FITCH AFFIRMS PETROBRAS AT 'BBB' AND 'AAA(BRA)'; OUTLOOK STABLE

Fitch Ratings-Buenos Aires-06 April 2011: Fitch Affirms Petrobras at 'BBB' and 'AAA(bra)'; Outlook Stable

Fitch Ratings has affirmed the foreign currency issuer Default Ratings (IDRs) and outstanding debt ratings for Petroleo Brasileiro S.A. (Petrobras) and subsidiaries as follows:

Petrobras

--Foreign currency IDR at 'BBB'
--International debt issuance at 'BBB'
--National long term rating at 'AAA (bra)'

Petrobras International Finance Company (PIFCO)
--International debt issuance at 'BBB'

Petrobras Argentina
--Guaranteed notes at 'BBB'.

These rating actions follow Fitch's recent upgrade of Brazil's long-term foreign and local currency IDRs to `BBB 'from `BBB-' this Monday.

In conjunction with these rating actions, Fitch has downgraded the local currency IDR of Petrobras to 'BBB' from 'BBB+'. This rating action incorporates higher expected leverage following the extensive capital expenditure program and the rising challenges of the pre-salt projects. This rating action also reflects the increasing linkage between Petrobras' ratings and that of the federal government of Brazil.

The Rating Outlook is Stable.

Below is a detail of Fitch's rating actions on these companies' debt instruments:

Petrobras and PIFCO:

--Senior unsecured notes US$1.4345 billion due 2011 at 'BBB';
--Senior unsecured notes US$750 million due 2013 at 'BBB';
--Senior unsecured notes US$600 million due 2014 at 'BBB';
--Senior unsecured US$500 million notes due 2016 at 'BBB';
--Senior unsecured US$399 million notes due 2016 at 'BBB';
--Senior unsecured JPY35 billion notes due 2016 at 'BBB';
--Senior unsecured US$1.75 billion notes due 2018 at 'BBB';
--Senior unsecured US$750 million notes due 2018 at 'BBB';
--Senior unsecured US$2.75 billion notes due 2019 at 'BBB''
--Senior unsecured US$2.5 billion notes due 2020 at 'BBB';
--Senior unsecured US$1.5 billion notes due 2040 at 'BBB';
--Senior unsecured US$2.5 billion notes due 2016 at 'BBB';
--Senior unsecured US$2.5 billion notes due 2021 at 'BBB';
--Senior unsecured US$1 billion notes due 2041 at 'BBB';
--Second issuance of debentures for USD750 million due 2012 at 'AAA(bra)'.

Petrobras Argentina S.A.:

--Guaranteed USD300 million notes due 2017 at 'BBB'.

Contact:

Primary Analysts
Ana Paula Ares
Senior Director
+5411 5235 8121
Fitch Argentina Calificadora de Riesgo S.A., Sarmiento 663, 7C1041AAM, Buenos Aires

Secondary Analyst
Lucas Aristrizabal
Director
+1-312-368-3260

Committee Chairman
Daniel Kastholm
Managing Director
+1-312-368-2070

Media Relations: Brian Bertsch, New York, Tel: +1 212-908-0549, Email: brian.bertsch@fitchratings.com.

Additional information is available at 'www.fitchratings.com'

Applicable Criteria and Related Research:
--Corporate Rating Methodology (Aug. 13, 2010);
--'Parent and Subsidiary Rating Linkage Fitch's Approach to Rating Entities within a Corporate Group Structure' (July 14, 2010).

Applicable Criteria and Related Research:
Corporate Rating Methodology
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=546646 Parent and Subsidiary Rating Linkage Criteria Report http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=534826

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