Petrobras International Finance 20-F 20 May 10 2009 FY Annual report (foreign) Financial data

Entity Information

Entity Information
	12 Months Ended Dec. 31, 2009
Entity information
Entity registrant name	PETROBRAS - PETROLEO BRASILEIRO SA
Entity central index key	0001119639
Entity current reporting status	Yes
Entity voluntary filers	Yes
Current fiscal year end date	--12-31
Entity filer category	Large Accelerated Filer
Entity well-known seasoned issuer	No
Entity common stock, shares outstanding	5,073,347,344

Document Information

Document Information
	12 Months Ended Dec. 31, 2009
Document information
Document type	20-F
Document period end date	2009-12-31
Amendment flag	false
Document Fiscal Year Focus	2,009
Document Fiscal Period Focus	FY

Balance Sheets

Balance Sheets (USD $)
	Dec. 31, 2009	Dec. 31, 2008
Current assets
Cash and cash equivalents	$16,169,000,000	$6,499,000,000
Marketable securities - current assets	72,000,000	124,000,000
Accounts receivable, net - current assets	8,115,000,000	6,613,000,000
Inventories - current assets	11,227,000,000	7,990,000,000
Deferred income taxes - current assets	660,000,000	500,000,000
Recoverable taxes - current assets	3,940,000,000	3,281,000,000
Advances to suppliers - current assets	1,026,000,000	626,000,000
Other current assets	1,435,000,000	1,125,000,000
Total current assets	42,644,000,000	26,758,000,000
Property, plant and equipment, net	136,167,000,000	84,719,000,000
Investments in non-consolidated companies and other investments	4,350,000,000	3,198,000,000
Non-current assets
Accounts receivable, net - non-current assets	1,946,000,000	923,000,000
Advances to suppliers - non-current assets	3,267,000,000	2,471,000,000
Petroleum and alcohol account - receivable from Federal Government	469,000,000	346,000,000
Marketable securities - non-current assets	2,659,000,000	1,738,000,000
Restricted deposits for legal proceedings and guarantees	1,158,000,000	798,000,000
Recoverable taxes - non-current assets	5,462,000,000	3,095,000,000
Goodwill	139,000,000	118,000,000
Prepaid expenses - non-current assets	618,000,000	513,000,000
Other non-current assets	1,391,000,000	1,018,000,000
Total non-current assets	17,109,000,000	11,020,000,000
Total assets	200,270,000,000	125,695,000,000
Current liabilities
Trade accounts payable - current liabilities	9,882,000,000	7,763,000,000
Current debt	8,553,000,000	5,888,000,000
Current portion of capital lease obligations	227,000,000	251,000,000
Income taxes payable - current liabilities	825,000,000	705,000,000
Taxes payable, other than income taxes	5,149,000,000	2,900,000,000
Payroll and related charges - current liabilities	2,118,000,000	1,398,000,000
Dividends and interest on capital payable	1,340,000,000	3,652,000,000
Employees postretirement benefits obligation - Pension and Health Care - current liabilities	694,000,000	492,000,000
Contingencies - current liabilities	31,000,000	23,000,000
Other payables and accruals	2,146,000,000	1,684,000,000
Total current liabilities	30,965,000,000	24,756,000,000
Long-term liabilities
Long-term debt	48,149,000,000	20,640,000,000
Capital lease obligations	203,000,000	344,000,000
Employees postretirement benefits obligation - Pension and Health Care - long-term liabilities	10,963,000,000	5,787,000,000
Deferred income taxes - long-term liabilities	9,844,000,000	7,080,000,000
Provision for abandonment	2,812,000,000	2,825,000,000
Contingencies - long-term liabilities	469,000,000	356,000,000
Other long-term liabilities	1,445,000,000	1,339,000,000
Total long-term liabilities	73,885,000,000	38,371,000,000
Shares authorized and issued
Preferred share - 2009 and 2008 - 3,700,729,396 shares	15,106,000,000	15,106,000,000
Common share - 2009 and 2008 -5,073,347,344 shares	21,088,000,000	21,088,000,000
Additional paid in capital	707,000,000	0
Capital reserve - fiscal incentive	296,000,000	221,000,000
Retained earnings
Appropriated	36,691,000,000	15,597,000,000
Unappropriated	15,062,000,000	25,889,000,000
Accumulated other comprehensive income
Cumulative translation adjustments	6,743,000,000	(15,846,000,000)
Postretirement benefit reserves adjustments net of tax ((US$848) and US$19 for December 31, 2009 and 2008, respectively) - Pension cost and Health Care cost	(1,646,000,000)	37,000,000
Unrealized gains (losses) on available-for-sale securities, net of tax	24,000,000	(144,000,000)
Unrecognized loss on cash flow hedge, net of tax	(13,000,000)	(39,000,000)
Petrobras shareholders equity	94,058,000,000	61,909,000,000
Noncontrolling interest	1,362,000,000	659,000,000
Total equity	95,420,000,000	62,568,000,000
Total liabilities and shareholders equity	$200,270,000,000	$125,695,000,000

Balance Sheets Parenthetical

Balance Sheets Parenthetical (USD $)
	Dec. 31, 2009	Dec. 31, 2008
Shareholders equity
Preferred share - authorized	3,700,729,396	3,700,729,396
Preferred share - issued	3,700,729,396	3,700,729,396
Common share - authorized	5,073,347,344	5,073,347,344
Common share - issued	5,073,347,344	5,073,347,344
Postretirement benefit reserves adjustments	($848,000,000)	$19,000,000

Statements Of Income

Statements Of Income (USD $)
	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Income Statements
Sales of products and services	$115,892,000,000	$146,529,000,000	$112,425,000,000
Less:
Value-added and other taxes on sales and services	(20,909,000,000)	(25,046,000,000)	(20,668,000,000)
Contribution of Intervention in the Economic Domain Charge - CIDE	(3,114,000,000)	(3,226,000,000)	(4,022,000,000)
Net operating revenues	91,869,000,000	118,257,000,000	87,735,000,000
Cost of Sales	(49,251,000,000)	(72,865,000,000)	(49,789,000,000)
Depreciation, depletion and amortization	(7,188,000,000)	(5,928,000,000)	(5,544,000,000)
Exploration, including exploratory dry holes	(1,702,000,000)	(1,775,000,000)	(1,423,000,000)
Impairment	(319,000,000)	(519,000,000)	(271,000,000)
Selling, general and administrative expenses	(7,020,000,000)	(7,429,000,000)	(6,250,000,000)
Research and development expenses	(681,000,000)	(941,000,000)	(881,000,000)
Employee benefit expense for non-active participants	(719,000,000)	(841,000,000)	(990,000,000)
Other operating expenses	(3,120,000,000)	(2,665,000,000)	(2,136,000,000)
Total costs and expenses	(70,000,000,000)	(92,963,000,000)	(67,284,000,000)
Operating income	21,869,000,000	25,294,000,000	20,451,000,000
Equity in results of non-consolidated companies	157,000,000	(21,000,000)	235,000,000
Financial income	1,899,000,000	1,641,000,000	1,550,000,000
Financial expenses	(1,295,000,000)	(848,000,000)	(677,000,000)
Monetary and exchange variation	(175,000,000)	1,584,000,000	(1,455,000,000)
Other taxes	(333,000,000)	(433,000,000)	(662,000,000)
Other expenses, net	(61,000,000)	(225,000,000)	(143,000,000)
Income before income taxes and minority interest	22,061,000,000	26,992,000,000	19,299,000,000
Income tax expense
Current	(4,378,000,000)	(6,904,000,000)	(4,826,000,000)
Deferred	(860,000,000)	(2,355,000,000)	(1,062,000,000)
Total income tax expense	(5,238,000,000)	(9,259,000,000)	(5,888,000,000)
Net income for the year	16,823,000,000	17,733,000,000	13,411,000,000
Plus/(Less): Net income attributable to the noncontrolling interest	(1,319,000,000)	1,146,000,000	(273,000,000)
Net income for the year attributable to Petrobras	15,504,000,000	18,879,000,000	13,138,000,000
Net income applicable to each class of shares
Net income applicable to each class of shares - common shares	8,965,000,000	10,916,000,000	7,597,000,000
Net income applicable to each class of shares - preferred shares	6,539,000,000	7,963,000,000	5,541,000,000
Net income for the year attributable to Petrobras	$15,504,000,000	$18,879,000,000	$13,138,000,000
Basic and diluted earnings per:
Basic and diluted earnings per common and preferred share	1.77	2.15	1.5
Basic and diluted earnings per common and preferred ADS	3.54	4.3	3
Weighted average number of shares outstanding
Weighted average number of shares outstanding - common	5,073,347,344	5,073,347,344	5,073,347,344
Weighted average number of shares outstanding - preferred	3,700,729,396	3,700,729,396	3,700,729,396

Statements Of Cash Flows

Statements Of Cash Flows (USD $)
	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Cash flows from operating activities
Net income for the year	$16,823,000,000	$17,733,000,000	$13,411,000,000
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation, depletion and amortization	7,188,000,000	5,928,000,000	5,544,000,000
Dry hole costs	1,251,000,000	808,000,000	549,000,000
Equity in the results of non-consolidated companies	(157,000,000)	21,000,000	(235,000,000)
Foreign exchange (gain)/loss	(1,051,000,000)	2,211,000,000	641,000,000
Impairment	319,000,000	519,000,000	271,000,000
Deferred income taxes	860,000,000	2,355,000,000	1,062,000,000
Other adjustments	(9,000,000)	617,000,000	394,000,000
Working capital adjustments
Decrease (increase) in accounts receivable, net	(777,000,000)	(1,098,000,000)	(245,000,000)
Decrease (increase) in inventories	(672,000,000)	(568,000,000)	(1,619,000,000)
Increase in trade accounts payable	206,000,000	2,246,000,000	1,709,000,000
Increase in taxes payable	1,086,000,000	(207,000,000)	460,000,000
Advances to suppliers	(428,000,000)	(1,684,000,000)	787,000,000
Recoverable taxes	(882,000,000)	(1,431,000,000)	(1,132,000,000)
Increase (decrease) in other working capital adjustments	1,163,000,000	770,000,000	1,067,000,000
Net cash provided by operating activities	24,920,000,000	28,220,000,000	22,664,000,000
Cash flows from investing activities
Additions to property, plant and equipment	(35,134,000,000)	(29,874,000,000)	(20,978,000,000)
Acquisition of Suzano and Ipiranga	0	0	(1,551,000,000)
Marketable securities and other investments activities	14,000,000	408,000,000	(1,497,000,000)
Net cash used in investing activities	(35,120,000,000)	(29,466,000,000)	(24,026,000,000)
Cash flows from financing activities
Net borrowing under line-of-credit agreement	1,100,000,000	0	0
Short-term debt, net issuances and repayments	1,286,000,000	380,000,000	(6,000,000)
Proceeds from issuance and draw-down of long-term debt	26,616,000,000	9,570,000,000	2,980,000,000
Principal payments of long-term debt	(3,002,000,000)	(4,655,000,000)	(3,561,000,000)
Proceeds of project financings	729,000,000	5,479,000,000	1,568,000,000
Payments of project financings	(1,809,000,000)	(3,124,000,000)	(2,599,000,000)
Payment of capital lease obligations	(273,000,000)	(125,000,000)	(367,000,000)
Dividends and interest on shareholders equity paid to shareholders and minority interest	(7,712,000,000)	(4,747,000,000)	(4,003,000,000)
Net cash used in financing activities	16,935,000,000	2,778,000,000	(5,988,000,000)
Increase (decrease) in cash and cash equivalents	6,735,000,000	1,532,000,000	(7,350,000,000)
Effect of exchange rate changes on cash and cash equivalents	2,935,000,000	(2,020,000,000)	1,649,000,000
Cash and cash equivalents at beginning of year	6,499,000,000	6,987,000,000	12,688,000,000
Cash and cash equivalents at end of year	16,169,000,000	6,499,000,000	6,987,000,000
Cash paid during the period for
Interest, net of amount capitalized	3,059,000,000	2,304,000,000	1,639,000,000
Income taxes	4,929,000,000	6,271,000,000	4,430,000,000
Withholding income tax on financial investments	2,224,000,000	1,176,000,000	1,007,000,000
Non-cash investment and financing transactions during the year
Recognition of asset retirement obligation - ASC Topic 410-20	(423,000,000)	75,000,000	1,728,000,000
Acquisitition of property, plant and equipment on credit	70,000,000	0	0
Acquisition of fixed assets on contract with transfer of benefits, risks and control of assets	$63,000,000	$6,000,000	$0

Shar. Equity

Shar. Equity (USD $)
	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007	Dec. 31, 2006
Stockholders equity - value	$95,420,000,000	$62,568,000,000	$67,511,000,000	$67,511,000,000
Net income for the year	16,823,000,000	17,733,000,000	13,411,000,000
Net income for the year attributable to Petrobras	15,504,000,000	18,879,000,000	13,138,000,000
Comprehensive income (loss) is comprised as follows:
Net income for the year	16,823,000,000	17,733,000,000	13,411,000,000
Cumulative translation adjustments, comprehensive income	22,589,000,000	(20,001,000,000)	10,357,000,000
Postretirements benefit reserves adjustments net of tax - Pension cost and Health Care cost	(1,683,000,000)	2,509,000,000	567,000,000
Unrealized gains (losses) on available-for-sale securities	168,000,000	(475,000,000)	(115,000,000)
Unrecognized gains (losses) on cash flow hedge	26,000,000	(30,000,000)	(9,000,000)
Total comprehensive income	37,923,000,000	(264,000,000)	24,211,000,000
Less: Net comprehensive income attributable to noncontrolling interest	(1,410,000,000)	1,315,000,000	(509,000,000)
Comprehensive income attributable to Petrobras	36,513,000,000	1,051,000,000	23,702,000,000
Total Petrobras shareholders equity [Member]
Stockholders equity - value	94,058,000,000	61,909,000,000	65,179,000,000	65,179,000,000
Preferred shares [Member]
Stockholders equity - value	15,106,000,000	15,106,000,000	8,620,000,000	7,718,000,000
Capital increase from undistributed earnings reserve	0	6,235,000,000	902,000,000
Capital increase from capital reserve	0	251,000,000	0
Common shares [Member]
Stockholders equity - value	21,088,000,000	21,088,000,000	12,196,000,000	10,959,000,000
Capital increase from undistributed earnings reserve	0	8,547,000,000	1,237,000,000
Capital increase from capital reserve	0	345,000,000	0
Additional paid in capital [Member]
Stockholders equity - value	707,000,000	0	0	0
Transfer from noncontrolling interest	707,000,000	0	0
Capital reserve - fiscal incentive [Member]
Stockholders equity - value	296,000,000	221,000,000	877,000,000	174,000,000
Capital increase	0	(596,000,000)	0
Transfer from unappropriated retained earnings	75,000,000	(60,000,000)	703,000,000
Accumulated other comprehensive loss Cumulative translation adjustments [Member]
Stockholders equity - value	6,743,000,000	(15,846,000,000)	4,155,000,000	(6,202,000,000)
Change in the year	22,589,000,000	(20,001,000,000)	10,357,000,000
Postretirement benefit reserves adjustments net of tax - Pension cost and Health Care cost [Member]
Stockholders equity - value	(1,646,000,000)	37,000,000	(2,472,000,000)	(3,039,000,000)
Other decreases (increases)	(2,550,000,000)	3,801,000,000	860,000,000
Tax effect	867,000,000	(1,292,000,000)	(293,000,000)
Unrecognized gains (losses) on available-for-sale securities, net of tax [Member]
Stockholders equity - value	24,000,000	(144,000,000)	331,000,000	446,000,000
Unrealized gains (losses)	255,000,000	(490,000,000)	(174,000,000)
Realized gains	0	(229,000,000)	0
Tax effect	(87,000,000)	244,000,000	59,000,000
Unrecognized loss on cash flow hedge, net of tax [Member]
Stockholders equity - value	(13,000,000)	(39,000,000)	(9,000,000)	(2,000,000)
Unrealized losses	0	0	0
Tax effect	0	0	0
Change in the year	26,000,000	(30,000,000)	(7,000,000)
Appropriated retained earnings [Member]
Stockholders equity - value	36,691,000,000	15,597,000,000	34,863,000,000	3,045,000,000
Legal reserve [Member]
Stockholders equity - value	5,419,000,000	3,257,000,000	4,297,000,000	3,045,000,000
Transfer from unappropriated retained earnings, net of gain or loss on translation	2,162,000,000	(1,040,000,000)	1,252,000,000
Undistributed earnings reserve [Member]
Stockholders equity - value	30,755,000,000	12,123,000,000	30,280,000,000	20,074,000,000
Capital increase	0	(14,782,000,000)	(1,647,000,000)
Transfer from unappropriated retained earnings, net of gain or loss on translation	18,632,000,000	(3,375,000,000)	11,853,000,000
Statutory reserve [Member]
Stockholders equity - value	517,000,000	217,000,000	286,000,000	585,000,000
Capital increase	0	0	(492,000,000)
Transfer from unappropriated retained earnings, net of gain or loss on translation	301,000,000	(69,000,000)	193,000,000
Unappropriated retained earnings [Member]
Stockholders equity - value	15,062,000,000	25,889,000,000	6,618,000,000	10,541,000,000
Net income for the year attributable to Petrobras	15,504,000,000	18,879,000,000	13,138,000,000
Dividends and interest on shareholders equity	(5,161,000,000)	(4,152,000,000)	(3,060,000,000)
Appropriation to reserves of tax incentives	(75,000,000)	0	0
Appropriation to reserves	(21,095,000,000)	4,544,000,000	(14,001,000,000)
Noncontrolling interest [Member]
Stockholders equity - value	1,362,000,000	659,000,000	2,332,000,000	1,966,000,000
Transfer to additional paid in capital	(707,000,000)	0	0
Other decreases (increases)	91,000,000	(169,000,000)	236,000,000
Net income for the period	1,319,000,000	(1,146,000,000)	273,000,000
Dividends and interest on shareholders equity	$0	($358,000,000)	($143,000,000)

Shar. Equity Parenthetical

Shar. Equity Parenthetical
	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Changes in stockholders equity
Dividends and interest on shareholders equity to common and preferred shares, per share	0.59	0.47	0.35

Note 1 - The Company and its Op

Note 1 - The Company and its Operations
	12 Months Ended Dec. 31, 2009
Notes to Financial Statements [Abstract]
Note 1 - The Company and its Operations	1.The Company and its Operations Petrleo Brasileiro S.A. - Petrobras is Brazils national oil company and, directly or through its subsidiaries (collectively, Petrobras or the Company), is engaged in the exploration, exploitation and production of oil from reservoir wells, shale and other rocks, and in the refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy related activities. Additionally, Petrobras may promote the research, development, production, transport, distribution and marketing of all sectors of energy, as well as other related or similar activities.

Note 2 - Summary of Significant

Note 2 - Summary of Significant Accounting Policies
	12 Months Ended Dec. 31, 2009
Notes to Financial Statements [Abstract]
Note 2 - Summary of Significant Accounting Policies	2.Summary of Significant Accounting Policies In preparing these consolidated financial statements, the Company has followed accounting policies that are in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). The preparation of these financial statements requires the use of estimates and assumptions that affect the assets, liabilities, revenues and expenses reported in the financial statements, as well as amounts included in the notes thereto. Estimates adopted by management include: oil and gas reserves, pension and health care liabilities, depreciation, depletion and amortization, abandonment costs, fair value of financial instruments, contingencies and income taxes. While the Company uses its best estimates and judgments, actual results could differ from those estimates as future confirming events occur. Certain prior years amounts have been reclassified to conform to current year presentation standards. These reclassifications are not significant to the consolidated financial statements and had no impact on the Companys net income. Events subsequent to December 31, 2009 were evaluated until the time of the Form 6-K filing with the Securities and Exchange Commission. Refer to Note 2 (n) for discussion of Codification Topic 855, Subsequent Events. a)Basis of financial statements preparation The accompanying consolidated financial statements of Petrleo Brasileiro S.A. -Petrobras (the Company) have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and the rules and regulations of the Securities and Exchange Commission (SEC). U.S. GAAP differs in certain respects from Brazilian accounting practice as applied by Petrobras in its statutory financial statements prepared in accordance with Brazilian Corporate Law and regulations promulgated by the Brazilian Securities and Exchange Commission (CVM). The U.S. dollar amounts for the years presented have been translated from the Brazilian Real amounts in accordance Accounting Standard Codification ASC Topic 830 Foreign Currency Matters as applicable to entities operating in non-hyperinflationary economies. Transactions occurring in foreign currencies are first remeasured to the Brazilian Real and then translated to the U.S. dollar, with remeasurement gains and losses being recognized in the statements of income. While Petrobras has selected the U.S. Dollar as its reporting currency, the functional currency of Petrobras and all Brazilian subsidiaries is the Brazilian Real. The functional currency of Petrobras International Finance Company PifCo and some subsidiaries and certain of the special purpose companies that operate in the international economic environment is the U.S. dollar, and the functional currency of Petrobras Argentina is the Argentine Peso. The Company has translated all assets and liabilities into U.S. dollars at the current exchange rate (R$1.741 and R$2.337 to US$1.00 at December 31, 2009 and 2008, respectively), and all accounts in the statements of income and cash flows (including amounts relative to local currency indexation and exchange var

Note 3 - Income Taxes

Note 3 - Income Taxes
	12 Months Ended Dec. 31, 2009
Notes to Financial Statements [Abstract]
Note 3 - Income Taxes	3.Income Taxes Income taxes in Brazil comprise federal income tax and social contribution, which is an additional federal income tax. The statutory enacted tax rates for income tax and social contribution have been 25% and 9%, respectively for the years ended December 31, 2009, 2008 and 2007. The Companys taxable income is substantially generated in Brazil and therefore subject to the Brazilian statutory tax rate. The following table reconciles the tax calculated based upon the Brazilian statutory tax rate of 34% to the income tax expense recorded in these consolidated statements of income. Year ended December 31, 2009 2008 2007 Income before income taxes and minority interest: Brazil 20,770 28,080 19,431 International 1,291 (1,088) (132) 22,061 26,992 19,299 Tax expense at statutory rate- (34%) (7,501) (9,177) (6,562) Adjustments to derive effective tax rate: Non-deductible postretirement and health-benefits (148) (254) (315) Change in valuation allowance (98) (1,004) (575) Foreign income subject to different tax rates 556 25 (199) Tax incentive (1) 167 219 712 Equity 114 (7) 82 Tax benefit on interest on shareholdersequity (see Note 17(e)) 1,331 995 998 Technological Innovations 134 162 81 Goodwill Impairment (see Note 18 (a)) - (76) - Other 207 (142) (110) Income tax expense per consolidated statement ofincome (5,238) (9,259) (5,888) (1) On May 10, 2007, the Brazilian Federal Revenue Office recognized Petrobras right to deduct certain tax incentives from income tax payable, covering the tax years of 2006 until 2015. During the year ended December 31, 2009, Petrobras recognized a tax benefit in the amount of US$167 (US$219 on December 31, 2008 and US$712 on December 31, 2007) primarily related to these incentives in the Northeast, within the region covered by the Northeast Development Agency (ADENE), granting a 75%reduction in income tax payable, calculated on the profits of the exploration of the incentive activities and these have been accounted for under the flow through method. The following table shows a breakdown between domestic and international income tax benefit (expense) attributable to income from continuing operations: Year ended December 31, 2009 2008 2007 Brazil: Current (3,987) (6,583) (4,473) Deferred (932) (2,463) (991) (4,919) (9,046) (5,464) International: Current (391) (321) (353) Deferred 72 108 (71) (319) (213) (424) Income tax expense (5,238) (9,259) (5,888) All the deferred tax assets and liabilities recorded are principally related to Brazil and there are no significant deferred tax assets and liabilities from international locations. There is no netting of deferred taxes between jurisdictions. The major components of the deferred income tax accounts in the consolidated balance sheet are as follows: As of December 31, 2009 2008 Current assets 669

Note 4 - Cash and Cash Equivale

Note 4 - Cash and Cash Equivalents
	12 Months Ended Dec. 31, 2009
Notes to Financial Statements [Abstract]
Note 4 - Cash and Cash Equivalents	4. Cash and Cash Equivalents As of December 31, 2009 2008 Cash 1,478 1,075 Investments - Brazilian reais (1) 10,780 2,813 Investments - U.S. dollars (2) 3,911 2,611 16,169 6,499 (1) Comprised primarily federal public bonds with immediate liquidity and the securitiesare tied to the American dollar quotation or to the remuneration of the Interbank Deposits - DI. (2) Comprised primarily by Time Deposit and securities with fixed income.

Note 5 - Marketable Securities

Note 5 - Marketable Securities
	12 Months Ended Dec. 31, 2009
Notes to Financial Statements [Abstract]
Note 5 - Marketable Securities	5.Marketable Securities As of December 31, 2009 2008 Marketable securities classification: Available-for-sale 2,551 1,608 Trading - 57 Held-to-maturity 180 197 2,731 1,862 Less: Current portion of marketable securities (72) (124) Long-term portion of marketable securities 2,659 1,738 Available-for-sale securities are presented as Non-current assets, as they are not expected to be sold or liquidated within the next twelve months. As of December 31, 2009, Petrobras had a balance of US$2,363 linked to B Series National Treasury Notes, which are accounted for as available-for-sale securities in accordance with Codification Topic 320. On October 23, 2008, the B Series National Treasury Notes were used as a guarantee after the confirmation of the agreements into with Petros, Petrobras pension plan (see Note 16 (b)). The nominal value of the NTN-Bs is restated based on variations in the Amplified Consumer Price Index (IPCA). The maturities of these notes are 2024 and 2035 and they bear interest coupon of 6% p.a., which is paid semi-annually. At December 31, 2009, the balances of the National Treasury Notes - Series B (NTN-B) are updated in accordance with their market value, based on the average prices disclosed by the National Association of Open Market Institutions (ANDIMA).

Note 6 - Accounts Receivable

Note 6 - Accounts Receivable
	12 Months Ended Dec. 31, 2009
Notes to Financial Statements [Abstract]
Note 6 - Accounts Receivable, Net	6.Accounts Receivable, Net Accounts receivable, net consisted of the following: As of December 31, 2009 2008 Trade 11,507 8,727 Less: Allowance for uncollectible accounts (1,446) (1,191) 10,061 7,536 Less: Long-term accounts receivable, net (1,946) (923) Current accounts receivable, net 8,115 6,613 As of December 31, 2009 2008 2007 Allowance for uncollectible accounts Balance at January 1, (1,191) (1,290) (1,120) Additions (130) (84) (215) Write-offs 88 16 160 Cumulative translation adjustments (213) 167 (115) Balance at December 31, (1,446) (1,191) (1,290) Allowance on short-term receivables (875) (638) (746) Allowance on long-term receivables (571) (553) (544) At December 31, 2009 and 2008, long-term receivables include US$633 and US$624, respectively relating to payments made by the Company to suppliers and subcontractors on behalf of certain contractors. These contractors had been hired by the subsidiary Brasoil for the construction/conversion of vessels into FPSO (Floating Production, Storage and Offloading) and FSO (Floating, Storage and Offloading) and failed to make the payments to their suppliers and subcontractors. The Company made the payments to avoid further delays in the construction/conversion of the vessels and consequent losses to Brasoil. The Companys management has determined that these payments can be reimbursed, since they represent Brasoils rights with respect to the contractors, for which reason judicial action was filed with international courts to seek reimbursement. However, as a result of the uncertainties related to the realization of such receivables, the Company recorded an allowance for all credits not backed by collateral. Such allowance amounted to US$561 and US$553 as of December 31, 2009 and 2008, respectively.

Note 7 - Inventories

Note 7 - Inventories
	12 Months Ended Dec. 31, 2009
Notes to Financial Statements [Abstract]
Note 7 - Inventories	7.Inventories As of December 31, 2009 2008 Products: Oil products 3,379 2,770 Fuel alcohol 377 256 3,756 3,026 Raw materials, mainly crude oil 5,494 3,301 Materials and supplies 1,917 1,578 Others 75 134 11,242 8,039 Current inventories 11,227 7,990 Long-term inventories 15 49 Inventories are stated at the lower of cost or market. Due to the recently declines in the oil international market prices, the Company recognized a loss of US$308 for the year ended December 31, 2009 (US$545 in 2008), which was classified as other operating expenses in the consolidated statement of income. The Company adopted the realizable value for inventory impairment purposes.

Note 8 - Recoverable Taxes

Note 8 - Recoverable Taxes
	12 Months Ended Dec. 31, 2009
Notes to Financial Statements [Abstract]
Note 8 - Recoverable Taxes	8.Recoverable Taxes Recoverable taxes consisted of the following: As of December 31, 2009 2008 Local: Domestic value-added tax (ICMS) (1) 2,816 1,924 PASEP/COFINS (2) 4,858 2,622 Income tax and social contribution 1,315 1,176 Foreign value-added tax (IVA) 42 113 Other recoverable taxes 371 541 9,402 6,376 Less: Long-term recoverable taxes (5,462) (3,095) Current recoverable taxes 3,940 3,281 (1) Domestic value-added sales tax (ICMS) is composed of credits generated bycommercial operations and by the acquisition of property, plant and equipment andcan be offset with taxes of the same nature. (2) Composed of credits arising from non-cumulative collection of PASEP and COFINS,which can be compensated with other federal taxes payable. The income tax and social contribution recoverable will be offset against future income tax payable. Petrobras plans to fully recover these taxes, and as such, no allowance has been provided.

Note 9 - Property, Plant and Eq

Note 9 - Property, Plant and Equipment, Net
	12 Months Ended Dec. 31, 2009
Notes to Financial Statements [Abstract]
Note 9 - Property, Plant and Equipment, Net	9.Property, Plant and Equipment, Net Property, plant and equipment, at cost, are summarized as follows: As of December 31, 2009 2008 Accumulated Accumulated Cost depreciation Net Cost depreciation Net Buildings and improvements 7,093 (1,982) 5,111 4,060 (1,310) 2,750 Capitalized expenses 47,958 (21,633) 26,325 26,281 (12,682) 13,599 Equipment and other assets 60,592 (27,637) 32,955 45,742 (21,230) 24,512 Capital lease - platforms and vessels 813 (63) 750 2,752 (2,073) 679 Rights and concessions 3,172 (1,009) 2,163 2,439 (655) 1,784 Land 574 - 574 441 - 441 Materials 4,360 - 4,360 2,219 - 2,219 Expansion projects: Construction and installations in progress: Exploration and production 27,664 - 27,664 19,779 - 19,779 Refining, Transportation Marketing 22,683 - 22,683 11,973 - 11,973 Gas Power 11,010 - 11,010 4,908 - 4,908 Distribution 285 - 285 185 - 185 International 680 - 680 1,346 - 1,346 Corporate 1,607 - 1,607 544 - 544 188,491 (52,324) 136,167 122,669 (37,950) 84,719 a)Codification Topic 410 - Asset Retirement and Environmental Obligations In accordance with Codification Topic 410-20, adopted by Petrobras since January 2003, the fair value of asset retirement obligations are recorded as liabilities on a discounted basis when they are incurred, which is typically at the time the related assets are installed. Amounts recorded for the related assets will be increased by the amount of these obligations and depreciated over the related useful lives of such assets. Over time, the amounts recognized as liabilities will be accreted for the change in their present value until the related assets are retired or sold. Measurement of asset retirement obligations is based on currently enacted laws and regulations, existing technology and site-specific costs. There are no assets legally restricted to be used in the settlement of asset retirement obligations. A summary of the annual changes in the abandonment provision is presented as follows: Liabilities Balance as of December 31, 2007 3,462 Accretion expenses 153 Liabilities incurred 687 Liabilities settled (23) Revision of provision (640) Cumulative translation adjustment (814) Balance as of December 31, 2008 2,825 Accretion expenses 164 Liabilities incurred 24 Liabilities settled (4) Revision of provision (955) Cumulative translation adjustment 758 Balance as of December 31, 2009 2,812 b)Impairment For the years ended December 31, 2009, 2008 and 2007, the Company recorded impairment charges of US$319, US$519 and US$271, respectively. During 2009, the impairment charge was primarily related to producing properties in Brazil and principal amounts were related to Petrobras Agua Grande field. In 2009 the petroleum and natural gas fields that presented losses a

Note 10 - Investments in Non Co

Note 10 - Investments in Non Consolidated Companies and Other Investments
	12 Months Ended Dec. 31, 2009
Notes to Financial Statements [Abstract]
Note 10 - Investments in Non-Consolidated Companies and Other Investments	10.Investments in Non-Consolidated Companies and Other Investments Petrobras conducts portions of its business through investments in companies accounted for using the equity and cost methods. These non-consolidated companies are primarily engaged in the petrochemicals and product transportation businesses. Investments Total ownership 2009 2008 Equity method 20% - 50%(1) 3,988 2,626 Investments at cost 362 572 Total 4,350 3,198 (1) As described further in this Note, certain thermoelectrics with ownership of 10% to50% are also accounted as equity investments due to particularities of significantinfluence. At December 31, 2009, the Company had investments interest of 31.9% and 25.33% with balance of US$658 and US$856 in Quattor Companhia Petroqumica and Braskem S.A., respectively, that were recorded according to equity method. The Company also has investments in companies for the purpose of developing, constructing, operating, maintaining and exploring thermoelectric plants included in the federal governments Priority Thermoelectric Energy Program, with equity interests of between 10% and 50%. The balance of these investments as of December 31, 2009 and 2008 includes US$110 and US$80 respectively, and are included as equity method investments due to the Companys ability to exercise significant influence over such operations. a)Investments in Venezuela In March, 2006, through its subsidiaries and affiliated companies in Venezuela, PESA executed with PDVSA and Corporacin Venezolana del Petrleo S.A. (CVP), Memoranda of Understanding (MOU) for the purpose of completing the migration of the operating partnerships to the form of mixed capital companies in accordance with legal articles. The MOU established that the interest held by the private partners in the mixed capital companies is 40%, with the Venezuelan government holding an interest of 60%. According to the corporate and governance structure specified for the mixed capital companies, as from April 01, 2006, PESA no longer recorded the assets, liabilities and results referring to the aforesaid operations in consolidated statements, presenting them as equity method investments. Recovery of these investments is strongly tied to the volatility of oil prices, social, economic and regulatory conditions in Venezuela and, in particular, to shareholders interest in developing the oil reserves. Consequently a provision for loss on investments has been made in the amount of US$77 in 2009 (US$23 in 2008). b)Petrobras Biocombustvel acquires 50% of a biodiesel plant in Paran In December 2009, Petrobras Biocombustvel made investments in the amount of US$32 in the capital of the company BSBIOS Marialva Indstria e Comrcio de Biodiesel Sul Brasil S.A. and now holds 50% of the companys shares. Of the total investment, US$26 was already paid in 2009 and the remaining US$6 will be paid when the start-up of operations of the company occurs, which is forecast for the second quarter of 2010.

Note 11 - Petroleum and Alcohol

Note 11 - Petroleum and Alcohol Account Receivable from Federal Government
	12 Months Ended Dec. 31, 2009
Notes to Financial Statements [Abstract]
Note 11 - Petroleum and Alcohol Account - Receivable from Federal Government	11.Petroleum and Alcohol Account - Receivable from Federal Government Changes in the Petroleum and Alcohol account The following summarizes the changes in the Petroleum and Alcohol account for the years ended December 31, 2009 and 2008: Year ended December 31, 2009 2008 Opening balance 346 450 Financial income (Note 23) 4 7 Translation gain 119 (111) Ending balance 469 346 In order to conclude the settlement of accounts with the Federal Goverment, pursuant to Provisional Measure n 2.181, of August 24, 2001, and after providing all the information required by the National Treasury Office - STN, Petrobras is seeking to settle all the remaining disputes between the parties. The remaining balance of the Petroleum and Alcohol account may be paid as follows: (1) National Treasury Bonds issued at the same amount as the final balance of the Petroleum and Alcohol account; (2) offset of the balance of the Petroleum and Alcohol account, with any other amount owed by Petrobras to the Federal Government, including taxes; or (3) by a combination of the above options.

Note 12 - Financings

Note 12 - Financings
	12 Months Ended Dec. 31, 2009
Notes to Financial Statements [Abstract]
Note 12 - Financings	12.Financing The Company has utilized project financing to provide capital for the continued development of the Companys exploration and production and related projects. The VIEs associated with the project finance projects are consolidated based on ASC Topic 810-10-25 (Variable Interest Entities). a)Short-term debt The Companys short-term borrowings are principally sourced from commercial banks and include import and export financing denominated in United States dollars, as follows: As of December 31, 2009 2008 Import - oil and equipment 189 479 Working capital 4,070 2,126 4,259 2,605 The weighted average annual interest rates on outstanding short-term borrowings were 2.53% and 4.72% at December 31, 2009 and 2008, respectively. b) Long-term debt Composition As of December 31, 2009 2008 Foreign currency: Notes 11,593 5,574 Financial institutions 12,119 9,320 Sale of future receivables 334 401 Suppliers credits 6 81 Assets related to export program to be offset againstsalesof future receivables (150) (150) 23,902 15,226 Local currency: National Economic and Social DevelopmentBank - BNDES (state-owned company, see Note 23) 16,332 3,676 Debentures: BNDES (state-owned company, see Note 23) 3,762 542 Other banks 1,610 1,198 Export Credit Notes 3,663 1,689 Bank Credit Certificate 2,075 1,543 Other 1,099 49 28,541 8,697 Total 52,443 23,923 Current portion of long-term debt (4,294) (3,283) 48,149 20,640 As of December 31 2009 and December 31, 2008, the Company had amounts invested abroad in an exclusive investment fund that held debt securities of some of the SPEs that the Company consolidates according to Codification Topic 810-25 (Recognition), in the total amount of US$749. These securities are considered to be extinguished, and thus the related amounts, together with applicable interest have been removed from the presentation of financings. Composition of foreign currency denominated debt by currency As of December 31, 2009 2008 Currencies: United States dollars 23,007 14,206 Japanese Yen 654 244 Euro 53 69 Other 188 707 23,902 15,226 Maturities of the principal of long-term debt The long-term portion at December 31, 2009 becomes due in the following years: 2011 7,040 2012 2,566 2013 2,992 2014 2,404 2015 2,215 2016 and thereafter 30,932 48,149 Interest rates on long-term debt were as follows: As of December 31, 2009 2008 Foreign currency 6% or less 15,105 11,354 Over 6% to 8% 6,913 2,447 Over 8% to 10% 1,743 1,040 Over 10% to 12% 33 140 Over 12% to 15% 108 245 23,902 15,226 Local currency 6% or less 1,614 1,827 Over 6% to 8% 15,151 642 Over 8% to 10% 6,001 1,756 Over 10% to 12% 5,775 1,437 Over 12% to 15% - 3,035 28,541 8,

Note 13 - Financial Income Expe

Note 13 - Financial Income Expenses, Net
	12 Months Ended Dec. 31, 2009
Notes to Financial Statements [Abstract]
Note 13 - Financial Income (Expenses), Net	13.Financial Income (Expenses), Net Financial expenses, financial income and monetary and exchange variation, allocated to income for the years ended at December 31, 2009, 2008 and 2007 are shown as follows: Years ended December 31, 2009 2008 2007 Financial expenses Loans and financings (1,913) (1,320) (1,258) Project financings (492) (314) (608) Leasing (30) (41) (79) Losses on derivative instruments (Note 20) (427) (425) (267) Repurchased securities losses (31) (35) (38) Other (511) (163) (130) (3,404) (2,298) (2,380) Capitalized interest 2,109 1,450 1,703 (1,295) (848) (677) Financial income Investments 712 533 824 Clients 123 129 231 Marketable Securities 392 183 110 Gains on derivative instruments (Note 20) 247 636 119 Other 425 160 266 1,899 1,641 1,550 Monetary and exchange variation (175) 1,584 (1,455) 429 2,377 (582)

Note 14 - Project Financings

Note 14 - Project Financings
	12 Months Ended Dec. 31, 2009
Notes to Financial Statements [Abstract]
Note 14 - Project Financings - (Variable Interest Entities)	14. Project Financing - (Variable Interest Entities - VIEs) Petrobras carries out project financings jointly with Brazilian and international financial agents and with companies in the petroleum and energy sector for the purpose of making feasible the investments needed in the business areas in which the Company operates. The project financing is made feasible through Variable Interest Entities - VIEs). The Companys is the primary beneficiary of the VIEs due to the finance lease arrangements. The VIEs are the lessors and the Company is the lessee. At the conclusion of the leased term, the Company will have the option to purchase the leased assets or all the common stock from the VIEs. All risks associated with the use and development of the leased assets relie on the Company. The Companys payments funds the VIEs thirty party debt and return on equity payments. The Companys variable interest in these VIEs, the financial lease arrangement, will absorb the majority of expected losses and receive a majority of the expected residual returns. The Companys responsibility under these contracts is to complete the development of the oil and gas fields, operate the fields, pay for all operating expenses related to the projects and remit a portion of the net proceeds generated from the fields to fund the special purpose companies debt and return on equity payments. At the conclusion of the term of each financing project, the Company will have the option to purchase the leased or transferred assets from the consolidated special purpose company. The VIEs associated with the project financings projects are consolidated based on ASC TOPIC 810-10-25. As of December 31, 2009, the amounts of cash outlay commitments assumed related to consolidated structured project financings are presented as follows: Transportadora Gasene 55 REVAP 250 Codajs 387 692 The following summarizes the projects, their purposes, the guarantees and estimates investments of each project: a) Projects with assets in operation VIE / Estimated Main investment Purpose Guarantees PPE Barracuda and Caratinga To allow development of production in the fields of Barracuda and Caratinga in the Campos Basin. The VIE Barracuda and Caratinga Leasing Company B.V. (BCLC), is in charge of building all of the assets (wells, submarine equipment and production units) required by the project, and is also the owner of them. Guarantee provided by Brasoil to coverBCLCs financial requirements. US$1,700 US$3,100 PDET The VIE PDET Offshore S.A. is the owner of the Projects assets and its purpose is to improve the infrastructure for the transfer of the oil produced in the Campos Basin to the oil refineries in the Southeast Region and for export. These assets have been leased to Petrobras until 2019. All of the projectsassets will bepledged as collateral. US$1,195 US$1,180 Malhas - (NTN/NTS) Consortium formed between Transpetro, Transportadora Associada de Gs (TAG) former Transportadora Nordeste Sudeste (TNS), Nova Transportadora do Sudeste (NTS) and Nova Transportado

Note 15 - Capital Lease Obligat

Note 15 - Capital Lease Obligations
	12 Months Ended Dec. 31, 2009
Notes to Financial Statements [Abstract]
Note 15 - Capital Lease Obligations	15.Capital Lease Obligations The Company leases certain offshore platforms and vessels, which are accounted for as capital leases. At December 31, 2009, assets under capital leases had a net book value of US$750 (US$679 at December 31, 2008). The following is a schedule by year of the future minimum lease payments at December 31, 2009: 2010 214 2011 130 2012 42 2013 17 2014 17 2015 20 2016 and thereafter 46 Estimated future lease payments 486 Less amount representing interest at 6.2% to 12.0% annual (56) Present value of minimum lease payments 430 Less current portion of capital lease obligations 227 Long-term portion of capital lease obligations 203

Note 16 - Employees Post retire

Note 16 - Employees Post retirement Benefits and Other Benefits
	12 Months Ended Dec. 31, 2009
Notes to Financial Statements [Abstract]
Note 16 - Employees Postretirement Benefits and Other Benefits	16. Employees Postretirement Benefits and Other Benefits a) Employees postretirement benefits balances The balances related to Employees Postretirement Benefits are represented as follows: As of December 31, 2009 December 31, 2008 Health Health Pension Care Pension Care Benefits Benefit Total Benefits Benefits Total Current liabilities Defined-benefit plan 182 325 507 176 224 400 Variable Contribution plan 187 - 187 92 - 92 Employees postretirement projectedbenefits obligation 369 325 694 268 224 492 Long-term liabilities Defined-benefit plan 4,419 6,544 10,963 1,786 4,001 5,787 Employees postretirement projectedbenefits obligation 4,788 6,869 11,657 2,054 4,225 6,279 Shareholders equity - Accumulated other comprehensive income Defined-benefit plan 2,282 121 2,403 253 (404) (151) Variable Contribution plan 91 - 91 95 - 95 Tax effect (807) (41) (848) (118) 137 19 Net balance recorded in shareholders equity 1,566 80 1,646 230 (267) (37) b)Pension plan - Fundao Petrobras de Seguridade Social - Petros The Fundao Petrobras de Seguridade Social (Petros) was established by Petrobras as a private, legally separate nonprofit pension entity with administrative and financial autonomy. The Petros plan is a contributory defined-benefit pension plan introduced by Petrobras in July of 1970, to supplement the social security pension benefits of employees of Petrobras and its Brazilian subsidiaries and affiliated companies. The Petros Plan is now closed to new employees of the Petrobras system since September 2002, and as from July 1, 2007, the Company introduced a new private pension plan, Petros Plan 2. In order to fund its objectives, Petros receives monthly contributions from the sponsoring companies and retired participants. With the most recent regulatory adjustments of the Plano Petros, the plan now receives from the sponsoring companies, instead of the 12.93% until then practised on the payroll of the employees who are members of the plan, regular contributions in amounts equal to the amounts of the contributions of the employees and retired employees, in an equal way, amounts which represented, on average, 12% of the participating payroll. Additionally, Petros is funded by income resulting from the investment of these contributions. The Companys funding policy is to contribute to the plan annually the amount determined by actuarial calculations. In the calendar 2009 year, benefits paid totaled US$911 (US$932 in 2008). The Companys liability related to future benefits to plan participants is calculated on an annual basis by an independent actuary, based on the Projected Unit Credit method. The assets that guarantee the pension plan are presented as a reduction to the net actuarial liabilities. The actuarial gains and losses generated by the differences between the values of the obligation and assets d

Note 17 - Shareholders Equity

Note 17 - Shareholders Equity
	12 Months Ended Dec. 31, 2009
Notes to Financial Statements [Abstract]
Note 17 - Shareholders Equity	17. Shareholders Equity a) Capital The Companys subscribed and fully paid-in capital at December 31, 2009 and 2008, consisted of 5,073,347,344 common shares and 3,700,729,396 preferred shares as retroactively restated for the stock split discussed below. The preferred shares do not have any voting rights and are not convertible into common shares and vice-versa. Preferred shares have priority in the receipt of dividends and return of capital. The Extraordinary General Meeting held on March 24, 2008, decided to effect a split of each Companys share into two, resulting: (a) in a free distribution of 1 (one) new share of the same type for each original share and based on the shareholding structure at April 25, 2008; (b) in a free distribution of 1 (one) new American Depository Shares (ADS) of the same type for each original ADS and based on the shareholding structure at April 25, 2008. At the same date, an amendment to article 4 of the Companys by-laws to cause capital be divided into 8,774,076,740 shares, of which 5,073,347,344 are common shares and 3,700,729,396 are preferred shares, with no nominal value, was approved. This amendment to the Companys bylaws is effective from April 25, 2008. The relation between the ADS and shares of each class remains of 2 (two) shares for one ADS. All share, ADS, per share and per ADS information in the accompanying financial statements and notes have been adjusted to reflect the result of the share split. Current Brazilian law requires that the Federal Government retain ownership of 50% plus one share of the Companys voting shares. The Management of Petrobras is proposing to the Special General Shareholders Meeting to be held jointly with the Annual General Shareholders Meeting on April 22, 2010, a capital increase in the Company from US$36,194 (R$78,967 million) to US$40,225 (R$85,986 million), through capitalization of a capital reserve in the amount of US$296 (R$515 million), of part of a profit reserve recorded in prior years in the amount of US$3,727 (R$6,490 million), of which US$516 (R$899 million) is from a statutory reserve, US$320 (R$557 million) from a tax incentive reserve and US$2,891 (R$5,034 million) from a profit retention reserve, and, in addition, US$8 (R$14 million) from part of a tax incentive reserve formed in 2009, without issuing new shares, in accordance with article 169, paragraph 1, of Law 6,404/76. The Extraordinary General Meeting, held together with the Ordinary General Meeting on April 4, 2008, approved the increase of the Companys capital from US$20,816 (R$52,644 million) to US$36,194 (R$78,967 million), through the capitalization of part of retained earnings recorded during previous years amounting to US$14,782 (R$25,302 million) and part of the capital reserves, amounting to US$596 (R$1,020 million), consisting of US$99 (R$169 million) of the Merchant Navy AFRMM subsidy reserve and US$497 (R$851 million) from the tax incentives reserve, and without issuing any new shares, in accordance with article 169, paragraph 1 of Law N 6404/76. b)Capital reserves AFRMM Relates to the Merchant Marine (AFRMM) freight surcharges levied in accordance with relevant le

Note 18 - Domestic and Internat

Note 18 - Domestic and International Acquisitions
	12 Months Ended Dec. 31, 2009
Notes to Financial Statements [Abstract]
Note 18 - Domestic and International Acquisitions	18. Domestic and International Acquisitions a) Goodwill Goodwill represents the excess of the purchase price over the estimated fair value of the net assets acquired in the acquisition of a business. In accordance with Codification Topic 350 -Goodwill and Other Intangible Assets (ASC 350), the Corporations goodwill is not amortized, but is tested for impairment at a reporting unit level, which is an operating segment or one level below an operating segment. The Company conducts its annual goodwill impairment review in the fourth quarter of each year and whenever events and changes in circumstances suggest that the carrying amount may not be recoverable. Goodwill impairment encompasses a two step approach. In the first step the Company compares the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value is lower than the carrying amount including goodwill, there is an indication of impairment loss that is measured by performing the second step. In the second step, the estimated fair value from the first step is used as the purchase price in a hypothetical acquisition of the reporting unit. Purchase business combination accounting rules are followed to determine a hypothetical purchase price allocation to the reporting units assets and liabilities. The residual amount of goodwill that results from this hypothetical purchase price allocation is compared to the recorded amount of goodwill for the reporting unit, and the recorded amount is written down to the hypothetical amount, if lower. During the fourth quarter of 2008, the Company recorded a goodwill impairment of US$223 in Petrobras indirect subsidiary in United States, Pasadena Refining System, that encompasses a refinery and a trading company. The primarily factors for the goodwill impairment were: (a) a decline in the price of crude oil and oil products (b) a gross margin decrease of refined products in the wholesale market, and (c) a decrease in the demand for refined products. Change in the balance of goodwill for the years ended December 31, 2009 and 2008: Balance as of December 31, 2007 313 Goodwill from PIB BV 50 Goodwill impairment of Pasadena Refining System (223) Cumulative translation adjustment (22) Balance as of December 31, 2008 118 Cumulative translation adjustment 21 Balance as of December 31, 2009 139 b) Acquisition of distribution interests in Chile On April 30, 2009, Petrobras, through its wholly owned subsidiaries Petrobras Venezuela Investments Services B.V. e Petrobras Participaciones, S.L., located in the Netherlands and Spain, respectively, concluded the process for the acquisition of the distribution and logistics businesses of ExxonMobil in Chile, with the payment of US$400, net of the cash and cash equivalents of the purchased companies. Due to immateriality, proforma information has not been presented. On December 1, 2009 Petrobras acquired Chevron Chile S.A.C, which produces and sells lubricants of the Texaco brand in Chile, for approximately US$14. c) Sale option of the Pasadena refinery by Astra In a decision handed down on Apr

Note 19 - Commitments and Conti

Note 19 - Commitments and Contingencies
	12 Months Ended Dec. 31, 2009
Notes to Financial Statements [Abstract]
Note 19 - Commitments and Contingencies	19. Commitments and Contingencies Petrobras is subject to a number of commitments and contingencies arising in the normal course of its business. Additionally, the operations and earnings of the Company have been, and may be in the future, affected from time to time in varying degrees by political developments and laws and regulations, such as the Federal Governments continuing role as the controlling shareholder of the Company, the status of the Brazilian economy, forced divestiture of assets, tax increases and retroactive tax claims, and environmental regulations. The likelihood of such occurrences and their overall effect upon the Company are not predictable. In an effort to ensure procurement of oil products for the Companys customers, the Company currently has several short and long-term normal purchase contracts with maturity dates up to 2017, which collectively obligate it to purchase a minimum of approximately 172,188 barrels of crude oil and oil products per day at market prices. Petrobras provided guarantees to the ANP for the minimum exploration program defined in the concession contracts for exploration areas, totaling US$2,355 (US$2,513 in 2008). Out of this total, US$2,042 (US$1,154 in 2008) represents a pledge on the oil to be extracted from previously identified fields already in production, for areas in which the Company had already made commercial discoveries or investments. For areas whose concessions were obtained by bidding from the ANP, Petrobras has given bank guarantees totaling US$333 through December 31, 2009 (US$522 in 2008). Petrobras entered into an agreement with Yacimientos Petrolferos Fiscales Bolivianos (YPFB), to purchase a total of 201,9 billion m3 of natural gas during the term of the agreement, undertaking to purchase minimum annual volumes at a price calculated according to a formula indexed to the price of fuel oil. The agreement is valid until 2019 and will be renewed until the total contracted volume has been consumed. The pipeline achieved an average throughput of 22.0 million cubic meters per day during 2009. In the period between 2002 and 2005, Petrobras bought less than the minimum volume established in the agreement with YPFB and paid US$81 at December 31, 2009, referring to the volumes not transported, the credits for which will be realized through the drawing of future volumes. The commitments for purchases of gas up to the end of the agreement represent annual average volumes of 24 million cubic meters per day. In the fourth quarter of 2009 Petrobras and YPFB signed a contractual addendum which regulates the payment of additional amounts to YPFB referring to the quantity of liquids (heavy hydrocarbons) present in the natural gas imported by Petrobras from YPFB through a Gas Supply Agreement (GSA). The addendum establishes additional amounts between US$100 and US$180 per year, applied to the volumes of gas delivered as from May 2007. With respect to 2007, the obligation for additional payment by Petrobras was recorded as a provision and was settled in February 2010. The payment of the amounts referring to subsequent years will only be due after compliance with a condition preced

Note 20 - Derivative Instrument

Note 20 - Derivative Instruments Hedging and Risk Management Activities
	12 Months Ended Dec. 31, 2009
Notes to Financial Statements [Abstract]
Note 20 - Derivative Instruments, Hedging and Risk Management Activities	20. Derivative Instruments, Hedging and Risk Management Activities The Company is exposed to a number of market risks arising from its normal course of business. Such market risks principally involve the possibility that changes in interest rates, foreign currency exchange rates or commodity prices will adversely affect the value of the Companys financial assets and liabilities or future cash flows and earnings. The Company maintains a corporate risk management policy that is executed under the direction of the Companys executive officers. In 2004, the Executive Committee of Petrobras set up the Risk Management Committee composed of executive managers from all the business departments and from a number of corporate departments. This committee, as well as having the objective of assuring integrated management of exposures to risks and formalizing the main guidelines for the Companys operation, aims at concentrating information and discussing actions for risk management, facilitating communication with the executive offices and the Board of Directors in aspects related to best corporate governance practices. The risk management policy of the Petrobras System aims at contributing towards an appropriate balance between its objectives for growth and return and its level of risk exposure, whether inherent to the exercise of its activities or arising from the context within which it operates, so that, through effective allocation of its physical, financial and human resources the Company may attain its strategic goals. The Company may use derivative and non-derivative instruments to implement its corporate risk management strategy. However, by using derivative instruments, the Company exposes itself to credit and market risk. Credit risk is the failure of a counterparty to perform under the terms of the derivative contract. Market risk is the possible adverse effect on the value of an asset or liability, including financial instruments that results from changes in interest rates, currency exchange rates, or commodity prices. The Company addresses credit risk by restricting the counterparties to such derivative financial instruments to major financial institutions. Market risk is managed by the Companys executive officers. The Company does not hold or issue financial instruments for trading purposes. a) Commodity price risk management The Company is exposed to commodity price risks as a result of the fluctuation of crude oil and oil product prices. The Companys commodity risk management activities are primarily undertaking through the uses of future contracts traded on stock exchanges; and options and swaps entered into with major financial institutions. The Company does not use derivatives contracts for speculative purposes. The Company does not usually use derivatives to manage overall commodity price risk exposure, taking into consideration that the Companys business plan uses conservative price assumptions associated to the fact that, under normal market conditions, price fluctuations of commodities do not represent a substantial risk to achieving strategic objectives. The decision to enter into hedging or non-hedging derivat

Note 21 - Financial Instruments

Note 21 - Financial Instruments
	12 Months Ended Dec. 31, 2009
Notes to Financial Statements [Abstract]
Note 21 - Financial Instruments	21. Financial Instruments In the normal course of its business activities, the Company acquires various types of financial instruments. a)Concentrations of credit risk Substantial portions of the Companys assets including financial instruments are located in Brazil while substantially all of the Companys revenues and net income are generated in Brazil. The Companys financial instruments that are exposed to concentrations of credit risk consist primarily of its cash and cash equivalents, the Petroleum and Alcohol account, trade receivables and futures contracts. The Company takes several measures to reduce its credit risk to acceptable levels. All cash and cash equivalents in Brazil are maintained with major banks. Time deposits in U.S. dollars are placed with creditworthy institutions in the United States. Additionally, all of the Companys available-for-sale securities and derivative contracts are either exchange traded or maintained with creditworthy financial institutions. The Company monitors its credit risk associated with trade receivables by routinely assessing the creditworthiness of its customers. At December 31, 2009 and December 31, 2008, the Companys trade receivables were primarily maintained with large distributors. Fair value Fair values are derived either from quoted market prices where available, or, in their absence, the present value of expected cash flows. Fair values reflect the cash that would have been either received or paid if the instruments were settled at year end in an arms length transaction between willing parties. Fair values of cash and cash equivalents, trade receivables, the Petroleum and Alcohol account, short-term debt and trade payables approximate their carrying values. The fair values of other long-term receivables and payables do not differ materially from their carrying values. The Companys debt including project financing obligations, resulting from Codification TOPIC 810 consolidation amounted to US$48,149, at December 31, 2009, and US$20,640 at December 31, 2008, and had estimated fair values of US$48,804 and US$20,032, respectively. The fair value hierarchy for the Companys financial assets and liabilities accounted for at fair value on a recurring basis at December 31, 2009, was: As of December 31, 2009 Level 1 Level 2 Level 3 Total Assets Marketable securities 2,551 - - 2,551 Foreign exchange derivatives (Note 20) - 66 - 66 Commodity derivatives (Note 20) 36 - - 36 Total assets 2,587 66 - 2,653 Liabilities Commodity derivatives (Note 20) (51) - - (51) Total liabilities (51) - - (51) The fair value hierarchy for the Companys non financial assets and liabilities accounted for at fair value on a non-recurring basis at December 31, 2009, was: As of December 31, 2009 Level 1 Level 2 Level 3 Total Assets Long-lived assets held and used - - 135 135 Equity method investments - - 133 133 In accordance with the provisions of ASC Topic 360, long-lived assets held and used

Note 22 - Segment Information

Note 22 - Segment Information
	12 Months Ended Dec. 31, 2009
Notes to Financial Statements [Abstract]
Note 22 - Segment Information	22. Segment Information The following segment information has been prepared in accordance with Codification Topic 280 - Disclosure about Segments of an Enterprise and Related information (ASC 280). The Company operates under the following segments, which are described as follows: Exploration and Production - This segment includes the Companys exploration, production development and production activities of oil, liquefied natural gas and natural gas in Brazil, for the purpose of supplying refineries in Brazil as well as selling surplus Brazilian production in domestic and foreign markets and limited oil trading activities and transfers of natural gas to the Companys Gas Power segment. Refining, Transportation Marketing (1) - This segment includes the Companys refining, logistic, transportation, exportation and the purchase of crude oil, as well as the purchase and commercialization activities for oil, oil products and fuel alcohol. Additionally, this segment includes petrochemical and fertilizers division, which includes investments in domestic petrochemical companies and the Companys two domestic fertilizer plants. Distribution - This segment represents the oil product and fuel alcohol distribution activities conducted by the Companys majority owned subsidiary, Petrobras Distribuidora S.A. - BR in Brazil. Gas Power (1) - This segment currently encompasses the purchase, sale, transportation and distribution of natural gas produced in or imported into Brazil. Additionally, this segment includes the Companys participation in domestic electricity production, including investments in domestic natural gas transportation companies, state owned natural gas distributors and thermoelectric companies. International - This segment represents the Companys international Exploration and Production, Refining, Transportation Marketing, Distribution and Gas Power activities conducted in 21 countries outside Brazil. The items that cannot be attributed to the other areas are allocated to the group of corporate entities, especially those linked with corporate financial management, overhead related with central administration and other expenses, including actuarial expenses related with the pension and health-care plans for non-active participants. The accounting information by business area was prepared based on the assumption of controllability, for the purpose of attribution to the business areas only items over which these areas have effective control. (1) The segments Refining, Transportation and Marketing and Gas and Power were previously reported as Supply and Gas and Energy, respectively, without representing changes in the factors used to identify the included activities, and in the amounts previously reported. The main criteria used to record the results and assets by business segments are summarized as follows: Net operating revenues: these were considered to be the revenues from sales to third parties, plus revenues between the business segments, based on the internal transfer prices established by the areas; Costs and expenses includes the costs of products and services sold, calculated per business segment, ba

Note 23 - Related Party Transac

Note 23 - Related Party Transactions
	12 Months Ended Dec. 31, 2009
Notes to Financial Statements [Abstract]
Note 23 - Related Party Transactions	23. Related Party Transactions The Company is controlled by the Federal Government and has numerous transactions with other state-owned companies in the ordinary course of its business. Transactions with major related parties resulted in the following balances: As of December 31, 2009 2008 Assets Liabilities Assets Liabilities Petros (pension fund) - 958 - 476 Banco do Brasil S.A. 847 4,167 627 2,170 BNDES 1 20,016 - 4,326 Caixa Econmica Federal S.A. - 2,270 1 1,548 Federal Government - 323 - 1,177 ANP - 759 - - Restricted deposits for legal proceedings 983 36 677 35 Investments - Brazilian reais 4,010 - - - Marketable securities 2,519 - 3,172 - Petroleum and Alcohol account - receivable from Federal Government (Note 11) 469 - 346 - Other 340 223 309 278 9,169 28,752 5,132 10,010 Current 5,143 3,332 2,349 2,833 Long-term 4,026 25,420 2,783 7,177 These balances are included in the following balance sheet classifications: As of December 31, 2009 2008 Assets Liabilities Assets Liabilities Assets Current Cash and cash equivalents 4,800 - 2,070 - Accounts receivable 43 - 27 - Other current assets 301 - 252 - Other Marketable securities 2,508 - 1,686 - Petroleum and Alcohol account - receivable from Federal Government (Note 11) 469 - 346 - Restricted deposits for legal proceedings 983 - 677 - Other assets 65 - 74 - Liabilities Current Current debt - 1,093 - 1,197 Current liabilities - 1,510 - 136 Dividends and interest on capital payable to Federal Government - 729 - 1,500 Long-term Long-term debt - 24,762 - 6,800 Other liabilities - 658 - 377 9,169 28,752 5,132 10,010 The principal amounts of business and financial operations carried out with related parties are as follows: Year ended December 31, 2009 2008 2007 Income Expense Income Expense Income Expense Sales of products and services Braskem S.A. 515 - 130 - 2,096 - Quattor Qumica 264 - - - - - Copesul S.A. - - 1,218 - 1,284 - Petroqumica Unio S.A. 633 - 729 - 435 - Other 1,507 - 378 - 120 - Financial income - - 13 - 1 - Petroleum and Alcohol account receivable from Federal Government (Note 11) 4 - 8 - 6 - Government securities - - 3 - 5 - Other (187) - (33) - 46 - Financial expenses 111 49 - - - (3) Monetary and exchange variation - (1,039) - - - - Other expenses, net 3 (2) - 4 - 2 2,850 (992) 2,446 4 3,993 (1)

Note 24 - Accounting for Suspen

Note 24 - Accounting for Suspended Exploratory Wells
	12 Months Ended Dec. 31, 2009
Notes to Financial Statements [Abstract]
Note 24 - Accounting for Suspended Exploratory Wells	24. Accounting for Suspended Exploratory Wells The Companys accounting for exploratory drilling costs is governed by Codification Topic 932 Extractive Activities Oil and Gas. Costs the Company has incurred to drill exploratory wells that find commercial quantities of oil and gas are carried as assets on its balance sheet under the classification Property, plant and equipment as unproved oil and gas properties. Each year, the Company writes-off the costs of these wells that have not found sufficient proved reserves to justify completion as a producing well, unless: (1) the well is in an area requiring major capital expenditure before production can begin; and (2) additional exploratory drilling is under way or firmly planned to determine whether the capital expenditure is justified. As of December 31, 2009, the total amount of unproved oil and gas properties was US$5,902, and of that amount US$3,810 (US$2,205 of which related to projects in Brazil) represented costs that had been capitalized for more than one year, which generally are a result of: (1) extended exploratory activities associated with offshore production; and (2) the transitory effects of deregulation in the Brazilian oil and gas industry, as described below. In 1998, the Companys government-granted monopoly ended and the Company signed concession contracts with the Agncia Nacional de Petrleo (National Petroleum Agency, or ANP) for all of the areas the Company had been exploring and developing prior to 1998, which consisted of 397 concession blocks. Since 1998, the ANP has conducted competitive bidding rounds for exploration rights, which has allowed the Company to acquire additional concession blocks. After a concession block is found to contain a successful exploratory well, the Company must submit an Evaluation Plan to the ANP for approval. This Evaluation Plan details the drilling plans for additional exploratory wells. An Evaluation Plan is only submitted for those concession areas where technical and economic feasibility analyses on existing exploration wells evidence justification for completion of such wells. Until the ANP approves the Evaluation Plan, the drilling of additional exploratory wells cannot commence. If companies do not find commercial quantities of oil and gas within a specific time period, generally 4-6 years depending on the characteristics of the exploration area, then the concession block must be relinquished and returned to the ANP. Because the Company was required to assess a large volume of concession blocks in a limited time frame even when an exploratory well has found sufficient reserves to justify completion and additional wells are firmly planned, finite resources and expiring time frames in other concession blocks have dictated the timing of the planned additional drilling. The following table shows the net changes in capitalized exploratory drilling costs during the years ended December 31, 2009 and 2008: Unproved oil and gas properties (*) Year ended December, 31 2009 2008 Beginning balance at January 1 3,558 2,627 Additions to capitalized costs pending determination of proved reserves 3

Note 25 - Subsequent Events

Note 25 - Subsequent Events
	12 Months Ended Dec. 31, 2009
Notes to Financial Statements [Abstract]
Note 25 - Subsequent Events	25. Subsequent Events a) Investment agreement among Petrobras, Petroquisa and Odebrecht On January 22, 2010 an investment agreement was entered into among Petrobras, Petroquisa and Odebrecht, which established the following stages for the planned integration of their petrochemical businesses: (i) the formation of a holding company, BRK Investimentos Petroqumicos S.A. (BRK), which will hold all the common shares issued by Braskem currently held by Odebrecht, Petroquisa and Petrobras; (ii) the allocation of financial resources into BRK, to be made in cash by Odebrecht and Petrobras; (iii) a capital increase in Braskem to be made in the form of a private subscription by its shareholders; (iv) the acquisition by Braskem of the shares of Quattor held by Unipar; (v) the acquisition by Braskem of 100% of the shares of Unipar Comercial e Distribuidora S.A. (Unipar Comercial) and of 33.33% of the shares of Polibutenos S.A. Indstrias Qumicas (Polibutenos); and (vi) the incorporation by Braskem of the shares of Quattor held by Petrobras and Petroquisa. Also on this date, Odebrecht, Petrobras, Petroquisa and Braskem executed an agreement, seeking to regulate their commercial and corporate relationship in the Petrochemical Complex of the State of Rio de Janeiro (COMPERJ) and in the Petrochemical Complex of Suape (Suape Complex). The joint-venture agreement establishes that Braskem will acquire certain first and second generation petrochemical companies within COMPERJ, and that it will also gradually acquire a share in the companies that develop the businesses of the Suape Complex, in accordance with terms and conditions agreed upon in the joint-venture agreement. These transactions are in alignement with the interests of Odebrecht and Petrobras to integrate their petrochemical businesses in Braskem. In continuation of its restructuring operation, on February 11, 2010, W.B.W., a wholly owned subsidy of Petroquisa, the holder of 31% of the voting capital of Braskem, was taken over by BRK. With this transaction, Odebrecht and Petrobras have begun the process for concentrating all their common shares issued by Braskem in BRK. As a result, BRK is now the holder of common shares issued by Braskem corresponding to 93.3% of its voting capital. Not later than April 5, 2010, Petrobras will transfer US$1,436 to BRK, which will participate with US$2,010 in the capital increase of Braskem. b) Petrobras Biocombustvel acquires an interest in an ethanol refinery In January 2010, Petrobras Biocombustvel contributed US$37 into the capital of Total Agroindstria Canavieira S/A (Total), in accordance with a commitment established in the Minutes of the Special Shareholders General Meeting of December 22, 2009, to contribute with the amount of US$84 by March 2011, when it will then hold 40.4% of Totals capital. This initiative, in line with strategic planning for 2009-2013, inserts the Company in the ethanol market. The partnership will make it viable to expand the refinery to a total capacity of 203 million liters per year, with surplus electric power of 38.5 MW for trading, generated through the use of sugar cane bagasse. c) Second drawdown of financi

Supplementary Information

Supplementary Information
	12 Months Ended Dec. 31, 2009
Notes to Financial Statements [Abstract]
Supplementary Information On Oil And Gas Exploration And Production	In accordance with Codification Topic 932 Extractive Activities Oil and Gas, this section provides supplemental information on oil and gas exploration and producing activities of the Company. The information included in items (i) through (iii) provides historical cost information pertaining to costs incurred in exploration, property acquisitions and development, capitalized costs and results of operations. The information included in items (iv) and (v) present information on Petrobras estimated net proved reserve quantities, standardized measure of estimated discounted future net cash flows related to proved reserves, and changes in estimated discounted future net cash flows. Beginning in 1995, the Federal Government of Brazil undertook a comprehensive reform of the countrys oil and gas regulatory system. On November 9, 1995, the Brazilian Constitution was amended to authorize the Federal Government to contract with any state or privately-owned company to carry out the activities related to the upstream and downstream segments of the Brazilian oil and gas sector. This amendment eliminated Petrobras effective monopoly. The amendment was implemented by the Oil Law, which liberated the fuel market in Brazil beginning January 1, 2002. The Oil Law established a regulatory framework ending Petrobras exclusive agency and enabling competition in all aspects of the oil and gas industry in Brazil. As provided in the Oil Law, Petrobras was granted the exclusive right for a period of 27 years to exploit the petroleum reserves in all fields where the Company had previously commenced production. However, the Oil Law established a procedural framework for Petrobras to claim exclusive exploratory (and, in case of success, development) rights for a period of up to three years with respect to areas where the Company could demonstrate that it had established prospects. To perfect its claim to explore and develop these areas, the Company had to demonstrate that it had the requisite financial capacity to carry out these activities, alone or through financing or partnering arrangements. The adoption of the SEC rules seeking to modernize the supplemental oil and gas disclosures and the FASBs issuance of the Accounting Standards Update n 2010-03, Oil and Gas Reserve Estimation and Disclosure, generated no material impact to the Companys consolidated financial statements other than additional disclosures as discussed in the Note 2(n). The International geographic area includes activities in South America, which includes Argentina, Colombia, Ecuador, Peru, Uruguai and Venezuela; North America, which includes Mexico and the United States of America; Africa, which includes Angola, Lybia, Mozambique, Namibia, Nigeria, Senegal and Tanzania, and Others, which includes India, Iran, Portugal and Turkey. The equity investments are composed of Venezuelan companies involved in exploration and production activities. (i) Capitalized costs relating to oil and gas producing activities The following table summarizes capitalized costs for oil and gas exploration and production activities with the related accumulated depreciation, depletion and amortization, and asset