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____

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Biofuel Investment Agreement

(Rio de Janeiro, October 10 2008) – PETRÓLEO BRASILEIRO S/A - PETROBRAS, [Bovespa: PETR3/PETR4, NYSE: PBR/PBRA, Latibex: XPBR/XPBRA, BCBA: APBR/APBRA], a Brazilian international energy company, announces it signed with Galp Energia SGPS an Investment Agreement today (10/10) to create a joint-venture to develop a biofuel production and marketing project.

This agreement is the outcome of the breakdown of the Memorandum of Understanding the companies signed last May 18 which was aimed at studying the feasibility of joint biodiesel production, marketing, and distribution projects in the Brazilian, Portuguese, and international markets. The studies and analyses that were carried out indicated the deal, dubbed as the Belém Project, is feasible.

The Project foresees the production of 600,000 tons of vegetable oil per year in Brazil, which will be used to produce 500,000 tons of 2^nd Generation biodiesel (2G Biodiesel) per year. Half of this volume will be produced in Portugal, while the other half at a location yet to be defined. The product will be marketed in Europe, prioritarily in the Iberian market.

The companies intend to deepen their studies on the Project’s viability and, if confirmed, a company be incorporated with joint stock shared between Petrobras (50%) and Galp Energia (50%), and the companies may be represented in such corporation by their affiliates.

 

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

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.

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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.

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