The Brazilian Senate on Tuesday night approved, by an overwhelming vote, a constitutional amendment to share revenues from federal government oil sales with states and municipalities. The proposal has already passed the Chamber of Deputies, but Senate amendments must now be reviewed by the lower house. The government is scheduled to hold a massive auction of excess oil capacity in the so-called pre-salt offshore region. The government expects to raise R$106 billion from the auction. Under the constitutional amendment, R$36 billion of that total will be paid to state-run oil company Petrobras. The remaining R$70 billion will be divided among the three levels of government, with states getting 15% of the total, municipalities 15% and the rest going to the federal government. Passage of the amendment is critical to the government´s ability to hold the auction, which is scheduled for November.
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