Brazil Senate Ensures Rio State to Receive R$2.5 Billion in Pre-Salt Auction Proceeds

RIO DE JANEIRO, BRAZIL – The bill determining the distribution of pre-salt surplus resources among states and municipalities was voted on Tuesday, September 3rd, in the Senate plenary session. The statute determines the allocation of the pre-salt mega-auction resources between states and municipalities (scheduled for November 6th).

Due to an amendment by Senator Flávio Bolsonaro, Rio will not lose much, as it will now get R$2.5 billion (US$625 million), in place of the mere R$326 million previously allocated.

According to the Poder 360 website, the government has relinquished three percent of its resources to benefit the oil producing states. The Constitutional amendment (PEC) defined the following division of resources: 67 percent for the Union, 30 percent for all states and municipalities and 3 percent for producing states.

The PEC was approved unanimously by the Senate in two rounds of voting but will need to return to the Chamber of Deputies, as a result of Senator Bolsonaro’s amendment, as it changed the base text.

The basic text of the 2019 PEC was approved by 74 votes in favor and no dissenting votes. In the second round, there were 69 votes to nil. The text now goes back to the Chamber of Deputies for a new examination.

Journalist Mateus Maia, from Poder 360, says that “the government’s forecast is for the auction to raise R$106.6 billion. This is the amount that the text allocates among states, municipalities and the federal government. At first, it would be 70 percent for the federal government, 15 percent for the states and another 15 percent for the cities. The government, however, agreed to give up three percent of the pre-salt mega-auction resources to producing states after a meeting of Senate leaders.

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