Petrobras declares commerciality of the Santos Basin pre-salt areas of

Iara and Entorno de Iara

Rio de Janeiro, December 29, 2014 – Petróleo Brasileiro S.A. - Petrobras announces that today it submitted the declarations of commerciality to Brazil’s National Petroleum, Natural Gas and Biofuels Agency (ANP) regarding the oil and gas accumulations located in the Santos Basin pre-salt areas of Iara (Discovery Evaluation Plan – DEP – of well 1-BRSA-618-RJS – Consortium BM-S-11), and Entorno de Iara (Block 4, of the Transfer of Rights Agreement).

In the Iara Evaluation Plan area, under the concession system, the work conducted by Consortium BM-S-11 began in September 2008 and consisted of 3D seismic data acquisition, drilling and assessing seven wells and executing an Extended Well Test (EWT). As a result, two deposits were identified by drilling wells 1-BRSA-618 RJS and 3-BRSA-1032 RJS, the limits of which extend into the Entorno de Iara block (Transfer of Rights).

In the Entorno de Iara block (Transfer of Rights), while conducting the Mandatory Exploration Program (MEP), Petrobras acquired 3D seismic data and drilled three wells aimed at discovering, delimiting and characterizing the reservoirs. In addition, three formation tests and an EWT were performed in order to assess the productivity of the reservoirs. A deposit was identified by drilling well 1-BRSA-1146 RJS, the limits of which extend into Concession area BM-S-11.

Therefore, the exploratory activity conducted during the DEP and on block 4 of the Transfer of Rights led to the delimitation of three accumulations. Due to current regulations and since it involves different agreements (Concession and Transfer of Rights) eight fields were declared commercial, which will be the object of the Production Individualization Agreements (PIA).

Given the extent of the deposits between Concession BM-S-11 and the Entorno de Iara area, the ANP was formally notified in accordance with current regulations.

The total estimated recoverable volumes of these fields exceed 5 billion barrels of oil equivalent (boe), confirming the high potential of the accumulations.

The following names were suggested to the ANP:

·        Accumulation of well 1-BRSA-618-RJS:

·        Accumulation of well 1-BRSA-1146-RJS:

Production Development

The fields are located some 230 km off the Rio de Janeiro coast, at water depths ranging from 2,000 to 2,300 meters. All fields contain good quality oil (24° to 30° API).

For these fields, Petrobras and its partners plan initial production development by using three FPSOs.

Engineering projects aimed at draining the fields will be detailed when the respective Development Plans are submitted to the ANP.

The development of the production of the fields discovered in the Iara area augments the development of the production of Lula field (Tupi and Iracema areas), also in BM-S-11, where 10 FPSOs will be set up.

Consortium BM-S-11 is operated by Petrobras (65%), in partnership with BG E&P Brasil (25%) and Petrogal Brasil (10%).

With the declaration of commerciality of Entorno de Iara, the exploratory phase of the Transfer of Rights Agreement has ended and the formal review process of the contract to be conducted on a block per block basis resumes, taking into account the technical and economic conditions of each area. The review of the Transfer of Rights Agreement is expected to be completed in 2015.

The Entorno de Iara block is operated by Petrobras (100%), as an assignee to the Transfer of Rights Agreement.

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