Rio de Janeiro, March 21, 2016 – Petróleo Brasileiro S.A. – Petrobras hereby responds to Official Letter 118/2016-CVM/SEP/GEA-1, which requests the following clarifications:

Official Letter 118/2016-CVM/SEP/GEA-1

“Dear Officer,

We refer to the news item published on March 18, 2016 in the electronic medium REUTERS BRASIL, entitled Petrobras considera abrir mão de controle da BR Distribuidora, dizem fontes (Petrobras is considering selling control of BR Distribuidora, sources claim), which contains the following affirmations:

SÃO PAULO (Reuters) – Petrobras is considering selling control of its fuel subsidiary BR Distribuidora after failing to ensure bids for a minority stake in the company, claimed two sources this Friday with direct knowledge of the plans.

The change in strategy began to be analyzed after three of the four competitors who delivered preliminary proposals for an interest in BR Distribuidora asked for management rights or a larger share of the company’s voting capital, declared the first source, who requested anonymity.

Both sources stated that around 30 companies had initially shown an interest in the business, adding that none of the proposals contained a price.

BR Distribuidora, which controls Brazil’s biggest gas station chain, was valued last year at around 10 billion dollars by UBS Securities analysts.

This represents a good part of the company’s divestment target of more than 14 billion dollars this year, part of a program to reduce its debt, which has been strongly impacted by the reduction in oil prices and the Operation Car Wash investigations by the federal police.

Concerns over Petrobras’ corporate governance standards, evidenced by the investigations, have led to more caution by interested parties in regard to acquiring minority interests in company assets are up for sale, according to investment bank professionals.

In November Petrobras called off a public offering of BR Distribuidora shares, citing unfavorable market conditions.

The four parties interested in the subsidiary include the Canadian Brookfield Asset Management and the private equity firms GP Investments and Advent International, claimed one of the sources.

Only one of the four showed an interest in acquiring a minority interest, said the same source, but without naming names.

The sale of a minority stake would help Petrobras to attract more interested parties, increasing the value of the subsidiary through a more competitive process, as well as avoiding another unsuccessful sale attempt, the sources explained.

Petrobras’ Board of Directors and its lawyers are currently analyzing the issue, given that any sale of the company’s control could be seen as a privatization, said the sources.

Petrobras has refused any immediate comment on the information, as have GP Investments and Brookfield. Advent preferred not to comment at all.

NEED FOR CASH

Asset sales of around 5 billion dollars by the end of the year should be sufficient to cover Petrobras’ investment needs and allow it to pay debt due this year, said one of the sources, given that the loan of up to 10 billion dollars obtained by the company in China has helped reduce its funding needs.

According to the sources, the companies that initially showed an interest in BR Distribuidora include the Pão de Açúcar Group, the country’s biggest retailer, and Ultrapar Participações, one of Brazil’s largest and most diversified industrial groups.

Representatives of Citigroup, Petrobras’ business consultant, told the interested parties that the interest for sale was between 25 and 40 per cent, claimed the sources.

Citigroup and Pão de Açúcar were unable to comment immediately, while Ultrapar preferred not to comment at all.

Given the above, we would like you to confirm if the content of this news item is in fact true and, if so, why such information was not deemed to constitute a material fact, We also request that you comment on any other relevant information on this topic.”

Clarification

Petrobras announces that it is in progress the competitive process for this divestment. However, there isn’t, to date, any signed agreement conferring certainty as to the completion of the transaction.

Also clarifies that no decision was taken by the Executive Board or the Board of Directors of Petrobras towards the sale of control of BR Distribuidora.

Facts deemed relevant on the subject will be timely announced to the market.