The Oil Company, The Crooked Politician and the Theft of Ireland’s Energy Resources
Jul 3rd, 2008 | By Bock | Category: Crime, PoliticsTry this experiment.
Ask anyone you know how much royalties Shell Oil and its partners are paying the country to take our gas from the Corrib Field. I tried this over the past few days and I got answers ranging from fifty per cent? to probably very little.
Nobody came up with the correct answer, which is Not a single penny.
Did you know that? Did you know that the energy consortium, whose pipeline is being forced past protesters by hundreds of our own police, pays nothing at all to this country for taking our natural resources? Did you know that we give it to them free, and, when they finish building their refinery, they intend to sell it back to us at full market price?
It’s ironic that this consortium also includes Statoil, the Norwegian state-owned energy company. It’s especially interesting to contrast the terms dictated by the Norwegian government with those our own government imposes on exploration companies.
In Norway, not only do they take royalties on all gas produced, but in addition they impose a 78% corporation tax. They also force the oil companies to take them on as full partners. This strategy has allowed them to accumulate a fund of €150 billion for the benefit of Norwegian citizens. In Ireland, we charge no royalties, because they were abolished by Ray Burke when he became Minister for Energy in 1987. (Ray Burke, you might recall, is a convicted crook who accepted bribes from property developers and who spent time in jail for tax evasion). Against the advice of his senior advisers, Burke met the oil industry’s representatives, and overturned the existing procedures laid down by previous ministers. He abandoned Ireland’s right to a 50% share in any find. As if that wasn’t generous enough, Ray then gave them a 100% tax write-off against all their exploration, production and development costs for 25 years, without defining exactly what these terms mean. To put it another way, he gave them a mechanism to minimise their tax liabilities to us, even though the profits are made by taking our resources for nothing and selling them back to us at the top rate.
This minister, responsible for protecting the nation’s interests, gave away all our resources to a private company following secret meetings with their representatives. Does that stink or does it not?
The politicians weren’t finished yet, though.
In 1992, when he was Minister for Finance, good old Bertie Ahern (who else?) 
reduced the corporation tax on energy companies from 50% to 25%, saying it would improve our competitive position in attracting exploration companies. This is the lowest tax rate in the world.
Now, I don’t understand any of this.
Why would one minister sign a deal with a huge exploration company, giving them our gas for nothing?
And why would another minister reduce their tax bill to almost nothing?
Let’s compare Norway and Ireland again for a second. We’ll do it in a table.
| Ireland | Norway | |
| Royalties | zero | 51.5% |
| Corporation tax | 25% | 78% |
| Shared ownership | zero | 50% |
Of course, some royalties will go to benefit the private citizen, but the only problem is that the citizen will be in Norway. Maybe somebody should tell the Norwegian press that their government is actively involved in a criminal enterprise involving the theft of resources from a friendly European nation.
There’s a simple solution: tear up all the agreements. Tell them the deals were made corruptly, we won’t let our country be robbed by crooks like Burke, and if they want to come back with a better offer, we’re listening.
Do you think they’ll walk away? Not a chance.
Despite that fact that we’re now running a huge budget deficit, and the fact that there will have to be savage cutbacks to compensate for it, do you think this miserable, cringeing government has either the balls or the brains to confront the exploration companies and accuse them of being thieves?
I’m afraid not. After all, this is the only country in the world that doesn’t bother to have full-time monitoring staff on the exploration platforms. We take the word of the energy companies when they tell us how commercially viable a find is.
It can hardly come as a surprise, in a country like this, run by such incompetent crooks, that our national police force has been put at the disposal of Shell and its business partners. It can come as no surprise that the same police force is routinely beating protesters out of the way so that Shell and partners can construct the facility they need to rob this country blind.
That’s the country we live in. A disgrace.
At the very least it warrants some explanation because something’s not right there. But who does a private citizen speak to about something like that? If you call the Energy Department they’re likely to give you the brush off.
Hi Bock!
Well said – great post.
It’s bad enough to be ripped-off by those non-productive and useless politicians , but they are not just ripping us off – their disgraceful ‘wheeling and dealing’ with resources which they themselves do not own will affect our kids , as they are practically robbing a better future from them .
A plague on all their houses.
Thanks!
Sharon.
Even the Iraqi’s get to keep 25%.
http://www.thenation.com/doc/20080721/lookout
Although I suppose Bertie and his cronies saved us from having the 101 Airborne come in for the gas.
Great Post.
It is just one more example of the outrageous concessions which were made for the well connected corporate companies in the 80’s and 90’s. Hopefully with the Green Party gaining a little hold and the country plunging into a 3b deficit next year this issue might finally get addressed.
This needs to be shouted from the rooftops by people with clout. It’s no use hoping for the greens to make a difference ‘cos at the end of the day (politspeak, sorry) they’re still seen as loonies and tree huggers.
It has me beat.
Unless…
Anyone interested in starting a new party…?
Bock I believe you have just scratched the surface of how the arrogant strutting criminals who have hijacked our land and indeed planet operate. They are a band of grubby, bought, owned, mad, lethal and miserable robbers! Apart from initiating criminal and treasonable class actions against the scum I’m afraid I don’t see any way out of our dismal predicament. They should all be hunted out of office and tried for what they have done, the feckin gobshites! Chuck fadja ar ladja as I think we say in Ulster!
They should be tried and hung for treason the lowlifes
And they has the balls to callme a sponger for refusing to pay their buddies a fortune to pick up my rubbish ive already paid the government to do.
That table says it all. It should be displayed on posters around the country.
I have a big problem with Ireland getting ZERO royalities for the natural gas but if I owned a company, any kind of company and I was told that the gub’mint was going to take 78% of my profits and I had to hand over 50% control of my company to this gub’mint…I would find somewhere else to do business.
It sounds like this Ray Burke guy really screwed you guys over.
You need to fix that but raising corporate taxes and forcing shared ownership is only going to drive business out.
I’ve been following this since the Corrib thing became news. Fintan O Toole in the IT has highlighted all the points you make, and done a good job too.
In fairness, there is a possible explanation, and a fairly simple one: Oil and Gas in Irish waters lies in deep seas which makes exploration costly, and incentives such as low tax on profits, no royalties etc appear to have been necessary to get companies to look for the stuff. The proof of this is that (if memory serves me) when prior to 1992 the government was inviting applications for exploration licences, nobody applied. So they reduced the tax rate, and next time out just one company applied – Shell. This is a totally different scenario to Norway, where there was loads of easily accessible gas and the oil companies were fighting each other to get at it.
However this does not necessarily mean Ray Burke didnt pull a foul stroke. After all, the government could have decided to just leave the stuff where it was, knowing that in the future (i.e. now) as supplies dry up and price rise, it would become attractive, and companies might gladly pay royalties. In conclusion then, they either did what they did out of short sightedness or corruption.
Lots of companies are applying now, because the rates are incredibly competitive. No other country in the world gives such a good deal for the big energy companies. Even places like Chad get a share of their own resources.
Sadly, it doesn’t actually make any difference how many companies apply for licences to exploit our resources, since we don’t get anything out of it. It would have made no difference to us if we had left the situation exactly as it was, except that we would now have a hugely valuable reservoir of natural gas off the Irish coastline that we would still own…
As for the Green Party making a difference, the Minister for Natural Resources, Eamon Ryan, is still awarding licences on the same no-royalties terms. He made a slight change to the tax situation, but as pointed out in the article, the energy companies are still allowed write off all their costs going back 25 years against tax, and they can pay tax wherever they say they make their profit, so many people question whether they will ever pay a cent in Ireland.
Sadly, for all their public support for the threatened local community in Rossport, when it came to the crunch, the Green Party loyalties were to Shell and big business interests.
Licences for oil and gas exploration off the Kerry and Donegal coasts are being handed over by Eamon Ryan at the moment, and there are plenty of oil companies scrambling for a piece of the action- sure why wouldn’t they? There are getting something for nothing.
I think the best balance of incentivization while still gettting a few bob for our resources, would have been to demand a certain level of royalty, (i.e. the royalty rate should have been decreased gradually until interest was shown, rather than just slashed to zero overnight) while also allowing companies to write off exploration costs. This would have made exploration attractive, without leaving ourselves penniless in the event of a find. In fairness looked on in that light it does look more like corruption than short-sightedness.
The main issue is not just about mineral rights, it is about the lack of accountability from the people we let manage it. We have handed the keys to the kingdom to a bunch of boneheaded backslappers. Ireland is probably one the last examples of pure tribal politics in western europe.
People don’t vote for good government, they vote so their team can win and they can shove it up the noses of their competing team. It is politics, not the county final and until we wake up to this, complete halfwits will be managing our economy and resources.
Maybe we need to setup an new improved underground government, it worked when the Brits were screwing us.
Bunch of fucking cunts…..every one of them…..the government, the companies and their mercenaries
The other night I was watching a programme about how Angola – where the vast majority of people live in wretched poverty – had annual oil turnovers valued at 10 billion dollars, given the programme was at least a year old, you can double that in today’s market. Amazingly, the money only goes to fat-cats and corrupt politicians who embezzle without shame and fly regularly to visit kindly old folk in Switzerland’s financial centres whose acquaintance they have made over the years, probably to discuss soccer and the correct method of making chocolate fondants, an Angolan favourite.
Thank fuck I had Bertie and cunts like Ray Burke overseeing our offshore resources. I’d hate to think something such as that which happens in Angola would ever happen here.
Jesus, I hope we never discover oil, we’ll be hunted mercilessly into the ocean.
It’s fucked up but it’s pretty standard practice Hoof. Nigeria is in the same situation. The government and oil companies piss all over the local people just to get paid. That’s why the supply keeps getting interupted there……the people are forced to rebel. Shell knows the situation it is creating but they don’t give a flying fuck…….we’re the ones making it so profitable though by buying the stuff. Where does that leave us?
Nigeria is not in the same situation. They impose a much higher tax than we do.
Off the top of my head I think Nigeria gets around 30 dollars per barrel of oil (or in the case of gas- barrel of oil equivalent). It’s a flat rate that means the country is getting a definite return no matter what is happening to the world price of energy.
We get zero dollars per barrel of oil equivalent.
Sadly, the people in the Niger Delta, where most of the oil comes from, see very little return for it, since the money has tended to stay with the dominant groups in Nigerian society.
Shell and the other companies have left a huge legacy of pollution and corruption in the delta, plus the many people who have died opposing the company like Ken Saro-Wiwa. There’s a good short film about KSW on Youtube here: http://ie.youtube.com/watch?v=YZhy_VaYisU
thank you bock for highlighting the corrib gas robbery. i come from north mayo (crossmolina}and i cannot understand the mentality of the irish people. even the western people and its editor seem to have lost all sense of fair play.he, the editor seemed to think it was alright to shoot a tinker in the back, citing because they robbed people and did not obey the law they were fair game! on a totally different note i love limerick and the hunt museum and everything about limerick.i love the photos of limerick. you bock have made me laugh and cry and made me envious of you and limerick.i am a member of london irish and harlequins rugby clubs and i was so proud of munster when they won the european cup, and me a connacht man! i played parish rugby in ballina years ago,and i love the game.i am sorry to have rambled on,but i love rossport and all the people of erris and i hate to see them put upon by a bunch of wankers..cross man
Amazing isn’t it? The government is prepared to go to any lengths to get money these days like gouging schoolkids and their parents by basically charging them to go to the loo but however we can’t tax oil and gas companies who are making or about to make colossal profits out of our natural resources and probably leave us with the bill for the cleanup or the carbon credits. Somehow this will have to be rectified.
The first priority of the oil companies and other business crooks who do business in this or any other country is to send in their ‘agents’ in order to determine who can be bought. They also do a study of the mentality of the citizens to gauge the extent of a possible backlash if the extent of their plundering is discovered.
In the case of the Irish electorate, all they had to do was look at the crooked and inept politicians whom we elected to come to the conclusion that setting up any type of scam here was ‘like taking candy from a baby’.
[...] “Ask anyone you know how much royalties Shell Oil and its partners are paying the country to take our gas from the Corrib Field. I tried this over the past few days and I got answers ranging from fifty per cent to probably very little. Nobody came up with the correct answer, which is not a single penny. Did you know that? Did you know that the energy consortium, whose pipeline is being forced past protesters by hundreds of our own police, pays nothing at all to this country for taking our natural resources…?” (From here.) [...]