Bloomberg News

Rousseff Says Brazil Will Respect Existing Oil Contracts

September 14, 2011

Sept. 14 (Bloomberg) -- Brazilian President Dilma Rousseff said her government will respect existing oil contracts, taking distance from allies in oil-producing states who want to raise taxes on Petroleo Brasileiro SA.

“You need to respect existing oil contracts,” Rousseff told reporters in Brasilia today. “You don’t break contracts because then you will have legal action that isn’t any help to anyone.”

Her comments came ahead of a meeting today between lawmakers and Finance Minister Guido Mantega to break a deadlock in Congress on how to distribute revenues from future oil concessions in the so-called pre-salt region of the Atlantic Ocean. States that produce no oil are requesting a greater share of revenues.

Rio de Janeiro Governor Sergio Cabral, an ally of the government, is seeking to increase revenue from an oil tax levied on the country’s most productive fields, most of which are located in his state. State-controlled Petrobras is Brazil’s biggest producer, pumping about 90 percent of the country’s oil and natural gas.

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--Editor: Joshua Goodman

To contact the reporter on this story: Peter Millard in Rio de Janeiro at Pmillard1@bloomberg.net

To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net


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