State Assets - which will be sold off first?

SKELLY

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So the path towards default looks like it will be set out tomorrow.

If so, we can expect a default within 2/3 years.

Before that there is likely to be a fire sale of state assets in a pathetic attempt to stop a default. We can also expect the same people that profited hugely during the "celtic tiger" to be the very same who will profit from this venture.

So which assets will go first?

ESB
Coillte

What other assets does Ireland have that will be harvested?
 


Pegasus1010

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I've posted this on another similar thread but it's relevant to this one also...

Back in JULY, Businessweek ran an article under the headline:
Key developments for The National Oil Reserves Agency Limited (Ireland To Sell State Assets)

Among those listed were:
RTÉ, TG4, ESB, Bord Gais, Irish Rail, An Post, Dublin Airport Authority, Shannon Airport, Cork Airport, CIE, Dublin Bus, Irish Rail, Bus Eireann, Irish Aviation Authority, Dublin Port Company, Port Of Cork Company, Drogheda Port Company, Galway Port Company, Port Of Waterford Company, Shannon Foynes Port Company, Wicklow Port Company, New Ross Port Company, Dundalk Port Company, Dún Laoghaire Harbour Company, Bord Na Mona, EirGrid, Coillte Teoranta, Horse Racing Ireland, National Stud, Bord Na gCon, National Oil Reserves Agency Ltd, mining and exploration licenses, the radio spectrum which is used to carry mobile phone and TV signals.

Note that the article (link below) is actually an announcement. It is made by the National Oil Reserves Agency Limited (aka NORA) which is a company under the direct aegis of Eamon Ryan, Dept of Comm. NORA is of interest in itself but I will leave that aside for this post.

The National Oil Reserves Agency Limited: Private Company Information - BusinessWeek


In addition to the asset sell-off (which doesn't appear to have been picked by the Irish media) an article in last Sunday's Irish Tribune under the headline: "Ireland warned it will have to stump up state assets" mentions that the IMF/EU are seeking the following to be pledged as 'bailout' collateral:

Aer Lingus, the motorways, the whole of the national pension fund, "the best parts of the Dublin banks", and the national oil reserves.

Ireland warned it will have to stump up state assets in bailout


Being a number cruncher by profession, I thought I'd a take a look at the value of one of these and opted for the oil/gas reserves since they’re mentioned so often…

First of all, the frequently seen figure of €420bn (which relates to Corrib only) is inaccurate as it is based on obsolete oil & gas per unit prices. I haven't seen any figures for the other proven fields on the west coast (such as at Spanish Point, Dunquin, Allen Basin, and etc) or those on the east or south coasts but in any case, the exercise here is to value the total national reserves…

For the purpose, I've used the oil & gas quantities as stated in the 2009 official report by the Petroleum Affairs Division of the Department of Communications. My understanding is that it is the oil prospectors that advise gov't as to the quantity of oil or gas in a reserve and that these are known in the industry as 'proven finds'. Moreover, gov't uses this data to determine the price it will charge for the right of the oil co to extract oil/gas from any particular reservoir. As is obvious, the less oil or gas claimed to be in a reservoir, the less that the oil companies pay for the right to extract it. On that basis, we can accept the reported quantities to not be overstated. They are as follows:

“Volumetric assessment and expulsion modelling shows volumes of over 130 billion barrels of oil and 50 trillion cubic feet [1.415 trillion cubic mtrs] of gas.”

Currently (Nov'10) oil is US$85 per barrel and avg wholesale price for gas is US$4 per m3. Therefore at this moment in time the reserves have a value of:

OIL: 130bn @ $85 = US$10.9 TRILLION
GAS: 1.415tr @ $4 = US$ 5.6 TRILLION


A total of US$16.5 Tr is a serious chunk of change and it's only going in one direction. For instance, media reports on Nov 17th refer to the oil company Providence Resources as saying that "new interpretations of old data suggest that a field at Spanish Point could be as big as Corrib and twice as valuable". (As that is a separate reservoir and not yet a 'proven find', clearly it was not in the 2009 report that I have based my valuation on.)

The oil/gas scenario in itself has a few other interesting little twists (such as what happens to the smaller ‘proven finds’ that the likes of Shell would not be interested in) but I will save that for another post.

At this stage all that’s necessary to say is even the doggies know why the IMF are proffering a loan that, with a little ‘helpful’ shove from them, will result in a default – and all this because the gambling losses of private banks ended up with the taxpayer.

(BTW, how many of you know that back in the 1980s, Garrett Fitzgerald (Fine Gael) did a very similar thing with an AIB liability and the taxpayer remains on the hook for that liability until it expires in 2050. The potential sums are not known but described as being a “black hole”… )
 

Run_to_da_hills

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Iarnrod Eireann and perhaps no harm, crows taking off from the chimneys of Inchicore, hopefully we will never see a repeat of such wastage of tax payers money as the abandonment and decay of perfectly good MK3 coaches. Roll on the day.
 

seanmacc

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I'd imagine the Oil and gas is gone. The massive potential is known by very few and it won't be missed by Joe taxpayer. It'll be sold for a pittence and the Irish public will barely see a penny
 

karldaly

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.
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"So which assets will go (gone) first"
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Dramatic revelations are imminent.
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FutureTaoiseach

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The following should be privatised:

ESB
Bord Gais
Bord na Mona
Bus Eireann
An Post
 

Pegasus1010

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I'd imagine the Oil and gas is gone. The massive potential is known by very few and it won't be missed by Joe taxpayer. It'll be sold for a pittence and the Irish public will barely see a penny

seanmacc, see my post at #5 (just above yours) and see the value of the oil/gas reserves based on current prices.


PS: Have we all forgotten that Ireland is a republic - and not a useless democracy where the wishes of the minority can be imposed on the majority - and that it hardly seems credible that the government can sell us out with this bloody IMF loan?

BTW, are we dealing with the Real IMF or the Provisional?
 

seanmacc

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seanmacc, see my post at #5 (just above yours) and see the value of the oil/gas reserves based on current prices.


PS: Have we all forgotten that Ireland is a republic - and not a useless democracy where the wishes of the minority can be imposed on the majority - and that it hardly seems credible that the government can sell us out with this bloody IMF loan?

BTW, are we dealing with the Real IMF or the Provisional?
In a FF government:

Those figures will be massaged downwards and the excuse that the reserves are not economically viable enough for a state company will be used. The drilling rights will be gifted to one of the worlds biggest oil companies who will only end up contributing corporation tax to the state.
 

LeDroit

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Back in JULY, Businessweek ran an article under the headline:
Key developments for The National Oil Reserves Agency Limited (Ireland To Sell State Assets)

Among those listed were:
RTÉ, TG4, ESB, Bord Gais, Irish Rail, An Post, Dublin Airport Authority, Shannon Airport, Cork Airport, CIE, Dublin Bus, Irish Rail, Bus Eireann, Irish Aviation Authority, Dublin Port Company, Port Of Cork Company, Drogheda Port Company, Galway Port Company, Port Of Waterford Company, Shannon Foynes Port Company, Wicklow Port Company, New Ross Port Company, Dundalk Port Company, Dún Laoghaire Harbour Company, Bord Na Mona, EirGrid, Coillte Teoranta, Horse Racing Ireland, National Stud, Bord Na gCon, National Oil Reserves Agency Ltd, mining and exploration licenses, the radio spectrum which is used to carry mobile phone and TV signals”… )
Delicious. Never waste a crisis. :)

The era of State monopoly domination in Ireland is ending.
 

hugh o'neill

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think we should sell off the dail, farmleigh and government buildings - open them up as an museum - think of corruption and think of the dail - think of waste and think of farmleigh and think of people who are failures and still make money think of government buildings

sell of the esb, rte, bus eireann, an post, dublin bus, coillte, hse, ....st lukes,
 

Jesus Wept

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RTE has to go: it's a luxury we quite simply can no longer afford. But who would interested purchasers be? Rupert Murdoch, Denis O'Brien and Tony O'Reilly for certain: they all have a background in media and possess the necessary spondulicks to engage in a bidding war against each other. But what about Mick O'Leary. He clearly doesn't have a background in media but does possess the necessary spondulicks: might he be tempted to diversify?
 

Jesus Wept

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BTW, TG4 also must go but I'm not certain any of the serious players would be happy to fork out good money for it. Sinn Fein, of course, would dearly love to get its grubby little paws on it and might raise the necessary capital by staging another major bank hoist like the Northern Bank one.
 

Springclean

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First that comes to mind is RTE - and with the sale should go the licence fee.

Others that comes to mind are Bus Eireann, Bord Gais and ESB.
 

loner

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RTE should be the first to go--it is totally surplus to requirements and far too costly . There is no need nowadays for a National broadcaster and a new open playing field would ensure a much better service allround with no cost to the taxpayer. The shekels gained from the sale could be set aside for projects that will be very shortfunded because of the cutbacks.
 


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