Corrib Gas Field

Bock the Robber

In the new economic climate, can we still afford to give Shell E&P 14 billion euros worth of our gas free of charge?

asdasd

The tax is 25%. Newer fields are higher at 40%. But that tax increase can only happen after a succesful find. The newest concessions in the North Sea are at 30% tax. Both 25% + 40% are considerably higher than the 12.5% standard corporation tax in Ireland.

the Irish government cannot renege on previously agreed tax rates or no drilling will ever happen again.

We "own" nothing by the way, unless "we" can get it out of the ground. Since Paddy Joe and Jimmy Mack from the council, nor Hermionie SmellCrap and Bock the "robber" from Indymedia are not going to be able to extract the gas we have to rely on the people with the experience of extracting gas.

The last thing we need is for luddites to stop this for any longer - the tax take is 1.7 B over the lifetime. Not amazing, but worth a few pence on the income tax.

/end thread

Bock the Robber

Far from being a Luddite, I welcome the development of this gas field. However, I want our country to benefit from it, especially in such difficult economic times.

All Shell's exploration costs, past and future, are allowable against tax and can be written off.

Furthermore, Shell pay no royalties to the Irish exchequer.

The State will receive nothing from this gas field, nor do we have have first call on the gas. It can be exported anywhere in the world and there is nothing our government can do to prevent it.

At the moment, we can buy gas more cheaply from the UK, and on this basis it makes more sense to leave the gas in the ground until we need it instead of giving it away for nothing.

Incidentally, I have no connection with Indymedia. Please explain what that comment refers to.

ednwireland

Bock the Robber wrote: »

In the new economic climate, can we still afford to give Shell E&P 14 billion euros worth of our gas free of charge?

no choice, contracts are signed, end of .

Bock the Robber

"End of." Does that mean something?

The State has no difficulty rescinding its contracts with public employees, so why not with Shell?

In any case, what sort of contract involves one party handing something over to another party free of charge?

ei.sdraob

Bock the Robber wrote: »

Far from being a Luddite, I welcome the development of this gas field. However, I want our country to benefit from it, especially in such difficult economic times.

All Shell's exploration costs, past and future, are allowable against tax and can be written off.

Furthermore, Shell pay no royalties to the Irish exchequer.

The State will receive nothing from this gas field, nor do we have have first call on the gas. It can be exported anywhere in the world and there is nothing our government can do to prevent it.

At the moment, we can buy gas more cheaply from the UK, and on this basis it makes more sense to leave the gas in the ground until we need it instead of giving it away for nothing.

Incidentally, I have no connection with Indymedia. Please explain what that comment refers to.

which part of the state will receive 25% you dont understand?

Bock the Robber

ei.sdraob wrote: »

which part of the state will receive 25% you dont understand?

I was hoping for an adult reply, but I'll write slowly, especially for you.

We receive nothing for our gas. Not a penny.

Is there any part of that you don't understand?

bauderline

Bock the Robber wrote: »

I was hoping for an adult reply, but I'll write slowly, especially for you.

We receive nothing for our gas. Not a penny.

Is there any part of that you don't understand?

Really ? What is the source of the information upon which you base this statement ?

Bock the Robber

bauderline wrote: »

Really ? What is the source of the information upon which you base this statement ?

How many would you like?

Here's one source. (Sustainability.ie)

Here's another. (Irish Times)

Here's another (Oireachtas debate transcript)

Speech by Minister Noel Dempsey (Dept of Communications, Environment and Natural resources website)

Reduction in tax: Acts of the Oireachtas

If you consider these examples unreliable, let me know and I'll dig out another ten or twenty.

MarkK

Bock the Robber wrote: »

I was hoping for an adult reply, but I'll write slowly, especially for you.

We receive nothing for our gas. Not a penny.

Is there any part of that you don't understand?

Bock the Robber wrote: »

How many would you like?

Here's another.

Your source says "A tax rate of only 25 per cent applies".
So Ireland does get something.

Bock the Robber

MarkK wrote: »

Your source says "A tax rate of only 25 per cent applies".
So Ireland does get something.

Ireland gets no royalties, and all of Shell's exploration costs, past and future, can be offset against tax on any profits they make by selling us our own gas at full market price.

Uniquely in the world, we have no professional monitors overseeing Shell's operation on site, so we are not even in a position to say what their costs are, or even how much gas they will extract.

And of course, Ireland gets nothing.

Perhaps that will change and they'll start to pay some tax, which is fine if you're happy with peanuts.

MarkK

I'm happy with peanuts.

Nody

Bock the Robber wrote: »

Ireland gets no royalties, and all of Shell's exploration costs, past and future, can be offset against tax on any profits they make by selling us our own gas at full market price.

Uniquely in the world, we have no professional monitors overseeing Shell's operation on site, so we are not even in a position to say what their costs are, or even how much gas they will extract.

And of course, Ireland gets nothing.

Perhaps that will change and they'll start to pay some tax, which is fine if you're happy with peanuts.

Ok, I'll bite because I'm bored.

You want the government, who gave you a company such as ESB with the average wage in the 80k region and the pink dildo love known as NAMA to:

1) Set up a completly new public company in an specialised area they never operated before
2) For a field that is very hard to get to and at a very poor place in terms of extraction
3) To aquire all the people, specialised equipment etc. for billions up on billions which can't be used for something else if the field don't work
4) To analyze and see if there is a field to actually make money of (which currently is unknown)
5) To pump into the Irish gas network at retail prices (can't pump in at lower as this would be unfair competative advantage and any company in EU should have the right to buy it at the price)
6) To break a contract with a major international company who would take it to court for decades and millions of cost

And you think the above would some how net Ireland more money? Either you got some very good weed or you have to be a FF voter at heart who think the government is the next coming of Jesus or something to pull it off successfully...

Bock the Robber

Nody wrote: »

Ok, I'll bite because I'm bored.

You want the government, who gave you a company such as ESB with the average wage in the 80k region and the pink dildo love known as NAMA to:

1) Set up a completly new public company in an specialised area they never operated before
2) For a field that is very hard to get to and at a very poor place in terms of extraction
3) To aquire all the people, specialised equipment etc. for billions up on billions which can't be used for something else if the field don't work
4) To analyze and see if there is a field to actually make money of (which currently is unknown)
5) To pump into the Irish gas network at retail prices (can't pump in at lower as this would be unfair competative advantage and any company in EU should have the right to buy it at the price)
6) To break a contract with a major international company who would take it to court for decades and millions of cost

And you think the above would some how net Ireland more money? Either you got some very good weed or you have to be a FF voter at heart who think the government is the next coming of Jesus or something to pull it off successfully...

Where did you notice me saying the government should set up a company?

ei.sdraob

Bock the Robber wrote: »

I was hoping for an adult reply, but I'll write slowly, especially for you.

We receive nothing for our gas. Not a penny.

Is there any part of that you don't understand?

Is there any part of the following from the REVENUE website you do not understand?

http://www.revenue.ie/en/tax/ct/basis-charge.html

25%: Non-trading income [includes income chargeable under Case III (e.g. discounts, interest, foreign income), Case IV (patent royalties, miscellaneous income) & Case V (rental income from land & buildings in the State) of Schedule D]. Also included at this rate is income from activities which consist of working minerals, petroleum activities & dealing in or developing land, other than construction operations.

Bock the Robber

Why are you answering a point I didn't make?

I said Shell can write off all their costs, past and future, against tax.

I didn't say that no tax rate had been set.

Shell will pay no tax on any profits in the Corrib field for at least ten years and will pay us nothing at all for the raw materials used to generate those profits.

Furthermore, the UK has a rate of 50% and Norway's rate is 78%.

In addition, Norway gets 51.5% royalties and has 50% shared ownership. The corresponding figures for Ireland are Zero and Zero, respectively.

I'm starting to wonder if I made a terrible mistake and accidentally posted this on the Shell employees' corporate blog.

yuloni

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Long Onion

Lenihan Solves Economic Crisis After Sudden Brainwave

By Cian O Breen | July 8, 2009


Idea was “staring [him] in the face all this time”
The Irish economy was single-handedly rescused from financial ruin today by Minister for Finance Brian Lenihan.
In a dramatic flash of political inspiraton, Mr Lenihan has decided to charge the petroleum company Royal Dutch Shell a staggering 5% of the value of the natural gas deposits they are extracting from the Corrib gas fields off the coast of Mayo.
“It was weird – the idea just struck me out of the blue, as if from nowhere,” explained the Minister.
“For months me and my cabinet colleagues have been thoroughly stumped by this godforsaken recession, and then bang! It just hits me – the Corrib gas fields! How could I have been so stupid?
“All this time the solution to our financial woes was there staring me in the face and I didn’t see it.”
When looking into the matter further, Mr Lenihan discovered that in 2003 his former Taoiseach Bertie Ahern granted exclusive exploration rights of the Corrib gas field to Shell (along with free security from the Gardaí and Defense Forces) in exchange for a can of coke and a packet of Smoky Bacon Tayto crisps.
“With hindsight, I can’t say it was a good idea.” concedes Mr Lenihan.
“But to be fair to Bertie, the State was rolling in money at the time due to the property boom. So taking a cut of the gas profits seemed a little mean I suppose. Even though the gas is located in Irish waters and by rights belongs to the Irish people…
“Besides, I absolutely love Tayto crisps as well -though I do prefer cheese and onion- so I can’t really blame Bertie for accepting Shell’s generous offer.”
The Minister spoke of how he realised he could avoid all the crippling cuts in health, welfare and education by taking a slice (or a ‘tax’ as it is commonly known) of the revenue Royal Dutch Shell will accumulate from Irish gas.
“Like all the best ideas, it’s simple really. I thought, well, if we can tax an individual, why can’t we tax a multinational corporation? It’s the exact same principle really – except companies have a lot more money of course!” laughed Mr Lenihan.
The Minister did however apologise to the foreign oil company for the “unfortunate” surcharge he will have to place on their access to an Irish natural resource they have no exclusive entitlement to, but somehow do anyway.
“Sorry, but we all have to tighten our belts in the current climate, even all-powerful global corporations who don’t answer to anybody. I’m sorry but that’s just the way it is – we really need that money to stabilise the economy.”
In a statement reported on RTE, Shell’s Irish spokesman Ian Quisley confirmed that his foreign superiors will go ahead with “immediate” legal action.
Despite the revelation that they had reneged on the can of coke part of their deal with Bertie Ahern, Mr Quisley maintains Shell “are entitled to all to the resources of Irish offshore territories under the agreement and anyone who says otherwise are either hippies, cranks, terrorists or madmen”.
Other articles: Number of Mother****ers Highest In Dublin and Limerick

Bock the Robber

Condi wrote: »

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Excellent. Health and education budgets are being slashed, but at least Killybegs will get a few pence from Shell.

Phew! That's all right, then.

Long Onion

Bock the Robber wrote: »

Excellent. Health and education budgets are being slashed, but at least Killybegs will get a few pence from Shell.

Phew! That's all right, then.

You forget the massive revenues generated from the rocketing sales of Rizla and hemp dildos in Belmullet.

Del2005

Bock the Robber wrote: »

And of course, Ireland gets nothing.

Yeah I heard that Shell don't pay their workers any money and the workers all live on fresh air.

The reason why we get little out of this field is because when the licence was granted oil was cheap. No one wanted to go out into the North Atlantic to try and find fossil fuels that at the time where nearly impossible to land ( and still is due to Shell to sea).

Since Shell invested billions to find the gas, and therefore prove it's there, should they not be entitled to get it back. We now have proof that there is oil and gas off our coast so the current licences are more advantagous(sp?) to us.

Correct me if I'm wrong, but aren't all capital projects by companies tax deductable?

Diarmuid

Bock the Robber wrote: »

In the new economic climate, can we still afford to give Shell E&P 14 billion euros worth of our gas free of charge?

Wildly inaccurate statement, now where have a I seen something like that before.... ahh I remember http://bocktherobber.com/bock-rants

Nothing to see here

Bock the Robber

Diarmuid wrote: »

Wildly inaccurate statement

Where is it inaccurate? Obviously you're content to be tossed a few copppers and put up with the savage cuts that are coming in the next four budgets. Well done on seeing the big picture. With vision like thins, how can Ireland go wrong go wrong go wrong go wrong go wrong ...

yuloni

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Bock the Robber

Condi wrote: »

This post has been deleted.

Anti-Lisbon? Either you visited the wrong website or else you can't read.

(That should be "whether", incidentally, not "wether").

Update: You changed "Lisbon" to "progress". Why did you do that?

yuloni

This post has been deleted.

SLUSK

Bock the Robber wrote: »

In the new economic climate, can we still afford to give Shell E&P 14 billion euros worth of our gas free of charge?

What exactly makes those fields "your fields", are you entitled to them just because you happen to be Irish? I am guessing Shell has bought the right to drill those fields... Without Shell or another company that gas would just be in the ground forever and ever.

baaaa

hypothetically speaking,what would happen if the deal was to be renaged on?

Bock the Robber

SLUSK wrote: »

What exactly makes those fields "your fields", are you entitled to them just because you happen to be Irish? I am guessing Shell has bought the right to drill those fields... Without Shell or another company that gas would just be in the ground forever and ever.

I didn't use the phrase "my fields" at all.

I said "our gas" because that's what it is: our gas, yours and mine, and our children, which has been given away in a dirty little deal instead of being used to fund schools and hospitals.

Anyway, there seems to be plenty of people happy enough to bend over and get boned for a few shillings.

There's a word for that, but here's a better one: if you enjoy the Shell boning, you're going to love NAMA!

SLUSK

What competency does the national or local government have to do exploration and drilling for oil?

Seems you advocate a Venezuelan style nationalization of the energy industry... don't be surprised if you end up like Venezuela if this policy is implemented...

baaaa

I don't think lack of experience is a valid reason for not nationalising the gas.

Bock the Robber

SLUSK wrote: »

What competency does the national or local government have to do exploration and drilling for oil?

Seems you advocate a Venezuelan style nationalization of the energy industry... don't be surprised if you end up like Venezuela if this policy is implemented...

Don't put words in my mouth. I didn't suggest that the government explore for oil -- or gas for that matter.

I suggested that it was wrong to give Shell our gas for nothing and that they should pay us for it.

Does that make me another Hugo Chavez? In that case, the Norwegians and Brits are also raving commies.

Interesting choice of words though: "don't be surprised if you end up like Venezuela". (My italics.)

Not "we."

Interesting.

Aidan1

€14m euro worth of gas? Where?

Corrib is a 1 terrascuf field - giving a market value of less than €4bn at today's prices. Given that the cost to bring the field to market will be well in excess of €1bn, and then there are ongoing running costs, the 'profit' will be far less than that figure. Given that the we'll be borrowing over 20bn this year, Corrib would hardly 'solve' anything.

However, even if we were to entertain the lunatic idea of 'nationalising' the field (and the State managed to avoid the punitive court case that would inevitably follow), the revenue would roll in over the next 15 years - hardly likely to provide the type of short term solution being touted here. However the State appropriating assets in the oil and gas sector would hardly encourage others to invest in exploration here. On the current course, we get both (a) tax revenue at 25% of profits, and (b) some measure of security of supply, and the potential for even more of (a) and (b) into the future.

If we were to dive in, Stalinist styleee, we'd end up sued, and with other companies re-thinking their involvement in our economy. Not so sure that's such a great idea.

Bock the Robber

Aidan1 wrote: »

If we were to dive in, Stalinist styleee, we'd end up sued, and with other companies re-thinking their involvement in our economy. Not so sure that's such a great idea.

Like those those Stalinist Americans did with their pinko lefty Oil Sense Act?

Aidan1

Have you actually read that Act?

It has nothing to do with nationalising industries, or confiscation by fiat. Rather it primarily deals with repealing reliefs granted to the large industry in the US from existing royalty legislation. Not introducing new legislation after the fact, which is what you are proposing.

However, there is a critical issue of scale here. Corrib is a small field. Diving in to the market in a disruptive way for the sake of one small field would merely ensure that no-one would go near the Irish offshore for years to come. The recent terms allow for a greater take (greater than the 25% under the old terms) - so if we get lucky, and find a big one that's actually exploitable, it's game on. Corrib is bait, in that sense.

Now, are you going to correct the factual inaccuracies in your OP?

Bock the Robber

Where did you see me talking about nationalisation or confiscation?

The Oil Sense Act was designed to deal with precisely the problem that we see in Corrib where energy companies were given sweetheart deals. It provides that any energy company currently failing to pay its fair share will not be licensed for future exploration.

As regards the OP, please state what inaccuracies you refer to.

If it's the valuation of the field, that's a red herring designed to distract attention from the fact that this State should not be giving away its resources to anyone, especially in the economic situation we find ourselves in. If you think 5 billion is small money, you're stuck in the mindset that afflicted Fianna Fail when they thought they had endless cash to waste.

You value it your way and I'll value it mine. It makes no difference. You say tomayto and I say tomato.

On the other hand, if the inaccuracy is the statement that Shell pay nothing to ireland for our natural resources, that's simply a fact.

You think Corrib is bait? The Corrib deal was given to us by a convicted crook and a man who happily bestowed over a billion of your money and mine on the religious orders to bail them out. You flatter these cowboys.

Aidan1

Well, if you think that there's no substantial difference between €5bn and €14bn, we have bigger problems. It is not a matter of pronounciation, it is, well, €9bn. Your suggested value was almost three times mine - this is not just a detail. For info - if you'd done any research, you'd have found that my figure of €5bn is very high - on today's prices and FX rates, the actual figure is around €4bn. I've left 25% of room in there to cover the likely price increases.

It is also summarily untrue to suggest that Shell pay nothing - the relevant piece of legislation has already been linked here.

Also, Shell did not get a 'sweetheart deal' - they got exactly the same deal that was open to any developer - the terms were set out in legislation years before Corrib was ever found (1996 - with Shell not becoming involved until years later).

For that simple reason, this:

The Corrib deal was given to us by a convicted crook

is completely and verifiably untrue.

Bock the Robber

We have bigger problems than you think, when our own people can't see any objection to transferring vital assets to a third party with no return to the State.

It's an education to see so many Irish people committed to the profits of an energy multinational.

It gets worse: these same Irish people see no difficulty in handing our natural resources to that multinational free of charge.

Depressingly, it amounts to this: we gave our gas away, and get nothing in return.

Unless, of course, you have figures showing how much the country will actually get from the Corrib field, apart from a few jobs.

yuloni

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Bock the Robber

That's exactly my point. Shell pay nothing for the gas.

eoinbn

Bock the Robber wrote: »

That's exactly my point. Shell pay nothing for the gas.

Of course they paid nothing for it, nobody knew how much, if any, was out there. They took the risk to drill, it paid off.

yuloni

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Bock the Robber

Your question isn't clear. Are you asking me what percentage I think we should own or are you askling if the company should pay corporation tax on their profits, or are you asking both?

yuloni

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Bock the Robber

It should be far more structured than that. What you describe sounds like buying a greyhound in the carpark of a pub.


Britain has 50% shared ownership and charges coorporation tax on whatever profits the exploration company makes after that

Norway has 51.5% shared ownership and levies 78% tax on the company's profits.

Since I'm not an economist, and don't claim to be, I won't give you a percentage that I think is correct, but I agree with the principle of shared ownership combined with corporation tax on profits.

Finally, though I'm not an economist, I do have a sense of smell, and I know when something stinks.

Sponge Bob

Why do these bull**** arguments get dragged up again and again ??

Enterprise ( not Shell) took the risk . The lucked out .

Aidan1

Bock - you've tried to evade every single point of fact put to you. In the space of a couple of hours, the resource has shrank by 60%, it has been pointed out that Mr Burke could not have made any 'deal' with Shell, that the State does get a take from the Corrib field, and that there is an underlying rationale behind the terms provided. And yet you pretend that none of these things impinge.

Here's a gentle hint for you - find a definition of prospectivity, and have a look at how Ireland compares with those other countries you have mentioned, and then try and get a handle on why different countries offer very different fiscal terms. And lets not just look at Norway, given that it's one of the largest exporters of hydrocarbons in the world. Look at the terms offered by France, or Spain, or other marginal resource areas.

And then have a look at the chronology of events, and try and work out why and how the terms changed as they did. If you can wrap your head around that, you should have a clearer understanding of what happened. It's very easy to make blithe assertions that there must have been some underhand dealings when you chose to operate in a fact free vacuum. Lets try it with at least one foot in reality, shall we?

Bock the Robber

Ray Burke is a sideshow, who needs to be investigated, but a sideshow nonetheless. Likewise, the under- or over-valuation of the resource has no relevance to the central issue, which is the transfer of our national assets to a private company for nothing in return.

If we think like peasants, and act like peasants, we'll be treated like peasants.

Guess what? It looks like we're peasants, with a few local land-agents thrown in to keep us in line.

Your use of industry jargon suggests that you have connections with the exploration business, and therefore might not be entirely objective. Or am I mistaken about that?

Aidan1

You are entirely mistaken.

Your continued mischaracterisation of the issues is a fairly obvious barrier to continued debate though. If you insist that your original position was correct, despite it having been shown that your basis for making those claims were entirely inaccurate, then we'll just have to leave you with your opinion that everyone else is wrong, that we're all peasants, and only you have the correct analysis (reality notwithstanding).

Bock the Robber

You seem to be well informed about the energy industry, while I'm just a citizen outraged at hospital and school closures at the same time that our wealth flows out of the country and into the bank accounts of a huge oil company.

So yes. I'm just an ill-informed member of the public, who has the cheek to ask impertinent questions of my betters, and who is concerned at having to pay more taxes while my children hunt around for jobs and the national debt grows beyond all historic levels.

Silly me.

How dare I question the deal to hand our gas resources to Shell?

Call me an old Commie if you like.

Call me stupid if you want. I probably am fairly stupid, and I certainly don't have the level of financial facts available to an oil-industry insider, but how would I?

Nevertheless, maybe we can turn this to our mutual advantage, so let me ask you to throw light on the subject.

What other countries, apart from Ireland, don't insist on having shared ownership of their energy resources?

Could you also list the countries that do insist on shared ownership?

What other countries, apart from Ireland, don't require any royalty payments?

Could you also please say whether the tax write-offs available to Shell include not only their exploration and development costs, past and present, but also the ultimate cost of closing down the operation after they have taken all the gas?

And finally, can I ask you how you have explained the increasing shortage of money to your children?

Sponge Bob

Bock the Robber wrote: »

You seem to be well informed about the energy industry, while I'm just a citizen outraged at hospital and school closures at the same time that our wealth flows out of the country and into the bank accounts of a huge oil company.?

Well buy a feckin calculator then willya

The last outbreak of complete muppetry on the subject of Corrib was a few months back in this thread below in this forum. Would it have hurt awfully to search ???

http://www.boards.ie/vbulletin/showthread.php?p=60787634#post60787634

Once the discussion got into economics, engineering and hard numbers the muppets disappeared .