Petrobras, Brazil’s state-controlled energy company, has been upgraded to investment grade by Standard & Poor’s.

The company’s real or dollar-denominated debt is now graded BBB-. Petrobras is the biggest exporter in Brazil, according to the country’s trade ministry, and is followed by Companhia Vale do Rio Doce (CVRD), Embraer, Bunge and Volkswagen.

Petrobras is also Brazil’s leading importer and is trailed by Embraer, refinery Albero Pasqualini – REFAP, Motorola and Caraiba Metais.

S&P states that Petrobras’ finances are strong enough to mitigate part of Brazil’s sovereign risk in case of economic stress, according to a Petrobras announcement.

However, S&P remarks this is offset by factors such as the company’s net export revenues being marginal due in part to imports of light oil to feed refineries, expectation of marginal cashflow generation stemming from an aggressive and cash-consuming investment plan and most of Petrobras’ assets and sales presently concentrated in Brazil.

Petrobras imported US$10.8bn between January and November 2006, while exports totalled US$10.1bn in the same period, according to the trade ministry.