October 15, 2019 / 4:24 PM / a month ago

Brazilian senate committee paves way for offshore oil rights sale

BRASILIA (Reuters) - A Brazilian Senate committee cleared the way for what may be a record-setting offshore oil rights auction on Tuesday, approving a government deal with state-run oil company Petroleo Brasileiro SA to settle a years-old dispute.

The full Senate is also expected to vote later on Tuesday on the bill on dividing proceeds from the blockbuster “transfer of rights” oil auction scheduled for November, upholding a lower house of parliament ruling.

The division between state and city governments was also seen as a key condition for final approval this month of the government’s proposed pension reform in the Senate.

The proposed bill determines that out of the total proceeds collected in the oil auction, the amount due to state-run Petrobras will be discounted according to the revised “transfer of rights” agreement.

Sixty-seven percent of the remaining proceeds will be passed on to the government, 15% to the states and 3% to the producing state, which in this case is Rio de Janeiro.

“The bill is not ideal for each state, but the best one for all,” said senator Omar Aziz, the bill’s rapporteur and president of the Senate committee, citing a political consensus to uphold rules determined by the lower house of parliament.

Reporting by Marcela Ayres; Writing by Gabriela Mello; Editing by Alexander Smith

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