RESULTS ANNOUNCEMENT 1st Quarter 2012 (IFRS)

Conference Call/Webcast

May 17th, 2012

DISCLAIMER

2

FORWARD-LOOKING STATEMENTS:

DISCLAIMER

The presentation may contain forward-looking statements about future events within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are not based on historical facts and are not assurances of future results. Such forward-looking statements merely reflect the Company’s current views and estimates of future economic circumstances, industry conditions, company performance and financial results. Such terms as "anticipate", "believe", "expect", "forecast", "intend", "plan", "project", "seek", "should", along with similar or analogous expressions, are used to identify such forward-looking statements. Readers are cautioned that these statements are only projections and may differ materially from actual future results or events. Readers are referred to the documents filed by the Company with the SEC, specifically the Company’s most recent Annual Report on Form 20-F, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements, including, among other things, risks relating to general economic and business conditions, including crude oil and other commodity prices, refining margins and prevailing exchange rates, uncertainties inherent in making estimates of our oil and gas reserves including recently discovered oil and gas reserves, international and Brazilian political, economic and social developments, receipt of governmental approvals and licenses and our ability to obtain financing.

We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information or future events or for any other reason. Figures for 2012 on are estimates or targets.

All forward-looking statements are expressly qualified in their entirety by this cautionary statement, and you should not place reliance on any forward-looking statement contained in this presentation.

NON-SEC COMPLIANT OIL AND GAS RESERVES:

CAUTIONARY STATEMENT FOR US INVESTORS

We present certain data in this presentation, such as oil and gas resources, that we are not permitted to present in documents filed with the United States Securities and Exchange Commission (SEC) under new Subpart 1200 to Regulation S-K because such terms do not qualify as proved, probable or possible reserves under Rule 4-10(a) of Regulation S-X.

HIGHLIGHTS OF THE QUARTER

» Production start-up of Cascade deep water field in Gulf of

Mexico

» Raising of U.S.$7,2 billion of bonds in the international capital

markets, at record low rates

» Capital expenditures of R$ 18,020 million, 52% of which were

invested in Exploration & Production

» Net income of R$ 9,214 million and EBITDA of R$ 16,521 million

» Daily average production of 2,676 thous. boed (+2% in relation to 1Q11)

» Pre-Salt discoveries: Carioca Sela and Carcará in Santos Basin, Pão de Açúcar in Campos Basin

» Post-Salt discoveries: Leste do Igarapé Chibata in Solimões Basin and Tambuatá in Espírito

Santo Basin

» Oil products: output increase (+3% ) and sales increase (+10%) in relation to 1Q11

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4

MAIN INDICATORS

1Q12 4Q11 ∆%

1Q12 X 4Q11 1Q11

EBITDA (R$/million) 16,521 14,054 +18% 15,855

OPERATING INCOME¹ (R$/million) 11,771 7,490 +57% 12,318

NET INCOME² (R$/million) 9,214 5,049 +82% 10,985

AVERAGE REALIZATION PRICES – ARP (R$/bbl) 176.72 173.13 +2% 163.72

Brent (US$/bbl) 118.49 109.31 +8% 104.97

Average FX Rate (R$) 1.77 1.80 -2% 1.67

Production (thousand bbl/day) 2,676 2,670 - 2,629

¹ Income before financial results, profit sharing and taxes

² Net income attributable to Petrobras shareholders

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OIL AND GAS PRODUCTION

2,044 2,049 2,066

341 367 364

1Q2011 4Q 2011 1Q2012

Natural Gas Oil and NGL

Total Production (daily average)

Brazilian Production (daily average)

2,670 2,385 2,676 2,430

2,629 2,416

» Increased production in new systems more than offset the natural decline in production from mature fields

» Natural gas production increased due to the start up of Mexilhão and Uruguá production

» Production targets are dependent on the revaluation of the efficiency of production assets and defining the return of the

Frade field and will be released in conjunction with the review of the Company's Business Plan

(tho

us b

pd)

(tho

us b

pd)

2,385 2,416 2,430

244 254 246

1Q2011 4Q 2011 1Q2012

Brazil International Brazil International

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OIL AND GAS PRODUCTION (BRAZIL)

358

85

+1% (+22 thous. bpd)

New Systems

1Q12

2,066

1,708

1Q11

2,044

1,959

New Systems

+ 273 thous. bbl/day

- 251 thous. bbl/day

Thous. bbl/day

» Decrease in existing systems:

» 1T12 vs 1T11 below expectations due to lower operating efficiency in Campos Basin

» Increasing attention being given to maintenance of older systems to recover efficiency

» Reservoir potential remains within expected levels

» Principal contributions from new systems (∆ 1T11 / 1T12) : P-56 +113 mil bpd, P-57 +86 mil bpd, Piloto

de Lula +31 mil bpd, TLD de Aruanã +20 mil bpd

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PRE-SALT

Petrobras’ wells: drilling, completion or

testing

Santos Basin

Campos Basin

Santos Basin » 13 drilling rigs operating in Santos Pre-salt cluster

Expectation to have 20 rigs by the end of the year

» Lula Pilot:

» 4th producion well connected in March

» Drilling of 1st horizontal well

» Current oil production: 94,000 bpd

» To date: 46 drilled wells (33 exploratory wells); 2012

forecast: 32 additional wells

»1Q12 Production:71,100 bpd (Petrobras + partners)

» 1Q12 Production: 63,600 bpd

(Baleia Franca, Tracajá, Carimbé e Brava)

Spread

US$ 11

PRICES

70 73 74 72

80

94

109 103 103112

75 76 78 77

86

105

117113

109

118

20

40

60

80

100

120

4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12

Petrobras Oil (average) Brent

Oil Prices (US$/bbl)

40

90

140

190

240

1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12

USA ARP Petrobras ARP

Average Realization Price (R$/bbl)

Average

1Q12

211.64

Average

1Q11

Average

4Q11

Spread

US$ 6

» International oil price increase and spread reduction between light and heavy crude resulting in higher Petrobras oil price relative to

1Q11 (US$ 112/bbl X US$ 94/bbl)

» Higher Average Realization Prince in Brazil due to readjustment in diesel (+2%) and gasoline (+10%) prices in November/11

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176.72

180.94 206.84

163.72 173.13

Lifting Cost Government Take

19.00 20.93 22.31 22.47 22.70

39.03 37.57 31.80 34.21

31.66

1Q11 2Q11 3Q11 4Q11 1Q12

COSTS

Lifting Cost (R$/barrel)

50.66 54.11

61.73

55,14 60.04

Refining Cost (R$/barrel)

7.578.78 8.56 8.57

7.54

1Q11 2Q11 3Q11 4Q11 1Q12

» Lifting Cost:

» Higher expenses with interventions due to increase in activities and increasing average rig rates

» Higher maintenance costs to recover efficiency in older systems

» Refining Cost:

» Lower costs with programmed stoppages and materials in 1Q12

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PRODUCTION AND SALES

819 866 852

390 389 431

134 141 141

534 553 518

1Q11 4Q11 1Q12

895 1.010 970

439547 545

208

224 214426

448 439

1Q11 4Q11 1Q12

Tho

usan

d ba

rrel

s/ d

ay

1,877 1,949 1,942

» Gasoline and diesel production increase due to optimization of existing refineries and operational efficiency (utilization factor 94%)

» 10% growth in oil products sales 1Q12/1Q11:

» 24% boost in gasoline volume as a result of competiveness vis a vis ethanol, and fleet increase

» 9% boost in diesel volume due to increase in economic activities

» Seasonal demand responsible for decrease in sales relative to 4Q11

PRODUCTION SALES

1,968

2,229 2,168

Diesel + Jet Fuel Gasoline LPG Others

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Tho

usan

d ba

rrel

s/ d

ay

TRADE BALANCE

Tho

us b

pd

497361

217

187

1Q12 4Q11

Oil Products

714

548

358 380

406 394

1Q12 4Q11

764 774

» Higher imports of oil products in 1Q12 , especially in March, to meet demand in 2Q12

» Higher crude oil exports due to the sales from inventories produced in 4Q 2011

Exports* Imports

11 * Recognized in the financial reports

Oil

NATURAL GAS

35,442,6

26,7

26,2

1,20,7

1Q11 1Q12

Import LNG Import Bolivia Domestic

38.5 39.4

6.311.4

1Q11 1Q12

Thermoelectrical Non Thermoelectrical

Mill

ion

cu

.m/d

ay

Supply Sales

44.8 50.8

» Demand from thermoelectric increased as a result of diminishing reservoir levels in the Southeast and energy exports to Uruguay

» Additional demand was met through domestic production, improving margins

+10%

+13%

*

* Sales do not consider transferences within Petrobras system (Refining, Fafens e UTEs) nor BR sales.

63,3 69,5

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Mill

ion

cu

.m/d

ay

OPERATING INCOME 1Q12 VS 4Q11

4Q11

Operating Income Sales Revenue COGS SG&A 1Q12

Operating Income

Other Expenses

7,490 8772,061 252

1,091 11,771

(R$ million)

» Increase in operating income

» Higher sales revenue due to higher prices and increase of oil exports (+38%) due to increase in production and sales

from inventories built at the end of 2011

» Decrease in COGS due to lower sales volume in the domestic market and a lower percentage of oil products imports in

COGS

» Absence of extraordinary items which occurred in the 4Q11 - impairment, extemporaneous depreciation and higher

exploratory costs

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NET INCOME 1Q12 VS 4Q11

5,049

4,281 65 41 (187) (35)9,214

4Q11 Net Income

OperatingIncome

FinancialResults

Equity Income Taxes Minority Interest 1Q12 Net Income

(R$ million)

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» Higher Net Income

» Increase in operating income

» Stable financial results

E&P 1Q12 VS 4Q11

15.525 2.160 (32) 531 30 632 18.846

4Q11 Operational

Results

Price effect on revenue

Volume effect on revenue

Average cost effect in COGS

Volume effect on COGS

Operational Expenses

1Q12 Operational

Results

Operating Income (R$ million)

» Higher revenues due to higher oil prices

» COGS reduction due to lower depletion as a result of reserves revision and extemporaneous depreciation occurred on the

4Q11

» Lower operating expenses due to the recognition of losses in 4Q11 (dryhole expense, impairment and other)

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, ,

,

DOWNSTREAM 1Q12 VS 4Q11

Operating Income

(6,557) 1,732

1,191

(2,626)(1,027)

186(7,101)

4Q11

Operational Results

Revenue

price effect

Volume effect on

revenue

Average cost

effect in COGS

Volume effect in

COGS

Operational

Expenses

1Q12

Operational Results

(R$ million)

» Increase in oil products price, especially gasoline and diesel

» Positive revenue from volumes due to higher exports, primarily of sales from inventories of oil produced in 4Q 2011

» Higher COGS due to higher level of acquisition costs/internal transfer prices, partially offset by lower sales of oil products

and lower share of imports in the sales volume (especially diesel)

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R$ Billion 03/31/12 12/31/11

Short-term Debt 18.0 19.0

Long-term Debt 146.1 136.6

Total Debt 164.1 155.6

(-) Cash and cash equivalents * 57.9 52.6

= Net Debt 106.2 103.0

US$ Billion 03/31/12 12/31/11

Net Debt 58.3 54.9

1.03 1.07 1.41 1.66 1.61

17% 17% 22% 24% 24%

-20%

0%

20%

40%

-0,5

1,5

3,5

5,5

1Q11 2Q11 3Q11 4Q11 1Q12

Net Debt/EBITDA Net Debt/Net Cap.

* Includes tradable securities (maturing in more than 90 days) ** Net Debt / (Net Debt + shareholder’s equity)

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**

» Operating income supported investment levels, keeping

leverage ratios stable

» Continued maintenance of high level of liquidity

» Access to capital markets: US$ 7.2 billion of bond

issuance, with tenor of up to 30y, at record low rates

CAPITAL STRUCTURE

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Information:

Investor Relations

+55 21 3224-1510

petroinvest@petrobras.com.br