1

Almir G. BarbassaChief Financial OfficerRio de Janeiro, September 2008

Supply Chain for the Pre-Salt Development

2

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 with the SEC.

CAUTIONARY STATEMENT FOR US INVESTORS

3

2006 2007 LTM Net Revenues 72.3 87.7 108.6 EBITDA 22.9 25.3 31.8 2006 2007 1H08 Capex 14.9 21.0 24.3 Total Debt(1) 21.3 21.9 25,9 Cash & Cash Equivalents 12.7 7.0 6.6 Net Debt 8.7 14.9 19.2 Total Equity 44.3 65.2 83.0 Total Assets 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

13%

87%

Brasil Internacional6%4%

1%

2% 26%

58%

2%

65.1

29.6

6.74.3

2.62.6

E&P RTC G&EPetrochemical Distribution Corporate Biofuel

1.5 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

5

2007 2006 2005Cash Flow from Operating Activities

Net Income $ 13.138 $ 12.826 $ 10.344Depreciation $ 5.544 $ 3.673 $ 2.926Other (inc.W.C.) $ 3.982 $ 4.578 $ 1.845

CFFO $ 22.664 $ 21.077 $ 15.115Net Cash used in Investing Activities

Capex and other $ (20.768) $(14.470) $ (10.376)Acquisitions $ (1.551) $(416)Puchase Marketable Seceurities $ (1.707) $ 205 $ 169

Total Investments $ (24.026) $(14.681) $ (10.207)Cash Flow From Financing Activities

Amortizations $ (6.670) $(4.167) $ (2.652)Additions to Debt $ 4.542 $ 2.957 $ 2.131Dividends and other $ (3.860) $ (3.144) $ (2.104)

Net from Financing $ (5.988) $ (4.354) $ (2.625)Increase (decrease) in cash andcash equivalents $ (7.350) $ 2.042 $ 2.283

$ 1.649 $ 775 $ 732

YEAR ENDED DECEMBER 31

Effect of exchange rate changes oncash and cash equivalents

CASH FLOW

6

BALANCED VERTICAL INTEGRATION

PetrobrasOther Companies

Dutos existentesRefinariaTerminal 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)

7

PRE SALT PROVINCE

hinge line

Well Tested HC CampusExploratory blocks Pre-salt Reservoirs

Total area of the Province: 112,000 km2Area under concession: 41,000 km2 (38%)Area not under concession: 71,000 km2 (62%)Area with Petrobras interest: 35,000 km2 (31%)

8

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

9

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%

10

Mauá-JurongNiterói/RJ2012ContractedOil:100.000 bpd

Gas: 6MM m3/diaRoncadorP-62

Mauá-JurongNiterói/RJ2009Under constructionGas: 15MM m3/diaMexilhãoPMXL-1

Atlântico SulSuape/PE - Rio Grande/RS2013Hull contracted. Basic

project under revision.Oil: 180.000 bpdGas: 6MM m3/diaRoncadorP-55

ProsafeKeppels - Cingapura2S08Under constructionOil: 35.000 bpd

Gas: 10 MM m3/diaCamarupimCidade São Mateus*

2011

2011

2S08

2S08

2S08

START-UP

Oil: 180.000 bpdGas: 2MM m3/dia

Oil:100.000 bpdGas: 6MM m3/dia

Oil: 180.000 bpdGas: 6MM m3/dia

Oil: 180.000 bpdGas: 6MM m3/dia

Oil: 100.000 bpdGas: 3,5 MM m3/dia

CAPACITY

Brasfels -FSTP Keppel & Technip - Angra/RJ

Under construction(P-51 Clone)Marlim SulP-56

SBMShipyard N/AContractedJubarteP-57

QuipRio Grande/RSUnder construction Marlim LesteP-53

Nuclep/BrasfelsAngra/RJUnder constructionMarlim SulP-51

ModecSipem - DubaiUnder constructionJabutiFPSO Cidade

de Niterói*

SHIPYARDSTATUSFIELDUNITS

* Leased

E&P: UPCOMING UNITS

11

The Pre-Salt Supply Chain Challenge

12

CHALLENGESEquipments Human ResourcesCost Inflation

CRITICAL RESOURCES

HOW PETROBRAS IS DEALING

Aggressive bidding program for rigs, support vessels and anchor handlers, mainly new built unitsLong-term contract with service providersAnticipating the renew of current contractsSupporting the expansion of the suppliers installed capacityTraining programs for its own employees and for the supply chain workforce

13

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

14

Forecasted investments meet Petrobras’ needs regarding exploratory and production development portfolio

LEASED/ BEING LEASED

NEW VESSELS TO BE CONTRACTED

TO BE LEASED

26246359

Large Vessels (VLCC/Tankers)Supply VesselsFPSO/SSOthers (jack-ups, TLWP)Total

4412281

175

TOTAL

70146144

234

15

PETROBRAS EMPLOYEES

Number of employees

HUMAN RESOURCES

46.723 48.798 52.037 53.90462.266

68.931

80.931

2002 2003 2004 2005 2006 2007 2012

Participants in the Training Programs

2002 2003 2004 2005 2006 2007

774989 1.043

1.213

2.468

2.101

22,000 new employees since 2002 and 12,000 more up to 2012 The superior level professionals, who were recently admitted, without the required previous experience, spend up to a year in classrooms before starting to effectively work at the company

Forecasted demand for workers at Petrobras supply chain in Brazil

The Brazilian Government, with Petrobras support has a specific training program to meet this demand

ENGENEERING CONSTRUCTION &PROCUREMENT

CIVILCONSTRUCTION MAINTENANCE

112.625 workers

5.967 84.57615.020 7.062

16

Brasfels Shipyard at Angra dos Reis. P-51 and P-56 construction sites.

Rio Grande Shipyard under construction. Designed for platforms construction.

BRAZILIAN OIL INDUSTRY MAIN CHALLENGES

• Infrastructure Enhancement• Critical Items Supply (imports)• Drilling Equipment• Dynamic Positioning and

Propulsion Systems• Steel Manufacturing Process and

Supply• Skilled Work Force for

Construction and Operation• Financiability

17

As per 2007As per 2007

US$ 5.2 Bi

US$ 23.6 Bi

US$11.0 Bi

• Service providers

• EPC

•Shipyards

•Constructors

• Manufacturers

• Distributors

• Retailers

•Equipment

•Chemicals

•Spare parts

•Etc.

• Seismic

•Drilling

•Transport

•Etc.

• Platform

•Refinery

•Revamps

•Etc.

SUPPLY STRATEGIES FOR GOODS AND SERVICES

18

Items Units ofMeasurement

Total Amount( 2008 ~ 2015 )

Structural Steel t 1.252.000Air Coolers un 721Mooring Cables km 2.726Christmas Trees un 3.930Safety boats un 344Pumps un 10.264Lifeboats un 1.978Well Heads un 3.657Compressors un 969Fan Coils un 2.818Heat Furnaces un 252Heat Reformers Furnace un 8Eletric Generator un 439Crane un 220Flexible Pipes m 7.200Diesel Engines un 717Eletric Motors un 17.035Reactors un 317Storage Tanks un 2.824Process Towers un 732Eletric Transformers un 1.236Heat Exchangers un 5.913Pipe lines t 1.542.266Turbines un 441Production Rigs un 36Pressure Vessels un 4.829

RELEVANT EQUIPMENT DEMAND FOR THE PERIOD 2008 - 2015

19

Technological Development• Submarine sensor for measuring oil and grease degree in water;• Signal optical cable for well temperature and pressure monitoring;• Submarine optical connectors;• Intelligent sensor network for natural gas flow measurement;• Internal for piping in the radiation zone of industrial furnaces;• Co-generation system using biomass as fuel;• Submarine sphere valves;• Monitored Cathodic protection system for pipelines.

MATERIALS AND EQUIPMENT TO BE DEVELOPED IN NEXT YEARS

20

Attendance by Specific Demand

ACTION

• Drilling;

• Wokover services;

• Flexible lines and umbilical's laying services;

• Support to diving;

• Support to ROV vehicles;

• Support to mooring activities;

• Special vessels;

• Submarine interconnection services.

Services

E&P

Area

Petrobras Vision

CRITICAL SERVICES - OTHERS

21

COMPETITIVE NATIONAL SUPPLY OF GOODS AND SERVICES

imports

imports

Current Demand Future Demand

1. Increase productivity capacity of highly competitive sectors

2. Develop competition among medium competitive sectors

3. Incentive for new national entrants

4. Incentive for association between national and international companies

5. Incentive for settling down international companies in Brazil

National Industry

PATH

Increase in National Supply

Capacity of G&S

Suitability of National Supplier Park

GOOD AND SERVICES SUPPLY

22Sources: UFRJ – Economy Institute and Petrobras

ACTIONSExpansion of

Production CapacityEncourage domestic components production

Stimulate R&D in Brazil (not a priority)

12

34

5

6

CRITICAL EQUIPMENTS (Non Exhaustive)

Special Steel (for boilers) and forged steel

Pipelines in the range of 14-42 inches diameter with longitudinal welding

Polished connecting rod with guided centralizer (ongoing action)

Polyester Mooring cables;

Drilling pipelines and Fiber glass pipelines;

Electrical cables for CSP;

Control Systems for well control, oil and gas metering systems, drilling activities;

Offshore drilling rigs

Gravel Packing

Drilling bits

Production pipelines alloy coatings(13 Cr, Super13 Cr);

Pumps API standard

Dry Transformers

1

2

5

3

4

6

High Level Competitiveness Sectors

NATIONAL INDUSTRY COMPETITIVENESS DIAGNOSIS

23

ACTIONSExpansion of

Production Capacity

Encourage domestic components production

Stimulate R&D in Brazil (not a priority)

12

345

6

IMPORTED COMPONENTS(Non Exhaustive)

Christmas Trees: Forged Steel and electronics

Umbilical: Nylon 11, flexible inox tubes and kevlar

Flexibles Pipes: External Polymers and some steels

Package ImportBearings and automation

Steel plate and copper

A

B

A

B

Sources: UFRJ – Economy Institute and Petrobras

High Level Competitiveness Sectors

NATIONAL INDUSTRY COMPETITIVENESS DIAGNOSIS

24

ACTIONSExpansion of

Production CapacityTechnology update /

Association with foreign companies

EQUIPAMENTOS CRÍTICOS (Não exaustivo)

HCC Reactors (250-300 mm wall width, 40 Kgf/cm2);Boiler works with special alloys (reactors, towers, pressure vessels);Boilers (steam generators);Heat exchangers working with H2S traces (ASTM A 387 degree11);Structural packing for refining process towers;

Moto Compressor and bare compressor

Large Engines

Offshore crains

Special sphere submarine valves

Forged Valves

Basic projects and thermal projects

8

7

9

10

11

12

7

8

9

10

11

12

Sources: UFRJ – Economy Institute and Petrobras

Medium Level Competitiveness Sectors

NATIONAL INDUSTRY COMPETITIVENESS DIAGNOSIS

25

BetterGood

Similar10 – 15% more expensive

Electrical• Panels• Cables

Good20% more expensiveInstrumentation

Good30 – 40% more expensiveHeat Exchanger

Good30 – 50% more expensivePressure Vessels

Better30 – 50% more expensivePipes Accessories

Similar20 – 40% more expensivePipes

Better10 – 30% more expensiveValves

BetterSimilarPumps

Delivery Time(Brazilian market)

Price (Brazilian market )

Products Families

Source: ABEMI

Brazilian Market x International Market

COMPARATIVE TABLE OF PRICES AND DELIVERY TIME

26

For more information, visit our website: http://www.petrobras.com.br/ri/english