Dear Mr/Mrs ..,

Petrobras' Proved Reserves in 2008

(Rio de Janeiro, January 15, 2009). - PETR�LEO BRASILEIRO S/A - PETROBRAS, [Bovespa: PETR3/PETR4, NYSE: PBR/PBRA, Latibex: XPBR/XPBRA, BCBA: APBR/APBRA], a Brazilian international energy company, announces its proved reserves of oil, condensate and natural gas in Brazil and abroad in 2008, according to the Society of Petroleum Engineers - SPE  and Securities and Exchange Commission - SEC criteria.

The pre-salt discoveries in the Santos Basin are still under evaluation and are not being considered for the calculation of the Proved Reserves according to both criteria.

Proved Reserves in Brazil

According to ANP/SPE criteria:

On December 31st, 2008, the Proved Reserves of oil, condensate and natural gas in the fields under concession of Petrobras in Brazil amounted to 14,093 billion barrels of oil equivalent (boe), representing an increase of 1.2% in relation to 2007.

During 2008, 920 billion boe were incorporated into Proved Reserves, with production over the same period amounting to 747 million boe, as shown in the following table:

For each barrel of oil equivalent extracted in 2008, 1.23 boe were incorporated into Proved Reserves, resulting in a Reserve Replacement Index (RRI) of 123%. The Reserve/Production (R/P) ratio in Brazil was 18.9 years.

The main appropriations in 2008 included:

�         Discoveries in exploratory blocks - Camarupim Norte and Jacutinga, by the Esp�rito Santo Exploration & Production Business Unit (UN-ES);

�         Discoveries in exploratory blocks incorporated to existing production fields -  Sa�ra,  C�rrego  Cedro  Norte, Guriri, and Rio Mariricu, by the Esp�rito Santo Exploration & Production Business Unit (UN-ES), and S�o  Miguel dos Campos, by the Sergipe and Alagoas Exploration & Production Business Unit (UN-SEAL);

�         Appropriations in existing fields as a result of the higher recovery factor- Marlim Sul, Barracuda, and Roncador, by the Rio de Janeiro Exploration & Production Business Unit (UN-RIO); Marlim, Badejo, and  Espadarte, by the Campos Basin Exploration & Production Business Unit (UN-BC); Baleia Franca, Cachalote, and Jubarte, by the Esp�rito Santo Exploration & Production Business Unit (UN-ES); and Urugu�, by the Santos Basin Exploration & Production Business Unit (UN-BS).

�         The pre-salt discoveries in Esp�rito Santo added 128 million boe to the reserves.

According to the SEC criteria:

According to the SEC criteria, 1.401 billion boe were incorporated in 2008 reserves, equivalent to 1.8 times the year production of 747 million boe. Regarding the 2007 reserves, the Brent price of the last day of 2008 is used to revaluate the reserves.  The oil price dropped 60% during the year, decreasing from $96.02/bbl in the end of 2007 to $36.55/bbl in the end of 2008. Consequently, the proved reserves suffered a loss of 1.198 billion boe. The incorporation that was made in the period (1.401 billion boe) represents 72% of the total reductions in the year (1.945 billion boe).

As a result of this, considering the incorporation, the year's production, and the loss with the price reductions, as per the SEC's criteria, the proved reserves on December 31 2008 were 10.274 billion boe.

On December 31st, 2008, Proved Reserves in Brazil were 5% lower than 2007 levels and the RRI was 27%. The Reserve/Production (R/P) ratio was 13.8 years. 

The pre-salt discoveries in Esp�rito Santo also contributed to the Proved reserves according to SEC criteria.

The main differences between the SEC and the ANP/SPE criteria, are due to the different assumptions used (oil price assumption, concession term and gas reserves with contracts not declared) and the non-booking of projects in the initial stages of production development in the company accounts.

International Proved Reserves

According to the SPE criteria:

On December 31st, 2008 Proved Reserves of oil, condensate and natural gas, abroad were 0.992 billion boe, representing a decrease of 9.0% in relation to 2007.

During 2008, the increase of proved reserves can be attributed to improving recovery factors in Argentina and Peru oil fields and the addition of Cascade field reserves in the United States. However this increase was offset by production activity, a decrease of assets in Ecuador and the revaluation of Nigeria reserves, resulting in a 98 million boe reduction of 2008 proven reserves, as shown below:

According to SPE criteria, international Reserve/Production (R/P) ratio was 12.1 years.

According to SEC criteria:

On December 31st, 2008, the oil, condensate and natural gas proved reserves were 917 million boe. This volume represents an increase of approximately 3.5% compared to the preceding year (886 million boe).

During 2008, the addition of proved reserves, mainly in Bolivia, Argentina, Nigeria and Peru, offset the decrease of proved reserves in Ecuador and general production activity, as shown below:

Using the same criteria, the Reserve/Production (R/P) ratio is 11.3 years.

Some of the differences between the SPE and SEC reserve numbers include:

• The Cascade field, offshore the Gulf of Mexico, was included only in SPE reserve figures and;

• Not all of the volumes in Nigeria can be declared as reserves based on SEC criteria.

Considering the possibility of changes in Bolivian legislation, the proved reserves in this country could be reduced in its totality, which represents, approximately, 2% of total Petrobras proved reserves.

Proved Reserves of Petrobras in 2008 (Brazil and International)

According to ANP/SPE criteria:

On December 31st, 2008 Petrobras' Proved Reserves of oil, condensate and natural gas amounted to 15.085 billion de boe, a 0.5% increase compared to last year, distributed as shown:

According to the SPE criteria, 904 million boe were incorporated into Proved Reserves in 2008 and 829 million boe were produced, resulting in an increase of 75 million boe in relation to 2007 proved reserves (15.010 billion boe). Consequently, for each barrel of oil equivalent produced during 2008, 1.09 barrels were incorporated into Proved Reserves, resulting in a Reserve Replacement Index - RRI of 109%. The Reserves/Production ratio (R/P) was 18.2 years.

According to the SEC criteria:

Proved reserves on December 31st, 2008 amounted to 11.191 boe, distributed as follows:

During 2008, 1.401 billion boe in additions to domestic reserves (equivalent to 1.8 times domestic production) were offset by a loss of 1.198 billion boe due to declines in the price of Brent, with oil ultimately falling to US$ 36.55/bbl on December 31, 2008. Proved Reserves thus declined 4.4% vs. 2007. This corresponds to a Reserve Replacement Index - RRI of 38% and the Reserves/Production ratio (R/P) was 13.5 years.

Petrobras clarifies that the hydrocarbon reserve properties belong to their respective National States.

Sincerely, 

Investor Relations Department