Petrobras announces the discovery of oil and gas in ultra-deep waters in the Central Gulf of Mexico, in the United States, via its Petrobras America Inc. subsidiary, based in Houston, Texas.

The discovery was made via the Stones # 3 well, drilled to perform the exploratory assessment of the Stones discovery, which is operated by Shell and located in Block WR 508, in ultra-deep Walker Ridge Quadrant waters. Petrobras America Inc. holds a 25% stake there. The remaining partners, in addition to Shell (35%), are Marathon and ENI, with 25%, and 15%, respectively.

The Stones # 3 well is located at a depth of 2,286 meters from the water line and reached a total depth of 8,960 meters under the sea bed, finding oil in multiple reservoirs. Future drilling and assessment activities are being planned to define this discovery’s size and commercial viability.

This result confirms the potential of significant oil reserves in this type of reservoir in the Gulf of Mexico, where Petrobras operates the Cascade and Chinook fields which at the present are in the production development and facility construction phase.

Petrobras will be the pioneer company in production in this type of reservoir in ultra-deep waters. It will also pioneer using an FPSO (Floating Production, Storage and Offloading) type platform in the region, the production of which is slated to go online in June 2010. In this same area, Petrobras also holds 25% stakes in the Saint Malo field. This field is operated by Chevron and is in the assessment and extension exploratory drilling phase. Also, studies are being done to the production development project for Saint Malo.

Holding stakes in these discoveries confers Petrobras a differentiated position in the Walker Ridge Quadrant and its neighboring areas. Furthermore, these discoveries are aligned with the company’s Strategic Plan and are important steps in the consolidation of a quality Exploration and Production project portfolio in deep waters in the Gulf of Mexico.

Petrobras was the highest bidder for 22 blocks in Lease Sale 206, offered by the Minerals Management Service (MMS), the United States’ regulatory agency that manages offshore activities, on March 19, 2008. Petrobras was well positioned among the main bidders and made a total investment in the order of $178.9 million.

The lease sale, which included the participation of a total of 78 oil and gas companies, focused on the central and eastern Gulf of Mexico. Of the 22 blocks, Petrobras secured 100% stakes for 11 blocks and will perform as the Operator for them. The remaining blocks were acquired in a 50/50 partnership with Devon Energy. Petrobras will operate four of them, while its partner will operate 7.

As in the lease sale held in October 2007, when it was the highest bidder for 26 blocks, Petrobras concentrated its bids on deep and ultradeep waters. The company boosted its position in these areas, which are the focus of its activities in the Gulf of Mexico, particularly the Walker Ridge, Mississippi Canyon, Green Canyon, Keathley Canyon, and Atwater Valley quadrants.

When the MMS awards the new concessions, the deep and ultra-deep water exploratory project portfolio will total 221 blocks, 157 of which operated by Petrobras.

The participation in the Lease Sale 206 is aligned with the demands of Petrobras Strategic Plan, which calls for international growth through investments made in priority areas such as the American sector of the Gulf of Mexico. As a result, Petrobras strengthens its position as one of the leaders of exploration in deep and ultra-deep waters in the region.

Petrobras holds stakes in four of the most important discoveries made in the Lower Tertiary reservoirs in the Cascade, Chinook, Saint Malo, and Stones fields, in the Walker Ridge Quadrant.

The Cascade and Chinook fields, currently in the development and facility construction stage, are operated by Petrobras, which will be the pioneering company there, not only in Lower Tertiary ultradeep water reservoir production, but also in the use of an FPSO (Floating Production, Storage and Offloading) platform, which is expected to go online in June 2010.

Petrobras’ 2008-2012 investment plan for the United States foresees a total expenditure of $4.9 billion, to be invested in exploration, production and refining activities.

This Wednesday (12/26), Petrobras announced it has set another daily oil-production record in Brazil: 2,000,238 barrels, a mark only eight companies in the world have reached. The result was celebrated in a ceremony attended by president José Sergio Gabrielli de Azevedo, Exploration & Production director Guilherme Estrella, Service director Renato Duque, and International director, Nestor Cerveró, in addition to executive managers José Antônio de Figueiredo (E&P/South-Southeast), and Solange da Silva Guedes (E&P/North-Northeast), among others.

Petrobras was awarded the Carolita Kallaur International Award in the Safety, Environment and Health (SEH) category, granted by the International Regulators Forum in recognition of the high level of performance the company and its contractors achieved in maritime installation operating safety. The event was held last night (12/04), in Miami.

The IRF brings together oil and gas sector regulators from the US, Canada, Australia, New Zealand, The Netherlands, Norway, England, and Brazil. The forum aims at encouraging improvements in safety and health in the oil sector via collaboration in joint programs and through the exchange of experiences and information among forum participants.

The award reflects Petrobras’ efforts in the pursuit of excellence in safety, environment, and health. As an acknowledgement of the improvements it has achieved in these areas in the past few years, the company has been listed in the New York and São Paulo stock exchanges’ sustainability indices since 2006, in addition to participating in the UN Global Compact’s board.

Petrobras’ Exploration & Production area’s manager for Safety, Environment and Health, José Laurindo de Farias, and its manager for Relationships with the NPA, Jorge Bastos, represented Petrobras in the awarding ceremony, which was held last night during the International Regulators' Offshore Safety Conference 2007, organized by the IRF. The event counted on the participation of representatives of regulatory agencies from upwards of 30 countries and of oil industry executives.

Petrobras was the highest bidder for 26 blocks in the Lease Sale 205 auction held on October 3 by the Minerals Management Service (MMS), the American agency in charge of regulating offshore activities. The company ranked among the top 10 competitors with the biggest number of winning bids, with a total investment of $108.1 million. This value was offered for the blocks located in central and eastern Gulf of Mexico, in one of the most competitive auctions ever held in the region.

In total, 73 oil & gas companies bid for blocks, particularly those found in deep and ultradeep waters. Of the 26 blocks, Petrobras ensured 100% participation and the operator status for 20. The remaining 6 were bid for in partnership with Devon Energy, 2 of which will also be operated by Petrobras, while four by the partners. Participation will be shared 50/50.

Pursuant to auction rules, the MMS must still confirm the winning proposals. Once confirmed, these blocks will be incorporated to the Company’s exploratory project portfolio, which totals 338 blocks, 200 of which operated by Petrobras.

As was the case in the auction held in August 2007, when it was the highest bidder for 34 blocks, Petrobras sought to consolidate its position in areas it is focusing its activities on in the Gulf of Mexico, targeting deep and ultradeep waters in the Walker Ridge, Mississippi Canyon, Green Canyon, Garden Banks, Keathley Canyon, and Lloyd Ridge quadrants. This will allow the company to boost its quality exploratory prospect chart.

Participation in the Lease Sale 205 auction is in line with Petrobras’ Strategic Plan, which calls for strong international growth with investments in priority areas, among which the American sector of the Gulf of Mexico. With this outcome, Petrobras – in agreement with the oil & gas industry’s model –once again shows the company is willing to compete and invest in all environments that are both promising for the use of its technology and knowledge, and are safe and at

Petrobras earned the right to renew its listing, as of September 24, on the Dow Jones Global Sustainability Index (DJSI), the most important global sustainability index, used as an analysis parameter by socially and environmentally responsible investors.

Petrobras maintained the recognition it gained of being among the 20 global oil and gas segment companies, and amid the seven most sustainable Brazilian companies. The DJSI evaluates the economic, environmental, and social performance of upwards of 2,500 corporations, in 57 sectors, the world over, considering answers given to a 118-question questionnaire and analyses of the news the media publishes about the companies.

Based on the DJSI evaluation criteria, Petrobras stood out for its Transparency, brand management, environmental performance, human resource development, and corporate citizenship. Out of a total 100 points, Petrobras scored 66, 62, and 82, respectively in the economic, environmental, and social dimensions, while 70 in the overall results. The top-scoring company added-up 77 points, while the low-scorer got 68.

Petrobras' listing on the DJSI index is a recognition of the company's efforts, over the past few years, in environmental performance, in transparency, and in corporate governance. The outcome of the annual review will influence investment decisions made by asset managers, the potential market for those who invest in socially and environmentally responsible companies - a market worth more than $4 trillion, according to data published by the United Nations, and in excess of $5.6 billion in investments in companies listed in the DJSI indices.

The questionnaire covers sustainability issues, such as corporate governance, brand and risk management, and industry-specific matters such as climate change, requirements imposed on vendors, and social project management.

The following Brazilian companies are featured on the list: Aracruz Celulose, Banco Bradesco, Banco Itaú, Companhia Energetica

Petrobras was the highest bidder for 34 blocks in the US Gulf of Mexico Lease Sale 204, promoted by the federal agency that manages the offshore oil and gas activities, the Mineral Management Service (MMS) on August 20.

The auction focused on the western region of the Gulf of Mexico, where the company made offers for 40 blocks, and was the highest bidder for 34, for a total sum of $29.3 million. As a result, Petrobras ensured 100% participation and the operator status for 20. Meanwhile, it will hold a 50% stake in the remaining 14 blocks, which were purchased in partnership with and will be operated by Devon Energy.

All of the blocks are located in the company's performance core area in the US Gulf of Mexico: 13 in shallow waters, for deep shelf natural gas reservoirs; and 21 in deep and ultradeep waters in the East Breaks, Alaminos Canyon, and Keathley Canyon quadrants, targeting oil-bearing reservoirs. As soon as the MMS awards these blocks, they will be incorporated to the Petrobras' exploratory project portfolio, which totals 313 blocks, 177 of which operated by the company.

Petrobras' success in the current auction attends to the priorities the company set forth in its Strategic Plan, which includes the American sector of the Gulf of Mexico among the priority areas for investments abroad. As a result, the company boosts its exploration and production activity portfolio in that region's deep and ultradeep waters, where it is associated to other oil companies and participated in three of the biggest discoveries ever made in the area. Among these discoveries, Petrobras is the operator in the Cascade and Chinook fields, with 50% and 66.7% stake, respectively. An FPSO (Floating Production, Storage and Offloading) vessel will be used at those fields. Expected to go online in 2009, this will be the first time ever this type of vessel will be deployed in ultradeep American waters. Devon Energy and Total E&P USA, Inc. participate in the remaining portion of these

(Houston) – Petrobras (NYSE: PBR/PBRA), a Brazilian international energy company, through its wholly owned subsidiary Petrobras America Inc. today announced that the first well of the new Cottonwood field has been brought online yesterday. The gas flowrate is being increased initially to 40 million standard cubic feet per day (1.1 million cubic meters per day). A second well will also start production in February, raising the field production to 70 million standard cubic feet of natural gas per day (2.0 million cubic meters per day), combined with oil condensate production that will take the field production to 20,000 barrels of oil equivalent per day.

The Cottonwood field is located in the Garden Banks quadrant, block 244, in the U.S. sector of the Gulf of Mexico in water depth of 670m. The field lies roughly equidistant between Houston and New Orleans, 138 miles off the Texas coast.

This is the first field in deep waters developed and put into production by Petrobras, as operator, outside of Brazil. Petrobras America is currently engaged in extensive exploration and development in various Gulf of Mexico deepwater sites.

The Cottonwood project team includes specialists from Petrobras Brazil in conjunction with Petrobras America, combining the extensive offshore experience and cutting-edge technology of the company with the best practices in the Gulf of Mexico. Notably, production in Cottonwood started within less than one year from approval by the Petrobras board of directors.

Petrobras is the operator with 100% of the project.

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