollars, rose 24%.
in the internal and external mar- increased 8%. In Brazil, the increase was Discounting the effects of the more
kets drove the net operating 2% when comparing 2007 to 2006. In expensive Real, at 10%, the refining costs
revenues (8% more than in 2006). the international ambit, in 2007 there in Reais were up 13%. Internationally,
The consolidated annual net profit was was a significant increase, both in pro- the refining cost surged 71% in the
affected by the more expensive Real, duction and in the installed capacity 2007/2006 comparison, due to the
by oil and derivative import costs, and with the acquisition of the Pasadena inclusion of the refinery in the US.
by extraordinary expenditures with Refinery, in the US. The short-term debt decreased
the personnel (Petros pension plan). The sales volume in the internal 31%, while total indebtedness was
The EBITDA remained stable in 2007. market rose 3% in 2007. The offshore down 15%. Even with a 53% availabil-
The total investments climbed and refinery operations in the US ity reduction, the EBITDA allows the
to US$ 21 billion in 2007, 34% drove the international sales vol- total debt to be liquidated in nine
more than in 2006. ume last year, up 17% compared months and the net indebtedness in
The average oil and gas produc- to 2006, compensating for the exclu- six. 2007 was marked by impor-
tion also remained stable compared sion of the operations in Venezuela tant appreciations of Petrobras’
to 2006, since four of the five major and of the refineries in Bolivia. Oil and stock, both in Brazil and in the US.
production projects foreseen for 2007 derivative exports climbed 5% and The economic contribution closed
only went online in the end of the 7%, respectively. In financial terms, the 2007 at relative stability compared to
year, when a new daily oil produc-balance was positive, by US$ 73 2006. Government participations in
tion record was set in Brazil – million, in 2007. Brazil were down 7% in the same peri-
2,000,238 barrels. Five new units Lifting costs rose 5% in Reais (with- od, reflecting the 10% appreciation of
slated to kick-off operations in 2008 out government participation) in the the Real and the application of a lower
will contribute to growing production. 2007/2006 comparison, and 17% in Special Participation aliquot derived from
Compared to 2006, the average Dollars. In the external ambit, they the lower production due to the natural
derivative price realization rose 1%. were up 24% in 2007. The unit refining decline in the main producing fields.
Petrobras ADRs versus DOW JONES and Amex Oil Indexes Economic and Financial Figures
RESULTS & RETROSPECTIVE
In US$ million 2007 2006 Variation (%)
1443% PBR (ADR ON)
1336% PBRA (ADR PN) Sales of products and services 112,425 93,893 20
249% Amex Oil Net operating revenues 87,735 72,347 21
1.600
1.500 59% Dow Jones Gross profit 32,402 28,490 14
1.400
1.300 Net income 13,138 12,826 2
1.200
1.100
Earnings per share 2.99 2.92 2
1.000 Earnings per ADS 5.98 5.84 2
900
800 Net cash provided by operating activities 22,664 21,077 8
700
600 Capital Expenditures 20,978 14,643 43
500
400 Net debt 14,908 8,650 72
300
200
Debt to equity ratio 50% 55% -5 pp
100
* Antes das receitas e despesas financeiras e da equivalência patrimonial.
Dec-02
Mar-03
Jun-03
Sep-03
Dec-03
Mar-04
Jun-04
Sep-04
Dec-04
Mar-05
Jun-05
Sep-05
Dec-05
Mar-06
Jun-06
Sep-06
Dec-06
Mar-07
Jun-07
Sep-o7
Dec-o7
Real Increase in Stock Price* Operating Performance
In thousand barrels of oil equivalent per day 2007 2006 Variation (%)
900% 840.8
800% ■ Ibovespa Total crude oil, NGLs and natural gas
700% ■ Petrobras PN production 2,301 2,297 -
600% ■ Petrobras ON
457.0 481.5 Total oil products production 2,046 1,892 8
500% 445.1%
400% 314.3%
Net Exports of crude oil and oil products 77 93 -17
300% Refining and marketing operations
200% 144.9%
64.5 78.6 Brazil - Utilization 90% 89% 1 pp
100% 33.1
0% International - Utilization 85% 81% 4 pp
-100% Domestic crude oil of total
10 Years 5 Years 1 Year
feedstock processed 78% 80% -2 pp
* Monthly changes discounted for inflation in accordance with IGP-DI index

3. PRODUCTION RECORD
Petrobras reaches a production of
2,000,000 barrels/day in Brazil
I
n December, Petrobras set anoth- To achieve this feat, five new The average onshore field produc-
er daily oil production record platforms went online in 2007 tion has oscillated around 230,000
in Brazil: 2,000,238 barrels, a alone. When they reach peak produc- barrels of oil per day.
mark previously achieved by but a tion, they will add another 590,000 This onshore production volume
few oil-producing countries in the barrels of oil to the installed capaci- has been being
world. The record was the outcome ty. The previous record had been set maintained in the
of the progressive increase in pro- in October 2006: 1,912,000 barrels. past few years
duction that has been made in The pace at which new produc- thanks to the
the past few years and represents tion systems kick-off their operations new technologies
yet another decisive step towards in the company’s portfolio will Petrobras has
Brazil’s self-sufficiency in this area. increase in 2008, when five new plat- been developing
forms are slated to go online. One of to boost mature
them will be the P-51, the first plat- field useful lives.
form built entirely in Brazil. Furthermore, the
Although more than 80% of the company expects
oil Petrobras produces in Brazil onshore produc-
comes from offshore fields, onshore tion to grow
production also had an important in the upcoming
role in the record the company set. years.
NEW FRONTIERS
EXPLORATION AND PRODUCTION
Exploratory
success in the
pre-salt layer
A
fter the discovery of the Tupi area, in the Santos
Basin, which now constitutes one of the world’s most
important oil provinces, Petrobras has announced
another important discovery: a major natural gas
and condensate field in the area known as Jupiter, in
Discovery the same basin. This reinforces the potential of the so-
called pre-salt region, in which the company holds stakes
in Peru in 13 blocks in the exploratory phase
The pioneer well is located at a final depth of 5,252
T he consortium formed by Petrobras (35.15%), Repsol
(41% – operator), and Burlington Resources (23.85%) has
made a gas discovery in Peru, in an exploratory well in
meters. It is located 290 km off the Rio de Janeiro coast and
37 km from the Tupi area, and is at a water depth of 2,187
meters. The area is explored by a consortium formed by
the province of Cuzco. The first production tests, currently in Petrobras (80% – operator) and Portuguese outfit Galp
progress, registered a flow of 1 million cubic meters Energia (20%).
of gas and of 198 cubic meters of condensate per day. Additionally, the consortium proved the existence of a
The structure that was discovered is more than 22 kilome- light oil field in another area in the Santos Basin,
ters long and bears some 115 meters of liquid gas and con- also in the pre-salt region. The well is located 280 km off the
densate reservoirs. Although the available data do not allow the coast of São Paulo, at a water depth of 2,234 meters, and
discovery’s resources to be defined with precision, the struc- at a depth of 5,350 meters from the ocean floor. The invest-
ture’s dimensions indicate volumes of some 2 TCF (56 billion ments and activities that are required to check the dimen-
cubic meters). The new field is near blocks 58 and 110, where sions of the new fields and reservoir characteristics continue
Petrobras undertakes exploratory activities and holds 100% of underway.
the stakes.

4. NEWS BOARD
SUSTAINABILITY
Petrobras in the World Economic Forum
Petrobras’ president, José Sergio Gabrielli de Azevedo, and the
company’s CFO and Investor Relations director, Almir Barbassa, participated
in the annual gathering of the World Economic Forum, held in Davos,
Switzerland. The event brought corporate and government leaders,
in addition to civil society representatives from all over the world together Urucu – Amazônia
to discuss the challenges that must be faced for global development. Urucu, Amazonia
One of Petrobras’ main engagements in Davos was the Energy Summit,
which welcomed executives from some of the world’s biggest oil companies The most
and authorities of the main oil-producer and consumer countries. During
the event, the company’s executives held work meetings to discuss issues
sustainable among
that are relevant to the sector. the oil companies
P etrobras has been acknowledged, in
a survey carried out by Management
& Excellence (M&E), as the world’s
New Partnership for most sustainable oil company. The
criteria used for the ranking took
premium fuel ethanol logistics compliance with several international
Petrobras has launched the Add standards into account. M&E is a
Cleaner premium fuel, a new
product aimed at the industrial
P etrobras has approved the
incorporation of a company with Mitsui
and Camargo Correa to build an ethanol
Spanish consultancy firm that is spe-
cialized in organizational assessments
segment to be used to generate pipeline between between Goiás and and is one of the institutions the
energy via burning in the São Paulo. The project also includes a investor market and the media in the
transformation process (kilns and second section that will interconnect United States, Europe, and Latin
boilers). This fuel is more efficient the Tietê-Paraná Waterway to the America respect the most.
and increases the combustion Paulínia Terminal. The initiative is part of
This result shows the acknowl-
system’s useful life, it allows the the Ethanol Exports Corridor, designed to
time involved in the scheduled
edgement of the company’s commit-
cover the states of Goiás, Minas Gerais,
shutdowns for equipment São Paulo, and Rio de Janeiro. ment to issues of governance, ethics,
maintenance and cleaning to be The ethanol pipeline’s main trunk transparency, social and environmen-
reduced and extends the period flow capacity will be up to 12 million m3 tal responsibility, as well as to its rela-
between maintenances. It is also of ethanol/year. Petrobras will make this tionship with investors and other
cleaner and has important structure available to the market as a stakeholders.
environmental benefits. transportation service and ensure efficient
ethanol arrival to the export harbors. Initiatives
In the sustainability context, Petrobras
increased its investments in processes
that allow it to improve its operations’
Biofuels reduce CO2 emissions ecoefficiency. In 2007, among other
improvements, it invested US$ 873 mil-
etrobras’ goal is to prevent the emissions of 21.3 million tons of CO2 to
P the atmosphere between 2007 and 2012. The company intends to achieve
levels of excellence in greenhouse effect gas emissions and, thus, contribute to
lion (US$ 597 million in 2006) in
pollutant gas emission reductions and
in water and power consumption
business sustainability and to mitigating climate change.
Projections show that the transportation sector will be the world’s biggest oil
management.
consumer in the 2005-2025 period, and the partial substitution of fossil fuels for On another front, the company,
the so-called biofuels, such as biodiesel, will play an important role in reducing via its Center of Environmental
emissions. Petrobras has invested Excellence in the Amazon (Ceap),
in biodiesel development and it the Ibama and the Government of
believes that in the near future this the State of Pará, signed a protocol
fuel’s participation in the of intentions for the integrated man-
transportation sector will increase. agement of the knowledge regarding
The legislation of several countries the Amazon region in the socioenvi-
determines biofuel be mixed to
ronmental area. In 2008, the Ceap
fossil fuel. In Brazil, biodiesel is
mixed at a rate of 2% to regular
will invest some US$ 28 million in the
diesel, a percentage that will be Amazon, while through 2012 total
increased to 5% in 2013. resources are expected to top-out at
US$ 55 million.
Newssheet edited by Petrobras' Investor Relations Department • Executive Manager: Theodore Helms • Editor: Cláudio Paula (RJ-21059-JP) • Writer: Orlando Gonçalves Jr. • Colaboration:
Ana Paula Carvalho and Fábio Rocha • Contact: Petrobras' Shareholders Department • Phones: (55-21) 3224-1540/4914 • Fax: (55-21) 2262-3678 • Address: Av. República do Chile, 65 /
2202-B • Centro – Rio de Janeiro – RJ – Brazil – 20031-912 • E-mail: acionistas@petrobras.com.br • Design: Estúdio Matiz
Depositary Bank: JPMorgan Chase Bank • JPMorgan Depositary Receipts • 4 New York Plaza, 13th Fl. • New York, NY 10004 • +1 (866) JPM-ADRS (576-2377)
Visit our website at www.petrobras.com.br/ri/english