Corrib Gas controversy

Kimia

Can someone explain this? So Bertie Ahern allowed the gas/oil companies to search for new fields (because there was little to no chance of them finding anything) in exchange for their investment into Ireland (jobs / tax etc) and then they found gas which is obviously worth more? Is that about right?

Oranage2

Kimia wrote: »

Can someone explain this? So Bertie Ahern allowed the gas/oil companies to search for new fields (because there was little to no chance of them finding anything) in exchange for their investment into Ireland (jobs / tax etc) and then they found gas which is obviously worth more? Is that about right?

Close, FF gave the gas fields away for free and in return ireland got the choice to buy the gas (at market price) back first.

red menace

From wiki

Beginnings

In 1985 Dick Spring modified former Minister for Industry and Commerce Justin Keating's 1975 exploration terms to give a sliding scale of royalties but retained a right to state participation in oil and gas finds. In 1987, in a move described by Dick Spring, then a member of the opposition, as "economic treason",[1] Fianna Fáil Minister for Energy Ray Burke abolished all royalties on petroleum and natural gas extraction and removed the state's right to participation.[2][3] He also surrendered the state's stake in the Kinsale Head gas field, discovered in 1971 off the south coast, but no commercially viable oil or gas field has been discovered until the Corrib field. Oil and gas exploration companies have spent over €2 billion over this period searching with a less then one in forty chance of a strike.[4] In 1992, then Minister for Finance, former Taoiseach, Bertie Ahern extended licensing terms for fossil fuel companies, drastically reducing the tax rate for exploration companies to the lowest in the world.[5] This was compounded by Department of the Marine and Natural Resources tying the fiscal measures into the licencing terms for oil and gas exploration in November 1992.[6] Following the locking in of fiscal measures into the licensing terms, the licence for the Corrib field was issued in January 1993.
The World Bank puts Ireland at the top (in the "very favourable" category) of its index of countries ranked by how congenial their laws are to oil and gas companies, In 2009 it was also ranked as having the lowest Government take in Western Europe.[citation needed] Sinn Féin called for an inquiry into the Corrib deal as early as 2001.
[edit]Reasons for Controversy

The controversy has stemmed from many points:
Local residents along the course of the proposed pipeline route felt they were not sufficiently consulted (decisions were imposed on the community by force)[7][citation needed]
The location of the pipeline and its proximity caused concern [8][citation needed]
The transmission pressure and untreated nature of the gas in the pipeline.
The location of the onshore processing facility on former forestry land caused concern adjacent to water supply[9]
Jailing of protesters at the request of Shell[citation needed]
Concerns about the marine ecology [10]
Most people who live in Cill Chomáin parish, the area affected, believe that gas processing should be carried out at sea [11][12][citation needed]
Some[13] are concerned with irregularities in the policies preceding this project
[edit]

ejmaztec

Did that bastard (and that's being polite) Ray Burke ever own up to anything in particular? As I understand it, he made certain that he was the only government representative in the room when the deal was done.

byhookorbycrook

Read "Once upon a time in the west" by the Irish time writer, Lorna Siggins ,for a good balanced view. We have been screwed, by Shell.

Kimia

Anyone else (besides Orange - thank you as you are the only one who replied with facts instead of telling me to read something else) have any info? I can read Wikipedia myself - it's just long and complicated so I wanted the info in layman's terms.

red menace

sorry didn't realise you wanted the MTV version

Kimia

parker kent wrote: »

How did the OP manage to bring Bertie Ahern into this? I mean I'm not fond of him, but at least blame him for stuff he actually had a role in deciding.

Afaik he was the one who agreed the entire deal? In 1991? I could be wrong though, but that's what I got from skimming wiki.

The MTV version is exactly what I want Ray - thanks! Just one or two concise sentences, I don't want to read books and pages upon pages. A general notion will suffice.

Kimia

That's weird, where did Parker's post go?

red menace

Kimia wrote: »

Afaik he was the one who agreed the entire deal? In 1991? I could be wrong though, but that's what I got from skimming wiki.

The MTV version is exactly what I want Ray - thanks! Just one or two concise sentences, I don't want to read books and pages upon pages. A general notion will suffice.

Bertie Ahern had like totally nothing to do with it
It was that total douche Ray Burke who totally abolished the royalties on Oil and Gas

Oranage2

Ministers Ray Burke and Bertie Ahern changed Irish law in 1987 & 1992 so that multinational oil companies:
• own 100% of the oil and gas they find under Irish waters;
• pay no royalties on it;
• can write off 100% of their costs against tax, even costs incurred in other countries;
• have profits taxed at 25%, compared to an international average of 68% for oil-producing countries;
• can export the oil or gas outside Ireland;
• can sell to Bord Gais at full market rates.
Gas estimated at 420 billion euro


So FF minister Ray Burke and some other cowboy negiated a deal with Shell that they can have our gas fields for free - pay little tax - and sell the gas they get back to us at the market price.

red menace

I stand corrected so

Kimia

Oranage2 wrote: »

Ministers Ray Burke and Bertie Ahern changed Irish law in 1987 & 1992 so that multinational oil companies:
• own 100% of the oil and gas they find under Irish waters;
• pay no royalties on it;
• can write off 100% of their costs against tax, even costs incurred in other countries;
• have profits taxed at 25%, compared to an international average of 68% for oil-producing countries;
• can export the oil or gas outside Ireland;
• can sell to Bord Gais at full market rates.
Gas estimated at 420 billion euro


So FF minister Ray Burke and some other cowboy negiated a deal with Shell that they can have our gas fields for free - pay little tax - and sell the gas they get back to us at the market price.

That is unbelievable. Why did they do that? I don't understand - surely it would have made more sense to do a revenue share - even for the corrupt politicians. What did they get out of it?

Oranage2

Kimia wrote: »

That is unbelievable. Why did they do that? I don't understand - surely it would have made more sense to do a revenue share - even for the corrupt politicians. What did they get out of it?

well ray burke the guy that negiogated it- http://en.wikipedia.org/wiki/Ray_Burke_(Irish_politician)#Corruption_allegations_and_fallout

his corruption part is bigger than his bio.

Also Ireland didnt have any infustructure for gas drilling or transport so Shell had to build it 'that was we got out of it'.

jimcoolding

Oranage2 wrote: »

Ministers Ray Burke and Bertie Ahern changed Irish law in 1987 & 1992 so that multinational oil companies:
• own 100% of the oil and gas they find under Irish waters;
• pay no royalties on it;
• can write off 100% of their costs against tax, even costs incurred in other countries;
• have profits taxed at 25%, compared to an international average of 68% for oil-producing countries;
• can export the oil or gas outside Ireland;
• can sell to Bord Gais at full market rates.
Gas estimated at 420 billion euro


So FF minister Ray Burke and some other cowboy negiated a deal with Shell that they can have our gas fields for free - pay little tax - and sell the gas they get back to us at the market price.

Why in Gods name did we agree to this?

galwayrush

We could have drilled many gas and oil holes for a fraction of what we are giving our ****ed up banks.

red menace

http://www.guardian.co.uk/world/blog/2010/dec/22/you-ask-we-search-december-22

This is worth a read also

jimcoolding

How come this Ray Burke fella and Bertie aren't in jail?

big_show

red menace wrote: »

http://www.guardian.co.uk/world/blog/2010/dec/22/you-ask-we-search-december-22

This is worth a read also

The Pipe is a TG4 Doc worth catching as well.

molequidgallus

Kimia wrote: »

That's weird, where did Parker's post go?

:rolleyes:Mods:rolleyes:

byhookorbycrook

jimcoolding wrote: »

How come this Ray Burke fella and Bertie aren't in jail?

:D:D:D
(There are no words...)

molequidgallus

jimcoolding wrote: »

How come this Ray Burke fella and Bertie aren't in jail?

Bertie should be brought to that famous wall in kilmainham and taken care of.

Kimia

Ok, so I'm after reading a few bits and pieces on this - also on shelltosea.ie.

I'm absolutely and utterly appalled. I would imagine that I'm not the only Irish person to have had an unclear idea of what this is all about - I'm ashamed to say at this stage my ears tune out when I hear 'political corruption', 'backhanders', 'fianna fail', and 'bertie ahern'. It's like I've been numbed to it so I just turned off the news when it came on or took little notice of the news etc.

I can't believe this has happened. I know people will laugh and say 'Oh you're only understanding the importance of this now', but this is one of the most shocking things I have ever read. The utter arrogance and betrayal by those FÚCKERS in the government make me sick. Is there anything left which hasn't been destroyed by our politicians? They have left no stone unturned and have ruined us, literally, in every way.

Is there anything that can be done? I'm already feeling overwhelmed when I think about fighting this. The sheer amount of corruption is mind-boggling - and it's hard to imagine if anything can be salvaged. I heard somewhere recently that Ireland has a more corrupt political system than Zimbabwae and I'm not surprised. Disgusting.

sock puppet

Oranage2 wrote: »

Gas estimated at 420 billion euro

I've got some magic beans you may be interested in. Don't worry I swear they're 100% legit.

jimcoolding

Kimia, can you please give me a summary?

Oafley Jones

As much as I enjoy giving FF a good kicking, here's some facts...

I've posted this before and I think it's worth putting up again. All of the below is taken from the poster oilking on thepropertypin.com
http://www.thepropertypin.com/viewto...=13259&start=0


The deal the Irish State did with Shell is no different than what both ourselves and our neighbours in Holland, Norway and the UK have been doing for years. The only difference is that since the 1970s (Kinsale gas field) this is the first commercial gas discovery on the Irish Continental shelf.
The continental shelf of each country is divided up into blocks which are each given numbers. Oil companies then bid on the rights to drill in a block. The block will be leased to the oil company for a stated number of years and yes they will earn revenue for bringing any hydrocarbons found to market. The state will then tax the revenue in a number of ways but usually this is done by royalties of a fixed percentage of revenue for each BOE (barrel of oil equivalent) produced. The tax rate of the royalties is stated in the terms of conditions set by the government prior to any oil company taking out a lease on a block.

In Ireland we've one of the worst strike rates for finding hydrocarbons of anywhere in the planet. (3% but I need to find the link for this) Here is some useful comparisons with our neighbours in Norway and the UK

Quote:
The Irish offshore industry is repeatedly compared to its Norwegian and UK counterparts. More often than not, this comparison focuses on the fiscal terms offered to companies carrying out exploration and development in these countries. This comparison is wholly inappropriate.

Exploration in Norway commenced at about the same time as in Ireland. Since then the Norwegian industry has drilled 1,200 exploration and appraisal wells. The UK industry has drilled 4,211 exploration and appraisal wells and currently has 350 producing oil and gas fields.

At the same time, Ireland has drilled only 155 exploration and appraisal wells and only has three producing gas fields with the fourth, Corrib, under development.

Norway is also seen as particularly attractive for exploration given the large average size of the fields discovered, approximately three times the size of the average in Ireland. Norway’s production to date plus proven reserves is 114 times greater than Ireland’s. UK production to date and proven reserves is 99 times greater than Ireland’s.

These enormous natural advantages enable Norway and the United Kingdom to impose tough fiscal terms on offshore explorers and make any comparison between terms offered in Ireland and the other two countries entirely inappropriate. The attractiveness of Norway and the United Kingdom, despite their relatively onerous fiscal terms, is emphasised by the number of applicationsfor exploration licences. For instance, the 24th Licensing Round (2006) in the UK attracted 147 applications from 121 companies. A comparable round in Ireland resulted in the award of 4 licences.

The appropriate comparison would be with other countries of relatively low prospectivity, such as France, Spain and Portugal, which have similarly low levels of activity to Ireland.
Norway is the third largest exporter of crude oil in the world and currently has 49 producing oil and gas fields with a further five fields under development. Another 13 fields have ceased production. The UK has over 300 producing oil and gas fields with 18 fields under development. Ireland has only three producing gas fields, one gas field under development and no commercial oil discoveries to date. These stark differences make comparisons between Ireland and the other two countries, and the fiscal terms they impose on exploration companies, entirely inappropriate.
Source: UKOOA, the Petroleum Affairs Division and the Norwegian Petroleum Directorate (Faktaheftet om norsk petroleum verksemd for 2005).


http://www.iooa.ie/securing-the-future-page41390.html


So, if you have lots of oil and gas already discovered on your continental shelf you can impose higher taxes/tariffs on the Oil companies producing oil and gas.
Because of the low success rate on the Irish continental shelf we must be very generous on the low taxes that we would charge so as to attract oil companies to drill in our waters.

It would seem that just as Shell is about to make a return on their massive investment on the Corrib project we have people in this country deciding that they should not have it, almost that we always knew that it was there and our government still decided to "give it away". This is nonsense. Do these people realise the massive cost today for exploring for oil and gas. An average exploration well in deep water such as off the coast of Mayo and Donegal where Shell is drilling is now costing at least $100 million.

I'm all for our government setting up an Irish National oil company to explore for oil and gas off of Ireland but I do not think that the Irish tax payer is willing to stump up the cost of maybe $1 Billion to go on a 10 well drilling programme with a success rate of perhaps 5%. And that cost would only be for drilling the wells. Not for building the offshore platforms, pipelines, onshore refineries. So perhaps double that price again.
How many hospitals, schools and roads are the Irish people willing to forfeit so that we can explore for oil and gas.
It seems we want to go down the path of just confiscating it from the companies who are willing to take the chance of finding it. This is outrageous.

I have no beef with people campaigning on whether Shell are doing a safe and environmentally friendly job of bringing the Corrib gas to shore but nationalising our tiny offshore reserves is economic suicide. Welcome to Communist Ireland.

For the record I work for a major Oil and Gas company but not Shell. The company I work for has no commercial interest in Corrib or any other project on the Irish Continental shelf.

shedweller

I brought up this subject here recently and was more or less told to f off. Apparently there is nothing worth drilling out there. Thats why they continue to drill out there......
Yes we'll happily pour billions into a virtual black hole but cant spend a tiny fraction of it to drill for some oil or gas that will actually benefit the country. Apparently we dont have the money to build decent motorways either so have to have private companies foot the bill, yet we can be taxed to the hilt to pour money down a black hole.

We are complete idiots for putting up with this. We deserve to be fleeced.

yosemite_sam

jimcoolding wrote: »

Kimia, can you please give me a summary?

You cannot blame Shell for this, they didn't write the terms they are only availing of them. Lap it up, you voted for them

FatRat

People need to watch TG4 more. It covers almost all important historical issues of this country. There was a documentary made about this and the fishermens struggle because of the controversy. It was, surprsingly, extremeley interesting. Far better then most of RTE's "Documentry's" cough:Charlie Bird:cough

shedweller

Oafley Jones wrote: »

I'm all for our government setting up an Irish National oil company to explore for oil and gas off of Ireland but I do not think that the Irish tax payer is willing to stump up the cost of maybe $1 Billion to go on a 10 well drilling programme with a success rate of perhaps 5%. And that cost would only be for drilling the wells. Not for building the offshore platforms, pipelines, onshore refineries. So perhaps double that price again.

But don't other countries get the oil companies to do the drilling for them? And tax them on the oil/gas they get?

Oafley Jones wrote: »

How many hospitals, schools and roads are the Irish people willing to forfeit so that we can explore for oil and gas.

Well, we seem to be hell bent on getting rid of all our hospitals at the moment! The savings just get poured down a black hole! Apparently thats the way to run a country! lol

Oafley Jones

shedweller wrote: »

I brought up this subject here recently and was more or less told to f off. Apparently there is nothing worth drilling out there. Thats why they continue to drill out there......
Yes we'll happily pour billions into a virtual black hole but cant spend a tiny fraction of it to drill for some oil or gas that will actually benefit the country. Apparently we dont have the money to build decent motorways either so have to have private companies foot the bill, yet we can be taxed to the hilt to pour money down a black hole.

We are complete idiots for putting up with this. We deserve to be fleeced.

The money that's going into the banks comes from Europe, it's money we don't have. And even in "the good times" we couldn't afford the drilling programme, not to mention the fact that we don't have the expertise. Irish governments have struck many,many ****e deals over the years but the one in relation to off-shore drilling isn't one of them.

Kimia

An overview as I've read it:

Oil companies go to a country and agree terms in order to search for oil/gas. Shell came to Ireland and negotiated terms with Ray Burke/Bertie Ahern. Now, it's very expensive to drill for oil/gas and the odds of finding oil/gas is very low, so what countries do is let the oil companies work away (at their own expense) and charge them a percentage (royalties) if they find anything, plus tax the companies for settling here while they are searching.

But for whatever reason (corruption/back handers one assumes) Ray Burke agreed to no royalties being paid to Ireland on the (small) chance they find something, very low percentage on profits, and then Bertie Ahern reduced the corporation tax to 25% which is extremely low compared to other countries.

So it was a shíte deal for Ireland, but the chances of the oil companies finding anything was very low so the politicians saw this money as easy money. But then of course, they found the Corrib gas field.

And NOW, what the controversy is about is that Shell (who are the majority investors) want to build a refinery inland, instead of out to sea. Which means that a big fúck off pipe will run through people's back garden's, basically. And the people who own that land have no right to 'interfere', even though there is the obvious environmental hazards, plus huge health and safety concerns because the gas is unrefined, so is risky (you can't smell it for example, if there was a leak).

So basically Ireland have natural resources but because of a badly judged decision made by an apparently corrupt politician and Bertie Ahern (need I say anything about him?) we are now in this horrible situation, where protesters are being arrested etc.

One thing I should add is that some people people the protesters to be 'nutters' and 'communists' etc. I don't know enough about this yet to make that call, but I don't think being appalled by the terms of Ireland's aquisition and sale of natural resources is being 'a communist'.

Thoughts welcome, I am a newbie to this issue.

R P McMurphy

Oafley Jones wrote: »

The money that's going into the banks comes from Europe, it's money we don't have. And even in "the good times" we couldn't afford the drilling programme, not to mention the fact that we don't have the expertise. Irish governments have struck many,many ****e deals over the years but the one in relation to off-shore drilling isn't one of them.

Would you mind giving a quick breakdown of the good aspects of the deal

Oafley Jones

R P McMurphy wrote: »

Would you mind giving a quick breakdown of the good aspects of the deal

Show me a country that has an equivalent strike rate to Ireland that has gotten what you'd consider a fair deal?

yosemite_sam

FatRat wrote: »

People need to watch TG4 more. It covers almost all important historical issues of this country. There was a documentary made about this and the fishermens struggle because of the controversy. It was, surprsingly, extremeley interesting. Far better then most of RTE's "Documentry's" cough:Charlie Bird:cough

Most of the fishermen took a compensation package, he was struggling to fish in front of a pipe laying vessel ?

Kimia

There doesn't seem to be any good aspects of the deal. It was a gamble. I'm assuming Bertie & Ray never thought there would actually be anything worth drilling for, so they thought they were making easy money from the oil companies. Except there was something there, and now we're not getting the benefit of it.

I would imagine the money they made was from corporation tax, plus I wouldn't be surprised if there were a few personal sweeteners thrown about.

FatRat

R P McMurphy wrote: »

Would you mind giving a quick breakdown of the good aspects of the deal

There is pretty much no gas left, but we are stiff benefiting from shell. They help the economy being out there, they really. It's not our government that are paying for the drilling, I think. I'm pretty sure shell are wasting their own money.

When there was a plentiful supply of gas, it also benefited us. It ment easy access to gas for the country, without having to buy from over-seas all the time (not saying we didn't need to buy from over-seas, obviously we did anyway, just at a lesser extent...)

R P McMurphy

Oafley Jones wrote: »

Show me a country that has an equivalent strike rate to Ireland that has gotten what you'd consider a fair deal?

I don't know enough about oil and gas exploration, my question was not critical, it was simply a question, as you seem to think it is a good deal, what are the benefits of it

Kimia

Why are they saying there's approx 400 - 600 billion euros worth of gas left? And if there's no gas left, why are Shell bothering to argue about an inland refinery then?

R P McMurphy

FatRat wrote: »

There is pretty much no gas left, but we are stiff benefiting from shell. They help the economy being out there, they really. It's not our government that are paying for the drilling, I think. I'm pretty sure shell are wasting their own money.

When there was a plentiful supply of gas, it also benefited us. It ment easy access to gas for the country, without having to buy from over-seas all the time (not saying we didn't need to buy from over-seas, obviously we did anyway, just at a lesser extent...)

If we are paying market rate for gas surely it does not matter where it comes from though

Oafley Jones

R P McMurphy wrote: »

I don't know enough about oil and gas exploration, my question was not critical, it was simply a question, as you seem to think it is a good deal, what are the benefits of it

I never said it was so much a good deal, but it is the best deal we could have gotten. Corruption and politics go hand in hand in this country, but I've yet to see any evidence that we could've gotten a better deal in this regard.

FatRat

Kimia wrote: »

Why are they saying there's approx 400 - 600 billion euros worth of gas left? And if there's no gas left, why are Shell bothering to argue about an inland refinery then?

Are they really saying that??? Apparently there is pretty much nothing left. Maybe they assume there is that much left to be found. But trying to find gas costs billions also.

Kimia

FatRat wrote: »

Are they really saying that??? Apparently there is pretty much nothing left. Maybe they assume there is that much left to be found. But trying to find gas costs billions also.

Who is saying there is pretty much nothing left?

And again, why would Shell be bothering to argue about the inland refinery if there was no serious profit to be made still?

R P McMurphy

Oafley Jones wrote: »

I never said it was a good deal, but it is the best deal we could have gotten. Corruption and politics go hand in hand in this country, but I've yet to see any evidence that we could've gotten a better deal in this regard.

Does the agreement reached with shell still stand for further finds by them and for other companies or has it been revised

General General

Pity our Army hasn't anyone cool like yer man Chavez to save us from the dark side of the force.

Oafley Jones

R P McMurphy wrote: »

Does the agreement reached with shell still stand for further finds by them and for other companies or has it been revised

As long as future finds are within the terms/area that they initially bid for why not? The governments hand is strengthened when entering into future deals with companies.

K-9

R P McMurphy wrote: »

If we are paying market rate for gas surely it does not matter where it comes from though

Funnily enough, the more we pay for oil and gas, the more it makes Irish reserves worth looking for!

I could quote knowledgeable posts from the Politics forum but they'll be ignored, rather like 4/5 threads on the go during the election on this same issue and nobody bothering to check facts, it's an ideology and a person reading something on Indymedia etc. and going Eureka.

The reserves could well be there. The estimates are based on Irish Government and oil company and owners of the fields estimates, very reliable as we all know, as Lenihan said "based on my estimates".

Fact is Kinsale is the only field we've landed Gas from and is running out and Corrib hasn't even got Gas ashore yet. We don't have queues of big oil and gas companies lining up.

If Gas and oil prices keep rising it makes our reserves worthwhile investigating. So stop moaning about diesel and gas prices. We've a bounty of riches of our coast.

PS. The Ray Burke deal has been changed as has tax policy on future profitable finds but that will be ignored.

Dwellingdweller

byhookorbycrook wrote: »

Read "Once upon a time in the west" by the Irish time writer, Lorna Siggins ,for a good balanced view. We have been screwed, by Shell.

It was our own government that bent us over though :rolleyes:

ArmaniJeanss

If there is really an easily accessible €600-800 billion worth of fossil fuels off our west coast, then why aren't the major exploration companies outbidding each other to drill in the fields that no licenses have yet been issued for? The coast from Cork to Donegal should look like Kuwait.

So either the exploration companies have taken their eye off the ball or else the figures being bandied about are rubbish. My money would be on the latter.

General General

ArmaniJeanss wrote: »

If there is really an easily accessible €600-800 billion worth of fossil fuels off our west coast, then why aren't the major exploration companies outbidding each other to drill in the fields that no licenses have yet been issued for? The coast from Cork to Donegal should look like Kuwait.

So either the exploration companies have taken their eye off the ball or else the figures being bandied about are rubbish. My money would be on the latter.

In all fairness, Montenotte is a bit like Kuwait.

molequidgallus

jimcoolding wrote: »

How come this Ray Burke fella and Bertie aren't in jail?

Because they are above the blue circle in their little golden circle. A member of the public should eradicate them, and BIFFO. Become a martyr :cool: