Oil-rich Brazil states rebel against revenue law

Two of the biggest oil-producing states in Brazil rebelled against a new revenue-sharing law that kicked in Friday, filing a constitutional motion against the measures in the Supreme Court.

The action from Rio de Janeiro and Espirito Santo states, both located in the southwest along the Atlantic Coast, contends that they will lose millions of dollars because of the law, a court spokeswoman told AFP.

Three of Brazil's 26 states -- Rio de Janeiro, Espirito Santo, and Sao Paulo -- produce most of the nation's oil, but the revenue law seeks to spread the money out to non-producing states.

After coming under intense pressure, President Dilma Rousseff in November vetoed provisions in the law that provided for a more equitable sharing of royalties among the 26 states and the federal district of Brasilia.

But Congress lifted that veto, clearing the path for the changes, which Rousseff said she deplored but would "be obliged to apply."

State-run energy giant Petrobras extracts most of the two million barrels produced daily in Brazil, where other national and foreign firms such as Anglo-Dutch Shell, Norwegian Statoil and US Chevron also operate.