Rio de Janeiro, April 7, 2016 – Petróleo Brasileiro S.A. – Petrobras hereby responds to Official Letter 1082/2016-SAE,  which requests the following clarifications:

Official Letter 1082/2016-SAE

“Dear Sirs,

A news item published in the April 6, 2016 edition of the newspaper Valor Econômico states that Petrobras needs oil prices to be higher than US$90 per barrel in order for the exploration of the 5 billion barrels acquired from the government not to generate negative returns.

We did not identify this information in the documents sent by this company via the Empresas.NET System. If we are mistaken, please indicate the document and the pages containing the information in question and the date and time when they were sent.

It is worth emphasizing that the company must disclose periodic, eventual and other information of interest to the market through the Empresas.NET System, thereby ensuring its immediate and ample dissemination and the equitable treatment of its investors and other market participants.

We therefore request that you provide us with clarification on the above item by 9:00 a.m. on April 7, 2016, without prejudice to article 6 of CVM Instruction 358/02, confirming its veracity or not, together with any other information deemed important.”

It is worth remembering that the sole paragraph of article 4 of CVM Instruction 358/02 states that inquiries must be made to determine if the company’s administrators and controlling shareholders are in possession of any information that should be disclosed to the market.

The file to be sent should contain a transcript of the subject of the inquiry before the company’s response.”

Clarification:

As disclosed in a material fact on September 1, 2010, the initial amount of the Transfer of Rights Assignment (TRA) contract granting Petrobras the right to produce five billion barrels of oil equivalent (boe), was determined by negotiations between Petrobras and the government, based on technical reports drawn up by independent certifying bodies contracted by Petrobras and the National Oil, Natural Gas and Biofuel Agency (ANP), resulting in a weighted average price of R$14.96 (US$8.51) per boe. The Minority Shareholders’ Committee, formed within the scope of the Board of Directors, approved the TRA contract, including the weighted average per-barrel price. The financial institution Barclays Capital advised the committee and issued a Fairness Opinion on the transaction.

The contract contains risk reduction mechanisms for Petrobras, expressed in the form of guaranteed production volumes in the various areas and price equitability.

In this context, the contract envisages a possible Revision of the amounts and volumes related to each area assigned in 2010 in the light of the exploration and production data obtained since then and the updating of project costs and oil and gas prices.

The Revision process has been under way since the declarations of commerciality were issued between December 2013 and December 2014, involving representatives of Petrobras, the ANP and, for the government, the Ministries of Finance and Mines & Energy. The amounts will be negotiated based on reports by the certifying bodies. The Revision was monitored by the Federal Accounting Court (TCU) and must be approved by the National Energy Policy Council (CNPE), pursuant to Law 12,276/2010 and the contract.

The characteristics of the contract allow for the generation of more free cash flow than the other regimes in Brazil, given that there is no prevision for the payment of royalties to the granting authority, whose maximum amount is 40% of the project’s net revenue, nor of surplus oil to the government, as under the Shared Production regime. Consequently, estimated cash flow from the projects under the TRA regime is an important component of the company’s strategic planning, given the deleveraging and cash generation targets.

When approving the TRA project phases, the usual oil industry procedures are taken into consideration, involving the analysis of scenarios, including prospective and full-life views. The prospective view is used for decisions regarding additional investments, while the full-life view is used to measure the competitiveness of the entire process, from acquisition of the hydrocarbon volumes to final production development. In this case, the biggest component of the difference between the views is the acquisition cost of US$8.51 per barrel. Both views imply the pursuit of guaranteed returns on the capital used by the company and, for the TRA projects, prospective views are obtained of the oil price guaranteeing project profitability (“Brent breakeven”) in line with the company’s other pre-salt projects.

When concluded, the Revision process will result in an adjustment of the amount paid in 2010 and, consequently, will affect the overall view of the contract.

Finally, we would like to make it clear that, contrary to what appeared in the media, the construction of the drilling rigs to be used in the Búzios field have no connection with the Sete Brasil contracts.