Senate suggests new equation for oil royalties.
To avoid a joint effort among non-producing states, a proposal by Senator Wellington Dias (PT-PI) allocates R$ 8 billion to the Union, R$ 12 billion to the producing states, and an additional R$ 8 billion to a special fund.
Based on the statement by the Finance Minister himself, Guido Mantega, that the government needs at least R$ 8 billion in revenue from royalties, Senator Wellington Dias (PT-PI) presented a proposal that foresees the distribution of oil revenue in 2012 as follows: R$ 8 billion for the Union, R$ 12 billion for the producing states, and another R$ 8 billion that would go to the special fund, the fund to compensate non-producing states and municipalities.
"If the government settles at R$ 8 billion, it will be possible to reach an agreement to avoid voting on the veto (of the Ibsen amendment), even if Rio de Janeiro disagrees," the senator told the Estado newspaper. According to Dias, the federal government, which received R$ 8,5 billion in royalties in 2010, is expected to collect around R$ 11 billion this year.
This division, devised by parliamentarians and reported by Senator Vital do Rêgo (PMDB-PB), in addition to reducing the share allocated to the Union in royalties and special participation by approximately R$ 3 billion, removes from the total the revenue from new wells that will come into operation during the period, which, according to Dias, represent 250 barrels per day and an income of another R$ 3 billion annually. The calculation also considers that producing states will waive royalties from wells that are not currently being exploited, which would generate revenue of approximately R$ 1,2 billion.
"Everyone will have to give something up. The big challenge will be how to design these tax rates among the states, without anyone losing more than the others," said Dias.
The government is trying to reach an agreement to prevent non-oil-producing states from uniting in Congress to overturn the veto imposed in 2010 by then-President Luiz Inácio Lula da Silva on the Ibsen Amendment. The amendment stipulates that royalties be distributed without distinction between producing and non-producing states, according to the criteria of the state and municipal participation funds.
The president of the Senate, José Sarney (PMDB-AP), has already warned the government that if a new bill is not approved, the veto of the Ibsen Amendment will be considered on October 5th. If it is overturned, the Presidential Palace anticipates a legal battle in the Supreme Court.
"If the veto is overturned, we will go to court and we believe we will win," assesses Senator Lindbergh Faria (PT-RJ). In his analysis, an alternative to the agreement would be to increase the special participation paid by oil companies. "The government's proposal centralizes revenues in the hands of the Union and encourages a federal war. We will not accept Rio being crushed," protested Lindbergh.
In the last round of negotiations, last week, Ideli told parliamentarians that taking the matter to the Supreme Court is "the worst of all worlds," since all oil revenues could be subject to judicial review until a final decision is reached. "I spoke very clearly: here, at this table with the Executive branch, you can insult us, say that the proposal is terrible, that you will be massacred. In the courts, no governor or senator will have any say," the minister said.