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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



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FORM 20-F/A

(Amendment No. 1)



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ANNUAL REPORT



PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934



For the fiscal year ended December 31, 2003



Commission File Number: 333-14168



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Petrobras International Finance Company

(Exact name of registrant as specified in its charter)



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Cayman Islands

(Jurisdiction of incorporation or organization)



Anderson Square Building

P.O. Box 714

George Town, Grand
Cayman

Cayman Islands

(Address of principal executive offices)



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Securities registered or to be registered pursuant to Section 12(b) of the Act: None



Securities registered or to be registered pursuant to Section 12(g) of the
Act: None



Securities for which there is a reporting
obligation pursuant to Section 15(d) of the Act:



Title
of each class:

U.S.$500,000,000 9.125% Senior Notes due 2007

U.S.$450,000,000 9.875% Senior Notes due 2008

U.S.$400,000,000 9.00% Global
Step-Up Notes due 2008

U.S.$600,000,000 9.750% Senior Notes due 2011

U.S.$750,000,000 9.125% Global Notes due 2013

U.S.$750,000,000 8.375% Global
Notes due 2018



Indicate the number of outstanding shares
of each of the issuers classes of capital or common stock

as of the close of the period covered by this Annual Report:

At December 31, 2003, there were outstanding:

50,000 common shares of Petrobras International Finance Company



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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.    Yes  x    No ̈



Indicate by check mark which financial statement
item the registrant has elected to follow.    Item 17 ̈Item 18  x



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Explanatory Note



This Amendment No. 1 to our annual report on Form 20-F for the fiscal year ended December 31, 2003 filed on June 30, 2004, or Amendment No. 1, is being filed solely
for the purpose of amending Item 6, Item 18 and Item 19, as follows:



| |  | to revise the year of appointment of Nilo Carvalho Vieira Filho to our board of directors from 2003 to 2004 in Item 6Directors, Senior Management and Employees.
The other portions of Item 6 were filed as part of our original filing and are being refiled as part of this Amendment No. 1, without change.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | to add the Report of Independent Registered Public Accounting Firm from PricewaterhouseCoopers Auditores Independentes dated February 13, 2003 with respect to the financial
statements for the two years ended December 31, 2002 in Item 18Financial Statements. The other portions of Item 18 were filed as part of our original filing and are being refiled as part of this Amendment No. 1, without change; and
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | to add Exhibit 15.2 in Item 19Exhibits, the consent of PricewaterhouseCoopers Auditores Independentes to the incorporation by reference in the Registration
Statement on Form F-3 (No. 333-92044) of Petrobras International Finance Company of its report dated February 13, 2003.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



This Amendment No. 1 consists of a cover page, this explanatory note, Item 6 (as amended), Item 18 (as amended), Item 19 (as amended), the signature page and the required
certifications of our chairman and financial manager.



Except as described
above, no change has been made to our annual report on Form 20-F. The filing of this amended annual report does not, and does not purport to, amend, update or restate the information in any other item of the annual report on Form 20-F filed on June
30, 2004 or reflect any events that have occurred after the annual report on Form 20-F was filed on June 30, 2004.



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Item 6. Directors, Senior Management and Employees



We are managed by a board of directors, consisting of three members, and by our executive officers. The board of directors is responsible for preparing our year-end accounts, convening shareholders meetings and
reviewing and monitoring our financial performance and strategy. Although not required by our bylaws, it is our policy that the Chairman and all of our executive officers be Petrobras employees. All of the current executive officers are experienced
managers from Petrobras, some of whom have served on the boards of directors of Petrobras subsidiaries and in representative offices abroad. The executive officers work as a board and are responsible for our day-to-day management.



Our board of directors serve indefinite terms and can be removed with or
without cause. The following table sets forth certain information about our board of directors.



BOARD OF DIRECTORS



|                             |  |                  |  |          |  |                    
|---------------------------- |  | ---------------- |  | -------- |  | -------------------
|Name                         |  | Date of Birth    |  | Position |  | Year of Appointment
|Almir Guilherme Barbassa     |  | May 19, 1947     |  | Chairman |  | 1999               
|Marcos Antonio Silva Menezes |  | March 24, 1952   |  | Director |  | 2003               
|Nilo Carvalho Vieira Filho   |  | October 26, 1954 |  | Director |  | 2004               



Almir Guilherme
Barbassa.Mr. Barbassa has been our Chairman and Executive Manager of Corporate Finance of Petrobras since July 12, 1999. He joined Petrobras in 1974 and served in Braspetro as Financial Manager in the Middle East, North Africa, the United
States and Brazil, and as Financial Director from 1993 to 1999. In addition, he was a professor in the economics department of the Petrópolis Catholic University and of the Faculdades Integradas Bennett from 1973 to 1979.



Marcos Antonio Silva Menezes. Mr. Menezes has been our Executive
Manager of the Accounting Department of Petrobras since 1998. He joined Petrobras in 1976 and served as Adjunct Superintendent of the former SEFIN  Financial Services (1995-1998). He currently serves as a member of the fiscal council
Fundação de Seguridade Social - PETROS(since 1995) and Companhia de Gás da Bahia - BAHIAGÁS(since 2003), as well as the chairman of the fiscal council of Instituto Brasileiro de Petróleo e
Gás(since 1998) and Organização Nacional das Indústrias de Petróleo - ONIP(since 1999).



Nilo Carvalho Vieira Filho. Mr. Vieira has been our Executive Manager of Marketing and Trading since June 25, 2004. He joined Petrobras in March
1985 as a supply engineer. Since then, he has occupied the positions of supply manager at Petrobras (1990-1994), head of external trading (1995-1999), Director of Braspetro (2000-2001) and Director of Eg3 in Argentina (2002-2004).



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The following table sets forth certain information about our executive officers.



EXECUTIVE OFFICERS



|                                  |  |                    |  |                   
|--------------------------------- |  | ------------------ |  | ------------------
|Name                              |  | Date of Birth      |  | Position          
|Cláudia Valéria Carreiro de Souza |  | March 8, 1963      |  | Commercial Manager
|Daniel Lima de Oliveira           |  | December 29, 1951  |  | Financial Manager 
|Mariângela Monteiro Tizatto       |  | August 9, 1960     |  | Accounting Manager
|Nilton Antônio de Almeida Maia    |  | June 21, 1957      |  | Legal Manager     
|Gérson Luiz Gonçalves             |  | September 29, 1953 |  | Auditor Manager   
|Isabela Cesário de Faria Alvim    |  | July 11, 1961      |  | Secretary         



Cláudia
Valéria Carreiro de Souza.Ms. Carreiro became an executive officer of our company on March 19, 2000. She joined Petrobras in 1990 and has served as our Commercial Department Manager for Petroleum Products Supply and Trading since 1994.



Daniel Lima de Oliveira. Mr. Lima de Oliveira became an
executive officer of our company on April 19, 2000. He joined Petrobras in 1976 as a supply engineer in the Commercial Department. In 1982 he moved to the Financial Department where he worked in the short-term credit division and served as Assistant
to the General Manager. From 1984 until 1988, he served as Financial Manager of Petrobras London office. From 1988 to 1999, he served as a manager at Braspetro and a financial manager of the New York office. Since January 2002, he has been a
director of Petrobras International Braspetro BV-PIB BV and Braspetro Oil Services Company-BRASOIL. He has served as our financial manager since 1999.



Mariângela Monteiro Tizatto.Ms. Tizatto has served as our Accounting Manager since April 4, 1998. She joined Petrobras in 1989 as an
accountant in the Accounting Department. Since 1999, she has served as Petrobras General Manager for Accounting Operations. From 1990 to 1995, she was Manager of Petrobras Consolidated Accounting System, and from 1995 to 1999, she served
as Manager of Petrobras Division of Corporate Accounting. Before joining Petrobras, Ms. Tizatto was Manager of Auditing for Deloitte Touche Tohmatsu, where she worked for seven years. She was also a professor of advanced accounting at the
Faculdade Moraes Junior in Rio de Janeiro (1990).



Nilton
Antônio de Almeida Maia.Mr. Maia has served as our Legal Manager since April 19, 2000. He joined Petrobras in 1984 as an internal auditor. He has served as a tax consultant to Petrobras Legal Department, and since early 2000, has
served as General Manager for the Finance and Tax Division. Mr. Maia currently serves as General Counsel for Petrobras. He has completed post-graduate degrees in law, with specializations in energy and tax law, from the Universidade Cândido
Mendes and the Universidade Estácio de Sá.



Gerson Luiz Gonçalves.Mr. Gonçalves has served as our Auditor Manager since April 19, 2000. He joined the Internal Audit Department of Petrobras in 1976 and has been Petrobras Executive Manager for Internal
Auditing for the last six years. He is responsible for all of Petrobras internal accounting control activities. Mr. Gonçalves is a member of the Brazilian Institute of Internal Auditors (AUDIBRA) and of the United States Institute
of Internal Auditors (IIA).



Isabela Cesário de Faria
Alvim. Ms. Alvim has served as our Secretary since April 2004. She joined Petrobras in 1984 as an analyst for Maritime Transport. Since 1995 she has been working in the Finance Department.



Compensation of Directors and Executive Officers



Our directors and executive officers are paid by Petrobras in respect of
their function as Petrobras employees, but they do not receive any additional compensation, pension or other benefits from us or Petrobras in respect of their functions as our directors or officers, as the case may be.



Board Practices



The dates of appointment of our current directors and executive officers are set forth above under Item 6. Directors
and Senior Management and Employees. Our directors and executive officers do not have set terms of appointment. We have not entered into any service or employment contracts with any of our directors and executive officers. We do not have any
audit or remuneration committees.



Employees



With the exception of fourteen employees of PEL, our personnel consists
solely of Petrobras employees, and we rely on Petrobras to provide all administrative functions.



Share Ownership



As of
June 16, 2004, we had 50,000 shares of common stock outstanding. All of our issued and outstanding shares of common stock are owned by Petrobras.



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Item 18. Financial Statements



The following financial statements, together with the reports of Ernst & Young Auditores Independentes S/S and PricewaterhouseCoopers Auditores Independentes thereon, are filed as a part of this annual report:



|                                                                                                  |  |     
|------------------------------------------------------------------------------------------------- |  | ----
|                                                                                                  |  | Page
|Report of Independent Registered Public Accounting Firm                                           |  | F-1 
|Report of Independent Registered Public Accounting Firm                                           |  | F-2 
|Consolidated Balance Sheets as of December 31, 2003 and 2002                                      |  | F-3 
|Consolidated Statements of Operations for the years ended December 31, 2003, 2002 and 2001        |  | F-5 
|Changes in Consolidated Stockholders Equity for the years ended December 31, 2003, 2002 and 2001 |  | F-6 
|Consolidated Statements of Cash Flows for the years ended December 31, 2003, 2002 and 2001        |  | F-7 
|Notes to Consolidated Financial Statements                                                        |  | F-9 
|See pages F-3 through F-23, incorporated herein by reference                                      |  |     



Item 19. Exhibits



|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No: |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Exhibit 1   |  | Memorandum and Articles of Association of Petrobras International Finance Company (incorporated by reference to Exhibit 1 to the Annual Report on Form 20-F of Petrobras International Finance
Company, filed with the Securities and Exchange Commission on July 1, 2002, and amendments to which were filed on December 13, 2002 and March 20, 2003 (File No. 333-14168)).                                                                                
|            | 
|Exhibit 2   |  | Indenture, dated as of May 9, 2001, between Petrobras International Finance Company and The Bank of New York, as Trustee, relating to the 97/8% Senior Notes due 2008 (incorporated by reference to Exhibit 4.1 to the Registration Statement of Petrobras International Finance Company and
Petróleo Brasileiro S.A.Petrobras on Form F-4, filed with the Securities and Exchange Commission on December 6, 2001 (File No. 333-14168)).                   
|            | 
|Exhibit 2.1 |  | Supplemental Indenture, dated as of November 26, 2001, between Petrobras International Finance Company and The Bank of New York, as Trustee, relating to the 97/8% Senior Notes due 2008 (incorporated by reference to Exhibit 4.2 to the Registration Statement of Petrobras
International Finance Company and Petróleo Brasileiro S.A.Petrobras on Form F-4, filed with the Securities and Exchange Commission on December 6, 2001 (File No. 333-14168)).
|            | 
|Exhibit 2.2 |  | Indenture, dated as of July 6, 2001, between Petrobras International Finance Company and The Bank of New York, as Trustee, relating to the 93/4% Senior Notes due 2011 (incorporated by reference to Exhibit 4.1 to the Registration Statement of Petrobras International Finance Company and
Petróleo Brasileiro S.A.Petrobras on Form F-4, filed with the Securities and Exchange Commission on December 6, 2001 (File No. 333-14170)).                  



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|             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|------------ |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit 2.3  |  | Supplemental Indenture, dated as of November 26, 2001, between Petrobras International Finance Company and The Bank of New York, as Trustee, relating to the 93/4% Senior Notes due 2011 (incorporated by reference to Exhibit 4.2 to the Registration Statement of Petrobras
International Finance Company and Petróleo Brasileiro S.A.Petrobras on Form F-4, filed with the Securities and Exchange Commission on December 6, 2001 (File No. 333-14170)).                                                                                                                                
|             | 
|Exhibit 2.4  |  | Indenture, initially dated as of February 4, 2002, as amended and restated as of February 28, 2002, between Petrobras International Finance Company and The Bank of New York, as Trustee,
relating to the 91/8% Senior Notes due 2007 (incorporated by reference to Exhibit 2.19 to the amended Annual
Report on Form 20-F of Petrobras International Finance Company, filed with the Securities and Exchange Commission on December 13, 2002 (File No. 333-14168)).                                                                                                                        
|             | 
|Exhibit 2.5  |  | Indenture, dated as of July 19, 2002, between Petrobras International Finance Company and JPMorgan Chase Bank, as Trustee (incorporated by reference to exhibit 4.5 of the Registration
Statement of Petrobras International Finance Company and Petróleo Brasileiro S.A.Petrobras on Form F-3, filed with the Securities and Exchange Commission on July 5, 2002, and amendments to which were filed on July 19, 2002 and August
14, 2002 (File No. 333-92044-01)).                                                                                                                       
|             | 
|Exhibit 2.6  |  | First Supplemental Indenture, dated as of March 31, 2003, between Petrobras International Finance Company and JPMorgan Chase Bank, as Trustee, relating to the 9.00% Global Step-Up Notes due
2008 (incorporated by reference to Exhibit 2.6 of the Annual Report on Form 20-F of Petróleo Brasileiro S.A.Petrobras, filed with the Securities and Exchange Commission on June 19, 2003 (File No. 1-115106)).                                                                                                                                                                              
|             | 
|Exhibit 2.7  |  | Second Supplemental Indenture, dated as of July 2, 2003, between Petrobras International Finance Company and JPMorgan Chase Bank, as Trustee, relating to the 9.125% Global Notes due
2013.                                                                                                                                                                                                                                                                                                                                                                                                 
|             | 
|Exhibit 2.8  |  | Second Supplemental Indenture, amended and restated, dated as of September 18, 2003, between Petrobras International Finance Company and JPMorgan Chase Bank, as Trustee, relating to the
9.125% Global Notes due 2013.                                                                                                                                                                                                                                                                                                                                                                     
|             | 
|Exhibit 2.9  |  | Third Supplemental Indenture, dated as of December 10, 2003, between Petrobras International Finance Company and JPMorgan Chase Bank, as Trustee, relating to the 8.375% Global Notes due
2018.                                                                                                                                                                                                                                                                                                                                                                                             
|             | 
|Exhibit 2.10 |  | Registration Rights Agreement, dated as of May 9, 2001, among Petrobras International Finance Company, Petróleo Brasileiro S.A.Petrobras, and USB Warburg LLC, Banc of America
Securities LLC, J.P. Morgan Securities Inc., RBC Dominion Securities Corporation and Santander Central Hispano Investment Securities Inc. (incorporated by reference to Exhibit 4.4 to the Registration Statement of Petrobras International Finance
Company and Petróleo Brasileiro S.A.Petrobras on Form F-4 filed with the Securities and Exchange Commission on December 6, 2001 (File No. 333-14168)).
|             | 
|Exhibit 2.11 |  | Registration Rights Agreement, dated as of July 6, 2001, among Petrobras International Finance Company, Petróleo Brasileiro S.A.Petrobras, and USB Warburg LLC, Banc of America
Securities LLC, J.P. Morgan Securities Inc., RBC Dominion Securities Corporation and Santander Central Hispano Investment Securities Inc. (incorporated by reference to                                                                                                                                                                                                                                    



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|             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|------------ |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|             |  | Exhibit 4.4 to the Registration Statement of Petrobras International Finance Company and Petróleo Brasileiro S.A.Petrobras on Form F-4, filed with the Securities and Exchange
Commission on December 6, 2001 (File No. 333-14170)).                                                                                                                                                                                                                                                          
|             | 
|Exhibit 2.12 |  | Registration Rights Agreement, initially dated as of February 4, 2002, as amended and restated as of February 28, 2002, among Petrobras International Finance Company, Petróleo
Brasileiro S.A.Petrobras, UBS Warburg LLC and Morgan Stanley & Co. Incorporated (incorporated by reference to Exhibit 2.20 to the amended Annual Report on Form 20-F of Petrobras International Finance Company, filed with the Securities and
Exchange Commission on December 13, 2002 (File No. 333-14168)).
|             | 
|Exhibit 2.13 |  | Standby Purchase Agreement, dated as of May 9, 2001, between Petróleo Brasileiro S.A.Petrobras and The Bank of New York (incorporated by reference to Exhibit 4.5 to the
Registration Statement of Petrobras International Finance Company and Petróleo Brasileiro S.A.Petrobras on Form F-4, filed with the Securities and Exchange Commission on December 6, 2001 (File No. 333-14168)).                                                                                                   
|             | 
|Exhibit 2.14 |  | Amendment No. 1 to the Standby Purchase Agreement, dated as of November 26, 2001, between Petróleo Brasileiro S.A.Petrobras and The Bank of New York, as Trustee (incorporated by
reference to Exhibit 4.6 to the Registration Statement of Petrobras International Finance Company and Petróleo Brasileiro S.A.Petrobras on Form F-4, filed with the Securities and Exchange Commission on December 6, 2001 (File No.
333-14168)).                                                          
|             | 
|Exhibit 2.15 |  | Standby Purchase Agreement, dated as of July 6, 2001, between Petróleo Brasileiro S.A.Petrobras and The Bank of New York (incorporated by reference to Exhibit 4.5 to the
Registration Statement of Petrobras International Finance Company and Petróleo Brasileiro S.A.Petrobras on Form F-4, filed with the Securities and Exchange Commission on December 6, 2001 (File No. 333-14170)).                                                                                                  
|             | 
|Exhibit 2.16 |  | Amendment No. 1 to the Standby Purchase Agreement, dated as of November 26, 2001, between Petróleo Brasileiro S.A.Petrobras and The Bank of New York, as Trustee (incorporated by
reference to Exhibit 4.6 to the Registration Statement of Petrobras International Finance Company and Petróleo Brasileiro S.A.Petrobras on Form F-4, filed with the Securities and Exchange Commission on December 6, 2001 (File No.
333-14170)).                                                          
|             | 
|Exhibit 2.17 |  | Standby Purchase Agreement, initially dated as of February 4, 2002, as amended and restated as of February 28, 2002, between Petróleo Brasileiro S.A.Petrobras and The Bank of New
York, as Trustee (incorporated by reference to Exhibit 2.21 to the amended Annual Report on Form 20-F of Petrobras International Finance Company, filed with the Securities and Exchange Commission on December 13, 2002 (File No.
333-14168)).                                                            
|             | 
|Exhibit 2.18 |  | Standby Purchase Agreement dated as of March 31, 2003, between Petróleo Brasileiro S.A.Petrobras and JPMorgan Chase Bank, as Trustee (incorporated by reference to Exhibit 2.15 to
the Annual Report on Form 20-F of Petrobras International Finance Company, filed with the Securities and Exchange Commission on June 19, 2003 (File No. 333-14168)).                                                                                                                                       



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|             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|------------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|             | 
|Exhibit 2.19 |  | Standby Purchase Agreement dated as of July 2, 2003, between Petróleo Brasileiro S.A.Petrobras and JPMorgan Chase Bank, as Trustee.                                                                                                                                                                                                                                                                                                                                                                                                                                 
|             | 
|Exhibit 2.20 |  | Amended and Restated Standby Purchase Agreement initially dated as of July 2, 2003, as amended and restated as of September 18, 2003, between Petróleo Brasileiro S.A.Petrobras
and JPMorgan Chase Bank, as Trustee.                                                                                                                                                                                                                                                                                                                                                
|             | 
|Exhibit 2.21 |  | Standby Purchase Agreement dated as of December 10, 2003, between Petróleo Brasileiro S.A.Petrobras and JPMorgan Chase Bank, as Trustee.                                                                                                                                                                                                                                                                                                                                                                                                                            
|             | 
|Exhibit 2.22 |  | Notes Purchase Agreement, dated as of January 29, 2002, between Petrobras International Finance Company and UBS Warburg LLC and Morgan Stanley & Co. Incorporated (incorporated by
reference to Exhibit 2.13 to the Annual Report on Form 20-F of Petrobras International Finance Company, filed with the Securities and Exchange Commission on July 1, 2002, and amendments to which were filed on December 13, 2002 and March 20, 2003
(File No. 333-14168)).                                                                                                      
|             | 
|Exhibit 2.23 |  | Master Export Contract, dated as of December 21, 2001, between Petróleo Brasileiro S.A.Petrobras and Petrobras Finance Ltd. (incorporated by reference to Exhibit 2.14 to the
Annual Report on Form 20-F of Petrobras International Finance Company, filed with the Securities and Exchange Commission on July 1, 2002, and amendments to which were filed on December 13, 2002 and March 20, 2003 (File No.
333-14168)).                                                                                                                                           
|             | 
|Exhibit 2.24 |  | Amendment to the Master Export Contract, dated as of May 21, 2003, among Petróleo Brasileiro S.A.  Petrobras and Petrobras Finance Ltd. (incorporated by reference to Exhibit 2.18
to the Annual Report on Form 20-F of Petrobras International Finance Company, filed with the Securities and Exchange Commission on June 19, 2003 (File No. 333-14168)).                                                                                                                                                                                                          
|             | 
|Exhibit 2.25 |  | Depositary Agreement, dated as of December 21, 2001, among U.S. Bank, National Association, Cayman Islands Branch, in capacity as Trustee of the PF Export Receivables Master Trust, Citibank,
N.A., in capacity as Securities Intermediary, and Petrobras Finance Ltd. (incorporated by reference to Exhibit 2.15 to the Annual Report on Form 20-F of Petrobras International Finance Company, filed with the Securities and Exchange Commission on
July 1, 2002, and amendments to which were filed on December 13, 2002 and March 20, 2003 (File No. 333-14168)).
|             | 
|Exhibit 2.26 |  | Letter Agreement relating to the Depositary Agreement, dated as of May 16, 2003 (incorporated by reference to Exhibit 2.20 to the Annual Report on Form 20-F of Petrobras International Finance
Company, filed with the Securities and Exchange Commission on June 19, 2003 (File No. 333-14168)).                                                                                                                                                                                                                                                                   
|             | 
|Exhibit 2.27 |  | Administrative Services Agreement, dated as of December 21, 2001, between Petróleo Brasileiro S.A.Petrobras, as Delivery and Sales Agent, and Petrobras Finance Ltd. (incorporated
by reference to Exhibit 2.16 to the Annual Report on Form 20-F of Petrobras International Finance Company, filed with the Securities and Exchange Commission on July 1, 2002, and amendments to which were filed on December 13, 2002 and March 20, 2003
(File No. 333-14168)).                                                                                                  
|             | 
|Exhibit 2.28 |  | Letter Agreement relating to the Administrative Services Agreement, dated as of May 16, 2003 (incorporated by reference to Exhibit 2.22 to the Annual Report on Form 20-F of Petrobras
International Finance Company, filed with the Securities and Exchange Commission on June 19, 2003 (File No. 333-14168)).                                                                                                                                                                                                                                                      



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|             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|------------ |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|             | 
|Exhibit 2.29 |  | Amended and Restated Trust Deed, dated as of December 21, 2001, among U.S. Bank, National Association, Cayman Islands Branch, in capacity as Trustee of the PF Export Receivables Master Trust,
Citibank, N.A., in capacity as Paying Agent, Transfer Agent, Registrar and Depositary Bank, and Petrobras International Finance Company, as Servicer (incorporated by reference to Exhibit 2.17 to the Annual Report on Form 20-F of Petrobras
International Finance Company, filed with the Securities and Exchange Commission on July 1, 2002, and amendments to which were filed on December 13, 2002 and March 20, 2003 (File No. 333-14168)).
|             | 
|Exhibit 2.30 |  | Receivables Purchase Agreement, dated as of December 21, 2001, among Petrobras Finance Ltd., Petróleo Brasileiro S.A.Petrobras and U.S. Bank, National Association, Cayman Islands
Branch, solely in capacity as Trustee of the PF Export Receivables Master Trust (incorporated by reference to Exhibit 2.18 to the Annual Report on Form 20-F of Petrobras International Finance Company, filed with the Securities and Exchange
Commission on July 1, 2002, and amendments to which were filed on December 13, 2002 and March 20, 2003 (File No. 333-14168)).                                                                                 
|             | 
|Exhibit 2.31 |  | Amended and Restated Receivables Purchase Agreement, dated as of May 21, 2003, among Petrobras Finance Ltd., Petróleo Brasileiro S.A.Petrobras and U.S. Bank, National
Association, Cayman Islands Branch, solely in capacity as Trustee of the PF Export Receivables Master Trust (incorporated by reference to Exhibit 2.25 to the Annual Report on Form 20-F of Petrobras International Finance Company, filed with the
Securities and Exchange Commission on June 19, 2003 (File No. 333-14168)).                                                                                                                                            
|             | 
|Exhibit 2.32 |  | Prepayment Agreement, dated as of December 21, 2001, between Petróleo Brasileiro S.A.Petrobras and Petrobras Finance Ltd. (incorporated by reference to Exhibit 2.26 to the Annual
Report on Form 20-F of Petrobras International Finance Company, filed with the Securities and Exchange Commission on June 19, 2003 (File No. 333-14168)).                                                                                                                                                                                                                                                                                                     
|             | 
|Exhibit 2.33 |  | Amended and Restated Prepayment Agreement, dated as of May 2, 2003, between Petróleo Brasileiro S.A.Petrobras and Petrobras Finance Ltd. (incorporated by reference to Exhibit
2.27 to the Annual Report on Form 20-F of Petrobras International Finance Company, filed with the Securities and Exchange Commission on June 19, 2003 (File No. 333-14168)).                                                                                                                                                                                                                                                                                      
|             | 
|Exhibit 12.1 |  | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|             | 
|Exhibit 13.1 |  | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|             | 
|Exhibit 15.1 |  | Ernst & Young Auditores Independentes S/S consent to the incorporation by reference in the Registration Statement (Form F-3 No. 333 - 92044) of Petroleo Brasileiro S.A.PETROBRAS
(Petrobras) of its report dated February 13, 2004, with respect to the consolidated financial statements for the year ended December 31, 2003 of Petrobras International Finance Company (PIFCo) and its subsidiaries included in the Annual
Report (Form 20-F) of PIFCo for the year ended December 31, 2003.                                                                                                                                               
|             | 
|Exhibit 15.2 |  | PricewaterhouseCoopers Auditores Independentes consent to the incorporation by reference in the Registration Statement (Form F-3 No. 333 - 92044) of Petrobras International Finance Company
(PIFCo) of its report dated February 13, 2003, with respect to the financial statements for the two years ended December 31, 2002 of PIFCo, which appears in Amendment No. 1 to the 2003 Annual Report on Form 20-F, filed with the
Securities and Exchange Commission on July 26, 2004.                                                                                                                                                           



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SIGNATURE



Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, Petrobras International Finance CompanyPIFCo, hereby certifies
that it meets all the requirements for filing on Form 20-F/A and has duly caused this annual report to be signed on its behalf by the undersigned, thereunto duly authorized.



Petrobras International Finance CompanyPIFCoBy:

/s/ ALMIR GUILHERME BARBASSAName:

Almir Guilherme BarbassaTitle:

Chairman




Date: July 26, 2004





---

PETROBRAS INTERNATIONAL FINANCE COMPANY

AND SUBSIDIARIES

(A wholly-owned subsidiary of PETRÓLEO BRASILEIRO S.A. - PETROBRAS)



FINANCIAL STATEMENTS

Years ended December 31, 2003 and 2002



Contents



|                                                          |  |    
|--------------------------------------------------------- |  | ---
|Report of Independent Registered Public Accounting Firm   |  | F-1
|Report of Independent Registered Public Accounting Firm   |  | F-2
|                                                          | 
|Audited Financial Statements                              |  |    
|                                                          | 
|Consolidated Balance Sheet                                |  | F-3
|Consolidated Statement of Operations                      |  | F-5
|Consolidated Statement of Changes in Stockholders Equity |  | F-6
|Consolidated Statement of Cash Flows                      |  | F-7
|Notes to Consolidated Financial Statements                |  | F-9



---

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Executive Board and Stockholder of

PETROBRAS INTERNATIONAL FINANCE COMPANY



We have audited the accompanying consolidated balance sheet of PETROBRAS INTERNATIONAL FINANCE COMPANY and its subsidiaries as of December
31, 2003, and the related consolidated statements of operations, changes in stockholders equity and cash flows, for the year then ended. These financial statements are the responsibility of the Companys management. Our responsibility is
to express an opinion on these financial statements based on our audit.



We
conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.



In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of PETROBRAS INTERNATIONAL
FINANCE COMPANY and its subsidiaries at December 31, 2003, and the consolidated results of their operations and their cash flows for the year then ended, in conformity with U.S. generally accepted accounting principles.



ERNST & YOUNG

Auditores Independentes S/S



Paulo José Machado

Partner



Rio de Janeiro, Brazil

February 13, 2004



F-1



---

LOGO



Report of Independent Registered

Public Accounting Firm



To the Board of Directors and Stockholders

Petrobras International Finance Company - PIFCO

(a wholly-owned subsidiary of Petróleo Brasileiro S.A. - PETROBRAS)



In our opinion, the accompanying consolidated balance sheet as of December 31, 2002 and the related consolidated statements of operations,
of cash flows and of changes in stockholders equity for each of the two years in the period ended December 31, 2002 present fairly, in all material respects, the financial position, results of operations and cash flows of Petrobras
International Finance Company - PIFCO and its subsidiaries at December 31, 2002 and for each of the two years in the period ended December 31, 2002, in conformity with accounting principles generally accepted in the United States of America. These
financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards
of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our opinion.



February 13, 2003



LOGO

PricewaterhouseCoopers

Auditores Independentes

Rio de Janeiro, Brazil



F-2



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PETROBRAS INTERNATIONAL FINANCE COMPANY

AND SUBSIDIARIES

(A wholly-owned subsidiary of PETRÓLEO BRASILEIRO S.A. - PETROBRAS)



CONSOLIDATED BALANCE SHEET

As of December 31, 2003 and 2002

(In thousands of US dollars)



|                                                             |  |                   |  |                  
|------------------------------------------------------------ |  | ----------------- |  | -----------------
|                                                             |  | December 31, 2003 |  | December 31, 2002
|Assets                                                       |  |                   |  |                  
|                                                             |  |                  
|Current assets                                               |  |                   |  |                  
|Cash and cash equivalents                                    |  | 1,262,039         |  | 260,629          
|Marketable securities                                        |  | 17,960            |  | 61,673           
|Accounts receivable                                          |  |                   |  |                  
|Related parties                                              |  | 5,064,472         |  | 4,837,080        
|Trade                                                        |  | 109,415           |  | 57,073           
|Notes receivable - related parties                           |  | 1,388,004         |  | 1,157,930        
|Inventories                                                  |  | 6,443             |  | 4,506            
|Export prepayments  related parties                         |  | 72,482            |  | 1,189            
|Restricted deposits for guarantees and others                |  | 81,976            |  | 7,889            
|                                                             |  |                   |  |                  
|                                                             |  | 8,002,791         |  | 6,387,969        
|                                                             |  |                   |  |                  
|Property and equipment                                       |  | 41                |  | 110              
|                                                             |  |                   |  |                  
|Other assets                                                 |  |                   |  |                  
|Marketable securities                                        |  |                  |  | 36,299           
|Advances to suppliers                                        |  |                  |  | 19,027           
|Notes receivable - related parties                           |  | 338,416           |  | 473,632          
|Assets related to export prepayments                         |  | 300,000           |  | 150,000          
|Export prepayment  related parties                          |  | 1,406,850         |  | 750,000          
|Net investment in direct financing leases from related party |  |                  |  | 832,319          
|Restricted deposits for guarantees and prepaid expenses      |  | 148,510           |  | 47,946           
|                                                             |  |                   |  |                  
|                                                             |  | 2,193,776         |  | 2,309,223        
|                                                             |  |                   |  |                  
|Total assets                                                 |  | 10,196,608        |  | 8,697,302        
|                                                             |  |                   |  |                  



F-3



---

PETROBRAS INTERNATIONAL FINANCE COMPANY

AND SUBSIDIARIES

(A wholly-owned subsidiary of PETRÓLEO BRASILEIRO S.A. - PETROBRAS)



CONSOLIDATED BALANCE SHEET

As of December 31, 2003 and 2002

(In thousands of US dollars)



|                                                              |  |                   |   |  |                   |  
|------------------------------------------------------------- |  | ----------------- | - |  | ----------------- | -
|                                                              |  | December 31, 2003 |   |  | December 31, 2002 |  
|Liabilities and stockholders equity                          |  |                   |   |  |                   |  
|                                                              |  |                  
|Current liabilities                                           |  |                   |   |  |                   |  
|Trade accounts payable                                        |  |                   |   |  |                   |  
|Related parties                                               |  | 270,950           |   |  | 291,980           |  
|Other                                                         |  | 349,029           |   |  | 281,133           |  
|Notes payable - related parties                               |  | 2,442,778         |   |  | 3,688,249         |  
|Short-term financing                                          |  | 852,390           |   |  | 285,770           |  
|Current portion of long term debt                             |  | 224,002           |   |  | 81,700            |  
|Accrued interest                                              |  | 71,494            |   |  | 56,169            |  
|Unearned income - related parties                             |  | 61,866            |   |  | 48,563            |  
|Capital lease obligations                                     |  |                  |   |  | 68,948            |  
|Others                                                        |  | 3,922             |   |  | 415               |  
|                                                              |  |                   |   |  |                   |  
|                                                              |  | 4,276,431         |   |  | 4,802,927         |  
|                                                              |  |                   |   |  |                   |  
|Long-term liabilities                                         |  |                   |   |  |                   |  
|Capital lease obligations                                     |  |                  |   |  | 601,733           |  
|Long-term debt                                                |  | 5,825,336         |   |  | 3,248,716         |  
|                                                              |  |                   |   |  |                   |  
|                                                              |  | 5,825,336         |   |  | 3,850,449         |  
|                                                              |  |                   |   |  |                   |  
|Stockholders equity                                          |  |                   |   |  |                   |  
|Shares authorized and issued                                  |  |                   |   |  |                   |  
|Common stock - 2003 and 2002 - 50,000 shares, par value US$ 1 |  | 50                |   |  | 50                |  
|Additional paid in capital                                    |  | 173,926           |   |  | 120,000           |  
|Accumulated deficit                                           |  | (79,135           | ) |  | (76,124           | )
|                                                              |  |                   |   |  |                   |  
|                                                              |  | 94,841            |   |  | 43,926            |  
|                                                              |  |                   |   |  |                   |  
|Total liabilities and stockholders equity                    |  | 10,196,608        |   |  | 8,697,302         |  
|                                                              |  |                   |   |  |                   |  



F-4



---

PETROBRAS INTERNATIONAL FINANCE COMPANY

AND SUBSIDIARIES

(A wholly-owned subsidiary of PETRÓLEO BRASILEIRO S.A. - PETROBRAS)



CONSOLIDATED STATEMENT OF OPERATIONS

Years Ended December 31, 2003, 2002 and
2001

(In thousands of US dollars, except share amounts)



|                                                 |  |                          |   |  |           |   |  |           |  
|------------------------------------------------ |  | ------------------------ | - |  | --------- | - |  | --------- | -
|                                                 |  | Years ended December 31, |  
|                                                 |  | 2003                     |   |  | 2002      |   |  | 2001      |  
|Sales of crude oil and oil products and services |  | 6,975,538                |   |  | 6,390,226 |   |  | 6,260,514 |  
|Lease income                                     |  |                         |   |  | 36,062    |   |  | 10,682    |  
|                                                 |  |                          |   |  |           |   |  |           |  
|                                                 |  | 6,975,538                |   |  | 6,426,288 |   |  | 6,271,196 |  
|                                                 |  |                          |  
|Cost of sales                                    |  | 6,920,177                |   |  | 6,371,465 |   |  | 6,253,009 |  
|Lease expense                                    |  |                         |   |  | 24,004    |   |  | 10,542    |  
|Selling, general and administrative expenses     |  | 18,600                   |   |  | 1,178     |   |  | 114       |  
|                                                 |  |                          |   |  |           |   |  |           |  
|                                                 |  | 6,938,777                |   |  | 6,396,647 |   |  | 6,263,665 |  
|                                                 |  |                          |   |  |           |   |  |           |  
|Gross profit                                     |  | 36,761                   |   |  | 29,641    |   |  | 7,531     |  
|                                                 |  |                          |   |  |           |   |  |           |  
|Financial income                                 |  | 442,878                  |   |  | 219,580   |   |  | 158,804   |  
|                                                 |  |                          |  
|Financial expense                                |  | 482,650                  |   |  | 314,683   |   |  | 187,101   |  
|                                                 |  |                          |  
|Gain on materials and equipment                  |  |                         |   |  |          |   |  | 435       |  
|                                                 |  |                          |   |  |           |   |  |           |  
|Net (loss) for the year                          |  | (3,011                   | ) |  | (65,462   | ) |  | (20,331   | )
|                                                 |  |                          |   |  |           |   |  |           |  
|Weighted average number of shares outstanding    |  | 50,000                   |   |  | 50,000    |   |  | 50,000    |  
|                                                 |  |                          |   |  |           |   |  |           |  



F-5



---

PETROBRAS INTERNATIONAL FINANCE COMPANY

AND SUBSIDIARIES

(A wholly-owned subsidiary of PETRÓLEO BRASILEIRO S.A. - PETROBRAS)



CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY

Years
Ended December 31, 2003, 2002 and 2001

(In thousands of US dollars)



|                                                                |  |                   |   |  |                  |   |  |                  |  
|--------------------------------------------------------------- |  | ----------------- | - |  | ---------------- | - |  | ---------------- | -
|                                                                |  | December 31, 2003 |   |  | December 31,2002 |   |  | December 31,2001 |  
|Common stock                                                    |  | 50                |   |  | 50               |   |  | 50               |  
|                                                                |  |                   |   |  |                  |   |  |                  |  
|Additional paid in capital                                      |  |                   |   |  |                  |   |  |                  |  
|Balance at January 1                                            |  | 120,000           |   |  | 60,000           |   |  |                 |  
|Capital contribution from PETROBRAS related to transfer of PNBV |  | 53,926            |   |  |                 |   |  |                 |  
|Conversion of loans to capital                                  |  |                  |   |  | 60,000           |   |  | 60,000           |  
|                                                                |  |                   |   |  |                  |   |  |                  |  
|Balance at end of year                                          |  | 173,926           |   |  | 120,000          |   |  | 60,000           |  
|                                                                |  |                   |   |  |                  |   |  |                  |  
|Accumulated deficit                                             |  |                   |   |  |                  |   |  |                  |  
|Balance at January 1                                            |  | (76,124           | ) |  | (10,662          | ) |  | 9,669            |  
|Loss for the year                                               |  | (3,011            | ) |  | (65,462          | ) |  | (20,331          | )
|                                                                |  |                   |   |  |                  |   |  |                  |  
|Balance at end of year                                          |  | (79,135           | ) |  | (76,124          | ) |  | (10,662          | )
|                                                                |  |                   |   |  |                  |   |  |                  |  
|Total stockholders equity                                      |  | 94,841            |   |  | 43,926           |   |  | 49,388           |  
|                                                                |  |                   |   |  |                  |   |  |                  |  



F-6



---

PETROBRAS INTERNATIONAL FINANCE COMPANY

AND SUBSIDIARIES

(A wholly-owned subsidiary of PETRÓLEO BRASILEIRO S.A. - PETROBRAS)



CONSOLIDATED STATEMENT OF CASH FLOWS

Years Ended December 31, 2003, 2002 and
2001

(In thousands of US dollars)

|                                                                     |  |                          |   |  |            |   |  |            |  
|-------------------------------------------------------------------- |  | ------------------------ | - |  | ---------- | - |  | ---------- | -
|                                                                     |  | Years ended December 31, |  
|                                                                     |  | 2003                     |   |  | 2002       |   |  | 2001       |  
|Cash flows from operating activities                                 |  |                          |   |  |            |   |  |            |  
|Net loss for the year                                                |  | (3,011                   | ) |  | (65,462    | ) |  | (20,331    | )
|Adjustments to reconcile net loss to net cash                        |  |                          |   |  |            |   |  |            |  
|Depreciation and amortization                                        |  | 8,346                    |   |  | 9,347      |   |  | 8,041      |  
|Decrease (increase) in assets                                        |  |                          |   |  |            |   |  |            |  
|Accounts receivable                                                  |  |                          |   |  |            |   |  |            |  
|Related parties                                                      |  | (410,756                 | ) |  | (2,069,800 | ) |  | 426,316    |  
|Other                                                                |  | (62,143                  | ) |  | (12,333    | ) |  | (5,132     | )
|Export prepayments  related parties                                 |  | (722,000                 | ) |  |           |   |  | (750,000   | )
|Other assets                                                         |  | (228,234                 | ) |  | (38,205    | ) |  | (65,602    | )
|Increase (decrease) in liabilities                                   |  |                          |   |  |            |   |  |            |  
|Trade accounts payable                                               |  |                          |   |  |            |   |  |            |  
|Related parties                                                      |  | (3,439                   | ) |  | 3,912      |   |  | 217,226    |  
|Other                                                                |  | 82,210                   |   |  | 50,133     |   |  | (362,190   | )
|Other liabilities                                                    |  | 32,398                   |   |  | 83,485     |   |  | (6,916     | )
|                                                                     |  |                          |   |  |            |   |  |            |  
|Net cash provided by (used in) operating activities                  |  | (1,306,629               | ) |  | (2,038,923 | ) |  | (558,588   | )
|                                                                     |  |                          |   |  |            |   |  |            |  
|Cash flows from investing activities                                 |  |                          |   |  |            |   |  |            |  
|Cash rendered in connection with transfer of subsidiary to PETROBRAS |  | (743                     | ) |  |           |   |  |           |  
|Cash acquired in connection with transfer of subsidiary from BRASOIL |  | 2,988                    |   |  |           |   |  |           |  
|Marketable securities, net                                           |  | 80,012                   |   |  | (96,385    | ) |  |           |  
|Issuance of notes receivable                                         |  | (1,400,290               | ) |  | (2,247,658 | ) |  | (1,397,655 | )
|Collection of principal on notes receivable                          |  | 1,231,526                |   |  | 1,422,122  |   |  | 1,210,383  |  
|Assets held for sale                                                 |  |                         |   |  |           |   |  | (144,721   | )
|Property and equipment                                               |  | (28                      | ) |  | (37        | ) |  | (213       | )
|Advances to suppliers                                                |  |                         |   |  | (7,718     | ) |  | (11,309    | )
|Net investment in direct financing activities from related party     |  |                         |   |  | (163,414   | ) |  | (156,017   | )
|                                                                     |  |                          |   |  |            |   |  |            |  
|Net cash used in investing activities                                |  | (86,535                  | ) |  | (1,093,090 | ) |  | (499,532   | )
|                                                                     |  |                          |   |  |            |   |  |            |  
|Cash flows from financing activities                                 |  |                          |   |  |            |   |  |            |  
|Short-term debt, net issuance and repayments                         |  | 566,620                  |   |  | (489,657   | ) |  | 245,075    |  
|Proceeds from issuance of long-term debt                             |  | 2,837,675                |   |  | 657,000    |   |  | 2,165,000  |  
|Principal payments of long - term debt                               |  | (268,371                 | ) |  | (215,000   | ) |  | (10,000    | )
|Proceeds from short term loans - related parties                     |  | 9,618,929                |   |  | 6,861,572  |   |  | 3,654,629  |  
|Principal payments of short term loans  related parties             |  | (10,375,070              | ) |  | (3,469,866 | ) |  | (4,961,129 | )
|Capital contribution                                                 |  | 14,791                   |   |  |           |   |  |           |  
|Dividends paid                                                       |  |                         |   |  |           |   |  | (38,060    | )
|                                                                     |  |                          |   |  |            |   |  |            |  
|Net cash provided by financing activities                            |  | 2,394,574                |   |  | 3,344,049  |   |  | 1,055,515  |  
|                                                                     |  |                          |   |  |            |   |  |            |  
|Increase (decrease) in cash and cash equivalents                     |  | 1,001,410                |   |  | 212,036    |   |  | (2,605     | )
|Cash and cash equivalents at beginning of year                       |  | 260,629                  |   |  | 48,593     |   |  | 51,198     |  
|                                                                     |  |                          |   |  |            |   |  |            |  
|Cash and cash equivalents at end of year                             |  | 1,262,039                |   |  | 260,629    |   |  | 48,593     |  
|                                                                     |  |                          |   |  |            |   |  |            |  



F-7



---

PETROBRAS INTERNATIONAL FINANCE COMPANY

AND SUBSIDIARIES

(A wholly-owned subsidiary of PETRÓLEO BRASILEIRO S.A. - PETROBRAS)



CONSOLIDATED STATEMENT OF CASH FLOWS

Years Ended December 31, 2003, 2002 and 2001

(In thousands of US dollars)



|                                                                       |  |                          |  |         |  |        
|---------------------------------------------------------------------- |  | ------------------------ |  | ------- |  | -------
|                                                                       |  | Years ended December 31,
|                                                                       |  | 2003                     |  | 2002    |  | 2001   
|Supplemental disclosures of cash flow information                      |  |                          |  |         |  |        
|Cash paid during the year for:                                         |  |                          |  |         |  |        
|Interest                                                               |  | 337,818                  |  | 322,286 |  | 151,487
|Income taxes                                                           |  | 109                      |  | 213     |  | 77     
|                                                                       |  |                          | 
|Non cash investing and financing activities                            |  |                          |  |         |  |        
|                                                                       |  |                          | 
|Book value of net assets exchanged for inter-company loan              |  | 6,361                    |  |        |  |       
|Capital contribution from PETROBRAS from transfer of PNBV              |  | 39,135                   |  |        |  |       
|Receipt of Junior Trust Certificates in exchange of future receivables |  | 150,000                  |  |        |  | 150,000
|Assets acquired through capital lease obligations                      |  |                         |  | 665,000 |  |       
|Increase of capital through conversion of loan payable                 |  |                         |  | 60,000  |  | 60,000 
|Receipt of notes receivable in exchange of Senior Exchangeable issued  |  |                         |  | 338,416 |  |       



F-8



---

PETROBRAS INTERNATIONAL FINANCE COMPANY

AND SUBSIDIARIES

(A wholly-owned subsidiary of PETRÓLEO BRASILEIRO S.A. - PETROBRAS)



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US
dollars)



|1. | The Company and its Operations
|-- | ------------------------------



Petrobras International Finance Company - PIFCo was incorporated in the Cayman Islands on September 24, 1997 and operates as a wholly-owned subsidiary of
PETROBRAS.



The primary objective of Petrobras International
Finance Company and its subsidiaries (the Company) is to purchase crude oil and oil products from third parties and sell the products at a premium to PETROBRAS on a deferred payment basis. Accordingly, intercompany activities and transactions, and
therefore the Companys financial position and results of operations, are affected by decisions made by PETROBRAS. Additionally, to a more limited extent, the Company sells oil and oil products to third parties. PIFCo also engages in
international capital market borrowings as a part of the PETROBRAS strategy.



On January 2, 2003, the Company entered into a series of transactions as part of a larger corporate restructuring implemented by PETROBRAS. The restructuring included the transfer of PETROBRAS NETHERLANDS B. V. - PNBV
to PETROBRAS and the transfer of BEAR INSURANCE COMPANY LIMITED - BEAR from BRASPETRO OIL SERVICES - BRASOIL to PIFCo.



PNBV was transferred to PETROBRAS through an intercompany loan of US$ 4,658, with PNBVs existing cash balance being US$ 743. BEAR was transferred to
the Company in exchange for an intercompany payable to BRASOIL of US$ 1,703, with BEARs existing cash balance being US$ 2,988. The restructuring was undertaken in order to group each business activities more closely with the corporate
goals of the respective companies in the PETROBRAS group.



The
corporate restructurings, which resulted in the transfer of PNBV from PIFCo and the transfer of BEAR to PIFCo, were accounted for under FAS 144 and FAS 141, respectively. Due to the immaterial impact of BEAR on PIFCos consolidated financial
statements, the financial statements of December 31, 2002 have not been restated to reflect this transfer among commonly controlled entities. Additionally, as PNBVs operating result was immaterial, the PIFCo financial statements as of December
31, 2002 have similarly not been restated to reflect discontinued operations for disposal of this component.



F-9



---

PETROBRAS INTERNATIONAL FINANCE COMPANY

AND SUBSIDIARIES

(A wholly-owned subsidiary of PETRÓLEO BRASILEIRO S.A. - PETROBRAS)



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US dollars)



|1. | The Company and its OperationsContinued
|-- | ----------------------------------------



In connection with the transfer of PNBV, the Company recognized US$ 39,135 as a capital contribution from PETROBRAS. This amount is equal to the
unamortized portion of the deferred gain of the platform P-47 (US$ 37,271) and the deferred gain on other equipment (US$ 1,864) under similar transaction structures, which upon transfer of PNBV to PETROBRAS was treated as a capital transaction. This
platform was acquired from BRASOIL in December 2001, for its book value of US$ 142,729. On the same date, the P-47 was sold to PB-47, an independent trust, for a market value of US$ 180,000. PB-47 subsequently entered into a charter agreement with
PNBV, which in turn entered into a subcharter agreement with PETROBRAS.



The following is a brief description of each of the Companys wholly-owned subsidiaries:



PETROBRAS FINANCE LIMITED



PETROBRAS FINANCE LIMITED - PFL, is based in the Cayman Islands. PFL purchases bunker and fuel oil from PETROBRAS and sells these products in the
international market in order to generate export receivables to cover the sale of future receivables obligations and to generate additional cash flows in connection with the Companys structured finance export prepayment program.



PETROBRAS EUROPE LIMITED



PETROBRAS EUROPE LIMITED - PEL, based in the United Kingdom, directs
PETROBRAS European trade and finance activities. These activities consist of advising on and negotiating the terms and conditions for crude oil and oil products supplied to PIFCo and PETROBRAS, as well as marketing Brazilian crude oil and
other derivative products exported to the geographic areas in which the Company operates. PEL plays an advisory role in connection with these activities and undertakes no commercial or financial risk.



F-10



---

PETROBRAS INTERNATIONAL FINANCE COMPANY

AND SUBSIDIARIES

(A wholly-owned subsidiary of PETRÓLEO BRASILEIRO S.A. - PETROBRAS)



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US dollars)



|1. | The Company and its OperationsContinued
|-- | ----------------------------------------



BEAR INSURANCE COMPANY LIMITED



BEAR INSURANCE COMPANY LIMITED - BEAR, based in Bermuda, contracts insurance for subsidiaries of PETROBRAS.



|2. | Basis of Financial Statement Presentation
|-- | -----------------------------------------



The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (US
GAAP).



| | (a) | Foreign currency translation
| | --- | ----------------------------



The functional currency of the Company is the US dollar, as the majority of its transactions are denominated in US dollars. When there are transactions in
foreign currencies, exchange gains and losses resulting from foreign currency transactions are recognized in the statement of operations.



| | (b) | Cash and cash equivalents
| | --- | -------------------------



Cash equivalents consist of highly liquid investments that are readily convertible into cash and have an original maturity of three months or less at
their date of acquisition.



| | (c) | Revenues, costs, income and expenses
| | --- | ------------------------------------



Revenues are recognized in accordance with the volume of crude oil and oil products sold and of services rendered; crude oil and oil products revenues are
recognized on an accrual basis when title has transferred. Costs are recognized when incurred. Income and expenses include financial interest and charges, at official rates or indexes, relating to current and non-current assets and liabilities and,
when applicable, the effects arising from the adjustment of assets to market or realizable value.



F-11



---

PETROBRAS INTERNATIONAL FINANCE COMPANY

AND SUBSIDIARIES

(A wholly-owned subsidiary of PETRÓLEO BRASILEIRO S.A. - PETROBRAS)



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US dollars)



|2. | Basis of Financial Statement PresentationContinued
|-- | ---------------------------------------------------



| | (d) | Current and other assets
| | --- | ------------------------



These are stated at their net realizable values.



| | (e) | Marketable securities
| | --- | ---------------------



The Company accounts for certain investments as held-to-maturity securities in accordance with SFAS 115 - Accounting for Certain Investments in Debt and
Equity Securities (SFAS 115). The securities are carried at their amortized cost.



| | (f) | Inventories
| | --- | -----------



Inventories are stated at the lower of cost or market value.



| | (g) | Deferred financing costs
| | --- | ------------------------



Deferred financing costs associated with various debt issuances are recorded as prepaid expenses and are being amortized over the terms of the related
debt, based on the amount of outstanding debt, using the effective interest method. The unamortized balance of deferred financing costs was US$ 80,513 and US$ 34,497 as of December 31, 2003 and 2002, respectively.



| | (h) | Income taxes
| | --- | ------------



The Company accounts for income taxes using an asset and liability approach, which requires the recognition of taxes payable or refundable for the current
year and deferred tax liabilities and assets representing the future tax consequences of events that have been recognized in the Companys financial statements. The measurement of current and deferred tax liabilities and assets are based on the
provisions of the tax laws in the countries in which the Company and its subsidiaries operate (the United Kingdom, Bermuda and the Cayman Islands in 2003 and United Kingdom, Netherlands and the Cayman Islands in 2002). Deferred tax assets are
reduced by the amount of any tax benefits when, based on the available evidence, such benefit may not be realized. The Cayman Islands and Bermuda have no corporate tax requirements, therefore the Company has no tax provision for the periods. There
were no significant operations in the United Kingdom or the Netherlands that gave rise to taxable income in these countries that would have created temporary differences.



F-12



---

PETROBRAS INTERNATIONAL FINANCE COMPANY

AND SUBSIDIARIES

(A wholly-owned subsidiary of PETRÓLEO BRASILEIRO S.A. - PETROBRAS)



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US dollars)



|2. | Basis of Financial Statement PresentationContinued
|-- | ---------------------------------------------------



| | (i) | Investments in direct financing leases and capital lease obligations
| | --- | --------------------------------------------------------------------



As of January 2, 2003, PNBV, the Companys leasing subsidiary, was transferred to PETROBRAS. Due to this transaction, leasing activities are no
longer included in the Companys results of operations. Prior period financial statements have not been restated for the effect of discontinued leasing operations as amounts related to these transactions were immaterial to PIFCo operations.



Through December 31, 2002, the Company acquired operating
platforms and production equipment under the terms of purchase agreements (see Note 6), purchase invoices and charter agreements and subsequently leased this equipment under the terms of existing and future charter and sub-charter agreements with
related parties. These charter and sub-charter agreements were considered to be Direct Finance Leases in accordance with the provisions of Statement of Financial Accounting Standards No. 13 Accounting for leases (SFAS 13) and
subsequently issued amendments to and interpretations of SFAS 13.





| | (i) | Investments in direct financing leases and capital lease obligationsContinued
| | --- | ------------------------------------------------------------------------------



Income and expense financing leases, consisting of interest income, was recognized over the lease term. Income and expense
from operating leases was recognized ratably over the terms of the leases.



| | (j) | Current and long-term liabilities
| | --- | ---------------------------------



These are stated at known or estimated amounts including, when applicable, accrued interest.



| | (k) | Unearned income
| | --- | ---------------





Unearned income represents the unearned premium charged by the Company to PETROBRAS and ALBERTO PASQUALINI - REFAP S.A.
(REFAP) to compensate for its financing costs. The premium is billed to PETROBRAS and REFAP at the same time the related product is sold, and is deferred and recognized into earnings as a component of financial income on a straight-line basis over
the collection period, which ranges from 120 to 270 days, in order to match the premium billed with the Companys financial expense.



F-13



---

PETROBRAS INTERNATIONAL FINANCE COMPANY

AND SUBSIDIARIES

(A wholly-owned subsidiary of PETRÓLEO BRASILEIRO S.A. - PETROBRAS)



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US dollars)



|2. | Basis of Financial Statement PresentationContinued
|-- | ---------------------------------------------------



| | (l) | Financial instruments
| | --- | ---------------------



All of the Companys derivative instruments are recorded on the balance sheet at their fair value. Changes in the fair value of derivatives are
recorded each period in current earnings. The ineffective portion of all hedges is recognized in current period earnings.



PIFCo holds a purchased call option that serves as an economic hedge on crude oil related to future sales of receivables under the structured finance
export prepayment program, the intent of which is to assure a minimum floor price of US$14/barrel sufficient to comply with its financial obligations. This option has no intrinsic value and immaterial time value at December 31, 2003, and therefore
does not have a material effect on the Company results or balance sheet.



| | (m) | Recently issued accounting pronouncements
| | --- | -----------------------------------------



In January 2003, FASB issued Interpretation No. 46 - Consolidation of Variable Interest Entities, which was later revised in December 2003 (FIN 46-R). FIN
46-R provides guidance on when certain entities should be consolidated or the interests in those entities should be disclosed by enterprises that do not control them through majority voting interest. Under FIN 46-R, variable interest entities are
required to be consolidated by an enterprise that has a controlling financial interest through an obligation to absorb the majority of expected losses or the right to receive the majority of expected returns. Entities identified with these
characteristics are called variable interest entities and the interest that enterprises have in these entities are called variable interests. These interests may derive from certain guarantees, leases, loans or other arrangements that result in
risks and rewards, which finance the variable interest entities, despite the voting interest in the entities.



The interpretation requires that if a business enterprise has a controlling financial interest in a variable entity, the assets, liabilities and results
of the activities of the variable interest entity must be included in the consolidated financial statements with those of the business enterprise. This interpretation applies immediately to variable interest entities created after January 31, 2003.
FIN 46-R must be adopted for variable interest entities created before February 1, 2003, at the end of the first interim or annual reporting period ended after March 15, 2004. The Company has concluded that it does not have any entities or
transactions that are subject to the requirements of FIN 46-R.



F-14



---

PETROBRAS INTERNATIONAL FINANCE COMPANY

AND SUBSIDIARIES

(A wholly-owned subsidiary of PETRÓLEO BRASILEIRO S.A. - PETROBRAS)



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US dollars)



|3. | Cash and Cash Equivalents
|-- | -------------------------



|                                              |  |           |  |        
|--------------------------------------------- |  | --------- |  | -------
|                                              |  | 2003      |  | 2002   
|Cash                                          |  | 1,312     |  | 1,226  
|Time deposits and short term investment funds |  | 1,260,727 |  | 259,403
|                                              |  |           |  |        
|                                              |  | 1,262,039 |  | 260,629
|                                              |  |           |  |        



At December 31, 2003,
PIFCo had amounts invested in an exclusive fund that held debt securities of PIFCo and PIFCo subsidiaries in the amount of US$ 54,004. These amounts were offset against the balance of financing classified under current and noncurrent liabilities.



Further, this fund held other debt securities in the amount
of US$ 221,909 of other PETROBRAS group companies that are affiliates, but not subsidiaries of the Company, and special purpose companies with which Petrobras has affiliations.



|4. | Marketable Securities
|-- | ---------------------



|                          |  |           |  |          |  |          |  |          |   |  |         |  |          |  
|------------------------- |  | --------- |  | -------- |  | -------- |  | -------- | - |  | ------- |  | -------- | -
|                          |  |           |  |          |  |          |  |          |   |  | Total   | 
|                          |  |           |  |          |  |          |  | Interest |   |  |         |  |          |  
|Security                  |  | Issuer    |  | Maturity |  | Currency |  | rate     |   |  | 2003(*) |  | 2002 (*) |  
|MARLIM 04 (1)             |  | MARLIM    |  | 2004     |  | Dollar   |  | 13       | % |  | 14,700  |  | 29,625   |  
|PETRO 04 (1)              |  | PETROBRAS |  | 2004     |  | Euro     |  | 9        | % |  | 3,260   |  | 2,624    |  
|PETRO 03                  |  | PETROBRAS |  | 2003     |  | Yen      |  | 4        | % |  |         |  | 52,622   |  
|OTHERS                    |  |          |  |         |  |         |  |         |   |  |         |  | 13,101   |  
|                          |  |           |  |          |  |          |  |          |   |  |         |  |          |  
|                          |  |           |  |          |  |          |  |          |   |  | 17,960  |  | 97,972   |  
|Less non-current balances |  |           |  |          |  |          |  |          |   |  |        |  | (36,299  | )
|                          |  |           |  |          |  |          |  |          |   |  |         |  |          |  
|                          |  |           |  |          |  |          |  |          |   |  | 17,960  |  | 61,673   |  
|                          |  |           |  |          |  |          |  |          |   |  |         |  |          |  

---

|(*) | The balances include interest and principal.
|--- | --------------------------------------------

|(1) | The Company classified these investments as held to maturity.
|--- | -------------------------------------------------------------

|
|



F-15



---

PETROBRAS INTERNATIONAL FINANCE COMPANY AND SUBSIDIARIES

(A wholly-owned subsidiary of PETRÓLEO BRASILEIRO S.A. - PETROBRAS)



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US
dollars)



|5. | Related Parties
|-- | ---------------



|                                            |  |                                    |   |  |                                                       |   |  |                                                                    |   |  |                                                  |   |  |                            |  |                             |  |                            |  |        |  |            |   |  |            |   |  |            |  
|------------------------------------------- |  | ---------------------------------- | - |  | ----------------------------------------------------- | - |  | ------------------------------------------------------------------ | - |  | ------------------------------------------------ | - |  | -------------------------- |  | --------------------------- |  | -------------------------- |  | ------ |  | ---------- | - |  | ---------- | - |  | ---------- | -
|                                            |  | PETRÓLEOBRASILEIROS.A. - PETROBRAS |   |  | DOWNSTREAMPARTICIPAÇÕESS.A. and its subsidiaries(iii) |   |  | PETROBRASINTERNATIONALBRASPETRO B.V. -PIB.B.V. and itssubsidiaries |   |  | BRASPETROOILSERVICES -BRASOILand itssubsidiaries |   |  | BRASPETROOIL COMPANY - BOC |  | PETROBRASDISTRIBUIDORA - BR |  | COMPANHIAPETROLIFERAMARLIM |  | Others |  | 2003       |   |  | 2002       |   |  |            |  
|Current assets                              |  |                                    |   |  |                                                       |   |  |                                                                    |   |  |                                                  |   |  |                            |  |                             |  |                            |  |        |  |            |   |  |            |   |  |            |  
|Accounts receivable,                        |  |                                    |   |  |                                                       |   |  |                                                                    |   |  |                                                  |   |  |                            |  |                             |  |                            |  |        |  |            |   |  |            |   |  |            |  
|principally for sales (i)                   |  | 4,746,196                          |   |  | 147,845                                               |   |  | 160,518                                                            |   |  |                                                 |   |  |                           |  | 1,906                       |  |                           |  | 8,007  |  | 5,064,472  |   |  | 4,653,462  |   |  |            |  
|Net investment in direct finance lease      |  |                                   |   |  |                                                       |   |  |                                                                   |   |  |                                                 |   |  |                           |  |                            |  |                           |  |       |  |           |   |  | 183,618    |   |  |            |  
|Notes receivable                            |  | 452                                |   |  |                                                      |   |  | 786,741                                                            |   |  | 341,610                                          |   |  | 259,201                    |  |                            |  |                           |  |       |  | 1,388,004  |   |  | 1,157,930  |   |  |            |  
|Marketable securities (Note 5)              |  | 3,260                              |   |  |                                                      |   |  |                                                                   |   |  |                                                 |   |  |                           |  |                            |  |                           |  | 14,700 |  | 17,960     |   |  | 51,906     |   |  |            |  
|Export prepayment                           |  | 72,482                             |   |  |                                                      |   |  |                                                                   |   |  |                                                 |   |  |                           |  |                            |  |                           |  |       |  | 72,482     |   |  | 1,189      |   |  |            |  
|Others                                      |  |                                   |   |  |                                                      |   |  |                                                                   |   |  |                                                 |   |  |                           |  |                            |  |                           |  |       |  |           |   |  | 970        |   |  |            |  
|                                            |  |                                    |   |  |                                                       |   |  |                                                                    |   |  |                                                 
|Other assets                                |  |                                    |   |  |                                                       |   |  |                                                                    |   |  |                                                  |   |  |                            |  |                             |  |                            |  |        |  |            |   |  |            |   |  |            |  
|Notes receivable                            |  |                                   |   |  |                                                      |   |  | 338,416                                                            |   |  |                                                 |   |  |                           |  |                            |  |                           |  |       |  | 338,416    |   |  | 473,632    |   |  |            |  
|Net investment in direct financing lease    |  |                                   |   |  |                                                      |   |  |                                                                   |   |  |                                                 |   |  |                           |  |                            |  |                           |  |       |  |           |   |  | 832,319    |   |  |            |  
|Export prepayment                           |  | 1,406,850                          |   |  |                                                      |   |  |                                                                   |   |  |                                                 |   |  |                           |  |                            |  |                           |  |       |  | 1,406,850  |   |  | 750,000    |   |  |            |  
|Marketable securities (Note 5)              |  |                                   |   |  |                                                      |   |  |                                                                   |   |  |                                                 |   |  |                           |  |                            |  |                           |  |       |  |           |   |  | 2,370      |   |  |            |  
|Others                                      |  |                                   |   |  |                                                      |   |  |                                                                   |   |  |                                                 |   |  |                           |  |                            |  |                           |  |       |  |           |   |  | 3,349      |   |  |            |  
|                                            |  |                                    |   |  |                                                       |   |  |                                                                    |   |  |                                                 
|Current liabilities                         |  |                                    |   |  |                                                       |   |  |                                                                    |   |  |                                                  |   |  |                            |  |                             |  |                            |  |        |  |            |   |  |            |   |  |            |  
|Trade accounts payable                      |  | 223,019                            |   |  | 4,138                                                 |   |  | 6,865                                                              |   |  | 36,528                                           |   |  |                           |  |                            |  |                           |  | 400    |  | 270,950    |   |  | 291,980    |   |  |            |  
|Notes payable (ii)                          |  | 2,441,401                          |   |  |                                                      |   |  |                                                                   |   |  | 1,377                                            |   |  |                           |  |                            |  |                           |  |       |  | 2,442,778  |   |  | 3,688,249  |   |  |            |  
|Unearned income                             |  | 59,466                             |   |  | 2,400                                                 |   |  |                                                                   |   |  |                                                 |   |  |                           |  |                            |  |                           |  |       |  | 61,866     |   |  | 48,563     |   |  |            |  
|                                            |  |                                    |   |  |                                                       |   |  |                                                                    |   |  |                                                 
|Statement of operations                     |  |                                    |   |  |                                                       |   |  |                                                                    |   |  |                                                  |   |  |                            |  |                             |  |                            |  |        |  |            |   |  |            |   |  | 2001       |  
|Sales of crude oil and oil products         |  | 3,618,804                          |   |  | 804,273                                               |   |  | 1,115,663                                                          |   |  |                                                 |   |  |                           |  | 4,282                       |  |                           |  |       |  | 5,543,022  |   |  | 5,375,484  |   |  | 5,849,883  |  
|Cost of sales                               |  | (1,669,984                         | ) |  | (74,510                                               | ) |  | (783,394                                                           | ) |  | (323,514                                         | ) |  |                           |  |                            |  |                           |  |       |  | (2,851,402 | ) |  | (2,409,034 | ) |  | (1,648,107 | )
|Lease income (expense)                      |  |                                   |   |  |                                                      |   |  |                                                                   |   |  |                                                 |   |  |                           |  |                            |  |                           |  |       |  |           |   |  | 12,058     |   |  | 140        |  
|Selling, general and administrative expense |  | (17,091                            | ) |  |                                                      |   |  |                                                                   |   |  |                                                 |   |  |                           |  |                            |  |                           |  |       |  | (17,091    | ) |  |           |   |  |           |  
|Financial income (expense)                  |  | 202,714                            |   |  | 8,787                                                 |   |  | 51,507                                                             |   |  | 9,176                                            |   |  | 14,387                     |  |                            |  | 3,268                      |  |       |  | 289,839    |   |  | 140,657    |   |  | 88,040     |  

---

Commercial operations between PIFCo and its
subsidiaries and affiliated companies are carried out under normal market conditions and at commercial prices, except for the sales of oil and oil products to PETROBRAS, which have an extended settlement period consistent with PIFCos formation
as a financing entity, and include finance charges incurred during the extended payment period.



The transactions were realized to support the financial and operational strategy of the Companys Parent Company, PETRÓLEO BRASILEIRO S.A. - PETROBRAS.



|(i) | Accounts receivable from related parties relate principally to crude oil sales made by the Company to PETROBRAS, with extended payment terms of up to 270 days.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|(ii) | Notes payable to related parties principally include balances to PETROBRAS for intercompany loans made on a 90 and 180 day basis.
|---- | ---------------------------------------------------------------------------------------------------------------------------------

|
|

|(iii) | On January 2 and 5, 2004, PIFCo received US$ 7,902 and US$ 18,400, respectively, relating to trade accounts receivable from REFAP outstanding in 2003.
|----- | ------------------------------------------------------------------------------------------------------------------------------------------------------



F-16



---

PETROBRAS INTERNATIONAL FINANCE COMPANY

AND SUBSIDIARIES

(A wholly-owned subsidiary of PETRÓLEO BRASILEIRO S.A. - PETROBRAS)



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US dollars)



|6. | Restricted Deposits for Guarantees
|-- | ----------------------------------



PIFCo has deposits in guarantee, relating to contractual obligations in financing arrangements. The amount of US$ 69,874 classified in current assets,
relates to a deposit made in connection with the issuance of global notes in the amount of US$ 500,000 (described in note 7) and is renewed annually. The amount classified in non-current assets is comprised of deposits of US$ 29,568 and US$ 38,429
related to issuances of senior notes in the total amount of US$ 450,000 and US$ 600,000, respectively (described in note 7). These guarantees will be maintained through maturity of the related financings.



|7. | Short-Term Financing and Long-Term Debt
|-- | ---------------------------------------



|                                  |  |           |  |           |  |           |  |          
|--------------------------------- |  | --------- |  | --------- |  | --------- |  | ---------
|                                  |  | Current   |  | Long-term
|                                  |  | 2003      |  | 2002      |  | 2003      |  | 2002     
|Financial institutions (i)        |  | 1,015,346 |  | 366,066   |  | 377,550   |  | 460,300  
|Senior notes                      |  | 53,612    |  | 53,647    |  | 1,541,558 |  | 1,550,000
|Sale of future                    |  |           |  |           |  |           |  |          
|Receivables                       |  | 61,764    |  | 577       |  | 1,699,650 |  | 900,000  
|Senior exchangeable               |  |           |  |           |  |           |  |          
|Notes                             |  | 3,840     |  | 3,349     |  | 338,416   |  | 338,416  
|Global step-up notes              |  | 8,951     |  |          |  | 380,077   |  |         
|Global notes                      |  | 4,373     |  |          |  | 1,488,085 |  |         
|                                  |  |           |  |           |  |           |  |          
|                                  |  | 1,147,886 |  | 423,639   |  | 5,825,336 |  | 3,248,716
|                                  |  |           |  |           |  |           |  |          
|Financing                         |  | 852,390   |  | 285,770   |  | 5,825,336 |  | 3,248,716
|Current portion of long term debt |  | 224,002   |  | 81,700    |  |          |  |         
|Accrued interest                  |  | 71,494    |  | 56,169    |  |          |  |         
|                                  |  |           |  |           |  |           |  |          
|                                  |  | 1,147,886 |  | 423,639   |  | 5,825,336 |  | 3,248,716
|                                  |  |           |  |           |  |           |  |          

---

|(i) | The Companys borrowings in US dollars are derived mainly from commercial banks and include trade lines of credit and commercial paper, which are primarily intended for the
purchase of crude oil and oil products, and with interest rates ranging from 2.57% to 5.21% at December 31, 2003. The weighted average borrowing rate for short-term debt at December 31, 2003 and 2002 was 3.85% and 3.44%, respectively.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



At December 31, 2003 and 2002, the Company had
fully utilized all available lines of credit for purchase of imports.



F-17



---

PETROBRAS INTERNATIONAL FINANCE COMPANY

AND SUBSIDIARIES

(A wholly-owned subsidiary of PETRÓLEO BRASILEIRO S.A. - PETROBRAS)



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US dollars)



|7. | Short-Term Financing and Long-Term DebtContinued
|-- | -------------------------------------------------



Long term financing  additional information



|                                           |  |                     |  |          |  |                   |  |           |   |  |                |  |          
|------------------------------------------ |  | ------------------- |  | -------- |  | ----------------- |  | --------- | - |  | -------------- |  | ---------
|                                           |  |                     |  |          |  |                   |  |           |   |  | Payment period
|                                           |  | Date of issuance    |  | Maturity |  | Interest rate     |  | Amount    |   |  | Interest       |  | Principal
|Senior Notes (a)                           |  |                     |  |          |  |                   |  |           |   |  |                |  |          
|Senior Notes                               |  | February, 2001      |  | 2007     |  | 9.125%            |  | 400,000   |   |  | semiannually   |  | bullet   
|Senior Notes                               |  | February, 2001      |  | 2007     |  | 9.125%            |  | 100,000   |   |  | semiannually   |  | bullet   
|Senior Notes                               |  | May, 2001           |  | 2008     |  | 9.875%            |  | 450,000   |   |  | semiannually   |  | bullet   
|Senior Notes                               |  | July, 2001          |  | 2011     |  | 9.750%            |  | 600,000   |   |  | semiannually   |  | bullet   
|                                           |  |                     |  |          |  |                   |  |           |   |  |                |  |          
|                                           |  |                     |  |          |  |                   |  |           |   |  |                |  |          
|                                           |  |                     |  |          |  |                   |  | 1,550,000 |   |  |                |  |          
|Senior Notes repurchased (e)               |  |                     |  |          |  |                   |  | (8,442    | ) |  |                |  |          
|                                           |  |                     |  |          |  |                   |  |           |   |  |                |  |          
|                                           |  |                     |  |          |  |                   |  | 1,541,558 |   |  |                |  |          
|                                           |  |                     |  |          |  |                   |  |           |   |  |                |  |          
|Sale of Future receivables (b)             |  |                     |  |          |  |                   |  |           |   |  |                |  |          
|Junior Notes                               |  |                     |  |          |  |                   |  |           |   |  |                |  |          
|Serie 2001-A1                              |  | December, 2001      |  | 2010     |  | 6.75%             |  | 19,000    |   |  | quarterly      |  | bullet   
|Serie 2001-A2                              |  | December, 2001      |  | 2010     |  | Libor 3 M + 1%    |  | 11,000    |   |  | quarterly      |  | bullet   
|Serie 2001-B                               |  | December, 2001      |  | 2011     |  | 6.60%             |  | 60,000    |   |  | quarterly      |  | bullet   
|Serie 2001-C                               |  | December, 2001      |  | 2013     |  | Libor 3 M + 0.85% |  | 60,000    |   |  | quarterly      |  | bullet   
|Serie 2003-B                               |  | May, 2003           |  | 2013     |  | 3.748%            |  | 40,000    |   |  | quarterly      |  | bullet   
|Serie 2003-A                               |  | May, 2003           |  | 2015     |  | 6.436%            |  | 110,000   |   |  | quarterly      |  | bullet   
|                                           |  |                     |  |          |  |                   |  |           |   |  |                |  |          
|                                           |  |                     |  |          |  |                   |  | 300,000   |   |  | (f)            |  |          
|Senior Notes                               |  |                     |  |          |  |                   |  |           |   |  |                |  |          
|Serie 2001-A1                              |  | December, 2001      |  | 2010     |  | 7.8%              |  | 95,000    |   |  | quarterly      |  | quarterly
|Serie 2001-A2                              |  | December, 2001      |  | 2010     |  | Libor 3 M + 2.05% |  | 55,000    |   |  | quarterly      |  | quarterly
|Serie 2001-B                               |  | December, 2001      |  | 2011     |  | 7.65%             |  | 300,000   |   |  | quarterly      |  | quarterly
|Serie 2001-C                               |  | December, 2001      |  | 2013     |  | Libor 3 M + 2.10% |  | 300,000   |   |  | quarterly      |  | quarterly
|Serie 2003-B                               |  | May, 2003           |  | 2013     |  | 5.548%            |  | 190,850   |   |  | quarterly      |  | quarterly
|Serie 2003-A                               |  | May, 2003           |  | 2015     |  | 6.436%            |  | 466,000   |   |  | quarterly      |  | quarterly
|                                           |  |                     |  |          |  |                   |  |           |   |  |                |  |          
|                                           |  |                     |  |          |  |                   |  | 1,406,850 |   |  |                |  |          
|                                           |  |                     |  |          |  |                   |  |           |   |  |                |  |          
|                                           |  |                     |  |          |  |                   |  | 1,706,850 |   |  |                |  |          
|Sale of Future Receivables repurchased (e) |  |                     |  |          |  |                   |  | (7,200    | ) |  |                |  |          
|                                           |  |                     |  |          |  |                   |  |           |   |  |                |  |          
|                                           |  |                     |  |          |  |                   |  | 1,699,650 |   |  |                |  |          
|                                           |  |                     |  |          |  |                  
|Senior Exchangeable Notes(c)               |  | October, 2001       |  | 2007     |  | 4.750%            |  | 338,416   |   |  | semiannually   |  | bullet   
|                                           |  |                     |  |          |  |                  
|Global Step-up Notes                       |  | March, 2003         |  | 2008     |  | 9.000% (d)        |  | 400,000   |   |  | semiannually   |  | bullet   
|Global Step-up Notes repurchased (e)       |  |                     |  |          |  |                   |  | (19,923   | ) |  |                |  |          
|                                           |  |                     |  |          |  |                   |  |           |   |  |                |  |          
|                                           |  |                     |  |          |  |                   |  | 380,077   |   |  |                |  |          
|                                           |  |                     |  |          |  |                  
|Global Notes                               |  |                     |  |          |  |                   |  |           |   |  |                |  |          
|Global Notes                               |  | July, 2003          |  | 2013     |  | 9.125%            |  | 500,000   |   |  | semiannually   |  | bullet   
|Global Notes                               |  | September, 2003 (e) |  | 2013     |  | 9.125%            |  | 256,524   |   |  | semiannually   |  | bullet   
|Global Notes                               |  | December, 2003      |  | 2018     |  | 8.375%            |  | 750,000   |   |  | semiannually   |  | bullet   
|                                           |  |                     |  |          |  |                   |  |           |   |  |                |  |          
|                                           |  |                     |  |          |  |                   |  | 1,506,524 |   |  |                |  |          
|Global Notes repurchased (e)               |  |                     |  |          |  |                   |  | (18,439   | ) |  |                |  |          
|                                           |  |                     |  |          |  |                   |  |           |   |  |                |  |          
|                                           |  |                     |  |          |  |                   |  | 1,488,085 |   |  |                |  |          



F-18



---

PETROBRAS INTERNATIONAL FINANCE COMPANY

AND SUBSIDIARIES

(A wholly-owned subsidiary of PETRÓLEO BRASILEIRO S.A. - PETROBRAS)



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US dollars)



|7. | Short-Term Financing and Long-Term DebtContinued
|-- | -------------------------------------------------



Long term financing  additional informationContinued



| | (a) | The three series of Senior Notes issued in 2001 have fixed interest rates with interest payable semi-annually. So long as any note of the issuances remains outstanding, the Company
is prohibited from creating or permitting any lien, other than a PIFCo permitted lien as defined in each of the issuances prospectus, by the Company on any of the Companys assets to secure additional indebtedness, except
under certain conditions. These issuances are general senior unsecured and unsubordinated obligations of the Company and will rank equal in right of payment with all other unsecured and unsubordinated obligations of the Company that are not
expressly subordinated in right of payment. The failure by the Company to make required payments of principal, interest or other amounts will compel PETROBRAS to fulfill payment obligations.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



PETROBRAS entered into standby purchase agreements in support of the
obligations of PIFCo under the issuances and their respective indentures. PETROBRAS has the obligation to purchase from the noteholders any unpaid amounts of principal, interest or other amounts due under the notes and the indenture. This purchase
obligation exists, subject to certain limitations, irrespective of whether any such amounts are due at maturity of the notes or otherwise.



| | (b) | Respective to the Senior and Junior Notes issued pursuant to the structured finance program, PETROBRAS and PFL have certain contracts (Master Export Contract and Prepayment
Agreement) between themselves and a special purpose entity not related to PETROBRAS, PF Export Receivables Master Trust (PF Export), relating to the prepayment of export receivables to be generated by PFL by means of sales on the
international market of fuel oil and other products acquired from PETROBRAS.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-19



---

PETROBRAS INTERNATIONAL FINANCE COMPANY

AND SUBSIDIARIES

(A wholly-owned subsidiary of PETRÓLEO BRASILEIRO S.A. - PETROBRAS)



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US dollars)



|7. | Short-Term Financing and Long-Term DebtContinued
|-- | -------------------------------------------------



Long term financing  additional informationContinued



As stipulated in the contracts, PFL assigned the rights to future receivables in the amount of US$ 1,800,000 (1st and 2nd
tranches) to PF Export, which, in turn, issued and delivered to PFL the following securities, also in the amount of US$ 1,800,000:



| |  | US$ 1,500,000 in Senior Trust Certificates, which were negotiated by PFL on the international market at face value. The amount was transferred to PETROBRAS as prepayment for exports
to be made to PFL, according to the prepayment agreement.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | US$ 300,000 in Junior Trust Certificates, which are held in the portfolio of PFL. If PF Export incurs any losses on the receipt of the value of the export receivables transferred by
PFL, these losses will be compensated by the Junior Trust Certificates.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The assignment of rights to future export receivables represents a liability of PFL, which will be settled by the transfer of the receivables to PF Export as and when they are generated. This liability will bear
interest on the same basis as the Senior and Junior Trust Certificates, as described above.



As long as any Senior Trust Certificates or amounts payable to the insurers that are guaranteeing the payments to the holders of the Senior Trust Certificates remain outstanding, PETROBRAS is required to export to the
Company, during each quarterly delivery period, (a) at least 80% of the total volume of heavy fuel oil exported by Petrobras during such period and (b) certain oil products having an aggregate value (as determined by the net invoice amount at which
such products are actually sold by PFL) equal to, at least, the debt service requirements of the Senior Trust Certificates multiplied by a coverage ratio. Moreover, certain additional receivables, as defined in the agreements, are to be generated by
the sale of eligible products to other buyers, to make the aggregate amount of both exports and additional receivables equal to 1.2 times the debt service. PETROBRAS also agrees that its average daily gross exports of heavy fuel oil for any rolling
12-month period will be equal to at least 70,000 barrels.



F-20



---

PETROBRAS INTERNATIONAL FINANCE COMPANY

AND SUBSIDIARIES

(A wholly-owned subsidiary of PETRÓLEO BRASILEIRO S.A. - PETROBRAS)



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US dollars)



|7. | Short-Term Financing and Long-Term DebtContinued
|-- | -------------------------------------------------



Long term financing  additional informationContinued



PETROBRAS will not be relieved of its obligations to deliver the oil products under the export prepayment program in the
amounts set forth for any reason, including, but not limited to force majeure or non-payment by PFL.



| | (c) | These notes were issued in connection with PETROBRAS purchase of a controlling interest in Perez Companc S.A. (currently PEPSA) and Petrolera Perez Companc S.A.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (d) | After April 1, 2006, the rate will be set at 12.375% per annum.
| | --- | ---------------------------------------------------------------



| | (e) | The aggregate amount of US$ 54,004 was reclassified from cash and cash equivalents as it relates to the portion of PIFCos debt included in the portfolio of a short-term
investment fund.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (f) | At December 31, 2003, pursuant to clarification from PIFCo legal advisors, the Junior Trust Certificates are presented in full amount rather than following a schedule of
amortization ratably with the Senior Trust Certificates, as previously stated.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Long-term maturities



|           |  |                 
|---------- |  | ----------------
|           |  | December 31,2003
|2005       |  | 259,348         
|2006       |  | 408,878         
|2007       |  | 994,756         
|2008       |  | 990,171         
|2009       |  | 173,218         
|Thereafter |  | 2,998,965       
|           |  |                 
|           |  | 5,825,336       
|           |  |                 



F-21



---

PETROBRAS INTERNATIONAL FINANCE COMPANY

AND SUBSIDIARIES

(A wholly-owned subsidiary of PETRÓLEO BRASILEIRO S.A. - PETROBRAS)



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US dollars)



|8. | Fair Value
|-- | ----------



Fair values are derived either from quoted market prices available, or, in their absence, the present value of expected cash flows. The fair values
reflect the cash that would have been received or paid if the instruments were settled at year end. Fair values of cash and cash equivalents, trade receivables, short-term debt and trade payables approximate their carrying values. Fair value for
long-term lines of credit approximates carrying value due to the nature of the transactions.



The Companys long-term debt included US$ 5,825 thousand and US$ 3,248 thousand, of which US$ 5,440 thousand and US$ 2,788 thousand related to senior notes, sales of future receivables, senior exchangeable notes,
global step-up notes and global notes at December 31, 2003 and 2002 and had estimated fair values of US$ 5,898 thousand and US$ 2,702 thousand, respectively.



The Companys long-term asset related to the export prepayment program included US$ 1,707 thousand and US$ 900 thousand at December 31, 2003 and
2002, and had fair values of US$ 1,724 thousand and US$ 900 thousand, respectively.



|9. | Commitments and Contingencies
|-- | -----------------------------



| | (a) | Commitments - Purchases
| | --- | -----------------------



In an effort to ensure procurement of oil products for the Companys customers, the Company currently has several short-term contracts which
collectively obligate it to purchase a minimum of approximately 139,344 barrels of crude oil and oil products per day at market prices.



F-22



---

PETROBRAS INTERNATIONAL FINANCE COMPANY

AND SUBSIDIARIES

(A wholly-owned subsidiary of PETRÓLEO BRASILEIRO S.A. - PETROBRAS)



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US dollars)



|9. | Commitments and Contingencies Continued
|-- | ----------------------------------------



| | (b) | Purchase Option  Platforms
| | --- | ---------------------------



The Company has maintained the right to exercise the call option on the existing Subchartered Asset Option Agreements with PNBV, for the Platforms P-8,
P-15, P-32 and P-47, after the expiration of the Charter terms with PNBV. Upon exercise of the call option, the Company will purchase all of the vessels for the greater of (i) the purchase price, any unpaid and accrued charter hire for all of the
vessels, or any costs and expenses which PNBV has incurred or may incur by virtue of any such purchase, and the amount equal to the default amount set forth in each of the charters for all of the Vessels; and (ii) Ten (10) dollars from PNBV,
representation or warranty of any kind or character, and assume and succeed to all rights, duties and obligations of PNBV under the charters.



PIFCo may designate any affiliate or subsidiary to perform its obligations under this agreement.



* * *



F-23