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____

Petrobras starts producing oil in deep waters in Northeastern Brazil

(Rio de Janeiro, October 11, 2007). – PETRÓLEO BRASILEIRO S/A - PETROBRAS, [Bovespa: PETR3/PETR4, NYSE: PBR/PBRA, Latibex: XPBR/XPBRA, BCBA: APBR/APBRA], a Brazilian international energy company, announces that the Piranema field, 25 km off the coast of Sergipe, started producing oil this Wednesday (10/10), in deep Northeastern Brazil waters. With operations going online in this field, Petrobras is taking another step towards maintaining Brazil’s oil self-sufficiency. The Piranema oil, of excellent quality, at 44º API, is the lightest oil produced in deep waters in Brazil.

Enormously important for the Northeastern region’s economy, this type of oil is essential for lubricant production. With operations being kicked off in Piranema, Petrobras sets the stage for other Northeastern states to also start exploring oil at greater depths.

The new field will initially produce 10,000 barrels of oil per day, a figure that may reach 30,000 in 2008. When it is at its full capacity, this field will boost Sergipe’s oil production by 60%. Chartered from Norwegian corporation Sevan Production AS, this platform is an FPSO-type unit (which produces, stores and offloads oil).

The new platform has unprecedented technical characteristics: the round hull, unlike the traditional floating systems, is more versatile and stable, rendering it safer for the operations. Chartered for an 11-year term, during the first phase of the project it will be anchored in the northern portion of the field, at a water depth of 1,090 meters, and will be connected to six wells. During the second phase, meanwhile, it will be moved to the southern area of the same field, and be connected to three other wells at a depth of 1,560 meters.

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.

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.