We understand
that the relations with society and the environment are essential. This is why the management system of social responsibility and standards of environmental excellence are continually being improved

Message from the CEO

I am pleased to present the Social and Environmental Report 2008 of Petrobras, an important instrument of transparency and communication with our stakeholders. Society increasingly demands ethical and sustainable behavior from companies, which makes our challenge greater and more complex. In this sense, we intend that the company’s performance is even better, in line with the concepts of sustainable development in business management.

The objective defined in our Strategic Plan is audacious: be among the five largest integrated energy companies in the world by 2020. In 2008, we were the ninth largest company of energy, according to the ranking of the consulting firm PFC Energy. Even with the instability of the international market and the price of the barrel of oil, Petrobras obtained a record net profit of R$ 33 billion, 53.3% more than the previous year, which shows that we are a solid and structured company. In 2008, our gas and oil production reached the mark of 2.4 million barrels of oil equivalent per day. For 2013, we expect to exceed the volume of 3.6 million barrels per day (bpd). For 2020, our goal is 5.7 million bpd.

The recent discoveries of petroleum in the pre-salt layer, in Santos Basin, will be responsible for a radical change in level for the business of Petrobras. In 2009, the first long-duration test will be undertaken in the Tupi field, and in 2010 a pilot system will be installed with the capacity to produce up to 100 thousand bpd, facts which mark the start of a new era for Petrobras and for Brazil. The production coming from the pre-salt layer has the great potential of stimulating the domestic market, generating new jobs and strengthening the Brazilian economy.

Concerning fuel quality, Petrobras has systematically invested in new technologies and upgrading the refineries to optimize production and enhance the products. To do so, R$ 8.5 billion will be invested in 13 hydrotreatment plants by 2013.

We will also have other challenges to overcome. One of them is the investment in clean energy such as biofuels. In 2008, we took an important step forward: the creation of Petrobras Biocombustível S.A., a subsidiary whose objective is to develop ethanol sales, biodiesel production and other products and activities. By 2013, US$ 2.8 billion will be invested in this segment.

With the increased supply and demand in the gas & energy area, we also intend to consolidate our performance in the Brazilian and international market, and to increase business in the generation of electricity and natural gas in Brazil.

We understand that relations with society and the environment are essential. This is why the management system of social responsibility and the standards of environmental excellence are continually being improved. In 2008, the company invested R$ 1.92 billion in the environment to upgrade the operational processes, in order to make them safer and more efficient.

Moreover, almost R$ 556.8 million were invested in more than 2,300 social, environmental, cultural and sports projects. These initiatives are inserted in corporate programs, such as the Petrobras Development & Citizenship, the Petrobras Environmental Program, the Petrobras Cultural Program and the Petrobras Sport & Citizenship Program. They are programs which have a public selection of projects, which allows organizations all over Brazil to have fair and democratic opportunities of access to the resources. During the public selection the registered projects undergo several levels of administrative and technical analyses by representatives of different segments of society.

Another highlight is the program Keeping an Eye on the Environment, which promotes the sustainable development of communities surrounding the operations of the company based on Agenda 21, a methodology for building sustainable societies, reconciling the methods of environmental protection, social justice and economic efficiency.

The information contained in this report is part of the Petrobras strategies for conducting business and activities with social responsibility, aligned with the ten principles of the UN Global Compact. Therefore, we restate our commitment to ongoing participation in this initiative, of which the company has been a signatory since 2003.

We hope that everyone will now learn a little more of the trajectory of Petrobras to attain this common objective: the building of a fairer, more ethical environmentally balanced world.

José Sergio Gabrielli de Azevedo
CEO of Petrobras