Jul 032008
 

Try 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, declared corrupt by the Flood Tribunal, and who subsequently spent time in jail for failing to declare payments to him by a broadcasting company at a time when he was responsible for awarding it a licence).

Against the advice of his senior advisers, Burke met the oil industry’s representatives alone, unaccompanied by officials who might report on what was discussed, and after that meeting 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.

  45 Responses to “The Oil Company, The Crooked Politician and the Theft of Ireland’s Energy Resources”

Comments (44) Pingbacks (1)
  1.  

    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.

  2.  

    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.

  3.  

    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.

  4.  

    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.

  5.  

    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…?

  6.  

    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!

  7.  

    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.

  8.  

    That table says it all. It should be displayed on posters around the country.

  9.  

    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.

  10.  

    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.

  11.  

    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.

  12.  

    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.

  13.  

    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.

  14.  

    Bunch of fucking cunts…..every one of them…..the government, the companies and their mercenaries

  15.  

    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.

  16.  

    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?

  17.  

    Nigeria is not in the same situation. They impose a much higher tax than we do.

  18.  

    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

  19.  

    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

  20.  

    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.

  21.  

    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’.

  22.  

    What Ireland needs is a proper Nationalist party. We the people of Ireland are a Nation. A Nation is unified and the very term Nation confers ownership of a country and its resources to the people. We can see how many corporate agents exist in our country who devide us when the word Nationalist is used. A strong unified people will not be pushed around.

    Irelands gas reserves are the property of the people of Ireland. We are a Nation with boundaries and those boundaries must be respected. Corporations care little for people or borders in their looting operations. They exist solely to extract wealth whenever and wherever possible.

    I saw politicians on RTE talking about peak oil and how it will impact on our security and lifestyles. It made me sick to see them talk crap to the people of Ireland when they have given away our energy security. We are having both our energy and food security looted and for what? Debt?

    What must be emphasised strongly is the fact that the gas pipeline is connected to Scotland and goes accross the North Sea to Europe. Estimates show that we are to give away 400billion euro in total from two gas fields.

    The gas off Mayo is in shallow water so there is no justification for giving it away. Why not leave it alone rather than give it away? Oil companies will give a good deal to Ireland for the gas. It is something they covet.

    We are bailing out foreign banks with their fictitious debt, we are giving away what little resources we do have. If we do not get a new party (untainted) into power then we will be left in the 1840’s. Make no mistake about that. It is not exaggeration. We are already being told to expect high inflation (due to bailouts). We will again see the Irish go hungry in a land of plenty.

  23.  

    Why isnt there a share button on this for facebook. Not many realise this so why dont you put a share button so we can spread this

  24.  

    That’s due to my technical incompetence. I hope to get it fixed some day by a geek.

  25.  

    Wonder will the IMF, if indeed they are investigating the shady financial dealings of Fianna Fail and Burke in particular, decide to declare this “deal” as a fraudulent one concocted by a thieving unrepentant crook who abused his position for a bag of silver.

    At least unlike Yehudi or Biffo, they might have the balls to do something, and its a richer source of revenue to this country as any pensioner’s pocket – in contrast to the present situation.

  26.  

    Ireland specific address for IMF.
    Yeah an email is useless but send one anyway.
    If they come and go and we’re stuck with the same old cronies then it’s game over.
    They could surely use a few pointers.

    IRLcontact@imf.org

  27.  

    Hoof, if you think the IMF are here on a social justice mission, think again. It is long proven they are a bunch of cunts, albeit unelected ones. Analyse the ruins they have left behind them – they are nothing short of Galway Tenters on a global scale.

    They are hardcore Friedmanite pimps who will fuck this country so hard up the ass (if allowed to do so) we will be begging for pittance. It has not been written in stone yet, it seems, so maybe we can salvage some grace and not have our grankids indebted too.

    By the way, 25 years ago Uganda told Energy Corps. to go shite due to the unfavourable terms they offered their State back then (yes, they were a nasty bunch of cunts in the mid-Eighties). For 1/4 a century Ugandans have been sent abroad to study the hydrocarbon industry and in recent years have reopened negotiations with Energy firms from a much stronger position of expertise. Pity we didn’t export some bright-minded folk to study similarly. By the way, great post Bock.

    It is very important to cut through all the mire and pierce the jugular, You have done the public a great service by reminding us all about just how atrocious the Shell-Burke deal was and how it’s aftermath is testimony to all that has become rancid in Ireland.

  28.  

    We need to look at who the governments of the day were listening to. What advice they were following ( who was promising them the most ). In another thread on this site i recommended a book by Naomi Klein called The Shock Doctrine, about the Rise Of Disaster Capitalism. It is a very indepth work of how the likes of Milton Friedman and his followers have pursued a neoliberalist type of economics to the detriment of people and democracy all over the world. Including murder.

  29.  

    Amazing and will this new lot change anything. Did the green minister change it. All very suspicious and I wonder will it be highlighted again. I for one will write to the minister just for the privilege of being ignored.

    Bock,

    Would you be able to heat this issue up again to see if the incoming minister for whatever can do whatever ?

  30.  

    Some very constructive feedback from the comments above. The simple truth of the matter is that the country and it’s citizens are being blatantly robbed! Yes there’s money involved in the excavation of the oil/gas but there is still a huge amount of profits made at the same time. We need a government that has the balls to stand up to them and do there jobs as representatives of the nation.

  31.  

    Watch two documentaries to compare how the protests were perceived.
    The Pipe which as far as I know has never been shown on RTE popular and all as it was. TV3 made one which was a hatchet job on the protestors but watch and make up your own mind.
    The guy who put The Pipe doco together (name escapes me and I’m using a phone so don’t want to leave current page) couldn’t get funding for his second doco on North Sea natural resources. Granted there may have been valid reasons why he didn’t but…
    Allegedly when he was pitching the first one to RTE, someone in RTE management and Shell advised him not to as TV3 were doing one around the same time.

  32.  

    Burke should be locked up for life. As should certain other miscreants posing as leaders.

  33.  

    And aside from the money corruption issues, what about the fact that we have on this planet access and knowledge of clean green power and ecologically sustainable technology to utalise . Most people have heard of Nicola Tesla now and how his inventions were repressed by the Nazis, its not hard to work out why. What about prioritising caring about Earth and its creatures health over the temporal thing of money. Thats the real outrage, weve had the solutions long time, some wait patiently, others secretly experiment with blueprints in garages.
    There is a lot of emotional power here that can unite the people through this particular situation but lets make sure the intention of our stand is clear. What do we want, some extra euros in our pockets. Will that satisfy? And the whole stinking mess of plundering continues. Theres no more room for it,enough is enough.
    Shell and the use of that feul is outdated , we dont need it. So lets look beyond and insist on a world where we can breathe fresh air.
    Its already happened in a sense , if you step out and look at the picture from a time traveling perspective , you see there are ages of a world without petrol where Shell means again that fossil on the beach. Its being played out now this transistion so lets go for it, ask , imagine what you really want. Do you believe that there is abundance of free harmless energy , does that make sense to you?

    Then once again we humans can be fully sensitive and thereby regain our power.

  34.  

    Are you really that surprised. Shell has 2.4 times the wealth of the Irish real GDP. No politician anywhere worldwide can dictate terms to oil companies on behalf of their constituents with that much wealth behind it. Oil companies such as Shell can ruin countries like Ireland at the stoke of a pen. Statoil on the other hand is owned by the Norwegian government. So guess who paying for Norway’s lovely entitlements? Irelands tax base is too small and as such is destined to remain cap in hand. Sadly.

  35.  

    Nothing like a spot of defeatism to brighten up the day.

  36.  

    That has been going on since the early 80s&some people are only finding out now.SHELL have no right.s what so ever if any thing they should be banned from IRELAND & IRISH WATER.S FOR TRYING TO DEFRAUD THE IRISH PEOPLE.They Brown enveloped The FF DÀIL.CHARLIE HAUGHIE&FF RAY BURK Did do jail for another separate fraud case.he done 2months6day.s in a more or less holiday home.&as far as is known is getting or going to get his big state pension.Charlie &Co where supposedly? given a 10.000.000punt.back hander by Shell.

  37.  

    Go easy on the old caps if it’s all the same to you.

    Thanks.

  38.  

    Here we go again, six or so weeks after enduring the last shower, we get our opportunity to change the administration and what do we do, vote them back in again. At least we can shout DOWN WITH SORT OF THING!! on all the social media platforms. Time to make a stand or better still sit down for 3 or 4 days every month until the change we demand comes about.

    Even your European partners cant understand our lame duck attitude.
    http://www.irishtimes.com/news/world/europe/conned-a-german-view-of-ireland-1.1454115

  39.  

    do ya want to know why all the corruption in politics exists ?? it’s because they ALWAYS get off free……and the Irish people do nothing about it….they deserve all they get….who elects them???…no use in sitting down in the pub complaining about the state of affairs in the country…..DO SOMETHING !!!!

  40.  

    IRELAND The Law Reform Commission, … The Law Reform Commission Act 1975 section 4 subs. (2) (a) … Larceny Act 1916, Ireland and Britain’s agreement
    http://www.lawreform.ie/_fileupload/Programmes%20of%20Law%20Reform/First%20Programme%20for%20Law%20Reform%201976.pdf

    Britain Larceny Act 1916
    http://www.legislation.gov.uk/ukpga/1916/50/enacted/data.pdf

    Criminal Justice (Theft and Fraud Offences) Act,…
    Text in the Irish language of the Convention drawn up on the basis of Article K.3 of the … Larceny Act, 1916. 6 & 7 Geo. 5 … (THEFT AND FRAUD OFFENCES) ACT,
    http://www.irishstatutebook.ie/eli/2001/act/50/enacted/en/pdf

    Public order offences in Ireland – Citizens…
    Nov 10, 2011 · The law on public order offences in Ireland is mainly set down in the … and extortion offences which were previously contained in the Larceny Act
    http://www.citizensinformation.ie/en/justice/criminal_law/criminal_offences/public_order_offenses_in_ireland.html

  41.  

    At Greg,

    Hi and as regards Governments taking onoil companies, Norway is a very good example. They set up Statoil and also have very favourable conditions for the state as a major stakhokder. The oil company ‘plays ball’ as they have no choice as they are in need of the product (oil aholics)…..and yes, also to Gertrude…..there must another way and many ways to extract our energy needs…..and as for the guards behaviour….all in all between the government, the manadarins and our ‘protectors’, we’re properly fuc*ed….wonderful little country to do business….says Enda ….the little bolli*.

  42.  

    Yeah , that,s what they done to our fishing industry , and God knows what other industry they sold out on us , we should have been out on the streets shouting for revolution years ago.

  43.  

    Shout away, the guards will just beat the shite out of you, take their numbers off and properly deal with you and all in the name of protecting the state…. Stalin would have been proud…..and we were supposedly modelled on the French Republic…..load of shite….but at least the weather is good at the moment….

  44.  

    What I want to know is where do we start to stop our government selling our resources without our knowledge, and who can do anything about it,instead of just wringing our hands while our country is being raped by foreign countries.

Leave a Reply