Bloomberg News

Brazil May Cut Its Oil Royalties Income Further, Folha Reports

October 06, 2011

Oct. 6 (Bloomberg) -- Brazil’s federal government may agree to reduce its share of profits from highly productive oil fields by a further 700 million reais ($382 million) to help reach agreement on how to share oil royalties with non-producing states, Folha de S.Paulo reported, citing unidentified government officials.

The government may cut the so-called special participation tax on lucrative fields to 42.5 percent from 50 percent, according to the newspaper. It had previously agreed to reduce the tax to 46 percent, Folha said.

The extra measure, which would only go ahead if oil- producing states also agree to give up some of their income, would lead to a total reduction in the government’s oil revenue of as much as 2.5 billion reais next year, Folha said.

To contact the reporter on this story: Karen Eeuwens in London at keeuwens@bloomberg.net

To contact the editor responsible for this story: Telma Marotto at tmarotto1@bloomberg.net


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