Brazil's government-run oil company Petrobras declared the second quarter of 2008 was its most profitable ever, on Monday, thanks to higher oil prices, increased production and decreased operating costs.

Second-quarter profits rose 29% percent over the same quarter in 2007 to 8.78 billion reals ($5.41 billion). Second quarter revenues were up 30% from a year ago to BRL54.57 billion. The company released its quarterly figures in BR GAAP terms.

“It is with great pleasure that I present the biggest net quarterly profit in the history of the company,” Petrobras president Sergio Gabrielli said in a statement.

"The significant rise in oil prices on world markets as well as rising oil and gas production and prices in the domestic market all contributed to record profits this quarter," the company said in the statement.

The company revealed that the net profits for January through June of 2008 reached 15.7 billion reals (US$9.8 billion), making it the companys most-profitable first half ever.

Petrobras announced its second-quarter earnings Monday after the markets closed. New York-traded shares fell 3.17 percent, or US$1.62, to US$49.44.