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Oil in the New Frontier Areas of the Santos Basin

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(Rio de Janeiro, July 11, 2006). – PETRÓLEO BRASILEIRO S/A - PETROBRAS, [Bovespa: PETR3/PETR4, NYSE: PBR/PBRA, Latibex: XPBR/XPBRA, BCBA: APBR/APBRA], a Brazilian international energy company, announces that the consortium made up of Petrobras, as operator, BG and Petrogal have made a light oil find at well 1-BRSA-369A-RJS (1-RJS-628A) in ultra-deep waters in the Santos Basin along a new exploratory frontier.

The discovery of this new reservoir represents a milestone for Brazilian oil exploration, being the first well to surpass an evaporatic salts sequence of more than 2,000-meters thickness. The well, which is still being drilled, is located at a water depth of 2,140 meters and is the first drilling to take place in the BM-S-11 block, about 250 kilometers from the southern coast of the city of Rio de Janeiro.

Since this is a new exploratory frontier area, preliminary results are highly significant. However, further investments will be necessary for fully evaluating the volume and productivity of the reservoir.

Petrobras has a 65% stake in the block together with the British-owned BG with 25% and the Portuguese company Petrogal, 10%.

Pursuant to the current legislation, the find has been notified to the National Petroleum Agency (ANP).

http: //www.petrobras.com.br/ri/english

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Contacts:

Petróleo Brasileiro S.A – PETROBRAS
Investor Relations Department
Raul Adalberto de Campos– Executive Manager
E-mail: petroinvest@petrobras.com.br
Av. República do Chile, 65 - 22^nd floor
20031-912 – Rio de Janeiro, RJ
(55-21) 3224-1510 / 9947

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.

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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 oc cur. 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.

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