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Oil Discovery at deeper geologic layers at Campos Basin

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(Rio de Janeiro, December 28, 2005). – PETRÓLEO BRASILEIRO S/A - PETROBRAS, [Bovespa: PETR3/PETR4, NYSE: PBR/PBRA, Latibex: XPBR/XPBRA], a Brazilian international energy company, announces that today confirmed the discovery of a new oil accumulation in the Marlim Leste field, at Campos Basin. This discovery is important not alone because it may contribute for the increase of the reserves of oil and gas, but, mainly, for being located in deeper geologic layers, opening a new exploratory frontier in Campos Basin. The discovery inaugurates a new exploratory model, which may result in other discoveries of lighter and better quality oil.

The discovery is located 120 kilometers of the coast and 188 kilometers from the city of Macaé, in a water depth of 1,350 meters. The finder well evidenced a column of 300 meters of 28º API oil, lighter than found so far in Marlim Leste field. The accumulation is located at 4,200 meters, superior depth than the average of Campos Basin, which is approximately 3,000 meters. Although the potential of the area is still in evaluation phase, it was confirmed good productivity for the type of reservoir where the oil is accumulated.

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This document may contain forecasts that merely reflect the expectations of the Company’s management. Such terms as “anticipate”, “believe”, “expect”, “forecast”, “intend”, “plan”, “project”, “seek”, “should”, along with similar or analogous expressions, are used to identify such forecasts. These predictions evidently involve risks and uncertainties, whether foreseen or not by the Company. Therefore, the future results of operations may differ from current expectations, and readers must not base their expectations exclusively on the information presented herein.

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This press release may contain forward-looking statements. These statements are statements that are not historical facts, and are based on management's current view and estimates offuture economic circumstances, industry conditions, company performance and financial results. The words "anticipates", "believes", "estimates", "expects", "plans" and similar expressions, as they relate to the company, are intended to identify forward-looking statements. Statements regarding the declaration or payment of dividends, the implementation of principal operating and financing strategies and capital expenditure plans, the direction of future operations and the factors or trends affecting financial condition, liquidity or results of operations are examples of forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.

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