Conference Call / WebcastRESULTS ANNOUCEMENT1st Quarter 2007(Brazilian Corporate Law)

Almir BarbassaCFO and Investor Relations Officer

May 15th 2007

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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

Disclaimer

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1,8001,823

4Q06 1Q07

• Decrease of 1.2% in the 1Q07 due to scheduled stoppage in P-37 platform (Marlim), from January 15 to February 05, 2007.

Δ = -1.2%

DOMESTIC OIL AND NGL PRODUCTION

thou

s. b

pd

3

TOTAL OIL, NGL AND NATURAL GAS PRODUCTION

Thous. boed

2,279

2,3342,304

2,273

2,305

1Q06 2Q06 3Q06 4Q06 1Q07

Δ = 1.2%

Δ = -1.2%

• Decrease in the 1Q07 production due to the scheduled stoppage in platform P-37; problems in the production growth acceleration in FPSO-Capixaba (Golfinho) and P-34 (Jubarte) units, preventing a better performance in the quarter;• 3% decrease in international production due to the interruption of activities in Ecuador caused by popular unrest.

4

E&P – OIL PRICES

47.7948.70

58.6958.20

53.69

46.05

54.24

43.04

37.48

56.9

47.50

51.59

61.53 61.75

69.62 69.49

59.68 57.75

55.2456.08

66.0764.74

57.5952.756.39

49.3344.19

1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07Average Sales Price Brent (aver.) OPEC Basket

US$

/bbl

•Decrease in Petrobras’ average oil sales price aligned to the international market.

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1,812 1,7951,753

1,696

1,623

1,684

1,7461,711

1,652

1,781

85899391 90

777881 7980

1,50 0

1,6 50

1,8 0 0

1,9 50

1T06 2T06 3T06 4T06 1T0750

6 0

70

8 0

9 0

D o mest ic o il pro ducts pro ductio n Oil pro ducts sales vo lume

P rimary pro cessed installed capacity - B razil (%) D o mestic crude o il as % o f to tal

REFINING IN BRAZIL AND SALES IN THE DOMESTIC MARKET

%Thous. barrels/day

• Reversal in the oil products production, which increased 5%, due to higher utilization factor (+ 5 p.p.);• Decrease in the volumes of oil products sold in the 1Q07 due to seasonality.

6

20

40

60

80

100

Dec-04 M ar-05 Jun-05 Sep-05 Dec-05 M ar-06 Jun-06 Sep-06 Dec-06 M ar-07

ARP Brasil (US$/bbl)Average Brent Price (US$/bbl)ARP USA (US$/bbl w/sales vo l.in Brasil)

68.8

59.7

70.6

4Q06Avrg

1Q06Avrg

70.2

61.8

71.0

AVERAGE REALIZATION PRICE - ARP

67.3

57.8

71.5

1Q07Avrg

• Steady ARP Brazil confirms our policy of aligning the domestic prices to international benchmarks in the mid/long term;•Due to Real appreciation, ARP in Reais presented a slight decrease (from R$ 152,10 to R$ 150,97, or -0.74%).

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5.200

7.460

10.225

26.696

41.041

4.131

8.582

10.993

23.629

38.894

Net Income

Operational Profit

EBITDA

GOGS

Net Revenues

4Q06 1Q07

-11.5%

15.0%

R$

mill

ion

- 20.6%

- 5.2%

INCOME STATEMENT 1Q07 VS 4Q06

7.5%

• Drop in net revenues due to lower sales volumes of oil products and lower average realization prices;• Drop in COGS as a result of lower oil prices, lifting cost, government participation, refining cost and import

volumes • Increase in the Operating profit due to better cost structure aligned with stable operating expenses even

considering the non-recurring expense of R$ 1 billion related to renegotiation of terms of the Petros Retirement Fund Plan;

• Net income was negatively affected by the financial result (FX variation) and the absence of fiscal benefit, when compared to the previous quarter.

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NET INCOME

20(84)Gains from investments in subsidiaries(72)(950)Net Financial Expenses

7.4608.582Operating Profit

5.200 4.131 Net Income(342)(476)Minority Interest

(1,901)(2,968)Income Tax / Social Contribution35 27 Non-operating Income (Expenses)

7.408 7.547 Operating profit (after fin. exp.)

4Q-20061Q-2007

• Higher net financial expenses due to FX variation on international assets;• Net Income in the 1Q07 did not reflect fiscal benefits from the payment of interests in own-capital occurred in the previous quarter.

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1.428

356

818

1.728

1.550

1.844

299

655

1.641

1.415

Others

Taxes

Exploratory Costs

General andAdministrative

Sales Expenses

4Q06 1Q07

29.1%

OPERATIONAL EXPENSES ANALYSIS 1Q07 VS 4Q06

R$

mill

ion

-8.7%

-5.0%

-19.9%

-16.0%

• Sales: highlights for the decrease of expenses in the distribution and international segments;• G&A: lower expenditures with wages and benefits;• Exploratory Costs: decrease due to high level of dry wells write-offs in the 4Q06 (R$ 125 million); • Others: increase caused mainly by the financial incentive paid to the Petros Plan participants, as a

counterpart for the acceptance of the renegotiation of its terms (R$ 1.040 million).

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CHANGE IN QUARTER REVENUES(1Q07 VS 4Q06)

1,8001,823 Domestic Oil, NGL and Condensate – thousand bpd

Exploration & Production –Operating Profit Change– R$ millions

• Increase of the Operating Profit due to lower production costs and gov. participation, partially offset by the production decline, as well as lower domestic oil average selling and transfer prices.

7.289 2447811.024 433 354

8.075

4Q06 Oper.Profit

Price Effect onNet Revenue

Avrg Cost Effecton COGS

Volume Effecton Net Revenue

Volume Effecton COGS

Oper. Exp. 1Q07 Oper.Profit

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CHANGE IN QUARTER REVENUES (1Q07 VS 4Q06)

Downstream – Change in Operating Profit – R$ million

• Increase of 46% in Operating Profit mainly due to reduction in the oil purchase / transfer cost in the 1Q07;

• This increase was partially offset by the reduction in selling volumes in the domestic market.

2.188 57

1.4741.8081.456

157 3.210

4Q06 Oper.Profit

Price Effect onNet Revenue

Avrg Cost Effecton COGS

Volume Effecton Net Revenue

Volume Effecton COGS

Oper. Exp. 1Q07 Oper.Profit

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NET EXPORTS OF OIL AND OIL PRODUCTS

Imports (thous barrels/day)Exports (thous barrels/day)

187 thous. bpd Volume Surplus and US$ 528 million Financial in the 1Q07

344 354 373 408 340

115 88137 132

97

1Q06 2Q06 3Q06 4Q06 1Q07

510442459 437540

262 267355

454 377

270 269221

215247

1T06 2T06 3T06 4T06 1T07Oil Oil Products

624532 536 576

669

• 1Q07 trade balance reflected seasonal demand, increase in the oil products production and stability in oil production.

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1,8001,823

NET INCOME CHANGE – R$ million (1Q07 VS 4Q06)

Domestic Oil, NGL and Condensate – thousand bpd

• Increase in the gross margin, provided by lower oil prices, government participation and import volumes was insufficient to offset extraordinary expenses related to the financial incentive paid to retirement plan participants, FX variation effects in the financial results and increase in tax burden.

5.200 2.147

3.067 202 990

1067

1344.131

4Q06 Net Income Revenues COGS Oper. Exp. Fin. Exp, NonOper. and Others

Taxes Minority Interest 1Q07 Net Income

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R$ million 03/31/2007 12/31/2006

Short Term debt (1) 11.879 13.074

Long Term Debt (1) 32.540 33.531

Total Debt 44.419 46.605

Cash and Cash Equivalents 20.463 27.829

Net Debt (2) 23.956 18.776

17% 16%

19%

27% 28%

20%

24%

32%

26%

18%

26%

23%19%

19%

28% 27%

jun/05 set/05 dez/05 mar/06 jun/06 set/06 dez/06 mar/07

Net Debt/Net CapitalizationShort-Term Debt/Total Debt

(1) Includes debt contracted through leasing contracts (R$ 2.259 million in 03.31.2007 and R$ 2.540 million in 12.31.2006).(2) Total debt - cash and cash equivalents

LEVERAGE

Petrobras’ Leverage Ratio

• Increase in Net Debt due to cash/cash equivalent reduction as a result of interest on own capital payment (R$ 5,9 billion).

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CONSOLIDATED CASH FLOW STATEMENT

R$ million1Q07 4Q06

(=) Net Cash from Operating Activities 7.493 13.244 (-) Cash used in Cap. Expend. (7.951) (12.061) (=) Free Cash Flow (458) 1.183 (-) Cash used in Financing and Dividends (6.908) 2.127 Financing (1.035) 2.128 Dividends (5.873) (1) (=) Net Cash Generated in the Period (7.366) 3.310 Cash at the Beginning of Period 27.829 24.519 Cash at the End of Period 20.463 27.829

• Cash decrease due to dividends and financing payments.

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INVESTMENTS

• Highlight: international capex due to construction of 2 drilling rigs (R$ 636,4 million) and GOM fields’development (R$ 122,6 million).

1Q07 %Direct investments 7.385 88 Exploration & Production 3.986 48 Downstream 1.040 12 Gas & Energy 197 2 International 1.922 23 Distribution 107 1 Corporate 133 2 Special Purpose Companies (SPCs) 861 11 Ventures under Negociation 54 1 Project Finance - - Total Investments 8.300 100

R$ million

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7.246.64

6.126.327.20

1TQ06 2Q06 3Q06 4Q06 1Q07

Δ = -0.6% or US$ 0.04

US$/bbl

DOMESTIC LIFTING COSTS WITHOUT GOVERNMENT PARTICIPATION

• Labor cost reduction duet to 4Q non recurring expenditures, retroactive to sept/06, as a result of the 2006/2007 Collective Agreement

• Lower material utilization for repairs and well intervention and substitutions.

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3.0 3.4 4.3 6.0 5.4 5.4 6.1 6.3 6.1 6.6 7.2 7.24.0 5.1

6.47.6 8.5 9.8 10.0 11.0 11.4 11.5 10.4 9.0

57.859.769.569.6

24.828.8

38.2

47.551.6

61.556.9

61.8

-4

6

16

26

2002 2003 2004 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07

US$

/boe

-20

0

20

40

60

Lifting Cost Gov. Take Brent

7,08,5

10,7

13,6 13,915,2 16,1

17,3 17,518,1 17,6

16,2

65%64% 64%

59%

59%

57%

56%

LIFTING COSTS INCLUDING GOVERNMENT PARTICIPATION

•Lower government take due to decrease in average domestic oil prices, linked to international benchmarks.

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2.542.71

2.48

2.071.90

1Q 06 2Q 06 3Q 06 4Q 06 1Q 07

REFINING COSTS IN BRAZIL (US$bbl)

Δ = -6.3% or US$ 0.17

• 6.2% decrease compared to the previous quarter reflecting the lower costs with personnel (wages and benefits) as a result of the bonus payment in the 4Q06 Collective Bargaining Agreement.

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COSTS: WORLD MARKET TRENDS

• Rising trend beginning in 2002/2004, affecting both the oil industry services and raw material (steel and iron for the construction of platforms and drilling rigs)

Source: CERA

2006

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QUESTION AND ANSWER SESSIONVisit our website: www.petrobras.com.br/ri

For more information contact:Petróleo Brasileiro S.A – PETROBRAS

Investor Relations DepartmentRaul Adalberto de Campos– Executive Manager

E-mail: petroinvest@petrobras.com.brAv. República do Chile, 65 – 22o floor

20031-912 – Rio de Janeiro, RJ(55-21) 3224-1510 / 3224-9947