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gotosy

Rio says Olympics threatened by oil reform

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Ibirapuera, the São Paulo participation in the municipal and state fund distribution is ridiculously small. I may support this if I were from Bahia or Piauí, which will be heavily benefitted, but it's just naive for someone from SP to defend this point of view. After all, a large chunk of the pre-salt is in the São Paulo coast - and you're advocating to the division of its funds betwen all federative states.

85% of the Brazilian oil being CURRENTLY explored is in the coasts of Rio de Janeiro and Espirito Santo, nowadays São Paulo is not getting much and this project changes not only the future 'pre sal oil' , but the current oil fields being explored, which belong to all Brazilians.

This pre-salt oil will just be explored by 2020 with some luck

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True, there's more to this issue than meets the eye. See the declarations of the Minister of Labour, Carlos Lupi, that all PDT's senators would work against the amedment. And they've come from all sorts of places like Amazonas, Bahia, Distrito Federal, Rondônia and Paraná. This is a very sensite subject, considering that in 7 months time we'll hold general elections. Nobody involved with Politics wants to displease São Paulo and Rio de Janeiro in these circunstances. Having the 1st and the 3rd electoral strongholds in Brazil angry with you is not on their minds.

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Wow.

Before this becomes a Rio bashing thread, can Brazilians tell us whether this could really have a large negative effect on Rio 2016, or is this Rio's state politicians using the Games (and world cup) as a pawn to get their own way?

If this law is approved it will indeed make things very difficult to Rio. But one must understand what is behind the scene. Altough proposed by a Southern Congressman, the new form of oil's royalties distribution among Brazilian counties fits as a glove to President Lula party - PT - to spread their roots all over the country by giving local politicians the money due to those counties and states the oil comes from. In Rio, particularly, the new law would help to kill Garotinho's family power, since they would not have money to rule by themselves the Northern Rio de Janeiro State. Garotinho, Lula's political enemy, was the third one in the last presidential election and has the support of protestant people, namely those from Assembleia de Deus. Although charged for corruption and apparently a political dead guy, he and his fellows are still strong contenders. Lula knows how dangerous and smart Garotinho is in this chess game. But to Rio 2016 the new law is harmless. Brazilian Congress and the Federal Government will surely pay the bill.

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The Itaipu Dam belong to all Brazilians, let's share their royalties too and leave Foz do Iguacu and other cities there without the money they have been using for the last 20-30 years...

Or cancel the zero-tax in Manaus Free Tax Zone and share their industries along Brazilian states...

Or even let's share the ICMS (taxs) Sao Paulo earns... All Brazil buys products from Sao Paulo industry, so we should share everything...

Why not transform Brazil into a communist country???

Hypocrite!

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85% of the Brazilian oil being CURRENTLY explored is in the coasts of Rio de Janeiro and Espirito Santo, nowadays São Paulo is not getting much and this project changes not only the future 'pre sal oil' , but the current oil fields being explored, which belong to all Brazilians.

This pre-salt oil will just be explored by 2020 with some luck

So you think it's better to take our current chunk of the royalties that will be distributed to 20+ States and 5000+ municipalities than to be the exclusive beneficiary of the royalties from the huge oil reserves to be explored in our coast from 2020 on?

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So you think it's better to take our current chunk of the royalties that will be distributed to 20+ States and 5000+ municipalities than to be the exclusive beneficiary of the royalties from the huge oil reserves to be explored in our coast from 2020 on?

Probably yes, Lucas, if this hurts Rio and the carioca people, he is favourable...

I call this prejudice...

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So you think it's better to take our current chunk of the royalties that will be distributed to 20+ States and 5000+ municipalities than to be the exclusive beneficiary of the royalties from the huge oil reserves to be explored in our coast from 2020 on?

Well, it's not like we're losing something we already have right ? And in all fairness, it is correct that the royalties are shared between all states of Brazil, after all, it's a treasure of all Brazilian people.

São Paulo is a very developed state and it's not like we must have loads of money from oil. I don't want my state to be a hostage of oil money , I want us to economic varied as we are now,a and I'm afraid that with all this pre-salt money we would start to get ...mmmm..."acomodado" as we say in Portuguese. This is what's happening in some cities of Rio de Janeiro. They are now hostage of these royalties and will be broke without them,'cause they didn't think in other options...

Countryside Sao Paulo for example has a richness maybe even more powerful than oil, the sugar cane fields, which might be the source of biofuels for the whole world...so yes, I want Sao Paulo to get benefited with the royalties, but also I don't want us to be hostage of this money as it happened in Rio de Janeiro.

So you think it's better to take our current chunk of the royalties that will be distributed to 20+ States and 5000+ municipalities than to be the exclusive beneficiary of the royalties from the huge oil reserves to be explored in our coast from 2020 on?

Well, it's not like we're losing something we already have right ? And in all fairness, it is correct that the royalties are shared between all states of Brazil, after all, it's a treasure of all Brazilian people.

São Paulo is a very developed state and it's not like we must have loads of money from oil. I don't want my state to be a hostage of oil money , I want us to be economic varied as we are now,a and I'm afraid that with all this pre-salt money we would start to get ...mmmm..."acomodado" as we say in Portuguese. This is what's happening in some cities of Rio de Janeiro. They are now hostage of these royalties and will be broke without them,'cause they didn't think in other options...

Countryside Sao Paulo for example has a richness maybe even more powerful than oil, the sugar cane fields, which might be the source of biofuels for the whole world...so yes, I want Sao Paulo to get benefited with the royalties, but also I don't want us to be hostage of this money as it happened in Rio de Janeiro.

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Yes, those cities will be broke because the cut of oil money.

Have you ever heard of Macaé??? Now Petrobras main city for deep sea oil exploration??? This town was a fisher-village with some sugarcane farms in the beggining of the 80's and become a city with 200,000+ people because of oil.

The city grew because of this industry and, AS YOU SHOULD KNOW, State of Rio de Janeiro CAN NOT ASK TAXES SINCE OIL AND ELECTRIC ENERGY ARE THE ONLY PRODUCTS THAT CAN NOT ASK ICMS (taxes).

The same happens on Parana with Itaipu Dam. Royalties are payed to many cities near the dam, since they can not received taxes for generating electric power.

So, without royalties and ICMS, these cities have nothing to receive to host a exploration industry. Indeed, that's why there is some "royalties" payments.

Royalties is a way to pay back cities and regions that host this kind of industry, or cities and regions affected by this industry. And this industry REALLY affect a region, for good and bad.

What about the "former-beautiful" city of Sao Sebastiao, SAO PAULO STATE???

It was a beautiful city full-transformed because federal govt puts a Oil Port in front of the historic downtown. Today Sao Sebastiao downtown is a ugly place because this port. And Sao Sebastiao that accepted this exploratory industry will lose the royalties money...

It's unfair to get the money that is payied to those regions that host a exploratory industry (including parts of Sao Paulo coast: Cubatao, Sao Sebastiao, Iguape) and simply take the money that is payed as a "reward".

"Acomodado" is the people from other states that want to earn easily this money. Why not, the stupid southern deputy made a law to invest this money ONLY IN THE POOREST STATES??? No he wanted to hurt Rio de Janeiro state, as you always do here.

He is as hypocrite as you, Ibirapuera. And I can say you are also arrogant when saying "Sao Paulo is already a rich state". Don't you see there is lots of poor people, specially in Sao Paulo coast because this part of the state, naturally, doesn't have industries??? The unemployment rate in Baixada Santista is very high???

Sao Paulo is a rich state, but many people inside the state are NOT and this money could be a investment for the most populous state and will really be missed in the third most populated one.

Indeed, most part of Sao Paulo state deputies voted against the amendment.

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For those, like Ibirapuera, that have no idea on what are saying, this is the now-a-days distribution of royalties and the proposed one.

See that producers regions only receives 50% of the total amount of royalties. So, Rio doesn't want "the whole world"...

7,5% of the royalties ALREADY ARE SAVED IN A MUNICIPALITIES AND STATES FUND!!!!

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http://www1.folha.uo...91u707996.shtml

The Ibsen proposal have been called as inconstitutional, indeed by polictical parties and some deputies from other states.

President Lula is worried about the political damage he could have in Sao Paulo, Rio and Espirito Santo states.

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http://www1.folha.uol.com.br/folha/dinheiro/ult91u708189.shtml - Folha de S. Paulo

Governor of Sao Paulo state, José Serra, joins Rio and Espirito Santo against Ibsen amendment.

"This proposal is unaccptable" he said.

"We can not change the rules in the middle of the game. It would be irresponsible with two major states of the Union"

http://www.estadao.com.br/noticias/economia,lula-reitera-que-pretende-vetar-divisao-de-royalties-do-pre-sal,523003,0.htm

"President Lula states that if Ibsen proposal passes it will be vetoed" - O Estado de S. Paulo

During the votation in the Federal Deputies Chamber, government leaders already said president Lula would not appove the proposal.

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So, I guess this is pretty much settled. If Lula (and, by consequence, Dilma) and Serra think the proposal is unacceptable, it would be very difficult for it to be sanctioned in its current form.

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Of course this amendment is too radical and it won't pass the way it is now.

It's only a political maneuver.

The governors of all states got together in 2009 to discuss the rules for the recently found oil reserves and, apparently, there was a lot of resistance from Rio de Janeiro's and Espirito Santo's states, refusing to get to a deal somewhere in the middle. Therefore the senate is sending a harsh political message like "if you refuse to negotiate, we will decide for you".

Said that, I found pathetic the way Rio's governor reacted and extremely disturbing to give a holiday to civil servants so they could participate in the protests. I'm curious to know why the protests couldn't take place during the weekend...

By the way, I agree it's unfair to, suddenly, deprive Rio from these resources. However, I believe Rio's politicians should rapidly move their asses, since oil is in a downhill trend. Due to their geography, they should be investing in education, technology and tourism instead of depending on doomed oil royalties.

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Of course this amendment is too radical and it won't pass the way it is now.

It's only a political maneuver.

The governors of all states got together in 2009 to discuss the rules for the recently found oil reserves and, apparently, there was a lot of resistance from Rio de Janeiro's and Espirito Santo's states, refusing to get to a deal somewhere in the middle. Therefore the senate is sending a harsh political message like "if you refuse to negotiate, we will decide for you".

Said that, I found pathetic the way Rio's governor reacted and extremely disturbing to give a holiday to civil servants so they could participate in the protests. I'm curious to know why the protests couldn't take place during the weekend...

By the way, I agree it's unfair to, suddenly, deprive Rio from these resources. However, I believe Rio's politicians should rapidly move their asses, since oil is in a downhill trend. Due to their geography, they should be investing in education, technology and tourism instead of depending on doomed oil royalties.

I agree. Indeed, many cariocas are surprised on "suddenly" Rio de Janeiro's dependence on oil money. Ok, US$ 5 billion will be missed, but these amount could not be a life-or-death problem for the 2nd most rich state of Brazil and the 2nd biggest Industrial park of the country...

About Rio politicians... No comments, they were, are and will be ridiculous...

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I wonder if this disagreement came about 7 months ago. Sure, I have no doubt that this will be settled, but it would have most definitely caused a distraction in their campaign. I guess we can't be asking "what if"...

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Apparently, if the amendment is approved, Rio will fall from the 1st to the 22nd position in royalties share. Not a pretty scenario. And now the dispute is getting really petty, with the City Senate threatening to remove Ibsen Pinheiro's Pedro Ernesto Medal (the House's highest honor) and the State Senate have proposed a motion to make him a persona non grata in there! 35 State Senators have already co-signed the motion. This is getting quite out of hand. Tomorrow's manifestation is risking to become quite a circus. It'll be a tense time till the Upper House of Congress votes the projects. *sigh*

Oh, Rio2016 official site has published the Nuzman's letter in English. Here it is:

The Rio 2016 Olympic Games Organizing Committee addresses the public to clarify its position on the consequences of the approval, by the Chamber of Parliament, of a new model of the division of the income for the exploration of petroleum in national territory.

During the process of candidature, the Brazilian government presented a number of guarantees that were included as part of the contract signed with the International Olympic Committee and became one of the Brazilian State’s obligations, represented by the federal, state and municipal government, according to their specific constitutional competences.

The reduction of income for the exploration of petroleum will leave the state of Rio de Janeiro without the resources to do the necessary construction work for the Rio 2016 Games. Any decision that affects the capacity of the State of Rio de Janeiro to fulfill their many obligations has a negative impact on the organization of the games and, if it is not remedied, it will represent a breach in the contract.

The Rio 2016 Committee has complete confidence that the legislative powers will take these facts into consideration, avoiding that the country, in a return to the past, disobeys the obligations they took on.

The Rio 2016 Committee makes itself available to the governor Sérgio Cabral, to fight for Rio de Janeiro’s rights and for the reliable compliance with the obligations taken on in an international contract.

Carlos Arthur Nuzman

2016 Olympic Games Organizing Committee

President

which states will receive the most? Rio Grande Do Sul,, Bahia, Amazonas?

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if lula vetoes this which he will for sure, can a veto be reversed? if so does it also require like 3/4 votes?

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if lula vetoes this which he will for sure, can a veto be reversed? if so does it also require like 3/4 votes?

For approval by the Legislative, supplementary laws must be approved by the absolute majority of the members of each House. After Legislative approval, the law goes to the sanction of the President. The President can sanction the law, veto the entire law, or veto articles of the law. In case of veto, the law returns to Congress, which can maintain or override it; to override the veto, it´s necessary absolute majority of Deputies and Senators. In case a veto is overriden, a legislative decree must be drawn to regulate the subject of the law.

It´s not uncommon for the President to veto articles of laws. It´s very uncommon, however, that vetoes are overriden; actually, it´s very uncommon that vetoes are even voted. From August 2000 to May 2004, not even one veto was examined; in May 2004, more than 1000 vetoes (the least controversial ones) were examined at once, and all of them were maintained

^ http://www.v-brazil.com/government/laws/laws.html

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But Lula will only use his veto power as an absolute last resort. He knows his image will be tarnished if he uses it. And that's something he can't afford if he wants to elect Dilma as the next president.

In today´s O Globo, Lula called for a meeting with 9 senators of the Government's Allied Base to work on an agreement that will prevent the losses suffered by the oil-producing states with the new royalties' redistribution. Also, there's been talks about postponing the vote of parts of the project (read "The Ibsen amendment") until after the October general elections

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That oil reform may prevent Rio de Janeiro from enhancing and improving its infrastructure and its downtown skyline for the Olympic Games.

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The governor alongside with his partner in crime (Nuzman) using the Olympics Games as a way to blackmail the congress.

Disgusting.

That oil reform may prevent Rio de Janeiro from enhancing and improving its infrastructure and its downtown skyline for the Olympic Games.

nope.

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Brazil's Lula says to veto oil royalty plan

RIO DE JANEIRO Dec 7 (Reuters) - President Luiz Inacio Lula da Silva said on Tuesday he would veto a plan to change the distribution of oil royalties among state governments, paving the way for the implementation of a legal overhaul of Brazil's oil sector.

Lula will veto an amendment proposing oil royalties be distributed beyond the three main oil-producing states, allowing him to sign legislation approved by Congress last week while avoiding angering oil producing states that receive most of those revenues.

"Upon receiving the proposal from Congress, I plan to veto it," Lula said during a ceremony in Rio, referring to the royalties plan.

The government has said it would negotiate a more moderate redistribution of oil revenues among other states that do not produce oil.

Months of wrangling over how to distribute revenues from the offshore fields among Brazil's states delayed Lula's legal changes that create a production sharing system for future projects in the vast subsalt offshore region. Current projects operate under a concession system created in the 1990s.

Brazil's discovery of billions of barrels of oil in deep waters off its coast spurred nonproducer states to argue they should be given an equal portion of revenues from future projects, sparking outrage among producer states, such as Rio de Janeiro and Sao Paulo, that stood to lose from the proposal.

The subsalt is believed to hold more than 50 billion barrels of oil buried under the ocean floor beneath a thick layer of salt.

Lula proposed the new system last year as part of a broader package of oil laws meant to ensure Brazil's government gets a bigger share of the revenues from the offshore discoveries.

Reuters

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That oil reform may prevent Rio de Janeiro from enhancing and improving its infrastructure and its downtown skyline for the Olympic Games.

No. At first, let's remember President Lula said today he will veto the reform. It is true, Rio de Janeiro - the State and the City - receive more royalties in the current system and the reform is not interesting for them, of course. But, once again, one must have in mind that the National Congress approved Rio's bid, passed the Olympic Act and stablished means to support financially the city.

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We should not forget that part of the royalties is ALREADY sent to the Municipies and States fund. (If I'm not wrong, it's 15% of the royalties).

More than 50% of the royalties goes to the Federal Government.

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Brazil to wait for new oil auctions

BRASILIA, Dec 22 (Reuters) - Brazil will hold no auctions

of deepwater oil reserves until a new model for distributing

royalties between states has been defined, the minister for

mines and energy, Marcio Zimmermann, said on Wednesday.

President Luiz Inacio Lula da Silva approved an overhaul of

the country's oil laws on Wednesday that is a crucial step to

tapping vast new offshore oil wealth in the years ahead.

But he vetoed a controversial part of the legislation that

sets out a new formula for sharing royalties from oil

production with non-oil-producing states.

http://af.reuters.com/article/energyOilNews/idAFN2221953920101222

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Chevron spill may complicate Brazil's oil dreams

(Reuters) - Chevron's oil spill off the Brazilian coast exposes the major environmental risks of tapping the country's new oil wealth and could further delay development by fueling nationalistic oil politics.

The accident, for which the U.S. oil company has taken responsibility, has quickly become politicized at a time when Rio de Janeiro and a handful of other "producer" states are campaigning bitterly against a proposal in Congress to spread the oil wealth more widely.

By drawing attention to the environmental risks of exploring at such massive depths, the spill could further delay the concession of new exploration areas and increase the power of state-controlled Petrobras at the expense of other oil companies, both national and foreign.

...

One of the first results of the spill could be to further delay expected sales of new oil rights in Brazil's so-called subsalt region, said Adriano Pires, head of the Brazilian Infrastructure Center, a Rio de Janeiro energy research group.

Brazil has not sold new offshore oil rights in the region near Rio de Janeiro and Sao Paulo since 2007, preventing companies from expanding activities in an area already responsible for more than 80 percent of Brazil's 2.1 million barrels a day of output.

The New York-sized subsalt area, which includes the Frade concession where Chevron's accident occurred, may hold 100 million barrels of oil or more, according to a study from the National Oil and Gas Institute. That's enough to supply all needs in the United States, the world's largest oil consumer, for more than 14 years.

...

more: Reuters

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