I have an idea that could net us 14 Billion euro.

Cobra Kai

Get Eamon Ryan on the phone, the Minister for Communications, Energy and Naural Resources. From the Green Party, you know--the ones in government. I have an idea so cunning you could put a tail on it and call it a Weasel. It could get us 14 Billion euro and that would mean we might be able to build decent schools for our children, hospitals that could facilitate our sick citizens in a humane way, reduce some of these disastrous cutbacks.
Here it is; send Eamon up to the Corrib gas field, which we own, so that he can tell Shell that the deal is off, to **** off to some other third world country and to steal their natural resources instead. Bastards. Do you know what they are doing? They are taking our gas and we will not get a penny for it. Not a cent. The gas field is estimated to be worth 14 billion. The only citizens to profit from this will be the Norwegians. Who? Why? Well, Statoil is part of the consortium and the Norwegians, fair play to them, will get 51% royalties from what ever they take out our gas field, not to mention the money they get from the 78% corporation tax they hit Statoil with. Smart. And they have a 50% government share in the company.
And where does this money go? The Norwegian pension fund, for the people of Norway. You and me? We get nothing. Our children? Thats right, not a cent.
The Norwegians got a great deal, we got a lousy one. I don't blame the Norwegians, they were just looking out for themselves, taking care of their peoples future. Who was looking out for us? What mastermind negotiated the deal on our behalf, on Irelands behalf? A consultant, a professional, someone competent in the area of corporate negotiation? Someone with the people of Irelands interests at heart? Would it surprise you if I revealed it was convivted criminal Ray Bourke and Bertie Ahern? A fine service. Did I mention that Shell will no doubt sell our gas back to us? No, you probably figured out that for yourself.
Its time for Minister Ryan to get on his bike and tell Shell the deal is off because its a *****ng joke. It makes no sense. None at all, except maybe to the crook in the ill-fitting suit that signed our natural resources away. 14 Billion euro , gone, sucked out of Ireland.

itsonlywords

Cobra Kai wrote: »

Get Eamon Ryan on the phone, the Minister for Communications, Energy and Naural Resources. From the Green Party, you know--the ones in government. I have an idea so cunning you could put a tail on it and call it a Weasel. It could get us 14 Billion euro and that would mean we might be able to build decent schools for our children, hospitals that could facilitate our sick citizens in a humane way, reduce some of these disastrous cutbacks.
Here it is; send Eamon up to the Corrib gas field, which we own, so that he can tell Shell that the deal is off, to **** off to some other third world country and to steal their natural resources instead. Bastards. Do you know what they are doing? They are taking our gas and we will not get a penny for it. Not a cent. The gas field is estimated to be worth 14 billion. The only citizens to profit from this will be the Norwegians. Who? Why? Well, Statoil is part of the consortium and the Norwegians, fair play to them, will get 51% royalties from what ever they take out our gas field, not to mention the money they get from the 78% corporation tax they hit Statoil with. Smart. And they have a 50% government share in the company.
And where does this money go? The Norwegian pension fund, for the people of Norway. You and me? We get nothing. Our children? Thats right, not a cent.
The Norwegians got a great deal, we got a lousy one. I don't blame the Norwegians, they were just looking out for themselves, taking care of their peoples future. Who was looking out for us? What mastermind negotiated the deal on our behalf, on Irelands behalf? A consultant, a professional, someone competent in the area of corporate negotiation? Someone with the people of Irelands interests at heart? Would it surprise you if I revealed it was convivted criminal Ray Bourke and Bertie Ahern? A fine service. Did I mention that Shell will no doubt sell our gas back to us? No, you probably figured out that for yourself.
Its time for Minister Ryan to get on his bike and tell Shell the deal is off because its a *****ng joke. It makes no sense. None at all, except maybe to the crook in the ill-fitting suit that signed our natural resources away. 14 Billion euro , gone, sucked out of Ireland.

Great ideas but surely you know that we the ordinary people of Ireland have no sayafter we elect the crooks that they offer us and they rip us off. They give away our rights for personal gain. Was Burke given a brown envelope by Shell?

Cobra Kai

I wouldn't surprise me if they both got 'sorted' after they 'sorted' Shell. We will never know with Bertie, he seems to be a black hole. Its our gas, the citizens of Ireland, it is up to us to take it back. I think there are very good grounds to null the contract.

Scofflaw

14 billion would cover about six months of our current deficit, in exchange for killing off for a good while any chance of developing an Irish offshore sector.

This idea floats at regular intervals - it's a non-runner in the real world. Ray Burke may have made the original deal, but there was nothing unusual about it by international standards for a market-opening deal, and it's been changed since.

cordially,
Scofflaw

Cobra Kai

We will never have an offshore sector at this stage. It may shore up the deficit for six months but it could ease the cuts that the government are making to essential public services. They were looking for 4 billion each year for the first three years and two billion for the last. That money could do a lot of things, it could establish a world class broadband service. Instead it is being piped out of here.

Nody

Cobra Kai wrote: »

Instead it is being piped out of here.

Only one "minor" issue with your idea; how the feck do you think to get the gas up out of the bloody depth of the ocean?

Are you seriously suggesting that the Irish government could set up and run the show themselves at zero cost (since you're claiming the full 14 billion worth of the field as profit) at depth which is usually not bothered with? This of course excluding the fact of the existing double the tax after cost etc. already in place but hey lets ignore reality and come up with ideas out of the blue instead.

jmayo

Scofflaw wrote: »

14 billion would cover about six months of our current deficit, in exchange for killing off for a good while any chance of developing an Irish offshore sector.

This idea floats at regular intervals - it's a non-runner in the real world. Ray Burke may have made the original deal, but there was nothing unusual about it by international standards for a market-opening deal, and it's been changed since.

cordially,
Scofflaw

And ray always looked after the public interest now didn't he. :rolleyes:
Oh wait no that was his own interests. :mad:

Then when you add in those other two ever so brilliant shining beacons of high morals and ethics in public office (i.e. frank "sinking boats" fahey and bertie "won it on a bet" ahern) who have also contributed to the nice tax breaks and rules for oil & gas exploration companies you really do wonder how come we are coming out of this so well. :rolleyes:

Cobra Kai

Ignoring reality is what got us into this mess in the first place, Nody. No, i'm not suggesting that this government could do it, they can't, the cretins. There would be an initial investment, yes, but whats wrong with doing it ourselves, are we that incapable? How many engineering, science, and geology graduates are unemployed in this cuntry? If we are prepared to plough money into idiotic projects like e-voting, pulse, etc, why not do something worthwhile. I said 14 billion but since the world reserves are decreasing, shouldn't the price of gas increase?
As for the depth of the gas, the technology is there to get gas from the deepest, most inaccessible wells--have you not seen the ads on TV? Its in the ether.

Cobra Kai

We are not jmayo, the country is ****ed. Rotten to the core.

jmayo

Cobra Kai wrote: »

We are not jmayo, the country is ****ed. Rotten to the core.

oh trust me I know we are not coming out of this well.
The initial plans for the pipeline ashore were equivalent to what they would try in pull in third world dictator led country.

People think that it is great bringing the gas ashore and it will be great for us and create loads of jobs. BS.
It creates a few jobs, the oil companies can write off all their capital investment and God knows what else against tax, the Irish citizens lucky enough to have a gas connection (i.e. the consumers) pay full market rates for the gas that supposedly belongs to their state.

Their is a win win for the gas companies and no one else really.
Well maybe the politicans involved but as we know corruption is very hard to prove.

Pittens

There would be an initial investment, yes, but whats wrong with doing it ourselves, are we that incapable? How many engineering, science, and geology graduates are unemployed in this cuntry? If we are prepared to plough money into idiotic projects like e-voting, pulse, etc, why not do something worthwhile. I said 14 billion but since the world reserves are decreasing, shouldn't the price of gas increase?

17? 21?

The idea that you just throw a few graduates at a problem, or even people with no experience in the area is so nonsensical it isn't worth discussing. That 14B is worth 14B because it is a resource which can be exploited by Shell. Without Shell, and other big bad energy companies, it is worth exactly zero.

If the Irish government wanted to hire people who could do it it would have to hire ex-employees of Shell ( if it can get any), or other energy companies - and then get all the capital equipment, and then hope that they could all work together.

The deal was a stadnard deal. If we renege on it now we will get no other off-shore development.

jmayo

Pittens wrote: »

17? 21?
...

The deal was a stadnard deal. If we renege on it now we will get no other off-shore development.

True, it's not like as if gas and oil deposits are in short supply in the world and companies are having to drill in deeper waters and for lesser deposits now is it ?

Scofflaw

jmayo wrote: »

True, it's not like as if gas and oil deposits are in short supply in the world and companies are having to drill in deeper waters and for lesser deposits now is it ?

I'm afraid they're really not that hard up for places to drill. The Atlantic is a technological frontier rather than a political one, and there are plenty of political frontiers opening up - most of Africa is still either unexplored or unexploited.

We've had only a couple of real finds in Irish waters ever, and when this deal was made we'd had one find. Ray Burke didn't know there was oil/gas out there when he signed it, and neither did the oil companies - he was trying to drum up interest in an offshore sector which only a couple of Irish academics believed had any prospects. He was offering a bargain basement rate for the same reason hotels in one-horse towns do.

cordially,
Scofflaw

Cookie_Monster

Don't worry about it, we'll find loads of oil and gas off Dalkey any day now

woodseb

so we kick out Shell and take over the project ourselves, who do we employ to get the oil/gas out?

Offshore drilling is an immensely difficult process (as the BP spill has proven) with only a handful of companies capable of doing it. The expertise to extract reserves is in great demand so we would have to bring in another oil multinational to do the job as we don't have a nationalised oil industry like the norwegians for example. We would have to pay these people the going rate which will be an extremely expensive flat fee or we can share the risk with whichever oil major takes on the job with a en.wikipedia.org/wiki/Production_sharing_agreement - so we're back to square one again, with the added bonus of discouraging exploration companies to operate in ireland for fear that the resource will be nationalised once it is found.

....in summary the OPs idea is cracked.

Cobra Kai

You know very well that was not what I meant wrt graduates. As for the estimation of the well value minus Shell, ridiculous. Even if we didn't do it ourselves, the worst we could do would be to imitate the Norwegians--strike up a 50% partnership deal with a petrochemical company. Giving it away for nothing is nonsensical.
Revoking the deal is a rational way forward, we are not getting a cent as it is. At least we would have a potential 14 Bn worth of gas in our sea bed. It might stop Shell drilling there in future, but what about every other company?
If they are not that hard up for places to drill then they wouldn't mind moving on, wouldn't they?

woodseb

what are the terms of the deal with shell - do you have link to it?

Cobra Kai

Its all available online, google it.
As for discouraging exploration companies, what is the point in having them here when we don't get any meaningful revenue from our own natural resources.
Do you think it would be unreasonable to go back to Shell to renegotiate the contract, considering they get everything and we get nothing?

whatnext

Dear Cobra Kai,

For one moment, suppose we (the Irish State) took the risk of exploring the Corrib Field of Oil or Gas and discovered nothing, as is the case in the vast majority of cases.

Would you be standing up there saying well done, at least you took the gamble, it could have paid off. €1.5bn (or what ever it cost) well spent. Lets try again a few miles further south?

You sound like the kind of punter in every Irish pub that says "I should have backed that" every time they see a 20/1 chance win a race.

whippet

Nody wrote: »

Only one "minor" issue with your idea; how the feck do you think to get the gas up out of the bloody depth of the ocean?

Are you seriously suggesting that the Irish government could set up and run the show themselves at zero cost (since you're claiming the full 14 billion worth of the field as profit) at depth which is usually not bothered with? This of course excluding the fact of the existing double the tax after cost etc. already in place but hey lets ignore reality and come up with ideas out of the blue instead.

why let reality get in the way of a really good tabloid headline for bashing the government ? It is the barstool economists who will forge the way out of recession for Ireland .... Two more pints please, i've just saved us €14bn, now I'll get to work on solving the Euro crisis before closing time.

Nehaxak

Come on, Burke is a convicted criminal, proven corrupt, with multiple offshore bank accounts to hide the monies he received from corrupt practices while in government.

Surely nobody in their right mind would even bare to think any deal with such a huge oil company made by Burke would have anything but his own interests (wallet) at heart ?

Oh sorry, I forgot, this is Ireland and FF, where stuff like this goes unpunished and sure he's only a cute aul whore that Burke fella, haha, fair play to him for getting a few bob in his back pocket, such a scoundrel that fella.

The_Honeybadger

whippet wrote: »

why let reality get in the way of a really good tabloid headline for bashing the government ? It is the barstool economists who will forge the way out of recession for Ireland .... Two more pints please, i've just saved us €14bn, now I'll get to work on solving the Euro crisis before closing time.

There is some logic to what he is saying, obviously we would need a Shell or some other company to explore and extract the gas, however do you not think the current deal is unbalanced, whereby the exploration company get all the proceeds, and the Irish public merely gets to buy their own gas at whatever price Shell feel appropriate. Surely we could have done better than this?

woodseb

Cobra Kai wrote: »

Its all available online, google it.
As for discouraging exploration companies, what is the point in having them here when we don't get any meaningful revenue from our own natural resources.
Do you think it would be unreasonable to go back to Shell to renegotiate the contract, considering they get everything and we get nothing?

i agree the deal does look skewed now but I'm not sure setting aside legal contracts with Shell are the way forward, after all it wouldn't be so much a negotiation as a unilateral repudiation which is not a path a state that relies on FDI and multinationals would want to go down - gradually raising the tax rate on these profits and retrospectively may be the way forward.

whatnext

woodseb wrote: »

i agree the deal does look skewed now but I'm not sure setting aside legal contracts with Shell are the way forward, after all it wouldn't be so much a negotiation as a unilateral repudiation which is not a path a state that relies on FDI and multinationals would want to go down - gradually raising the tax rate on these profits and retrospectively may be the way forward.

as they are doing in Australia at the moment

Cobra Kai

I think its relevant to note that Ray Burke abolished the royalties that companies pay when extracting our natural resources, when he had Eamon Ryan's job back in 1987. Then he abandoned our right to a 50% share in such a find. Then he gave them a full tax write-off from any expenses they incurred for products, exploration, etc.

RichardAnd

14 billion eh. I had a few guys handing out leaflets door to door about this a few weeks ago and their estimate was that that gas line would earn us half a trillion. Very nice, it all I can say.

However, the instant I read it I just knew it couldn't be as simple as kicking out statoil and taking over the gas for ourselves. It isn't.

I'm not well informed on the issue but I think that it could have been a better deal for Ireland. We don't have the technology, experience, equipment or even the professional aptitude or ability to mine for gas but we could have cut some sort of a deal where we get some cash for it. It's a shame but people shouldn't get too distracted by it.

oppenheimer1

Pittens wrote: »

17? 21?

The idea that you just throw a few graduates at a problem, or even people with no experience in the area is so nonsensical it isn't worth discussing. That 14B is worth 14B because it is a resource which can be exploited by Shell. Without Shell, and other big bad energy companies, it is worth exactly zero.

If the Irish government wanted to hire people who could do it it would have to hire ex-employees of Shell ( if it can get any), or other energy companies - and then get all the capital equipment, and then hope that they could all work together.

The deal was a stadnard deal. If we renege on it now we will get no other off-shore development.

Exactly. The gas is worth €0.00 while it is in the ground. Offshore drilling isn't easy as whats happening in the gulf is showing us. We simply do not have - or ever had - the resources to develop a home grown fossil fuel industry. The known reserves we possess do not justify it. Our reserves are difficult to exploit so if we want to see any of the money, we must provide sweeteners.

It is this logic that shell to sea and the cohort of other lunatics cannot seem to understand.

Amhran Nua

Scofflaw wrote: »

14 billion would cover about six months of our current deficit

And keep in mind thats just the deficit, not the total expenditure of the state.

RichardAnd

Cobra Kai wrote: »

How many engineering, science, and geology graduates are unemployed in this cuntry?

I just noticed this but I have to comment.

Letting graduates with no experience loose on anything is a bad, BAD idea. One of the reasons so many graduates are unemployed is that they have a shiny degree but nothing else and believe me, alot of employers don't give a crap about 2.1s or 1.1s or any of that rubbish, they want people who have proven their abilities in the real world, not in academic sand boxes.

Now, you are suggesting a mammoth task of drilling underwater which has never been attempted before in Ireland and you think people who are barely more than children can do that?

Cobra Kai

Just putting it out there that i'm not one of the shell to sea lunatics, far from it. I don't believe its worth nothing while its in the ground. Its worth nothing to us out of the ground, in fact it will cost us money in the future to buy that gas back as customers. Leave it in the ground, some other company will want to drill it. Get 50% back as royalties, and tax a good portion of it like other countries.
Sweeteners? Certainly. But I can't see the logic in giving away all of the gas found. Thats not even illogical, its stupidity.

Scofflaw

Cobra Kai wrote: »

I think its relevant to note that Ray Burke abolished the royalties that companies pay when extracting our natural resources, when he had Eamon Ryan's job back in 1987. Then he abandoned our right to a 50% share in such a find. Then he gave them a full tax write-off from any expenses they incurred for products, exploration, etc.

This is the regime for petroleum exploration announced in 1992:

Ireland's Government has introduced detailed petroleum tax legislation designed to boost offshore exploration and development.

The petroleum tax measures, published last week and included in the government's omnibus finance bill for 1992, will provide Ireland for the first time a comprehensive petroleum tax regime.

They include elements which, in tax terms, will make Ireland "a most attractive location" for oil and gas exploration and development," said Irish Energy Minister Robert Molloy.

He said, "Exploration companies will now have the benefit of the certainty of a detailed tax framework and attractive tax rates."

Debate on the finance bill has begun in the Irish Dail (parliament). Under Ireland's constitution, the budget bill must be approved and signed by the president by the end of May. Failure to approve a budget bill within that time would mean the current government's collapse.




<B>TAX DETAILS</B>

Here are the main features of petroleum tax provisions in the finance bill:

• A corporation tax of 25% applied to profits from oil and gas production on "petroleum" (development) leases issued before specified dates. No production related levy or higher tax rate applies. There will be no royalties or state participation.
  
• A corporation tax at the standard rate of 40% applied to profits from production of oil and gas from petroleum leases issued after specified dates.
  
• Allowance of 100% for development outlays, which may be used in the first year of commercial production with unlimited carryforward for unused allowances.
  
• Allowance of 100% for operating expenses.
  
  
• Allowance of 100% for exploration costs.
  
• Ring fence provisions with adjustments to allow losses from onshore mineral losses to be offset against offshore petroleum profits.
  
• Allowances and loss relief related to abandonment expenditures.

A Department of Energy official said the proposed measures make Ireland's petroleum tax regime competitive with any in Europe.

The measures soon will go to a parliamentary committee for possible amendments.

"At this stage, there are no objections (in parliament) to the petroleum tax measures," the DOE official said.


<B>OTHER MEASURES</B>

Ireland's DOE also is implementing other measures aimed at enhancing the country's attractiveness for petroleum investment.

It is overhauling licensing procedures and expects in June to issue the country's first new license terms in 17 years.

DOE expects to issue three new types of offshore exploration licenses: standard, covering friendly marine environments and likely to carry a term of less than 10 years; deepwater, likely to carry a term of 10-15 years; and frontier, likely to carry a term of more than 15 years.

That would put the operative dates for petroleum (production) leases at June 1, 2003, June 1, 2007, and June 1, 2013. Petroleum leases issued after those dates would be subject to the standard 40% corporation tax rate.


In addition, plans call for Ireland's first frontier licensing round, in the Erris and Slyne Trough areas of the deepwater Atlantic Ocean, to be held in mid-1993 (see map, OGJ, Apr. 29, 1991, p. 77).</p>

The government last year signed an agreement with Marathon Petroleum Ireland Ltd. calling for Marathon to drill at least seven exploratory wells and conduct at least 4,000 line km of seismic surveys through Dec. 31, 1996 (OGJ, Dec. 16, 1991, p. 30).

Molloy said he is "particularly anxious" to bring about an early increase in exploratory drilling.

"Accordingly," he said, "the structure of the tax terms now on offer is such that greatest benefit can accrue to those who make early commitments to exploration licenses and drilling."

Source: Oil & Gas Journal (subscription required).

The intention of that regime was quite specifically to drum up interest in the Irish offshore sector - which had been non-existent. That generated a round of exploration wells in the following couple of years, the vast majority of which were dusters.

However, that's not the regime which is currently in operation. That's this one:

Fiscal regime

Ireland’s fiscal regime that applies to the petroleum industry consists of a combination of corporation tax and a Profit Resource Rent Tax (PRRT) based on field profitability.

Royalties: None
Bonuses: None
PSC: Not applicable
Income tax rate: Corporation tax rate 25%
Resource rent tax: PRRT rate between 5% and 15%, depending on field
profitability relative to capital investment (PRRT is not deductible for corporation tax purposes.)
Capital allowances: D, E (D: accelerated depreciation, E: immediate write-off for exploration costs.)
Investment incentives: L, RD (L: losses can be carried forward indefinitely], RD: R&D incentive.)

B. Fiscal regime

Ireland’s fiscal regime that applies to the petroleum industry consists of a combination of a corporation tax and a PRRT (this latter tax was introduced in the Finance Act 2008).

Corporation tax

Irish resident companies are subject to corporation tax on their worldwide profits (i.e., income and gains). Income from an Irish trade is subject to corporation tax at a rate of 12.5%; however, certain “excepted trades” are subject to corporation tax at a rate of 25%. The definition of excepted trades includes dealing in land, working minerals and petroleum activities.

Source

So, yes, we used to have a tax regime for petroleum activities sufficiently savage to gladden the heart of any "resource nationalist". The result was that nobody bothered doing any drilling in Ireland's unknown western waters - so the government made the prospect a good deal more tempting.

That tax regime, you might notice, is very heavy on advantages to exploration - production attracts rather more in the way of tax. That's because Ireland's offshore is largely unexplored.

Now, having successfully tempted the oil companies back in with a nice deal, we have racked the rent up a little bit, because exploration carried out under that deal has finally yielded some actual shows. Not big, not huge, just a couple of little fields. We haven't become some kind of wet Saudi Arabia - but still the "economic nationalists" are pissing and moaning that the terms aren't savage enough and there's imaginary trillions at stake. The Irish government has learned the lesson, but not our armchair prospectors.

Let's be clear here - we're not the belle of the ball. We're one of the ugly girls, and if we want any action, we're going to have to offer easy terms. Otherwise we'll once again be left to our own devices - and we don't have any of the right sort of devices to exploit even our known offshore resources, let alone the expertise and finances to explore for more in what is still an environment at the outer edge of the oil industry's technical capacity.

cordially,
Scofflaw

Cobra Kai

Where did I say that we should let graduates loose to run the show, RichardAnd? You have completely misrepresented me there.

dunsandin

whatnext wrote: »

Dear Cobra Kai,



Would you be standing up there saying well done, at least you took the gamble, it could have paid off. €1.5bn (or what ever it cost) well spent. Lets try again a few miles further south?

Dead right, who can afford to gamble that sort of money?? Though, hang on,How much did we punt on anglo again today?? Ah sure the next billion we stick in there, we should try each way, we're sure to win. Always a few bob for crap, no money for real economic development. Like an alcoholic husband. At least the Indians got a box of beads for manhattan island. Their negotiators were obviously a better class of mug than our lot.

Cobra Kai

Or how about the 1.3 Bn (and rising) that we are paying to abuse victims on behalf of the catholic church? Or the 11 Bn we have over spent on roads?

Stabshauptmann

[edit]
Thank you Scofflaw. Very informative as usual.

dynamick

Just a couple of points:

1) The total value of the Corrib gas field to the consortium is about €1.8bn
We know this because last year, an 18.5% stake was sold to Vermilion energy Trust for $400m. Link

2) The total expected tax revenue from the Corrib gas field is €1.7bn Link

3) It costs about $100-$200m to drill a hole that may or may not reach an oil or gas field. If the success rate is 1 in 10 then, on average an exploration company will need to spend 1-2 billion dollars to find gas. So they will need to expect to make a profit of 1-2 billion dollars to make it worth their while drilling.

Now Ireland has not had anything like a success rate of 1 in 10. More than 100 holes have been drilled and we have found two commercially exploitable gas fields. (Kinsale and Corrib) both of which are very small. There are many gas fields hundreds of times larger so its really just enough gas to do Ireland for a few years, maybe a decade.

So the reason Ireland doesn't search for its own oil is that we don't have the expertise or the equipment and if we bought it in and started drilling holes we might well end up losing money on the deal. At least with our current arrangement we have an expected return of 1.7bn and no risk.

And the reason we have a zero royalty rate for exploration companies is because the chances of finding oil are so slim that nobody would spend money searching for oil in Irish waters if we threatened to tax them too much. We are not alone in setting a zero royalty rate: France and Spain do likewise for offshore gas.

Countries like Norway that have 100 times our gas reserves and have a success rate of 1 in 3 can charge super high taxes and still attract exploration interest. Also they can get involved in extracting the oil themselves and investing in oil infrastructure.

Shell have done an amazingly bad PR job in Corrib just as they did with the Brent Spar. People in Mayo lead lifestyles that are very dependent on fossil fuels and there is a strategic interest for Ireland to have at least some degree of energy independence.

Scofflaw

Stabshauptmann wrote: »

Actually it was a very unusual deal.
Im anti-Shell to Sea and not saying we should renege on the deal; but it was not standard.

Even micky-mouse third world countries get royalties on the natural resource. We had it in legislation before, and after this deal; but it is not present in the deal. Ray Burke is a proven corrupt individual. TBH, I think a quick enquiry into the contract might not be a bad idea. If Shell were proven to have acted improperly declare the contract void, if not, continue as planned, be it a bad deal or not

I'm not suggesting that either Ray Burke or Shell are some kind of standard for honesty (well, high standard, anyway), but the terms of the deal were heavily publicised at the time - see the quoted article from Oil & Gas - and didn't apply just to Shell. No "deal" was made specifically in respect of Corrib, either - it's simply under the generous but not unusual terms offered in the early 1990s to drum up interest in exploration of the Irish offshore (it was discovered in 1996). Those terms have subsequently been changed to our benefit:

Claims of a tax yield of some €1.7 billion over the life of the field have been made by the Irish government based on data about the field's size and 2008 gas prices. Up to 2007, the Irish Petroleum Licensing Terms imposed a flat 25% income tax on gas production revenues. In August 2007, the top rate of tax on the most profitable fields was increased to 40%. The new licensing terms called for changes to the tax imposed based upon fields ' profit ratios (equal to the rate of profit less 25% divided by the accumulated level of capital investment). Where this ratio is greater than 4.5, an additional 15% tax was imposed, where it is between 3.0 and 4.5 an additional 10% was imposed and where the profit ratio is between 1.5 and 3.0, and additional 5% tax was added. Less profitable fields were not affected

cordially,
Scofflaw

Norwayviking

Cobra Kai wrote: »

Get Eamon Ryan on the phone, the Minister for Communications, Energy and Naural Resources. From the Green Party, you know--the ones in government. I have an idea so cunning you could put a tail on it and call it a Weasel. It could get us 14 Billion euro and that would mean we might be able to build decent schools for our children, hospitals that could facilitate our sick citizens in a humane way, reduce some of these disastrous cutbacks.
Here it is; send Eamon up to the Corrib gas field, which we own, so that he can tell Shell that the deal is off, to **** off to some other third world country and to steal their natural resources instead. Bastards. Do you know what they are doing? They are taking our gas and we will not get a penny for it. Not a cent. The gas field is estimated to be worth 14 billion. The only citizens to profit from this will be the Norwegians. Who? Why? Well, Statoil is part of the consortium and the Norwegians, fair play to them, will get 51% royalties from what ever they take out our gas field, not to mention the money they get from the 78% corporation tax they hit Statoil with. Smart. And they have a 50% government share in the company.
And where does this money go? The Norwegian pension fund, for the people of Norway. You and me? We get nothing. Our children? Thats right, not a cent.
The Norwegians got a great deal, we got a lousy one. I don't blame the Norwegians, they were just looking out for themselves, taking care of their peoples future. Who was looking out for us? What mastermind negotiated the deal on our behalf, on Irelands behalf? A consultant, a professional, someone competent in the area of corporate negotiation? Someone with the people of Irelands interests at heart? Would it surprise you if I revealed it was convivted criminal Ray Bourke and Bertie Ahern? A fine service. Did I mention that Shell will no doubt sell our gas back to us? No, you probably figured out that for yourself.
Its time for Minister Ryan to get on his bike and tell Shell the deal is off because its a *****ng joke. It makes no sense. None at all, except maybe to the crook in the ill-fitting suit that signed our natural resources away. 14 Billion euro , gone, sucked out of Ireland.

In the oil industry its all about know how,and when Norway started drilling in the North sea back in the early 70s,we had to have help from the yanks to do the job.
It took Norway probably 20 years to build up the technology and know how that is required to get the oil and gas up from the the North sea.
And today i believe we are one step ahead of the yanks again.
But my point is that Phillips Petroleum that first started out with the drilling in the North sea also got a good deal in the start 51 % of the royalties.
The money does not go in to a pension fund,its going into a fund for generations to come,cause sometime this planet will run out of oil and gas.
Unfortunately our prime minister loves to travel with Norways checkbook to often,and gives money to every other country than Norway,so thats probably why i still have to pay 50% taxes to Norway,while living in Ireland.
And politicians are politicians either you live in Ireland or Norway!!!!!

Cobra Kai

I knew it was a fund of some sort, apologies. Thanks for the insight though, Norwayviking.

Norwayviking

Cobra Kai wrote: »

I knew it was a fund of some sort, apologies. Thanks for the insight though, Norwayviking.

No problem still wish i could pay taxes to Ireland though lol

dunsandin

Fair play to the Norwegians, they put in the investment and will reap the benefits, I admire them as a race. BUT, can we not, as Irish, put in our own seeds, and put in our couple of decades of learning the ropes, to reap the long term benefits? We Irish appear to take a very short term view of our economy, and seem to be very reluctant to broaden our reach to harvest new streams of income. Why no Irish energy exploration effort? Tullow oil proves that we can do it, so why not with Corrib? Or am I being naive?

Cobra Kai

I see we have very recently put in an application to extend our territorial waters beyond the 200 nautical miles, in more than one location. Just looking at the number of wells the UK are currently drilling, astonishing.

Bobby31

Cobra Kai wrote: »

Ignoring reality is what got us into this mess in the first place, Nody. No, i'm not suggesting that this government could do it, they can't, the cretins. There would be an initial investment, yes, but whats wrong with doing it ourselves, are we that incapable? How many engineering, science, and geology graduates are unemployed in this cuntry? If we are prepared to plough money into idiotic projects like e-voting, pulse, etc, why not do something worthwhile. I said 14 billion but since the world reserves are decreasing, shouldn't the price of gas increase?
As for the depth of the gas, the technology is there to get gas from the deepest, most inaccessible wells--have you not seen the ads on TV? Its in the ether.

No, the Irish government is better off leaving this alone.By the time our politicians have thrown a party to celebrate what they'll see as a cash cow and paid themselves the usual huge bonuses and expenses they'll then spend years diddering about how best to get it ashore.Then of course the Greens will have to throw in their tuppence worth of nonsensical rubbish about the danger to the environment etc and this will take another few years . Then they will probably give it away or lose it or something but it wont matter because the taxpayer will be saddled with the bill anyway. No leave it there it'll work out cheaper on us in the end.!!

Cobra Kai

I agree, Bobbby31. Piss-up. Brewery.

dunsandin

If we have no such faith in our Govt, then we are lost. You get the Government you deserve, someone once said. If we feel we are led by fools, what does that say for the rest of us? We voted for them.

Cobra Kai

I didn't. It's clear we need an overhaul of the electoral system but maybe thats for another thread.

dunsandin

Never gonna happen cobra. Sadly.

Cobra Kai

You might be right.

dunsandin

Nothing to be said.

Scofflaw

dunsandin wrote: »

Fair play to the Norwegians, they put in the investment and will reap the benefits, I admire them as a race. BUT, can we not, as Irish, put in our own seeds, and put in our couple of decades of learning the ropes, to reap the long term benefits? We Irish appear to take a very short term view of our economy, and seem to be very reluctant to broaden our reach to harvest new streams of income. Why no Irish energy exploration effort? Tullow oil proves that we can do it, so why not with Corrib? Or am I being naive?

Something to bear in mind here is that the Norwegians were looking across the water at the UK's part of the North Sea, where oil had already been found. Given that the whole North Sea is pretty much one basin with similar geology across it, there was every chance that there would be oil in the Norwegian sector. Water depths in the Ekofisk field - the first one to be discovered, in 1969 - are only 250 feet, and that field is enormous, expected to continue production until 2050. Offshore oil field technology at the time was not particularly well advanced - the first semisub was only built in 1963 or so - so there wasn't much catching up to do.

For us, on the other hand - well, our geology is very poorly known, our known fields are small and in deep water (Corrib is about 1000 foot water depth), and rather than 6 years of rig technology to catch up on, we have nearly half a century's gap to close.

All that for very little certainty of what's out there - I think we're better off letting the oil companies explore it for us. If there's really serious reserves out there, we will in time have an oil industry - in the meantime we're getting money at no risk.

cordially,
Scofflaw

Citizen_Cutback

Perhaps if the State took the exploration risk and paid the commercial exploration companies' well drilling costs at €50m a pop while also giving the commercials a royalty option... say 25% if a discovery is made.

If this were to happen, I think that we would have all the main players drilling off our coasts. With improved resource data we could then reduce the royalties for new drilling campaigns and still attract the oil companies. I believe it is estimated that we have hydrocarbon resources estimated at being worth €420 billion in the Rockall and Porcupine basins alone.

Given BP's problems at the moment, in the Gulf of Mexico, it is likely that new equipment will be developed to cope better with deep sea drilling problems in the near future. This would definitely be to our advantage while also allowing BP etc... defray the cost of this technology if they could get payment for the use this technology in Irish waters.