SAO PAULO Aug 23 The governor of Rio de
Janeiro state, where most of Brazil's oil production is
located, said he opposed changes to regulations that would
reduce the state's tax revenue, a newspaper reported on Sunday,
days before the country's revamped oil rules are unveiled.
Sergio Cabral, a close ally of President Luiz Inacio Lula
da Silva and whose party is the biggest in the governing
coalition, told O Estado de S.Paulo newspaper it would be
"unjust" to reduce the amount of oil royalties and taxes paid
to producing states. One of the proposals would place control
of oil royalties in the hands of the federal government.
The new rules, aimed at regulating the exploration of vast
sub-salt oil reserves, will be released on Aug. 31, the
newspaper said. Oil has been found in the ultradeep sub-salt
layers that stretch 800 km (497 miles) along the southeastern
coast of Brazil and includes Rio de Janeiro, Sao Paulo and
Espirito Santo states.
"There is nothing that would let me permit Rio to be
robbed," Cabral said in an interview with Estado. "Sao Paulo
will be robbed too."
The newspaper said Cabral met with Lula last week and
discussed his concerns.
Cabral also said it would be "completely absurd" to give
state-controlled Petrobras (PETR4.SA)(PBR.N) a guaranteed 30
percent minimum stake in all future oil finds in sub-salt
wells. The company lacks resources to invest in developing the
wells, which would cause billions of losses to states like Rio
de Janeiro, he added.
Rio de Janeiro state received 6.8 billion reais ($3.7
billion) in royalties and other oil-related tax transfers from
the federal government in 2008, Estado said.
(Reporting by Elzio Barreto, Editing by Stacey Joyce)