Petrobras Clarifies on E&P Activities with ONGC

Petrobras, in response to Written Notice CVM/SEP/GEA-2 No. 161/2010, clarifies news published yesterday by the DCI newspaper titled "Petrobras gives up on Indian corporation." 

On June 4, 2007, Petrobras announced the signing of a partnership agreement for Exploration and Production activities with ONGC, the Indian national oil company. The agreement included the operation of six deepwater exploratory blocks, three of which are in Brazil and three off the Eastern Coast of India. 

Regarding the three blocks considered under the partnership agreement located in India, after the technical studies, Petrobras chose to give up on the activities in two blocks, and expressed such an interest in December 2008, with reference to block MN-DWN-98/3 (operated by ONGC), and in December 2009, in relation to block KG-DWN-98/2 (operated by ONGC in partnership with Statoil and Cairn). 

The Company reports that activities related to the assessment of granted areas, both in Brazil and abroad, are a part of the normal course of its activities, and that according to the results obtained in the exploratory phase, it may or not choose to develop the project given the high investments and risks that are characteristic of the segment.

It is worth noting that the return of Petrobras' stakes in these blocks is a process that is still in progress. Petrobras has only expressed its interest in returning its stakes in the blocks and is currently waiting for formal approval from the Indian government in order to materialize this. 

About the the third block (CY-DWN-2001/1), Petrobras remains actively involved in the partnership, since there are still analyses to be made and a well to be drilled. 

Finally, the Company emphasizes that investments in India are less than 0.05% of total investments foreseen in its 2009 to 2013 Business Plan, worth $174.4 billion, and less than 0.3% of the investments made by the international area, amounting to $16.2 billion for the period.