﻿<?xml version="1.0" encoding="utf-8"?>
<InstanceReport xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance" xmlns:xsd="http://www.w3.org/2001/XMLSchema">
  <Version>2.2.0.7</Version>
  <hasSegments>false</hasSegments>
  <ReportName>Note 12 - Capital Lease Obligations</ReportName>
  <ReportLongName>00911 - Disclosure - Note 12 - Capital Lease Obligations</ReportLongName>
  <DisplayLabelColumn>true</DisplayLabelColumn>
  <ShowElementNames>false</ShowElementNames>
  <RoundingOption />
  <HasEmbeddedReports>false</HasEmbeddedReports>
  <Columns>
    <Column>
      <LabelColumn>false</LabelColumn>
      <Id>1</Id>
      <Labels>
        <Label Id="1" Label="9 Months Ended" />
        <Label Id="2" Label="Sep. 30, 2010" />
      </Labels>
      <CurrencyCode>USD</CurrencyCode>
      <FootnoteIndexer />
      <hasSegments>false</hasSegments>
      <hasScenarios>false</hasScenarios>
      <Segments />
      <Scenarios />
      <Units>
        <Unit>
          <UnitID>Dollars</UnitID>
          <UnitType>Standard</UnitType>
          <StandardMeasure>
            <MeasureSchema>http://www.xbrl.org/2003/iso4217</MeasureSchema>
            <MeasureValue>USD</MeasureValue>
            <MeasureNamespace>iso4217</MeasureNamespace>
          </StandardMeasure>
          <Scale>0</Scale>
        </Unit>
        <Unit>
          <UnitID>Shares</UnitID>
          <UnitType>Standard</UnitType>
          <StandardMeasure>
            <MeasureSchema>http://www.xbrl.org/2003/instance</MeasureSchema>
            <MeasureValue>shares</MeasureValue>
            <MeasureNamespace>xbrli</MeasureNamespace>
          </StandardMeasure>
          <Scale>0</Scale>
        </Unit>
      </Units>
      <CurrencySymbol>$</CurrencySymbol>
    </Column>
  </Columns>
  <Rows>
    <Row>
      <Id>2</Id>
      <Label>Notes to Financial Statements [Abstract]</Label>
      <Level>0</Level>
      <ElementName>pbra_NotesToFinancialStatementsAbstract</ElementName>
      <ElementPrefix>pbra</ElementPrefix>
      <IsBaseElement>false</IsBaseElement>
      <BalanceType>na</BalanceType>
      <PeriodType>duration</PeriodType>
      <ShortDefinition>No definition available.</ShortDefinition>
      <IsReportTitle>false</IsReportTitle>
      <IsSegmentTitle>false</IsSegmentTitle>
      <IsSubReportEnd>false</IsSubReportEnd>
      <IsCalendarTitle>false</IsCalendarTitle>
      <IsTuple>false</IsTuple>
      <IsAbstractGroupTitle>true</IsAbstractGroupTitle>
      <IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow>
      <IsEquityAdjustmentRow>false</IsEquityAdjustmentRow>
      <IsBeginningBalance>false</IsBeginningBalance>
      <IsEndingBalance>false</IsEndingBalance>
      <IsReverseSign>false</IsReverseSign>
      <PreferredLabelRole />
      <IsEPS>false</IsEPS>
      <FootnoteIndexer />
      <Cells>
        <Cell>
          <Id>1</Id>
          <ShowCurrencySymbol>false</ShowCurrencySymbol>
          <IsNumeric>false</IsNumeric>
          <IsRatio>false</IsRatio>
          <DisplayZeroAsNone>false</DisplayZeroAsNone>
          <NumericAmount>0</NumericAmount>
          <RoundedNumericAmount>0</RoundedNumericAmount>
          <NonNumbericText />
          <NonNumericTextHeader />
          <FootnoteIndexer />
          <hasSegments>false</hasSegments>
          <hasScenarios>false</hasScenarios>
          <DisplayDateInUSFormat>false</DisplayDateInUSFormat>
        </Cell>
      </Cells>
      <OriginalInstanceReportColumns />
      <ElementDataType>xbrli:stringItemType</ElementDataType>
      <SimpleDataType>string</SimpleDataType>
      <ElementDefenition>No definition available.</ElementDefenition>
      <IsTotalLabel>false</IsTotalLabel>
    </Row>
    <Row>
      <Id>3</Id>
      <Label>Note 12 - Capital Lease Obligations</Label>
      <Level>1</Level>
      <ElementName>us-gaap_LeasePolicyTextBlock</ElementName>
      <ElementPrefix>us-gaap</ElementPrefix>
      <IsBaseElement>true</IsBaseElement>
      <BalanceType>na</BalanceType>
      <PeriodType>duration</PeriodType>
      <ShortDefinition>No definition available.</ShortDefinition>
      <IsReportTitle>false</IsReportTitle>
      <IsSegmentTitle>false</IsSegmentTitle>
      <IsSubReportEnd>false</IsSubReportEnd>
      <IsCalendarTitle>false</IsCalendarTitle>
      <IsTuple>false</IsTuple>
      <IsAbstractGroupTitle>false</IsAbstractGroupTitle>
      <IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow>
      <IsEquityAdjustmentRow>false</IsEquityAdjustmentRow>
      <IsBeginningBalance>false</IsBeginningBalance>
      <IsEndingBalance>false</IsEndingBalance>
      <IsReverseSign>false</IsReverseSign>
      <PreferredLabelRole />
      <IsEPS>false</IsEPS>
      <FootnoteIndexer />
      <Cells>
        <Cell>
          <Id>1</Id>
          <ShowCurrencySymbol>false</ShowCurrencySymbol>
          <IsNumeric>false</IsNumeric>
          <IsRatio>false</IsRatio>
          <DisplayZeroAsNone>false</DisplayZeroAsNone>
          <NumericAmount>0</NumericAmount>
          <RoundedNumericAmount>0</RoundedNumericAmount>
          <NonNumbericText>&lt;p style="TEXT-ALIGN: left"&gt;&lt;b&gt;&lt;font size="2"&gt;12. Capital Lease Obligations&lt;/font&gt;&lt;/b&gt;&lt;/p&gt;
&lt;p style="TEXT-ALIGN: justify"&gt;&lt;font size="2"&gt;The Company leases certain offshore platforms and vessels, which are accounted for as capital leases. As of September 30, 2010, assets under capital leases had a net book value of US$477 (US$750 at December 31, 2009).&lt;/font&gt;&lt;/p&gt;
&lt;p style="TEXT-ALIGN: justify"&gt;&lt;font size="2"&gt;The following is a schedule by year of the future minimum lease payments as of September 30, 2010:&lt;/font&gt;&lt;/p&gt;
&lt;div align="left"&gt;
  &lt;table style="FONT-SIZE: 7pt; WIDTH: 100%; FONT-FAMILY: 'Arial'" cellspacing="0" border="0"&gt;
    &lt;tr&gt;
      &lt;td width="85%"&gt;&lt;/td&gt;
      &lt;td width="1%"&gt;&lt;/td&gt;
      &lt;td width="14%"&gt;&lt;/td&gt;
    &lt;/tr&gt;
    &lt;tr valign="bottom"&gt;
      &lt;td align="left"&gt;&lt;font size="2"&gt;2010&lt;/font&gt;&lt;/td&gt;
      &lt;td&gt;&amp;nbsp;&lt;/td&gt;
      &lt;td align="right"&gt;&lt;b&gt;&lt;font size="2"&gt;88&lt;/font&gt;&lt;/b&gt;&lt;/td&gt;
    &lt;/tr&gt;
    &lt;tr valign="bottom"&gt;
      &lt;td align="left"&gt;&lt;font size="2"&gt;2011&lt;/font&gt;&lt;/td&gt;
      &lt;td&gt;&amp;nbsp;&lt;/td&gt;
      &lt;td align="right"&gt;&lt;b&gt;&lt;font size="2"&gt;107&lt;/font&gt;&lt;/b&gt;&lt;/td&gt;
    &lt;/tr&gt;
    &lt;tr valign="bottom"&gt;
      &lt;td align="left"&gt;&lt;font size="2"&gt;2012&lt;/font&gt;&lt;/td&gt;
      &lt;td&gt;&amp;nbsp;&lt;/td&gt;
      &lt;td align="right"&gt;&lt;b&gt;&lt;font size="2"&gt;42&lt;/font&gt;&lt;/b&gt;&lt;/td&gt;
    &lt;/tr&gt;
    &lt;tr valign="bottom"&gt;
      &lt;td align="left"&gt;&lt;font size="2"&gt;2013&lt;/font&gt;&lt;/td&gt;
      &lt;td&gt;&amp;nbsp;&lt;/td&gt;
      &lt;td align="right"&gt;&lt;b&gt;&lt;font size="2"&gt;18&lt;/font&gt;&lt;/b&gt;&lt;/td&gt;
    &lt;/tr&gt;
    &lt;tr valign="bottom"&gt;
      &lt;td align="left"&gt;&lt;font size="2"&gt;2014&lt;/font&gt;&lt;/td&gt;
      &lt;td&gt;&amp;nbsp;&lt;/td&gt;
      &lt;td align="right"&gt;&lt;b&gt;&lt;font size="2"&gt;18&lt;/font&gt;&lt;/b&gt;&lt;/td&gt;
    &lt;/tr&gt;
    &lt;tr valign="bottom"&gt;
      &lt;td align="left"&gt;&lt;font size="2"&gt;2015&lt;/font&gt;&lt;/td&gt;
      &lt;td&gt;&amp;nbsp;&lt;/td&gt;
      &lt;td align="right"&gt;&lt;b&gt;&lt;font size="2"&gt;18&lt;/font&gt;&lt;/b&gt;&lt;/td&gt;
    &lt;/tr&gt;
    &lt;tr valign="bottom"&gt;
      &lt;td align="left"&gt;&lt;font size="2"&gt;2016 and thereafter&lt;/font&gt;&lt;/td&gt;
      &lt;td&gt;&amp;nbsp;&lt;/td&gt;
      &lt;td style="BORDER-BOTTOM: #000000 1px solid" align="right"&gt;&lt;b&gt;&lt;font size="2"&gt;46&lt;/font&gt;&lt;/b&gt;&lt;/td&gt;
    &lt;/tr&gt;
    &lt;tr valign="bottom"&gt;
      &lt;td align="left"&gt;&lt;font size="2"&gt;Estimated future lease payments&lt;/font&gt;&lt;/td&gt;
      &lt;td&gt;&amp;nbsp;&lt;/td&gt;
      &lt;td align="right"&gt;&lt;b&gt;&lt;font size="2"&gt;337&lt;/font&gt;&lt;/b&gt;&lt;/td&gt;
    &lt;/tr&gt;
    &lt;tr&gt;
      &lt;td colspan="3"&gt;&amp;nbsp;&lt;/td&gt;
    &lt;/tr&gt;
    &lt;tr&gt;
      &lt;td colspan="3"&gt;&amp;nbsp;&lt;/td&gt;
    &lt;/tr&gt;
    &lt;tr valign="bottom"&gt;
      &lt;td align="left"&gt;&lt;font size="2"&gt;&lt;font size="2"&gt;Less amount representing interest at 6.2% to 12.0%&lt;/font&gt; annual&lt;/font&gt;&lt;/td&gt;
      &lt;td&gt;&amp;nbsp;&lt;/td&gt;
      &lt;td style="BORDER-BOTTOM: #000000 1px solid" align="right"&gt;&lt;b&gt;&lt;font size="2"&gt;(44)&lt;/font&gt;&lt;/b&gt;&lt;/td&gt;
    &lt;/tr&gt;
    &lt;tr&gt;
      &lt;td colspan="3"&gt;&amp;nbsp;&lt;/td&gt;
    &lt;/tr&gt;
    &lt;tr valign="bottom"&gt;
      &lt;td align="left"&gt;&lt;font size="2"&gt;Present value of minimum lease payments&lt;/font&gt;&lt;/td&gt;
      &lt;td&gt;&amp;nbsp;&lt;/td&gt;
      &lt;td style="BORDER-BOTTOM: #000000 3px double" align="right"&gt;&lt;b&gt;&lt;font size="2"&gt;293&lt;/font&gt;&lt;/b&gt;&lt;/td&gt;
    &lt;/tr&gt;
    &lt;tr&gt;
      &lt;td colspan="3"&gt;&amp;nbsp;&lt;/td&gt;
    &lt;/tr&gt;
    &lt;tr valign="bottom"&gt;
      &lt;td align="left"&gt;&lt;font size="2"&gt;Less current portion of capital lease obligations&lt;/font&gt;&lt;/td&gt;
      &lt;td&gt;&amp;nbsp;&lt;/td&gt;
      &lt;td style="BORDER-BOTTOM: #000000 1px solid" align="right"&gt;&lt;b&gt;&lt;font size="2"&gt;138&lt;/font&gt;&lt;/b&gt;&lt;/td&gt;
    &lt;/tr&gt;
    &lt;tr&gt;
      &lt;td colspan="3"&gt;&amp;nbsp;&lt;/td&gt;
    &lt;/tr&gt;
    &lt;tr valign="bottom"&gt;
      &lt;td align="left"&gt;&lt;font size="2"&gt;Long-term portion of capital lease obligations&lt;/font&gt;&lt;/td&gt;
      &lt;td&gt;&amp;nbsp;&lt;/td&gt;
      &lt;td style="BORDER-BOTTOM: #000000 1px solid" align="right"&gt;&lt;b&gt;&lt;font size="2"&gt;155&lt;/font&gt;&lt;/b&gt;&lt;/td&gt;
    &lt;/tr&gt;
  &lt;/table&gt;
&lt;/div&gt;
&lt;p style="MARGIN: 0px"&gt;&amp;nbsp;&lt;/p&gt;</NonNumbericText>
          <NonNumericTextHeader>12. Capital Lease Obligations
The Company leases certain offshore platforms and vessels, which are accounted for as capital leases. As of September 30, 2010,</NonNumericTextHeader>
          <FootnoteIndexer />
          <hasSegments>false</hasSegments>
          <hasScenarios>false</hasScenarios>
          <DisplayDateInUSFormat>false</DisplayDateInUSFormat>
        </Cell>
      </Cells>
      <OriginalInstanceReportColumns />
      <ElementDataType>us-types:textBlockItemType</ElementDataType>
      <SimpleDataType>textblock</SimpleDataType>
      <ElementDefenition>Describes an entity's accounting policy for leasing arrangements (both lessor and lessee). This description may address (1) lease classification (that is, operating versus capital), (2) how the term of a lease is determined (for example, the circumstances in which a renewal option is considered part of the lease term), (3) how rental revenue or expense is recognized for a lease that contains rent escalations, (4) an entity's accounting treatment for deferred rent, including that which arises from lease incentives, rent abatements, rent holidays, or tenant allowances (5) an entity's accounting treatment for contingent rental payments and (6) an entity's policy for reviewing, at least annually, the residual values of sales-type and direct-finance leases. The description also may indicate how the entity accounts for its capital leases, leveraged leases or sale-leaseback transactions.</ElementDefenition>
      <ElementReferences>Reference 1: http://www.xbrl.org/2003/role/presentationRef
 -Publisher FASB
 -Name Statement of Financial Accounting Standard (FAS)
 -Number 13
 -Paragraph 6, 7-15, 17, 18, 19, 32, 34, 43-47

Reference 2: http://www.xbrl.org/2003/role/presentationRef
 -Publisher FASB
 -Name Statement of Financial Accounting Standard (FAS)
 -Number 34
 -Paragraph 1

Reference 3: http://www.xbrl.org/2003/role/presentationRef
 -Publisher FASB
 -Name Statement of Financial Accounting Standard (FAS)
 -Number 98
 -Paragraph 7

</ElementReferences>
      <IsTotalLabel>false</IsTotalLabel>
    </Row>
  </Rows>
  <Footnotes />
  <NumberOfCols>1</NumberOfCols>
  <NumberOfRows>2</NumberOfRows>
  <HasScenarios>false</HasScenarios>
  <MonetaryRoundingLevel>UnKnown</MonetaryRoundingLevel>
  <SharesRoundingLevel>UnKnown</SharesRoundingLevel>
  <PerShareRoundingLevel>UnKnown</PerShareRoundingLevel>
  <HasPureData>false</HasPureData>
  <SharesShouldBeRounded>true</SharesShouldBeRounded>
</InstanceReport>
