Petrobras

Considering that:

I - Petrobras is a publicly held open capital company with its shares negotiated on the stock exchanges;

II - besides carrying out their functions to achieve the objectives and assure the best interests of the Company, and having satisfied the requirements as to the public good and the social function of the Company, the management must loyally serve the said Company;

III - it is incumbent on management (i) to communicate to the market, through the Investor Relations Director, acts and events relevant to the market on the Company's business (Duty to Inform), (ii) to maintain this information confidential until its communication and dissemination to the market (Duty of Confidentiality), as well as (iii) ensure that subordinates and third parties privy to this same information exercise confidentiality ( Duty to Ensure Confidentiality among those not part of Management);

IV - those individuals privy to this information due to both the post or position which they hold and also in the light of the policy of delegating responsibilities to Petrobras' employees, may not use this same information for their own benefit or that of others through the negotiation of securities (Duty not to Use Privileged Information);

V - it is necessary that both management and also employees of Petrobras conduct themselves according to the highest ethical standards, avoiding situations of conflict of interest or improper behavior involving the negotiation of securities issued by the Company;

VI - the Company's management has the duty (as provided for under the provisions of the Brazilian Securities and Exchange Commission - CVM) to immediately inform the CVM and the stock exchanges or entities responsible for the organized over-the-counter market on which the securities issued by the Company are authorized to trade, as to its shareholdings in the Company and respective changes;

VII - it is important to adopt an efficient policy of market relations for the purpose of providing the investors and market analysts with information not only related to prospects for the Company, thus providing the basis for decisions as to investments and divestments of the Company's securities, but also for enabling the holders of these securities to fully exercise their rights acquired through the said securities, especially voting rights.

It is herewith resolved to establish the following norms that will govern Petrobras's Internal Policies for Disseminating Information on Acts or Events Relevant to the Market; the Negotiation of Securities; the Conduct of Management and Employees who comprise the Senior Management of Petrobras; the Indication to Management Positions in the Subsidiaries, Controlled Companies and Affiliates and the Investor Relations Policy:  

POLICY FOR DISSEMINATING INFORMATION ON ACTS OR EVENTS OF RELEVANCE TO THE MARKET

Article 1 It is incumbent on the Investor Relations Director to ensure that the information on acts or events of market relevance that have taken place or relating to Petrobras's businesses be disseminated to the market in the form established in the legislation and in this Code.

Article 2 The Investor Relations Director must inform the act or event of market relevance to the Brazilian Securities and Exchange Commission - CVM , the São Paulo Stock Exchange - Bovespa, and any other stock exchange or entity responsible for the organized over-the-counter market in which securities issued by the Company are authorized to be traded as well as ensure the widest and immediate dissemination of the information simultaneously to all these markets.

Para. 1 Dissemination will be through the publication in the mass circulation newspapers customarily used by the Company, it being permissible to publish in a summarized format with an indication of Internet addresses where the complete information is available to all investors, in a manner at least identical to that delivered to the entities mentioned in the first sentence of this article.

Para. 2 Whenever possible, dissemination will be made before the start or after the close of trading in Brazil (Bovespa) and the United States (NYSE) and should this not be possible, precedence will be given to the hours the Brazilian market is open for business.

Article 3 For the Investor Relations Director to take the necessary steps to disseminate the information, the following bodies must communicate in writing any act or event of market relevance of which they have knowledge: the majority shareholder, the Directors, members of the Board of Directors and the Fiscal Council, any bodies with technical or consultative functions created as a result of a statutory resolution and the Business and Management Committees created respectively by the Board of Directors and by the Executive Board of Petrobras.

Sole Paragraph. The Investor Relations Director will inform the steps he has taken immediately and in writing to the individual who has sent the original communication.

Article 4 Exceptionally, the Investor Relations Director has the discretion not to disseminate the act or event of market relevance if he understands that its appropriateness will put at risk the Company's legitimate interests and, when necessary and according to legal requirements, requesting the Brazilian Securities and Exchange Commission - CVM to maintain the information confidential.

Para. 1 The Investor Relations Director may present this material for the decision of the Company's Executive Board and the latter in turn, to the Board of Directors.

Para. 2 Should the matter be submitted for the examination of the Brazilian Securities and Exchange Commission - CVM, the request will be addressed to the President of the CVM, in a sealed envelope marked with the word confidential.

Article 5 Should the decision have been taken to maintain the act or event confidential, the Investor Relations Director must immediately announce it in the case of an information leak or if an atypical fluctuation occurs in the quotation, price or quantity negotiated in securities issued by the Company or instruments indexed to such securities.

Article 6 Should the individuals cited in article 3 above have personal knowledge of the act or event of market relevance and it is found that the Investor Relations Director has failed to fulfill his duties of communication and dissemination, including the eventuality mentioned in article 5, they must deliver a copy of the correspondence containing the details cited in the first sentence of article 3 and according to its Sole Paragraph, to other members of the Executive Board and to the Board of Directors, in order that the necessary action can be immediately taken to disseminate the information.

Para. 1 If, in spite of this, the question remains pending then the directors, members of the Board of Directors, of the Fiscal Council and any organs with technical and consultative functions created by statutory resolution, will only be exempt from responsibility should they immediately communicate the act or event of market relevance to the CVM.

Para. 2 The Director or member of the Board of Directors who is in disagreement as to the decision not to disseminate the act or event of market relevance, which does not place the Company's legitimate interests at risk, may submit the matter to the Securities and Exchange Commission - CVM, pursuant to the provisions of paragraph 2 of Article 4.

Article 7 It is incumbent on the Directors, members of the Board of Directors and Fiscal Council, of any organs with technical and consultative functions created through a statutory resolution, of the Business Committee and Management Committees established respectively by the Board of Directors and by the Executive Board of Petrobras, of organs comprising employees of the Senior Management, as well as any of the Company's employees who are privy to the act or event of market relevance, to maintain this information confidential until its due dissemination to the market.

Para. 1 The individuals referred to in the first sentence to this article:

cannot use this information to obtain for themselves or for others any advantage by the buying and selling of securities issued by Petrobras, or other instruments indexed to such securities;

must ensure that the provisions in this article are not violated by subordinates or third parties in their trust, being responsible in case of disregarding; and

must communicate to the Company their assets relative to securities issued by Petrobras or other instruments indexed to such securities and must immediately communicate the fact following any movement in their position.

Para. 2 Those considered trusted third parties are individuals who have a commercial and professional relationship or one of trust with the Company, such as independent auditors and other individuals and institutions comprising the distribution system. Third parties will also include spouses from whom the individuals in the first sentence of this article are not legally separated, common law partner, any dependent included in his/her annual income tax return and corporations controlled directly or indirectly by these individuals and, additionally, anyone that has a relationship of trust with these same corporations.

Article 8 The Company will communicate formally with the Directors, to members of the (i) Board of Directors, (ii) Fiscal Council, (iii) technical and consultative bodies created through a statutory resolution, (iv) Business Committee created by a decision of the Board of Directors and (v) members of the Management Committees created by the Executive Board, the terms of the decision of the Board of Directors which approves or alters the Policy for Disseminating Information on Acts or Events of Relevance to the Market. The Company will obtain from these individuals their respective formal adhesion in an instrument which must be filed at the Company's head office from the date the said adhesion is established up to the end of the fifth year or at least until the relationship with the Company is terminated.

Sole Paragraph. The Company will hold at its head office and available to the CVM, the list of individuals mentioned in the first sentence of this article with their respective identification details, an indication of their position or function, address and corporate or individual tax enrollment number, this information to be up-dated whenever there is any change.

Article 9 The same individuals referred to in the first sentence of article 8 are required to communicate to the Company, the CVM and the Bovespa, or any other stock exchange or entity responsible for the organized over-the-counter market on which securities issued by the Company are negotiated, the quantity, characteristics and form of acquisition of the securities issued by both the Company and its controlled corporations - publicly held open capital companies - or other instruments which are indexed to such securities, of which the said individuals are the beneficial owners, as well as any changes in the positions held.

Para. 1 The communication must contain at least the following information:

name and identification of the beneficial owner, including his/her tax enrollment number;

quantity, by type and class in the case of shares, and remaining characteristics in the case of other securities as well as the identification of the issuing Company;

form, price and date of the transactions.

Para. 2 The communication will be sent to the Company immediately following the investiture of the individuals in the position and within a maximum term of 10 (ten) days following the end of the month in which a change in position occurred, with an indication of the outstanding position in the period.

Para. 3 Also to be listed are the securities held by the individual's spouse from who he/she is not legally separated, common law partner, any dependent included in his/her annual income tax return and corporations controlled directly or indirectly by these individuals.

Article 10 The prohibitions contemplated in this Chapter apply both for negotiations on the stock exchange and organized over-the-counter market and also negotiations carried on outside the stock exchanges and without the intervention of an institution which is part of the distribution system.  

POLICY FOR NEGOTIATION OF SECURITIES

Article 11 The Investor Relations Director will be the director responsible for implementation of the necessary procedures for compliance with the Negotiation
Policies and for their monitoring.

Article 12 The Company's Directors, members of the Board of Directors and the Fiscal Council, Executive Managers, members of the Business and Management Committees set up respectively by the Board of Directors and by the Executive Board and any technical and consultative bodies created by a statutory resolution as well as employees in the Investor Relations area, are all prohibited from negotiating securities issued by Petrobras and publicly
held companies controlled by it or in which it holds a stake or other securities indexed to those of Petrobras during the following periods:

before 180 (one hundred and eighty) days have elapsed as from the date of acquisition through the stock exchanges;

for the period of one month immediately preceding the closing of the financial year and until the publication of the notice making the financial statements available to the shareholders or the publication of the financial statements themselves, whichever occurs first;

in the period between the date a decision is taken by the appropriate corporate body to increase or reduce the capital stock, distribute dividends, stock dividends or their derivatives, to split, or make a reverse split or issue other securities, and the publication of the respective notices or announcements;

during the process of a buy-back or sale of the shares issued by the Company itself, its controlled companies, affiliates or other corporation under common control;

in the 15 (fifteen) days prior to the dissemination of the Company's quarterly information (ITR), standard financial statements (DFP), and annual information (IAN);

before the dissemination to the market of an act or event of relevance to the market involving the Company's business;

Para. 1 Prior to dissemination to the market of an act or event of market relevance to the Company's business, it is also prohibited to negotiate securities issued by the Company or by publicly held open capital companies controlled by the Company or in which the Company holds a stake, or other securities indexed to
those issued by the Company or by whoever, in virtue of his/her post, function, employment or position in the Company, its controlled or affiliate companies, has knowledge of the information relative to the act or event of market relevance.

Para. 2 Without prejudice to the provisions in the preceding paragraph, the prohibition in the leading sentence is applicable to the individuals therein mentioned following their resignation from the Company management for a term of six months from the date they leave the Company.

Para. 3 in the event of force majeure which requires the need to sell securities in contravention of the rules contained in this article, the party concerned must communicate the fact to the Investor Relations Director, who will decide on any request presented and duly supported by a suitable justification.

Para. 4 It is incumbent on the Investor Relations Director to investigate the reason and the purpose of the operation and if need be, obtain prior ruling from the Brazilian Securities and Exchange Commission - CVM with respect to the matter.

Article 13 The individuals referred to in the first sentence of Article 12 may have their own plans for negotiating securities issued by the Company, these plans to be presented to the Investor Relations Director for the purpose of examining their compatibility with the provisions in this Code.

Para. 1 The Company will only approve the Plan should its contents not represent the use of relevant information obtained on a privileged basis. Thus the Plan must be prepared in such a way that the decision to buy or sell cannot be taken after the information has become known, the proponent of the Plan thereby
not exercising any influence on the operation, the relevant information for which has not been released to the market.

Para. 2 The Plan must include the nature of the operations programmed, both in terms of buying and selling, as well as dates, quantities and the prices or a predetermined criterion for deciding these elements, all of which must be compatible with the provisions in Article12.

Para. 3 The individuals cited in the first sentence of article 12 must communicate to the stock exchanges or the entity responsible for the organized over-the-counter market as to their plans for periodic negotiation of securities as well as subsequent alterations or infringements of such plans.

Article 14 The same restrictions provided for in article 12 of this Code also apply to Petrobras with respect to the negotiation of its own shares.

Article 15 The prohibitions contemplated in this Chapter apply both for negotiations on the stock exchange and organized over-the-counter market and also negotiations carried on outside the stock exchanges and without the intervention of an institution which is part of the distribution system.

Article 16 The controlling shareholder of Petrobras may adhere to the Company's Negotiation of Securities Policy in accordance with the terms and pursuant to paragraph 7 of Article 13 of CVM Instruction 358/02, without prejudice to the legal provisions and pertinent regulations.  

POLICY FOR CONDUCT OF MANAGEMENT AND EMPLOYEES WHO COMPRISE THE SENIOR MANAGEMENT OF PETROBRAS

Article 17 Management and employees comprising the Senior Management of Petrobras have the same duty of loyalty and consequently must conduct themselves in such a way as to avoid any occurrence of situations which may be construed as a conflict of interest and affect the Company's businesses and operations.

Article 18 The management and employees comprising the Senior Management of Petrobras, principally those employees in positions of authority or, as a result of their functions, having contact with clients, suppliers and competitors, must, in compliance with this Policy, abstain from:

receiving from any supplier, client or competitor, a reward or payment for services rendered as an employee or consultant;

receiving for himself or any member of his family or person residing in his place of abode, gifts or entertainment which, irrespective of value, may give grounds for conflicts of interest;

practicing any acts that place him/her in a position of subordination or under the influence of a supplier, client or competitor.

Article 19 The management and employees comprising the Senior Management of Petrobras must act with due diligence to avoid the occurrence of conflicts of interest.

Article 20 The management and employees comprising the Senior Management of Petrobras must exercise the attributes that the law and the Bylaws bestow on them to fulfill the corporate purpose and in the interests of the Company, at the same time, satisfying the requirements of the public good and the social function of the Company.

Article 21 The management and employees comprising the Senior Management of Petrobras must loyally serve the Company.  

POLICY FOR INDICATION TO MANAGEMENT POSITIONS IN THE SUBSIDIARIES, CONTROLLED COMPANIES AND AFFILIATES

Article 22 Members of the Executive Board are able to exercise concurrently positions in the management of subsidiaries, controlled companies and affiliates, as long as the said corporations exercise activities in the same respective area as those performed by these Executive Board members in accordance with the Basic Organization Plan.

Article 23 It is incumbent on the Board of Directors to examine each request involving the indication of members of the Executive Board to hold positions on the management of subsidiaries, controlled companies and affiliates of the Company.

Sole Paragraph. The Board of Directors may delegate to the Executive Board the responsibility in each case, to examine and decide the requests for the indication of members of the Executive Board to hold other management positions at the subsidiaries, controlled companies and affiliates of the Company in view of the relevance of the technical knowledge he/she brings to the performance of the function in the said corporations as well as for the purpose of maintaining the guidelines and the strategic plan outlined by the Board of Directors of Petrobras.

Article 24 The holding of a position in the management of affiliate, controlled and subsidiary companies may not result in a failure to fulfill the legal duties required from this professional as an Executive Director of Petrobras.

Article 25 The concurrent holding of management positions at Petrobras and also at its subsidiary, controlled and affiliate companies in the manner indicated above reflects the objective of achieving a single administrative and command unit based on the guidelines established by the Board of Directors of Petrobras.
 

INVESTOR RELATIONS POLICY

Article 26 The CFO and Investor Relations Director is the Company representative responsible for supplying information to the securities market and regulatory and self-regulatory entities pertaining to this market. The same director will be responsible for outlining a policy for investor relations.

Sole Paragraph. The Director will appoint an Executive Investor Relationship Manager, who will act under the guidance and supervision of the Director as the official spokesperson for the Company and be responsible for executing the investor relations policy, being incumbent on him/her to:

protect the image and credibility of Petrobras in the eyes of investors, investment analysts and the market at large, and

promote the announcement and dissemination of information to the market in a proactive, transparent, disciplined, careful, complete and impartial manner in accord with legal and regulatory requisites.

Article 27 It is Petrobras's duty, in a timely manner, to correct relevant information considered accurate when released to the market but subsequently found to be incorrect, as well as to up-date relevant information whenever this is modified in such a way as to impact the negotiation of securities issued by the Company in the market.

Para. 1 The dissemination of these alterations will be made through the same channels as the announcement of the original information. It is recommended that in case of error, immediately following the announcement of the correction, a conference call with investors and investment analysts be held for explaining the reasons for the corrections made.

Para. 2 When the information is of a non-relevant nature, and announced voluntarily, Petrobras will up-date the data through the company website and communiqués to the market, however at the same time, and at the Company's discretion, reexamining the convenience and usefulness of maintaining the flow of this information.

Article 28 The dissemination of relevant information must be made uniformly so that all investors and investment analysts are made aware of the information before the start or after the closing of trading of securities issued by the Company.

Para. 1 Petrobras will adopt the policy of not commenting on any rumors that may arise, unless they directly affect the negotiation of its own securities, or other securities indexed to these of the Company. In this case, it will issue a declaration denying or confirming the news. In addition, Petrobras will not respond to market rumors via the Internet.

Para. 2 In the case of extraordinary circumstances of inadvertent selective dissemination or the leaking of an act or event of market relevance, it may become imperative to immediately release the information even during the hours that the said securities are being traded. In the latter case, the CFO and Investor Relations Director has the autonomy to request the appropriate authorities to suspend trading.

Article 29 Should Petrobras exercise its prerogative of disseminating any prospective information (or forecast), to enable investors and investment analysts to better evaluate the Company and its future opportunities, the assumptions and details used in the relative calculations must be clearly shown for each one of the items and forecast periods.

Sole Paragraph. It is Petrobras's duty to observe standards of reasonableness and reliability in its forecasts, in this way avoiding excessive optimism as to future performance and frustrating market expectations. Should these forecasts prove to be invalid or suffer modification, Petrobras will announce the corrections or make the appropriate up dating through its website and market communiqués. Should the forecasts not be fully realized, the reasons that have led to the discrepancy in results shall be informed to the market.

Article 30 In principle, Petrobras, will adopt a policy of not endorsing investment recommendations by investment analysts, neither will it comment as to conclusions or results' forecasts which must reflect independent opinions.

Para. 1 Consequently, Petrobras must be cautious in distributing or making reference to investment analysts' reports, even if public knowledge, in this way avoiding any inference as to preference for any particular one of them. Should the Company eventually distribute such reports, it will include a statement disclaiming any endorsement of the respective conclusions.

Para. 2 With the purpose improving the level of disclosure in these reports, the Company when it believes opportune, will restrict itself to correcting errors of historical fact or clarifying badly interpreted communiqués as well as pointing to information that has been omitted and which is public knowledge.

Para. 3 The Company will only announce the existence of extraordinary items which can cause a difference in the forecasted results of investment analysts if it has sufficient elements to provide an appropriate clarification, in which case the information will be transmitted via the Company website and Communiqués to the market.

Article 31 Petrobras will only participate in chat rooms which the Company itself sponsors or which are programmed in partnership with financial institutions and coordinated by the Executive Investor Relations Management. As a general rule, on these occasions only those managers designated by the Company's Senior Management may speak.

Article 32 The Company's in-house system of communicating information will be conducted in writing, transmission by facsimile or e-mail being acceptable with the individual who provides the information duly identified as well as indicating his/her position or function. The information must also contain a clear statement as to restrictions on access and dissemination of this same information to the general public.

Article 33 With the proviso of the exceptions contained in the pertinent legislation, Petrobras will assure the confidentiality and security of the registered information of the shareholders, thus avoiding the use of such information for the sending of advertising material via direct mailing shots, the exception being institutional correspondence sent by Petrobras itself.

Sole Paragraph. Those employees who breach the confidentiality regulations either directly or indirectly are subject to the legal penalties.