Petrobras Clarifies Commercial Viability of Two Fields

Petrobras wishes to clarify that the information provided on the declaration of commercial viability of two oil fields in the Campos Basin up to the year-end, is customary practice in the oil industry. Following the announcement of potential hydrocarbon finds, the Company continues to develop its exploration program until it is able declare commercial viability to the National Petroleum Agency (ANP), pursuant to the provisions of the concession contracts.

In this respect, part of the area of the former BC-60 block, where the so-called Parque das Baleias oil-bearing complex already exists, is still in the exploratory/evaluation phase, with the prospect that part of its oil producing potential may be declared commercially viable before the end of this year. Out of the potential 2.1 to 2.5 billion barrels of oil equivalent, approximately 1 billion has already been classified as total reserves in the Jubarte, Cachalote and Baleia Franca fields, with about 800 million boe already classified as proven reserves. The volumes still unclassified as reserves are contingent upon the execution of a schedule of exploration activities and evaluations, as called for under the concession contracts, before a declaration of their commercial viability can be announced. The oil-bearing potential of these discoveries was widely published by the Company, principally in the Press Release of June 4 2003.

Pursuant to the prevailing legislation and according to the ANP’s Technical Regulation criteria for classification and appropriation of established reserves, Petrobras announces its Annual Reserves Bulletin at the beginning of each fiscal year. The proven reserves in this Annual Bulletin are duly certified and audited by an independent company.

The information on discoveries, the commercial viability of which has still not be declared or oil-bearing potential not incorporated into reserves, are subject to revision and fresh evaluation of potential.