I.

INTRODUCTION

Founded in 1953, Petrobras is the

worlds 15th largest oil producing company and
a prominent supplier of oil products, with
refineries and tanking operations. It is a
Brazilian multinational energy company
located in Rio de Janeiro, Brazil. Also, it is a
world leader in development of advanced technology from deep-water and ultra-
deep water oil production. This corporation can produce more than 2 million
barrels or 320, 000 m3 of oil per day. Because of this big wave of production,
Petrobras became Brazils legal monopolist in the oil industry since 1997.
September 2010, the company raised $72.8 billion worth of shares on the BM&F
Bovespa stock exchange. Conducting the largest share sale in history at that
time, it immediately became the fourth largest company in the world measured by
market capitalization.

According to a featured article as of 2007, territory, technology and

governance were the three factors that served as Petrobras keys to success.
Territory because Brazil, ranked 17th worldwide in coastline length, has the
longest coastline in South America 4,650 miles and that coast is producing
prodigious amounts of oil. Technology because base from Lou Riveras travel to
Brazil during the 1980s, Petrobras engineers were working on concepts that
were far beyond the things being talked about at major conferences. It was a
Golden Age of research and innovation. Finally, Petrobras has been allowed to
succeed because of its corporate governance, which sets it apart from most
other national oil companies.

Petrobras is also recognized as the largest sponsor of arts, culture, and

environmental protection in Brazil. Among the environmental initiatives, Petrobras
is the main supporter of whale conservation and research through the Brazilian
Right Whale Project and the Instituto Baleia Jubarte (Brazilian Humpback Whale
Institute). Petrobras has been a sponsor of the Williams Formula-1 team. The
company employs the H-Bio process to produce biodiesel.

OBJECTIVES OF THE STUDY

1. To analyze the different processes used by Petrobras in refining crude oil.

2. To develop our knowledge and understanding on how petroleum products
are created.
3. To document the production, transportation and marketing of petroleum
products of Petrobras.
4. To assess the efficiency of Petrobras to refine high quality petroleum
products by different processes they are using.

COMPANY BACKGROUND

October 3, 1953, Brazilian president Getlio Vargas, created Petrleo

Brasileiro S. A. (Sociedade Annima) or Petrobras. Operating at Rio de Janeiro,
Brazil, Petrobras is a dominant player in the oil industry and is one of the largest
corporations in the world, with a market capitalization of $120 billion.
 Petrobras commenced its activities with the collection it inherited from the
old National Oil Council (pt) (Conselho Nacional do Petrleo, CNP), which,
however, preserved its inspection function for the sector.

Petrobras began processing oil shale in 1953, developing Petrosix

technology for extracting oil from oil shale. An industrial size retort began
processing shale in the 1990s. In 2006, Petrobras claimed that this industrial
retort had a design capacity to process 260 tonnes/hour of oil shale.

The oil exploration and production operations, as well as the remaining

activities connected to the oil, natural gas, and derivative sector, except for
wholesale distribution and retail via service stations, were a monopoly Petrobras
held from 1954 to 1997. Early on, in 1961, it was hurt by a pessimistic
government report concerning oil prospects in Brazil. Two years after the report's
release, Petrobras created its research center Cenpes.

Unfortunately, only ten years later, the company's period of growth was
halted by the 1973 oil crisis. The entire country was affected, and the "Brazilian
miracle", a period of rapid growth in the economy ended. Petrobras itself nearly
went bankrupt. But, then, a year later, the company discovered an oil field in
Bacia de Campos. This discovery boosted its finances and helped it restructure
nationwide. In 1975, Petrobras signed contracts partnering with private oil
contracts concerning exploration for more oilfields in Brazil. The company was
also affected by the 1979 energy crisis, but not as bad as in 1973.

During this period, Petrobras became the leader in derivative marketing in

Brazil, and, thanks to the companys performance, it was awarded the Offshore
Technology Conference (OTC) in 1992, one which it was granted again in 2001.

After 40 years of exploration, production, refining, and transportation of

Brazil's oil, Petrobras started to compete with other foreign and domestic
companies in 1997 when the government approved Law N.9.478. This law broke
Petrobras's monopoly and allowed for competitors to develop Brazil's oilfields.
The Brazilian government also created the National Petroleum Agency (Agncia
Nacional do Petrleo, ANP), responsible for the regulation and supervision of
activities in the petroleum industry, and the National Council of Energy Policies, a
public agency responsible for the development of public energy policy. That same
year, Petrobras reached the mark of producing 1 million barrels (160,000 m3) per
day. The company also executed agreements with other Latin American
governments and began operations outside of Brazilian domains.

In 2000, Petrobras achieved a world record for oil exploration in deep

waters. The exploration reached a depth of 1,877 metres (6,158 ft) below sea
level. The following year, an accident of an explosion at the P-36 Platform, the
world's largest oil platform, caused it sink on March 20. Petrobras lost about
1,500 tons of oil from this one accident alone.

In 2003, commemorating its 50 years, Petrobras doubled its daily

production of oil and natural gas, surpassing the mark of 2 million barrels
(320,000 m3). That same year, it acquired the Argentine company Perez
Companc Energa (PECOM Energa S.A.). This acquisition also included bases
in Bolivia, Peru, and Paraguay. Two years later, on December 19, 2005,
Petrobras announced a contract with the Japanese Nippon Alcohol Hanbai to
launch a joint-venture. The project, named Brazil-Japan Ethanol, would import
ethanol from Brazil, in a bid to develop an ethanol market in Japan.

On April 21, 2006, the company started production on the P-50 oil
platform, in the Albacora East Field at Campos Basin, which gave Brazil self-
sufficiency in oil production. The following year, the Tupi oil field in the Santos
Basin was discovered. This field could possibly be the world's largest. In 2007,
Petrobras inaugurated the Petrobras 52 Oil Platform. The 52 is the biggest
Brazilian oil platform and third in the world. In 2008, Petrobras announced the
discovery of the Jupiter field, off the coast of Rio de Janeiro.

The following year, Petrobras discovered what is possibly the world's third
largest oil field in the State of So Paulo. However, no evidence has been shown
for this so far. In 2009, Petrobras announced a market capitalization plan to
finance its future investments in ultra-deep oil exploration. The share offering in
the BM&F Bovespa Stock Exchange took place in September 2010, becoming
the largest market capitalization in history, with R$ 120,4 billion (US$69,97
billion) in shares issued. In 2009, it also acquired Esso's Chilean business.
Petrobras also finalized a $10 billion loan from China in return for a ten years
long supply of oil (150,000 barrels (24,000 m3) a day the first year, 200,000
barrels (32,000 m3) a day the nine others).
II. PROCESS

Petrobras turn crude oil into products that are essential to the entire
population's everyday life, working to meet the growing demand for oil products
in Brazil. They currently have 13 refineries, spread nationwide, and a shale
processing unit in Paran. In 2014, the refining park produces a total of 2.17
million bpd, such as diesel, gasoline, naphtha, jet fuel, liquefied petroleum gas,
and lubricants, among other substances used as feedstock for many other
products. This volume is 45,000 barrels of oil per day above the previous record,
set in 2013, with a 2.1 percent increase in the year.

Advanced Control Monitoring

 The Advanced Control Monitoring in Petrobras refineries serves a
twofold objective: to evaluate the efficiency of the installed applications, and to
manage the engineering staff aiming at the improvement of this efficiency. The
main benefits that can be obtained from advanced control are:

Improvement in product quality;

Increased yields of the most valuable products;
Increase in unit feed flow rate;
Energy savings;
Improved operational stability;
Increased unit operational factor by protecting the process from
violating operational constraints.

Main Refining Stages

Producing oil products from oil involves, basically, three main processes:

1. Distillation
In Petrobras, distillation is the process of separating oil products:
The oil is heated at high temperatures until evaporating. This vapor
returns to a liquid state as it cools at different levels within the distillation
tower. At each level there is a container that collects a particular oil
product.
 Refining starts in Petrobras when crude oil is distilled in the crude oil
distillation unit (CDU). The various components of crude oil have different sizes,
weights and boiling temperatures and because they have different boiling
temperatures, they can be separated easily by the process called distillation.
The process begins when crude oil is heated to a high temperature.
Heating is usually done with high pressure steam to temperatures of about 1112
degrees Fahrenheit / 600 degrees Celsius. When the mixture boils, lightest
materials where first formed like propane and butane and rises to the top of the
first atmospheric column. Medium weight materials, including gasoline, jet and
diesel fuels, condense in the middle. Heavy materials, called gas oils, condense
in the lower portion of the atmospheric column. The substance with the lowest
boiling point will condense at the highest point in the column; substances with
higher boiling points will condense lower in the column.
Heavy distillate materials will be further refined to reduce its boiling
temperature to make various products.
 2. Conversion

Conversion is the process that transforms the heavier, lower value oil
parts into smaller molecules, giving rise to the noblest oil products. This
increases oil utilization.

In the catalytic cracking process, the heavier particles produced in the

distillation of oil are broken down into smaller molecules by the action of the
catalyst particles, a solid sand-like material that is made of fluid (Fluid Catalytic
Cracking), which generates products like gasoline and GLP. This process is
carried out inside a converter and generates an accumulation of coke, that is, a
carbon residue, on the surface of the catalyst. As the coke deactivates the
catalyst, it is necessary to burn off this residue so that the catalyst can be
reactivated. This burning is done by means of injecting air, which generates a
gas containing between 10 and 15% of CO2 and which is released into the
atmosphere.
 To capture this CO2 before its emission into the atmosphere, Petrobras
has developed a technology, oxicombustion, which has the potential to reduce
the carbon dioxide in the Refining area by about 37%, in addition to costing about
50% less than traditional technology. Studies to develop this technology began in
2004. Since then, laboratory tests were carried out by Petrobras and the Federal
University of Rio de Janeiro, acting in partnership. Finally, the technical viability
was demonstrated in the Petrobras research and development center, CENPES.
Today, a project for the capture of CO2 is in progress in the Fluid Catalytic
Cracking Unit.

In oxicombustion, pure oxygen is substituted for air, which makes the

CO2 in the resulting gas more concentrated and, therefore, easier to capture. To
avoid the sudden temperature rise and the reduction of the fluidization of the
catalyst, undesirable side effects resulting from the injection of pure oxygen into
the converter, part of the CO2 is recycled and the gas and the pure oxygen are
mixed, explains Leonardo Mello of CENPES, technical coordinator of the Fluid
Catalytic Cracking Unit project for the capture of CO2.

Other Conversion process:

Microalgae generate biodiesel

The Petrobras research and development center, CENPES, in partnership

with the Federal University of Rio Grande (FURG) and the Federal University of
Santa Caterina (UFSC) has developed laboratory research with the objective of
studying microalgae and their reproduction to be used in filtering CO2 in the
environment, replacing it with oxygen and generating biodiesel.
 Researchers have collected samples from various aquatic environments in
Rio Grande do Norte, which contain thousands of microalgae, invisible to the
naked eye. In the laboratory, the samples are placed in ovens with adequate
temperature and illumination set to maintain the algae alive. Later, using micro
pipettes, each water sample is put in drops onto slides where the microalgae are
captured, isolated, and classified. Each species is then placed in a photo
bioreactor with micronutrients for reproduction. Days later, the microalgae are
placed to dry and are wrapped to avoid contact with light or air. The dried
microalgae are then placed in a reactor where the oil they carry is extracted. This
oil is returned to the reactor, where, through a chemical reaction, biodiesel is
generated.

Petrosix

The Petrobras Shale Industrialization Unit, SIX, possesses a consolidated

technology, patented and renowned worldwide, for the extraction and processing
of shale, a sedimentary rock which is the Units raw material. This technology is
called Petrosix and comprises the stages described below.

Shale, which contains kerogen, that is, an organic complex which

decomposes by a thermal process and produces oil and gas, is extracted from
open cast mines. The raw material is then transported to a crusher where the
rock is reduced to fragments. The fragments are carried on a conveyor belt to a
vertical cylindrical reactor, also known as a retort, where the material is brought
to a high temperature. The shale then releases organic material in the form of oil
and gas.

In another stage, the shale is cooled, which results in the condensation of

oil vapors, which are then carried out of the retort by the gases which form. The
shale gases pass through another cleaning process to produce light oil. The
remainder is sent to a gas treatment unit where combustible gas and liquid gas
(LPG) are produced and where sulfur may be recovered.

Today, SIX processes 7,800 tons of shale daily, in complete conformity

with the requirements of international norms of quality, environment, health, and
safety in the workplace.

3. Treating

Treatments are processes aimed at adjusting oil derivatives to the quality

required by the market. In one such process, for example, sulfur is removed. The
set of units and equipment involved in these processes sequentially is called
Refining Train.

Crude Oil Treatment

Introduction
 After primary oil/water separation, there is often a small amount of
unwanted salts in residual water in the crude oil that needs to be reduced to a
concentration around 5-10 PTB (Pounds per Thousand Barrels) salt.

This salt needs to be removed so that the crude oil can be processed in a
renery or stabilizer plant without fouling heaters and exchangers and other
equipment. Crude Oil Desalting technology is utilized to remove residual salt to
meet these requirements.

The type and size of the Desalter that is used is dependent on a number
of fundamental factors such as pressure, temperature, uid viscosity and ow-
rate, as well as customer requirements relating to maximum salt allowed in the
product oil stream.

Process Group has developed a range of crude oil dewatering and

desalting technologies to be applied in appropriate situations.

Description

Process Group offers a range of technology options to cover most typical

processing requirements related to Crude Oil Desalting:

Free Water Knock Outs Effective bulk water removal using

horizontal vessels & mechanical coalescing packs to reduce water levels down to
2 - 5% BS&W (Basic Sediment & Water).

Heater Treaters Dehydration at elevated temperature using gas

or oil red burners and mechanical (to 0.5% BS&W) or electrical (to 0.2% BS&W)
coalescing.

Dehydrators Dehydration and associated salt removal using high

voltage electrical grids to achieve 0.1 0.2% BS&W.

Electrostatic Desalters Dilution water used to reduce salt content

to 5-10 PTB.
 Mechanical Coalescers

Process Groups liquid/liquid coalescing media is used in our Free Water

Knock Out vessels and Heater Treaters as an economic and reliable way to
dehydrate the oil to pipeline specication. Generally the self-cleaning type media
is specied as this requires lower maintenance.

Crude Oil Heating

To dehydrate most crude oils (< ~35API) to water levels where they are
acceptable to reneries, heating is needed. This has several benets:

The oil density is reduced relative to the water density, providing

better gravity separation,

The viscosity is reduced which reduces the ow resistance of water

droplets falling through the oil layer, providing better gravity separation,

Heat improves coalescing and assists in breaking emulsions that

would otherwise prevent separation to the required degree.

Heating is generally via a submerged re-tube either in a separate or

combined vessel.

Electrostatic Dehydration

The basic principle behind electrostatic dehydration is that an electrical

eld is used to excite droplets of brine within the bulk oil phase so that they
collide with other droplets and coalesce into larger globules that separate under
gravity.

Traditional Electrostatic Coalescers employ two horizontal grids connected

to a high voltage AC supply, and the emulsion ows upwards through the grids.
The water coalesces and ows downwards, whilst the clean oil leaves via the top
of the vessel.

Distributors are used to ensure even plug ow up the vessel and grids.
 The 2 grid system is still widely used, however more modern and
improved Low Salt Treaters are available in various other proven styles 3 grids
and 1, 2 or 3 phase power supplies, to achieve oil purity of 0.1% BS&W or better.

Desalting

More important than water content to a rener is the salt content of the oil.
Depending on the downstream process, a limit of between 1- 10 PTB of salt is
usually specied which can require additional treatment beyond dehydration.
This can be performed by a Desalter unit.

Clean dilution or wash water is injected into the crude oil feed to the
Desalter through a mixing device to dilute the brine to a level where the target
salt content can be achieved by the downstream Dehydration unit.

In difcult applications this wash water can be recovered and recycled in a

2 stage dehydration and desalting process.

Degassing

To ensure optimum performance the crude oil should be stabilised prior to

the Electrostatic Treater. This can be done in the Electrostatic Treater, or in a
separate vessel located upstream.

Mechanical Treaters

Process Group also offers Mechanical Treaters with the following benets
and features:

Effective design means minimal chemical treatment

Sample points & emulsion drains tted as standard

Adjustable for load & voltage giving maximum exibility

Low maintenance ideal for unmanned plants or facilities

Excellent turn-down / turn-up performance

 Safe electrical design means no overloading; fewer trips

Blending

Crude oil blending is often undertaken to increase the sale price or

process-ability of a lower grade crude oil by blending it with a higher grade,
higher price crude. The objective is to produce blended crude oil to a target
specification at the lowest cost using the minimum higher cost crude oil.

The crude oil feed-stocks used for blending often vary in quality and for
this reason crude oil blenders normally use viscosity or density trim control
systems. When the crude oil blender is started the required flow rate and
component ratio is set by the control system based on the ratio in the recipe. A
density or viscosity analyzer, installed at a homogeneous point in the blender
header, generates a control signal, which is used to continually optimize the
blended product by adjusting the component ratio. This ensures that the blended
product remains as specified at all times during the batch.

Crude oil blending equipment is designed and selected to ensure minimal

pressure drop and maximum reliability. Blended products are volume corrected to
standard conditions using API 2540 / IP 200. Loading and blend documentation
can be automatically produced in volume or mass units by the controller.

III. PRODUCTS
 The need for oil products in Brazil rapidly changed from 2010 and 2012.
And in every year, the increase ranges to 7.9%. Petrobras Brasileiro S.A.
operates in the distribution, trade and manufacturing of oil products and
byproducts, in addition to in imports and exports. On the Brazilian streets and
roads, the company has upwards of 7,000 service stations, the biggest service
station network in Brazil. The company ceased to be Brazil's legal monopolist in
the oil industry in 1997; it remains a significant oil producer, with output of more
than 2 million barrels (320,000 m3) of oil equivalent per day. And to supply the
emerging needs for oil products, Petrobras created products to satisfy the needs.

Petrobras Brasileiro S.A. mainly produces products for roads, rails, on the
sea or in the sky, their technology guaranteed customers with high-quality,
reliable products.

They manufacture gasoline, one which is Petrobras Podium Gasoline.

The product has a minimum octane rating of 95 units, measured based on the
anti-knock index (AKI), and up to 30 mg/kg (or ppm) of sulfur. It is the highest
octane fuel in the world, higher even than the European super-premium
gasolines, and is marketed exclusively at Petrobras service stations. The regular
gasoline that they commercialize has a minimum octane rating of 87 units,
measured by the anti-knock index (AKI), and up to 50 mg/kg (or ppm) of sulfur.
 Diesel fuel, in its various denominations, is the main fuel marketed in
Brazil, and is used to transport cargo and passengers on boats, in the industry, to
generate power, in construction machinery, in farm machinery and in
locomotives, meeting the needs both of the consumers and of the most
advanced technologies in combustion engines. Petrobras diesel fuel is formed
by special oil currents and has exclusive additives in it, which keep the injection
system clean and reduce foaming when filling the tank up. Since 2009, the
company produces low sulfur content diesel. The new S-10 diesel, produced in
2013 contains the extremely low sulfur content of 10 milligrams per 1,000,000
milligrams of the product (10 parts per million), replaced the S-50 Diesel.

Petrobras lubricants meet the worlds most demanding standards and

specifications and are deeply knowledgeable of the use conditions in Brazil. It is
a brand that blends high-quality, high-tech, tradition, and reliability. Lubrax, a
lubricant line product is marketed by Petrobras Distribuidora and its performance
levels have been approved by the biggest carmakers and equipment
manufacturers the world over. Now, they went on to accumulate new functions,
such as protecting against corrosion, assisting in sealing, transferring heat, and
removing undesirable products from the system. The main advantages of
lubrication include reduced wear and tear on parts, less loss due to friction, and
increased operation safety. Actually, when one person mentions Lubrax, most
people immediately think of the automotive line. But the family is much bigger
than that. There are several products that also supply the industrial, aviation,
railway, and maritime sectors.

ARLA 32 (Automotive Liquid Reducing Agent) is a chemical that acts to

reduce the nitrogen oxide (NOx) released by vehicular exhaust gases. To ensure
product quality all the way to the end consumer, Petrobras have rolled-out
Petrobras Flua on the market. This is the only ARLA 32 with Petrobras brand's
quality assurance. It is certified by INMETRO and meets international quality
requirements set forth under ISO 22241.
 Other Petrobras industrial products includes Industrial Natural Gas used
as fuel in industries to supply heat and generate electricity; Mineral Turpentine
and Toluene for the formulation of paints and varnishes and for cleaning and
degreasers; Hexane which is mainly used to extract vegetable oil and to
formulate glues and adhesives; Benzene which is used for feedstock; Xylene
used for pesticides, paint and varnish colorant and resin industries and Kerosene
used to adjust viscosity and to give the paint a retouching power. Petrobras
paraffin are commonly used to make candles but is also present in several
products such as chewing gums, pharmaceuticals, cleaning products, matches,
photographic films, a few type of paper and rubber, and even used to protect
fruits and seeds.

Liquefied Petroleum Gas (LPG) is one of the lightest fractions of oil and it
burns very clean, with extremely low levels of pollutant emissions. Because of
these characteristics, it can be used in closed environments, such as in the
kitchen of the house, for industrial applications that are sensitive to pollutants,
and to manufacture glass, ceramic products, and food.

Green petroleum coke is obtained from processing liquid fractions in

Delayed Coking Units (UCR). It is a material with high fixed carbon content
comprising hydrocarbons and low levels of inorganic compounds. Its appearance
is that of a bulk composed of solid black fragments, and the term "green" in its
name refers to the stage of its production process. The green petroleum coke
produced in the companys refineries has, as its main differential, its low sulfur
content, rare worldwide, and a product with higher value, added and lowers
environmental impact. Petrobras refineries produce two types of green coke,
distinguished per anode grade or metallurgical grade. Anode grade coke is an
essential input to obtain calcined coke, which is used to manufacture anodes to
produce aluminum or titanium dioxide.

The sulfur obtained from the removal of sulfurous compounds are

processed by the company as their commitment to environmental preservation
and social responsibility. The products that they have produced include
agricultural fertilizers, bleaching sugar, vulcanizing rubbers and many more.
 Urea is the main source of nitrogen for Brazilian agriculture, an area that
accounts for some 57% of this product's consumption in Brazil. Synthesized at
high temperatures and pressures from ammonium and carbon dioxide, urea is
used as a raw material in the industry and in agriculture and cattle raising in
Brazil. Urea are classified as Granulated Fertilizer Urea, Pearled Fertilizing Urea,
and Industrial Urea.

Petrobras Bunker surpasses the international quality requirements;

it has a low metal content and complies with the requisites set forth by the
ISO 8217/2005 standard. The vessels that operate along the Brazilian
coast can rely on bunkering services and on Petrobras high-quality
products, guaranteed delivery, excellence in services, and competitive
pricing.
 Aviation fuel, also known as GAV, is used predominantly by small aircraft
fitted with spark ignition engines. Small aircraft include airplanes used in private
aviation, in agriculture, to train pilots, for minor commercial aviation and in
experimental and competition aircraft. Another is Aviation kerosene, also known
as QAV-1, is the fuel used by airplanes and helicopters equipped with turbine
engines, such as pure jet, turboprops, or turbofans.

Petrobras kerosene's thermal stability ensures the aircraft's performance.

Because it is more stable, QAV-1 also allows the time between scheduled aircraft
maintenance servicing to be increased, reducing costs for airlines and airplane
and helicopter owners.

Aviation fuel has special characteristics that are controlled by means of

strict laboratory tests. That is how Petrobras guarantee its quality standard,
compliance with specifications, and, thus, its good performance in the engines.
This fuel is made solely for aircraft. Aviation fuel should not be used in
automotive vehicles.
IV.MARKET AND TRANSPORTATION

Petrobras operate in the transport and storage of oil products, biofuels and
natural gas by means of our Transpetro subsidiary. They operate a network of
pipelines ranging over 30,000 km, our own oil tankers or chartered vessels, and
onshore and waterway terminals, where they store the products before they are
shipped to the refineries or for export.

Petrobras is the main partner of TBG, Transportadora Brasileira Gasoducto

Bolivia-Brasil S.A., which owns and operates the Brazilian portion of the Bolivia Brazil
Pipeline. Approximately 2,593 km of the pipeline is located in Brazil which operates at a
30 MMcm/d capacity.

Fleet renewal

To meet increased production in the pre-salt and post-salt, the company is

renewing their fleet through the Transpetro's Fleet Modernization and Expansion
Program (Promef). Created to build vessels in Brazil with a high degree of
domestic content, Promef has been responsible for the resurgence of the
Brazilian shipbuilding industry, deploying and modernizing yards and creating
thousands of direct and indirect jobs across the industry.
 Promef encompasses the ordering of 49 vessels and 20 waterway
convoys, with an investment of R$11.2 billion in the period ranging from 2007-
2020. This will allow the addition of 4 million dwt of fleet capacity, as well as the
incorporation of new technologies. The program aims to achieve the minimum
level of nationalization of 65% in the first phase, and of 70% in the second, and
to make Brazilian shipyards more competitive internationally.

Promef Hidrovia, meanwhile, was created to increase efficiency in the flow

of biofuels, especially ethanol, in the Midwest and Southeast.

Trade

Trade is an activity that is inherent to several of Petrobras operations.

They conduct business with corporate customers and, through Petrobras
Distribuidora, with end consumers at the more than 7,000 service stations
throughout Brazil. The main products they trade are diesel fuel, gasoline,
liquefied petroleum gas (LPG), naphtha, fuel oil, and jet fuel.

Distribution

Getting products to the consumer's daily activities and setting agriculture,

aviation, railways, thermal power plants, fleets of vehicles and various types of
industries into motion is one of the most important stages of Petrobras work.

Leaders in oil product and biofuel distribution in Brazil, the company have
12,000 major customers and a network of over 7,500 service stations nationwide,
where they resell fuels and lubricants by means of their Petrobras Distribuidora
subsidiary. Abroad, they have service stations in Argentina, Chile, Colombia,
Paraguay and Uruguay.
 In Brazil, they also distribute liquefied petroleum gas (cooking gas) to
millions of consumers and several industry and trade sectors by means of the
companys Liquigs subsidiary, the Brazilian markets leader in the distribution of
bottles used at homes.

By 2018, Petrobras will invest $2.7 billion in distribution, with emphasis on

logistics projects.

Oil and Gas Exploration and Production

Oil and natural gas exploration and production are Petrobras core
activities. They seek to increase their reserves and develop production to make
sure they can meet the increased demand for energy. With technology and the
persistence of their employees, they overcome challenges that once seemed
impossible, such as the deep waters of the Campos Basin, in the 1970s. Today,
production in deep pre-salt waters is already a consolidated reality. Therefore,
they are always in search of the next frontier, expanding their operations in a
sustainable manner in areas with great potential for exploration and production.

Most of their oil reserves are nestled in offshore fields, a fact that has led
their drilling activities to achieve increasing depths.
 To operate in pre-salt and post-salt areas, several platforms have come
into operation in recent years, such as P-58, P-62, the FPSOs Cidade de
Mangaratiba, Cidade de Ilhabela, among others. FPSO P-63 has already been
deployed, and the P-61 (an TLWP - Tension Leg Wellhead Platform) will soon be
deployed at the Papa-Terra field (Campos Basin). They will operate integrated
with each other, with joint processing capacity of 140,000 bpd of oil and a million
cubic meters of gas per day. The first oil of FPSO Cidade de Itagua is expected
for 2015.

The company also have significant production onshore, concentrated,

mainly, in Northern and Northeastern Brazil and, to a lesser extent, in the
Southeast, in the Esprito Santo area.

In addition, they have promoted actions to optimize production and extend

the life of mature fields. An example is the Program for Increasing Operating
Efficiency in the Campos Basin (Proef), which managed to reverse the downward
trend in efficiency at the Campos Basin and Rio de Janeiro operating units. The
Associated Gas Utilization Optimization Program (Poag 2015) has also
contributed to improve the performance of operating units in Southeastern Brazil.

For 2015, their production target is 2.1 million barrels of oil per day.

Transportation of Products

Transporting Natural Gas

 Petrobras natural gas transportation system in Brazil comprises two
main pipeline networks the 4,413 km (2,743 mile) Malha Sudeste (Southeast
Network), which connects the main offshore natural gas producing fields in the
Campos and Esprito Santo basins to the growing markets of the Southeast
Region, including Rio de Janeiro and So Paulo, and the 1,980 km (1,231 mile)
Malha Nordeste (Northeast Network), which transmits gas from onshore and
offshore natural gas fields in the Northeast to consumers in that region. The
Southeast Network includes the 2,593 km (1,612 mile) Brazilian portion of the
Bolivia-Brazil natural gas pipeline. The two main pipeline networks will be linked
by the Southeast Northeast Interconnection Gas Pipeline (GASENE), which they
expect to be completed by the first quarter of 2010. In the Northern Region, the
660 km (410 mile) Urucu-Coari-Manaus pipeline will connect the Solimes Basin
to Manaus, where natural gas will be used primarily to generate electric power,
and also to meet industrial, commercial and retail demand.

In 2008, the company invested U.S.$3.3 billion to improve and expand

their natural gas transportation system. They extended their natural gas transport
system by a total of 776 km (482 miles) to 6,933 km (4,309 miles), including the
following additions to the Southeast and Northeast Networks:

303 km (188 mile) gas pipeline linking Cabinas to Vitria, the site of the
gas processing facility that handles gas produced from the Campos Basin.
This pipeline has the capacity to transport up to 20 mmm 3/d (707 mmcf/d)
from the Esprito Santo Basin to the Southeast Region;

255 km (158 mile) addition to the CampinasRio pipeline in the

Southeast Region with capacity to transport up to 8.6 mmm 3/d
(303.7 mmcf/d) of natural gas, increasing their ability to deliver volumes
imported via the Bolivia-Brazil gas pipeline to market;
 196 km (122 mile) gas pipeline linking Catu to Itaporanga with the capacity
to transport up to 10 mmm3/d (353 mmcf/d) of natural gas from the Manati
gas field and other sources to the Northeast Region; and

22 km (14 mile) gas pipeline linking the Pecm LNG terminal to their
distribution network in the Northeast Region with capacity to transport up
to 7 mmm3/d (247 mmcf/d) of natural gas.

In addition, Petrobras is in the final stages of a pipeline construction program that

will connect most of Brazils principal gas pipelines, allowing gas to be
transported through pipelines from the South to the Northeast of the country and
from the Solimes Basin to the Amazonian market. This will increase the capacity
and flexibility of their natural gas networks and allow them to make better use of
growing gas supplies. They expect that the program will be completed by the first
quarter of 2010. The program includes:

constructing the 954 km (593 mile) final section of the GASENE,

completing the link between Malha Sudeste and Malha Nordeste. This pipeline
will transport up to 20 mmm3/d (707 mmcf/d) from Cacimbas to the city of Catu in
the State of Bahia and will be completed in the first quarter of 2010; and

completing the 660 km (410 mile) Urucu-Coari-Manaus pipeline, which will

supply up to 5.5 mmm3/d (194 mmcf/d) of natural gas from the Solimes Basin
to the city of Manaus starting in the third quarter of 2009.

Petrobras have completed construction of two LNG terminals, one in Rio de

Janeiro with a send-out capacity of 20 mmm3/d (706 mmcf/d) that was
completed in January 2009, and the other in Pecm in Northeastern Brazil with a
send-out capacity of 7 mmm3/d (247 mmcf/d) that was completed in December
2008. The terminals will be supported by two large LNG regasification ships with
a capacity of 14 mmm3/d (494 mmcf/d) and 7 mmm3/d (247 mmcf/d),
respectively. The new terminals and regasification ships give them the flexibility
to import gas from other sources to supplement domestic natural gas supplies.
The company have negotiated and signed with several companies LNG supply
contracts and Master Sales Agreements that will be used to acquire spot cargoes
as needed.

Transporting Oil Products

The Oil Law requires that a separate company operate and manage the
transportation network for crude oil, oil products and natural gas in Brazil, so the
company created a wholly-owned subsidiary, Transpetro, in 1998 to build and
manage their vessels, pipelines and maritime terminals and handle various other
transportation activities. In May 2000, Transpetro also took over the operation of
their transportation network and storage terminals to comply with the
requirements of the Oil Law. As of October 1, 2001, with the approval from the
ANP, these pipelines and terminals were leased to Transpetro, which started to
offer its transportation services to Petrobras and third parties. As the owner of the
facilities leased to Transpetro, they retain the right of preference for its
shipments, based on the historical level of transportation assessed for each
pipeline, formally assigned by the ANP. The excess capacity is offered to third
parties on a non-discriminatory basis and under equal terms and conditions.
 Prior to the enactment of the Oil Law, Petrobras were the only company
authorized to ship oil products to and from Brazil and to own and operate
Brazilian pipelines. Additionally, only vessels flying the Brazilian flag were entitled
to carry shipments to and from Brazil. Pursuant to the Oil Law, the ANP now has
the power to authorize any company or consortium organized under Brazilian law
to transport crude oil, oil products and natural gas for use in the Brazilian market
or in connection with import or export activities, and to build facilities for use in
any of these activities. The Oil Law has also provided the basis for open
competition in the construction and operation of pipeline facilities.

Pipelines and Terminals

Petrobras own, operate and maintain an extensive network of crude oil

and natural gas pipelines connecting their terminals to their refineries and other
points of primary distribution throughout Brazil. At December 31, 2004, the
companys onshore and offshore crude oil and oil products pipelines aggregated
6,449 miles or 10,377 kilometers in length, their natural gas pipelines aggregated
approximately 6,192 miles or 9,963 kilometers in length - including the Brazilian
side (1,612 miles or 2,593 kilometers) of the Bolivia-Brazil pipeline, and their
flexible pipelines aggregated 1,523 miles or 2,451 kilometers in length. Different
pipelines and terminals of Petrobras are listed below:

Volta Redonda Terminal - OSVOL Pipeline

So Caetano do Sul Terminal - OBATI Pipeline
Uberlndia Terminal - OSBRA Pipeline
Uberaba Terminal - OSBRA Pipeline
Senador Canedo Terminal - OSBRA Pipeline
Rio Grande Terminal
Ribeiro Preto Terminal - OSBRA Pipeline
VitriaTerminal
 Suape Terminal
So Sebastio Terminal - OSPLAN I Pipeline
So Luis Terminal
So Francisco do Sul Terminal - OSPAR Pipeline
Santos Terminal - Pipelines between Santos and Cubato
Pecm Regasification Terminal (LNG)
Paranagu Terminal
Osrio Terminal - OSCAN Oil Pipeline
Norte Capixaba Terminal
Niteri Terminal - ORNIT Pipeline
Natal Terminal
Mucuripe Terminal
Manaus Terminal
Madre de Deus Terminal - Pipelines between Madre de Deus and RLAM
Macei Terminal - OPMAC Pipeline
Macap Terminal
Jequie Terminal - ORSUB Pipeline
Japeri Terminal - OSVOL Pipeline
Itaja Terminal - OPASC Pipeline
Itabuna Terminal - ORSUB Pipeline
Ilha Redonda Terminal - LPG-Reduc Pipeline
Ilhad'gua Terminal - Pipelines between Ilhad'gua and Reduc
Guarulhos Terminal - OSVAT 16 Pipeline
Guararema Terminal - OSRIO Pipeline
Guaramirim Terminal - OPASC Pipeline
Guamar Terminal
Cubato Terminal - Pipelines between Santos and Cubato
Coari Terminal - ORSOL I and II Pipelines
Campos Elseos Terminal - ORBEL I Pipeline
 Cabinas Terminal - OSDUC Pipeline
Cabedelo Terminal
Braslia Terminal - OSBRA Pipeline
Biguau Terminal - OPASC Pipeline
Barueri Terminal - OBATI Pipeline
Barra do Riacho Waterway Terminal
Belm Terminal
Angra dos Reis Terminal - ORBIG Pipeline
Guanabara Bay Regasification Terminal (LNG)
Aracaju Terminal

Crude Oil and Oil Product Pipelines in Brazil

In March 2005, Petrobras signed all of the financing documents for the
PDET project originally designed to enhance their crude oil transportation system
extending from their most productive fields, located in the Campos Basin, to their
refineries located in the Southeast region of Brazil.

At the end of 2003, the government of Rio de Janeiro enacted a law

creating severe obstacles to the economic feasibility of the original concept of the
onshore portion of PDET. After three months of ultimately unsuccessful
negotiations with the Rio de Janeiro State government, the company announced
the cancellation of the onshore portion of the PDET project and a revision to the
projects original design.

Under the revised project, the original offshore fixed platform (PRA-1) will
be connected to five offshore production platforms through pipelines and will
transfer the crude oil to a floating, storage and offloading platform (FSO) and two
monobuoys, which will in turn facilitate the transfer of the crude oil to shuttle
tankers or the export of the crude oil to other countries. The shuttle tankers will
transport the oil to the Southeast terminals where it will be pumped to existing
onshore pipelines connected to refineries in Rio de Janeiro, Minas Gerais and
So Paulo. The PDET project will cost approximately U.S.$760 million and is
expected to start its commercial operation in the first quarter of 2007. This project
will permit the increase the flow of oil produced in the Campos Basin by up to
630,000 barrels per day.

Transpetro also operates 43 storage terminals with aggregate capacity of

63.3 million barrels of oil equivalent. At December 31, 2004, tankage capacity at
these terminals consisted of 34.1 million barrels of crude oil, 26.7 million barrels
of oil products and fuel alcohol and 2.5 million barrels of LPG.

Transpetro is currently evaluating alternatives to improve the efficiency of

its transportation system, including evaluating improvements to the monitoring
and control of the crude oil and natural gas and oil products pipeline network
through the gradual implementation of a supervisory control and data acquisition
system, which, when completed, will monitor the pipelines and storage facilities
located throughout the country. Transpetro implemented the first phase of the
project and inaugurated a centralized control and operating center in June 2002,
in its headquarters in Rio de Janeiro. Currently, there are a national back-up
master station and two regional master stations connected through satellite
communication. Tank-farms and pump stations are equipped with mini stations
connected to the regional master stations. Transpetros goal is to be able to
operate all of its domestic pipelines remotely, initially via the regional stations,
and ultimately via the centralized control and operating center located in its
headquarters in Rio de Janeiro. In 2004, the centralized control and operating
center began to operate a new oil pipeline (OCAB) from Barra do Furado to
Cabinas, and a new gas pipeline (GASEB) from Sergipe to Bahia. Petrobras will
continue to develop this project. In addition, Transpetro has been investing in the
development of a pipeline integrity program (Programa de Integridade de Dutos)
to ensure the integrity and safety of its pipelines operations.

Gas pipelines
 Compared with road transport, the pipeline network affords significant
environmental gains on account of its greater flexibility, increased operating
safety, fewer accidents and spills, and lower rates of atmospheric emissions, thus
providing significant environmental gains.

Because of this, Petrobras invest in improving and expanding their

pipeline network and in this system's reliability, through initiatives such as the
Program for the Structural Integrity of Pipelines. Similarly, the company manage
this mode of transport's potential risks to the environment, such as impacts on
biodiversity.

Their natural gas transport pipeline network ranges for over 9,000
kilometers.

V. HEALTH, SAFETY, SECURITY AND ENVIRONMENT

Health, Safety and Environmental Initiatives

 The protection of human health and the environment is one of Petrobras
primary concerns, and is essential to their success as an integrated energy
company. They have created a Health, Safety and Environment (HSE)
Management Committee composed of executive managers of business units and
directors of subsidiaries BR Distribuidora, Transpetro and Petrobras
Biocombustvel. The Committees work is supported by four commissions and
four subcommissions as well as by temporary work groups, each responsible for
a specific HSE issue, such as licensing and environmental compensation,
emissions and climate change and health management.

They have also created an Environmental Committee composed of three

members of our board of directors. This committees responsibilities include: (i)
overseeing and managing environmental and work safety issues affecting the
company; (ii) establishing measurable environmental targets and ensuring
compliance; and (iii) recommending changes in environmental, health and safety
policy, if necessary, to the board of directors. The Environmental Committee
charter is awaiting approval by the board of directors.

Actions to address health, safety and environmental concerns and ensure

compliance with environmental regulations include:

PEGASO program to upgrade pipelines and other equipment,

implement new technologies, improve emergency response readiness, reduce
emissions and residues and prevent environmental accidents. From April 2000 to
December 2008, the company spent approximately U.S.$5,003 million under this
program, including the Programa de Integridade de Dutos (Pipeline Integrity
Program) through which they conduct inspections of, and improvements to,
pipelines. In 2008, they spent approximately U.S.$355 million in connection with
the PEGASO program;

new HSE policy and corporate guidelines, which focus on principles

of sustainable development, compliance with legislation and environmental
performance indicators;

ten environmental protection centers and thirteen advanced bases

for oil spill prevention, control and response, local and regional, onshore and
offshore oil spill contingency plans involving public services and communities,
three dedicated oil spill recovery vessels (OSRVs) fully equipped for oil spill
control and fire fighting;

ISO 14001 (environment) and OHSAS 18001 (health and safety)

certification of the operating units. As of December 2008, Petrobras held 38
certificates for its operating units in Brazil and units abroad. Because some of
those certificates cover more than one site, the total number of certified sites is
183 in Brazil and 20 abroad. The Frota Nacional de Petroleiros (National Fleet of
Vessels) has been fully certified by the IMO International Management Code for
Safe Operation of Ships and for Pollution Prevention (ISM Code) since
December 1997;

regular and active engagement with the Brazilian Ministry of Mines

and Energy and IBAMA, including negotiating new environmental compensation
regulations and discussing environmental issues connected with new gas
pipelines, oil and gas production projects and other aspects of operations.

a new Climate Change strategic project, which aims to implement

the highest standards in the energy industry regarding greenhouse gas
management. By reducing the environmental impact of operations, Petrobras will
contribute to their sustainability and mitigate global climate change.

In addition, the company conduct environmental studies for all new

projects as required by Brazilian environmental legislation, and the HSE
department evaluates every project with a total budget exceeding U.S.$25 million
to confirm its compliance with all HSE requirements and adoption of the best
HSE practices throughout the projects life cycle.

In 2008, they experienced oil spills totaling 115,179 gallons of crude oil,
compared to 101,970 gallons of crude oil in 2007 and 77,402 gallons in 2006.

They continue to evaluate and develop initiatives to address HSE

concerns and to reduce exposure to HSE risks.

In order to address and prioritize health, safety and environmental

concerns and ensure compliance with environmental regulations, we have:

proposed the execution of, or entered into, environmental

commitment agreements with several environmental protection agencies and/or
the federal or state public ministries, in which we agree to undertake certain
measures in order to complete the environmental licensing for several of our
operating facilities;

integrated our corporate health department into the already

existing corporate environment and safety department, thereby facilitating the
development of systematic, company-wide procedures to handle concerns
related to health, safety and the environment, or HSE.

undertaken capital investments to reduce the HSE risk of our

operations, including making improvements to our refineries and transportation
facilities and developing and implementing oil pollution prevention guidelines;

developed the Programa de Segurana de Processo

(Process Safety Program) to implement standardized, company-wide guidelines
of HSE, effectively investigate incidents and strengthen our institutional
commitment to HSE through employee training. As part of this program, we have
created a HSE Management Manual;

developed an Air Emissions Management System, in

conjunction with an international consulting company, for our operations in Brazil
and South America. The system gathers information about emissions of sulfur
dioxide, nitrogen oxides, carbon monoxide, the main greenhouse gases (carbon
dioxide, methane and nitrous oxide) and other chemicals, allowing us to improve
the management of our emissions;

participated in negotiations conducted by the Brazilian

Ministry of Mines and Energy of new regulations of environmental compensation
related to the implementation of new projects;

participated with the Brazilian Ministry of Mines and Energy

and IBAMA in a governmental body created to supervise the implementation of
the new planned gas pipelines;

developed and implemented programs to promote the use of

renewable energy. In 2004, our Strategic Plan allocated 0.5% of our total capital
expenditures to investments in these programs, which included: (1) a pilot wind
power plant with an installed capacity of 1.8MW in the State of Rio Grande do
Norte; and (2) solar panels to heat water for dressing-rooms at the Gabriel
Passos Refinery in Minas Gerais, among others.

Safety, Environment, and Health Policy

Petrobras safety, environment, energy efficiency, and health activities are

guided by a policy that covers, among others, topics such as workforce
education, training, and commitment. The policies are:

Educate, train, and commit workers to the HSE issues, getting suppliers,
communities, competent bodies, worker representative entities and other
stakeholders involved;
 Encourage the registration and treatment of HSE issues and take
performance in HSE into account in the consequence and recognition
systems;
Foster health and protect human beings and the environment by
identifying, controlling and monitoring risks, adjusting process security to
the best global practices and being ready for emergencies at all times;
Ensure the sustainability of projects, ventures and products throughout
their life cycle, considering the impacts and benefits on the economic,
environmental and social dimensions;
Consider operation and product ecoefficiency, minimizing the adverse
impacts that are inherent to the industry's activities.

The policy is further broken down into 15 guidelines:

Leadership and Responsibility

By incorporating health, safety and environment to their corporate strategy, they

reassert the commitment of all of their employees and contractors to the pursuit
of excellence in these areas.

Legal Compliance

Their activities must be in compliance with the current health, safety and
environment legislation.

Risk Assessment and Management

Risks inherent to the companys activities should be identified, assessed and

managed to avoid accidents and/or ensure the minimization of their effects.

New Undertakings

New projects must be in accordance with the legislation and incorporate the best
health, safety and environment practices throughout their life cycle.

Operation and Maintenance

Petrobras operations must be carried out according to established procedures
and using appropriate equipment and facilities, which have been inspected and
are in proper conditions to ensure compliance with the health, safety and
environment requirements.

Change Management

Temporary or permanent changes must be assessed aiming to eliminate and/or

minimize risks resulting from their deployment.

Good and Service Procurement

Contractor, supplier and partner performance in health, safety and environment

must be compatible with that used by Petrobras System.

Qualification, Education, and Awareness

Training, education and awareness should be provided continuously in order to

underpin the workforce's commitment to performance in health, safety and
environment.

Information Management

Information and knowledge related to health, safety and the environment should
be accurate, up to date and documented in order to facilitate queries and use.

Communications

Information on health, safety and the environment must be stated in a clear,

objective and fast manner in order to produce the desired effects.

Contingency

Emergency situations must be foreseen and handled quickly and efficiently to

reduce their effects to the fullest possible extent.

Relationship with the Community

The company must ensure the safety of the communities where they have
operations, and keep them informed about the impacts and/or risks that may
derive from their activities.

Accident and Incident Analysis

Accidents and incidents resulting from their operations should be examined,

investigated and documented in order to avoid recurrence and/or to minimize
their effects.

Product Management

Petrobras must ensure the health, safety and environment aspects of their
products, from the source to final destination, and undertake all efforts to
continuously reduce the impacts they may cause.

Ongoing Improvement Process

Ongoing improvements must be made to the performance in health, safety and

environment at all levels to ensure its progress in these areas.

Operating Safety

Petrobras work everyday thinking about the safety of their employees and
their operations. Therefore, the company prepares for risks seeking to improve
operations to mitigate their impact on the environment, on people's health, and
on the assets themselves and the communities where they operate.

To prevent accidents, Petrobras meet rules and adopt strict standards and
operating procedures. Their workforce is trained to operate safely. They practice
the "When in doubt, stop!" motto. If anyone has any questions while undertaking
a procedure, he or she is instructed to stop immediately.

The company is always in pursuit of new solutions to control major risks

and impacts, including partnering with other companies operating out of the
industry. At the business areas and subsidiaries, they have implemented the Zero
Spill Plan, with actions in the areas aimed at reducing the risk of spills.

Environmental Defense Centers

To minimize potential impacts in case of extreme situations, Petrobras

seek to make emergency response plans more agile and effective. The company
has ten Environmental Protection Centers, 14 Advanced Bases and Emergency
Response Centers distributed nationwide. In addition to boats, vessels, collector
equipment and containment barriers, the Environmental Protection Centers are
equipped with communication equipment and vehicles that may be quickly
moved by road or air to combat emergencies anywhere in Brazil.

Environment

Caring for the safety of Petrobras operations and undertaking actions to

balance their activities and the welfare of workforce and of the communities: This
is environmental responsibility. By improving products and processes, increasing
efficiency, providing training and sponsoring conservation and ecosystem
preservation projects, they always seek to grow by contributing to sustainable
development.

The company invests in research to develop products and processes that

contribute to rationalize natural resource consumption, pursuing to diversify the
use of different sources of energy, including renewables. They also encourage
the rational use of energy and upgrade their processes to increase energy
efficiency, reducing greenhouse gas emissions.

To reduce risks to human health and to the environment, their operations

have action plans and undertake emergency drills, and the workforce is required
to attend frequent training courses. In addition, the company sponsor a number
of environmental projects aimed at mitigating carbon emissions, protecting the
environment and endangered species, and conserving biodiversity.

o Water resources

Petrobras seek to adopt technologies that are less intensive in water use, to
optimize production processes, and to implement technologies that enable water
reuse.

o Health, Safety and Environment Policy and Guidelines

The companys safety, environment, energy efficiency and health activities

are guided by a policy and 15 guidelines that encompass different topics.

o Climate change

To mitigate the impact of their activities, they invest in energy efficiency,

operational improvements, research and renewable sources and promote the
efficient use of the products.

o Biodiversity

Petrobras take biodiversity into account when planning their projects and in
their day to day operations, undertaking actions for environmental protection and
restoration.

o Operational safety

With the safety of their employees and operations in mind, the company seek
to prepare for risks and optimize their operations to mitigate potential impacts.
 o Environmental licensing

In order to deploy their projects, they submit to environmental licensing

processes that include analyzing the possible impacts on the region.

Preserving the Environment

Petrobras focus is on ecoefficiency. For them, it does not suffice to

produce, refine and distribute oil within the strictest safety standards. With
rational water and energy use, in association with the generation of the least
possible amounts of effluents, residues and emissions at all units, they reduce
their impact on the environment and reinforce their commitment to pursuing
excellence in operations.

The Capuava Refinery, in So Paulo, is a concrete example of water

reuse; it is the first unit with zero effluent disposal. Nearly all of their units around
the world are ISO 14001 (relative to the environment) and BS 8800 (relative to
safety and health) certified.

The Maximum Admissible Limit (MAL) for hazardous solid residue

generation in their processes is another practical action in environmental
responsibility, as is monitoring atmospheric emissions.
 From 2000 to 2011, Petrobras invested R$43.5 billion in Safety,
Environment and Health. Part of this amount was used to deploy Environmental
Defense Centers (EDCs) at strategic points of operation. They complement the
existing local contingency plans at the terminals, refineries and other units to
ensure maximum protection and flexibility in an emergency.

Valuing Diversity

Petrobras goal is to become an

international benchmark in social
responsibility in business management,
contributing to sustainable development.

They believe permanent dialog is

fundamentally important in order for them to
attain their goals. The company seeks to
reduce risks, avoid negative social impacts, and to generate positive results
through their relationship with the communities that neighbor their operations.

By knowing the reality that surrounds the company, they can ensure social
insertion and improve people's quality of life, always with respect for diversity.

The great importance of Social Responsibility, for them, translates into

investments. Petrobras support projects that contribute to the reduction of
poverty and social inequality, promoting the protection of human rights and
ensuring access to culture and sports.

In addition to projects that encourage income generation and work

opportunities, they pay special attention to education for professional qualification
and to ensure the rights of children and adolescents. Thus, they do their part as
one of the largest companies in the world and contribute to the development of
the planet.
Labor

Petrobras is set into motion by the work of people on all continents. They
count on the diversity of cultures, knowledge, and talent. They invest in their
employees because the company knows it is impossible to achieve excellence in
financial results, productivity, and technology without valuing people.

For this reason, their professionals' careers are constantly encouraged by

means of training programs, opportunities for promotions, remuneration at
market standards, educational benefits, and health insurance, among others.

The values, acquired throughout their history, are among Petrobras

greatest riches, which they call intangible assets. These are essential factors for
companies to create value and competitive edge, classified as human,
organizational, and relationship and technological domain capital.

Respect for human and cultural diversity and non-discrimination are

principles that are essential to the company. They guarantee the right to
difference, ensuring each worker, regardless of their characteristics, full
conditions to develop their talent and potential.
Labor Practices and Human Rights

No wonder so many people consider working at Petrobras units. They

believe in and advocate best practices in labor relations, pursuant to the Brazilian
law and the international labor conventions. This includes the rejection of child,
slave, and degrading labor throughout our supply chain, as per the commitments
made in our Social Responsibility Policy.

Social Responsibility Policy

For the company, Social Responsibility is the mechanism for the

integrated, ethical, and transparent management of their business and of their
relationships with all stakeholders, driving human rights and citizenship,
respecting human and cultural diversity, not allowing discrimination, degrading
work, child and slave labor, contributing to sustainable development and to
reducing social inequality.

Workforce Commitment

Commit the workforce to Petrobras Systems Social Responsibility Policy.

Integrated Management

Ensure integrated social responsibility management at the Petrobras

System.

Sustainable Development
 Carry Petrobras Systems business and activities out with social
responsibility, implementing their commitments pursuant to the principles set
forth by the UNs Global Compact and contributing to sustainable development.

Human Rights

Respect and support internationally-acknowledged human rights, guiding

Petrobras Systems actions based on the promotion of the principles of decent
work and non-discrimination.

Diversity

Respect the human and cultural diversity of their workforce and of the
countries where they have operations.

Labor Principles

Support the eradication of child, slave, and degrading work in Petrobras

Systems productive chain.

Sustainable Social Investment

Seek sustainability for social investments for a worthy, productive insertion

of the communities.

Corporate Performance

Make sure Petrobras Systems corporate governance is committed to

ethics and transparency in its relationship with its stakeholders.

Petrobras offer equal opportunities to all employees, respecting gender

differences and the diversity of cultures, knowledge, and skills. Since 2007, for
example, they have acknowledged same sex partners' rights to health care and
pension benefits. Few of their employees' benefits are:

Health insurance (medical, dental, psychotherapy and pharmacy

allowance)
Complementary pension plan
 180-day maternity leave
Educational benefits for children, from kindergarten to high school (school
expense reimbursement)
Promoting occupational safely, preventing risks and encouraging healthier
lifestyles are also priorities.

Careers

To overcome Petrobras challenges, they rely on the commitment of

professionals of different profiles. They value their employees, with wages and
benefits consistent with the market, opportunities for career advancement, and
training and courses for continuing education.

In Brazil, anyone who is just starting can get to know technical careers
and participate in the daily life of Petrobras, in internships or in a program aimed
at young apprentices.

To prepare the energy market for new demands, they also invest in
programs that offer training courses and scholarships to students from the
technical to the doctorate level.

Training Opportunities

To prepare professionals for the energy industry, Petrobras invest in

programs in collaboration with institutions, creating qualification opportunities for
Brazilians with different levels of education.

For young people in social vulnerability, the company promotes the social
inclusion: They have the opportunity to experience their company after the
vocational course in institutions.
 Petrobras takes part in other initiatives, offering scholarships to students
at the technical, undergraduate and doctoral level and to researchers. They also
visit schools to present to students to the technical professions related to the
energy industry.

Internships

In Brazil, they have been elected several times the "Company of the
Dreams of Young People." Students live in practice what they learn at Brazilian
schools, monitored by their professionals. Young talents enroll for internship
openings at their administrative and operating units across the country.

Petrobras University

In addition to the outside training provided to empower their professionals,

they offer a wide variety of courses at Petrobras University, which has units in Rio
de Janeiro and Salvador.

In Rio de Janeiro, the unit is headquartered in an eco-sustainable building

equipped with classrooms, laboratories, special distance education cabins, and
tutoring rooms. In the course of 2012, Petrobras University recorded 73,000
attendances at courses and conferences, in addition to training courses for new
professionals.
VI. GENERALIZATION

Integrated growth and socio-environmental responsibility are the keywords

in Petrobras mission and vision. With this, Petrobras caught a glimpse of their
2020 vision of being one of the five largest integrated energy companies in the
world and the preferred choice among their stakeholders.

From the well to the service station, they generate the energy that sets
ones life into motion as they operate in several areas. They research, innovate
and provide consumers with quality products. They have built a network of more
than 30,000 kilometers of oil and gas pipelines, and have a fleet of 60 vessels
which is currently under expansion.

Petrobras invest in their employees because they know it is impossible to

achieve excellence without valuing people. Their history is made by persons who
overcome challenges everyday. Their growth is directly related to their
commitment to society and respect for the environment. Their innovations made
them into one of the best. For Petrobras, they had to go for the oil which was
much deeper than they would have liked.