EXCELLENCE STANDARDS IN THE ENVIRONMENTAL AREA

Principle 7 Businesses should support a precautionary approach to environmental challenges

By interacting in different manners with the environment in developing its business and activities, Petrobras is committed to maintaining standards of environmental excellence in order to guarantee products and services suited to the expectations of its stakeholders and the legislation in force wherever it performs.

In order to contribute to sustainable development, the company maintains a management system focusing on the environment for the continuous improvement of its processes, including the productive chain, and promotes internal and external actions of environmental consciousness.

During the year, R$ 1.97 billion was invested in the environment, including operational processes and support for programs and projects.

ENVIRONMENTAL MANAGEMENT

“Investing in the sustainability of its projects, products and services, maximizing the benefits in the economic, social and environmental spheres and minimizing the adverse impacts and monitoring the entire life cycle of its facilities, operations and products”. This is a Petrobras commitment provided in its Code of Ethics.

This is why legal preventive measures are permanently adopted. The company manages the environmental aspects of its activities combined with the issues of safety and health, as stated in its policy of Health, Safety and Environment (HSE), directed at adopting the best practices in its operations (see first back cover).

The third guideline of this policy, referring to risk assessment and management, states that “risks inherent to the company’s activities must be identified, assessed and managed in order to prevent the occurrence of accidents and/or ensures the minimization of their effects”. On the other hand, the eighth guideline addresses capacity building, education and consciousness, which, when promoted, reinforce the commitment of the workforce to its performance in health, safety and environment. Some requirements of this guideline are the implementation of programs which encourage the adoption of safe and healthy conduct and respect for the environment, in and outside the company, and periodic evaluations of the workforce’s capacity building regarding HSE requirements.

The HSE Management Committee, consisting of representatives from different areas and subsidiaries, meets monthly to identify, plan and accompany the development and application of management strategies and policies common to the company with regard to the topic, as well as to monitor and assess corporate performance in the area of health, safety and environment, proposing actions and initiatives to optimize performance.

The Principle of Precaution – which provides economically feasible measures to prevent environmental degradation even in cases where there is no scientific certainty of the threat of serious or irreversible damage – is present in the assessments of risk and environmental impact for new undertakings and in events of change in existing facilities. An example of the application of this principle is the assessment of impacts on climate change by Petrobras to analyze new undertakings. The Principle of Precaution was established at the 1992 United Nations Conference on Environment and Development in Rio de Janeiro.

R&D

The company’s strategy for integrated growth until 2020 stresses operational excellence, management, energy efficiency, human resources and technology. Concerning this last point, Petrobras has the competitive edge of its know-how in deepwater exploration.

Moreover, the company has assumed the challenge of being a world benchmark in technologies that contribute to its sustainable growth in the oil and gas, petrochemical and biofuel industry. Accordingly, its R&D aims to provide and advance technological solutions with a vision of innovation and sustainability. With the work of Cenpes, Petrobras also reinforces its role in the academic community by participating in different research networks involving science and technology institutions. Approximately R$ 400 million are invested each year in Brazilian institutions of this type.

Cenpes occupies a built-up area of 57,000 m2 in Rio de Janeiro and currently has 30 pilot units and 137 laboratories. After its extension, to be concluded in 2010, it will then occupy 190,000 m2 of built-up area and 227 laboratories.

The new facilities will have a Collaborative Viewing Center, with immersive systems intended for research and simulations, and a convention center for 400 people. They will also host the Petrobras Integrated Data Processing Center, which will contain all the company’s information technology services.

The extension, based on eco-efficiency, is planned to have its own water treatment and reuse plant, taken from rainfall and soil; facilities planned to use natural ventilation and light and a natural gas energy cogeneration plant.

cogeneration plant. From January to September 2008, registrations were received for the 4th year of the Petrobras Technology Award, designed to encourage and recognize the contribution of the Brazilian academic community to technological development of interest to Petrobras and the Brazilian oil and gas industry. Graduates, postgraduates (master’s degree or PhD) from any higher education institution in Brazil may take part. The awards have nine categories and their result is to be announced in the first semester of 2009.