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”

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    […] “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.) […]

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