Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. 

Form 20-F ___X___ Form 40-F _______

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes _______ No___X____

• Consolidated net income in the 4Q-2009 totaled R$ 8,129 million, 11% up on the previous quarter, fueled by the increase in the average Brent crude price in 4Q-2009 and its impact on exports, the 2.3% upturn in domestic sales and the reduction in operating expenses. The decline in operating expenses in the 4Q-2009 was chiefly due to the non-recurring expense from the special participation tax (government take) from the Marlim field in 3Q-2009.

• Annual consolidated net income totaled R$ 28,982 million, 12% down on 2008, reflecting the reduction in oil and oil product sale prices (34% decline in the average Brent price and 11% slide in the average realization price – ARP), exchange losses during the period when the Company maintained net dollar exposure, and the non-recurring expense from the special participation tax. Note that, despite the lower oil and oil product prices, operating cash flow (EBITDA) increased by 5% to R$ 59,944 million, chiefly due to the reduction in average unit costs and the decline in expenses from imports and the government take, which are pegged to international commodity prices. Excluding the non-recurring expense from the special take in the Marlim field, EBITDA amounted to R$ 62,009 million, 8% up on 2008.

• Total oil and natural gas production in 2009 averaged 2,526 thousand barrels/day, a 5% improvement over 2008, thanks to increased output from the P-52 and P-54 platforms in the Roncador field and the P-53 platform in Marlim Leste, as well as the operational start-up of P-51 (Marlim Sul), FPSO - Cidade de Niterói (Marlim Leste), FPSO – Cidade de São Vicente (TLD Tupi) and FPSO-Cidade de São Mateus (Camarupim), all of which more than offset the natural decline in production from the mature fields.

• Petrobras’ 2009 trade balance, based on oil and oil product exports and imports, recorded a surplus of 156 thousand barrels/day, thanks to the increase in domestic oil production and the 23% decline in the volume of imported oil products. It is worth mentioning that the reduction in diesel imports was due to lower demand and higher output from the Brazilian refineries.

• Annual investments totaled R$ 70,757 million, most of which went to increasing future oil and gas production capacity and to the refineries, in order to expand capacity and improve fuel quality, as well as to the Brazilian gas pipeline network, thereby improving distribution and market access.

• Total reserves closed the year at 14.865 billion barrels of oil equivalent (boe), according to SPE/ANP criteria and 12,143 billion barrels according to SEC criteria. The Reserve Replacement Index (RRI) stood at 75% according to the SPE and 209% according to the SEC (reserve-production ratios of 17 and 14 years, respectively). Proven reserves exclude the pre-salt discoveries in the Santos Basin, still under evaluation, but include 182 million boe from the pre-salt layer in the Espírito Santo Basin.

• Dividends totaled R$ 8,335 million, R$ 7,195 million of which having been provisioned to shareholders in 2009 as interest on own capital, generating a tax benefit of R$ 2,446 million. On December 31, 2009, the Company’s market capitalization amounted to R$ 347,085 million, 55% up on the previous year.

www.petrobras.com.br/ri/english
Contacts: PETRÓLEO BRASILEIRO S. A. – PETROBRAS
Investor Relations Department I E-mail: petroinvest@petrobras.com.br / acionistas@petrobras.com.br
Av. República do Chile, 65 – 22^nd floor - 20031-912 - Rio de Janeiro, RJ I Tel.: 55 (21) 3224-1510 / 9947

This document may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (Exchange Act) 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 forward-looking statements. 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.

1

Statement by the CEO,
José Sergio Gabrielli de Azevedo

Dear shareholders and investors,

Our financial results for the fourth quarter and full year of 2009 reflect the Company’s accomplishments during the year, despite the global financial crisis. By maintaining a well-defined strategic focus, we recorded outstanding operating and financial performances.

With improvements in the rational use of resources, efficient cost controls and record capital investment, we continued on our path to becoming one of the world’s largest energy companies. In doing so we created new opportunities in Brazil and abroad, while increasing value to our shareholders.

As a new regulatory framework for the unlicensed Pre-salt areas is being debated in Congress, Petrobras is preparing for a new and even greater era in the country’s economic development. We are currently reviewing our 2010-2014 Business Plan, with a focus on maintaining our growth well into the future.

In 2009, capital spending totaled a record R$ 71 billion, 33% more than in 2008. As a result of this spending, oil and gas output increased by 5.3%, with the start-up of new production units in Brazil, as well as the beginning of production in Akpo, in Nigeria.

The Company’s cash flow continued to increase, up 5% from the previous year, despite a 37% decline in Brent crude prices. Annual net income totaled R$ 29 billion, only 12% lower than 2008. This has allowed us to continue expanding our capital spending. Capital discipline has enabled us to improve our performance and it worth emphasizing that capital discipline remains an important pillar in our expansion plans.

On December 31, 2009, the Company’s market capitalization stood at R$ 347,085 million, 55% above last year’s close. At the Annual Shareholders’ Meeting on April 22, 2010, we will be proposing dividend payments based on 2009 results, of R$ 8 billion, R$ 7 billion of which was already paid in 2009.

Proven reserves in Brazil at the end of 2009 totaled 14.865 billion BOE of oil, condensates and natural gas according to SPE (Society of Petroleum Engineers) criteria. Of this total, only 182 million BOE are from pre-salt reservoirs. As we incorporate reserves from the Pre-salt we should be able to comfortably continue to replace more than 100% of our production each year, as we have done for the last 17 consecutive years. We will begin booking reserves from the Santos pre-salt cluster following the declaration of commerciality, which is expected by December of 2010 for Tupi, by 2011for Carioca, by 2012 for Parati and Guará and by 2013 for Iara.

As a result of the increase in production, Petrobras became a substantial net exporter of crude oil and refined products in 2009, recording a volume surplus of 156,000 barrels/day, and a monetary trade surplus of US$ 2.9 billion.

We should also mention the consolidation of the domestic petrochemical sector, through an agreement with Odebrecht S.A.. The agreement resulted in the merger of Quattor and Braskem. Petrobras now has an important minority position in a world class petrochemical company, with the scale to grow in Brazil and to expand internationally.

In a year of credit aversion and worldwide financial volatility, we managed to contract more than US$ 35 billion of debt at attractive rates and extended tenors. This debt will complement our internally generated cash flow to fund our investment plan.

In 2009 the continued development of the Pre-salt was an extremely productive year: we produced the first oil in the Santos cluster, with the Tupi Extended Well Test; we initiated several new projects and continued other ongoing ones; we announced recoverable oil volume from Guará; and we confirmed the excellent productivity of the pre-salt reservoir in Tupi and Guará.

To conclude, 2009 was an exceptionally challenging year, given the turbulence in the international markets. Although we are beginning 2010 in a much calmer environment, we will continue to approach our challenges in the same uncompromising manner. We remain more determined than ever to use our enterprising spirit to achieve growth, improve results, overcome barriers and build an energy company that respects all its stakeholders while contributing to the development of Brazil, its society, and each country where we operate.

2

Net Income and Consolidated Economic Indicators

Petrobras posted consolidated net income of R$ 28,982 million in 2009, 12% down on 2008.

⁽¹⁾ Operating income before financial result, equity balance and taxes.
⁽²⁾ Operating income before financial result, equity balance and depreciation/amortization.
(*) Unaudited.

EBITDA is a measure not recognized by the accounting practices adopted in Brazil and other companies may define it in different ways. It should not be considered as an alternative indicator for measuring operating income, or as the best form of measuring liquidity or cash flow from operating activities. EBITDA is an additional measure of the Company’s capacity to amortize debt, maintain investments and cover working capital needs.

3

The behavior of the various components of consolidated net income (2009 vs. 2008) is shown below:

• A R$ 178 million increase in gross profit:

• Operating expenses remained stable. The main variations are shown below:

√ Reduction in provisions for impairment losses (R$ 389 million), due to higher provisions for exploration and production assets in 2008, thanks to the decline in oil prices forecast;

√ Reduction in research and development costs (R$ 342 million), due to the decline in provisions for the contracting of projects with institutions accredited by the ANP (R$ 533 million), in turn due to lower oil prices which affects the calculation base for establishing minimum R&D investments;

√ Reduction in taxes (R$ 205 million), due to lower withholding tax on the 2009 distribution of dividends from foreign subsidiaries (R$ 80 million), the reduction in PIS and COFINS taxes on non-core activities and lower IOF tax on financial operations (R$ 52 million);

4

√ Increase in other operating expenses (R$ 876 million), due to non-recurring expenses from the special participation take from the Marlim field in September 2009, pursuant to the agreement between Petrobras and the ANP (R$ 2,065 million). This was partially offset by the reduction in losses from the depreciation of inventories (R$ 731 million), non-recurring expenses from provisions for contingencies related to the payment of additional royalties on the Guando field in Colombia, in 2008 (R$ 227 million), lower expenses from institutional relations and cultural projects (R$ 158 million) and the exchange variation on these expenses (R$ 159 million), in addition to the launch of new operations in Chile and Japan.

• Financial loss (R$ 5,967 million), due to losses from the exchange variation on foreign assets (R$ 12,055 million), combined with losses from hedge operations (R$ 1,075 million), which more than offset exchange gains on the net debt (R$ 2,771 million) and the monetary variation on funding operations (R$ 2,727 million).

• Increase in equity income (R$ 790 million), reflecting the better 2009 results from the petrochemical sector (R$ 682 million) which in 2008 were affected by FX losses on financings and by international segment (R$ 127 million), which in 2008 accrued higher losses from Pasadena refinery related to impairment, despite the 2009 losses associated with the acquisition price of the 50% remaining stake arbitrated by judicial decision.

• Minority interest (R$ 4,842 million), due to exchange gains on debt from structured projects.

• Income Tax and Social Contribution (R$ 5.985 Millions) reduced due to: a) lower net income in 2009 b) increased results in units abroad with lower income tax regimes and c) losses in 2008 with some subsidiaries which realization of fiscal benefits were remote.

5

The behavior of the various components of consolidated net income (4Q-2009 vs. 3Q-2009) is shown below:

• A R$ 857 million reduction in gross profit:

(1) Expenses with transportation, terminals and pipelines.

Due to the average inventory period of 60 days, international oil and oil product prices, as well as the impact of the exchange rate on imports and government take are not fully reflected in the cost of goods sold in the actual period, but in the subsequent period.

The chart below shows the estimated impact on COGS:

(*)The impact of selling inventories formed at a lower unit cost in previous periods was smaller in the 4Q-2009 than in the 3Q-2009, reflecting the behavior of international oil and oil products prices and FX rate.

6

• Reduction of R$ 873 million in operating expenses, notably the decline in other operating expenses (R$ 1,369 million), due to the special participation take from the Marlim field in the previous quarter, pursuant to the agreement between Petrobras and the ANP (R$ 2,048 million), partially offset by the increase in expenses from institutional relations and cultural projects (R$ 147 million) and losses from the impairment of domestic exploration and production assets (R$ 544 million).

• Reduction in the financial result (R$ 942 million), due to monetary gains on funding transactions (R$ 1,167 million), offset by the reduction in exchange losses on funds invested abroad (R$ 138 million).

• Reduction in equity income (R$ 706 million), reflecting the weaker result of the petrochemical sector and the provisions for losses on investments in the Pasadena refinery.

• Minority interest (R$ 1,322 million), due to the revision of future flows from financial leasing operations and the reduction in exchange gains on debt from structured projects.

7

RESULTS BY BUSINESS AREA

Petrobras operates in an integrated manner, with the greater part of oil and gas production in the Exploration and Production area being transferred to other Company areas.

When reporting results per business area, transactions with third parties and transfers between business areas are valued in accordance with the internal transfer prices established between the various areas and assessment methodologies based on market parameters.

EXPLORATION AND PRODUCTION

Domestic Production (Th. barrels/day) ^(*)

^(*) Unaudited
⁽¹⁾ Does not include liquefied gas and includes re-injected gas

8

Lifting Cost – Domestic^(*)

^(*) Unaudited

Lifting Cost Excluding Government Take

Lifting Cost Including Government Take

REFINING, TRANSPORTATION & MARKETING

9

Imports and exports (Th. barrels/day)

⁽¹⁾ Unaudited
⁽²⁾ Export volumes from Exploration & Production and RTM segments.

10

Oil Products (Th. barrels/day) ^(*)

(*) Unaudited.
(1) As per ownership recognized by the ANP.

Processed Feedstock – Domestic (Th. barrels/day) ^(*)

(*) Unaudited.

Refining Cost – Domestic

(*) Unaudited.

11

GAS AND POWER

Gas Imports (Th. barrels/day) ^(*)

(*) Unaudited.

12

DISTRIBUTION

13

INTERNATIONAL

International Production (Th. barrels/day) ^(*)

(*) Unaudited.
(1) Does not include liquefied gas and includes re-injected gas.
(2) Non consolidated companies in Venezuela.

14

International Lifting Cost

(*) Unaudited.
(1) Revisions on the lifting cost from Nigeria and Angola.

Processed feedstock – International

(*) Unaudited.

Oil Products – International ^(*) (Th. barrels/day)

(*) Unaudited.

Refining Cost – International

(*) Unaudited.
(1) Recalculation of Japanese Refinery cost.

15

Sales Volumes – (Th. Barrels/day) ^(*)

(*) Unaudited.

Annual domestic sales volume fell by 2% over 2008, reflecting sales of the following products:

• Diesel (reduction of 3%) – due to the emergency operation of diesel-powered thermal plants in 2008, the period reduction in GDP growth, the increase in the biodiesel percentage to 4%, the decline in the 2009 grain harvest and the increased share of third-party diesel (importers and the Riograndense Refinery).

• Gasoline (decline of 2%) – due to the reduction of the purely-gasoline-powered fleet and the increased share of other players in 2009, especially in regard to gasoline blends, due to imported refinery streams.

• Fuel oil (reduction of 7%) – reflecting the decline in output from the manufacturing industry due to the global crisis, the reduction in thermal plant consumption and zero consumption by the pelletizing industry.

• Naphtha (increase of 9%) – due to scheduled stoppages in petrochemical units and their lower orders in 2008, triggered by the crisis that hit the entire petrochemical chains.

• Natural gas (reduction of 25%) – due to the economic slowdown, the replacement of gas with fuel oil for industrial use, and reduced demand from thermal plants due to higher water-reservoir levels in the Southeast hydropower-plants , compared to the beginning of 2008.

Exports moved up by 5% thanks to increased output.

International sales fell by 3% due to lower offshore volume caused by the termination of tender agreements in 2009.

CORPORATE OVERHEAD (US$ MILLION) ^(*)

(*) Unaudited.

16

Consolidated Investments

In compliance with the goals outlined in its strategic plan, Petrobras continues to prioritize investments in the expansion of its oil and natural gas production capacity by investing its own funds and by structuring ventures with strategic partners. In 2009, total investments amounted to R$ 70,757 million, 33% more than in 2008.

In line with its strategic objectives, Petrobras acts in consortiums with other companies as a concessionaire of oil and gas exploration, development and production rights. Currently the Company is a member of 105 consortiums, of which it operates 71.

17

Consolidated Debt

(1) Includes contractual commitments involving the transfer of benefits, risk and the control of goods (R$ 739 million on December 31, 2009 and R$ 1,390 on December 31, 2008).
(2) Total debt less cash and cash equivalents.
(3) Total liabilities net of cash/financial investments.

The net debt of the Petrobras System increased by 47% over December 31, 2008, due to financing operations, mainly maturing in the long-term, pursuant to the Company’s 2009/2013 business plan and the payment of interest on own capital during 2009.

The level of indebtedness, measured by the net debt/EBITDA ratio, increased from 0.85 on December 31, 2008, to 1.19 on December 31, 2009. The portion of the capital structure represented by third parties was 50%.

18

Income Statement – Consolidated

Certain figures relating to previous periods have been reclassified to bring them into line with the current financial statements, thereby facilitating comparisons.

19

Balance Sheet – Consolidated

Certain figures relating to previous periods have been reclassified to bring them into line with the current financial statements, thereby facilitating comparisons.

20

Statement of Cash Flow – Consolidated

Certain figures relating to previous periods have been reclassified to bring them into line with the current financial statements, thereby facilitating comparisons.

21

Statement of Added Value – Consolidated

Certain figures relating to previous periods have been reclassified to bring them into line with the current financial statements, thereby facilitating comparisons.
* Net of Provisions for Doubtful Debts.

22

Consolidated Statement by Business Area ⁽¹⁾ - 2009

Consolidated Statement by Business Area - 2008