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PRESS RELEASE

PRSI Continues Safety Improvements based on OSHA Audit

Published on 12/30/2010

PASADENA, TX – PRSI is actively working to address and correct some issues brought to light through a recent OSHA (Occupational Safety and Health Administration) audit, the results of which were released on December 29, 2010. Based on one alleged citation with 21 items in the report, OSHA proposed $115,650.00 in fines. The refinery places top priority on safety and environmental compliance, and will promptly schedule a meeting with OSHA to discuss the alleged items.

An HSE Operational Excellence Program began in June of 2009 at PRSI, emphasizing continual improvement in operations and procedures. The program highlights employee training, behavioral based safety, enhanced supervisory training, and updating of procedures, all of which lead to an increased and sustainable health and safety compliance.

PRSI, located on the Houston Ship Channel, is an independent refiner and marketer of petroleum products, including petrochemical feedstock, with a related crude oil capacity of just over 100,000 barrels per day.

CONTACT Maggie Edinger Hill & Knowlton (212) 885-0307 maggie.edinger@hillandknowlton.com

Arbitrage chamber sets the put option price for the Pasadena Refinery

Published on 4/16/2009 at 9:12:25

The decision handed down in an arbitral process – carried out pursuant to the rules set forth by the International Centre for Dispute Resolution – set the amount of $466 million, to be paid by Petrobras America (a wholly-owned Petrobras subsidiary) to Transcor Astra Group (Astra) as a result of the latter having exercised its put option for 50% of its interests in Pasadena Refining System Inc (PRSI) and in the PRSI Trading Company.

The amount will be paid in three installments. The first one, due on April 27 2009, will be for $296 million. The two subsequent ones, for $85 million each, are due in September 2009 and September 2010. Petrobras, by means of Petrobras America and its affiliates, will now hold 100% of PRSI, which controls the Pasadena refinery, in Texas, and of PRSI Trading, a company incorporated to purchase feedstock, including crude oil for processing, and to market the refinery’s derivatives production.

Petrobras, via its attorneys and consultants, is analyzing the arbitral decision.

US Court reasserts the decision about Pasadena Refinery

Published on 3/12/2010 at 8:50:48

Petrobras informs that on March 10, 2010, the United States District Court for the South District of Texas confirmed an arbitration award issued on April 10, 2009 that found that Petrobras America Inc. (PAI), an indirect affiliate of Petróleo Brasileiro S.A. – Petrobras, acquired 100% of the interest held by Astra Oil Trading NV (Astra) in the Pasadena Refining System, Inc. (PRSI) and PRSI’s related trading company (Trading Company).

In October 2008, an arbitration panel issued a preliminary decision establishing the validity of certain put-options exercised by Astra and its affiliates in PRSI and the Trading Company. The preliminary arbitral decision found that a closing should have occurred as of September 17, 2008, resulting in PAI, an indirect subsidiary of Petróleo Brasileiro S.A. – PETROBRAS (Petrobras), owning 100% of PRSI and the Trading Company and controlling such entities.

In April 2009, the arbitration panel issued a final decision, reaffirming the rulings in its preliminary decision and setting the put-option exercise price for PRSI at US$296 million. The purchase price for the Trading Company was based on the market price of its inventory as of July 1, 2008, totaling approximately US$170 million. The purchase prices for PRSI and the Trading Company jointly amount US$ 466 million.

The arbitrators also found that Astra was entitled to reimbursement of Astra’s proportionate share of the payment of certain Trading Company debts, interest as well as attorneys’ fees and arbitration costs (totaling US$ 173 MM). The full amount set forth in the arbitral decision was approximately US$639 million. The impacts of such contingency have been considered on the first quarter 2009 balance sheet, as provided in note 11.4 of the Quarterly information-ITR 2009 (Similar to 10-Q) – 3rd Quarter 2009 – released to the market by Petrobras on November 13, 2009.

Later in April 2009, Astra delivered to PAI the stock power and assignments relating to the PRSI shares and the Trading Company partnership interests at issue in the arbitration.

PAI is considering to appeal against the March 10, 2010 ruling.

Arbitrage chamber sets the put option price for the Pasadena Refinery

Published on 4/16/2009 at 9:12:25

Arbitration Chamber hands down a decision regarding the Pasadena refinery

Published on 10/31/2008 at 8:47:36

Petrobras informs that an interim award issued in connection with the arbitration process brought to the International Centre for Dispute Resolution between its wholly-owned subsidiary Petrobras America Inc. (PAI) and Astra Oil Trading NV (Astra), which own the Pasadena Refining System Inc. – PRSI, located in Texas, handed down on October 24 2008, held that the put option was validly exercised by Astra against PAI, for the sale of its stakes in PRSI to Petrobras America.

The award also considered that the exercise of the put option by its affiliates in PRSI Trading Company LP, an entity formed to market, sell, and distribute the crude oil and refined products for the refinery, was valid.

If the interim award is maintained, PAI and its affiliates will remain with 100% of the stakes in both companies.

The exercise price to be paid was reserved for future proceedings.

Notwithstanding the lack of a price determination, the companies are working together to transition all operational, managerial and financial responsibilities to PAI immediately.

Petrobras informs about litigation involving refinery in the US

Published on 7/3/2008 at 9:42:09

Petrobras announces that initiated arbitrage proceedings against Transcor Astra Group on June 19, 2008 to resolve issues regarding Transcor Astra's failure to comply with its obligations regarding the operation of two Petrobras/Transcor Astra jointly owned U.S. companies in Texas, PRSI and PRSI Trading Company, which operate a refinery and trading company.

In response to Petrobras' initiatives, on July 1, 2008, Transcor Astra Group filed litigation in the U.S. against Petrobras and purported to exercise its put options related to Transcor Astra's interests in those entities and demand Petrobras purchase its 50% stake in them.

Petrobras considers Transcor Astra's claims to be without merit and plans to vigorously defend against the Transcor Astra action.

Purported Exercise of Put by Transcor Astra

Petrobras’ U.S. subsidiary Petrobras America, Inc. and affiliates collectively own 50% of PRSI and of PRSI Trading Company. Transcor Astra Group owns the remaining 50%.

The Transcor Astra entities hold options under the PRSI Shareholder Agreement and the Trading Company Articles of Incorporation, exercisable under certain circumstances, to put their interests in PRSI and the Trading Company to the respective Petrobras subsidiaries that own interests in PRSI and the Trading Company, thereby requiring the purchase of such interests by the respective Petrobras subsidiaries.

Due to recent failures by Transcor Astra to abide by its obligations under the PRSI Shareholder Agreement and the Trading Company's Articles of Incorporation, on June 19, 2008, Petrobras exercised its right to approve the essential actions to give continuity to the entities as provided for in the agreements.

In furtherance to some disagreement between the shareholders as to various matters in the refinery and Trading Company governance, on July 1, 2008, Transcor Astra purported to exercise its put options to require the purchase by Petrobras of Transcor Astra’s 50% of PRSI and the Trading Company.

The price payable for the option is determined according to a mechanism contractually prescribed.

Petrobras is analyzing the terms of Transcor Astra’s purported put option requirement with the assistance of its lawyers and other advisors.

Petrobras' president formalizes refinery purchase in the US

Published on 9/20/2006

Arbitrage chamber sets the put option price for the Pasadena Refinery

Arbitrage chamber sets the put option price for the Pasadena Refinery

Petrobras' president, José Sérgio Gabrielli de Azevedo, formalized, Tuesday (19/9), the company's purchase of a 50% participation in the Pasadena refinery, in Texas, United States.

Astra Oil Company, a subsidiary of Belgian Compagnie Nationale a Portefeuille AS, is Petrobras' partner in the business and holds the remaining 50%. The total investments were approximately $360 million.

Petrobras America's general manager, Renato Bertani, and directors Nestor Cerveró (International) and Paulo Roberto da Costa (Supply) were present at the agreement signing ceremony.

The refinery's current 100,000-barrel-a-day processing capacity will be stepped-up. To achieve this goal, Petrobras and Astra are undertaking studies to double production and adapt the refinery to process the heavy oil imported from the Campos Basin to convert it into high-quality byproducts suitable for the American environmental norms.

By purchasing half of the Pasadena refinery, Petrobras starts participating in the American downstream (refining and marketing) segment, pursuant to the company's Strategic Plan.

Before signing the agreement, the Petrobras executives held a press conference for some 30 American and Brazilian journalists at Petrobras America's main office, in Houston.

Gabrielli highlighted to the press the investment the company has made in the American sector of the Gulf of Mexico, a region where the company purchased the biggest number of blocks auctioned in last month's Lease Sale 200.

Totaling $45,483 million, offered for 34 tracts, Petrobras was also the top bidder insofar as the total value invested is concerned.

In this auction, Petrobras sought to consolidate its position in two of the areas where it is currently focusing its activities: ultra-deepwaters in the Keathley Canyon quadrant and deepwaters in the Garden Banks area.

Also last month, Petrobras America announced the acquisition of an additional 25% participation in the Cascade field, and of another 26.67% of the Chinook field, belonging to BHP Billiton, both located in the American sector of the Gulf of Mexico.

Petrobras also decided to acquire the 15% participation Hess held in the Chinook field. After wrapping these transactions up, the Company will hold 50% of the Cascade and 71.67% of the Chinook fields. Petrobras will be the operator in the development of the two fields. The remaining participations in Cascade and Chinook will continue with Devon and Total, respectively.

Developing Cascade and Chinook is greatly important for the oil industry in the Gulf of Mexico. In addition to producing oil from plaeogenic reservoirs never before developed at this water depth, a development concept based on a FPSO-type production unit will be used there. This is a novelty in the American Gulf of Mexico waters, although this technology has been commonly employed by Petrobras in its offshore operations in Brazil.

Petrobras is also the operator of a gas field called Cottonwood, located in the Garden Banks block, where it holds 80% participation. The production project consists in the underwater completion of the wells and their interconnection to production the infrastructure available in shallower waters. Production is expected to kick off in early 2007.

Between 2007 and 2011, Petrobras will invest $12.1 billion abroad. The Exploration & Production operations will get 70.2% of the investments, while the second biggest part of the investments - 24.8% - will be used in the refining and marketing activities.

Of the $12.1 billion, 28% ($3.3 billion) will be allocated in Latin America, 23% ($2.8 billion) in North America, 16% ($2 billion) in Africa, and 33% ($4 billion) in new projects.