Brazilian
Federal, State Governments
Battle Over New Oil Rules
Rio de Janeiro - Brazil's
new oil exploitation regulations for the
pre-salt layer oil reserves have sparked
friction between the federal and state
governments, local press said Friday.
The new rules, to be unveiled on Monday in
Brasilia, will give the federal government
more control over oil exploration and
foresee a more equal distribution of oil
royalties among all Brazilian states.
Oil producing states will be the most
affected as they currently receive a lion's
share of royalties that put billions of
reais into their revenues.
In an act of protest, the governors of Rio
de Janeiro state and Espirito Santo state,
where most of Brazil's oil fields are
located off coasts, said they would not
attend the ceremony for the announcement of
the rules.
In order to settle the dispute, Brazilian
President Luiz InacioLula da Silva invited
the two governors for a meeting on Sunday,
along with the governor of Sao Paulo state
where many of pre-salt oil reserves locate
along the coast as well.
Lula will forward the measures to the
Congress on Tuesday for an approval. But if
the three states do not agree with the
rules, the federal government may have
serious trouble in passing the bill in the
House of Representatives, in which the three
states together have almost a quarter of the
seats.
Rio de Janeiro state received 6.8 billion
reais (3.7 billion U.S. dollars) in
royalties and other oil taxes last year.
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