oil licences given away by government again

Just read in the daily mail today that the government has given away more licences to oil companies with the same controversial conditions it gave away the corrib field (albeit before it was discovered). They will be allowed to search for oil in irish waters in an area as large as Northern Ireland (25,000 square km). Basically they collect no royalties from any potential discoveries. The only amount paid is corporation taxes of 20% on profits made from exploiting any discovery and they will be able to write off any costs entailed in prospecting before they pay any tax. They are not even obliged to sell the oil even at market prices to ireland and can load it onto tankers and sell it to who ever they like. Noel Dempsey promised that the procedure for issuing licences would be reviewed. However this seems to have been rushed through with no press release. It just appeared on the department website at 6am on saturday morning. This is just a summary of what I read today in the daily mail. No western democracy imposes less conditions on oil companies prospecting for oil than ireland...

Does anything that this govenment does surprise anyone anymore,not me anyway !.

We don't have many great oil prospects so it is clear major incentives are needed if companies are going to do so.

Personally I would set an upper limit on the 0% royalties commission. The Corrib gas field is absolutely enormous - some €50 billion worth of gas could be taken from the field - so once the money made from the gas extracted by companies like Shell has exceeded a certain amount (say €20 billion) they would pay royalties on the rest of the gas extracted.

In this way we do not disincentivise exploration but we don't essentially give away a huge potential asset like the Corrib field.

"In this way we do not disincentivise exploration but we don't essentially give away a huge potential asset like the Corrib field."

its not our asset its owned by shell, all shell have to pay is tax on profits after deducting exploration costs. Because of the corrib field the chances of finding more are greatly enhanced

The corrib gas belongs to the irish people not shell,look what the boys in south america did.
I think a law should be brought in that any contracts signed by a politician that was later proven to be corrupt should be null and void and thus open up to renegotiation.You don't have to do it but you have an option.
Don't tell me this couldn't be done,ray burke is a prime example.

You need the big companies to develop these fields but they are getting too much , any profit after all normal expenses should be split 50:50

ah Dempsey Demspey Dempsey, what a guy. The next Taoiseach !!!!

And any expenses that Shell et. al. incurr in exploration (including the cost of exploration rights), they just write off against tax. We should do a Hugo Chavez on this country (or at least adopt a little bit of what he does).

CelloPoint said:

And any expenses that Shell et. al. occur in exploration (including the cost of exploration rights), they just write off against tax. We should do a Hugo Chavez on this country (or at least adopt a little bit of what he does).

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That's a good idea. I'm sure there are plenty of other dictators we can cherry pick economic policy from as well.

CelloPoint said:

And any expenses that Shell et. al. incurr in exploration (including the cost of exploration rights), they just write off against tax. We should do a Hugo Chavez on this country (or at least adopt a little bit of what he does).

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I think you'd get a more positive response to this proposal over on Indymedia

CelloPoint said:

And any expenses that Shell et. al. incurr in exploration (including the cost of exploration rights), they just write off against tax. We should do a Hugo Chavez on this country (or at least adopt a little bit of what he does).

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Yeah the multinationals would love that and continue to invest here for the long term

The economy would be fecked if these multinationals left.

room305 said:

We don't have many great oil prospects so it is clear major incentives are needed if companies are going to do so.

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Yeah, because without significant incentives they'll just turn up their noses at us. "Oil! We don't need your stinkin' oil! We may have bribed and supported dodgy regimes in other parts of the world, but you Irish and your insane demands to keep some of the profits from your resources for yourselves, why that is all too much!"

It's in the ground, under our territory. It's not like an IT or pharma co. that can relocate to somewhere else if we don't provide enough incentives.

I mean, it's oil! Black gold, texas tea, the stuff the entire western world depends on. For the next few decades anyway we are dependent on the stuff to move us about, keep us warm, feed us for goodness sake. (Of course alternative sources of fuel and energy are being developed, but we have a while before we can be fully weaned off the stuff).

Oil companies are about to enter a massive grab for every and any reserve they can get, and they will pay big bucks for it, and we have just signed a deal to give it all away. Even worse, they have no incentive to sell it to us first. We can continue to be dependent on our energy from the Middle East (you think they'll be getting any stable govt's there anytime soon?) while our own fuel is being siphoned off to other countries.

Never mind Venezuela - do you think Britain or Norway would have signed a deal that gave them so little control over their natural resources?

Why couldn't we just copy exactly what Norway did?

We cannot do a Norway , they found their oil in shallower water and very easily

Irelands oil (if present) is in deep water . Expensive to extract . Look at the map, most of these are bloody miles out and with no pipeline network or anything to plug into. If they were in the Irish sea you may have a reason to complain I will concede.

http://www.dcmnr.gov.ie/NR/rdonlyres/7C322A26-8674-43C4-AE86-AC3DD289C0FF/0/sedlicensingroundmap.pdf

Once we do get some extraction going we can then change the terms of the exploration licences

2Pack said:

We cannot do a Norway , they found their oil in shallower water and very easily

Irelands oil (if present) is in deep water . Expensive to extract . Look at the map, most of these are bloody miles out and with no pipeline network or anything to plug into. If they were in the Irish sea you may have a reason to complain I will concede.

http://www.dcmnr.gov.ie/NR/rdonlyres/7C322A26-8674-43C4-AE86-AC3DD289C0FF/0/sedlicensingroundmap.pdf

Once we do get some extraction going we can then change the terms of the exploration licences

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Mechanical engineering has advanced hugely in the oil exploration area. It is now possible to drill to very deep levels. And besides, with oil prices at their present levels, it is now financially feasible to use the latest expensive engineering methods to extract oil from great depths.

I believe strongly that the Irish people have been undersold by an incompetent (if not corrupt - this wouldn't surprise me at all) government.

So the two options we have are:
1. Let the oil & gas lie there untouched or
2. Create an attractive tax regime that will encourage energy companies to spend vast amounts trying to guess where oil & gas may be found, and in return the state takes 20% of any profits.

Or do you propose that SIPTU and the Socialist Workers party have a skillset that will enable them to survey, prospect, transport and sell these national resources?

hmmm said:

So the two options we have are:
1. Let the oil & gas lie there untouched or
2. Create an attractive tax regime that will encourage energy companies to spend vast amounts trying to guess where oil & gas may be found, and in return the state takes 20% of any profits.

Or do you propose that SIPTU and the Socialist Workers party have a skillset that will enable them to survey, prospect, transport and sell these national resources?

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They are just the two options you have presented,i would contend the people could/should get a lot more than 20% of the profits after millions and millions of tax write off's for "exploration".Have you never run a small business,they are always advised to declare as little profit as possible,once again the politicans have robbed the people of this country !.

20% of feck all is feck all.

lets revisit this whole issue when Oil is found in decent quantities and when Shell build that bloody pipeline around the people not thru them.

Its a very very sweet heart deal. Nobody is saying they should be taxed prohibitively but this deal is giving away a national resource far too cheaply.

Another thing that annoys me about this is the government saying we need this to secure our energy requirements into the future. Thats just bull. We will have to buy it back on the open market as if it came straight from Iraq.

thewatcher said:

They are just the two options you have presented,i would contend the people could/should get a lot more than 20% of the profits after millions and millions of tax write off's for "exploration".Have you never run a small business,they are always advised to declare as little profit as possible,once again the politicans have robbed the people of this country !.

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The quotations around exploration imply you think it is of dubious merit. Are you suggesting that the oil and gas exploration companies know exactly where the oil and gas is located but faff about spending millions looking in other areas as part of an overall tax reduction strategy?