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The purpose of PPSA is to manage the production sharing agreements executed by the Ministryof Mines and Energy and the contracts of sale of oil, natural gas and other hydrocarbon fluidsbelonging to the federal government, with the aim of maximizing the economic result of suchcontracts.According to the articles of incorporation of PPSA, as approved by Decree 8,063, thecorporation’s capital is 50 million reais, divided into fifty thousand registered common shareswithout par value, fully owned by the federal government.PPSA is managed by a Board of Directors, with decision-making functions, and by an ExecutiveBoard. The Executive Board is the collective body responsible for the general direction of thecorporation and is comprised of four officers appointed by the President of Brazil, uponrecommendation of the Minister of Mines and Energy. The officers are appointed for a three-yearterm. Reappointment is allowed.The Board of Directors is comprised of five members appointed by the President of Brazil for afour-year term. Reappointment is allowed.24.9. The Production Sharing RegimeOne of the main features of production sharing agreements (PSA) is the fact that the ownershipof the extracted mineral resources is retained by the government, whereas under the concessionregime, the ownership of the extracted minerals is held by the concessionaire.Under the production sharing regime, the oil company carries out exploration, appraisal,development and production activities in a certain block/field at its own risk and expense, inaddition to performing technical obligations, paying for the costs and allocating the investmentsand resources required for the activity.Therefore, in case of commercial discovery, the oil company is entitled to a share of theproduction as compensation for the investments and other costs incurred in connection with theoil production – the so-called "cost oil". The exceeding amount of the oil and/or natural gasproduction (i.e. after deduction of the "cost oil" and any amount of oil used in the operation itself)is shared with the federal government according to the provisions of the production sharingagreement (the so-called "profit oil").Under the production sharing regime, Petrobras acts as the sole operator of the blocks with aminimum 30% equity interest. Other companies are allowed to participate as non-operators.125