1. PETROBRAS
Conference Call / Webcast
1st Quarter 2006
(Brazilian Corporate Law)
Almir Barbassa
CFO and Investor Relations Officer
May, 16th 2006

2. PETROBRAS
Disclaimer
The presentation may contain forecasts about future events. Such forecasts
merely reflect the expectations of the Company's management. Such terms as
"anticipate", "believe", "expect", "forecast", "intend", "plan", "project", "seek",
"should", along with similar or analogous expressions, are used to identify such
forecasts. These predictions evidently involve risks and uncertainties, whether
foreseen or not by the Company. Therefore, the future results of operations may
differ from current expectations, and readers must not base their expectations
exclusively on the information presented herein. The Company is not obliged to
update the presentation/such forecasts in light of new information or future
developments.
Cautionary Statement for US investors
The United States Securities and Exchange Commission permits oil and gas
companies, in their filings with the SEC, to disclose only proved reserves that a
company has demonstrated by actual production or conclusive formation tests
to be economically and legally producible under existing economic and
operating conditions. We use certain terms in this presentation, such as oil and
gas resources, that the SEC’s guidelines strictly prohibit us from including in
filings with the SEC.
1

3. PETROBRAS
Income Statement 1Q06 vs 4Q05
1Q06 4Q05
-7.1%
38,638
Net Revenues
35,886
R$ Millions
22.030 -10.8%
COGS
19.644
13.211 6.8%
EBITDA 14.113
10.940 9.8%
Operating Profit (1) 12.010 More tax
payments -18.0%
8.142
Net Income 6.675
• Operating result 9.8% higher than the previous quarter, mainly due to the
absence of extraordinary items (operating expenses) occurred in 4Q05 as
shown in the following slide.
(1) Operating Profit and EBITDA of the previous quarters were readjusted in a form to purge the amount of provision for
employee’s profit sharing program, accrued until the 3Q05 in other operating expenses. 2

4. PETROBRAS
Operating Expenses Analysis 1Q06 vs 4Q05
1T06 4T05
1,709 -21.5%
Sales Expenses
1,342
General and 1,660 -28.6%
Administrative Exp. 1,186
1,254 -75.3%
Exploratory Costs
310
573 -25.3%
Others
428
• Better operating expenses structure in the 1Q06 because of lack of
extraordinary items occurred in 4Q05 such as: provisional expenses for
doubtful receivables, personnel expenses, high exploratory costs and
thermoelectric contractual pending expenses.
• In addition, there was a reduction on the maritime freight costs in 1Q06.
3

5. PETROBRAS
Domestic oil and NGL production
∆ = 14% ∆ = 2.5%
1,795
thousand bpd
1,730 1,725 1,736 1,751
1,543
1Q05 2Q05 3Q05 4Q05 1Q06 Apr/06
• 14% increase compared to last year same quarter due to the start-up in
Campos Basin of P-43 and P-48 platforms (Barracuda & Caratinga) in
December 2004 and February 2005 respectively. The production of both
units stabilized in the second quarter of 2005.
• On April 21st 2006, platform P-50 (180 thous. bbld) began operation in
Albacora Lest field and on May 8th the FPSO Capixaba (100 thous. bbld)
started operating in Golfinho field. Two more units are expected for the
2H06: P-34 and Piranema.
4

6. PETROBRAS
E&P – Oil Prices
61.53
US$ 8.07 bbl
61.75
56.90
51.59 56.39
52.70 57.59
47.83
44.00 53.69
US$/bbl
41.59 54.24
49.33
38.98
35.38 44.19 46.05
32.02 34.38 39.70 43.04
30.77 37.48
36.14 35.11
32.88
29.53
1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06
Brent (average) Average Sales Price OPEC Basket
• The spread between the Brazilian average oil price and the Brent
decreased from US$ 10.84/bbl in 4Q-2005 to US$ 8.07/bbl in 1Q-2006. This
heavy oil appreciation hindered refining margins.
5

7. PETROBRAS
Domestic Lifting Costs w/o Gov. Part.(*)
∆ = +6% or US$ 0.25
6.07 6.32
5.99
5.45 5.44
1Q 05 2Q 05 3Q 05 4Q 05 1Q06
Main Causes
+ US$ 0.07/boe: decrease in production (in bpd the production was stable,
but considering the total amount, it was below 4Q05);
+ US$ 0.18/boe: effect of average exchange rate due to Real appreciation of
3%.
• In Reais tern, this indicator remained stable relative to the previous quarter
(R$ 13,69 as to R$ 13,73 in 4Q05).
(*) The company, in order to promote better indexes adherence to its operating and management models, has reviewed their concepts,
recalculating the values of previous periods. 6

8. PETROBRAS
Extraction Costs including Gov. Participation (*)
26 61.5 56.9 62
51.6 61.8
47.5 52
21
38.2 17.3
16.0 42
16 15.0
28.8 13.6 13.3
US$/boe
32
63 %
24.8 10.7 11.0
62 %
11 9.9
56 %
7.6 9.6
8.5 7.8 22
7.0
6.4
6
57%
5.1
4.0 12
6.0 5.5 5.4 6.1 6.3
3.0 3.4 4.3
1 2
2002 2003 2004 1Q05 2Q05 3Q05 4Q05 1Q06
-4 -8
Lifting Cost Gov. Participation Brent
• Increase in government participation in the lifting cost due to higher Brent
prices and start-up of highly productive fields.
7

9. PETROBRAS
Changes in Operating Profit (1Q06 vs. 4Q05)- E&P
Changes in Operating Profit – R$ million
1,736 Domestic Oil, NGL and Condensate – thousand bpd 1,751
807 10.523
2.059 233 193 96
7.987
4Q05 Oper. Price effect Volume effect Average cost Volume effect Operating 1Q06 Oper.
Profits on Net on Net effect on on COGs Expenses Profits
Revenue Revenue COGs
• 31% increase in operating profit due to a rise in international oil price and
a reduction of exploratory and drilling costs in the 1Q06.
• Although the average daily production increased, the total volume
produced during the 1Q06 was lower due to smaller number of days.
8

10. PETROBRAS
Refining and Sales in the Domestic Market
1.804 1.761 1.812 100
1.708 1.668
1.800
1.649 95
1.600 1.731
1.665 1.647
1.589
90
1.400 91 91 91
83
85
1.200 87
1.000 80
81 80 81
79 79 75
800
600 70
1Q05 2Q05 3Q05 4Q05 1Q06
Domestic oil products production Oil products sales volume
Primary processed installed capacity - Brazil (%) Domestic crude as % of total
• Despite the increase of domestic oil in refinery throughput an increase of
oil products production can be observed, resulting from operational
improvements in refining, specially in the conversion of heavy oil.
9

11. PETROBRAS
Average Realization Price - ARP
100
4Q05 1Q06
Average Average
80
74.05 71.0
68.9 70.2
60
56.9 61.8
40
20
Mar-04 Jun-04 Sep-04 Dec-04 Mar-05 Jun-05 Sep-05 Dec-05 Mar-06
ARP Brazil (US$/bbl) Brent Average Price ARP USA (w/ volumes sold in Brazil)
• The ARP Brazil aligned with international prices, which are still pressured
by geopolitical issues and Asian demand;
• The ARP in Reais decreased 4.9% from R$ 161,11 (4Q05) to R$ 153,16
(1Q06).
10

12. PETROBRAS
Domestic Refining Costs (*) (US$/bbl)
2.03
1.96 1.90
1.86
1.74
1Q 05 2Q 05 3Q 05 4Q 05 1Q 06
• 6% reduction due to smaller number of programmed stoppages in the
quarter;
• Taking out the Real appreciation of 3%, refining costs decreased 8%.
(*) The company, in order to promote a better indexes adherence to its operating and management models, has reviewed their concepts,
recalculating the values of previous periods. 11

13. PETROBRAS
Changes in Operating Profit (1Q06 vs 4Q05)- Supply
Changes in Operating Profit – R$ million
1.606 42 3.013
123 1.672
2.302
696
4Q05 Op. Profit Price effect on Volume effect Average cost Volume effect Operating 1Q06 Op. Profit
Net Revenue on Net Revenue effect on COGs on COGs Expenses
• Increase in operating profit due to inventory consumption accumulated at lower
prices in the previous period;
• Main effects of smaller sales volume:
• less days in the 1Q06 (R$ 650 MM)
• Contraction of oil exports by the Refining terminals (R$ 340 MM)
• Offshore (R$ 300MM) and domestic market (R$ 160 MM) sales
• Oil products exports (R$ 101 MM)
• Price effect on Net Revenue: increase of ARP for the oil products foreign market;
12

14. PETROBRAS
Changes in Net Profit – R$ million (3Q05 vs 4Q05)
1,736 Domestic Oil, NGL and Condensate – thousand bpd 1,751
1.006
1.436
850 1.210
8.142 2.752
2.386 1.483
6.675
4Q05 Net Revenues COGS Oper. Exp. Fin. and non Employees Minority Taxes 1Q06 Net
Profit oper. exp., Participation Interest Profit
others and
Equity Inc.
• The 1Q06 net profit was negatively affected by:
• Lower realization prices in Reais;
• Higher income taxes (absence of tax benefit occurred in 4Q05 for the Interest on
Own Capital declaration);
• appreciation of the Real by 3% causing losses on equity income line.
• These effects were partially offset by an improved expenses and costs structure.
13

15. PETROBRAS
Business areas’ share in Operating Profit – R$ million (4Q05 vs 1Q06)
711 339 150 160 2.503
23
2.536
12.010
10.940
4Q05 Oper. E&P Downstream G&E Distribution International Corp. Elimin. 1Q06 Oper.
Profit Profit
• Results in other Areas affected by:
• G&E: Lack of thermoelectric extraordinary contractual pending expenses (occurred
in 4Q05);
• INTER: the higher oil & NG sales prices weren’t sufficient to offset the effect of the
Real appreciation on investments abroad;
• DISTRIBUTION: market share decrease caused by aggressive competition.
14

16. PETROBRAS
Net exports of oil and oil products
Exports (thousand bpd) Imports (thousand bpd)
559
564 551 517
495 424 492 459
109 368 416 425
446
409 396 221 99
250 105 65 115
246 255 46 83
213
228 235
450
393 360
343 319 322 Oil
333 344
249 301 262
233 181 161
2003 2004 1Q05 2Q05 3Q05 4Q05 1Q062003 2004 1Q05 2Q05 3Q05 4Q05 1Q0
Oil Oil Products Oil Oil Products
• 58 thous. bpd volume superavit in the 1Q06;
• only US$ 41 million in deficit.
(Exports: US$ 2.54 billion / Imports: US$ 2.58 billion)
15

17. PETROBRAS
Cash Breakdown (R$ millions)
1.600
25.000
1.200
Financial Revenues
15.000 800
Cash
400
5.000
0
12/31/2004 3/31/2005 6/30/2005 9/30/2005 12/31/2005 3/31/2006
(5.000)
FX rate
change* ∆0.4% ∆-11.8% ∆-5.5% ∆5.3% ∆-7.2%
(400)
(15.000) Abroad In Brazil w/ FX correction**
(800)
In Brazil CDI Cash
Financial Income
(25.000) (1.200)
• Financial revenues influenced by the US dollar indexed cash as hedge
against the debt and costs linked to dollar.
*Price of US Dollar at end of the period
** The line ‘Fundos de investimentos financeiros - cambial " was restated to “..investimentos exclusivos" in order to fullfill CVM
requirements CVM 411 and 413/2004.
16

18. PETROBRAS
Leverage
Petrobras’ Leverage Ratio
37% R$ million 03/31/2006 03/31/2005
32% Short-term debt
(1) 11,384 11,116
26% 26%
24% Long-term debt
(1) 33,083 37,126
20% 19% 19%
23%
20% Total debt 44,467 48,242
(2)
Net debt 21,484 24,825
1Q05 2Q05 3Q05 4Q05 1Q06
Net Debt / Net. Cap.
Short-Term Debt / Total Debt
• The short-term debt increased because PRI Bonds maturing in 2007.
• Long-term debt decrease of 4 base points compared to 12.31.05 due to:
• Real appreciation;
• Financing amortizations.
(1)Includes debt contracted through leasing contracts of R$ 3.300 million on December 31, 2005, and R$ 4.021 million on December 31, 2004.
(2)Total debt - cash and cash equivalents 17

19. PETROBRAS
Consolidated Cash Flow Statement
R$ million
1Q06 4Q05 (1)
(=) Net Cash from Operating Activities 10,144 8,513
(-) Cash used in Cap. Expend. (6,020) (7,025)
(=) Free Cash Flow 4,124 1,488
(-) Cash used in Financing and Dividends (4,558) (718)
Financing (499) (768)
Dividends (4,059) 50
(=) Net Cash Generated in the Period (434) 2,206
Cash at the Beginning of Period 23,417 21,210
Cash at the End of Period 22,983 23,417
• Cash at the end of period affected by the payment of interest on own capital
during the 1T06.
(1) As of January 1, 2005, the Special Purpose Companies whose activities are directly or indirectly controlled by Petrobras were included in
the Consolidated Financial Statements, as per CVM Instruction No. 408/2004.
18

20. PETROBRAS
Investments
Jan-Mar
2006 % 2005 % %
• Direct investments 5.386 91 4.740 89 14
Exploration & Production 3.359 57 2.834 54 19
Supply 799 13 681 13 17
Gas and Energy 149 3 433 8 (66)
International 703 12 545 10 29
Distribution 138 2 112 2 23
Corporate 238 4 135 2 76
• Special Purpose Companies 494 8 457 9 8
• Ventures under Negotiation 33 1 45 1 (27)
• Project Finance 1 - 39 1 (97)
Exploration & Production 1 - 39 1 (97)
Espadarte/Marimbá/Voador 1 - 39 1 (97)
Total Investments 5.914 * 100 5.281 100 12
19

21. PETROBRAS
QUESTION AND ANSWER
SESSION
Visit our website: www.petrobras.com.br/ri/english
For further information please contact:
Petróleo Brasileiro S.A – PETROBRAS
Investor Relations Department
Raul Adalberto de Campos– Executive Manager
E-mail: petroinvest@petrobras.com.br
Av. República do Chile, 65 - 22nd floor
20031-912 – Rio de Janeiro, RJ
(55-21) 3224-1510 / 3224-9947
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