On the surface, the latest chapter in Brazu's seemingly interminable row over the distribution of oil royalties would seem to have few implications for upstream operators. The country's Congress has overridden the veto issued last year by President Dilma Rousseff and decided that royalties from existing contracts should in fact be subject to redistribution, in addition to those on future contracts. This will not, however, affect the actual amount of royalties operators pay, nor should it affect the timetable for three long-awaited licensing rounds now expected later this year. Government officials insist that any new dispute over existing contracts is a nonissue for the bid rounds, as royalty distribution arrangements for future contracts aimed at more equitably dividing resource wealth among states were approved by Congress and signed into law in December (PIW Dec. 10' 12). By vetoing a clause to include existing contracts under the new terms, Rousseff was striving for compromise between the big earners of current and future royalties. Up for grabs in the first licensing round in May are 289 blocks covering 156,000 square kilometers and subject to a 10% royalty fee. Specific blocks for November's round — mainly geared toward onshore gas — and the December auction for presalt acreage are still being determined.
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