Congress Approves Power-Sector Overhaul That Retains New Oil Reference Price Rule

Overview

• Both chambers approved MP 1.304 on Oct. 30 in swift votes, and the text now awaits President Luiz Inácio Lula da Silva’s sanction.
• An article affecting gas transport and processing was removed, but the clause redefining the oil reference price was kept, tying it to averages of international transaction quotations with fallback to Law 14.596/2023.
• The new benchmark replaces the ANP’s technical formula that underpins royalties and government participations, and experts say it would boost near-term revenue for federal, state and municipal coffers.
• Petrobras executives warned the change could render projects without a final investment decision uneconomic, citing the Sergipe Águas Profundas units and Campos Basin revitalizations; the company is negotiating with SBM Offshore over Seap FPSO terms.
• Industry groups split: the IBP flagged legal uncertainty and investment risk, while RefinaBrasil backed the shift and estimates up to R$83 billion in extra collections over a decade; some lawmakers indicated the pricing clause could face a presidential veto.