Rio de Janeiro, November 17 2009 � Petr�leo Brasileiro S/A � Petrobras announces it formalized with the BG Group, today, the incorporation of a joint venture to develop the FEED (Front End Engineering and Design) aiming to build an onboard natural gas liquefaction unit (ONGU). The plant is expected to operate in the Santos Basin's Pre-Salt Complex, located 300 km off the coast. The ONGU unit is one of the technological transportation solutions that can be used to transport the natural gas produced in the pre-salt layers.

Natural gas is traditionally liquefied in onshore units. Because of the distance between the coast and the areas where the Santos Basin's Pre-Salt Complex blocks are located, Petrobras decided to assess the possibility of installing an ONGU unit to transport natural gas production from these areas. In 2011, based on the technical and economic feasibility analysis of the FEEDs and of other alternative solutions, such as installing submarine gas pipelines, a decision will be made regarding the best option to transport the gas from the Santos Basin's Pre-Salt Complex.

Installed near the FPSOs, the ONGU plant will receive the associated gas and process and liquefy natural gas, butane, propane, and condensate. The unit's processing capacity will be up to 14 million cubic meters per day of associated gas. The ONGU will also store and transfer processed products to gas carrier vessels, which, in turn, will then transport it to the consumer market.

In the case of LNG, the product will be delivered to regasification terminals, where the natural gas is transformed from the liquid to the gaseous state and, finally, injected into the gas pipeline network. In Brazil, Petrobras' LNG regasification terminals are installed in Pec�m (state of Cear�) and in the Guanabara Bay (state of Rio de Janeiro).

Strategic for Petrobras and for the BG Group, the project will allow Santos Basin's Pre-Salt Complex gas reserves to be monetized, ensuring flexibility to supply the internal market and the possibility of exporting the product in the spot market during periods of low demand from Brazilin thermoelectric capacity.

Today's decision of incorporating a joint venture blends the two companies' internationally renowned expertise: Petrobras in deepwater oil and natural gas exploration and production; and BG Group in producing and trading liquefied natural gas (LNG).

Sincerely,

Investors Relations