New taxation model for the oil and gas industry

Rio de Janeiro, August 23, 2017 – Petróleo Brasileiro SA – Petrobras informs
that on August 18, 2017, the Provisional Measure No. 795 was published for the
oil and gas industry, in addition to Decree No. 9.128, which extended the
special customs regimen for the export and import of goods intended for research
activities and extraction and exploration of oil and natural gas reserves  –
REPETRO until 2040, in order to provide greater predictability to the standards
applicable to the oil and gas industry in the country and encourage investments
in the sector.

The new legislation provides for the following:

i)	Deductibility of the calculation basis of the Corporate Income Tax (IRPJ) and
the Social Contribution on Net Profits (CSLL) of investments made in the
exploration and production phases of oil and natural gas:

(a) Revokes Decree Law No. 62, dated November 21, 1966, which provided for the
immediate deduction of all investments made in the exploration, production
development and oil production in the calculation basis of taxes on income;

(b) Allows investments made in exploration and production to be immediately
deductible in the years in which they are incurred. However, the expenses
associated with assets formation for the production development should be
deducted according to the method of units produced, and it can be calculated at
an accelerated rate, 2.5 times, until December 2022. The amendment of the
legislation grants greater legal certainty for the oil and gas industry.

Petrobras has disputes in the amount of R$ 15.6 billion related to this matter
in its financial statements (ITR) for the 2nd quarter of 2017, as described in
explanatory note 29.3. Contingent liabilities.

ii)	Taxation by Withholding Income Tax (IRRF) on remittances abroad for the
payment of vessels chartering:

(a) Amends, as of January 1, 2018, the limits of charter agreements, whose
remittances abroad are subject to the reduced IRRF rate of zero, increasing the
tax burden applicable to these agreements;

(b) However, it recognizes the historical way of hiring adopted by the industry,
making it possible to close a significant portion of the company’s litigation
associated with such matter, upon payment of the difference between the limits
established for IRRF, added default interests, with amnesty of default and
exofficio fines, provided that all administrative and legal suits are dropped.
Petrobras has disputes in the amount of R$ 52.7 billion in its financial
statements (ITR) for the 2nd quarter of 2017, as described in explanatory note
29.3. Contingent liabilities.

iii)	Proposal to adapt the terminology used in the special tax regime for
profits earned abroad by subsidiaries that carry out chartering activities,
lease of goods or services related to the exploration and production of oil and
natural gas, established by Law 12.973, dated May 13, 2014.

iv)	Amendment, as of January 1, 2018, of the REPETRO system and creation of the
special regime for the acquisition and industrialization of goods that request
definitive permanence in the country, intended for the exploration and
production of oil and natural gas. REPETRO is now limited to temporary admission
goods, exempt from paying federal taxes until 2040. For goods that will remain
permanently in the country, a new regime was established to ensure tax relief on
import and acquisitions within the domestic market, until December 2022.

Petrobras understands that the new taxation model will have positive effects for
the oil and gas industry, clarifying important concepts, reducing litigation and
providing greater legal certainty and stability, in addition to encouraging new
investments.

It is important to note that the new legislation is still subject to the
approval of the National Congress and the regulation of the Brazilian Federal
Revenue Service. After which, it will be possible to evaluate its financial
impacts.

Facts deemed relevant will be disclosed to the market in a timely manner.

__________________________________________________________________________
www.petrobras.com.br/ir
Contacts:
PETRÓLEO BRASILEIRO S.A. – PETROBRAS | Investor Relations Department I e-mail:
petroinvest@petrobras.com.br
Av. República do Chile, 65 – 10th floor, 1002 – B – 20031-912 – Rio de Janeiro,
RJ | Phone: 55 (21) 3224-1510 / 3224-9947

FORWARD-LOOKING STATEMENTS
This release includes forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, that are subject to risks and uncertainties.
The forward-looking statements, which address the Company’s expected business
and financial performance, among other matters, contain words such as “believe,”
“expect,” “estimate,” “anticipate,” “optimistic,” “intend,” “plan,” “aim,”
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undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information or future events or for any
other reason.

The Company’s actual results could differ materially from those expressed or
forecast in any forward-looking statements as a result of a variety of
assumptions and factors. These factors include, but are not limited to, the
following: (i) failure to comply with laws or regulations, including fraudulent
activity, corruption, and bribery; (ii) the outcome of ongoing corruption
investigations and any new facts or information that may arise in relation to
the “Lava Jato Operation”; (iii) the effectiveness of the Company’s risk
management policies and procedures, including operational risk; and (iv)
litigation, such as class actions or proceedings brought by governmental and
regulatory agencies.  A description of other factors can be found in the
Company’s Annual Report on Form 20-F for the year ended December 31, 2016, and
the Company’s other filings with the U.S. Securities and Exchange Commission.