Mitsubishi ufj securities_ing

1

Mitsubishi UFJ Securities “Brazil Day”Conference - 2008

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DISCLAIMER

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.

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 withthe SEC.

CAUTIONARY STATEMENT FOR US INVESTORS

3

2005 2006 2007

LTM (6/30/2008)

Net Revenues 56.3 72.3 87.7 108.6 EBITDA 17.6 22.9 25.3 31.8 2005 2006 2007 1H08 Capex 10.4 14.9 21.0 24.3 Total Debt(1) 21.2 21.3 21.9 25,9 Cash & Cash Equivalents

9.9 12.7 7.0 6.6

Net Debt 11.3 8.7 14.9 19.2 Total Equity 32.9 44.3 65.2 83.0 Total Assets 78.6 98.7 129.7 156.9

NOTES:

Exploration & Production

Downstream(Supply)

Gas & EnergyDistribution

Petrochemicals

Downstream

16%

Domestic E&P

81%

Distribution

3%

International

CORPORATE ORGANIZATION AND KEY OPERATING RESULTS

Summary Financials (US$ billion)

Income from Operations(2)

1 Includes capital leases2 For tthe year ended December 31, 2007. Excludes losses in gas and energy, corporate results and eliminations

Biofuels

4

Profitability

To grow production and

oil and gas reserves

sustainably, being recognized for excellence in E&P operations

To expand integrated

operations in refining,

commercialization, logistics and

distribution with a focus on the Atlantic

Basin

Expand operations in target markets for oil, oil products, petrochemicals, gas and energy, biofuels and distribution, being a world benchmark as an integrated energy company

IntegratedGrowth

Social and Environmental Responsibility

Gas & EnergyE&P Downstream (RTC) Distribution Petrochemicals Biofuels

CORPORATE STRATEGY

Develop and lead the Brazilian natural

gas market and operate on an

integrated basis in the gas and electric energy markets with

a focus on South America

Expand operations in

petrochemicals in Brazil and South America on an

integrated basis with the

PETROBRAS Group’s other businesses

Operate on a global basis in biofuels

commercialization and logistics, leading the

domestic production of biodiesel and

expanding participation in the ethanol segment

Operational, management, technological and human resources excellence

Commitment to sustainable development

5

BALANCED VERTICAL INTEGRATION

PetrobrasOther Companies

Existing PipelinesRefineriesTerminal aquaviárioTerminal terrestre

Upstream Operations Downstream Operations

Proved Domestic Reserves of 13.92 Billion BOE (SPE)Southeast Basins responsible for more than 80% of Brazil’s oil production2007 domestic oil average daily Production of 1,792 k bpd

11 refineries in Brazil2007 domestic throughput of 1,795 k bpd 2007 oil products domestic consumption of 1,725 k bpd

Áreas de Concessão(outubro/2005)

6

Source: Bloomberg

TRADED VOLUME 2003 - 2008

Turnover NYSE & Bovespa (daily average US$ MM)

$304

$552

$382$431

$998

$132

$56

$101

$25,0

$201

$99

$227

0

200

400

600

800

1000

1200

1400

1600

1800

2000

2003 2004 2005 2006 2007 2008 YTD

Dai

ly A

vera

ge (U

S$ M

M)

PETR4 (Bovespa) PETR3 (Bovespa) PBR/A (Nyse) PBR (Nyse)

$60

$2,034

$992

$483

$219$111

NysePBR

PBR/A

BovespaPETR3PETR4

7

DIVIDEND POLICY

28%

34%30% 30% 29% 29%

-

2.000

4.000

6.000

8.000

10.000

12.000

14.000

2002 2003 2004 2005 2006 20070%

10%

20%

30%

40%

50%

Net Income Dividend Dividend as % of Net Income

According to the Brazilian Corporate Law, shareholders are entitled to a mandatory dividend of 25% of the annual net income.

In the last years, Petrobras has been paying an average of 30%

US GAAPUS$

* Net Income and Dividends based on provisioned dividends and US GAAP.

8

UPSTREAM OVERVIEW

9

LONG-TERM RECORD OF INCREASING RESERVES

15.015.014.914.914.512.1

10.710.4

2000 2001 2002 2003 2004 2005 2006 2007

BY DEPTH

BY GRAVITY

OIL VS. GAS

BY LOCATION

92%

8%

56%

23%

11%10%

85%

6%9%

Non-Assoc. GasAssoc. GasOil and Condensate

OnshoreOffshore (0-300m)Offshore (300-1500m)Offshore (>1500m)

74%26%

BrazilInternational

> 31o API Light< 31o API Heavy/Intermediate

WORLDWIDE PROVED RESERVES OF PETROBRAS (SPE)PROVEN RESERVES BY CATEGORY

(Reviewed and Certified by DeGolyer and MacNaughtonsince 2001)

BILLION BBLS

Note: SPE (Society of Petroleum Engineers) method and includes both Brazilian and international reserves.

10

E&P - RAPIDLY GROWING PRODUCTION PROFILE

2 .8 122 .4 2 1

6 4 3

6 3 7

515

2 8 5151

18 3

809 869 1 . 004 1. 132 1 . 271 1. 336 1 . 500 1. 540 1. 493152 163

179197

221 232252 250 265

1 . 684

716

1. 778 1. 792

274

134

277 273142

168161

25 38 47 4560

53 4435 163

12610196

94852324

20161011910

109

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Natur al Gas - Inter national

Oi l and NGL - Inter national

Natur al Gas - Br azi l

Oi l and NGL - Br azi l

Thou

sand

boe

d

2012 Target 2015 Forecast

* Includes non consolidated production

885

3,494

4,153

8.7% p.y.

7.7% p.y.

*

*

1,008 1,0901,238

1,505 1,5651,636

1,810 2,036 2,0202,217

8.3% p.y.

2,298 2,300

11

2.421

1.792

1.950*2.191

2.2962.374

1.600

1.800

2.000

2.200

2.400

2.600

2007 2008 2009 2010 2011 2012

Obs.: This curve does not include Tupi’s Pilot System Production

MAIN PROJECTS IN BRAZIL – 2007-2012

Rio de JaneiroEspadarte Mód II100.000 bpd6/jan/07

RoncadorP-52180.000 bpdNovember 2007

RoncadorP-54180.000 bpdNovember 2007

Piranema30.000 bpd10/oct/07

Cidade de VitóriaGolfinho Mód. 2100.000 bpdNovember 2007

Marlim LesteP-53180.000 bpd2008

Marlim Sul Módulo 2P-51180.000 bpd2008

Cidade NiteróiJabuti (FPSO)100.000 bpd2008

Parque das Conchas100.000 bpd2009

Frade100.000 bpd2009

Cachalote & BaleiaFranca FPSO Capixaba100,000 bpd2010

Marlim SulMódulo 3 –P-56

100.000 bpd2011

EspadarteMódulo 3100.000 bpd2012

JubarteP-57180.000 bpd2011

TupiEWTUp to 30.000 bpd2009

TupiPilot SystemUp to 100.000 bpd2010

RoncadorModule 4 P-62100.000 bpd2012

* Target may vary +/- 2.5%

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3.3 3.0 3.4 4.3 5.7 6.6 7.7 8.7 9.93.3 4.0 5.1 6.4 9.0 11.1 11.7 16.221.2

24.4 24.8 28.8

38.2

54.4

65.172.5

96.9

121.0

-10

10

30

50

70

90

110

130

2001 2002 2003 2004 2005 2006 2007 1Q08 2Q08

US$/b

oe

Lifting Cost Production Tax Brent

8.510.7 14.7 17.7 19.4

24.9

7.06.6

31.1

13

Sergipe-AlagoasLight Oil

Espirito SantoLight Oil & Natural Gas

CamposProducible Heavy Oil & Light Oil

SantosLight Oil & Natural Gas

Proven Reserves: 3.80 B boeProb.&Poss. Res: 4.50 B boeUnder Evaluation (2007) : 4.70 B boe

~ 13.0 billion boe(2002-2007)

MAIN DISCOVERIES - 2002/2007

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164 Million years ago152 Million years ago130 Million years ago122 Million years ago108 Million years agoEarth Planet as today

EARTH DEVELOPMENT

0 4960 Miles

SINBPA/Petrobras - Scotese

15

PRE SALT PROVINCE

hinge line

Well Tested HC CampusExploratory blocks Pre-salt Reservoirs

16

RECENT OIL/GAS DISCOVERIES 2006-2007 - CLUSTER BLOCKS

Discovered fields before 1984Discovered fields between 1985/2001Discovered fields between 2002/2007Cluster Blocks

Production to date: 7 bi boeActual Production: 1.6 MMboepdProducing Wells: 542 Area: 7,000 km2

Pre-salt Cluster:15.000 km2Tupi: 5 to 8 bi boeIara: 3 to 4 bi boe

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TUPI AND NEIGHBOURING BLOCKS

Wells Drilled

Evaluation Plans approved by ANP

Evaluation Plans being prepared/under negotiation

Parati – 1-RJS-617Tupi – 1-RJS-628Carioca – 1-SPS-50Caramba – 1-SPS-51Guará – 1-SPS-55

Bem-Te-Vi – 1-SPS-52Júpiter – 1-RJS-652Iara – 1-RJS-656

Blocks ConsortiumBMS-8BMS-9BMS-10BMS-11BMS-21BMS-22BMS-24BMS-50

BR (66%), SH (20% e PTG (14%)BR (45%), BG (30%) e RPS (25%)BR (65%), BG (25%) e PAX (10%)BR (65%), BG (25%) e PTG (10%)BR (80%), PTG (20%)EXX (40%), HES (40%) e BR (20%)BR (80%), PTG (20%)BR (60%), BG (20%) e RPS (20%)

BM-S-21Caramba

BM-S-24Jupiter

BM-S-8Bem-te-Vi

BM-S-9Carioca

BM-S-11Tupi

BM-S-17

BM-S-42

BM-S-10Psrati

BM-S-42

Yara

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* Leased from BW Offshore

EXTENDED WELL TEST -TUPI

1st Oil: March/2009

1 Oil Production

Capacity

1Riser to Export Gas1000 thous. m3Flare Capacity

Wells

2,170 mWater Depth

28 – 42 º API30,000 bpd

Oil RangeCapacity to Process Oil

FPSO – Leased*

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Capacity

5 oil production (+4 extra)2 water injection (+3 extra)

1 gas injection (+1 extra)Wells

20 – 30 º APIOil degree

100 mil bpd60 mil bpd

Water InjectionWater Production

2,145 mWater Depth

4 million m3 /d

100,000 bpd

Capacity of Gas Compression

Capacity to Process Oil

1st Oil: Dec./2010

TUPI PILOT SYSTEM* - PRODUCTION UNIT

* Leased from Modec

20

2812269628Total per year

63352321156Cumulative

+ 28 new units to be leased

• Delba V• Delba VI• Scorpion• Delba VII• Delba VIII• Norbe IX• Schahin 1• Schahin 2• Norbe VIII• Petroserv• Etesco 8• Sevan Brasil

•Delba IV

• Gold Star• Schahin I• Norbe VI• Delba III• SSV Victoria• West Orion

• Lone Star• Schahin III• Petrorig II• Sevan Driller• West Taurus• West Eminence• Dave Beard

5≥ 2000m

From 2013 to 2017

1000-1999m

0-999m

Water Depth

18

5

Operating 2007

• Pride South Atlantic

• O. Yorktown• Pride Mexico • Borgny Dolphin• Ocean Concord• Falcon-100

Start Up 2008

Olinda StarOcean Worker

Start Up 2009

•Petrobras XIV

Start Up 2011

Start Up 2010

Start Up 2012

NEW RIGS

Stena Drillmax e Dep Water Millennium are not being considered since they are being negotiated in the Spot Market

21

CONTRACTING OF 10 FPSOs FOR THE PRE-SALT AREA

10 new FPSO-type oil-production platforms for the Pre-Salt areas in the Santos Basin.

First two FPSOs to be chartered:• Oil Production Capacity: 100,000 bpd;• Gas Compression: 5 million m3;• Employed as Pilot Units in new Blocks;• Start-up between 2013 and 2014.

Eight additional FPSOs belonging to Petrobras:• Construction of the hulls at the dry dock of the Rio Grande Shipyard, in Rio Grande do Sul;• Dry dock leased by Petrobras for a 10 years term; • Topside production modules to be defined in the future;• Oil Production Capacity: 120,000 bpd;• Gas Compression: 5 million m3;• Start-up in 2015 and 2016.

After the 10 FPSOs are deployed, major technological innovations will be introduced for the subsequent production development phases in the pre salt.

22

DOWNSTREAM OVERVIEW

23

DOWNSTREAM REFINING CAPACITY(thousands barrels/day)

REFINING INFRASTRUCTURE

Pasadena - Estados Unidos 100 91Ricardo Eliçabe - Argentina 31 29San Lorenzo - Argentina 50 47Okinawa – Japan 100 19

TOTAL INTERNATIONAL 281 186(*) (**) TOTAL 2.267 1.965

Refineries Capacity(Mbpd)

Troughput(Mbpd)

Paulínia - Replan (SP) 365 348Landulpho Alves - Rlam (BA) 323 261Duque de Caxias -Reduc (RJ) 242 243Henrique Lage - Revap (SP) 251 236Alberto Pasqualini - Refap (RS) 189 148Pres. Getúlio Vargas - Repar (PR) 189 169Pres. Bernardes - RPBC (SP) 170 153Gabriel Passos - Regap (MG) 151 132Manaus - Reman (AM) 46 41Capuava - Recap (SP) 53 42Fortaleza - Lubnor (CE) 7 6TOTAL BRAZIL 1.986 1.779

(*) According to ownership acknowledged by the ANP (National Oil Agency)(**) Only includes refineries with equity holding equal to or above 50%

24

29%

13%

18%4%

8%

8%

20%

Quality (8,619)Conversion (3,938)Expansion(5,353)HSE (1,083)Transportation (2,270)Pipelines (2,264)Others (6,112)

3

5

8

10

3

Delayed Coking HDT - NK Destilates HDT HDS Gasoline CatalyticReforming

New Refining Units (2008 – 2012)

TOTAL DOWNSTREAM INVESTMENT: US$ 29.6 BILLION

*HDS: Hidrodessulfurização ˚HDT: Hidrotratamento

25

Exports (‘000s barrels/day) Imports (‘000s barrels/day)

319450

352 370 390

105

109

94 118 148

209

125

2003 2004 2005 2006 2007 2012

233 181263

335 353

213228

260246 262

454

141

2003 2004 2005 2006 2007 2012Oil Oil Products

NET EXPORTS OF OIL AND OIL PRODUCTS

• Surplus in Liquides;

• Deficit in Trade Balance

446409

615581 595

523

424488

538

334

559

446

26

REFINING EXPANSION - INTERNATIONAL

REFINERY IN THE USAPetrobras has acquired 50% of the Pasadena Refinery System Inc. (PRSI), located in Texas, USA;Capacity of 100,000 bbl/day, will be upgraded to handle up to 70,000 bbl/day of heavy oil and feedstock;

Petrobras signed the purchase document of 87.5% interest in the Japanese Company Nansei Sekiyu Kabushiki Kaisha (NSS)

REFINERY IN JAPAN

ACQUISITION INCLUDES:a refinery with capacity of 100 thousand bpd, that process light crude oil and high quality products,

a crude oil and products terminal with storage capacity of 9.6 million barrels, three piers with capacity to receive product vessels of up to 97 thousand deadweight tonnage (dwt),

a mono buoy for Very Large Crude vessels (VLCC) of up to 280 thousand dwt.

The use of terminal capacity is planned to boost the commercialization of biofuels in Japan and other Asian markets and complement current trading of crude oil and products into Asian market of approximately 100,000 bpd.

27

GAS AND ENERGY OVERVIEW

28

Participation of the natural gas in the Brazilian energy matrix

Sour

ce: M

ME, B

EN 2

006

In 16 years, natural gas participation in the energy matrix increased 370%, boosted by the ramp up of Campos Basin production and Gasbol pipeline

Campos Basin

Gasbol

INCREASING DEMAND FOR NATURAL GAS

1970 1980 1989 1990 1998 1999 2000 2002 2004 2006

4.7%

9.4%

2.0%

2007 2012*

10%13,4%

*Forecast

29

Million cu.m/day

1998

TermeletricIndustrialOther Uses*

134

•Other uses: vehicle, residential / commercial, refineries e fertilizer plants•Source: Petrobras and MME

E&P

Boliv

iaLN

G

0

20

40

60

80

100

120

140

160

2000 2007 20122012

25,3

17,5

48,3

10,9 16,1 5,5

Average Demand Average Supply

12,5

1,9 1,79,4 0,5 0,9

134

48,0

42,1

43,9

72,9

30,0

31,1

NATURAL GAS SUPPLY VS. DEMAND

30

GAS & POWER OPERATIONAL PERFORMANCE

Energy sold in the last auctions

Increase gas supply from E&P

New gas pipelines in operation

New regulatory framework in the electric sector

Next Steps…Completed ActionsMore gas available to be sold or to be used in

thermo generation

Better prices and margins

Higher dispatch in the thermo power plants to guarantee the security of the electric system

Recovery of fixed costs

Reduction in contractual penalties

HydroNuclearWindCoalThird-parties Thermo generation (oil + gas)Petrobras Thermo generation (oil + gas)

New contracts with the distribution companies

40.000

42.000

44.000

46.000

48.000

50.000

52.000

jan/07 jun/07 jan/08 jun/08

MW av

erga

e

Gas-fired thermo generation growing importance in Brazil

Creating flexibility in the portfolioIncrease LNG regasification capacity

Completing gas infra-structure

Increasing domestic production

More contracts sold in energy auctions

Source: ONS (Brazilian Energy System)

31

RENEWABLES

32

Begun operation of the First Ethanol Lignocellulosis Pilot Plant, in BrazilThe pilot phase is focused on the optimization of the production process of the bio ethanol (second generation fuel which diminishes environmental impacts) Semi- Industrial bio ethanol plant: Forecast 2010

2008-2012 INVESTMENTS 2012 TARGET

Biodiesel Plants Availability of 938 Thousand m3/year

H-Bio (Bio-Refining)

Installed Capacity of Generation of Electric Power from 365 MW Renewable Sources

Ethanol pipelines

Aeolic Energy

Ethanol Vessel

Solar Energy

Other Sources of Renewable Energy

Guamaré Biodiesel Plant

4%

21%

46%

29%

BiofuelsPipelines and Ethanol PipelinesOthersH-Bio

RENEWABLE ENERGY AND BIOFUELS (2008-2012)

Export of 4.7 billion m³/year of Ethanol

Vegetable oil Processing 1.6 million m³/year

US$ 1.5 BILLION INVESTMENTS

LIGNOCELLULOSIS

Total avoided GHG emissions: 3.93 MM tons CO2 equivalent

33

Raw Material Production / ha (kg) Quantity of Ethanol/ ha

Energy out/ Energy in

SUGAR CANE 85,000 7.080 liter 8,3

CORN 10,000 4.000 liter 1,3 - 1,8

Total countryNative Amazon ForestSecondary Amazon Forest and Others Native ForestsPastureTemporary CropsPermanent CropsAvailable land Available land with low impact (*)

851370180

6197

597,626390

AREA (MMHA)TYPE (LAND USE IN BRAZIL)Today the ethanol consumption is 2,6%

of gasoline MKT Increasing ethanol to 10% of gasoline will represent 118 Billion Lt (more than 2 million barrels per day)

RAW MATERIAL COMPARISON

Source: FAO, 2002 and EMBRAPA (*)

34

São Paulo Marine Terminal

Rio de JaneiroMarine Terminal

PETROBRAS INVESTMENTS TO EXPORT ETHANOL

Ethanol collection, storage and distribution centers are spread out through producing and consuming regions

New Ethanol Pipeline (919Km)

Large scale marine terminals improve efficiency

Large storage capacity necessary to regulate supplyPipelines reduce transport costs; improve energy efficiency

New Water Way for Ethanol

Replan – Ilha Dágua Pipeline Current flow

Tietê-Paraná Water way

Senador Canedo -São Sebastião Pipeline

Replan – Brasília Pipeline (OSBRA)

Replan – Guararema Pipeline

Existing Pipeline

Future Pipeline

Existing Terminal

Future Terminal

Exportation

Target: Export 4.75 MM cu.m/year in 2012

New Ethanol Pipeline(1.150 Km)

New Pipeline (1412 km)

35

FINANCIAL CONSIDERATIONS

$

36

13%

87%

Brasil Internacional6%4%

1%

2% 26%

58%

2%

65.19

29,22

6.74

2.252.25

E&P RTC G&EPetrochemical Distribution Corporate Biofuel

1.13 97.4

15.0

Note: Includes International

US$ 65.1 billion directed to E&PExploration: US$ 13.8 billionProduction: US$ 51.3 billion

INVESTMENT PLAN BY BUSINESS SEGMENT

2008-12 PeriodUS$ 112.4 billion

4,5

37

104.486.7Projected Net Cash Flow (Including Dividends)

1416Return on Capital Employed (ROCE) (%)

2025Net Debt/ Net Debt + Shareholders’ Equity (Leverage) (%)

112.483.5Projected Investments for 2008-2012

2008 – 40.002009-2011 – 35.00

2.50

2007-2011 Plan2.18FX rate (R$/US$)2008 – 55.002009 – 50.002010 – 45.002011-2012 – 35.00

Brent for Funding(US$/bbl)

2008-2012 PlanIndexes

(*) PPP – purchase power parity

PETROBRAS’ BUSINESS PLAN

38

STRONG RETURNS HAVE ENABLED COMPANY TO GROW WITHOUT INCREASING DEBT

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

2003 2004 2005 2006 2007

Sources Uses

CFFO(including W.C.)

Capex

Dividends

Consolidated Cash Flows74.3 BN 2003-2007

Inc. Debt

7,5961,83810,61514,48048,529PP&E (inc. Dep.)

291

446

Distri-bution

Int’lGas & Energy

Downstream (Brazil)

E&P(Brazil)

1,1446,0239,37113,558O/w Construction in Progress

(815)(834)2,78514,072Net Op. Inc.

Historical ROCEU.S. GAAP

Operating Income and Assets by Segment - 2007(US GAAP – US$ Millions)

Source: Petrobras and Bloomberg

39

PETROBRAS SCENARIO

Perspective of a high increase in production and reserves

High volume of investments

Pro-active performance to overcome present challenges of the oil and gas industry

Activities Integration

40