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Discovery in the Caxaréu Field

(Rio de Janeiro, March 2, 2007). – PETRÓLEO BRASILEIRO S/A - PETROBRAS, [Bovespa: PETR3/PETR4, NYSE: PBR/PBRA, Latibex: XPBR/XPBRA, BCBA: APBR/APBRA], a Brazilian international energy company, announces that discovery well 4-ESS-172-ES (NPA acronym: 4-BRSA-446-ESS), has located reservoirs saturated with light oil (approximately 30° API) under a thick layer of salt at a water depth of 1,011 meters and at a final depth of 4,862 meters, which have shown to have excellent productivity in a formation test carried out with a lined well. This test indicated potential production may top-out at 10,000 barrels per day, while preliminary geological studies reveal an in place potential of some 570 million barrels.

This accumulation is situated in old BC-60 block, off the coast of Espírito Santo, nearly 120 km to the south of the city of Vitória and 15 km southeast of the Jubarte oil field. It constitutes a new exploratory horizon within the CAXARÉU oil field, in northern Campos Basin, which was already declared commercial to the National Petroleum Agency (NPA) in December 2006, a fact that was communicated to the market at the time.

The discovery was identified during the1-ESS-121-ESS well campaign as part of the Discovery Assessment Plan, in an area operated by Petrobras which has 100% of the concession.

Additional studies will be undertaken to better evaluate the full potential of this field.

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www.petrobras.com.br/ri/english
Contacts: PETRÓLEO BRASILEIRO S. A. – PETROBRAS
Investor Relations Department I Raul Adalberto de Campos - Gerente Executivo I E-mail: petroinvest@petrobras.com.br
Av. República do Chile, 65 – 22^nd floor - 20031-912 - Rio de Janeiro, RJ I Tel.: 55 (21) 3224-1510 / 9947

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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