This excerpt taken from the PBR 20-F filed Jun 30, 2005.
PIFCo may not earn enough money from its own operations to meet its debt obligations.
PIFCo is a direct wholly-owned subsidiary of Petrobras incorporated in the Cayman Islands as an exempted company with limited liability. Accordingly, PIFCos financial position and results of operations are largely affected by our decisions, as its parent company. PIFCo has limited operations consisting principally of the purchase of crude oil and oil products from third parties and the resale of those products to us, with financing for such operations provided by us as well as third-party credit providers. PIFCo also buys and sells crude oil and oil products from and to third parties on a limited basis. PIFCos ability to pay interest, principal and other amounts due on its outstanding and future debt obligations will depend upon a number of factors, including:
In the event of a material adverse change in our financial condition or results of operations or in our financial support of PIFCo, PIFCo may not have sufficient funds to repay all amounts due on its indebtedness. See Risks Relating to Our Operations for a more detailed description of certain risks that may have a material adverse impact on our financial condition or results of operations and therefore affect PIFCos ability to meet its debt obligations.