Petrobras Completes Acquisition of Pecom

Petrobras has received approval from the Argentinean Government to acquire 58.62% of the shares of Perez Companc S.A., which holds 98.21% in Pecom Energía S.A.

The confirmation was made official by a resolution issued by the Secretaria da Competencia, Desregulación e Defensa do Consumidor, in Argentina, after the approval of the Comissão Nacional da Defensa da Competência, which is the governing body of that Department for consumer defense issues. The operation had been announced by the two companies on October 17, 2002 and is now being formalized, with a positive answer from the federal Government.

Pursuant to the resolution, Pecom Energía S.A. was bound to disinvest the entirety of shares in Citelec S.A., which holds 42.439% of the call B shares, 7.5% of class D shares, of the power transmission company Transener S.A. Such disinvestments shall be effected in accordance with Law 24,065, of the Power Regulatory mark, and to the concession agreement of the power company, and shall be supervised by Ente Nacional Regulador da Eletricidad (ENRE), with approval of the Department of Energy in Argentina.

Furthermore, Petrobras was approved today to acquire 39.67% of the shares in Petrolera Perez Companc S.A.

With the approval of the operation, Petrobras is now changing the name of Perez Companc S.A. to Petrobras Energía Participaciones S.A, and of Pecom Energía S.A. to Petrobras Energia S.A., which have already been approved by the Shareholders Meetings of the two companies last month.

The new Petrobras Energía is born with prestige, tradition and history of success of the two companies, Pecom and Petrobras, with leadership and great business perspectives and consolidation of energy market position in Argentina and Latin America.

Pecom, now integrated to Petrobras Argentina, was established in 1946 by the Argentinean family Perez Companc, originally as a shipping company that evolved to the oil and energy sector. It leads a group of companies that are connected therewith, with the main activity in the power area, which constituted its core business. Perez Companc is engaged in several countries in Latin America, including Brazil, Venezuela, Bolivia, Peru and Ecuador, summing up activities in the oil, natural gas and power areas: in the trade and transport of products, refinement, exploration and production of oil and gas, distribution and petrochemicals. In the oil production, it has 22 fields in Argentina and 15 in other countries. In the distribution of derivatives, it maintains a network of 185 service posts. The 2002 sales of the group corresponded to US$ 1.674 billion.

After the acquisition, the main challenge is to consolidate the third place among the operators in the upstream area in Argentina and second place in the fuel market in the country.

For the first stage, Pecom prepared a self-funded, ambitious strategic plan, which will allow it to continue to grow.

The company will invest US$ 300 million in 2003 and roughly US$ 2.2 billion in the next five years. The focus will be on oil. But the company also has gas and power projects, which were previously postponed because of economic issues. In this segment, it intends to invest in the Argentinean market US$ 150 million in 2003 and US$ 650 million in five years.

Pecom had consolidated business with Brazil since 1997, when on April 28 of that year it established in Pólo Petroquímico de Triunfo, in Rio Grande do Sul, the company Innova, to produce and trade styrene, polystyrene and other petrochemicals, operating one of the first integrated plants for the production of styrene in Latin America and becoming a leading company in the petrochemical industry in Mercosur.