BRASILIA, (Reuters) – Brazilian President Luiz Inacio Lula da Silva tried yesterday to overcome opposition by three state governors to a legislative proposal he hopes will make the country a top oil producer and help fight poverty.
Lula’s government will unveil today a legal framework to develop massive new off-shore oil deposits, which triggered euphoria and expectations of newfound wealth in Latin America’s largest country when they were announced in 2007.
The Brazilian leader received late yesterday the governors of Rio de Janeiro, Sao Paulo and Espirito Santo, the nation’s three major oil-producing states. They oppose Lula’s plans to share future oil revenue with states that do not produce oil.
Rio de Janeiro Governor Sergio Cabral, whose state harbors many of the country’s oil companies and installations, said on Friday the government was acting like Robin Hood in proposing to redistribute oil revenue.
He added that the government also was raising false hopes that oil was a panacea for all Brazil’s troubles.
Cabral intended to propose to Lula that the government maintain current oil laws and simply increase taxes and royalties to boost the state’s share, O Globo newspaper reported yesterday.
Lula was to present various formulas of divvying up the royalties in hopes of winning over the governors, local media reported during the weekend.
The three governors, including Espirito Santo state Governor Paulo Hartung, threatened to spoil the show for Lula, who intends to present the proposal in an elaborate ceremony in the capital Brasilia.
Cabral and Sao Paulo state Governor Jose Serra have not confirmed their presence at the presentation on Monday.
Lula hopes his proposal to distribute oil wealth more widely, particularly on health and education, will benefit his chief of staff and handpicked presidential candidate, Dilma Rousseff, in next year’s election.
Lula is barred from running for another term.
Energy Minister Edison Lobao said yesterday that Lula would send the bills to Congress on a fast-track, which means each house of Congress has 45 days to vote on the proposal.
Rousseff, who was Lula’s energy minister from January 2003 to June 2005, has been instrumental in shaping the new oil framework and will take center stage beside Lula during the presentation ceremony.
