"10th annual latin american conference"

Santander10th Annual Latin American Conference

Raul Adalberto de CamposInvestor Relations Executive Manager

January 17-20, 2006Acapulco, Mexico

Petrobras 2015

2

The presentation may contain forecasts about future events. Such forecasts merely reflect the expectations of the Company's management. Such terms as "anticipate", "believe", "expect", "forecast", "intend", "plan", "project", "seek", "should", along with similar or analogous expressions, are used to identify such forecasts. These predictions evidently involve risks and uncertainties, whether foreseen or not by the Company. Therefore, the future results of operations may differ from current expectations, and readers must not base their expectations exclusively on the information presented herein. The Company is not obliged to update the presentation/such forecasts in light of new information or future developments.

Cautionary Statement for US investors

The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this presentation, such as oil and gas resources, that the SEC’s guidelines strictly prohibit us from including in filings with the SEC.

Petrobras 2015

3

2006 – 45.002007 – 30.00

2008~2010 – 25.00Brent for funding (US$/bbl)

Linked to prices in the international market, without changes in the

relative pricesOil Products Prices

19.00Robustness Brent (US$/bbl)

4.2GDP – World (% pa) – PPP(*)3.7GDP – Latin America (% pa) – PPP

3.0FX rate (R$/US$)4.0GDP – Brazil (% pa)

2006-2010Indexes

Macroeconomic Assumptions

(*) PPP – purchase power parity

Petrobras 2015

4

226300 307 337226 235 253

732 775894

95121 132

255

201196

117127

0

500

1,000

1,500

2,000

2,500

2003 2004 BP 2006-10LPG Gasoline Naphta Diesel + QAV Fuel Oil Others

Oil products market in Brazil presenting a high dynamism

Thous. bpd 2010

1,7631,700

2,060

+2,6% p.y.

Assumptions – domestic market

Does not include own refineries consumption

Petrobras 2015

5

1.638,61692,17

808,71

1.380,81

162,45190,70

487,38

229,55 339,020

1000

2000

3000

4000

2003 2004 PN 2006/10*

Thermoeletric Industrial Other

Assumptions – domestic market

1,084.3

(30.7 MM3)

1,338.4

(37.9 MM3)

2010

(*) considers the total supplying capacity, including bi-fuel conversion, contingency demand managing and isolated system in the North region. In the previous plan only the forecasted shipping of the thermo-electric demand was contemplated.

Note: does not include Petrobras direct consumption

3,506.80(99.3 MM3)

MMcfd / (Million m3/day)

Petrobras 2015

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Investment Plan

34,1

6,7

11,41,11,0

2,1

4%12%

2%20%

60%

2%

E&P Downstream G&EPetrochemical Distribution Corporate

34.1

6.711.4

1.11.0

2.1

Note: Includes International

2006-10 PeriodUS$ 56.4 billion

11,41,11,0

• US$ 56.4 billion for 2006-2010, representing US$ 11.3 billion average annual investment, maintaining emphasis in E&P and Downstream projects;• US$ 9.9 billion average annual investment in Brazil and US$ 1.4 billion abroad.

Distribution by AreaDistribution by Business Segment

87%

13%

Brazil International

49.3

7.1

Petrobras 2015

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Explanation on investment changes (consolidated)

1.338

5.605

6.446

8.503

34.481

BP 2015 New Cost Increase

Anticipated Others*

SP 2015 ===> 34,481 US$ millionBP 2006-2010 => 56,373 US$ million

* Others including: change in project scope, eliminations, chartering adjustments and other factors.

• Roncador P-55 and Jubarte P-57; • BS 500; • Integrated Refining-Petrochemical Unit; • Acquisition of Merchants Plants.

• NE/SE Network, • Gasene, • Golfinho Mod. 1 and 2; • RJS 409; • Piranema; • Marlim Leste P-53.

• Bid 6 new exploration blocks; • Peroa Phase 2 (ES); • New projects in mature fields aiming to reduce declining rate;• Golfinho FPSO Mod. 3,• Additional offer of natural gas in Esp. Santo; • Bi-fuel conversion.

Petrobras 2015

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58.9

12.2

2004-2010FinancingCash Flow

56.4

14.7

2004-2010Debt Amortization

Investment

(US$ 71.1 billion)(US$ 71.1 billion)

(*) US$ 58.9 billions – Cash flow net of dividends

(**) Net of leasing and chartering amortization from 2006 to 2010 in the amount of US$ 2.3 billion

Sources and Uses

(*)

Investment Plan

(**)

Petrobras 2015

9

1.8

7.8

43

8.3

5.8

23

2003

0.4

6.4

38

6.8

2.4

24

2004

1.5

8.6

28

4.4

2.9

15

2006-2010 Average

Oper. Cash Flow before interest and taxes / interest

Free Operating Cash Flow before dividends and debt amortization (US$ billion)

Cash Balance (end of the year) (US$ billion)

Net Debt/ Net Debt + Shareholders’ Equity (Leverage) (%) *

Long Term Funding (US$ billion)**

Return on Capital Employed (ROCE) (%)*

Targets

(*) BRGAAP (**) Includes conventional funding, project finance, leasing and chartering

Financial indicator forecasts show conditions for arranging finance and attractive returns, in spite of the adoption of conservative assumptions for long-term oil prices.

Financial Targets

Petrobras 2015

10

25252530

45

50

38

2925

0

10

20

30

40

50

60

2002 2003 2004 2005 2006 2007 2008 2009 2010

(*) past data at nominal base, from 2006 on current value.

Petrobras’ Brent forecast (red)

37,535,0

32,5

30,0

27,5

25,0

22,5

20

25

30

35

40

12 13 14 15 16 17 18

ROCE

Ave

rage

Bre

nt p

rice

2006

–20

10

Brent curve variations – ROCE margin

correlation: Brent x Roce

(*)

Strategic plan based on conservative variables:

- Costs took in consideration BRENT at US$ 50- Future revenues based on BRENT price projected for the period

Ave

rage

Bre

nt p

rice

BRENT average @ US$

25 30 35 40

Sensitivity in 2010

• US$ 5.00 price change will result in a US$ 2.5 billion change inthe operational cash generation in 2010.

Petrobras 2015

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Total production - Oil, NGL, Natural Gas

Corporate Targets

1,50 0 1,54 0 1,4 9 3 1,6 8 4

16 816 3

2 ,3 0 01,3 3 6

2 742 6 5

56 0

2 502 522 3 2

3 3 9

16 13 54 3

8 52 3

2 0 6

9 69 4

2 5

2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 10 T arget

Oil and N GL - B raz i l N at ural Gas - B raz i lOil and N GL - Int ernacio nal N at ural Gas - Int ernacional

2,036

3,405

1,8101,636

9.0% p.y.

• As of 2006, light oil production from new projects will surpass 150 thous. bpd;• Crude oil exports of 522 thous. bpd.

2,0202,217

Thou

sand

boe

d

Petrobras 2015

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2,200

2,100

2,000

1,910

1,684

2,300

1,400

1,600

1,800

2,000

2,200

2,400

2005A 2006 2007 2008 2009 2010

Corporate Targets

Albacora LesteP-50

180,000 bpdApril 2006

Albacora LesteP-50

180,000 bpdApril 2006

BarracudaP-43

150,000 bpdCaratinga

P-48150,000 bpd

2005

BarracudaP-43

150,000 bpdCaratinga

P-48150,000 bpd

2005

JubartePhase 1

P-3460,000 bpd

2H 06

JubartePhase 1

P-3460,000 bpd

2H 06

Marlim LesteP-53

180,000 bpd2008

Marlim LesteP-53

180,000 bpd2008

GolfinhoMod. 1

100,000 bpd2006

GolfinhoMod. 1

100,000 bpd2006

RJS-409Espadarte

100,000 bpd2007

RJS-409Espadarte

100,000 bpd2007

Frade100,000 bpd

2009

Frade100,000 bpd

2009

RoncadorP-52

180,000 bpd2007

RoncadorP-52

180,000 bpd2007

RoncadorP-54

180,000 bpd2007

RoncadorP-54

180,000 bpd2007

Marlim SulModule 2

P-51180,000 bpd

2008

Marlim SulModule 2

P-51180,000 bpd

2008

Piranema20,000 bpd

2006

Piranema20,000 bpd

2006

GolfinhoMod. 2

100,000 bpd2007

GolfinhoMod. 2

100,000 bpd2007

AlbacoraExtension

100,000 bpd2010

AlbacoraExtension

100,000 bpd2010

RoncadorP-552010

RoncadorP-552010

GolfinhoFPSO Mod. 3100,000 bpd

2010

GolfinhoFPSO Mod. 3100,000 bpd

2010

JubartePhase 2

P-572010

JubartePhase 2

P-572010

Thou

sand

boe

d

Domestic production will grow at an average of 6.4% per year

Petrobras 2015

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Corporate TargetsDevelopment of Natural Gas and Oil Production in the Santos Basin

Pólo BS-500 (RJ)Pólo BSPólo BS--500 (RJ)500 (RJ)

Pólo Mexilhão (SP)Pólo Mexilhão (SP)Pólo Mexilhão (SP)

Pólo Centro (SP, RJ)Pólo Centro (SP, RJ)Pólo Centro (SP, RJ)

Pólo Sul (SP, PR, SC)Pólo Sul (SP, PR, SC)Pólo Sul (SP, PR, SC)

Pólo Merluza (SP)Pólo Pólo MerluzaMerluza (SP)(SP)

(Área de 352.000 km2 de 0 a 3000m)

Pólo BS-500 (RJ)BS- 500 Pole (RJ)

Pólo Mexilhão (SP)Mexilhão Pole (SP)

Pólo Centro (SP, RJ)Center Pole (SP, RJ)

Pólo Sul (SP, PR, SC)South Pole (SP, PR, SC)

Pólo Merluza (SP)Merluza Pole (SP)(SP)

(352.000 km Area2 from 0 to 3000m)

• US$ 18 billion over the next 10 years to be invested by Petrobras and partners ;• Increase of 12 million m3/day in the supply of gas as from the 2H 08;• By the end of 2010, this volume should have grown to 30 million m3/day;• Reducing the country’s dependence on imported gas.

Petrobras 2015

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Corporate TargetsInternal Replacement Proven Reserve Rate (SPE)

13.02 12.350.88

2004 2005

Finds in Exploratory Blocks:• Papa-Terra, in the Campos Basin; • Uruguá e Tambaú, in the Santos Basin; • Canapu, in the Espírito Santos Basin – Offshore; • Inhambu, in the Espírito Santos Basin – Onshore; • Acauã, in the Rio Grande do Norte Basin;• Anambé, in the Alagoas Basin – Onshore• Jandaia, in the Recôncavo Basin.

Finds in production field concession (Ring Fence)• Albacora Leste in the Rio de Janeiro E& P Business Unit – UN-RIO• Marlim and Albacora, in the Campos Basin E&P Business Unit – UN-BC.

Re-evaluations of existed fields in 2005•Roncador field in the Rio de Janeiro Exploration and Production Business Unit – UN-RIO, and Badejo (membro Siri), in the Campos Basin Exploration and Production Business Unit – UN-BC.

Production(0.67 billion boe)

13.23

2005 Internal Replacement

0.88

0.67= 131 %

Petrobras 2015

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Oil and NGL Lifting Costs

US$/bbl

Corporate Targets

3.36

4.26

5.95

4.88

5.83

4.48

2003 2004 1Q 05 2Q 05 3Q 05 Current2010 BP

Petrobras 2015

16

2,300

1,271

1,712 1,895

1,596

1,869

1,050

1,250

1,450

1,650

1,850

2,050

2,250

2000 2001 2002 2003 2004 Jan-Set 05 2010Oil Production Oil Products Sales Throughput

Low operational flexibility

High operational flexibility

Business Strategies

• Domestic oil production will exceed throughput;• In 2010 oil products sales will be equal to throughput;• Increase of the domestic oil participation in throughput, reaching 91% in 2010.

Thou

sand

boe

d

Petrobras 2015

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Business Strategies - Downstream

1,670 1,659 1,727 1,708 1,6681,804

1,674 1,6041,726

1,7201,542 1,537 1,533 1,619

1,676 1,6911,589

1,66587

84

7779

81 80

8184

86

8987 83 91

73

8077

79 77

600

800

1,000

1,200

1,400

1,600

1,800

3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q0570

75

80

85

90

95

100

Domestic oil products production Oil products sales volumePrimary processed installed capacity - Brazil (%) Domestic crude as % of total

• The increase in light imported oil caused domestic refining utilization to rise to 91%;• Domestic oil as a percent of throughput remained flat despite the higher utilization, as investments in conversion enabled Petrobras to process more of its heavy crude;• The higher refining utilization factor reduced the need for more expensive imports of oil products.

Domestic refining and sales

Petrobras 2015

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Downstream

Investment Plan

61%

15%

8%

16%

RefiningPipelines & Terminals TransportShip TransportPetrochemical

US$ 12.9 billion in the downstream segment…

...of which US$ 8 billion in refining

41%

14%

12%

25%

8%

Diesel and gasoline quality ExtensionMainteinance and HSE ConversionOther

US$ 3.3

US$ 2.0US$ 1.1

US$ 1.0

US$ 0.6

US$ 8,0

US$ 2,0

US$ 1,9

US$ 1,0

Petrobras 2015

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Refining Costs

US$/bbl

• The increase in refining costs reflects higher costs for operating more complex units and sophistication in the quality of products;

• Costs still in line with the oil industry as a whole.

Corporate Targets

1.141.34

1.822.06

1.93 2.02

2003 2004 1Q 05 2Q 05 3Q05 Current 2010BP

Petrobras 2015

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Investments in improving fuel quality

HDT: Hydro-treatment Unit HDS: Hydrodesulphurization

20096 thous. m3/d1 HDT for diesel

20093 thous. m3/d1 HDT for naphtha cock

US$ 210 MMOperating4 thous. m3/d1 HDT for diesel

REDUC20085 thous. m3/d1 HDS for gasoline



US$ 125 MMAug/053.5 thous. m3/d1 HDT for diesel

REGAP20084 thous. m3/d1 HDS for gasoline



20098 thous. m3/d2 HDS for gasolineRLAM

20098.5 thous. m3/d1 HDT for diesel

US$ 134.7 MMMay/055 thous. m3/d1 HDS for diesel

REPAR20095 thous. m3/d1 HDS for gasoline

Investment amountStart-upCapacityProjectPlant

Petrobras 2015

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Investments in improving fuel quality

HDT: Hydro-treatment Unit HDS: Hydrodesulphurization

20102 thous. m3/d1 HDS for gasoline

20104 thous. m3/d1 HDS for dieselRECAP

2009-1 HDT for diesel


REVAP 20097 thous. m3/d1 HDS for gasoline


USD 182 MMNov/055 thous. m3/d1 HDT for diesel

REPLAN20098 thous. m3/d2 HDS for gasoline



20085 thous. m3/d1 HDS for gasolineRPBC

20082.2 thous. m3/d1 HDT for diesel


REFAP 2008-1 HDS for gasoline

Investment amountStart-upCapacityProjectPlant

Petrobras 2015

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Investments in conversion

20052 thous. m3/d1 coking unitREFAP

2010Under evaluation1 coking unitREPLAN

2010Under evaluation1 coking unitREGAP

20085 thous. m3/d1 coking unitREVAP

20065 thous. m3/d1 coking unitREDUC

20124 thous. m3/d1 coking unitRELAM

20095 thous. m3/d1 coking unitREPAR

20057 thous. m3/d1 URFCC

Start-upCapacityProjectPlant

Petrobras 2015

23(*) Domestic Imports and Private Refineries

International Production339

Brazilian Production2.300

339 522+

1.710

Imports350

522

Brazilian Throughput 1.869

Brazilian Oil ProductsConsumption 2.060

Oil 159

Oil Products (*)191

International Sales861

68

Liquids production flow: in 2010 international sales will reach 861 thous. bpd

Business Strategies

Thous. bpd

Petrobras 2015

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P-Xylene/PTA/PET Complex

PQU Expansion – Mauá / São Paulo

Rio Polímeros – Duque de Caxias / Rio de JaneiroPetrochemical Complex at Bolivia border

US$ 2.0 billion investment for 2006-2010

Polypropylene Unit – São Paulo

Acrylic Complex – Minas Gerais

PTA Unit – PernambucoIntegrated Refinery-petrochemical Unit – Rio de Janeiro

Main Projects

Petrochemical investments: pro-active role searching for synergies with refining

Investment Plan

In the previous 2006-2010 Business Plan, Petrochemical investments totaled US$ 0.6 billion.

Petrobras 2015

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Gas Delivery Development Plan - PDEGGas Pipeline Paulínea-Jacutinga

Southeast-Northeast NetworkBolívia-Brasil Gas Pipeline compression (up to 34 MM m3/day)Gasbel Extension

Urucu-Coari-Manaus Gas Pipeline

Northeast Gas Pipeline Network

Southeast-Northeast Gas Pipeline (GASENE)Principal Gas Pipeline Projects

Natural Gas investments: infra-structure investments to increase delivery capacity

Investment Plan

Petrobras 2015

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Renewable energy

UTEs (conclusion and cycle closing of existing plants)


Bi-fuel conversion

Acquisitions

Activities

Energy investments: consolidating Petrobras position in power generation.

Investment Plan

Petrobras 2015

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• Investments will go towards the following priority sources of energy:

• Wind power generation;

• Biomass energy;

• Photo voltaic;

• Bio-diesel production.

• Main Targets for 2010:

• Availability of 169 MW;

• Produce 8,200 bpd of bio diesel.

Renewable Energy

Business Strategies

Petrobras 2015

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168 163

33996

206

94

2004 2005 Current 2010 BPOil and LGN Natural Gas

International

262 259

545

US$ 2.1 boeLifting Costs US$ 1.8/boe Refining Costs

154Throughput – Abroad (thous. bbl/day)

2010Corporate Targets

Production (thous. boed)

Corporate Targets

Petrobras 2015

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Final Remarks

• Continuing and significant growth in the output of Brazilian oil, including the post 2010 period, with sustainable self-sufficiency in oil as from 2006;

• CAPEX in the upgrading of the refinery complex for improving the quality of products and value-added of national oil;

• Consolidation of the infrastructure for the development of the natural gas market;

• The Plan allows for the concomitant operation of all the authorized thermo-electric power plants within the 2006-2010 timeline; this involves the supply of domestic gas, importing of Bolivian gas, gas-powered thermal operations on a bi-fuel basis and the emergency handling of natural gas demand;

• Selective expansion in the petrochemicals sector plays a more prominent role in the 2006-2010 Business Plan;

• The fleet renewal program set out in the previous Plan was left unchanged;• Petrobras will consolidate its position in the Brazilian market for renewable

energy for the 2006-2010 period; • To achieve leadership in all segments of the consumer market in the

distribution area, Petrobras’ consolidation in the LPG market merits particular attention with the acquisition of Liquigás;

Petrobras 2015

30

• In the Company’s international business, 82% of CAPEX is directed towards countries which are core to Petrobras’ overseas activities and 87% will go to the E&P segment;

• The high oil prices and the growth in activities, principally the production of oil in Brazil and overseas, ensures the generation of sufficient cash to finance 78% of capex for the 2006-2010 period;

• Based on the assumptions adopted, the financial forecasts indicate good conditions for funding and returns as well as for guaranteeing the Company’s solvency and liquidity;

• As a basis for sustaining the implementation of the 2006-2010 Business Plan, Petrobras maintains as the basic pillars on which its corporate performance rests, growth, profitability and social and environmental responsibility;

• In this context, the Plan includes the allocation of the necessary resources for the Company to achieve standards of excellence in the areas of safety, the environment and health.

Final Remarks

Petrobras 2015

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Conference Call / Webcast3rd Quarter 2005

(Brazilian Corporate Law)

Petrobras 2015

32

The presentation may contain forecasts about future events. Such forecasts merely reflect the expectations of the Company's management. Such terms as "anticipate", "believe", "expect", "forecast", "intend", "plan", "project", "seek", "should", along with similar or analogous expressions, are used to identify such forecasts. These predictions evidently involve risks and uncertainties, whether foreseen or not by the Company. Therefore, the future results of operations may differ from current expectations, and readers must not base their expectations exclusively on the information presented herein. The Company is not obliged to update the presentation/such forecasts in light of new information or future developments.

Cautionary Statement for US investors

The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this presentation, such as oil and gas resources, that the SEC’s guidelines strictly prohibit us from including in filings with the SEC.

Disclaimer

Petrobras 2015

33

E&P’ oil prices

47.83

37.4843.04

54.24

61.53

51.59

29.43 32.0228.42

41.59

35.3844.02

35.11

26.16 29.5326.79

36.1432.88

56.39

49.3344.1939.70

27.41 28.79 30.7734.38

38.98

3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05

Brent (average) Average sales price OPEC Basket

• The spread between the average sales price for Petrobras crude oil and Brent declined as the demand for low sulfur heavy crude oil increased.

Petrobras 2015

34Source: Purvin & Gertz

Refining Margins limited by the conversion capacity

US Gulf Refining Margins(US$/bbl, 2004 currency)

* Forecast for the year average. Last Update: aug/05

(2)

0

2

4

6

8

10

12

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

*

Maya Coking (Heavy Oil)Isthmus CokingIsthmus Cracking

• Strong demand for medium and light oil products enabled refiners with heavy oil processing capacity to increase margins;•Environmental specifications in the USA and Europe, low inventories, and limited refining and conversion capacity, strengthened refining margins.

Petrobras 2015

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Domestic oil and NGL production

1,725

1,511 1,543

1,730

1,523

3Q04 4Q04 1Q05 2Q05 3Q05

thou

sand

bpd

∆ = 13.3%

• 13.3% increase as compared to 3Q04 due to the start-up of P-43 (Barracuda) and P-48 (Caratinga) platforms in dec/04 and feb/05, respectively;• Compared to 2Q05, production remained at the same level due to scheduled stoppages in some platforms (P-18 and P-20), natural gas compression adjustments in P-48 unit and a drought in the Amazon river, which limited production in Urucu field.

Petrobras 2015

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Net exports of oil and oil products

Imports (thousand bpd) Exports (thousand bpd)

233 233 181 161343 247

228 235

221244

32

206 213203

2001 2002 2003 2004 1Q05 2Q05 3Q05Oil Oil Products

397 326 319450

322 333 393

326216

105109

46 83115

2001 2002 2003 2004 1Q05 2Q05 3Q05Oil Oil Products

723542

424559 508 439 446 409 396

368

564

416235

491

• During 3Q05, diesel imports increased to meet growth in seasonal domestic demand (3.3% increase in the sales volume of oil products as compared to 2Q05);• Imports of light oil increased to adjust production output to meet seasonal shift in internal consumption; • Increase in gasoline exports due to high demand in the USA;• Decrease in oil exports due to logistic difficulties caused by Gulf of Mexico hurricanes.

Petrobras 2015

37

Average Realization Price - ARP

• ARP-USA significantly affected by the hurricane season.• ARP Brazil continued to follow medium and long term international price trends;• 9.0% increase in ARP Brazil compared to the 2Q05; 51.6% in the last 12 months;• On Sept. 10, Gasoline and Diesel prices increased 10% and 12% respectively (including impact of CIDE and PIS/COFINS); •The price of Brent continued to trend upward;

20

40

60

80

100

Dec-02 Mar-03 Jun-03 Sep-03 Dec-03 Mar-04 Jun-04 Sep-04 Dec-04 Mar-05 Jun-05 Sep-05

ARP Brazil (US$/bbl) Brent Average Price ARP USA (w/ volumes sold in Brazil)

60.26

73.20

61.54

3Q05Average

Petrobras 2015

38

Sales Volume

• 3Q05/ 3Q04: oil product sales’ volume was particularly affected by increased diesel demand (seasonal demand related to agriculture), higher domestic demand for natural gas as well as international sales.• In this same period oil exports decrease due to logistic difficulties caused by the hurricanes in Gulf of Mexico;• When comparing 9M05/ 9M04 the main cause of the increased total sales volumes were the exports and natural gas demand.

Thousand bpd 3Q05 2Q05 % 9M05 9M04 %

Total Oil Products 1,720 1,665 3 1,658 1,619 2Alcohol, Nitrogen and others 26 23 13 26 31 (16)Natural Gas 235 222 6 224 205 9Total Domestic Market 1,981 1,910 4 1,908 1,855 3Exports 509 572 (11) 496 441 12International Sales 413 334 24 388 424 (8)Total International Market 922 906 2 884 865 2Total 2,903 2,816 3 2,792 2,720 3

Petrobras 2015

39

Expressive Operational Results in the 3Q05R

$ m

illio

n

(1) Earnings before financial revenues and expenses, equity in results of non-consolidated companies and taxes.

4,930

9,576

11,809

17,939

32,359

5,632

10,630

12,488

20,601

35,711

Net Income

Operating Profit (1)

EBITDA

COGS

Net Revenues

2Q05 3Q05

10.4%

14.8%

5.7%

11.0%

14.2%

Petrobras 2015

40

Changes in Net Profit – R$ million (2Q05 versus 3Q05)

1,730 1,725Oil, NGL and Condensate – thousand bpd

Tax benefits

4,930746

70

4,184

3,352 2,662

364

1,096 1,378

5,632

2Q05 Net Income Income COGs OperatingExpenditures

Fin., Non Op. andOther Exp. and

Gains Inv. InSubsidiaries

Minority Interest Taxes 3Q05 Net Income

• 3Q05 net income was 14% higher than last period result; it would be even higher, about 34%, if tax benefits were excluded from 2Q05 results.

4,930

Petrobras 2015

41

9.698

3.516 1.483

60 11.64949

71

2Q05Operating

Profit

Effect ofprices on theNet Revenue

Effect ofvolumes on

the NetRevenue

Effect of theaverage costson the COGs

Effect of thevolumes on

the COGs

OperatingExpenses

3Q05Operating

Profit

∆ = 20%1.730 1.725

Changes in Operating Profit (3Q05 vs. 2Q05) – R$ millionE&P

Oil, NGL and Condensate – thousand bpd

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4.15 4.094.75

5.954.88

5.83

2Q 04 3Q 04 4Q 04 1Q 05 2Q 05 3Q 05

Lifting Costs without Gov. Take

∆ = +19.5% or US$ 0.95

Main causes

+ US$ 0.71/boe: Third parties services and charges, higher expenses with charter of platforms from third parties and readjustment of charter rate of FPSO-MLS due to high oil price;

+ US$ 0.34/boe: FX rate effect due to the Real appreciation compared to Dollar;

- US$ 0.17/boe: Recovery of expenses related to partnerships, mainly in Albacora Leste and Coral.

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Changes in Operating Profit (3Q05 vs. 2Q05) – R$ millionDownstream

3.104

1.559

4.308

16 725

1.255

1.641

2Q05Operating

profit

Effect ofprices on theNet Revenue

Effect ofvolumes on

the NetRevenue

Effect of theaverage coston the COGS

Effect ofvolumes onthe COGS

Operatingexpenditures

3Q05Operating

profit

Operating Profit Evolution – R$ million

• Quarterly result affected by increases in oil and oil products imports, and the high cost of purchasing oil and oil products.

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1.32 1.321.67 1.82

2.06 1.93

2Q 04 3Q 04 4Q 04 1Q 05 2Q 05 3Q 05

Domestic Refining Cost

Domestic Refining Costs (US$/bbl)

Decrease due to:

• 12% increase in the feedstock processed;

• Lower consumption of catalysts and chemical products in the current quarter due to higher rate of imported light oil;

• Factors partially offset by scheduled stoppages in RPBC and REDUC units.

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Contribution of the Business Segments to the Operating Profit 3Q05 vs. 2Q05 (R$ million)

9.576

1.951 2.379

152 157 95 145

10.6301.427

2Q05Operating

Profit

E&P Downstream Gas &Energy

Distribution International Corporate Eliminations 3Q05Operating

Profit

• 11.0% growth in Operating Profit mainly due to higher international prices for our exports, increases in volumes of oil products sold domestically, and higher ARP during the period;• Eliminations reflects the effect oil price escalation in the downstream purchases, especially since 2Q05, distributed between COGS and Inventory.

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Cash Breakdown(R$ million)

(25.000)

(15.000)

(5.000)

5.000

15.000

25.000

'3/31/2004 6/30/04 9/30/04 12/31/04 3/31/05 6/30/05 9/30/05

(1.200)

(800)

(400)

0

400

800

1.200

Abroad In Brazil with FX correctionIn Brazil CDI CashFinancial Income

Cas

h

Fina

ncia

l Rev

enue

s

FX rate change*

∆+6.8% ∆-8.0% ∆-7.1% ∆0.4% ∆-11.8%

* US Dollar end of period price

∆-5.5%

• Financial income when expressed in Reais is highly influenced by the exchange rate, given the substantial cash balances that are indexed to the dollar as a hedge against dollar denominated debt and costs.

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Petrobras’ Leverage Ratio

Leverage

R$ million Sep-05 Jun-05 Mar-05

Short-term debt 8,991 9,645 11,419

Long-term debt 38,422 40,866 46,092

Total debt 47,413 50,511 57,511

Net debt 26,203 33,316 39,883

32%

26%

19% 19%

37%

43%42%40%

36%

20%17%16% 16% 16%

1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05

Net debt/Net capitalizationShort-term debt/Total debt

• 21% decrease in net debt as a result of Real appreciation and strong cash generation.

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2005 (1) 2004 (2)

(=) Net Cash from Operating Activities 29,857 17,695 (-) Cash used in Cap. Expend. (15,385) (14,307) (=) Free Cash Flow 14,472 3,388 (-) Cash used in Financing and Dividends (11,473) (10,486) Financing (6,372) (5,023) Dividends (5,101) (5,463) (=) Net Cash Generated in the Period 2,999 (7,098) Cash at the Beginning of Period 18,211 27,577 Cash at the End of Period 21,210 20,479

R$ millionJan-Sep

Consolidated Cash Flow Statement

(1) As of January 1, 2005, the Special Purpose Companies whose activities are directly or indirectly controlled by Petrobras were included in the Consolidated Financial Statements, as per CVM Instruction No. 408/2004.(2) To facilitate comparability, Special Purpose Companies were also included in the financial statements of 2Q-2004 and 1H-2004.

• Outstanding cash generation in the quarter, resulting in higher cash balances, despite the increase in capital expenditure and net debt repayments.

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Petrobras Visit our website: www.petrobras.com.br/ri/english

For further information please contact:

Petróleo Brasileiro S.A – PETROBRASInvestor Relations Department

E-mail: [email protected]. República do Chile, 65 – 22nd floor

20031-912 – Rio de Janeiro, RJ(55-21) 3224-1510 / 3224-9947

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Documents

funding us

robustness brent us

downstream projects

gdp brazil

average annual investment

international market

brazil international49

investment plan34