Obligation Petrobas 5.875% ( USP7873PAD89 ) en USD

Petrobas

100 % ▼

Bresil

USP7873PAD89 ( en USD )

5.875% par an ( paiement semestriel )

15/05/2017 - Obligation échue

Prospectus brochure de l'obligation Petrobras USP7873PAD89 en USD 5.875%, échue

2 000 USD

300 000 000 USD

P7873PAD8

Petrobras est une compagnie pétrolière et gazière brésilienne intégrée verticalement, opérant dans l'exploration, la production, le raffinage, la distribution et la vente de produits pétroliers et gaziers.

L'Obligation émise par Petrobas ( Bresil ) , en USD, avec le code ISIN USP7873PAD89, paye un coupon de 5.875% par an.
Le paiement des coupons est semestriel et la maturité de l'Obligation est le 15/05/2017

L'Obligation émise par Petrobas ( Bresil ) , en USD, avec le code ISIN USP7873PAD89, a été notée NR par l'agence de notation Moody's.

L'Obligation émise par Petrobas ( Bresil ) , en USD, avec le code ISIN USP7873PAD89, a été notée NR par l'agence de notation Standard & Poor's ( S&P ).

PROSPECTUS CONTAINING THE PRICING SUPPLEMENT DATED MAY 2, 2007
AND THE OFFERING MEMORANDUM DATED APRIL 16, 2007

Petrobras Energía S.A.
U.S.$300,000,000
5.875% Series S Notes due 2017
Payments supported by a standby purchase agreement provided by
Petróleo Brasileiro S.A. PETROBRAS

The Series S Notes (the "Series S Notes") are part of the U.S.$2,500,000,000 Medium-Term Note Program of Petrobras Energía S.A. (the
"Program"). The Series S Notes will mature on May 15, 2017 and will bear interest at the rate of 5.875% per year. Interest on the Series S
Notes is payable in arrears on May 15 and November 15 of each year, beginning November 15, 2007 to holders of record on the prior May 1
and November 1. Unless stated otherwise or required by the context, references to "Petrobras Energía," "the Issuer," "we," "us," "our" and
similar terms refer to Petrobras Energía S.A. and its controlled subsidiaries, but excluding affiliates and companies under joint control.

The Series S Notes will represent general senior unsecured obligations of the Issuer and will constitute nonconvertible negotiable obligations
(obligaciones negociables) under, and will be issued pursuant to and in compliance with, all of the requirements of Law No. 23,576, as
amended by Law No. 23,962 (the "Negotiable Obligations Law"), and any other applicable Argentine laws and regulations. Our payment
obligations under the Series S Notes, except as is or may be provided under Argentine law, at all times will rank equal in right of payment
with all of our other unsecured and unsubordinated obligations that are not, by their terms, expressly subordinated in right of payment to the
Series S Notes.

The Series S Notes will have the benefit of credit support provided by Petróleo Brasileiro S.A. -- PETROBRAS ("Petrobras"), as majority
shareholder of the Issuer, under the terms of a standby purchase agreement (the "Standby Purchase Agreement") which will obligate
Petrobras to purchase from the noteholders their rights to receive payments in respect of the Series S Notes from the Issuer in the event of
nonpayment by the Issuer. The obligations of Petrobras under the Standby Purchase Agreement constitute general senior unsecured
obligations of Petrobras which will at all times rank pari passu with all other senior unsecured obligations of Petrobras that are not, by their
terms, expressly subordinated in right of payment to Petrobras' obligations under the Standby Purchase Agreement.

Application has been made to list the Series S Notes on the Buenos Aires Stock Exchange ("BASE") and to make the Series S Notes eligible
for trading in the Argentine over-the-counter market (Mercado Abierto Electrónico S.A. or "MAE"). Application has also been made to admit
the Series S Notes for listing on the Official List of the Luxembourg Stock Exchange and for trading on the Euro MTF Market, the exchange-
regulated market operated by the Luxembourg Stock Exchange ("Euro MTF"). There can be no assurance that a trading market for the Series
S Notes will develop.

Investing in the Series S Notes involves risks, including risks related to the Standby Purchase Agreement. Prospective investors
should carefully consider the risk factors beginning on page 41 of this Pricing Supplement and page 19 of the Offering Memorandum
that is incorporated by reference hereto (the "Offering Memorandum") before making an investment in the Series S Notes.

The Series S Notes (including the credit support provided by Petrobras under the Standby Purchase Agreement) have not been registered
under the Securities Act of 1933, as amended (the "Securities Act") or any state securities laws and are being offered and sold only to
"qualified institutional buyers" (as defined in Rule 144A under the Securities Act) and to certain non-U.S. persons in offshore transactions in
reliance on Regulation S under the Securities Act. For a description of certain restrictions on transfers of the Series S Notes, see "Plan of
Distribution" and "Notice to Investors" in the Offering Memorandum.

The Series S Notes initially will be sold to investors at a price equal to 99.617% of the principal amount thereof, plus accrued interest, if any,
from May 7, 2007.

Neither the United States Securities and Exchange Commission (the "SEC") nor any state securities commission has approved or
disapproved of these securities or determined if this Pricing Supplement or the Offering Memorandum is truthful or complete. Any
representation to the contrary is a criminal offense in the United States.

It is expected that the Series S Notes will be ready for delivery on or about May 7, 2007 to purchasers in book-entry form through the
Depository Trust Company and its direct and indirect participants, including Clearstream Banking, S.A. Luxembourg and Euroclear Bank
S.A./N.V., as operator of the Euroclear System.

HSBC

Morgan Stanley
Argentine Placement Agent:
HSBC Bank Argentina S.A.
The date of this Prospectus is May 2 , 2007.
This Prospectus may only be used for the purposes for which it has been published.

TABLE OF CONTENTS
Pricing Supplement
Use of Proceeds .........................................................................................................................................................................................4
Capitalization of the Issuer ........................................................................................................................................................................5
Description of the Series S Notes ..............................................................................................................................................................6
The Standby Purchaser ..............................................................................................................................................................................9
Selected Financial and Other Information ........................................................................................................................................... 10
Management's Discussion and Analysis of Petrobras' Financial Condition and Results of Operations ............................................. 14
Recent Developments .......................................................................................................................................................................... 23
Incorporation by Reference of Certain Documents of the Standby Purchaser..................................................................................... 26
Additional Provisions Relating to the Series S Notes .............................................................................................................................. 27
Description of the Standby Purchase Agreement..................................................................................................................................... 33
Risk Factors Relating to the Standby Purchase Agreement ..................................................................................................................... 41
Plan of Distribution.................................................................................................................................................................................. 43
Placement Efforts and Allocation Process ............................................................................................................................................... 47
Taxation ................................................................................................................................................................................................... 49
Legal Matters ........................................................................................................................................................................................... 50
Listing and General Information.............................................................................................................................................................. 51

You should rely only on the information contained or incorporated by reference in this Pricing Supplement or the Offering
Memorandum. None of us, Petrobras and the Initial Purchasers authorized any other person to provide you with different information.
If anyone provides you with different or inconsistent information, you should not rely on it. None of us, Petrobras and the Initial
Purchasers are making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume
that the information appearing in this Pricing Supplement and the Offering Memorandum is accurate only as of their respective dates.
Our business, financial condition, results of operations and prospects may have changed since those dates.
We are relying on an exemption from registration under the Securities Act for offers and sales of securities that do not
involve a public offering. By purchasing the Series S Notes, you will be deemed to have made the acknowledgements, representations,
warranties and agreements described under the heading "Notice to Investors" in the Offering Memorandum. You should understand
that you will be required to bear the financial risks of your investment for an indefinite period of time.
In Argentina, we are conducting a public offer of the Series S Notes. In connection with such public offering in Argentina,
the Argentine Placement Agent plans to make a series of marketing and public offering placement efforts subject to applicable
Argentine laws, including Argentine Law 17,811, as amended, the Negotiable Obligations Law, Decree No. 677/2001 and the Joint
Resolution No. 470-1738/2004, as amended by Joint Resolution No. 500-2222/2007, both jointly issued by the Argentine Securities
Commission (Comisión Nacional de Valores or "CNV") and the Argentine Tax Authority ("AFIP") on September 14, 2004 (the "Joint
Resolution"). Outside of Argentina, we have submitted this Pricing Supplement and the Offering Memorandum to certain U.S.
institutional investors and to certain non-U.S. persons so that they can consider a purchase of the Series S Notes. We have not
authorized the use of this Pricing Supplement and the Offering Memorandum for any other purpose. By accepting delivery of this
Pricing Supplement and the Offering Memorandum, you agree to certain restrictions. See "Notice to Investors" in the Offering
Memorandum.
This Pricing Supplement and the Offering Memorandum are based on information provided by us and by other sources that
we believe are reliable. This Pricing Supplement and the Offering Memorandum summarize certain documents and other information
and we refer you to them for a more complete understanding of what we discuss in this Pricing Supplement and in the Offering
Memorandum. In making an investment decision, you must rely on your own examination of our company and the terms of the
offering and the Series S Notes, including the merits and risks involved.
1

You should not consider any information in this Pricing Supplement or the Offering Memorandum to be legal,
business or tax advice. You should consult your own attorney, business advisor and tax advisor for legal, business and tax
advice regarding an investment in the Series S Notes.
The establishment of the Program has been authorized by the CNV pursuant to Certificate No. 202, dated May 4, 1998,
Certificate No. 290 dated July 3, 2002 and Certificate No. 296 dated September 16, 2003. Such authorization means only that the
information requirements of the CNV have been satisfied. The CNV has not rendered any opinion in respect of the information
contained in this Pricing Supplement or the Offering Memorandum. The truthfulness of the accounting, financial, economic and all
other information contained in this Pricing Supplement and the Offering Memorandum is the sole responsibility of our Board of
Directors and, insofar as is applicable, the Syndics (as defined under Argentine law).
Neither the SEC nor any state securities commission has approved or disapproved of these securities or determined if
this Pricing Supplement or the Offering Memorandum is truthful or complete. Any representation to the contrary is a
criminal offense in the United States.
This Pricing Supplement and the Offering Memorandum have been prepared on the basis that all offers of Series S Notes will be
made pursuant to an exemption under Directive 2003/71/EC (together with any applicable implementing measures in any Member
State, the "Prospectus Directive"), as implemented in Member States of the European Economic Area (the "EEA"), from the
requirement to produce a prospectus for offers of securities. Accordingly, any person making or intending to make any offer within the
EEA of Series S Notes that are the subject of the placement contemplated in this Pricing Supplement and the Offering Memorandum
should only do so in circumstances in which no obligation arises for us, Petrobras or the Initial Purchasers to produce a prospectus for
such offer. None of us, Petrobras and the Initial Purchasers have authorized, nor do we, Petrobras or the Initial Purchasers authorize,
the making of any offer of Series S Notes through any financial intermediary, other than offers made by the Initial Purchasers which
constitute the final placement of Series S Notes contemplated in this Pricing Supplement and Offering Memorandum.
This Pricing Supplement and the Offering Memorandum are for distribution only to persons who (i) have professional
experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005 (as amended, the "Financial Promotion Order"), (ii) fall within Article 49(2)(a) to (d) ("high net worth
companies, unincorporated associations etc") of the Financial Promotion Order, (iii) are outside the United Kingdom, or (iv) are
persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial
Services and Markets Act 2000) in connection with the issue or sale of any Series S Notes may otherwise lawfully be communicated
or caused to be communicated (all such persons together being referred to as "relevant persons"). This Pricing Supplement and the
Offering Memorandum is directed only at relevant persons and must not be acted on or relied on by persons who are not relevant
persons. Any investment or investment activity to which this document relates is available only to relevant persons and will be
engaged in only with relevant persons.

This Pricing Supplement is supplementary to, and should be read in conjunction with, the Offering Memorandum, which at
the date hereof contains, inter alia:
1. A description of the notes to be issued under the Program and general information regarding the Program;
2. A description of our business; and
3. A description of the significant differences between United States Generally Accepted Accounting Principles ("U.S.
GAAP") and Argentine Generally Accepted Accounting Principles ("Argentine GAAP") and the Auditors' Report and
financial statements of the Issuer as at and for the years ended December 31, 2006, 2005 and 2004.
The issuance of the Series S Notes was authorized by a resolution of our board of directors dated March 6, 2007.
In addition, this Pricing Supplement contains information about Petrobras and the terms of the Standby Purchase Agreement.
Copies of the Offering Memorandum and of other documents referred to herein are available at the registered office of the
Issuer, located at Maipú 1, (C1084ABA), Buenos Aires, Argentina.

THE OFFERING MEMORANDUM IS HEREBY INCORPORATED BY REFERENCE IN THIS PRICING
SUPPLEMENT.
2

THE SERIES S NOTES (INCLUDING THE CREDIT SUPPORT PROVIDED BY PETROBRAS UNDER THE STANDBY
PURCHASE AGREEMENT) HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT.
SUBJECT TO CERTAIN EXCEPTIONS, THE SERIES S NOTES MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS (AS DEFINED IN REGULATION S). THIS
PRICING SUPPLEMENT HAS BEEN PREPARED BY THE ISSUER FOR USE IN CONNECTION WITH THE OFFER AND
SALE OF THE SERIES S NOTES OUTSIDE THE UNITED STATES TO NON-U.S. PERSONS IN RELIANCE ON
REGULATION S AND WITHIN THE UNITED STATES TO "QUALIFIED INSTITUTIONAL BUYERS" IN RELIANCE ON
THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144A. PROSPECTIVE PURCHASERS ARE HEREBY
NOTIFIED THAT SELLERS OF THE SERIES S NOTES MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS
OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A. FOR A DESCRIPTION OF THESE AND CERTAIN
FURTHER RESTRICTIONS ON OFFERS AND SALES OF THE SERIES S NOTES AND DISTRIBUTION OF THIS PRICING
SUPPLEMENT AND THE REMAINDER OF THE OFFERING MEMORANDUM, SEE "PLAN OF DISTRIBUTION" IN THIS
PRICING SUPPLEMENT AND "NOTICE TO INVESTORS" CONTAINED IN THE OFFERING MEMORANDUM. NO
REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT FOR RESALES OF ANY SERIES S NOTES.

3

USE OF PROCEEDS
We expect to use the net proceeds of the issue of the Series S Notes, estimated at approximately U.S.$298 million (before
expenses), for the purpose of (i) working capital in Argentina, (ii) investments in tangible assets located in Argentina, (iii) refinancing
of debt and/or (iv) contributions to the capital of controlled or affiliated companies, provided that any such company uses the proceeds
of such contributions in the manner specified above.
4

CAPITALIZATION OF THE ISSUER
The following table sets forth our consolidated debt and total capitalization (including the proportional consolidation of
companies over which we exercise joint control), which comprises total long-term and short-term debt, minority interest and
shareholders' equity, at December 31, 2006. Our authorized and issued share capital at December 31, 2006 amounted to P$1,010
million. There have been no material changes in our capitalization since December 31, 2006, except as discussed in this Pricing
Supplement and the Offering Memorandum.
The information presented herein was obtained from our consolidated financial statements and the Management's Discussion
and Analysis of Consolidated Financial Condition and Result of Operations included in the Offering Memorandum.
As of
As of

December 31, 2006
December 31, 2006

(in millions of pesos)
(in millions of U.S.

dollars) (2)
Short-term debt

Petrobras Internacional Braspetro B.V. .............
20
8
Financial Institutions .........................................
1,148
374
Notes (1) .............................................................
960
313
Others .................................................................
6
2
Distrilec Inversora S.A. ......................................
45
15
Compañía de Inversiones de Energía S.A. .........
467
152
Total short-term debt ..........................................
2,646
864
Long-term debt

Petrobras Internacional Braspetro B.V. ..............
768
250
Financial Institutions .........................................
273
89
Notes ..................................................................
2,505
816
Distrilec Inversora S.A. ......................................
183
60
Compañía de Inversiones de Energía S.A. .........
987
321
Total long-term debt ...........................................
4,716
1,536

Minority interest ........................................................
771
251

Shareholders' equity

Capital stock par value P$1.00 per share .....................
1,010
329
Adjustment to capital stock..........................................
1,230
401
Additional paid-in capital on sales of own stock .........
56
18
Merger premium ..........................................................
960
313
Reserves .......................................................................
403
131
Treasury stock..............................................................
(33)
(11)
Unappropriated retained earnings ...............................
4,221
1,375
Deferred results ...........................................................
(11)
(4)
Total shareholders' equity............................................
7,836
2,552
Total capitalization.......................................................
15,969
5,203

(1)
In January 2007, all of the outstanding Series G Notes were paid in full and cancelled at maturity for an aggregate total of U.S.$250
million (approximately P$768 million, based on the exchange rate in effect as of December 31, 2006).
(2)
Amounts are obtained by dividing the Peso amount by the exchange rate as of December 31, 2006 between the Peso and the U.S. dollar
(U.S.$1=P$3.07).

5

DESCRIPTION OF THE SERIES S NOTES
The following summary sets forth the specific details of the Series S Notes and, unless otherwise provided or to the extent not
consistent with the terms hereof, terms and conditions set forth under the heading "Description of Notes" in the Offering
Memorandum and in the Amended and Restated Indenture between the Issuer and The Bank of New York, as Trustee, dated as of
August 1, 2002 (the "Base Indenture"), as amended and supplemented by the Sixteenth Supplemental Indenture relating to the Series
S Notes (the "Supplemental Indenture" and, together with the Base Indenture, the "Indenture"), shall apply. Capitalized terms not
otherwise defined herein have the same meaning given to them in the Offering Memorandum, or in the Indenture, as applicable.
Copies of the Offering Memorandum and the form of the Series S Notes are available to investors for inspection at our registered
office and at the addresses of the Paying Agents set forth on the reverse hereof.

Issuer:
Petrobras Energía S.A.

Standby Purchaser:
Petróleo Brasileiro S.A.-- PETROBRAS

Aggregate Principal Amount:
U.S.$300,000,000

Issue Price:
99.617%, plus accrued interest, if any, from May 7, 2007.

Original Issue Date:
May 7, 2007.

Time of Delivery:
9:00 am (New York City time) on May 7, 2007 or as soon as practicable thereafter.

Interest Rate:
5.875% per annum, as calculated on a 360-day year basis, with twelve 30-day months each.

Interest Commencement Date:
May 7, 2007.

Interest Payment Date:
May 15 and November 15 of each year, commencing on November 15, 2007.

Maturity Date:
May 15, 2017

Ranking:
Our payment obligations under the Series S Notes, except as is or may be provided under
Argentine law, at all times will rank equal in right of payment with all of our other unsecured
and unsubordinated obligations that are not, by their terms, expressly subordinated in right of
payment to the Series S Notes.
The obligations of Petrobras under the Standby Purchase Agreement constitute general senior
unsecured obligations of Petrobras which will at all times rank pari passu with all other senior
unsecured obligations of Petrobras that are not, by their terms, expressly subordinated in right of
payment to Petrobras' obligations under the Standby Purchase Agreement.

Standby Purchase Agreement:
The Series S Notes will have the benefit of credit support in the form of a Standby Purchase
Agreement under which Petrobras will be obligated to make certain payments to the Trustee in
the event the Issuer fails to make required payments of principal, interest and other amounts due
under the Series S Notes and the Indenture. Under the terms of the Standby Purchase
Agreement, Petrobras will be required to purchase from the holders of the Series S Notes, and in
consideration pay to the Trustee amounts in respect of, the noteholders' right to receive (i) the
amount of any interest or other amounts not paid by the Issuer in accordance with the terms of
the Series S Notes and the Indenture, (ii) the entire principal amount (including any amounts
paid in connection with any redemption or repurchase obligation) of the Series S Notes in the
event the Issuer fails to make any required payment of principal at the maturity of the Series S
Notes or earlier upon any redemption, repurchase or acceleration of the Series S Notes prior to
the maturity date and (iii) interest on all of the foregoing amounts at the rate of 1% above the
interest rate on the Series S Notes, which we refer to as the default rate, for payments beyond the
date that the Issuer was required to make such payments under the Indenture. See "Description
of the Standby Purchase Agreement."

Optional Redemption:
We may redeem, in whole or in part, the Series S Notes at any time by paying the greater of the
principal amount of the Series S Notes and the applicable "make-whole" amount, plus, in each
case, accrued interest, as described below in "Additional Provisions Relating to the Series S
NotesOptional RedemptionOptional Redemption With "Make-Whole" Amount." The
Series S Notes will also be redeemable without premium, in whole but not in part, prior to
maturity at our option in the event of certain changes in or amendments to the laws or
regulations of Argentina, or certain changes in the application or official interpretation of such
6

laws or regulations, as described in "Description of Notes--Redemption for Taxation Reasons"
in the Offering Memorandum.

Repurchase at the Option of the
Holders of the Series S Notes:
In the event of a Change of Control (as defined below), we will be required to make an offer to
repurchase, not later than 60 days following such Change of Control, all outstanding Series S
Notes at a repurchase price equal to 101% of the outstanding principal amount plus accrued
interest up to (but not including) the date of repurchase, as described below in "Additional
Provisions Relating to the Series S Notes--Repurchase at the Option of the Holders of the Series
S Notes."

Authorized Denominations:
U.S.$2,000 and integral multiples of U.S.$1,000 in excess thereof.

Specified Currency:
U.S. dollars.

Form of Series S Notes:
Series S Notes sold to qualified institutional buyers in reliance on the exemption from
registration provided by Rule 144A will be issued in the form of beneficial interests in one or
more permanent global securities in fully registered form and deposited with a custodian for, and
registered in the name of a nominee of, The Depository Trust Company ("DTC"). Series S Notes
sold to non-U.S. persons in offshore transactions in reliance on Regulation S will be issued in the
form of beneficial interests in one or more permanent global securities in fully registered form
and deposited with a custodian for, and registered in the name of a nominee of, DTC (for the
accounts of Euroclear and Clearstream Luxembourg, as DTC participants).

Application for Listing:
Application has been made to admit the Series S Notes for listing on the Buenos Aires Stock
Exchange and on the Official List of the Luxembourg Stock Exchange. However, even if
admission for listing is obtained, we will not be required to maintain it.

Eligibility for Trading:
Mercado Abierto Electrónico S.A. and the Euro MTF market of the Luxembourg Stock
Exchange.

Rule 144A Notes:

CUSIP:
71646J AB5

ISIN:
US71646JAB52
Reg
S
Notes:

CUSIP:
P7873P AD8

ISIN:
USP7873PAD89

Rating:
Moody's: Baa2
S&P: BBB-

Payment of Additional Amounts: All payments of or in respect of principal, interest and premium, if any, on each Series S Note
shall be made free and clear of, and without withholding or deduction for or on account of, any
present or future taxes, penalties, fines, duties, assessments or other governmental charges of
whatsoever nature, imposed, levied, collected, withheld or assessed by, Argentina or any
political subdivision or governmental authority thereof or therein having power to tax, unless
such withholding or deduction is required by law. In such event we shall, subject to certain
exceptions, pay such additional amounts as may be necessary to ensure that the amounts
received by the holder after such withholding or deduction shall equal the respective amount of
principal, interest and premium, if any, that would have been receivable in respect of such Series
S Note in the absence of such withholding or deduction. See "Taxation--Argentine Tax
Considerations" and "Description of Notes--Payment of Additional Amounts" in the Offering
Memorandum. In the event Petrobras is obligated to make payments to the holders of the Series
S Notes under the Standby Purchase Agreement, Petrobras will pay such additional amounts
necessary to ensure that such noteholders receive the same amount as they would have received
without such withholding or deduction, subject to certain exceptions. See "Description of the
Standby Purchase Agreement--Additional Amounts."

Use of Proceeds:
We intend to use the net proceeds from the sale of the Series S Notes for the purpose of (i)
working capital in Argentina, (ii) investments in tangible assets located in Argentina, (iii)
refinancing of debt and/or (iv) contributions to the capital of controlled or affiliated companies,
7

provided that any such company uses the proceeds of such contributions in the manner specified
above.

Clearance and Settlement:
The Series S Notes will be issued in book-entry form through the facilities of DTC for the
accounts of its participants. Beneficial interests in Series S Notes will not be entitled to receive
physical certificated notes except in certain limited circumstances. For a description of certain
factors relating to clearance and settlement, see "Clearance and Settlement" in the Offering
Memorandum.

Offering and placement of the
Series S Notes in Argentina:
The Series S Notes will be offered to the public in Argentina in accordance with General
Resolution 368/2001 of the Argentine Securities Commission (Comisión Nacional de Valores or
"CNV"), as amended, and the placement of the Series S Notes in Argentina will be
consummated in accordance with the provisions set forth in Section 16 of Public Offering Law
No. 17,811 and applicable CNV regulations, including the Joint Resolution, as described in
"Placement Efforts and Allocation Process."

Consent to jurisdiction:
Any suit, action or proceeding against us, our property, assets or revenues with respect to any
Series S Note may be brought by holders of the Series S Notes, on a non-exclusive basis, in (a)
any court of the State of New York or any United States federal court sitting in the Borough of
Manhattan, The City of New York, New York; (b) the Ordinary Courts in commercial matters
sitting in the City of Buenos Aires; or (c) if the Series S Notes are listed in the Buenos Aires
Stock Exchange, before the Permanent Arbitral Tribunal of the Buenos Aires Stock Exchange
under the provisions of Section 38 of the Annex to Decree No. 677/2001.

Trustee, Co- Security Registrar,
Paying Agent and Transfer Agent: The Bank of New York.

Security Registrar, Argentine
Paying Agent and Transfer Agent: Banco Santander Río S.A.

Luxembourg Transfer Agent and
Paying Agent:
The Bank of New York (Luxembourg) S.A.

Luxembourg Listing Agent:
The Bank of New York (Luxembourg) S.A.

Initial Purchasers:
HSBC Securities (USA) Inc. and Morgan Stanley & Co. Incorporated

Argentine Placement Agent:
HSBC Bank Argentina S.A.

Risk Factors:
See "Risk Factors" beginning on page 41 of this Pricing Supplement, page 19 of the Offering
Memorandum and page 11 of the Petrobras 2005 20-F (as defined below) for a discussion of
factors you should carefully consider before deciding to invest in the Series S Notes.

8

THE STANDBY PURCHASER
General
Petrobras, the Standby Purchaser, is a mixed-capital company created pursuant to Brazilian Law No. 2,004 (effective as of
October 3, 1953). A mixed-capital company is a Brazilian corporation created by special law, of which a majority of the voting capital
must be owned by the Brazilian federal government, a state or a municipality. Petrobras is controlled by the Brazilian federal
government, but its common and preferred shares are also publicly traded. Petrobras is one of the world's largest integrated oil and gas
companies, engaging in a broad range of oil and gas business activities. For the years ended December 31, 2006 and 2005, under U.S.
GAAP, Petrobras had sales of products and services of U.S.$93.9 billion and U.S.$74.1 billion, consolidated net operating revenues of
U.S.$72.3 billion and U.S.$56.3 billion and consolidated net income of U.S.$12.8 billion and U.S.$10.3 billion, respectively.
Petrobras controls, directly or indirectly (through our parent company, Petrobras Energía Participaciones, S.A.)
approximately 67.25% of our capital stock.
Petrobras engages in a broad range of activities, which cover the following segments of its operations:
· Exploration and Production--This segment encompasses exploration, development and production activities in Brazil, sales
and transfers of crude oil in the Brazilian and foreign markets, transfers of natural gas to Petrobras' gas and energy segment
and sales of oil products produced at Petrobras' natural gas processing plants.
· Supply--This segment encompasses refining, logistics, transportation, export and the purchase of crude oil, as well as the
purchase and sale of oil products and fuel alcohol. Additionally, this segment includes Petrobras' petrochemical and
fertilizers division, which includes investments in domestic petrochemical companies and Petrobras' two domestic fertilizer
plants.
· Distribution--This segment encompasses oil product and fuel alcohol distribution activities conducted by Petrobras' majority
owned subsidiary, Petrobras Distribuidora S.A.-BR in Brazil.
· Gas and Energy--This segment encompasses the purchase, sale, transportation and distribution of natural gas produced in or
imported into Brazil. Additionally, this segment includes Petrobras' participation in electricity production in Brazil, including
investments in natural gas transportation companies in Brazil, state owned natural gas distributors and thermoelectric
companies.
· International--This segment encompasses international activities conducted in 15 countries, which include Exploration and
Production, Supply, Distribution and Gas and Energy.
· Corporate--This segment includes those activities not attributable to other segments, including corporate financial
management, overhead related with central administration and other expenses, including pension and health care expenses.
Petrobras' principal executive office is located at Avenida República do Chile, 65, 20031-912 - Rio de Janeiro - RJ, Brazil
and its telephone number is (55-21) 3224-4477.
Capitalization
The following table sets forth the consolidated debt and capitalization of Petrobras as of December 31, 2006, excluding
accrued interest. There have been no material changes in the consolidated capitalization of Petrobras since December 31, 2006.

As of December 31, 2006

(in millions of U.S. Dollars)
Short-term debt:

Short-term debt ..............................................................................
$
1,293
Current portion of long-term debt..................................................
2,106
Current portion of project financings.............................................
2,182
Current capital lease obligations....................................................
231
Total .............................................................................................
5,812
9