Petrobras – Investor Relations

Petrobras

Investor Relations

Participation in the ANP¿s 7th Bidding Round for Exploratory Blocks.

(Rio de Janeiro, October 21, 2005). – PETRÓLEO BRASILEIRO S/A - PETROBRAS, [Bovespa: PETR3/PETR4, NYSE: PBR/PBRA, Latibex: XPBR/XPBRA], a Brazilian international energy company, announces that on October 17 and 18 2005 it took part in the 7th Bidding Round for Exploratory Blocks organized by the National Oil, Gas and Biofuels Agency (ANP).  
 
In the course of this bidding round, the Company acquired 96 new blocks either exclusively or in consortium, and tendered bids in 109 of the 1134 blocks offered for auction by the Agency.
 
Of the blocks acquired by the Company, 73 are located onshore and 23, offshore. Petrobras is to participate as the operator for 70 of these and in a non-operating capacity, for a further 26. The Company’s results in the latest round are shown below: 

 

Petrobras successfully bid for 18 blocks in high exploratory potential areas of the Espírito Santo, Campos and Santos basins with the objective of consolidating the Company’s position in deep and ultra-deep waters where it has an existing comprehensive infrastructure and is  operating on a selective basis. In addition, Petrobras obtained blocks in strategic areas of shallow waters in the Espírito Santo and Santos basins. These acquisitions will enable the Company to operate in areas where there are economically viable opportunities, the focus being on possible gas finds. In these areas, Petrobras has signed agreements for 11 blocks with Shell, Statoil, Petrogal, Devon, BG and Repsol-YPF. The Company’s average stake in these partnerships is 60%.
 
The acquisition of 63 blocks in mature areas in the Potiguar, Sergipe-Alagoas, Recôncavo and Espírito Santo basins is consistent with the strategy of operating in onshore areas by leveraging opportunities, and in synergy with existing production facilities. In the case of these acquisitions, Petrobras has signed partnership agreements with Petrogal, Starfish and Partex for 32 blocks and participates with an average stake of 56% in the related investments and interests.
 
 The Company successfully tendered for 15 blocks in new exploratory frontier deep-water areas in the Potiguar basin and in the onshore São Francisco and Solimões basins. These investments are in line with Petrobras’ strategy of developing its  exploratory activities in new frontier areas and are designed to ensure a sustainable “reserve/strategic production” ratio with the emphasis on increasing possible oil and gas discoveries. In 11 of these blocks where it is to operate in consortium with Petrogal, Encana and BG, the Company’s average stake is 60%.

Petrobras was the company that acquired the most blocks, 54 as partners and 42 on an exclusive basis, increasing its exploratory projects portfolio by an additional concession area of 39,871 km2 (including acquisitions on a consortium basis). The Company’s total financial outlay for account of the 7th Bidding Round was R$ 503.5 million. The success ratio in the acquisition of blocks was 88.1%.
 
The new concession areas will be instrumental in allowing the Company to replenish its portfolio of exploratory blocks,  at the same time lengthening the portfolio’s average maturity. With the incorporation of the results of this bidding round, the  Company will have enhanced its participation to more than 331  exploratory blocks. The signature of the new concession contracts is forecast for January 2006.
 
The active participation of Petrobras in the latest round is in line with the priorities set out in the Company’s Strategic Plan for operating prudently and profitably in a socially and environmentally responsible manner.

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