Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. 

Form 20-F ___X___ Form 40-F _______

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes _______ No___X____

Clarifications on Petrobras' activities in Ecuador

(Rio de Janeiro, July 5, 2007). – PETRÓLEO BRASILEIRO S/A - PETROBRAS, [Bovespa: PETR3/PETR4, NYSE: PBR/PBRA, Latibex: XPBR/XPBRA, BCBA: APBR/APBRA], a Brazilian international energy company, considering the news that has been aired by the Ecuadorian and Brazilian media about supposed irregularities committed by its controlled company Petrobras Energia Equador, reaffirms it has complied with all legal provisions in all legal, contractual and administrative acts in that country.

The Company clarifies has never been notified regarding any investigation carried out by the Special Commission created by the Ecuadorian Ministry of Mines and Energy as to its contractual and legal obligations. Moreover, it also states it was not invited to provide information or possible clarifications regarding any act that could be considered as an irregularity under Ecuadorian law.

Petrobras expects the Ecuadorian Government will disregard the accusations involving reserve acquisitions which may have been the justification for the investigation, as it has or has requested all formal authorizations issued by the competent regulatory bodies.

Additionally, the Ecuadorian State’s control agencies have hitherto always made favorable statements regarding Petrobras’ hydrocarbon reserve acquisitions in Ecuador.

The company once again reiterates its respect for the Ecuadorian laws, which is in line with its mission of performing in the oil, gas and, energy sector in a safe, profitable and socially and environmentally responsible manner. Furthermore, pursuant to its Strategic Plan, it contributes to the development of the countries where it has operations, in agreement with its 53-year corporate history and its presence in upwards of 24 countries.

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.

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.