Petrobras – Clarification on News: Financial Statements Adjustment

Petrobras – Clarification on News: Financial Statements Adjustment

Rio de Janeiro, April 14th, 2015 – Petróleo Brasileiro S.A. – Petrobras´ response to Official Letter/CVM/SEP/GEA-1/N.º 123/2015 that requests clarification as follows:

OFFICIAL LETTER/CVM/SEP/GEA-1/N.º 123/2015

“In reference to news broadcasted on 04.11.2015 by the Brazilian Newspaper O Globo, under the headline“Petrobras: cost of corruption may reach R$ 6 billions”, which states as follows:

Balance Sheet may be disclosed on 04.20.15, according to a Company´s source.

Petrobras´ technicians will conclude the exact sum of corruption´s cost in the company´s accounts by this weekend. The Board of Directors has an estimate based on contracts under Operação Lava-Jato´s investigations by the Brazilian Federal Police, which indicates, approximately, R$ 6 billion in loss. The Company´s executives will receive the final sum results on Monday. Officially, the amount will be presented and disclosed on 04.20.15, when the Company will announce the third quarter balance sheet for last year, which has been already audited.

DISCLOSURE

Impairment. The Company´s technicians will conclude the loss sums by this weekend. They will search the entire system in order to know the exact amount which may be around R$ 6 billion, according to a high Company´s source who requested anonymity. This is the main step to recover the Company´s credibility. Also according to source, the account was created in a conservatory manner demonstrating that the new administration will not cover up losses due to corruption. The amount under analysis represents around 3% of the Company´s assets sum which is supposed to be diverted, such as Abreu e Lima Refinery (Renest), in Pernambuco, and Comperj, in Itaboraí, Rio de Janeiro.

INVESTMENT RANK UNDER RISK

The announcement scheduled for 20.04.15 will happen only two months after Petrobras´ new board of director’s investiture as well as several meetings with technicians, auditors and PricewaterhouseCoopers` representatives (PwC). The impairment of R$ 6 billion was calculated after Brazilian Securities Commission and Securities Exchange Commission approval of the corruption cost´s calculation methodology in several Company´s projects.

The sum is approximately 93% less than presented by Petrobras on January 27th, when the Company calculated an impairment of R$ 88,6 billion in 31 assets. The government was not satisfied with the amount disclosed, which has contributed to the Resignation of Petrobras` former chairman Maria das Graças Foster and her entire board of Directors.
[…]”

In regard, we have determined the Company´s response, until 9:00 AM on 04.14.15, about the veracity of these statements, and if so confirmed, explanations regarding the reasons for not interpreting as Relevant Fact, according to Directive CVM n. º 358/2002.

Moreover, we emphasized that the Company should clarify that the Brazilian Securities Commission was not consulted and neither has explained the matters mentioned on the News

Clarification

As mentioned in other occasions, due to developments on the Operação Lava-Jato, Petrobras makes necessary analysis to financial statements´ closing and disclosure of the third and fourth quarters of 2014, reviewed by the auditors.

These analyses may result in loss recognitions, which may be reflected in the results. These adjustments are still under evaluation.

The Company reaffirms that the Brazilian Securities Commission was not consulted regarding the financial treatment proposed for overpayment and neither has made comments on the matter.
According to the Relevant Fact released in April 13, Petrobras´ Board of Directors will meet to: (i) review its interim financial statements for the third quarter 2014, reviewed by the Company’s independent auditors; and (ii) approve the Company’s 2014 audited financial statements.

The Company expects to release these financial statements following the meeting, subject to the determination of the Board of Directors.

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