Petrobras approves corporate restructuring in Petrobras Distribuidora

Rio de Janeiro, August 25, 2017 - Petróleo Brasileiro S.A. – Petrobras informs
that its Board of Directors approved the corporate restructuring of its full
subsidiary, Petrobras Distribuidora S.A. (BR), which implies the execution of
the following operations:

1. Capital Contribution of Petrobras in BR, for the value of approximately R$
6.3 billion;

2. Partial split-off of BR, which consists in the separation of the receivables
held by BR resulting from debt acknowledgement agreement with the Eletrobras
System that have been collateralized by payables from the Brazilian Energy
Development Account (Conta de Desenvolvimento Energético ‐ CDE) and the
receivables held by BR with other societies of the Petrobras System. The splited
part will be incorporated in Downstream Participações Ltda. (“Downstream”), a
subsidiary of which social capital belongs fully to Petrobras;

3. Incorporation of Downstream in Petrobras.

The resource generated by the operation of capital contribution will be fully
used for the pre-payment of debts, contracted previously by BR and secured by
Petrobras.

Since it is a restructuring between societies that the total social capital
belongs to Petrobras, the operations will be performed considering the companies
book value based on the assessment report, not impacting their results. The
operation also does not generate a relevant impact in the Shareholders’ equity
of Petrobras and BR.

The information about the receivables of the electric sector are available in
the financial statements consolidated (ITR) of the 2nd quarter of 2017 of
Petrobras, as per the explanatory note 7.4. “Trade receivables – electricity
sector (isolated electricity system in the northern region of Brazil)" and in
the financial statements of the fiscal year of 2016 of BR, as per the
explanatory note 7.2 Composition - Electric Sector (7.2 “Composição – Setor
elétrico (Sistema isolado)”).

This operation is still subject to the approval of the Shareholders General
Meeting of BR and by the Meeting of the Partners of Downstream, as well as the
declaration of the Coordination and Governance Department of the State-Owned
companies - SEST, in the terms of the Decree No. 9.035/2017. The incorporation
of Downstream will still be subject to deliberation by the competent corporate
entities.

______________________________________________________________________________
www.petrobras.com.br/ir
Contacts:
PETRÓLEO BRASILEIRO S.A. – PETROBRAS | Investor Relations Department | 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,”
“will,” “may,” “should,” “could,” “would,” “likely,” and similar expressions.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date on which they are made. There is no
assurance that the expected events, trends or results will actually occur. We
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.