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Memorandum of Understanding with Vale for
Exploration in the State of Espírito Santo

Rio de Janeiro, June 25, 2009 – PETRÓLEO BRASILEIRO S/A - PETROBRAS, informs that it has signed today a Memorandum of Understanding with Vale S.A. which establishes the framework for a partnership to explore and produce oil and natural gas in part of BM-ES-22 concession, located off the northern coast of the state of Espírito Santo.

This concession is formed by ES-M-466, ES-M-468, ES-M-527 and ES-M-523 blocks, acquired by Petrobras at National Petroleum Agency (ANP) sixth bidding round. The blocks are situated at water depths of between one and two thousand meters and exploration is focused on the post-salt section.

The object of the Memorandum is to establish the basis to negotiate the transfer of 25% working interest in the blocks ES-M 466, ES-M-468 and ES-M-527 to Vale and assure the exclusive right to Vale to acquire the participation of theses blocks during the tenor of the Memorandum. The final conditions of the negotiation have to be submitted for the approval of the ANP.

The joint participation in the BM-ES-22 concession will be add to the partnerships already set with Vale in 22 other exploratory blocks located in Espírito Santo and Santos basins, and in the offshore (Pará-Maranhão Basin) and onshore (Parnaíba Basin) frontier exploration areas.

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 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.