Petrobras – Investor Relations


Investor Relations

Petrobras concludes agreement for acquisition of MPX Termo Ceará

Rio de Janeiro, March 24 2005 – PETRÓLEO BRASILEIRO S/A - PETROBRAS, [Bovespa: PETR3/PETR4, NYSE: PBR/PBRA, Latibex: XPBR/XPBRA], a Brazilian international energy company, announces that it signed a Term Sheet containing the conditions for suspending the current arbitration and legal processes involving MPX. This will provide a basis for the parties to the dispute to negotiate an irrevocable settlement to the litigation, which would involve Petrobras’ acquisition of MPX. With the signing of the Term Sheet, the parties will begin the process of due diligence.

The signature of the Term Sheet signifies that the parties may now jointly request the temporary
suspension of the arbitration procedure and the preventive injunctions as well as take the necessary steps to cease any extrajudicial proceedings still pending. The requirements under the Consortium Contract and other related contracts will also be suspended for a term of 90 (ninety days). Should the due diligence and agreement on the details of the acquisition be completed on a mutually satisfactory basis to the parties concerned, the Participation Agreement will be transformed into a purchase and sale agreement. Once this agreement is concluded, the parties will jointly request the definitive extinguishment of the arbitration and legal processes.

The parties will make every effort to conclude these procedures in the shortest possible time, the expectation being that this timeframe will be three months. If the operation is satisfactorily concluded, Petrobras will disburse US$ 137 million (between the acquisition price and the settlement of MPX’s debt), including the amount of approximately US$ 5 million paid in by Petrobras as a court deposit.

With the finalization of the operation, ownership of the Termo Ceará Thermoelectric Power Plant (Power Plant) will be entirely transferred to Petrobras.

The final conditions of the purchase and sale contract will be submitted for approval by Petrobras’ Executive Board and Board of Directors, the executive bodies of MPX and the financing institutions of the Power Plant.

The conclusion of these negotiations is part of Petrobras’ strategy for the energy sector, which provides for an increase in the Company’s thermal electric generation capacity only through either the conclusion of projects already under construction or the acquisition and consequent reduction in contingency payments.

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