Rio de Janeiro, October 04, 2016 – Petróleo Brasileiro S.A. – Petrobras, operator of Libra consortium, confirms that it has commenced a new bid process for the Libra Pilot Project FPSO.

The company confirms the cancellation of the previous bid process, which began on August 12th, 2015, because it resulted in a proposal with an abnormally high price compared to what could be expected in the international market, exceeding the expectations of Petrobras and its partners. This previous bid process required a local content commitment from the bidders in accordance with the Production Sharing Contract.

The Production Sharing Contract provides for the possibility of exemption from the local content requirement in cases where commercial proposals received are higher than international market rates. This particular exemption provision ensures that the project will be executed in a competitive manner, ensuring the investments for the development of the Libra area are efficiently effected in relation to schedule, budget, quality and safety. Accordingly, the Libra Consortium registered with the ANP a local content waiver request related to the Pilot FPSO on August 30th, 2016 and commenced on September 16th, 2016 the new bid process with lower local content requirements which optimises the construction performed in Brazil with no impact on cost or schedule of the project.

The Libra Consortium expects the start-up of operations of the Libra Pilot project oil production system during the second half of 2020, and to achieve this milestone, the FPSO should be hired during the first semester of 2017.

The Libra Consortium is comprised of Petrobras as the operator (40%), Shell (20%), Total (20%), CNPC (10%) and CNOOC (10%), and state-owned Pré-Sal Petróleo S.A. (PPSA), as manager of the production sharing contract.