1. Sustainability Report

2. Profile
Founded in 1953, Petrobras is a publicly traded company with activites in 30
countries on all continents. The oil sector leader in Brazil, it ranks third among
the international energy companies in market value, according to PFC Energy’s
ranking. Petrobras operates in exploration and production, refining, oil and
natural gas trade and transportation, petrochemicals, oil product distribution,
electric energy, biofuels, and in other sources of renewable energy.
Mission
Operate in a safe, profitable manner, with social and environmental responsibility,
in Brazil and abroad, providing products and services that meet clients’ needs and
that contribute to the development of Brazil and of the countries in which it
operates.
Vision for 2020
We will be one of the five largest integrated energy companies in the world and
the preferred choice among our stakeholders.
Attributes of the Vision for 2020
Our operations will stand out for:
» Their strong international presence
» Being a global reference in biofuels
» Excellence in operations, management, energy efficiency,
human resources, and in technology
» Their profitability
» Being a benchmark in social and environmental responsibility
» Their commitment to sustainable development
Values
» Sustainable development
» Integration
» Results
» Readiness for change
» Entrepreneurship and innovation
» Ethics & transparency
» Respect for life
» Human & cultural diversity
» People
» Proud to be Petrobras

3. Highlights
OPERATIONAL SUMMARY 2008 2009 2010 PERFORMANCE SCHEDULE
PROVED RESERVES - SPE Criterion - (billions of barrels INDICATOR 2006 2007 2008 2009 2010
15.1 14.9 16.0
of oil equivalent - boe) (1) (2) - BRAZIL AND ABROAD Environment
Oil and condensate (billions of barrels) 12.5 12.6 13.4 Oil & Oil Product Leaks (m 3) 293 386 436 254 668
Natural gas (billion boe) 2.6 2.3 2.6 Energy consumption (terajoule - TJ) 576,762 574,145 604,333 527,717 716,673
AVERAGE DAILY PRODUCTION (thousand boe) (1) - BRAZIL AND ABROAD 2,400 2,526 2,583 Greenhouse gas emissions
50.43 49.88 57.6 57.8 61.1
BRAZIL (million tons of CO2 equivalent)
Ք Oil & LNG (thousand bpd) 1,855 1,971 2,004 Carbon dioxide emissions - CO2 (million tons) 46 45 54 52 57
Ք Natural gas (thousand boe) 321 317 334 Methane emissions - CH 4 (thousand tons) 190 206 188 235 196
ABROAD Nitrous oxide emissions - N2O (tons) 997.23 919.5 1,215 1,241 1,360
Ք Oil & LNG (thousand bpd)* 124 141 152 Atmospheric emissions - NOx (thousand tons) 233.54 222.65 244.50 222.04 227.75
Ք Natural gas (thousand boe) 100 97 93 Atmospheric emissions - SOx (thousand tons) 151.96 150.9 141.79 135.39 133.73
FLOW WELLS (oil and natural gas) – on December 31 (1) 13,174 14,905 15,087 Other atmospheric emissions - includes particulate
17.11 15.22 16.71 19.30 17.51
DRILLING RIGS – on December 31 109 100 98 matter (thousand tons)
PLATFORMS IN PRODUCTION – on December 31 112 133 132 Fresh water withdrawal (million m 3) 178.8 216.5 195.2 176.0 187.3
PIPELINES (km) – on December 31 25,197 25,966 29,398 Water effluent disposal (million m )
3
164.3 172.8 181.14 197.2 172.6
VESSEL FLEET – on December 31 189 172 291 Occupational Health and Safety
Amount - Own operation 54 52 52 Lost Time Injury Frequency Rate - LTIFR
0.77 0.76 0.59 0.48 0.52
(includes employees and workers)
- Operated by third parties 135 120 239
TERMINALS – on December 31 (3) Fatalities (including employees and workers) 9 15 18 7 10
Amount 46 47 48 Fatal Accident Rate (fatalities per 100 million
REFINERIES – on December 31(1) (5) man-hours of exposure to risk - including 1.61 2.28 2.4 0.81 1.08
employees and workers)
Nominal installed capacity (thousand barrels per day - bpd) 2,223 2,223 2,288
Average daily oil products production (thousand barrels per day - bpd) 1,970 2,034 2,052 Percentage of Lost Time (includes employees only) 2.06 2.19 2.31 2.36 2.38
Brazil 1,787 1,823 1,832 Employees*
Abroad 183 211 220 Number of employees 62,266 68,931 74,240 76,919 80,492
IMPORTS (thousand barrels per day – bpd) 570 549 615 Number of workers 176,810 211,566 260,474 295,260 291,606
Oil 373 397 316 Contributions to society
Oil Products 197 152 299 Investments in social projects (R$ million) 199.6 248.6 225.1 173.6 199.3
EXPORTS (thousand barrels per day – bpd) 673 705 697 Investments in cultural projects (R$ million) 288.6 205.5 206.8 154.6 170.3
Oil 439 478 497 Investments in environmental projects (R$ million) 44.6 51.7 53.8 93.9 257.7
Oil Products 234 227 200 Investments in sports projects (R$ million) 58.2 80 69 42.4 80.5
OIL PRODUCTS TRADE (thousand barrels per day – bpd)
Brazil 1,737 1,754 1,960
INTERNATIONAL SALES (thousand barrels per day – bpd) CONSOLIDATED FINANCIAL INFORMATION 2008 2009 2010
Oil, gas, and oil products 552 537 593 Gross Operating Revenue (R$ million) 266,494 230,504 268,107
SOURCE OF THE NATURAL GAS (millions of m 3 per day) (4) 58 45 62 Net Operating Revenue (R$ million) 215,118 182,710 213,274
Domestic gas 29 23 29 Operating Profit (R$ million) 45,950 46,128 47,057
Bolivian gas 29 22 26 Profit / Share (R$) 3.76 3.30 3.57
LNG 1 8 Net Profit (R$ million) 32,988 28,982 35,189
DESTINATION OF THE NATURAL GAS (millions of m 3 per day) (4) 58 45 62 EBITDA (R$ million) 57,170 59,944 60,323
Distributors 37 32 37 Net Debt (R$ million) 48,824 71,533 62,067
Thermoelectric plants 14 5 16 Investments (R$ million) 53,349 70,757 76,411
Refineries 5 6 7 Gross Margin 34% 40% 36%
Fertilizers 2 2 2 Operating Margin 21% 25% 22%
ENERGY (1) Net Margin 15% 16% 16%
Number of thermoelectric plants (5) (6) 18 18 15
Installed capacity (MW) (5) (6) 6,103 6,136 5,944
FERTILIZERS (1)
2 2 2
(*) Includes non-consolidated
(1) Includes information from abroad for Petrobras’ part in associated companies
(2) Proved reserves measured according to the SPE (Society Petroleum Engineers) criterion
(3) Includes only Transpetro terminals
(4) Excludes flaring, own consumption by E&P, liquefaction and reinjection
(5) Only includes assets in which there is an interest of 50% or more
(6) Only includes the natural gas-fired thermoelectric plants

4. Contents
002 Message from the CEO
004 About the Report
006 Corporate Performance
008 Profile
012 Corporate governance
019 Strategy
027 Intangible assets
029 Our stakeholders
032 Operational Performance
034 Our activities
050 Results and Contributions to Society
052 Economic and financial results
056 Contributions to society and indirect impacts
066 Employment Practices and Human Rights
068 People management
075 Human rights
078 Environment
080 Environmental management
092 Social Balance According to the IBASE Model
094 GRI Table of Contents
098 Glossary
100 Management
102 Independent Auditors’ Limited Assurance Report
103 Editorial Staff

5. SuSTAInABILIT y REPORT 2010
Message
from the CEO
Three major accomplishmenTs marked Lula and Cernambi fields. The rate of reserve primarily via Gasene, in order to enable nat- listed on the Dow Jones Sustainability Index,
2010: the start-up of operations at the Lula field replacement was 229%, meaning that for each ural gas supply source diversification and the world’s most important in this regard, for
Pilot System, in the accumulation area known barrel of oil equivalent produced, Petrobras flexibilization. the fifth year in a row, evidence of our com-
as Tupi, in the Santos Basin Pre-Salt layer; the added 2.29 barrels to its reserves. Seeking to increase its stakes in the mitment to the environment and to sustain-
raising of R$120.2 billion through the world’s The excellent results achieved in 2010 con- biodiesel and ethanol business, Petrobras able development.
largest ever equity issuance; and the signing of firmed Petrobras’ strategic direction is on the invested R$1.2 billion in this area, a sum Petrobras’ Sustainability Report brings
the Transfer of Rights Agreement, guarantee- right track. Investments amounted to R$76.4 equivalent to 2% of the total investments. together, under a single cover, not only the
ing the company the right to produce 5 billion billion, 8% more than in 2009. These invest- In Distribution, Petrobras continued grow- company’s main achievements, but also the
barrels of oil equivalent (boe) in Pre-Salt areas ments were mainly directed to increase oil and ing its market share, maintaining its lead- challenges it faced in 2010. The information
that are not under concession. natural gas production, to improve and en- ing position in the domestic fuel market, of contained herein is part of our strategy to con-
Petrobras’ dedication to exploring new hance refining facilities, to hire new vessels to which it holds a 38.8% share. To this end, it duct business and activities with social and
business frontiers has allowed the company transport company products, and to complete invested R$900 million, equivalent to 1% of environmental responsibility, aligned with the
to make these achievements, which have the construction work for the pipeline net- the total, mainly in automotive market proj- ten principles of the UN Global Compact. This
strengthened it. Petrobras has a robust port- work that interconnects all of the main Bra- ects and in logistics and operations. is why we reaffirm our commitment to con-
folio in the Santos Basin Pre-Salt layer, the zilian markets. The large investments made in Our performance is the end result of mas- tinue taking part in this initiative, of which
most promising exploration region along the each of the segments in which the company sive investments in technology development the company has been a signatory since 2003,
Brazilian coast. The capitalization operation operates underpin Petrobras’ position as an and in qualifying employees, this combined fulfilling and reporting our activities under
provided the resources needed not only for the integrated energy company. with our relentless commitment to adopting the ten principles relating to Labor, Human
Transfer of Rights Agreement, but also to sup- Most of the investments (43%) were ear- good corporate governance practices. Year af- Rights, Environment, and Transparency.
port Petrobras 2010-2014 Business Plan, which marked for Exploration and Production, ter year, Petrobras stands out worldwide for its In 2010, Petrobras once again has proven
calls for investments in the order of $224 billion. which received R$32.7 billion, 6% more than pioneering technology in oil exploration and its competence to overcome challenges. Tech-
The company’s net revenue reached R$35.2 a year earlier. The goal of the investments production. Petrobras is the Brazilian com- nological accomplishments, increased reserves
billion, 17% more than in 2009. This is a result was to boost oil and natural gas output and pany that invests the most in R&D. In 2010, and output, refining plant enhancements and
of the expanding Brazilian economy, of the in- reserves. In the Pre-Salt area, the highlight it invested R$1.8 billion in this area, with spe- modernizations, and a record equity issuance
creased oil and natural gas production, higher was the start-up of operations of the Lula cial emphasis on the doubling of the Research ensured the sustainability the company need-
oil trade volumes on the Brazilian market, and Pilot System, with nominal capacity of 100 Center, one of the world’s biggest and key to ed and guaranteed continuity in the imple-
of the international oil price recovery. Domes- thousand barrels of oil and 3.5 million cubic the development of new technologies for all mentation of its Business Plan.
tic oil and natural gas liquids output added up meters of natural gas per day. segments the company has operations in, par-
to 2.004 million barrels of oil per day (bpd), up The Downstream area investments were ticularly oil production in the Pre-Salt area. José Sergio Gabrielli de Azevedo
1.7% over the previous year due mainly to new R$28.5 billion, 73% more than in the previ- To address both the corporate challeng- Petrobras’ CEO
platforms going on stream. Natural gas pro- ous year. The company advanced the con- es it faces and the company’s ever-growing
duction in Brazil, meanwhile, rose to 56.6 mil- struction work of the Abreu e Lima Refinery business expansion, the Petrobras System
lion cubic meters per day, 5.6% more than in and the Rio de Janeiro Petrochemical Com- increased its staff by 4.65% compared to
the previous year. The total volume of oil and plex (Comperj), and set the two Premium re- 2009, ending the year with 80,492 employ-
natural gas produced by Petrobras in 2010 was finery projects. The goal is twofold: add value ees. Two selection entry processes were held
2.583 million boed, 245,000 of which coming to domestic oil and supply the Brazilian oil for Petrobras Holding alone. Approximately
from units abroad. product market. 336,000 candidates signed-up for the pro-
The company’s proved oil and natural gas The Gas & Power area invested R$6.9 cess and 2,687 were hired.
reserves, according to the ANP/SPE criteria, billion, equivalent to 9% of the total and up With activities on all continents and oper-
climbed to 15.986 billion boe in late 2010, a 5% compared with the previous year. These ations in 25 countries besides Brazil, Petrobras
7.5% increase over 2009 thanks to the addi- resources were directed mainly to integrate ended 2010 ranked third among the global
tion of new discoveries, particularly in the the Southeast-Northeast pipeline network, energy companies in market value. We were
002 003

6. SuSTAInABILITy REPORT
SuSTAInABILIT y REPORT 2010
information is available in the online version Transporte S.A. (Transpetro), Liquigás, and
of this report, which is posted on Petrobras’ the Alberto Pasqualini Refinery (Refap). The
Parameters website. The contents of the report were
submitted to an external audit conducted by
KPMG Auditores Independentes (check the
criteria used to select these companies and
subsidiaries were their role in management
and control and the organization’s represen-
for the report
statement out on page 102). tativeness in the Petrobras System.
The Subcommittee for Social Responsi- When the data considered for the perfor-
bility Report Preparation and Assessment mance indicator differs from the scope set for
conducts the process of developing the com- the report, this information is presented in
ABOUT THE REPORT
pany’s sustainability report. Comprising rep- sections highlighted within the text itself, in
peTrobras applies The guidelines seT out growth, profitability, and social responsibil- resentatives of 24 Petrobras System areas and footnotes or in the notes to the graphs and
in the third generation of Global Reporting ity. The information provided in the docu- subsidiaries, the subcommittee consolidates schedules.
Initiative’s Sustainability Reporting Frame- ment covers the period ranging from January information compiled and obtained by a net- Some information from previous years on
work (GRI G3) to draft its report. Headquar- 1 to December 31, 2010. The latest report was work of about 300 collaborators. It also as- performance indicators, stated in historical se-
tered in Amsterdam, the Netherlands, the released last year and concerned the activi- sess the information published in the report ries, have been reviewed and, therefore, these
initiative brings together representatives of ties carried out in 2009. We also report on our to then undertake actions aiming to improve figures differ from those published in previous
governments, companies, NGOs, and experts compliance with the ten principles of the UN company management. editions of the report. In such cases, explana-
in order to set parameters and indicators for Global Compact, of which we are signatories. tions about data updates or on possible indi-
peTrobras’ the preparation of sustainability reports. This Since it presents information on all GRI lIMIT OF THE REPORT cator calculation methodology changes are
reporting model is the one that is currently guidelines essential performance indica- In preparing the content for the 2010 Sus- reported together with the reviewed informa-
susTainabiliTY most widely used by world-class companies tors, Petrobras’ sustainability report is in tainability Report, the activities of Petrobras’ tion in order to facilitate understanding. The
operating in several industries worldwide. accordance with application level A+. We in Brazil and in 29 other countries where it same is true concerning the techniques used
reporT reaches We present our sustainability report to use a materiality matrix to define and pri- has activities were considered - except for the to calculate a given indicator - if necessary, an
our stakeholders every year, disclosing our oritize content, and the issues considered thermoelectric plants controlled indirectly by explanation comes along with the indicator.
The a+ leVel oF economic, social and environmental perfor- most relevant both by Petrobras’ stakehold- the company -, as were those of Petrobras Dis- In 2010, no significant change was made to
mance and focusing primarily on integrat- ers and by the company are addressed in the tribuidora, Petrobras Química S.A. (Petro- the scope or coverage compared to the com-
applicaTion ing the three pillars of our corporate strategy: printed version of the document. Additional quisa), Petrobras Biocombustível, Petrobras pany’s previous report.
MATERIALITy MATRIX REPORT CAPTIOnS
The materiality matrix provides the themes that are priority for the company, which are deter- There are a few graphic figures in the report that were designed to help the reader find content, to
mined based on the crossing of the perceptions of key stakeholders – employees, investors, sup- associate content to indicators, to identify the relevance in the materiality matrix, and to find more
pliers, communities, experts and public authorities, among others. Get to know the ten issues information about a particular topic. These graphic figures are as follows:
considered most strategic for Petrobras activities. Additional information about the materiality
process can be found in the online version of the Report. @ » More information on the topic @ : available on Petrobras’ website (www.petrobras.com.br) or in the
online version of the Sustainability Report (www.petrobras.com.br/rs2010).
» Some additional information can be found on the investor relations website:
GREATEST RElEvAnCE
B A
1. Risk management
www.petrobras.com.br/ri.
2. Alternative and renewable energy
» Global Compact Icon: appears next to the chapter corresponding to Petrobras’ actions related
3. Emissions reductions and management to a certain principle of the Global Compact.
1
4. Accident prevention » Material topic : the indication appears next to items considered material by the main stake-
holders at the materiality matrix process.
5. Contribution to local development
» GRI indicators: in the GRI table of contents, the table shows, next to the indicator, the description
Society
6. Impact on local communities
of the topic, the guidelines degree of adherence, and the page where the information is presented.
7. Accountability and transparency
8. Pre-Salt management, policy and feasibility 2 COnTACT US
9. Research and development / E-mail comments, questions, suggestions and criticism regarding Petrobras’ Sustainability Re-
technological innovation port to rs2010@petrobras.com.br. This feedback helps us increasingly adjust the content to the
10. Engagement and dialogue Company
readers’ demands and needs.
with stakeholders GREATEST RElEvAnCE
004 005

7. CORPORATE
PERFORMANCE

8. PROFILE
SuSTAInABILIT y REPORT 2010
A global COMPAnY PROFIlE
name Petrobras
company of
Corporate name Petróleo Brasileiro S.A.
World headquarters Rio de Janeiro, Brazil
CORPORATE PERFORMAnCE
number of employees (Dec/2010): 80,492 (Petrobras System)
Brazilian origin
number of products offered 255 products (Petrobras Holding)
Diesel fuel, liquefied petroleum gas, gasoline,
Main products
lubricants, naphtha, fuel oil, and jet fuel.
ENGLAND
peTrobras is The Third largesT energy
company in the world, with an average daily THE NETHERLANDS
output of 2.6 million barrels of oil equivalent.
Established in 1953 and with a presence in 30
countries on all continents, the company is a
state-run, publicly traded company controlled UNITED STATES
PORTUGAL
by the Brazilian government by means of the TURKEY
Ministry of Mines and Energy. CHINA
IRAN JAPAN
The oil and gas industry leader in Brazil,
Petrobras has integrated operations in explora- LIBYA
tion and production, refining, oil and natural MEXICO CUBA INDIA
gas trade and transportation, petrochemicals,
oil product distribution, electricity, biofuels, CURACAO
and in other sources of renewable energy.
Products made by the Petrobras System COLOMBIA NIGERIA
VENEZUELA SINGAPORE
– formed by the Company, its subsidiaries,
jointly controlled and associated companies ECUADOR
–, are present in virtually all areas of mod- TANZANIA
PERU
ern life, ranging from the fuel that moves BRAZIL ANGOLA
cars and propels aircraft to the liquefied pe-
troleum gas (LPG) used in the kitchens of
BOLIVIA
homes and businesses. Diesel fuel, gasoline, PARAGUAY AUSTRALIA
NAMIBIA
lubricants, naphtha, biodiesel, ethanol, fuel
oil and jet fuel, among others, complement
CHILE URUGUAY
the company’s portfolio.
@ learn more about our operations ARGENTINA
at Petrobras’ website
NEW ZEALAND
Petrobras’ main customers include, in ad-
Exploration Distribution /
dition to end consumers, businesses operating Representation
and Production Trade
in logistic transportation, agricultural, indus-
trial, air, maritime, and rail markets and in the Refining /
Gas & Power Main Office
Petrochemicals
thermoelectric segment.
008 009

9. PETROBRAS AnD ITS BuSInESS AREAS
PROFILE
SuSTAInABILIT y REPORT 2010
The company’s large array of activities, products and customers demand efficiency and organiza-
tional capacity. Therefore, Petrobras’ businesses are divided into four areas:
» Exploration & Production – This area encompasses oil, natural gas liquids (nGL), and natural
gas exploration, production development, and production in Brazil. It aims, primarily, to supply
the Brazilian refineries and to trade, on the domestic and foreign markets, both excess oil and
the products produced at its natural gas processing plants;
CORPORATE PERFORMAnCE
» Downstream – This area undertakes oil and oil product refining, logistics, transportation, and
trade activities, ethanol exports, and shale extraction and processing. Additionally, it holds
interests in businesses operating in the petrochemical industry in Brazil. It aims to produce
high-quality oil products, ensuring the supply of products that are essential for the entire pop-
ulation’s daily life;
» Gas & Power – This area’s activities include transporting and trading natural gas produced in
Brazil or imported; liquefied natural gas (LnG) transportation and marketing; electric energy
production and sales; and equity interests in natural gas transporters and distributors and in
thermal power plants in Brazil. It is also responsible for the fertilizer business;
» International – This area works with oil and gas exploration and production, supply, and gas,
power and distribution operations carried out abroad, in several countries of the Americas,
Africa, Europe, Asia, and Oceania.
PERFORMAnCE On Petrobras also has the Corporate Finance and Services areas. Each of these areas is controlled
THE BRAzIlIAn MARKET by a director, except the Corporate area, which is connected directly to the CEO.
Petrobras has a daily output of 2.338 million The market for biodiesel, Petrobras Bio-
barrels of oil equivalent of oil and natural gas. combustível’s flagship product, is regulated
The average total daily production, adding by federal law. In order to meet the demand
Brazil and abroad, is 2.583 million. for the biodiesel that is needed to compose the
Petrobras Distribuidora operates nation- B5 blend (5% biodiesel in diesel), the National @ learn, in the online version of the Report, the main
wide in the Service Station and Consumer Petroleum Agency (ANP) organizes auctions changes made to the organizational structure in 2010
markets - the latter including the sale of large covering the entire Brazilian territory.
amounts of fuel, lubricants, special products, To become a Petrobras customer and
asphalt, emulsions, and energy. purchase gasoline or diesel, the company
The LPG market, served by Liquigás, is must be registered as a distributor by the
broken down into two business areas: Bottled ANP, and such record must be published in PETROBRAS SySTEM’S MAIn COMPAnIES*
and Bulk. The bulk area is characterized by Official Register.
direct sales to corporations, while the bottled » Petróleo Brasileiro S.A. (Petrobras)
one is geared to small corporate clients and in- GlOBAl OPERATIOnS » Petrobras Distribuidora S.A.
dividuals, mostly through its reseller network. Petrobras has operations in 29 countries, be- » Petrobras Transporte S.A. (Transpetro)
Petroquisa has ownership interests in com- sides Brazil, and projects on five continents. » Petrobras Química S.A. (Petroquisa)
panies operating in the petrochemical and In addition to its representation offices and » Petrobras Biocombustível S.A.
chemical segments and has national (North- production units, the company has coopera- » Liquigás Distribuidora S.A.
eastern, Southeastern, and Southern Brazil) tion agreements with other countries to de- » Refinaria Alberto Pasqualini S.A. (Refap)
and international coverage. velop knowledge and business that can make » Petrobras Gás S.A. (Gaspetro)
Transpetro, in turn, operates nationwide, both technology and energy projects feasible. *The companies above are controlled by Petrobras or by one of its subsidiaries.
with facilities in 19 states and in the Federal A total of R$4.8 billion was invested in the
District. Such facilities include water and land international businesses, 12% of which ear- OnE MIllIOn SHAREHOlDERS
transportation terminals, pipelines, and ves- marked for refining, petrochemicals, distri- Petrobras has 396,975 shareholders at BM&FBovespa, which, added to the shareholders of
sels that transport and store oil, oil products, bution, and gas and energy, while 88% to ex- funds that invest in Petrobras shares (365,899), to FGTS fund investors (86,562), and to holders
gas, petrochemicals, and biofuels for all types ploration and production, of which 60% were of ADRs (180,000 approximately), increase the company’s total number of investors to close to
of customers, such as fuel and gas distributors, allocated to develop production. a million shareholders.
among others.
010 011

10. CORPORATE GOVERnAnCE fighting against discrimination, degrading regarding ten principles related to Labor, Human @ More information can
SuSTAInABILIT y REPORT 2010
work, child and slave labor, aiming to con- Rights, the Environment, and Transparency. be found in the online
tribute to sustainable development and to The company has been a member of the version of the Report
The path towards reduce social inequality.
The company’s activities are guided by
codes and policies such as the Code of Eth-
Brazilian Committee of the Global Compact
since its inception, and has been represented
by its CEO on the Global Compact’s Interna-
transparency
ics, the Code of Good Practices, the Code tional Board since 2006, when it became the @ In the online version of
of Competitive Conduct, and by policies on only Latin American and oil and gas industry the Report, learn more
CORPORATE PERFORMAnCE
HSE, Human Resources, Social Responsibil- company to be on the Board. @ about other commitments
ity, Corporate Performance, New Business Petrobras has taken-on
Development, Capital Discipline, Communi- TRAnSPAREnCY HIGHlIGHTS and initiatives and forums
cations, Tax Management, and Principles of For the fifth consecutive year, Petrobras is in which it takes part
Corporate Security. @ part of the Dow Jones Sustainability Index
(DJSI), the most important global index in
GlOBAl COMPACT this category, which brings together over
Petrobras has been a signatory of the United 300 companies from 57 industry sectors. The
Nation Global Compact since 2003, an initia- company distinguished itself in the Trans-
tive through which businesses commit, volun- parency criterion, in which it again got the
tarily, to fullfil and report their performance highest score in the industry.
THE TEn PRInCIPLES OF THE GLOBAL COMPACT
RESPECT MAKE SURE UPHOlD ElIMInATE EFFECTIvElY
and support the company the freedom all forms eradicate all
internationally is not complicit of association of forced or forms of child
proclaimed human with human and recognize compulsory labor from its
rights in its area rights abuses the right to labor productive chain
of influence collective
bargaining
peTrobras adopTs The besT corporaTe 2002 by the U.S. Congress aiming to protect in-
governance practices and the most advanced vestors by improving the accuracy and reliability ElIMInATE SUPORT UnDERTAKE EnCOURAGE WORK AGAInST
discrimination a precautionary, initiatives and the development corruption in
management tools, according to international of the information disclosed by companies. in respect of responsible, and practices to and dissemination all its forms,
employment proactive approach promote and of environmentally including
standards. As a publicly-held company, it is and occupation to environmental disseminate friendly extortion
subject to the rules set forth by the Securities BUSInESS DRIvERS challenges environmental
responsibility
technologies and bribery
and Exchange Commission (CVM) and by Over the years, Petrobras has developed poli-
BM&FBovespa. Abroad, it meets the Securi- cies, codes and procedures that reflect the
ties and Exchange Commission (SEC) and the company’s commitment to issues such as sus-
NYSE rules, in the United States; the rules set tainability, business ethics and valuing its em-
forth by the Latibex, of the Madrid Stock Ex- ployees, among others. PETROBRAS AnD ABnT LAunCHED ISO 26000 In BRAZIL
change, in Spain; as well as those of the Bue- One such instrument is Petrobras’ Social
nos Aires Stock Exchange and of the Comisión Responsibility Policy, which, aligned to UN In December 2010, Petrobras, in partnership with the Brazilian Association of Technical Stan-
Nacional de Valores (CNV), in Argentina. Global Compact principles, establishes eight dards (ABnT), promoted the release of the International Standard ISO 26000: Guidance on Social
To meet these standards, the company guidelines focused on corporate activities, Responsibility in Brazil. The company was the industry representative of the Brazilian delegation
relies on instruments such as its bylaws and integrated management, sustainable develop- on the international working group responsible for building the standard. In 2011, the company
the Corporations Law (Act 6404, of 1976), ment, human rights, diversity, working prin- will sponsor, together with ABnT, a nationwide series of seminars promoting the ISO 26000 stan-
based on which it is managed. It also adopts ciples, sustainable social investments, and dard in which the free distribution of the printed standard is provided.
other business drivers, such as codes of Eth- workforce commitment.
ics and Good Practices, the Code of Conduct To Petrobras, social responsibility is the Petrobras’ internal actions to implement the ISO 26000 guidelines include qualifying workforce
of the High Federal Administration, the Code integrated, ethical, and transparent man- through specific training courses on the issues covered by the standard to be held at Petrobras
of Competitive Conduct, and the Corporate agement of its business and activities and of university, and providing training in social responsibility to suppliers. The standard establishes
Governance Guidelines. its relationships with all of its stakeholders, the definition, principles, and core themes of social responsibility and was drafted on a multi-
Petrobras also meets the standards set forth promoting human rights and citizenship, stakeholder process encompassing representatives of the industry, government, labor, consum-
under the Sarbanes-Oxley Act (SOX), enacted in respecting human and cultural diversity, ers, nGOs, academia and services, research and consulting organizations.
012 013

11. CORPORATE GOVERnAnCE
SuSTAInABILIT y REPORT 2010
CORPORATE STRUCTURE and employees, emphasizing it is necessary to e. Business Committee: comprising members of the Executive Board and other company execu-
In 2010, the Basic Organization Plan, approved avoid any situation that may characterize con- tives, this committee aims to examine and give its opinion to the Executive Board on corporate
by the Board of Directors, was refined to in- flict of interest and affect the company’s busi- matters involving more than one Area, as well as those whose importance and relevance de-
clude Petrobras’ Corporate Governance Mod- ness. The Code of Ethics also addresses the mand broader discussion.
el and its structure, comprising: the Board of subject, only more generally, as it is a tool for f. Integration Committees: composed of executive managers of the company, these committees
CORPORATE PERFORMAnCE
Directors and its committees, the Executive all Petrobras employees, and not only for the are forums to analyze and examine issues under their scope and can also assist in structuring
Board, the Fiscal Committee, the Internal senior management. information to be presented to the Business Committee and to the Executive Board. They are
Audit, the Ombudsman’s Office, the Business According to the Corporate Governance divided into: Segment Committees (E&P, Downstream, and Gas & Power) and Corporate Com-
Committee, and the Integration Committee. Guidelines, the Board has committees to as- mittees (Corporate, Financial, Technology, and Engineering & Services).
Petrobras’ directors are elected by the sist in the analysis of financial and environ-
General Meeting without any influence mental issues. Petrobras has specific units
from the Executive Board. Since 1999, the in its organizational structure to supervise,
Board has been chaired by a non-executive implement and monitor its economic, social, OVERALL COMPAny ORGAnIZATIOn
member of the company. and environmental practices. With links to
In late 2010, the President of Brazil en- the Business Committee, Integration Com-
BD AC
acted Act 12,353, which determines the par- mittees were created specifically to address Board of Directors
Audit Committee
ticipation of active employees on the Boards of economic, environmental, and social issues.
state-owned and mixed-economy companies These include, for example, the Financial Ombudsman Internal Auditing
and their subsidiaries and affiliates. The rep- Integration Committee and the Corporate
resentative will be selected through elections Function Integration Committee. These com- Corporate Strategy
organized together with the trade unions. mittees are composed of executive managers Executive
CEO Board
Petrobras, Petrobras Distribuidora, Liquigás, from related areas. Corporate Performance
Organization, Management
and Governance
Transpetro, Refap (the Alberto Pasqualini Re- The Board of Directors should also assess
finery), and TBG (Transportadora Brasileira its performance annually pursuant to crite- new Business Legal Department
Gasoduto Brasil-Bolívia S.A.) are expected ria it defines. Likewise, it is also foreseen that
to elect employee representatives to serve on the Board should also assess the performance Human Resources CEO’s Office
General Secretary Corporate
of Petrobras Communications
their Boards of Directors from 2011. of Petrobras’ CEO and officers to ensure the
The company’s Code of Good Practices alignment of the interests of the members of
provides policies on important issues related the Executive Board with the shareholders’ Gas & Power Exploration & Downstream International
Financial Area Services Area
Area Production Area Area Area
to insider trading - such as a ban on trading in long-term interests. Board of Director and
securities in certain periods - and to the con- Executive Board evaluation mechanisms are Safety,
@
Corporate Section Corporate Section Corporate Section Corporate Section Corporate Section
learn more about the duct of Petrobras’ Senior Management officers currently being studied. @ Environment,
Energy Efficiency,
and Health
qualifications of Petrobras’ Financial Investment Production Investment Business
Planning & Risk Program Engineering Programs Technical Support
officers and about our Management
Materials
managers compensation PETROBRAS’ CORPORATE GOVERnAnCE STRuCTuRE EnCOMPASSES: natural Gas Production Logistics Business
Logistics & Development Development
policy in the online Finance Equity Stakes Projects
Research &
version of the Report a. Board of Directors: composed of nine members elected - four of whom independent - by the Development
(Cenpes)
Refining Latin America
Energy Operations
General Shareholders Meeting, which is responsible for guiding and for the higher manage- Accounting
& Equity Stakes
Offshore Well
Construction
ment of the company. Americas, Africa Engineering
Petrochemicals
& Eurasia
b. Audit Committee: a permanent body, this committee comprises five members who are also Taxation Chemical Gas
Services
& Liquefaction
Information
elected by the General Shareholders Meeting. It is responsible for monitoring management Technology and
Marketing & Sales
Telecommunications
actions and for reviewing the financial statements, among other duties. Investor Relations
Marketing & Sales Exploration
c. Executive Board: composed of the CEO and six officers elected by the Board of Directors, the
Shared Services
Executive Board is responsible for managing the company’s business. Pre-Salt
d. Board of Directors’ Committees: composed of three members of the Board of Directors,
these committees are intended to assist the Board by providing analyses and recommenda- north-northeast
tions on specific issues (pursuant to Corporate Governance Guidelines adopted by the Board
of Directors, Petrobras has three Board Committees: Auditing, Environment, and Compen- South-Southeast
sation & Succession).
014 015

12. CORPORATE GOVERnAnCE
SuSTAInABILIT y REPORT 2010
GEnERAL OMBuDSMAn
The General Ombudsman’s Office is a channel for dialogue between the company’s stakeholders
and its executive management and aims to receive denunciations, complaints, and suggestions.
Linked directly to the Board of Directors, the General Ombudsman’s Office acts independently as
CORPORATE PERFORMAnCE
an instrument to drive transparency and ethics.
The Ombudsman’s term is for two years, renewable once for an equal period. The General Om-
budsman’s Office is responsible for concerns related to other Petrobras System enterprises,
except for Petrobras Distribuidora and Transpetro, which have ombudsmen in their organiza-
tional structures.
InvESTOR RElATIOnS
Petrobras is committed to providing cor- and material facts, the Investor Relations
rect and accurate information to its inves- Portal provides presentations, conference
tors - whether corporate or individual, in- calls, chats, event calendars, and sharehold-
cluding shareholders and debenture holders. ers meeting minutes.
The goal is to maintain ongoing dialogue A telephone support for shareholders and
and credibility, a prerequisite for successful an e-mail address to be used solely by this
share trading. audience (acionistas@petrobras.com.br) are
The investor relations Internet portal also available. Each quarter, after the results
(www.petrobras.com.br/ri) brings together are announced, a chat is held with investors,
data about the company, such as its corpo- and information is sent to them by letter or
rate strategy, corporate governance, com- fax. Information about the company is avail-
petitive advantages and risk factors, opera- able over social networks, the Internet, and
tional highlights, announcements, reports, cell phones. In 2010, this structure, coupled (PETR4) fell 25.62%. At the New York Stock Ex- TREATMEnT OF MInORITY SHAREHOlDERS
information about the dividends payment with advertising and corporate communica- change (NYSE), where common and preferred During the capitalization process, questions
policy, and about shareholding breakdown, tions, allowed for the widespread divulging ADRs are traded, the slump was 20.63% and were raised about the benefits the operation
among others. In addition to press releases of the equity issuance. 19.38%, respectively. Even with the price drop, would afford minority shareholders. The
the company’s market value ended the year main concerns included the price Petrobras
18.6% above the 2009 mark, closing at $236.5 would pay the Federal Government per bar-
InDEXES PETROBRAS IS LISTED On billion as a result of the capitalization process. rel, an amount set by the Brazilian President.
Petrobras distributed gross dividends of In that case, Petrobras complied with the
» Bovespa: Ibovespa, Brasil (IBrX), and Brasil 50 (IBrX50). R$1.03 per common or preferred share refer- current legislation and got the approval for
» new York Stock Exchange: nyse International 100 Index, nyse World Leaders Index, Dow ring to the 2010 fiscal year, adding up to R$11.73 the price to be paid per barrel from a Special
Jones Sustainability Index, and nyse Energy Index, the latter through Petrobras Energía billion. Furthermore, in 2010, Petrobras had Committee formed by minority shareholder
Participaciones S.A. approved and made the payment of three an- representatives both to monitor all stages of
ticipated distributions of interest on equity for the equity issuance and to make sure the pro-
the 2010 fiscal year. This anticipation was worth cess was transparent and done pursuant to
STOCK MARKET PERFORMAnCE Despite the good operating results and al- R$0.91 per common or preferred share, for a to- the Corporations Law.
In a year marked by stability, the main high- though the huge potential of the Pre-Salt region tal of R$7.95 billion. Petrobras also made sure that minority
light was the large number of new investors was confirmed with the declaration of com- Petrobras shareholding composition was shareholders were entitled to acquire shares
who took part in Petrobras’ equity issuance, merciality of the Lula and Cernambi fields, the maintained even after the capitalization, and and receipts in the same extent they held in the
bringing to 396,975 the number of sharehold- company’s shares closed the year in a slump. At its main shareholders took part in the offer- period prior to the capitalization to avoid the
ers at the BM&FBovespa on December 31, BM&FBovespa, the common stocks (PETR3) ing. The Government increased its stake in the dilution of their holdings if they so wished. In
2010, up 26.48% over the previous year. were down 26.65%, while the preferred ones company’s total capital through the Sovereign other words, the Government could only grow
Fund, which purchased 4.6% of the bonds of- its share in the capital if the minority share-
fered to the market. holders did not fully exercise their rights.
016 017