Rio 2016 In Trouble?

Plans for the Rio 2016 Summer Olympic Games could be off to a rocky start following a proposed federal law that would reduce the amount of petroleum royalties Brazil now receives. And less oil money could hamper plans for the Rio 2016 Summer Olympic Games and the 2014 soccer World Cup.

Gulf News reports thousands of Brazilian schoolchildren, and city and state workers, were given the afternoon off Wednesday to gather in Rio de Janeiro to protest the proposed federal law. Rio's governor said the proposed law, which would share Brazil's oil revenues more evenly among the country's 26 states, was "a lynching" for his state.

If passed the amendment would reportedly cost Rio at least $2.8 billion in annual income and be calamitous for the sate's future, said Governor Sergio Cabral.

He said, "with this amendment the Olympics and World Cup are no longer viable. Towns will grind to a halt. The state won't have the resources".

Gulf News reports that much of the resources needed to prepare Rio for the Olympics and World Cup come from oil royalties. Almost 90 per cent of Brazil's oil comes from fields off the Rio coast and much of the deep-water reserves discovered in 2007 and 2008 lie in the same area.

Under the current laws about half the oil profits go to states and municipalities producing the oil, about one third reportedly goes to federal coffers, and the rest goes into a fund for social welfare programs.

The country's energy minister has called on the Senate to tone the bill down, saying it is too "radical".

Meanwhile many analysts expect President Luiz Inacio Lula da Silva to veto the bill which would likely lead to more negotiations over sharing the oil wealth, reports the Gulf News.

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