Good morning ladies and gentlemen, welcome to Petrobras Conference Call with analysts and investors for the presentation concerning the Third Quarter 2014 Results. We would like to inform you that participants will only be listening to the conference call during the Company’s presentation which will be conducted in Portuguese with simultaneous translation to English. Following the presentation a Q&A session will begin in Portuguese and in English at that time further instructions will be given. [Operator Instructions] This broadcast is being recorded. Present with us today are, Ms. Maria Das Gracas Foster, Petrobras CEO; Mr. Almir Guilherme Barbassa, Petrobras Chief Financial and Investor Relations Officer; Mr. Jose Miranda Formigli, Exploration and Production Director, Mr. Jose Carlos Cosenza Downstream Director, Mr. Jose Alcides Santoro Gas and Power Director, as well as other company executives. To begin we will hear Ms. Graças Foster, who along with the other directors will present information regarding the third quarter 2014 results. Subsequently, for questions from participants will be answered. Please Ms. Foster. Maria das Graças Foster: Good morning ladies and gentlemen. Today under normal conditions, we would have only one topic to present. We would be disclosing the earnings results of the Company. However, today we're going to have two topics. One, it’s to do with the financial statement of the third quarter '14 and another topic will be our operating results. I will quickly explain these two different topics and how different they are. In light of the accusations and investigations of the Operation Car Wash Lava Jato Operation, we learnt about it on March 20, 2014, while in light of these accusations and investigations Petrobras has enabled to publish its third quarter '14 financial statements. Because these accusations if found to be true, could potentially affect the Company's financial statements. A determining fact…

Good morning, everyone. Thank you for joining us in our meeting room and also those of you who are following us over the Web. The downstream process remains very stable and also very reliable. One example of this of the level of reliability and productivity can be seen through production of oil products and also the use of facilities. In oil product area I highlight when you compare the third quarter 2013 to third quarter 2014, there is an increase in oil product production at 4% and in the second quarter 2014, compared year-on-year an increase of 1%. I’ll remind you that these numbers of 4% and 1% are being achieved with the same facilities, in other words our hard work or the level of investment to make it happen is zero. So this is improvement in how we manage the business and how we adapt our oil facilities be it for domestic or foreign oil and the impact is shown here. For fourth quarter 2014, we expect to see significant improvement in diesel output, diesel is our flagship in production, strong support in the market, due to start-up of Rnest as Ms. Foster reminded yesterday we had the operation license for Rnest and we start the start-up onsite with placement of gas in several units and also we will start treatment plant, hydrotreatment is key today in order to ensure to quality and production volume particularly for gasoline and diesel. Refap HDT started now in September and expects to see significant production increase by minimizing the degradation of diesel/oil. Another fact, another highlight is a record we have in our HDT processing of 654,000 barrels per day, which is a record certainly exceeded With Refap HDT hydrotreatment like I said before both for gasoline and diesel are our flagships to ensure quality and volume for supply for oil processing in this area we show on the right hand side charts the stability achieved in our processing. This shows our policy our reliability in our industrial facilities and we also show the stake of domestic oil, 80% which is quite significant and our factor of use of our facilities which is quite high and maintain once again we maintain stability of our refineries and consequently the level of reliability which is our permanent management in our refining through the reliability of our industrial facilities. These are my comments and now I give the floor to Santoro, Gas and Energy Officer.

Thank you Cosenza, good morning everyone. Petrobras supplied over the third quarter of 2014 an average volume of 97.7 million cubic meters per day, 14% higher than the same period of the previous year and 1% higher than the previous quarter. The major highlight of this quarter was an increase in production of natural gas supply to the market of 11% compared to the previous quarter, generating a supply of domestic gas of 45.6 million cubic meters per day. This increase in domestic natural gas supply had as a result a reduction of 16% of imports of liquefied natural gas compared to the same period of the previous year, with an important volume of 18.5 million cubic meters per day. As to the demand side we’ve seen a continuous increase in demand in the thermoelectric market, which was 4% higher than the previous quarter or second quarter ’14 with a total volume of 43.5 million cubic meters per day providing generation of 7.7 average gigawatts of generation, and this volume of 43.5 was 26% higher compared to the same period of the previous year as to other markets, they remain virtually stable. And these were my remarks. And now I give the floor to Almir Barbassa.

Thank you, Alcides. Good morning all of you who are following us. I’ll be talking about our schedule of third quarter ’14 financial statements release. First of all we expect to see the publication of our financial statements, unaudited on December 12, 2014. This publication or release has to do with our management covenants they’re being very diligent and we are going to be a lot of transparency. In addition to this duty in some financial agreements we also have the so called covenants which requires submission for financial agencies of all our quarterly statements, even if unaudited within 90 days of the closing of the quarter, which in this case is December 30, 2014. These statements although unaudited will reflect the best way possible the equity status of Petrobras considering all the facts known by that date or until the publication date, it should include everything we know and also in the best way possible with all the necessary adjustments. The publications of unaudited financial statements do not perceive the Company’s obligations till then disclose the audited financial statements. In other words our third quarter report will be followed by the independent auditor’s statement, in this case PricewaterhouseCoopers. Having said that, let us talk now about the audited financial statements release. Those two depend on a couple of actions and in order to lower our turn to disclose these audited financial statements, Petrobras is providing all conditions necessary so that independent auditors and also the firms in charge of investigations and the way can also work efficiently and also in a prompt manner, and therefore work as soon as possible with the audited third quarter financial statements release. Independent investigation will prioritize all topics directly related to Operation Car Wash and also the managers and executives in-charge of production and certification of such financial statements. Credit rating agencies will be informed of the reasons why the Company did not disclose its financial statement with a review for the third quarter within the time period prescribed, as well as the measures that have been taken by the company in order to provide this information as soon as possible. And as soon as there is a definition on the conclusion date, the company will announce that disclosure date to the market at least 15 days in advance. In order to disclose that financial statements related to Q3 '14 and this time audited. With that we're going to close our presentation. We would now like to move to the question-and-answer session.

and:

The question-and-answer session will now begin. Each participant will be limited to at most two questions. Questions should be made clearly and consecutively, so that executives may answer them afterwards. [Operator Instructions] We inform that questions in English will be translated into Portuguese for the executives of Petrobras their answers will be translated to English. [Operator Instructions] Ms. Paula Kovarsky, Itaú BBA would like to ask a question. Paula Kovarsky - Itaú BBA: Good morning everyone. I would like to start with two questions. The first question goes to Barbassa, perhaps you could help us understand, what kind of accounting adjustments could be necessary, if indeed the accusations of surcharge -- overcharge are confirmed, I don't want to discuss whether they've happened or not this was not up to us, however we need to understand how this can possibly impact the financial statements of the company in the third quarter or the fourth quarter. So if we suppose that there is say 5 billion of over price in the construction of Rnest how would this be recognized in the balance sheet of the company? What are the main line items that would be impacted? That is my first question. My second question, I would like to understand of the debt portfolio that Petrobras has, what portion of this debt has specific covenants linked to quarterly results in other words what percentage of the debt would have a net debt over EBITDA covenant or I don't want to know one-by-one, but I would appreciate if you could give us an order of magnitude in terms of what portion of the debt could be impacted by the fact that the financial statements were not published and if the unaudited financial statements would be enough to fulfill that covenant?

Hello Paula, good morning. Your question about the adjustments, the adjustments that perhaps could be impacted if the accusations are proven to be true, would refer to adjustments at fair price of the PP&E that was acquired. In this case whether there was any overpayment, payment above what would be a fair value for a good or service, in this case this value should be removed from PP&E line item invested value and should be taken to the result. So, these would be the two line items that would be affected in this case, which is the case that we have information about at this point. And is this valid for an acquisition and for the construction of a refinery, so it could be a project or it could be incoming asset, you are correct. If this became a fixed asset a PP&E that asset should not include values, we try not a fair value for that good or service. Paula Kovarsky - Itaú BBA: In terms of the fair value how do you come up with this fair value?

Well, the way we see this now, we would deduct form it any amount that could be linked to bribery of any sort, any excess of price that would have been charged. This would be the case for adjustments resulting from the fact as we know them today on the state. Now whether we have any specific covenant we do not have any covenant referring to net debt over EBITDA, so this is not an issue. We do however have a commitment of submitting by year-end to a very small portion of our debt, the financial statements even if unaudited. So that would be the first landmark that we need to be compliant with. Yes go ahead. Paula Kovarsky - Itaú BBA: I do want to interrupt you by that, I am sorry.

Well to continue then, by the end of January, we’ll come to a second phase by then we should have our financial statements duly audited for the third quarter. Paula Kovarsky - Itaú BBA: And if I may ask one last question, so all of this works for debt that Petrobras currently has the debt that this part of the current portfolio of the company, so again I know it's difficult to talk about deadlines I know, but normally the company goes to market in every beginning of year to raise significant amount of money and you’ve been doing this quite successfully normally in the first quarter of every year. Do you see any restrictions to a new offering of debt in the international market, if you do not have the audited financial statements or say you have them?

Absolutely, we do need to have a comfort letter or a comfort report from our auditors in our order to go to market for funding. As for the issuance of a review report, well the auditors are not ready to provide us with that yet. So, we need to work to produce this review report as soon as possible, the company is diligent to produce to enable the production of this review report once we get it we’ll be able to operate in normal conditions. Maria das Graças Foster: Paula this is Graças speaking if you allow me I would like to add to what has been said so far. As for the amounts that we would be writing down in terms of our results, our official reference are the depositions made in court. This is what the judges are calling evidence, temporary evidence, so in this case we have a schedule of activities and we have deadlines to each one of these activities. For example, there is definition of criteria to measure the affects of losses caused by fraud and here in an objective and material fashion, our reference will be the depositions made so far. The evidence provided that will be submitted to Petrobras by the Federal Police. We will then use this evidence to have our write-downs and do the write-downs year-after-year regarding company’s A, B, C, D that we might have contracted.

Mr. Luiz Carvalho, HSBC would like to ask a question.

Good morning almost good afternoon. Thank you for the opportunity, I have two quick questions. Ones is related to Paula’s question Barbassa regarding a possible restriction in your excess to the debt market, if you lack this comfort letter to be provided by independent auditors, if by any chance information takes longer than you expect what would be the company’s Plan B, would it be to reduce CapEx initially because I am thinking more about the consequence rather than on the cause itself, would you consider a capital increase, what could you do with Plan B looking forward? And my second question in terms of production increase for Mexilhão you ended up reducing your guidance for this year despite the fact that output would increase for the ninth consecutive month as we said the company has been growing its production. So how could this impact the long-term output curve? I just want to understand if you would be reviewing your projections for the long-term? With all of the investigations that are taking place on the companies involved in the shipyards, could this impact your production curve if you need for example to exchange one company, replace one company by another if the company is convicted?

We have commented on this restriction, again we need deferred quarter 2014 balance sheet duly audited, so that the auditors can provide us with a comfort letter that would be necessary if we think about issuing shares. By the way this was not in our plan, it’s not part of our plan, hasn’t been part of our plan. What we need to do indeed is spare no efforts here to have this review reports ready and quickly. And we need to work with the independent auditors and collaborate with them, so that their investigations can be completed quickly and so that we can create the right conditions to release our third quarter earnings and so that we can continue our business as usual. Fortunately this year we brought forward our funding along the year we kind of brought forward the funding that we would be doing next year, so that the cash available in the company gives us enough space and momentum to do the work that we need to do now.

Louis this is Formigli speaking. Firstly regarding the output curve 2015 onwards, at this point we’re not revising anything because of this lower ramp-up that we had in 2014, the conditions are here for us to continue to increase production. We have PLSV, the rigs are there the critical equipment wet Christmas tree, flow lines, everything is happening according to plan, we’re monitoring our suppliers and also all of the process is under control. Now when you ask about the consequences for the project, the consequences that the current situation on the project. What we see is what is already contracted will be business as usual; we will not be changing absolutely anything of what has been contracted. Now what we still need to contract, we do have alternatives and we will use them. And four, as necessary so as not to impact our output curve the priority of the company’s unchanged our priority is our output curve and we will use all of the options available in terms of hiring goods and services to ensure that we will work on the new wells that we will ensure interconnection, we don’t see any indication or problem there and the same time goes for the platforms.

Just one follow-up question, Barbassa, and going back to Paulo’s question if there is an impact, if you need to write-off given some loss or if the accusations of an overcharge are confirmed. Is there any change in the dividend payout policy, perhaps the divided if you have a lower income net income would it change in anyway the dividend payout for common shares?

Luiz I would prefer to wait for the calculations that we’re doing, at this point any hypothesis would be too premature given the current status at the investigations and possible adjustments to be made. If the profit on the net income remains as expected and we don’t really expect any effect on dividend payout. But again any statement at this point if you don’t know the figures would be a premature statement. Thank you very much.

Bruno Montanari from Morgan Stanley has a question.

Barbassa I would just like to check a point about bonds and covenants. You said it applies just to a small share of indebtedness. But I have the feeling that some of the bonds could also have the cross across accelerations clauses and it might also affect a significant part of the debt with the capital markets. And just to clarify another point, assuming a scenario in which the auditors review will be extended for a longer timeframe, what is Plan B? Would it be try to have bilateral debt or Plan B would be perhaps to slightly review your CapEx occurred over 2015? I'm not considering the mid to long-term basis, but just to offset the cash flow for next year? Thank you.

Our debt, our small debt that would have a demand or a requirement by year-end, if we fail to handle it properly, then we could have this cross acceleration you mentioned in other debt. But because we are addressing this very early on, the publication that will be solved and we don’t expect this to happen or to have non-compliance to this obligation that might generate other related events. We've been working in order to try to meet our obligations and this is reasonably within our control. Should this timeframe be extended, I mean the period for the financial statements, the audited financial statement then the bilateral condition is the possibility, but as I said before, the volume of our resources is very high or our funds available and it gives us additional time to work on it, should it be necessary. But all the efforts are focused on trying to expedite everything we can do, as Ms. Foster already mentioned, we're doing everything in our power and we've been paying keen attention to the elimination of this hindrance that is ahead of us. Maria das Graças Foster: This is Graças speaking, can I just add something? Formigli mentioned very well that top priority at our company is the production curve. I've particularly been saying this since I took the company's office back in 2012. And today I also say that priority, I do know who comes first, but we have this audited financial statement the same days that we have as a deadline for the Brazilian CVM and SEC. So we've been fully dedicated to material agendas related to any potential write-offs that we expect to see in our assets and also in our acquisitions. We look at the future in the mid-term having all these issues settled for the balance sheet, however paying a lot of attention on our project portfolio profitability and on Brent and exchange variation. So that's a point of concern for us, and it does not stand from the fact that we have this delay in the release of the company's audited financial statement. The business and management plan has already been discussed, priorities have already been set. The performance of shipyards in Brazil and abroad, we've already been more flexible in order to have the highest value of the production curve as of 2016 and '17 when the new production units start up. And that there's something that I want to make very clear to you is that just ask for the last few months, we've been pursuing the conclusion of our production units, the good performance of the drilling rig and the new FPSOs in our internal groups we're trying to make our plans happen, so we can have the audited balance sheet and obviously that our old investigations, new facts might come up which are outside Petrobras' control. But we simply consider that we won't have debt acceleration due to the non-closing of the audited financial statements.

Pedro Medeiros from Citigroup has a question.

I have two questions. The first question, moving a little bit away from the implications and the company's investment plan, what about the current five year plan that the company introduced this year if considered substantially different oil price and exchange amount than what we have today? I think it was R$1.9 and $100 per barrel for the oil price. Can you mention any alternatives or the Company’s priorities right now considering the change in the macroeconomic scenario in order to stick to the goal of lowering the financial leverage for the price policy that the Company published? As to the current plan of five years, do you have flexibility? And my second question, could you comment on some of the pending points for the cash flow of this quarter and next quarter? First, of all the negotiation of the transfer of rights payment or the payment of R$2 originally in the contract and any specific change including receivables considering the pending issues for the electric factor and also the gas distribution company for the second quarter?

Pedro, I’ll answer the question about brand and exchange. It's a little bit of what I said before. Let me show our business plan. We introduced ‘14 and ‘18 and we showed a reference scenario and then a scenario in which we had a more depreciated Brazilian real. The reduction in oil price, oil barrel price, you're right, we are revisiting this average price per year for brand 2014. We consider it will remain on average around what we mentioned before, $105 per barrel. And by 2018, we expect to have $85 per barrel. So today, this is the sign we see. Like we said before, Brent or exchange in 2016 is 1.92, but we also had a sensitivity analysis ranging from 232 to 225 per barrel. And when we import oil products, a lower Brent for us is good, it's favorable. We still have a difference considering the losses we had in the past and it's important to recover these losses today. And the difference gulf-to-gulf is favorable to Petrobras or virtually zero considering the cost. So in the plan review, like I said, lower Brent and more depreciated Brazilian real with a stronger dollar rate, then there is a difference certainly when it comes to generating our revenues and also our fundability. As of next year, we’ll become a net oil exporter and it's good for us to have a higher Brent and more appreciated Brent and also a depreciated Brazilian real. So if we put it all together, we have a better outcome. All these variations are very recent, this volatility I mean. But for Brent we look at it for the future by 2018 not $95, but $85 per barrel. We had a slight adjustment in prices over the last week, 3% in gasoline, 5% diesel and obviously it's a way to work on our cash. These are adjustments over next year. We don’t work with smaller adjustments or a higher frequency so we can really work on our cash. As to divestment project, just as they were always on our spreadsheets, we also understand that for the next year our investments remain the same. We do not make any changes in 2015. Contracts, nearly all contracts have been signed. But we also understand this brand variation is very recent just as the Brazilian real depreciation and we have to look at it carefully. This is basically what we are doing. The next question? Transfer of rights, Formigli will answer.

The question about the surplus of transfer the rights or the assignment of rights area, we are negotiating with the government, all the terms of the agreement. They involve more than one area actually for execution purposes. The timing set was for this year and the news released last week. The Ministry of Mines and Energy and ANP tried to demand the [TC] use demand in order to consider the negotiation. I cannot anticipate any impacts when it comes to the closing of our negotiations and consequently the payment of the bonus of 2 billion. As to transfer of rights, everything is within our expectations. The commercialization statements of Iara surroundings for this year and also Iara area which is under concession. And as for next year, we expect to conclude the revision of the economic terms of the contracts of the transfer of rights. So no news for transfer of rights and the surplus. We had negotiations on the terms of the agreement and now we’re just awaiting for ANP the Ministry for Mines and Energy to clarify all the points with the Brazilian Federal [indiscernible]. There was a question about the electrical sector and this will be answered by my colleague, Alcides Santoro.

As the receivables from Eletrobras Gas, we’ve been negotiating the contract of debt issuance with the Eletrobras System. There was progress vis-à-vis the previous quarter. We have already worked on amounts, correction index and deadlines. But we still have some points to be agreed upon when it comes to collaterals. And we also decided to supply gas upon anticipated payment. Since early this month, Eletrobras has been paying gas in advance and therefore the debt will not grow on nominal terms.

Lilyanna Yang from UBS has a question.

My first question is about impairment. There is something I didn’t understand. The impairment tax, as far as I understand, had already been conducted in 2013. So what changes or what is still necessary? Why do you need a new one? The market was already suspicious that Abreu Lima a $17 billion or $20 billion is still expensive vis-à-vis a benchmark refinery, and the Company answered that in 2013 we don’t need this impairment. I understand the auditors looked at all the other refineries altogether and this might be to a neutral impact on Petrobras. So I had a feeling that this is something that will be revisited by the Company and auditors. So my question is, in reality what you would like to show in terms of adjustments in the financial statements will no longer be related to internal controls and governance. My second question is about the penalty expected should you take longer than expected to release the audited financial statements. So the question is, any risk of penalty or suspension of trading in ADR stock or might we consider another penalty should we have a reservation or caveat in the annual or other statements? Could you clarify that, please?

This is Almir. As for the impairment tax, it may not necessarily exclude values paid, undue values paid for an asset, because it only measures the capacity of bad assets of recovering the value invested. Now that recovery can’t be higher than the so called fair value. So the impairment tax would not be enough to eliminate this problem of additional prices, higher prices. This is why we will need to go through adjustments of the accounting depending on the events that become known. As we speak, we have former Director Paulo that made pre-deal and he’s making his depositions. Lilyanna Yang – UBS: So the impairment tax was more affected by the expectation of the Company of having or not an adequate price policy. Am I correct?

No. The impairment tax aims to measure how recoverable an asset is. Considering the existing market scenarios, this is what it measures. Now the asset can be good enough and return a higher value than the one that was originally posted and in that original value there might be an overcharge resulting from factors that are being investigated that are resulting from these allegations referring to an inadequate price to be capitalized for that asset. So it’s a specific adjustment given a possible overcharge, but not because of a lack of recoverability of that asset. It might be recoverable and still go through an adjustment. Maria das Graças Foster: This is Graças speaking. You have an obligation to write off from the asset a cost related to corruption. So the asset can give us the best return possible. But still if there is a cost related to corruption in the value of that asset, even if the asset can pay off that cost, you have an obligation to write off that cost, you have to discount that cost. As for your second question regarding a possible penalty that we might have to incur, there is a fine imposed by CVM, the Brazilian SEC. As of the 45th day after we close the quarter, if we do not file with CVM audited financial statement, there is a penalty of R$500 per day. And for the management, in particular my case, there might be a sanction for us to verify why the deadline was not respected. So these would be the penalties that might result. In the case of the SEC, we only have an obligation to file with SEC what is required to be filed over here. In this quarter, there is no demand for the audited financial statement. Now the next stage would be for us to finalize the balance sheet for the whole year. This one need to be reviewed, audited. In the case of CVM, we would have 90 days after we close the year and in the case of the SEC, 120 days.

Mr. [Ivan Fernandez] (ph) would like to ask a question.

I would like to ask a follow-up question. Somebody said that in terms of what is contracted, it is business as usual. But isn't there legal limitation in terms of contracting additional rigs or such things? If a bribery is proven in contracting these assets, don't you have a legal obligation to advise the contract partner or perhaps terminate the contract? I just want to understand a potential effect on production looking forward. This is my first question.

Regarding a possible impact on contracts that are in effect, so far as far as we know, there is no indication effect. Now if this is the case, we'll have to analyze the contracts on a case-by-case basis. But what I want to make clear is that possible revisions in contracts where inadequate hiring practices are identified, they will be corrected, but they will not be a priory ended or suspended. Now there might be an impact and we're already considering this in a very stretched way its impact on new hirings, new contractors, and in this case the impact of these investigations will be considered in the way that we will approach the market looking forward. But what we have so far [indiscernible] cases that could impact to the bidding process, we do not see any reason in principle to make any changes. And case-by-case, wherever we identify a need to negotiate and review down the values, this will be done obviously according to the results of the ongoing investigations.

And if I may ask a supplementary question. Maria das Graças Foster: This is Graças. Before you ask your question, I just want to add to what Formigli said. Where we identify losses, we will address these losses. Overcharge, loss, write-up of results, the legal department of Petrobras is already working on a number work front. This is not the venue to discuss things we don't want any antidotes to be created against these actions. But we will try to recover these losses and we want these funds to be returned to the Company's cash. The Board of Directors is putting pressure on us to try to receive back whatever we have paid beyond what was a fair value, beyond what was a reasonable amount.

My other question is regarding the additional time that the auditing will take. Is this process depending only on internal processes between Petrobras and auditors or do you need to receive information from court and do you need to have access, for example, to the depositions of the people who were recently arrested? Do you have to rely on the Federal Police on the court or is there just the auditors' work if they add more people to the team then they can expedite the process? How should we think this whole process?

I’ll transfer your question. We have the two law firms hired, TRW and Gibson, Dunn & Crutcher and we also have the Federal Police that is conducting Operation Car Wash or Lava Jato operation. So there are two activities in parallel there, the results of the investigation and the results on the procedures of the Company, all of that will depend on these two work fronts that are moving ahead in parallel. The independent investigation law firms that were hired by Petrobras and also the work that is being conducted by the Federal Police, they're constantly looking for new depositions and to provide Petrobras with new information.

Mr. Christian Audi from Santander would like to ask a question. Christian Audi – Santander: Barbassa, I would like to understand. Have you been talking with the rating agencies around this whole process? Are you in constant contact with them or has this not happened yet? And how do you see this dynamic? Obviously, investment grade is extremely important for Petrobras, and this whole process is adding a lot of noise to the whole system. So I would like to understand, in your opinion, how are you dealing with the rating agencies?

Christian, we want to make specific contact just this week to speak about this. The rating agencies have been saying their opinion, you probably know what their opinion is. But our intention is to inform the rating agencies in detail what led us to postpone the release of our financial statements. And we want to make clearer to them, all of the procedures that we are adopting looking forward so that we can get as quickly as possible to an audited financial statement that can be released. Now our contact with the rating agencies is a systemic one, a systematic contact with them. Regularly we have meetings with them, whenever necessary we contact them and this is one case that naturally requires that we have a perfect flow of information to them so that the rating agencies can make their own evaluation, having all of information available at hand. Christian Audi – Santander: And my follow-up question, Barbassa and for you, Graças, in the current status what we see a lot of changes in oil prices and real exchange rate and all of these events that you talked about here. Would this lead perhaps to many changes in the CapEx and cash generation dynamics for the Company? You normally announce your strategic plan every year normally in March or April. But given all of these changes, do you expect to bring this plan forward just perhaps to answer to these concerns that might continue to exist the next year? Or this is very difficult, is it difficult to accelerate this process or will we have an update as we normally do in March or in April of next year? Maria das Graças Foster: Well, I guess that we have a pretty good reason to at least present our update to…

[Julian Zinger] (ph) from BTG Pactual has a question. Felipe Santos from JP Morgan has a question.

My question is very simple. If you think about the adjustment and impairment, do you intend to make this adjustment all at once in a lump sum or will you do by steps and then you can assess again considering a mismatch between information release a court and your internal committee.

Felipe, everything that we are aware of will be adjusted for the publication of the balance sheet, even an audited financial statement. In our work plan the possibility of being aware of something that is not disclosed, this would never happen. It is our obligation to include every information we have up to then and have it included in the report to the release, this is our purpose today.

What about this adjustment? Would it happen in two parts? One addressing impairment and the other one, as Graças mentioned, considering deviations out of corruptions. So are these considered to be two different kinds of adjustment?

Today our stronger focus is an adjustment related to corruption matters. As to impairment, this is business as unusual whenever we are aware of any asset, every year we complement it. But that’s not necessarily by the end of the year. And if any asset is not recovered according to the cash generation expectation, then it will lead to impairment. This is one thing. The second thing is adjustment owing to information which is being assessed or already disclosed stemming from the corruption event. This is the strongest focus right now.

One last question, if I may. How about indicator of billing, there is any revenue or overcharge will also be taken into account?

Can you repeat the question?

Sure. My question has to do with the overcharge in some of the works that even appear with the TCU. Would it also be taken into account in such adjustments?

Only if this is related to their corruption process that is being investigated. Maria das Graças Foster: Graças speaking. Any discrepancy, well potential discrepancies may happen at the TCU in terms of how we calculate our strategy and also in civil engineering, earth-moving works. So these are discrepancies that we’ve been working very heavily on in order to eliminate them. But some of these processes can take up to three, four, five years to be discussed. And this is not what we’re referring right now. We justified that we were not ready to have our audited and revised balance sheet.

We have a question in English. Mr. Frank McGann from Merrill Lynch has a question.

I'm wondering if you could just say what if you haven an estimate of the cost of the investigation, how material that would be? Secondly, just what your thoughts on the possible SEC or U.S. Department of Justice investigation, I was wondering if you had been notified by either of them of possible investigation? And then what would you have to accrue now for possible fines that you could expect that could come from either Brazilian or other regulatory bodies?

Answering your question about the value of investigations, the global estimated amount of the contract, the global estimated in the contract is R$6 million for TRW contract, and as for Gibson, $5 million for Gibson Dunn. These are the two amounts we have. This contract sets forth works for one year, 365 days, which doesn't mean it will necessarily take 365 days, but there is an agreement for one year. Up to now, we don't have any news about any kind of penalty of any nature as we speak.

We have another question in English. [Lisa Bigari from Atfield Lee] (ph) has a question. [Alicia] (ph), please go ahead. We couldn't hear from her, so next is Mr. [indiscernible].

Few questions, first, you mentioned the possibility of recovering any cost related to overpayment. Can you discuss the avenues by which you may be able to do that? And then I guess secondly, do you anticipate that you'd be liable for any fines or penalties either from the Brazilian Government or potentially outside governments like the U.S. regarding the implication of bribery being paid? I just want to know, even though they may be confined individuals, if both governments could EBITDA culpable for any fines and penalties going forward?

Answering your question, we have legal measures for reimbursement of the allegedly funds, be them related to overprice or surcharge or any deviation of funds. And we do have these legal measures underway, but as I said in the beginning, disclosing any of them would be something impossible and not the right thing to do, because we would be creating actions against our ability to bring these funds back to the Company, which right now are considered to be lost. As to the government, we have a case with the public prosecutor’s office and also the Federal Police. We’ve been dedicated to support them and also to CGU which is the Brazilian office of the Federal Controller and this is our duty because that’s a national matter. We have to give full support to these control agencies, the Brazilian Federal account in court, the Federal Controller General, the public prosecutor’s office. This can only bring good results to Petrobras and its shareholders. I hope I answered your question?

Yes. And just on the risk associated with potential write-down of assets due to overpayment, is that just confined to assets on the balance sheet for downstream of infrastructure assets or is there any risk that you could see some reserves written down as well?

As to drilling rigs, the 28 drilling rigs that are being built in Brazil, the seven first rigs and then we have another 21, several of them under construction. These rigs are not owned by Petrobras. So any matters about price, this has no impact whatsoever on our Company. These are Brazilian shipyards, we have systematic follow-up of the physical progress and development of these production units, but these are not Petrobras owned drilling rigs and that’s why there is no need to consider that we should write them off our result or any amount due to corruption when it comes to these rigs and we were not even notified of anything vis-à-vis these drilling rigs. But just to make it clear, they don’t belong to us. All we have is a contract we have chartered or leasing agreement.

Mr. Marcus Sequeira would like to ask a question. Marcus Sequeira – Deutsche Bank: Good morning. Thank you for taking my question. In the beginning of the call there was a question about compliance, a compliance department. I’d like to know how it's going to work. Difficult to have truly independent members and I would like to understand what would be the responsibilities of this department and how would this department relate with for example the Federal Accounting Court, the public prosecutor’s office or the Brazilian office of the Federal Controller General? Maria das Graças Foster: Marcus, your questions are my question first of all. We started drafting those project. Some senior people from the Company and outside the Company have approached myself and some of our officers and have suggested that we create a governance and compliance department. It is evident that we sent fax will expedite this process and make it clear and unequivocal that we need this kind of department, a compliance and governance department at Petrobras. But this is still at a very incipient stage. However, we are keen to come to a conclusion very soon. Next Wednesday we will have a first presentation of this possible structure that you're asking about and this is why I cannot answer your question yet. But we had full support from the Board of Directors of Petrobras, they asked us to further the examination of this proposal. And earlier today we had a meeting about how this would work and perhaps on Wednesday we might have a practically defined structure and then we’ll be in contact with the Board members to expedite the process, which it will not be different when a compliance department of many big company, particularly companies that might have gone through a painful process as the one that we are going through at this point. But the fact is we have no doubt regarding the importance of this kind of department. As I said, we want to be acknowledged for our governance. We want to be respected for our governance. It is as important as the respect that the market has for us when we talk about production units, reservoir, drilling rigs, energy generation, refining, this is how important this kind of compliance department is. We’re running against time. We want to turn this difficult moment into something much better.

Thank you, Graças. Here's a comment. As a former analyst and now as an investor, we hope that this area will be very transparent and independent. We must have independent members, members who are not Petrobras employees that can have independence. And I want to take this opportunity to wish you all of the success in the implementation of this department. Maria das Graças Foster: Well, ladies and gentlemen, thank you very much for listening to us, for asking questions, for trying to audit us. We’re indeed going through a very difficult moment in the Company. It’s a very labor intensive moment. But we’re convinced that we will have a better management after we structure and implement all of these management improvement processes. I am convinced that we will be able to implement this compliance department. We had exceptional results this year in terms of gas and energy downstream that is producing refining, more refining with the same hardware in E&P. We have all of the critical resources that we did not three, four, two years ago. Petrobras is a company that dreams to produce more and more oil and to produce more and more transparency to the controlling shareholder in all of our portfolio of shareholders. Again, I would like to thank you for your attention and I urge you to please believe in the Company, in our intent to build a better and better Petrobras. Thank you very much.