Fitch affirms Petrobras Energia

Fitch Ratings said it affirmed Petrobras Energia's BB- local currency debt rating, B foreign currency debt rating and AA-(arg) Argentine national scale rating.

The outlook is stable.

Petrobras Energia's ratings incorporate its solid credit profile, significant oil and gas reserves, geographic diversification of its assets, significant cash generation outside of Argentina and its ability to retain a material amount of export revenues offshore, the agency said.

The international ratings are constrained by the Argentine sovereign environment, however, and a high level of uncertainty exists as to the company's activities in Venezuela, which represent about 30% of its EBITDA and oil production.

Nevertheless, Fitch said Petrobras Energia's proven access to financing sources, the potential support of its controlling shareholder Petrobras Energia Participacoes SL and the improvement in credit protection measures in 2005 should mitigate the possible reduction in cash flow.

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