Voluntary Separation Incentive Plan – PIDVWe developed the Voluntary Separation Incentive Plan (PIDV) in order to streamline our workforce to meet the challenges of our 2014-2018 Business and Management Plan. We had the enrollment of 8,298 employees, which represents 12.4% of the company’s total workforce. We expect 55% of the separations to take effect in 2014. The program was designed taking into account the retention of knowledge and the safe and sustainable continuation of operations and is expected to generate estimated cost savings of R$ 13 billion from 2014 to 2018.

Record of natural gas deliveries On March 26, natural gas deliveries to the Brazilian consumer market reached a record 101.1 million/m³. Of this total, 45.1 million/m³ went to meet the demand of the thermal electric market; 42.5 mil-lion/m³ went to the non-thermal electric sector (industries, residences, transpor-tation and others) and the remaining 13.5 million/m3 to our facilities.

New fertilizers plant In May, the cornerstone of the José Alencar Nitrogenated Fertilizer Plant (Fafen-JA), in Uberaba (MG), was laid. Investments will total R$ 1.95 billion and the facility will have a production capacity of 519 thousand tons of ammonia per year. The plant is expected to start-up in 2017 and, with the new facility, 87% of Brazil’s demand will be produced domesti-cally by 2020. The fertilizers will be used in crops such as corn, sugar cane, coffee, cot-ton and oranges, among others.

PROCOP leads to savings of R$ 6.6 billion in 2013—

Petrobras headquarters

F irst-year results of the Operating Expenses Optimization Program

(PROCOP) indicated savings of R$ 6.6 billion in 2013. The result

surpassed the yearly target of R$ 3.9 billion. This initiative seeks to

cut costs with a relevant and continuous impact on operations. According

to our CEO, Graça Foster, “this program changes the company’s cost management culture. Not only do we seek excellence in deep water exploration, but we also seek excellence in cost management”.

All of our areas presented better-than-expected results. Generated

savings are equivalent to an output of 130 thousand barrels per day.

In 2014, we continue to exceed our targetsWe expect to reach a result of

R$ 7.3 billion in 2014. In the first

quarter alone, we achieved sav-

ings of R$ 2.4 billion, up by

42% from our forecast for this

period.

PROCOP extends to our

operations abroad. Initia-

tives encompass our op-

erational assets in eight

countries (Argentina,

Bolivia, Chile, Uruguay,

Paraguay, Colombia,

United States and

Japan), in the up-

stream and down-

stream oil and gas

segments.

May, 2014 • #42www.petrobras.com.br/ir

SHARING PETROBRAS NEWS

First quarter 2014 results —

Our net income totaled R$ 5.4 billion, down

by 14% from the fourth quarter of 2013,

largely due to the absence of the tax

benefit related to the provision of interest on

stockholders’ equity, which took place in the

previous quarter.

Operating results grew by 8% from the

previous quarter to R$ 7.6 billion. This rise

reflects higher prices of oil products mainly due

to the diesel and gasoline price increases that

took place in November 2013; the smallest

share of imported oil products on sales in the

domestic market; and lower total cost of oil

and oil products production, which offset the

provision of R$ 2.4 billion for the Voluntary

Separation Incentive Plan (PIDV).

Investments totaled R$ 20.6 billion, of which

64% were allocated to the Upstream segment in

Brazil.

Total oil and natural gas output averaged

2 million 531 thousand barrels of oil per day

(bpd) for the quarter, remaining stable in relation

to the fourth quarter of 2013.

The production of oil products in the Brazil-

ian’s refineries reached 2 million 124 thousand

barrels of oil per day (bpd), up 1% from the

fourth quarter of 2013. The utilization factor of

refining facilities reached 96%, maintaining an

excellent level of efficiency.

Gross debt rose by 15%, in Reais, in relation

to 12.31.2013, due to new financing, primarily

by issuing bonds in the U.S. and European

markets, allowing us to finish the quarter with a

solid liquidity (R$ 78 billion 478 million in cash).

The Net Debt/Adjusted EBITDA ratio was

impacted by the annualized provision of the

PIDV and closed the quarter at 4 times. Leverage

(Net Indebtedness/(Net Indebtedness +

Stockholders’ Equity)) remained stable at 39%.

z

In thousand barrels of oil equivalent per day 1Q 14 4Q 13 Variation

Total oil, NGL and natural gas output 2,531 2,534 0%

Oil and NGL output in Brazil 1,922 1,960 -2%

Total oil products output 2,124 2,105 1%

Net imports of oil and oil products -417 -378 10%

Refining facilities utilization factor (Brazil) 96% 95% 1%

Share of domestic oil in throughput 83% 83% 0%

Operating performance

In US$ million 1Q 14 4Q 13 Variation

Sales Revenues 34,494 35,593 -3%

Gross Profit 8,229 7,474 10%

Operating Income* 3,203 3,091 4%

Net income 2,280 2,760 -17%

Earnings per share 0.17 0.21 -19%

Adjusted EBITDA 6,068 6,832 -11%

Market Value** 87,784 92,425 -5%

Capital Expenditures (CAPEX) 8,708 15,441 -44%

Net debt 101,488 94,579 7%

Net debt/Adjusted EBITDA 4.18 3.21 30%

Net debt/(net debt + shareholder's equity) 39% 39% –

Economic and financial figures

Period PBR PBR/A DJIA

Last 10 years(03/31/04 to 31/03/14)

57,01% 87,81% 58,89%

Last year(03/31/13 to 31/03/14)

-20,64% -23,58% 12,89%

Petrobras ADR’s return (NYSE)

PBR PBR/A Dow Jones

87.81%57.01%

58.89%

0

400

800

Mar-04 Mar-06 Mar-08 Mar-10 Mar-12 Mar-14

(Index number = 100 in 03/31/2004)

Performance shares (NYSE): PBR and PBR/A

* Net Income before financial results, share of profit of equity-accounted investments and income taxes. ** Source: Bloomberg.

High productivity of pre-salt wells

Start-up of new

platformsPlatforms P-58 and P-62

started-up on March 17 and May 12, respectively. Both are

FPSO (floating production storage and offloading) type

units and have a daily processing capacity of

180 thousand barrels of oil and 6 million/m3 of natural gas. P-58 is situated in an area referred to as Parque das

Baleias, in Campos Basin, and P-62 is in Roncador field, also

in Campos Basin.

P roduction in the pre-salt has been repeatedly setting new records. The latest one was set on May 11 and exceeded 470 thousand barrels of oil

per day (bpd) in Santos and Campos Basins fields.Average productivity per well in Santos Basin reached

28 thousand bpd, a rise of nearly 30% compared to February 2013. The first well to be interconnected through the innovative Buoyancy Supported Riser (BSR) technology was installed on FPSO Cidade de São Paulo, in Sapinhoá field, and it has been presenting above average performance and is the best performing production well in Brazil with some 36 thousand bpd.

BSR

Increasing operational efficiency of Campos Basin—

The Operational Efficiency Increase Program (PROEF)

continues to showcase highly positive results. In April,

the Campos Basin Operations Unit (UO-BC) reached

an efficiency rate of 81%, the highest for the past 46 months,

indicating the consistency of the actions implemented to

recuperate this vital area. The Rio de Janeiro Operations Unit

(UO-RIO), which manages platforms with higher production

capacity platforms, presented its highest operational efficiency

rate for the last three years of 96% in March.

An important consequence of this rise in efficiency was a

production gain of 25 thousand barrels of oil per day (bpd) in

2012, 63 thousand bpd in 2013 and 58 thousand bpd in the first

quarter of 2014.

PROEF was created in May 2012 as one of the structuring

programs of our Business and Management Plan with the objective

of recovering the operational efficiency of UO-BC, which at the

time had indicated a downward trend since 2009. In 2013, UO-RIO

was included in the program in order to minimize risks of efficiency

losses on newer systems. The program is currently expanding to

include the Espírito Santo Operations Unit (UO-ES).

Production fields

Macaé

RIO DE JANEIRO

CAMPOS BASIN

Technological partnership with Fiat

We executed a memorandum of understanding with Fiat Automóveis, in Rio de Janeiro, for cooperation in Research & Development

projects. Technical/economic viability studies will be carried out with an emphasis on more efficient and less pollution-emitting vehicles.

Attendance at the 45th OTC

In May, we attended the 45th edition of the Offshore Technology Conference (OTC) in Houston/USA, the world’s biggest offshore

upstream sector event. We presented works and studies aimed at improving the management of fields along the Brazilian coast, with an emphasis on efficiency, increasing productivity and reducing costs.

Known as Grifo04, this supercomputer is comprised of 544 servers, which add up

to 40 terabytes of RAM memory, and whose performance is 23 thousand times higher than that of the leading personal computer. It is housed in our Integrated Data Processing Center located in Rio de Janeiro.

With this capacity and use of specific programs, the supercomputer is capable of processing more than 6 trillion seismic samples per second. This information is important to locate areas of high potential for oil and gas production.

Latin America’s most powerful supercomputer is ours!—

New Petrobras Sustainability Report

In May, we released the 2013 Sustainability Report (available at: www.petrobras.com.br/rs2013). The publication is prepared on an annual basis and provides information on our corporate actions, operational performance, labor practices and the environment, among other topics.

The report is guided by ISO 26000 and complies with the latest guidelines of the Global Reporting Initiative (GRI), the world’s main initiative in defining parameters for such publications.

AGENDA

Newsletter published by Petrobras’ Executive Management of Investor Relations • Executive manager: Theodore Helms • Journalist: Orlando Gonçalves Jr. MTb-MA 993 • Collaboration:Izabel Ramos, Fernanda Bianchini, Daniela Ultra, José Roberto Darbilly and Luan Barbosa (trainee) • Graphic project and desktop publishing: Estúdio Matiz.

Shareholder Service:Av. República do Chile, 65/Sala 1002 – Centro • Rio de Janeiro – RJ – Brazil • Zip Code: 20031-912 Telephone: +55 21 3224-9916 • Fax: +55 21 2262-3678 • E-mail: acionistas@petrobras.com.br • Site: www.petrobras.com.br/ir

>>>> July 22 and 23 National Meeting of Investors Relations, in São Paulo, Brazil

>>>> August 21, 22 and 23 The Money Show, in San Francisco, USA