Bond Petrobas 6.875% ( US71645WAQ42 ) in USD

Petrobas

96.768 % ▼

Brazil

US71645WAQ42 ( in USD )

6.875% per year ( payment 2 times a year)

19/01/2040

Prospectus brochure of the bond Petrobras US71645WAQ42 en USD 6.875%, maturity 19/01/2040

/

/

71645WAQ4

BB ( Non-investment grade speculative )

Ba1 ( Non-investment grade speculative )

20/07/2025 ( In 67 days )

Petrobras is a Brazilian multinational corporation and the world's largest producer of offshore oil.

The Bond issued by Petrobas ( Brazil ) , in USD, with the ISIN code US71645WAQ42, pays a coupon of 6.875% per year.
The coupons are paid 2 times per year and the Bond maturity is 19/01/2040

The Bond issued by Petrobas ( Brazil ) , in USD, with the ISIN code US71645WAQ42, was rated Ba1 ( Non-investment grade speculative ) by Moody's credit rating agency.

The Bond issued by Petrobas ( Brazil ) , in USD, with the ISIN code US71645WAQ42, was rated BB ( Non-investment grade speculative ) by Standard & Poor's ( S&P ) credit rating agency.

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Table of Contents
Filed pursuant to Rule 424(b)(2)
Registration Statements Nos. 333-139459 and 333-139459-01
PROSPECTUS SUPPLEMENT
(To Prospectus dated December 18, 2006)
Petrobras International Finance Company
Unconditionally guaranteed by
Petróleo Brasileiro S.A.--Petrobras
(Brazilian Petroleum Corporation--Petrobras)
U.S.$2,500,000,000 5.75% Global Notes due 2020
U.S.$1,500,000,000 6.875% Global Notes due 2040
The 5.75% Global Notes due 2020 (the "2020 Notes") and the 6.875% Global Notes due 2040 (the "2040 Notes") (each a "series" and
collectively the "notes") are general, unsecured, unsubordinated obligations of Petrobras International Finance Company, or "PifCo,"
a wholly-owned subsidiary of Petróleo Brasileiro S.A.--Petrobras, or "Petrobras." The notes will be unconditionally and irrevocably
guaranteed by Petrobras. The 2020 Notes will mature on January 20, 2020, and will bear interest at the rate of 5.75% per annum.
Interest on the 2020 Notes is payable on January 20 and July 20 of each year, beginning on January 20, 2010. The 2040 Notes will
mature on January 20, 2040, and will bear interest at the rate of 6.875% per annum. Interest on the 2040 Notes is payable on January
20 and July 20 of each year, beginning on January 20, 2010.
PifCo will pay additional amounts related to the deduction of certain withholding taxes in respect of certain payments on the notes.
PifCo may redeem, in whole or in part, the notes at any time by paying the greater of the principal amount of the notes and the
applicable "make-whole" amount, plus, in each case, accrued interest. The notes will also be redeemable without premium prior to
maturity at PifCo's option solely upon the imposition of certain withholding taxes. See "Description of the Notes -- Optional
Redemption--Redemption for Taxation Reasons."
PifCo intends to apply to have the notes approved for listing on the New York Stock Exchange, or the "NYSE."
See "Risk Factors" on page S-14 to read about factors you should consider before buying the notes offered in this prospectus
supplement and the accompanying prospectus.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these
securities or determined if this prospectus supplement is truthful or complete. Any representation to the contrary is a criminal
offense.

Per

Note

Total
Initial price to the public(1):

2020 Notes
99.060%
U.S.$2,476,500,000
2040 Notes
98.452%
U.S.$1,476,780,000
Underwriting discount:

2020 Notes
0.400%
U.S.$10,000,000
2040 Notes
0.500%
U.S.$7,500,000
Proceeds, before expenses, to PifCo:

2020 Notes
98.660%
U.S.$2,466,500,000
2040 Notes
97.952%
U.S.$1,469,280,000

(1) Plus accrued interest from October 30, 2009, if settlement occurs after that date.
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The underwriters expect to deliver the notes in book-entry form only through the facilities of The Depository Trust Company and its
direct and indirect participants, including Clearstream Banking, société anonyme and Euroclear S.A./N.V., as operator of the
Euroclear System, against payment in New York, New York on or about October 30, 2009.
Joint Bookrunners

Citi

HSBC
J.P.Morgan

Santander
Co-managers

BB Securities
SOCIETE GENERALE
October 23, 2009

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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT

Page
About This Prospectus Supplement
S-3
Difficulties of Enforcing Civil Liabilities Against Non-U.S. Persons
S-3
Forward-Looking Statements
S-4
Incorporation of Certain Documents By Reference S-5
Where You Can Find More Information
S-6
Summary
S-7
Risk Factors
S-14
Use of Proceeds
S-16
Capitalization
S-17
Description of the Notes
S-20
Clearance and Settlement
S-31
Description of the Guaranties
S-34
Plan of Distribution (Conflicts of Interest)
S-41
Taxation
S-44
Legal Matters
S-48
Experts
S-48
PROSPECTUS

Page
About This Prospectus
2
Forward-Looking Statements
3
Petrobras and PifCo
4
The Securities
5
Legal Ownership
5
Description of Debt Securities
8
Description of Mandatory Convertible Securities
24
Description of Warrants
25
Description of the Standby Purchase Agreements
31
Description of the Guarantees
38
Description of American Depositary Receipts
40
Form of Securities, Clearing and Settlement
48
Plan of Distribution
53
Expenses of the Issue
54
Experts
54
Validity of Securities
55
Enforceability of Civil Liabilities
55
Where You Can Find More Information
57
Incorporation of Certain Documents by Reference
58
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Table of Contents
ABOUT THIS PROSPECTUS SUPPLEMENT
This document consists of two parts. The first part is the prospectus supplement, which describes the specific terms of the notes
PifCo is offering and certain other matters relating to PifCo and Petrobras and their financial condition. The second part, the
accompanying prospectus, gives more general information about securities that PifCo and Petrobras may offer from time to time.
Generally, references to the prospectus mean this prospectus supplement and the accompanying prospectus combined. If the
description of the notes in this prospectus supplement differs from the description in the accompanying prospectus, the description in
this prospectus supplement supersedes the description in the accompanying prospectus.
You should rely only on the information incorporated by reference or provided in this prospectus supplement or in the
accompanying prospectus. PifCo and Petrobras have not authorized anyone to provide you with different information. Neither PifCo
nor Petrobras is making an offer to sell the notes in any jurisdiction where the offer is not permitted. You should not assume that the
information in this prospectus supplement, the accompanying prospectus or any document incorporated by reference is accurate as of
any date other than the date of the relevant document.
In this prospectus supplement, unless the context otherwise requires or as otherwise indicated, references to "Petrobras" mean
Petróleo Brasileiro S.A.--Petrobras and its consolidated subsidiaries taken as a whole, and references to "PifCo" mean Petrobras
International Finance Company, a wholly-owned subsidiary of Petrobras, and its consolidated subsidiaries taken as a whole. Terms
such as "we," "us" and "our" generally refer to both Petrobras and PifCo, unless the context requires otherwise or as otherwise
indicated.
DIFFICULTIES OF ENFORCING CIVIL LIABILITIES AGAINST NON-U.S. PERSONS
Petrobras is a sociedade de economia mista (mixed capital company), a public sector company with some private sector ownership,
established under the laws of Brazil, and PifCo is an exempted limited liability company incorporated under the laws of the Cayman
Islands. A substantial portion of the assets of Petrobras and PifCo are located outside the Unites States, and at any time all of their
executive officers and directors, and certain advisors named in this prospectus supplement, may reside outside the United States. As a
result, it may not be possible for you to effect service of process on any of those persons within the United States. In addition, it may
not be possible for you to enforce a judgment of a United States court for civil liability based upon the United States federal securities
laws against any of those persons outside the United States. For further information on potential difficulties in effecting service of
process on any of those persons or enforcing judgments against any of them outside the United States, see "Enforceability of Civil
Liabilities" in the accompanying prospectus.
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FORWARD-LOOKING STATEMENTS
Many statements made or incorporated by reference in this prospectus supplement are forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, or the "Securities Act," and Section 21E of the Securities
Exchange Act of 1934, as amended, or the "Exchange Act," that are not based on historical facts and are not assurances of future
results. Many of the forward-looking statements contained, or incorporated by reference, in this prospectus supplement may be
identified by the use of forward-looking words, such as "believe," "expect," "anticipate," "should," "planned," "estimate" and
"potential," among others. We have made forward-looking statements that address, among other things, but are not limited to our:
·
regional marketing and expansion strategy;

·
drilling and other exploration activities;

·
import and export activities;

·
projected and targeted capital expenditures and other costs, commitments and revenues;

·
liquidity; and

·
development of additional revenue sources.
Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause actual results
to differ materially from those expressed or implied by these forward-looking statements. These factors include, among other things:
·
our ability to obtain financing;

·
general economic and business conditions, including crude oil and other commodity prices, refining margins and prevailing
exchange rates;

·
global economic conditions and the current global credit crisis;

·
our ability to find, acquire or gain access to additional reserves and to successfully develop our current ones;

·
uncertainties inherent in making estimates of our oil and gas reserves including recently discovered oil and gas reserves;

·
competition;

·
technical difficulties in the operation of our equipment and the provision of our services;

·
changes in, or failure to comply with, laws or regulations;

·
receipt of governmental approvals and licenses;

·
international and Brazilian political, economic and social developments;

·
military operations, acts of terrorism or sabotage, wars or embargoes;

·
the cost and availability of adequate insurance coverage; and

·
other factors discussed below under "Risk Factors."
These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are
difficult to predict. Therefore, our actual results could differ materially from those expressed or forecast in any forward-looking
statements as a result of a variety of factors, including those in "Risk Factors" set forth in this prospectus supplement and in
documents incorporated by reference in this prospectus supplement and the accompanying prospectus.
All forward-looking statements attributed to us or a person acting on our behalf are expressly qualified in their entirety by this
cautionary statement. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of
new information or future events or for any other reason. Because of these uncertainties, potential investors should not rely on any
forward-looking statements.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
We are incorporating by reference into this prospectus supplement the following documents that we have filed with the SEC:
PifCo
(1) The combined Petrobras and PifCo Annual Report on Form 20-F for the year ended December 31, 2008, filed with the SEC on
May 22, 2009.
(2) The PifCo Report on Form 6-K containing financial information for the six-month period ended June 30, 2009, prepared in
accordance with U.S. GAAP, furnished to the SEC on September 9, 2009.
(3) Any future filings of PifCo on Form 20-F made with the SEC after the date of this prospectus supplement and prior to the
completion of the offering of the securities offered by this prospectus supplement, and any future reports of PifCo on Form 6-K
furnished to the SEC during that period that are identified in those forms as being incorporated into this prospectus supplement or the
accompanying prospectus.
Petrobras
(1) The Petrobras Report on Form 6-K relating to Petrobras' Business Plan for 20092013, furnished to the SEC on January 26,
2009.
(2) The combined Petrobras and PifCo Annual Report on Form 20-F for the year ended December 31, 2008, filed with the SEC on
May 22, 2009.
(3) The Petrobras Report on Form 6-K relating to the downgrade by Standard & Poor's of Petrobras' and PifCo's debt ratings,
furnished to the SEC on June 11, 2009.
(4) The Petrobras Report on Form 6-K relating to the approval by Petrobras' board of directors of an interest-on-own-capital
payment to shareholders in the amount of R$2.6 billion, furnished to the SEC on June 26, 2009.
(5) The Petrobras Report on Form 6-K relating to Petrobras' R$25 billion loan from the Banco Nacional de Desenvolvimento
Econômico e Social (BNDES), the Brazilian National Development Bank, furnished to the SEC on July 31, 2009.
(6) The Petrobras Report on Form 6-K relating to the approval by Petrobras' board of directors of an interest-on-own-capital
payment to shareholders, furnished to the SEC on August 11, 2009.
(7) The Petrobras Report on Form 6-K relating to an increase in planned investments in the Abreu e Lima Refinery, furnished to
the SEC on August 27, 2009.
(8) The Petrobras Report on Form 6-K outlining the new exploration and production regulatory model for the pre-salt layer and in
potentially strategic areas, furnished to the SEC on August 31, 2009.
(9) The Petrobras Report on Form 6-K relating to a new discovery in the central region of the Gulf of Mexico, furnished to the SEC
on September 2, 2009.
(10) The Petrobras Reports on Form 6-K containing financial information for the six-month period ended June 30, 2009, prepared
in accordance with U.S. GAAP, furnished to the SEC on September 9, 2009, and September 10, 2009.
(11) The Petrobras Report on Form 6-K relating to Petrobras' strategy for the construction of drilling rigs in Brazil, furnished to the
SEC on September 14, 2009.
(12) The Petrobras Report on Form 6-K relating to new discoveries in the Santos Basin Pre-Salt concession area, furnished to the
SEC on September 15, 2009.
(13) The Petrobras Report on Form 6-K relating to the approval by Petrobras' board of directors of an interest-on-own-capital
payment to shareholders in the amount of R$1.76 million, furnished to the SEC on September 22 2009.
(14) Any future filings of Petrobras on Form 20-F made with the SEC after the date of this prospectus supplement and prior to the
completion of the offering of the securities offered by this prospectus supplement, and any future reports of Petrobras on Form 6-K
furnished to the SEC during that period that are identified in those forms as being incorporated into this prospectus supplement or the
accompanying prospectus.
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WHERE YOU CAN FIND MORE INFORMATION
Information that we file with or furnish to the SEC after the date of this prospectus supplement, and that is incorporated by
reference herein, will automatically update and supersede the information in this prospectus supplement. This means that you should
look at all of the SEC filings and reports that we incorporate by reference to determine if any of the statements in this prospectus
supplement, the accompanying prospectus or in any documents previously incorporated by reference have been modified or
superseded.
Documents incorporated by reference in this prospectus supplement are available without charge. Each person to whom this
prospectus supplement and the accompanying prospectus are delivered may obtain documents incorporated by reference herein by
requesting them either in writing or orally, by telephone or by e-mail from us at the following address:
Investor Relations Department
Petróleo Brasileiro S.A.--Petrobras
Avenida República do Chile, 65 -- 22nd Floor
20031-912 -- Rio de Janeiro -- RJ, Brazil
Telephone: (55-21) 3224-1510/3224-9947
Email: [email protected]
In addition, you may review copies of the materials we file with or furnish to the SEC without charge, and copies of all or any
portion of such materials can be obtained at the Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the
SEC at 1-800-SEC-0330 for further information on the public reference room. We also file materials with the SEC electronically. The
SEC maintains an Internet site that contains materials that we file electronically with the SEC. The address of the SEC's website is
http://www.sec.gov.
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SUMMARY
This summary highlights key information described in greater detail elsewhere, or incorporated by reference, in this
prospectus supplement and the accompanying prospectus. This summary is not complete and does not contain all of the
information you should consider before investing in the notes. You should read carefully the entire prospectus supplement, the
accompanying prospectus including "Risk Factors" and the documents incorporated by reference herein, which are described
under "Incorporation of Certain Documents by Reference" and "Where You Can Find More Information."
In this prospectus supplement, unless the context otherwise requires or as otherwise indicated, references to "Petrobras"
mean Petróleo Brasileiro S.A.--Petrobras and its consolidated subsidiaries taken as a whole, and references to "PifCo" mean
Petrobras International Finance Company, a wholly-owned subsidiary of Petrobras, and its consolidated subsidiaries taken as a
whole. Terms such as "we", "us" and "our" generally refer to both Petrobras and PifCo, unless the context requires otherwise
or as otherwise indicated.
PifCo
PifCo is a wholly-owned subsidiary of Petrobras, incorporated under the laws of the Cayman Islands. PifCo was formed to
facilitate and finance the import of crude oil and oil products by Petrobras into Brazil. PifCo acts as an intermediary between
third-party oil suppliers and Petrobras by engaging in crude oil and oil product purchases from international suppliers, and
reselling crude oil and oil products in U.S. dollars to Petrobras on a deferred payment basis, at a price which includes a premium
to compensate PifCo for its financing costs. PifCo also purchases crude oil and oil products from Petrobras for sale outside
Brazil. Additionally, PifCo sells and purchases crude oil and oil products to and from third parties and related parties, mainly
outside Brazil. PifCo is generally able to obtain credit to finance purchases on the same terms granted to Petrobras, and it buys
crude oil and oil products at the same price that suppliers would charge Petrobras directly.
As part of Petrobras' strategy to expand its international operations and facilitate its access to international capital markets,
PifCo engages in borrowings in international capital markets unconditionally guaranteed by Petrobras or supported by Petrobras
through standby purchase agreements.
In addition, PifCo engages in a number of activities that are conducted by four wholly-owned subsidiaries:
·
Petrobras Europe Limited, or PEL, a United Kingdom company that acts as an agent and advisor in connection with
Petrobras' activities in Europe, the Middle East, the Far East and North Africa;

·
Petrobras Finance Limited, or PFL, a Cayman Islands company that carries out a financing program supported by future
sales of fuel oil;

·
Bear Insurance Company Limited, or BEAR, a Bermuda company that contracts insurance for Petrobras and its
subsidiaries; and

·
Petrobras Singapore Private Limited, or PSPL, a company incorporated in Singapore to trade crude oil and oil products in
connection with our trading activities in Asia.
PifCo's principal executive office is located at Harbour Place, 103 South Church Street, 4th Floor, P.O. Box 1034GT-BWI,
George Town, Grand Cayman, Cayman Islands, B.W.I., and its telephone number is (55-21) 3487-2375.
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