Brazil’s Congress Passes Bill to Redistribute Oil Royalties

From Fox News Latino

Brazil’s Congress has passed a bill that would reduce the proportion of royalties that accrue to the state and municipal governments of oil-producing states, while distributing more of those revenues to other states.

The Senate had already passed the legislation and the lower house followed suit Tuesday with a vote of 286-124.

The bill mainly affects the southeastern states of Rio de Janeiro and Espirito Santo because 80 percent of the country’s proved reserves come from fields located in marine basins off their coasts.

Under the current regulatory framework, those states receive the vast majority of the royalty revenue from those fields.

Oil-producing states and municipalities could lose nearly $4 billion annually in royalties from existing and future oil fields as of 2013 if President Dilma Rousseff signs the new distribution arrangement into law, according to press reports.

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