Fitch affirms Petrobras

Fitch Ratings said it affirmed the international foreign currency and Brazilian national scale ratings of Petroleo Brasileiro SA's at BB- and AAA(bra). The outlook is stable.

Fitch said the ratings of Petrobras are supported by substantial proved hydrocarbon reserves and increasing upstream output, which includes material international operations and should lead to a potential shift to a net export position by early 2006.

The ratings agency said these factors are tempered by vulnerability to fluctuations in international commodity prices, exposure to political interference, currency risk, domestic-market revenue concentration, a debt structure still heavily weighted in foreign-denominated currencies and significant medium-term capital-investment requirements.

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