In a speech in Rio de Janeiro, Lula expressed his agreement with the governors of oil-producing states Sao Paulo, Rio de Janeiro and Espirito Santo to veto the law change.
The proposed change in the distribution of royalties was part of a broader change proposed by legislators aiming to give all states and municipalities an equal share of revenues.
Under the current system, which Lula supports in a qualified version, the oil-producing areas receive a greater share of the revenues.
Lula said he would submit another bill to Brazilâs Congress to ensure a more equitable change in the distribution of oil revenues in the country.
Under the bill, the oil royalties would be divided among all states in the country, while the oil-producing states would not suffer a loss of income.
Lula said that the country has enough resources to ensure its oil-producing states do not suffer losses, even as other states get a larger share.
While Lula has expressed concern over the royalty issue, he has given whole-hearted approval to the remainder of the oil-related legislation recently approved by Congress.
Congress passed three other measures that Lula already signed into law â all aimed at giving Brazil greater control over the revenues expected from the reserves of the pre-salt region.
The deepwater region is estimated to hold between 50-100 billion bbl of oil, considered more than enough to turn Brazil into one of the world's top five producers of oil.
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