Brazil's main oil-producing states asked their country's Supreme Court on Friday to overturn a new law that strips them of billions of dollars in royalties levied on the output of rich offshore oil fields. The three main oil-producing states, Rio de Janeiro, Espirito Santo and Sao Paulo, filed challenges with the court in Brasilia arguing that the legislation is unconstitutional because it changes existing contracts and violates Brazil's fiscal discipline law.
Brazil's constitution has clauses limiting the government's ability to deprive people of established rights. The bill signed into law by president Dilma Rousseff on Thursday night forces the government to share offshore oil royalties more equally among the country's 26 states, federal district, and 5,500 municipalities.