Rio de Janeiro, October 21, 2016 – Petróleo Brasileiro S.A. – Petrobras announces that it is beginning negotiations with Tereos Internacional S.A. regarding the sale of 45.9% interest of Petrobras Biocombustível in the sugarcane company Guarani S.A. and that it is in progress the hiring of Banco Itaú BBA to advise in the transaction.

The operation is part of Petrobras’ Divestment Program and is in line with the Company’s Strategic Plan, announced on 09/20/2016, which foresees its exit from biofuel production activities.

Until now, there is no guarantee regarding the conclusion of the transaction, nor has it been deliberated upon by Petrobras’ Executive Board or Board of Directors.

Any facts concerning this matter deemed to be material will be promptly disclosed to the market.