Petrobras informs that it signed an Integrated Project Business Model Agreement (“IPBMA” or “Business Model Agreement”) with China National Oil and Gas Exploration and Development Company (“CNODC”), a subsidiary of CNPC, advancing towards their Strategic Partnership, as disclosed to the market on July 4, 2018.

The Business Model Agreement details the steps of a feasibility study to evaluate COMPERJ current technical status, its investment case and the remaining scope to conclude the refinery and the business valuation. A joint team composed by CNPC and Petrobras specialists and external consultants will conduct the studies. Once the full benefits and costs of this project are quantified, the next step is to create a JV between Petrobras (80%) and CNPC (20%) to conclude and operate the refinery.

The integrated project also includes 20% participation of CNPC in Marlim cluster, which is composed by Marlim, Voador, Marlim Sul and Marlim Leste fields. Petrobras will have 80% and will keep the operatorship of all these fields.

Marlim crude oil production perfectly fits the design crude slate to be processed in COMPERJ refinery, a world class and high conversion heavy oil refinery.

This is an important milestone of the Strategic Partnership between Petrobras and CNPC while its effective implementation depends upon the successful results of COMPERJ feasibility study with the respective investment decision by the parties, as well as the negotiation of final agreements.

Petrobras and CNPC:

Since 2013, Petrobras and CNPC are partners in the Libra area, which was the first contract under the production sharing agreement regime and is located in the Santos Basin pre-salt area. In 2017, the consortium formed by Petrobras (operator, with 40% stake), CNPC (with 20%) and BP (with 40%) was the winner for the Peroba Block, one of the most contested in the auction promoted by the National Agency of Petroleum, Natural Gas and Biofuels (ANP).

The strategic partnership between the companies will strengthen their ties and, furthermore, contribute to deepen the Global Strategic Partnership between Brazil and China, both members of the BRICS group.

The strategic partnership is also part of Petrobras’ broader program for the revitalization of its Eastern refining and logistics park. Regarding to upstream segment the partnership will focus on the optimization of the Revitalization project of Marlim field and the other projects related to Marlim Sul and Marlim Leste fields aiming to optimize the results of mature fields.

About Petrobras

We have upwards of 100 production platforms, 16 refineries, 30,000 kilometers of pipelines and more than 6,000 service stations. Our proved reserves are around 14 billion barrels of oil, a figure expected to double in the next few years. With the discovery of oil and gas in the pre-salt region, Brazil may become the world's fourth biggest oil producer in 2030.

We have built a track record of overcoming challenges since 1953, when the company was created. The main one was developing technology to explore and produce oil in deep and ultra-deep waters, where upwards of 90% of our reserves are nestled. With innovation and daringness, we are now the Brazilian company that makes the applies for the most patents in Brazil and abroad.

About CNPC

CNPC is China's largest oil and gas producer and supplier, as well as one of the world's major oilfield service providers and a globally reputed contractor in engineering construction. With a presence in almost 70 countries, we are seeking an even greater international role. We provide energy in a profitable manner, and always attach great importance to our social and environmental responsibilities.