billion barrel oil find confirmed off Cork coast, we got nothing?

zing zong · 25-07-2012 09:14AM #1

According to http://www.independent.ie/business/irish/barryroe-billion-barrel-oil-find-confirmed-off-cork-coast-3179875.html

Billions of barrels of oil found, where the company were originally expecting only millions. The article says that the state, i.e. us, will get corporate tax rate of 25% and "investment".

This strikes me as BS as all big companies pay corporate tax (regardless of the rate), the question is, what do we get for them selling OUR resources? does anyone know if we get a % of the profit or what is the arrangement?

a % of the sale of billions of barrels ain't exactly peanuts!

Sleepy · 25-07-2012 09:19AM

25% of the corporate profit is our cut. The company don't just wave a wand and fill the barrels without any cost to themselves, tbh, 25% of the profit for 0% of the risk sounds like a reasonable enough deal to me...

Of course we'll also get more tax from them for on every person they hire (and those people's PAYE and PRSI), VAT on their purchases, increased corporate and employment related taxes from companies that supply to them and their workers and of course, this should lead to a few people coming off the live register.

25-07-2012 09:21AM

Im sure we'll find a way to get 0% from it,
were guaranteed to **** ourselves over

KindOfIrish · 25-07-2012 09:22AM

We are rich again!!!!:D

zing zong · 25-07-2012 09:23AM

nonsense

even google pay 25% corporate tax, but they don't use *OUR* resources to make said profit

is it any wonder Norway think we are hilarious fools!

everdead.ie · 25-07-2012 09:24AM

25% is the minimum tax rate that will be charged however there are a two things to be noted.

They can write off any exploration costs against tax.
25% can increase to 40% depending on the profitability of the field.

Also they won't recover a billion barrells of Oil as some ofit won't be recoverable.

25-07-2012 09:25AM

If we take back our fishing rights and nationalize this new-found oil wealth we could be the kings of the sardine industry. Power to the people!

:rolleyes:

zing zong · 25-07-2012 09:25AM

all the same, does any one know any of the actual details of whatever arrangements we have with this company?

zing zong · 25-07-2012 09:28AM

everdead.ie wrote: »

25% is the minimum tax rate that will be charged however there are a two things to be noted.

They can write off any exploration costs against tax.

25% can increase to 40% depending on the profitability of the field.

Also they won't recover a billion barrells of Oil as some ofit won't be recoverable.

can you point me to where I can read more on this increase to 40%? thanks

smcgiff · 25-07-2012 09:33AM

zing zong wrote: »

nonsense

even google pay 25% corporate tax

You might want to keep that quiet, I'd say Google themselves would be of the belief they pay a lot less.

everdead.ie · 25-07-2012 09:34AM

I found a bit from Reuters where they think about 160m barrels are recoverable and this could be revised upwards after further tests or tech advancements.

http://www.reuters.com/article/2012/07/25/providence-resources-idUSL6E8IOID820120725

brianb10 · 25-07-2012 09:35AM

why not let them explore and get as much oil as possible and then if it turns out we have a decent supply we could seize and nationalize it like argentina did with Repsol

everdead.ie · 25-07-2012 09:36AM

zing zong wrote: »

can you point me to where I can read more on this increase to 40%? thanks

http://www.independent.ie/business/irish/raise-taxes-on-oil-companies-profits-report-3103834.html

Here it's called a PRRT tax of up to 15% but naturally now we have proved we have oil everyone wants to increase the tax take but that wouldn't count for this find only on future licences handed out.

itzme · 25-07-2012 09:37AM

zing zong wrote: »

can you point me to where I can read more on this increase to 40%? thanks

A quick search found this siptu document talking mentioning it, didn't see a more official document here
This was a decent debate between Fintan O'Toole, Rabbitte and another labour councillor
here

ardmacha · 25-07-2012 10:05AM

The point about this oil find was that it was somewhat unexpected. You can't get people to prospect for oil where finding it is unexpected if you are going to seize all of the profits from finding such oil. In the future you may be able to propose different arrangements and still have people willing to search for oil.

zing zong · 25-07-2012 10:07AM

smcgiff wrote: »

You might want to keep that quiet, I'd say Google themselves would be of the belief they pay a lot less.

correction, they pay 20%

http://www.guardian.co.uk/business/ireland-business-blog-with-lisa-ocarroll/2011/mar/24/google-ireland-tax-reasons-bermuda?CMP=twt_gu

zing zong · 25-07-2012 10:11AM

brianb10 wrote: »

why not let them explore and get as much oil as possible and then if it turns out we have a decent supply we could seize and nationalize it like argentina did with Repsol

because this nation is run by clowns I would imagine

even though I reckon thats a great idea

I am pie · 25-07-2012 10:12AM

I look forward to the crusty brigade decamping to Cork and demanding we get 100% of the revenue for 0% of the cost.

bbam · 25-07-2012 10:15AM

Didn't this company announce at the time of the oil find that they would employ NO Irish workers when oil extraction starts.
Also I think the deal is similar to the shell corroborate deal where yes they pay tax but only after every single cost for the set up and extraction has been recovered from profits. I read that it could take five years after full production has been achieved before a cent is paid to the state.

We must be a laughing stock. Right we can't afford to develop the fields ourselves at the moment, surely this means we leave them sit until we get organised rather than essentially give them away.

We have a choice. Give away these resources and hope to sell sandwiches to the workers or get our **** together and start developing an energy sector. Wind, gas and oil. We could build a decent economy. But we won't because the country is ran by a bunch of failed teachers and local parish pump politics.

Surely the money from the pension reserve would be better spent on this rather than on more roads and better garda stations.

LeinsterDub · 25-07-2012 10:15AM

brianb10 wrote: »

why not let them explore and get as much oil as possible and then if it turns out we have a decent supply we could seize and nationalize it like argentina did with Repsol

So that works maybe the once and everyone else says don't do business is Ireland especially don't prospect for resources

everdead.ie · 25-07-2012 10:20AM

bbam wrote: »

Didn't this company announce at the time of the oil find that they would employ NO Irish workers when oil extraction starts.
Also I think the deal is similar to the shell corroborate deal where yes they pay tax but only after every single cost for the set up and extraction has been recovered from profits. I read that it could take five years after full production has been achieved before a cent is paid to the state.

We must be a laughing stock. Right we can't afford to develop the fields ourselves at the moment, surely this means we leave them sit until we get organised rather than essentially give them away.

We have a choice. Give away these resources and hope to sell sandwiches to the workers or get our **** together and start developing an energy sector. Wind, gas and oil. We could build a decent economy. But we won't because the country is ran by a bunch of failed teachers and local parish pump politics.

Surely the money from the pension reserve would be better spent on this rather than on more roads and better garda stations.

It is the same situation in Norway and other countries exploration costs can be written off against tax but I don't know if your five year timeframe is correct.

We also don't have people with the skills needed to maintain oil wells.

zing zong · 25-07-2012 10:21AM

ardmacha wrote: »

The point about this oil find was that it was somewhat unexpected. You can't get people to prospect for oil where finding it is unexpected if you are going to seize all of the profits from finding such oil. In the future you may be able to propose different arrangements and still have people willing to search for oil.

the trouble I have with that is its a bit like saying to somebody to come to your house, have a look about, if you find anything you get to keep it, after all you did look around

the point is, no matter how the resource was found or sought, there was already a reasonable expectation to find some amount of oil, regardless of how much.

so they put in the risk and expense of searching for the oil, all well and good, what do they get for it? well they get to sell it for profit.

they get the privilege of selling *our* oil, if anything they should get 25% and we get the rest, it is ours after all

again, the Norwegians are having a great laugh at how we manage our resources you can be sure of that

bbam · 25-07-2012 10:21AM

LeinsterDub wrote: »

So that works maybe the once and everyone else says don't do business is Ireland especially don't prospect for resources

Do you think.
It's funny but when you
Start pumping that black gold out of a hole in the ground everyone wants to be your friend. Do you think all the energy companies want to do business in the middle east just to clock up their air miles. The man with oil is king, and considering this country hasn't a cent in the pisss pot we should grow a pair and start exploiting it.
A bit of wheeling and dealing is needed. The oil conglomerate who pays off our debt mountain gets to drill free for ten years tax free. Bet they'd be queuing up for it.

Sleepy · 25-07-2012 10:21AM

bbam wrote: »

they pay tax but only after every single cost for the set up and extraction has been recovered from profits. I read that it could take five years after full production has been achieved before a cent is paid to the state

Income - Costs = Profits.

Some of those costs may be large initial ones which will have been financed. Once all those costs are covered the company starts to make profits. Prior to that, they're just making payments against their financing.

everdead.ie · 25-07-2012 10:24AM

zing zong wrote: »

the trouble I have with that is its a bit like saying to somebody to come to your house, have a look about, if you find anything you get to keep it, after all you did look around

the point is, no matter how the resource was found or sought, there was already a reasonable expectation to find some amount of oil, regardless of how much.

so they put in the risk and expense of searching for the oil, all well and good, what do they get for it? well they get to sell it for profit.

they get the privilege of selling *our* oil, if anything they should get 25% and we get the rest, it is ours after all

again, the Norwegians are having a great laugh at how we manage our resources you can be sure of that

Sure if when you come into my house you pay me a licence fee to look around and then spend Millions trying to find something

everdead.ie · 25-07-2012 10:25AM

bbam wrote: »

Do you think.
It's funny but when you
Start pumping that black gold out of a hole in the ground everyone wants to be your friend. Do you think all the energy companies want to do business in the middle east just to clock up their air miles. The man with oil is king, and considering this country hasn't a cent in the pisss pot we should grow a pair and start exploiting it.
A bit of wheeling and dealing is needed. The oil conglomerate who pays off our debt mountain gets to drill free for ten years tax free. Bet they'd be queuing up for it.

No where in the middle east has ever nationalised an oil company though they play by the rules set at the beginning.

You come in take the oil we take 50% it's all set out at the begining not to mention they also bend over backwards to let the oil companies explore wherever they want.

touts · 25-07-2012 10:26AM

Even if we nationalised the find and took 100% in tax it would all go on the bank reparations to repay German investors gambling losses. Long term the profits from this oil will build more schools in Germany than in Ireland so I say **** them and let corporations take it all.

I am pie · 25-07-2012 10:27AM

zing zong wrote: »

the trouble I have with that is its a bit like saying to somebody to come to your house, have a look about, if you find anything you get to keep it, after all you did look around

the point is, no matter how the resource was found or sought, there was already a reasonable expectation to find some amount of oil, regardless of how much.

so they put in the risk and expense of searching for the oil, all well and good, what do they get for it? well they get to sell it for profit.

they get the privilege of selling *our* oil, if anything they should get 25% and we get the rest, it is ours after all

again, the Norwegians are having a great laugh at how we manage our resources you can be sure of that

1. Oil Companies pay a fortune to explore our oil fields. They don't turn up and have a look around.

2. If we followed your pricing model, there would be €0.00 tax from oil in this country, because it would not be commercially viable. Oil companies need profit as an incentive to operate. What's better 0% or 25% of profit

3. If they had bothered reading it, the Norwegians would be laughing at your simplistic example. They have abundant resources, discovery is less of a risk, hence a higher premium is paid. Discovery in ireland is comes with the risk of discovering nothing, therefore an incentive is required to get companies to come look for the oil at their expense on the basis that they will make a decent profit from it, as will we.

Talk of 75% tax would simply mean we would never get the oil out of the ground.

PS....no, we don't have the money to set up our own exploration company nor would it be wise to take the risk of wasting money on not discovering oil onto the national balance sheet.

Dose of reality required here.

bbam · 25-07-2012 10:28AM

Sleepy wrote: »

Income - Costs = Profits.

Some of those costs may be large initial ones which will have been financed. Once all those costs are covered the company starts to make profits. Prior to that, they're just making payments against their financing.

It's a bad deal.
This is a one off gig for ireland and these companies need access to ye reserves. They should pay a dividend on every barrel pumped right from the first. We need the money now. By the time they cover their asses it will take years and by then well be broke (or just more broke). And they could claim the well is finishe and not viable to pump further, cap it off and then strike another golden deal with yet another idiot minister who's only qualification is as a teacher or an agricultural green cert.

ardmacha · 25-07-2012 10:29AM

the Norwegians are having a great laugh at how we manage our resources you can be sure of that

So if Ireland is such a great deal, compared to Norway, why is Norway full of producing oil fields while Ireland has none?

ArmaniJeanss · 25-07-2012 10:30AM

zing zong wrote: »

there was already a reasonable expectation to find some amount of oil, regardless of how much.

~140 fields explored in 40 years, 5 commercial hits.

Your definition of 'reasonable expectation' may differ to mine.

billion barrel oil find confirmed off Cork coast, we got nothing?

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