Fitch: Petroleo Brasileiro S.A.'s IDR of 'BBB-' Unaffected on Acquisition Announcement

Business Wire, August 10, 2007

CHICAGO & RIO DE JANEIRO, Brazil -- Fitch's ratings and Outlook for Petroleos Brasileiro S.A. (Petrobras) are not affected by Petrobras' announcement of its intention to acquire Suzano Petroquimica S.A. (Suzano) (not rated by Fitch). Petrobras has both a Foreign Currency Issuer Default Rating (IDR) and Local Currency IDR of 'BBB-'. The Rating Outlook is Stable.

The proposed R$2.1 billion acquisition further solidifies Petrobras' position in Brazil's petrochemicals industry. As the petrochemicals market expands in the Southern Cone, Petrobras is well positioned to increase its participation in Brazil's Southeast region as the market continues to consolidate. With the acquisition, Petrobras will increase its participation in RioPol, Petroquimica Uniao and Petroflex. We do not believe the acquisition will adversely affect Petrobras' credit profile.

Petrobras is an integrated international oil and gas company engaged in the exploration, development and production of hydrocarbons and in the refining, marketing, transportation and distribution of oil and a wide range of petroleum products, petroleum derivatives, petrochemicals and liquid petroleum gas. Petrobras is also an integrated power company with operations in electric power generation, transmission and distribution. By law, the federal government must hold at least a majority of Petrobras' voting stock.

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