Brazilian Supreme Court case could drastically alter royalty distribution, oil and gas landscape

On 7 May, the Brazilian Federal Supreme Court began proceedings to decide the constitutionality of a 2012 law that changed the distribution percentages of government oil revenues for various states and municipalities. The law, which had been approved by the Brazilian Congress, would allow non-producing states to get a larger percentage of the revenue, shifting portions away from major producing states. It did not go into effect, however, as a provisional court ruling in 2013 suspended the law. Subsequent lawsuits from Brazil’s oil-producing states have challenged the constitutionality of the law.

In this interview with DC, Leandro Luzone, Legal Adviser to the IADC Brazil Chapter, explained the mechanics of the law and the subsequent lawsuits being considered by the Supreme Court. He also discussed the amicus curiae IADC filed in support of the lawsuits, as well as the potential effects on oil and gas operations in Brazil should the court uphold the law. The court had not issued its opinion at the time of filming.